Mott Community College
Special Committee of The Whole
May 18, 2011
College Finances
STRATEGIC PLAN
_____________________________________________________________________
• 7-0. Budget/Finance
• 7-1. Focus on controllable revenues and costs to sustain
our current reputation and facilities and provide funding
for strategic priorities
• 7-2. Establish short and long-term budget and finance
priorities that provide a balanced approach to the needs
of a learning organization with the flexibility to realign
resources
• 7-3. Implement a comprehensive strategy to address the
long-term deficit which enables us to continue to provide
affordable high quality education
• A balanced approach
2
PRIOR YEAR BUDGET IMPACT
3
$6,000,000
Prior year Impact in Dollars
$464,851
$552,155
$5,000,000
$871,353
$4,000,000
$1,400,000
$3,000,000
$5,873,359
$2,000,000
$2,585,000
$1,000,000
$0
Lost Property Taxes
Debt Contribution
Health Insurance Increase
MPSERS Increase
Lost State Aid
4
Tuition Keeps Up with Lost Funding/Increase in
$130.00 Non-controllable costs for prior year
$3.11
$3.71
$125.00
$120.00
$5.85
$115.00
$9.40
$110.00
$39.42
$105.00
$127.76
$100.00
$17.35
$95.00
$90.00
$85.00
$80.00
$88.34
Current Tuition
Lost Property Taxes
Debt Contribution
Health Insurance Increase
MPSERS Increase
Lost State Aid
5
Prior Year
Budget Balancing Steps
6
Prior Year Budget Cuts
• Decreased Hiring (Open Position Pool)
• Cut funding to Reserves
• Less Spending on Maintenance
and Replacement (72 fund)
• Cut Contingency
Total current year cuts
Set-aside cuts from last year
Total budgetary expenditure cuts
$ 325,000
$ 620,000
$1,250,000
$ 250,000
$2,445,000
$1,400,000
$3,845,000
7
Prior Year Budget Cuts (continued)
Total Budgetary Expenditure Cuts
(from previous slide)
Current Year Shortfall
Shortfall Remaining
$3,845,000
($5,900,000)
($2,055,000)
65% of current year shortfall is made up through
budget cuts.
8
FUNDING SOURCES
(2011-2012)
State Aid
Property Taxes
-Operating
-Debt
Tuition
9
Trends in Funding Sources & Enrollment
40,000
$33,500,000
35,000
Funding
$28,500,000
30,000
$23,500,000
25,000
$18,500,000
20,000
15,000
$13,500,000
10,000
$8,500,000
5,000
$3,500,000
0
State Aid
Property Taxes
Headcount
10
2011-12 FUNDING PROJECTIONS
with a 15% Decrease in State Aid
$33,500,000
40,000
35,000
Funding
$28,500,000
30,000
$23,500,000
25,000
$18,500,000
20,000
15,000
$13,500,000
10,000
$8,500,000
5,000
$3,500,000
0
State Aid
Property Taxes
Headcount
11
THEN and NOW
2010-2011
1999-2000
Other
6%
Tuition
48%
Taxes
26%
Tuition
32%
State
Aid
36%
State Aid Funding
$15,344,107
Other
4%
State
Aid
20%
Taxes
28%
State Aid Funding
$15,121,880
12
THEN and NOW
Projected 2011-2012 with -15%State aid
2011-2012
1999-2000
Other
6%
Tuition
50%
Taxes
26%
Tuition
32%
State
Aid
36%
State Aid Funding
$15,344,107
Other
5%
State
Aid
18%
Taxes
27%
State Aid Funding
$12,853,598
13
Trends in Funding Sources & Enrollment, Fiscal
Year Equated Students (FYES)
$6,500
$33,500,000
$6,000
$28,500,000
Funding
$23,500,000
$5,500
$18,500,000
$5,000
$13,500,000
$4,500
$8,500,000
$3,500,000
State Aid
$4,000
Property Taxes
Revenue per FYES
14
State and Local Funding Does Not
Keep Up With Enrollment
31,981
34,000
32,000
30,000
28,000
26,000
24,000
21,225
22,000
20,000
Actual Unduplicated Headcount
Adjusted Unduplicated Headcount
15
Projected Property Tax Funding
FYE 2010 through FYE 2016
$2.6 Million Decrease or $8.27 per contact hour
$24
$22
Millions
$20
$18
$1.5 Million Decrease or $4.95 per contact hour
$23.5
$972 Thousand Decrease or $3.33
per contact hour
$20.9
$19.5
$18.5
$18.8
$19.4
$20.0
$16
$14
$12
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
16
Percentage of Property Tax and
State Aid of Total Funding
70%
60%
63%
60%
62%
60%
59% 58%
57% 56% 56%
50%
54%
51%
47%
06/30/11
06/30/10
06/30/09
06/30/08
06/30/07
06/30/06
06/30/05
06/30/04
06/30/03
06/30/02
06/30/01
06/30/00
40%
17
Percentage of Property Tax and State Aid of Total
Funding projected for 2011-2012 with -15% State aid
70%
63%
60%
62%
60%
59% 58%
57% 56% 56%
50%
54%
51%
47%
06/30/11
06/30/10
06/30/09
06/30/08
06/30/07
06/30/06
06/30/05
06/30/04
06/30/03
06/30/02
06/30/01
06/30/00
40%
45%
06/30/12
60%
18
What’s Happening with Property Taxes?
(Operating)
Historical Average Increase
35,000,000
7 Year Forecast
$32.2M
32,500,000
30,000,000
27,500,000
25,000,000
22,500,000
$20.0M
20,000,000
17,500,000
15,000,000
Total lost operating property tax funding over 7 year period is
$60.2 million. The average per year is $8.6 million.
19
What If Tuition Covered State Aid Losses?
Add in Property tax loss = $218.08
$143.70
$155.00
$135.00
$115.46
$99.61 $99.88
$115.00
$129.65
$120.92
$128.65
140.32
$95.00
$75.00
$55.00
$72.50
$61.34
$61.15 $62.85
$69.00 $70.55
Actual
$82.05 $84.70 $86.52
$79.50
$75.80
$93.51
Hypothetical
20
What’s Happening with Property Taxes?
Historical Average Increase
11,000,000
(Bonds)
7 Year Forecast
$10.4M
10,000,000
9,000,000
8,000,000
$7.0M
7,000,000
6,000,000
Total lost bond tax funding over 7 year period is $15.8 million.
The average per year is $2.3 million.
21
Bonded Debt Payments vs Tax Collections at
.69 Mills
$9,000,000
$8,500,000
8,279,381
8,052,269
$8,000,000
7,835,136
7,735,245
7,571,294
$7,500,000
7,492,450
$7,000,000
$6,500,000
6,596,937
$6,000,000
Debt Payments
Actual/Projected Revenue
22
Bond Funds
1. County and City Taxable Values will decline by 7% for
2011-2012
2. The Financial Impact (Shortfall) to the Bond Funds will be
$ 850,000 in 11/12.
3. We are legally required to levy a millage rate that will be
sufficient to collect enough dollars to make the current
year required payments
-ORHave enough funds available from other sources to cover
any shortfall from a lower millage rate.
4. Commitment made to voters in 2004 to keep millage at
.69 through 2011. (GF contribution $1.4 million last year)
23
What Have We Done Regarding
Controlling/Cutting Costs?
24
Past Expenditure Reductions
1) Energy Conservation Project
- Utility costs averaged 8.2% in 2003, Now they are 2.4%
• Savings $520K
2) Hold on vacant positions
•
Average savings of $800K per year
3) Change in timing of custodial shift
•
Savings of approximately $170K per year
4) Eliminating and restructuring food service
•
•
Was losing approximately $100K per year
Now generating $48K per year in revenues
25
Past Expenditure Reductions
5) Utility Reduction Analyst Project
•
Resulted in $720K savings between 2004-2010 on
Telecommunications/IT, Water, and Waste
6) Employee Contract Bargaining
•
•
Employees agreed to pay freezes with incremental
increases over 9 years at 1.35%
Industry average is 2.8%
–
Savings of $460K per year
7) Course Section Efficiency
•
Maximizing section seat count before adding new
sections
8) Discretionary budget cuts
•
Average savings of $400K per year
26
Past Expenditure Reductions
9) Reduction of ORP (optional retirement plan) costs
•
Average annual savings of $400K
10) Combining Deans position
•
Fine Arts and Social Science combined saving $168K per
year
12) Outsourcing custodial and grounds work at sites
•
Savings of approx. $350K per year
13) Changes to health insurance coverage and plans
•
Savings $500K
14) New print shop lease
• Savings of $200,000 per year
27
A Comparison
to
7 Other Michigan
Peer Community Colleges
Based on 2009 –2010 ACS Data
Comparison of State of Michigan Peer Group
Revenue Percentages
Based on 2009 - 2010 ACS Data
50%
46%
31%
32%
35%
2%
6%
3%
12%
15%
4%
13%
47%
30%
19%
3%
3%
14%
4%
4%
10%
22%
23%
30%
16%
19%
40%
20%
37%
37%
44%
33%
50%
30%
50%
60%
54%
61%
70%
0%
Delta
Grand
Rapids
State Aid
Henry Ford Kalamazoo
Valley
Property Tax
Mott
Schoolcraft Washtenaw
Tuition & Fees
All Other
Wayne
County
Prior Year Comparison of Millage
Rates/Property Tax Declines with
State Grouping
6.00
4.00
2.00
1.79
1.80
1.99
2.04
2.41
2.48
3.00
3.41
-12.00
-8.64
-3.14
-8.64
-8.64
Washtenaw
Henry Ford
-8.00
-10.00
Delta
Mott
-3.76
Wayne County
-6.00
-1.64
Kalamazoo Valley
-4.00
Schoolcraft
-2.00
Grand Rapids
0.00
-5.33
-10.98
MCC is 3rd Lowest in Millage Rate, and has the Largest Property Tax
Decline
Current Year Comparison of State Aid
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
31
Current Year Comparison of State of
Michigan Peer Group Property Tax
Revenue
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
MCC is 3rd Lowest in Property Tax Revenue
Current Year Comparison of State Peer Group
Total Revenue
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0
MCC is 4th lowest in Total Revenue
Tuition & Fees: Local Comparison
College
Mott CC
Saginaw Valley University
Eastern Michigan University
Oakland University
Baker College - Flint
Ferris State University
University of Michigan - Flint
Central Michigan University
Michigan State University
Davenport University
University of Michigan - Ann Arbor
ITT Technical of Flint
Kettering University
Yearly Tuition & Fees
3,329
7,308
8,377
9,285
9,840
9,930
10,097
10,380
11,722
11,814
13,461
25,064
29,116
Cost as based on in district/state rates from the College’s web sites
MCC’s annual cost is approximately 46% of that of the next
34
most affordable college/university in our area.
Tuition & Fees:
Community College Comparison
Yearly Tuition & Fees
College
Mott CC (In-District)
Wayne County CC
Oakland CC
Macomb CC
Schoolcraft CC
Delta CC
Washtenaw CC
Lansing CC
Henry Ford CC
St. Clair CC
$3,229
$3,310
$3,457
$3,760
$3,910
$3,977
$4,140
$4,300
$4,402
$5,663
Costs based on published “out of district” rates for other
Community Colleges for 30 Credit/Contact hours
35
Comparison of MI Community Colleges and Universities
from 2005/06 to 2009/10
35%
30%
30%
25%
20%
32%
31%
Community
College %
Change
22%
16%
16%
18%
15%
University
% Change
10%
6%
5%
2%
3%
0%
From 3/27/11 Free Press
36
CURRENT YEAR BUDGET IMPACT
37
$9,000,000
FYE 2012 Impact in Dollars
$8,000,000
$453,656
$675,000
$7,000,000
$750,000
$6,000,000
$850,000
$5,000,000
$900,000
$4,000,000
$1,500,000
$8,128,658
$3,000,000
$2,000,000
$3,000,000
$1,000,000
$0
Capital Funding Restoration
Health Insurance Increase
Contingency Restoration
Lost State Aid
Lost Property Taxes
Debt Contribution
MPSERS Increase
38
Tuition Keeps Up with Lost Funding/Increase in
$160 Non-controllable costs for FYE 2012
$155
$150
$145
$140
$135
$130
$125
$120
$115
$110
$105
$100
$95
$90
$85
$80
$3.17
$4.71
$3.11
$5.93
$6.28
$10.47
$56.73
$155.41
$20.94
$98.68
Current Tuition
Lost Property Taxes
Debt Contribution2
MPSERS Increase
Capital Funding Restoration
Health Insurance Increase
Contingency Restoration
Lost State Aid
39
COMPARISON PRIOR YEAR/CURRENT YEAR
2011
2012
40
Reserve Requirements
8
Still need $183K
7
Current
Reserve
In millions
6
5
4
Still need $950K
Still need $36K
Required
Reserve
3
2
Adequately funded
1
0
General Fund
(01)
Rainy Day (02)
Maint &
Replacement
(72)
Building & Site
(78)
41
FEDERAL FINANCIAL ASSISTANCE
PELL GRANTS
42
Millions
Pell Awards
30
25
Increased Five-Fold in Ten Years
20
15
10
5
2001
2002
2003
2004
2005
2006
2007
Academic Year
2008
2009
2010
2011
Pell Award & Cost of Tuition
Mott Community
College
In-District
(Published 10/11)
Saginaw Valley
State University
In-State
(Published 10/11)
Delta CC
Out of District Rate
Pell Awarded
$5,550
$5,550
$5,550
Tuition & Fees
$3,229
$7,308
$3,977
Books & Supplies
$1,000
$1,000
$1,000
Difference
$1,321
-$2,758
$ 573
(30 contact hours)
Student Receives
Remaining
Balance
Student Needs
Unmet
Student Receives
Remaining
Balance
Pell Distribution – 09/10
Sample of Approx. 8,000
Students
Awarded
$24,787,898
Educational
NonEducational
Books & Supplies Educational
Tuition & Fees
Charges
Govt. Refund
$14,787,184
$2,896,345
$7,104,367
STATE INFLUENCES
46
PERCENTAGES CAN BE MISLEADING
Mott Community
College
In-District
Current Tuition
(30 contact hours)
$2,960
Saginaw Valley State University of Michigan University
Flint
In-State
In-State
$6,870
$9,692
47
PERCENTAGES CAN BE MISLEADING
Mott Community
College
In-District
Current Tuition
(30 contact hours)
5% increase
$2,960
Contact
Hour
Tuition
Change
Change
$5
$148
Saginaw Valley State University of Michigan University
Flint
In-State
In-State
$6,870
Contact
Hour
Tuition
Change Change
$11
$344
$9,692
Contact
Hour
Tuition
Change
Change
$16
$485
48
PERCENTAGES CAN BE MISLEADING
Mott Community
College
In-District
Current Tuition
(30 contact hours)
5% increase
7% increase
$2,960
Contact
Hour
Tuition
Change
Change
$5
$148
$7
$207
Saginaw Valley State University of Michigan University
Flint
In-State
In-State
$6,870
Contact
Hour
Tuition
Change Change
$11
$344
$16
$481
$9,692
Contact
Hour
Tuition
Change
Change
$16
$485
$23
$678
49
The Inequality of any Percentage
Increase
$6,720,025
$7,000,000
$6,000,000
$4,674,800
$5,000,000
MCC
$4,000,000
SVSU
UM-Flint
$3,000,000
$2,000,000
$2,045,225
$1,000,000
7% Increase
The impact of a 7% tuition increase for MCC compared with local 4 year Universities
50
Enrollment vs Appropriations
FY 06 – FY11
35
35
30
Enrollment
In percents
25
20
Appropriations
15
10
3.4
5
5
4.8
-
0
-5
-10
(8.8)
-15
K-12 Schools
Universities
Community Colleges
51
COMMENTS/QUESTIONS?
52