Board of Trustees Meeting September 12, 2017 Fourth Quarter 2016-17 - - PowerPoint PPT Presentation

Merced Community College Board of Trustees Meeting September 12, 2017

 Fourth Quarter 2016-17 311Q  Final Budget Presentation for 2017-18

Presented by: Joe Allison, CPA

CONTENT

4th Quarter 311Q:

 What changed from the 3rd quarter.  How did we close out the year.

Final Budget 2017-18:

 Enrollment impact on the budget.  Enrollment Efforts  Historical Comparisons  Final Budget Revenue Assumptions and Projections.  Final Budget Expenditure Assumptions and Projections.  Final budget 2016-17 to Final Budget 2017-18.  Reserve/Fund Balance: Assumptions and Projections .

Questions?

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What Changed from the 3rd Quarter vs 4th Quarter 311Q

 Closed the books with no deficit factor.  Savings in operating expenses but also reduction in revenue.  Net loss was lower than estimated:

• $(238,526) 2016-2017 Adopted Budget estimate.
• $(352,446) Estimated for the Tentative Budget.
• $(278,970) Final Year-End Close Actual.

 Fund Balance $4,537,647 or 7.55% of expenditures.

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3rd Quarter versus 4th Quarter Comparison

2016-17 Ending Balance Based on 4th Quarter - FUND 110 ONLY Projected Actual Adopted 3rd Qtr 4th Qtr Variance Budget TOTAL REVENUE 60,158,555 59,820,580 (337,975) 59,245,243 TOTAL EXPENDITURES 60,511,001 60,099,550 (411,451) 59,483,769 NET INCOME (LOSS) (352,446) (278,970) 73,476 (238,526) BEGINNING FUND BAL 4,816,617 4,816,617 4,816,617 ENDING FUND BAL 4,464,171 4,537,647 4,578,091 % OF EXPENDITURES 7.38% 7.55% 7.70%

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2017-18 FINAL BUDGET PRESENTATION

Enrollment Impact on the Budget

 The College did not make the FTES cap of 9,754 due to several factors including:

• Changes in legislation related to course repeatability, new registration requirements.
• Economic changes continue to decrease unemployment.

 The College received a full year of funding in the year of decline 2015-16 and will receive 3

additional years of stability funding based on actual FTES.

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Enrollment Efforts

 Activity from Student Services to mitigate the impacts:

• Increased outreach to service area high schools.
• Transitional high school counseling program.
• 15 To Finish Initiative.
• Increased Support Services to increase retention and persistence.
• Transition to new Student Planning Tool.

 Activity from Office of Instruction to increase enrollment:

• Utilized the new enrollment tool that provides a more sophisticated way to monitor and

manage enrollment trends.

• Improve strategies in classroom scheduling.
• Expand waitlists to better monitor demand.
• Expand the development of AB288 courses at the high schools.
• Expand off site offerings of ESL .
• Promote and expand the educational programs at Valley State Prison.

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Ten-Year Comparison (millions)

10 20 30 40 50 60 70 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Revenue Expenditures 8

Budget to Actual Net Income (Loss) Comparisons

• 7000000
• 6000000
• 5000000
• 4000000
• 3000000
• 2000000
• 1000000

1000000 2000000 3000000 4000000 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 Budget Actual

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Fund Balance Comparison

2 4 6 8 10 12 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

Fund balance by year

Fund Balance (millions) 10

Final Budget Revenue Assumptions

 Includes Cost of Living Adjustment (COLA) of 1.56%, or $847,031.  No deficit factor – budget language indicates that unused statewide growth funding will be used

to backfill any apportionment deficit.

 Based on the state’s Growth Funding Allocation model, the District’s maximum growth potential is

0.5%, or $227,124. The District is still working to restore FTES to its base level, therefore, the Final Budget does not include any growth revenue.

 General Operating FTES base increase of $1,536,268.  Education Protection Account (EPA) funding at $7,456,201.

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Final Budget Revenue Assumptions

Below is a breakdown of our Total Computation Revenue, based on the Chancellor’s Office Advanced Principal Apportionment plus District FTES and revenue projections. The categories below comprise our state general apportionment funding: $ 7.5M EPA $ 12.5M Property Taxes and Redevelopment Pass-Through $ 2.5M Enrollment Fees $ 0.5M Full-Time Faculty Hiring $ 0.0M Revenue Shortfall $ 0.0M Apportionment Growth $ 33.7M State Apportionment $ 56.7M Total General Fund Computational Revenue

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Final Budget Revenue Projections

2017-18 2015-16 2016-17 Final Actual Actual Budget Revenue: 8100 Federal $ 29,766 $ 26,600 $ 30,000 8600 State 43,586,294 42,438,481 43,903,833 8800 Local 14,977,734 16,241,399 17,086,998 8900 Transfers-In 166,189 1,114,100 485,000 Total $ 58,759,983 $59,820,580 $ 61,505,831

Final Budget Expenditure Assumptions

 Full-Time (FT) Faculty Obligation for Fall 2017 of 177.7 FTEF. The Final Budget includes 189 filled

faculty positions plus one current recruitment (Art Professor). Included in the 189 positions are 7 Less-Than-Full-Time contract faculty.

 Adjustments for step/column and longevity increases: $618,172.  The general fund cost for faculty reassigned time is estimated at approximately $900K ($700K for

FT faculty and $200K for adjunct backfill).

 SISC medical benefit rates for active employees increased by 3.43%, or $179,972.  Although SISC medical benefit rates for retirees increased, there were fewer numbers of covered

• retirees. As a result, it is estimated that there will be a net decrease in retiree benefit costs of

approximately $12K.

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Final Budget Expenditure Assumptions cont.

 The District’s STRS contribution rate increased from 12.58% to 14.43% ($368,553).  The District’s PERS contribution rate increased from 13.888% to 15.531% ($152,169)  Includes $50K for various stipend payments (Program Review, Performing Arts, etc.).  Planned Expenditures and Resource Allocation items have not been finalized and no cost

estimates have been included.

 All long-term and short-term liabilities are included. 15

Final Budget Expenditure Assumptions cont.

 Maintenance Agreement costs will increase by $23,747.  SERP payments of $296,722 and $257,397 are included.  Includes Lifecycle Technology funding of $100K.  Vacation payouts to management and classified employees who separate from the District are

included at $95K.

 Projects salary savings of $400K and benefit savings of $600K.  Provides $100K in contingency funding for unanticipated costs that arise during the fiscal year.  SSSP match remains at 1.3 to 1, estimated cost of $2.3M. 16

Final Budget Expenditure Assumptions cont.

 2017-18 budgeted expenditures are projected to be approximately $1.2 million higher than

2016-17 actual expenditures.

 The primary causes for the increase include the following:

• Increased benefit costs (STRS, PERS & SISC rate increases).
• Step & Column.
• Budget savings from prior year are re-budgeted .

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Final Budget Expenditure Projections

2017-18 2015-16 2016-17 Final Actual Actual Budget Expenditures: 1000 Faculty Salaries $20,671,390 $21,047,513 $20,914,525 2000 Classified Salaries 9,146,910 10,012,751 9,958,863 3000 Benefits 16,665,622 17,640,297 18,151,817 4000 Supplies 531,392 559,240 629,974 5000 Services 5,895,450 5,557,611 6,461,270 6000 Capital Outlay 448,366 477,103 287,062 7000 Transfers-Out 4,955,660 4,805,035 4,852,046 Total Expenditures $58,314,790 $60,099,550 $61,255,557

Final Budget Expenditure Projections cont.

2017-18 2015-16 2016-17 Final Actual Actual Budget Net Income(Loss) $ 445,193 $ (278,970) $ 250,274 Beginning Balance $4,371,424 $4,816,617 $4,537,647 Ending Fund Balance $4,816,617 $4,537,647 $4,787,921

Final Budget Reserve Assumptions

 Provides a Board Reserve of 6% of anticipated expenditures $3,675,333.  2016-17 ending balance: $4,537,647 or 7.55%.  2017-18 ending balance estimated at $4,787,921 or 7.82%.  Also included in the Fund Balance Reserves are carryover amounts for encumbrances and

instructional material fees.

 Budget augmentation requests totaled $119,806. No amount for these requests has been

included in the Final Budget or specifically set aside in reserves.

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2017-18 Final Budget vs 2016-17 Adopted Budget

2016-17 2017-18 2017-18 Adopted Final Final Budget Assumptions Budget Total Revenue 59,245,243 2,260,588 61,505,831 Total Expenditures 59,483,769 1,771,788 61,255,557 NET INCOME (LOSS) (238,526) 250,274 BEGINNING FUND BAL 4,816,617 4,537,647 ENDING FUND BAL 4,578,091 4,787,921 % OF EXPENDITURES 7.70% 7.82%

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Major Components of Projected 2017-18 Ending Balance

Reserve for Contingency @ 6.0% $ 3,675,333 Set Aside for Encumbrances 53,527 Set Aside for Materials Carryover 94,371 Set Aside for Budget Augmentation 0 One-time Expenditures 964,690 Projected 2017-18 Ending Balance $ 4,787,921

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