Fiscal Year 2017 Proposed Budget Board of Governors Meeting May - - PowerPoint PPT Presentation

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Fiscal Year 2017 Proposed Budget

Board of Governor’s Meeting

May 11, 2016 Presented by: David Bea, Ph.D.

Finance and Administration www.pima.edu

Fiscal Year 2017 Budget Calendar

December 2015

• Fiscal Year 2017 Budget Planning Presentation was made to the Board of Governors during Study Session.

February 2016

• Fiscal Year 2017 Budget Planning and Outlook presentation was made to the Board of Governors
• Fiscal Year 2017 Budget Outlook presentations were made at numerous College locations
• Fiscal Year 2017 Budget Planning and Tuition presentation was made to the Board of Governors during

Study Session

• Property tax levy letter was received from Pima County

March 2016

• Fiscal Year 2017 Budget Outlook presentations were made at numerous College locations
• Fiscal Year 2017 Budget Outlook presentation was made to Student Leaders
• Fiscal Year 2017 Budget Outlook and Tuition presentation was made to the Finance and Audit Committee
• Academic Year 2017 tuition and fees were presented to the Board of Governors and approved
• Employee benefits contracts for fiscal year 2017 were presented to the Board of Governors and approved
• SB 1322 was signed into law by Governor Ducey

April 2016

• Fiscal Year 2017 Budget Outlook and Revenue presentation was made to the Finance and Audit Committee
• Fiscal year 2017 Capital Budget and Projects were presented to the Board of Governors and approved

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Fiscal Year 2017 Budget Calendar

(continued)

May 2016

• Fiscal Year 2017 Budget Overview was presented to the Executive Leadership Team
• Proposed fiscal year 2017 preliminary budget, tax rate, and tax levy with a request for approval to allow

publication according to statutory guidelines are presented to the Board of Governors

• Proposed fiscal year 2017 budget and 'Truth in Taxation Notice of Tax Increase' (if necessary) are

published and a press release is distributed as required by Arizona Revised Statutes

• Proposed fiscal year 2017 budget and 'Truth in Taxation Notice of Tax Increase' (if necessary) are

published as required for a second time as required by Arizona Revised Statutes June 2016

• A Public Hearing is scheduled on the proposed fiscal year 2017 budget, property tax rates and levies
• A Special Meeting is scheduled to vote on the budget and property tax levies and rates and by a roll call

vote to levy the proposed property tax and vote to approve the proposed budget

• The documents are transmitted to the Property Tax Oversight Commission as required by Arizona

Revised Statutes July 2016

• On July 1, 2016 the fiscal year 2017 budget is implemented for the new fiscal year

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Budget Communications

• Budget Outlook presentations were made to:

– Student Leaders – Finance and Audit Committee – Executive Leadership Team – Board of Governors – Faculty and Staff at 9 different locations

• Created survey for continuous improvement and

feedback

– All presentations available on Budget webpage

• https://www.pima.edu/administrative-services/finance/budget/index.html
• Strategic Planning Committee, Budget

Subcommittee

• Numbers! – PCC’s Finance Newsletter

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1. Reaffirm HLC accreditation and fully commit to the HLC guiding values

• 2. Improve access and student success
• 3. Foster partnerships to strengthen educational
• pportunities in response to community needs
• 4. Improve responsiveness to the needs of business

community and economic development opportunities

• 5. Increase diversity, inclusion, and global education
• 6. Develop a culture of organizational learning and

employee development

https://www.pima.edu/about-pima/strategic-plan/docs/strategic-plan-district-wide-2014-17.pdf

PCC Strategic Plan 2014-2017

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Strategic Planning Committee, Budget Subcommittee - Criteria for Budgetary Decisions

• Resources will be allocated to ensure the success of the College’s priorities

as outlined in our Missions, Goals, and Strategic Plans.

• All regulatory and compliance requirements will continue to be met and

funded.

• All programs and services will be evaluated in terms of their benefits, costs,

relevancy, and impact to our students, and external community, including businesses and transfer institutions.

– Underperforming areas, once identified, should be modified or eliminated. – As new needs arise, funds will be needed for new programs and services.

• Human resources should be optimally assigned throughout the district.

– In-house talent, retraining, and cross training may be considered before external hiring occurs. – Unit functionality and efficiency will be promoted, meaning that employee assignments correspond to real needs, student enrollment, and organizational demands. – All services need not be offered at all locations.

• Physical assets will be optimally utilized throughout the district.
• Return on investment, process efficiency, and income-generating initiatives

need to be explored in order to continuously improve and adapt.

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Major Factors Impacting Budget

• No State Appropriations or

State Aid for Capital equipment

• Continued Enrollment Declines
• Expenditure Limitation
• Ongoing College Reorganization
• Facility intensive structure

throughout County

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Expenditure Limitation (EL) Cost Reduction Strategies

• Reorganization/Reductions

– Campus/Department Consolidation – Hiring / Recruitment Reviews and position eliminations – Budgeting for expected faculty positions

• Minimizing Capital Budget Expenses
• Lease purchase equipment vs. purchase
• Funding for ongoing and future capital needs

– Educational and Facilities Master Plans – Program innovation – Resource reallocation/consolidation $

$

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25 50 75 100 125 150 175 Sep 2015 Oct 2015 Nov 2015 Dec 2015 Jan 2016 Feb 2016 Mar 2016 Apr 2016

Change in Number of Vacant Positions by Month and Personnel Account Code

Non Exempt Exempt Instructional Academic Support Administrators

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Revenues

http://www.jpacaz.org/index.asp

Finance and Administration www.pima.edu

FY 2017 Revenue Summary

Tuition and Fees

– $3.00 increase to in-state resident tuition, from $75.50 per unit to $78.50 per unit

• 2nd lowest in-state resident tuition rate among Arizona community colleges for 2017

– New Life-Long Learner tuition discount – Tuition cap at 15 credit hours – Decreases to out-of-state non-resident tuition rates in order to ensure that we are competitive with peer institutions yet still cover the cost of education

Property Tax

– Primary

• Growth of 1.89%, $2.0 million
• Levy Increase of 1.0%, $1.1 million

– Secondary

• $0.00 – No Debt!

State Based Funding

– $0.00 - Operating State Aid – $0.00 - STEM and Workforce programs State Aid – $100,000 increase in Proposition 301 funding

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FY 2017 AZ Community Colleges In-State Resident Tuition Rates + Fees per unit

Coconino Mohave Maricopa Pinal - Central Pima Yuma/La Paz - AZ Western Graham - Eastern Cochise Yavapai Navajo - Northland Pioneer FY 2017 Fees Per Unit $0.00 $7.00 $0.00 $0.00 $5.50 $0.00 $0.00 $0.00 $0.00 $0.00 FY 2017 Tuition Per Unit $102.00 $81.00 $86.00 $84.00 $78.50 $80.00 $80.00 $79.00 $79.00 $70.00

$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 $110.00

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FY 2016 + 2017 AZ Community Colleges In- State Resident Tuition Rates + Fees per unit

Coconino Mohave Maricopa Pinal - Central Pima Yuma/La Paz - AZ Western Graham - Eastern Cochise Yavapai Navajo - Northland Pioneer FY 2016 Tuition + Fees Per Unit $99.00 $88.00 $84.00 $82.00 $81.00 $78.00 $69.33 $77.00 $75.00 $68.00 FY 2017 Tuition + Fees Per Unit $102.00 $88.00 $86.00 $84.00 $84.00 $80.00 $80.00 $79.00 $79.00 $70.00

$0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00

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Property Tax Levy Detail - Proposed

(per $100 net assessed valuation)

FY 2016 FY 2017 Levy Neutral FY 2017 1% Increase Primary Tax Rate $ 1.3689 $ 1.3597 $ 1.3733

% Change in Tax Rate 2.6%

• 0.7%

0.3%

Secondary Tax Rate $ 0.0000 $ 0.0000 $ 0.0000

% Change in Tax Rate 0.0% 0.0% 0.0%

Combined Primary and Secondary Rates $ 1.3689 $ 1.3597 $ 1.3733

% Change in Tax Rates 2.6%

• 0.7%

0.3%

Difference in Combined Tax Rates $ -0.0092 $ 0.0044

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Primary Property Tax Levy Detail – Proposed

FY 2016 FY 2017 Levy Neutral FY 2017 1% Increase Net Taxable Value Current Year ($100s) $ 76,203,609 $ 78,166,998 $ 78,166,998 Overall Change in Valuation 1.36% 2.58% 2.58% Change from New Property 1.94% 1.89% 1.89% Estimated Primary Tax Rate Authorization (per $100 net assessed valuation) $ 1.3689 $ 1.3597 $ 1.3733 Primary Tax Levy $ 104,315,120 $ 106,283,667 $ 107,346,737 Change from previous fiscal year $ 1,968,547 $ 3,031,617 Truth in Taxation Levy Increase $ 1,063,070

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Residential and Commercial Property Estimated PCC Property Tax Impact

FY 2015 FY 2016 FY 2017 Neutral FY 2017 1% Increase Residential Property Summary Property Value $ 100,000 $ 100,000 $ 100,000 $ 100,000 Assessment Ratio 0.10 0.10 0.10 0.10 Assessed Value 10,000 10,000 10,000 10,000 PCC Combined Taxes Due $ 133.44 $ 136.89 $ 135.97 $ 137.33 % Change

• 0.7%

0.3% Commercial Property Summary Property Value $ 100,000 $ 100,000 $ 100,000 $ 100,000 Assessment Ratio 0.190 0.185 0.180 0.180 Assessed Value 19,000 18,500 18,000 18,000 PCC Combined Taxes Due $ 253.54 $ 253.25 $ 244.75 $ 247.19 % Change

• 3.4%
• 2.4%

*Assumes FCV and Limited Value are identical for both residential and commercial property examples

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PCC Primary, Secondary, and Combined Tax Rates (Fiscal Years 2000-2017)

FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 * FY 2017 Primary Property Tax Rate 1.1626 1.1709 1.1455 1.1530 1.1358 1.1143 1.0930 1.0570 1.0191 0.9787 0.9356 0.9755 1.0846 1.1484 1.2746 1.3344 1.3689 1.3733 Secondary Property Tax Rate 0.2070 0.3865 0.4015 0.3803 0.3526 0.2285 0.2184 0.1945 0.1654 0.1502 0.1414 0.1093 0.0248 0.0257 0.0187 0.0000 0.0000 0.0000 Combined Primary + Secondary Tax Rates 1.3696 1.5574 1.5470 1.5333 1.4884 1.3428 1.3114 1.2515 1.1845 1.1289 1.0770 1.0848 1.1094 1.1741 1.2933 1.3344 1.3689 1.3733

$1.3696 $1.3733 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25 $1.50 $1.75

* proposed

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AZ Community College Proposed Property Tax Rates for FY 2017 (Rates Per $100 Net Assessed Valuation. Proposed combined rates are shown)

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 Graham Pinal Yuma/La Paz Cochise Yavapai Navajo Maricopa Pima Mohave Coconino Primary Tax Rate Secondary Tax Rate

$3.1384

$2.6269 $2.5607 $2.2860 $2.0561 $1.7884 $1.4651 $1.3733 $1.3288 $0.6214

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AZ Community College Primary Property Tax Rates (Fiscal Years 2006-2017)

Average of AZ Community Colleges PCC's Primary Property Tax Rate is below the average for each year, 2006 to present $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 * 2017 Primary Property Tax Rates per $100/Valuation

Cochise Coconino Graham Maricopa Mohave Navajo Pima Pinal Yavapai Yuma Average

* proposed

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Truth in Taxation

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FY 2016-2017 Proposed Budget Revenues $247.8 million (all funds, in $ millions)

Property Tax Revenue $107.3 43% Grants, Contracts, Financial Aid $58.0 23% Tuition & Fees $48.2 20% College Equity $28.8 12% Other Revenue $5.5 2%

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Budgeted Revenue and Fund Balance by Source (all funds, in $ thousands)

$- $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $325,000 FY 2008FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Fund Balance Grants, Contracts & Financial Aid Other Revenue Tuition & Fees Property Taxes State Aid (Operations + Capital)

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FY 2016-2017 General Fund Revenues by Source (in $ millions)

FY16 Proposed FY17 Change Property Tax Levy $ 104.3 $ 107.3 $ 3.0 Tuition and Fees 46.7 40.4

• 6.3

Other Revenue 0.7 0.6

• 0.1

College Equity 0.5 5.6 5.1 Total Resources $ 152.2 $ 153.9 $ 1.7

Property Tax Levy 69.8% Tuition & Fees 26.3% Other Revenue 0.4% College Equity 3.6%

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Budgeted General Fund Revenue Sources as a percent of Total Revenue

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Property Tax 59% 61% 62% 60% 62% 62% 64% 66% 69% 72% Tuition 24% 24% 24% 28% 32% 32% 31% 29% 31% 27% State Aid 15% 13% 13% 11% 5% 5% 5% 4% 0% 0% Other 2% 1% 1% 0% 1% 1% 1% 1% 0% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80%

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Expenditures

http://www.jpacaz.org/index.asp

Finance and Administration www.pima.edu

FY 2017 Budget Expenditure Priorities

• Employee Benefit Costs: +$ 1.0 million
• Contractual Obligations: +$ 1.1 million
• Athletics: +$ 0.5 million
• Depreciation / Capital Project Funding
• Strategic Resource Reallocation

– Enrollment Initiatives – Operational/Position Reductions

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General Fund Expenditures

(in $ millions)

$ 1.7 $ 153.9 $ 152.2

• 0.5

5.2 5.7 4.2 5.5 1.3 0.1 0.5 0.4

• 0.1

27.6 27.7

• 2.0

115.1 117.1 0.3 27.3 27.0 0.1 15.5 15.4

• 0.7

43.3 44.0

• 1.5

22.8 24.3 $ -0.2 $ 6.2 $ 6.4 Change Proposed FY 2017 FY 2016 Total Contingency / Reserves Transfers (net) Capital Operations Subtotal Fringe Other Compensation / Adjunct Faculty Staff-Classified Faculty Administrators

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Designated Fund Budget Detail by Program (in $ millions)

FY 2016 Proposed FY 2017 Change Professional Development $ 0.8 $ 0.8 $ 0.0 Athletics 2.1 2.2 0.1 Course Fees 2.1 1.8

• 0.3

Academic Programs 1.4 1.1

• 0.3

Center for Training & Development 2.9 2.9 0.0 Contract Training 1.0 0.9

• 0.1

Prison Program 0.6 0.6 0.0 Public Safety Institute 0.8 0.8 0.0 Community Education 0.3 0.4 0.1 Other 1.3 1.1

• 0.2

Contingency / Reserves 1.5 1.4

• 0.1

Total $ 14.8 $ 14.0 $ -0.8

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Auxiliary Fund Summary

(in $ millions)

FY 2016 Proposed FY 2017 Change Food Service 0.2 0.2 0.0 Business Relations 0.2 0.2 0.0 Rentals 0.1 0.1 0.0 Transfers 0.8 0.7

• 0.1

Contingency / Reserves and Other 1.4 1.4 0.0 Total $ 2.7 $ 2.6 $- 0.1

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Restricted Fund Summary

(in $ millions)

FY 2016 Proposed FY 2017 Change Student Financial Aid $ 42.3 $ 37.2 $ - 5.1 Workforce Development (Prop 301) 2.7 2.4

• 0.3

Grants Health Profession Opportunity Grant (HPOG) 3.0 3.0 0.0 Adult Education 3.7 3.7 0.0 Title III – Improving graduation rates, particularly STEM 1.2 0.4

• 0.8

Title V – Developing Hispanic Serving Institutions 1.2 1.2 0.0 TRIO (Upward Bound, Student Support Services, Talent Search) 1.9 2.1 0.2 Trade Adjustment Assistance 2.1 0.6

• 1.5

Other 0.9 1.1 0.2 New Grants 4.0 6.6 2.6 Total $ 63.0 $ 58.3 $ - 4.7

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Capital Fund Summary

(in $ millions)

FY 2016 Proposed FY 2017 Budget Year Projects General Capital Projects $ 6.5 $ 1.9 Technology Fee Projects 1.2 0.6 Proposition 301 Projects 2.7 2.8 Grant Funded Projects 0.1 0.0 Contract/Auxiliary Projects 0.1 0.5 Total Budget Year Projects $ 10.6 $ 5.8 Carry Forward Projects 15.3 16.0 Contingency / Reserves 1.0 2.2 Total All Projects $ 26.9 $ 24.0 Less Transfers from Other Funds Proposition 301 Funding

• 2.4
• 2.2

General Fund Transfer

• 0.0
• 2.9

Other Funds Support (including grants)

• 0.1

0.2 Net Budget $ 24.4 $ 19.1

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PCC Budgets Fiscal Years 2013-2017

2013 2014 2015 2016 2017 Budget - All Other Funds $137.4 $122.3 $107.8 $106.5 $94.0 Budget - General Fund $161.5 $161.7 $158.4 $152.2 $153.9 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $ millions $(14.9) $(32.7) $(40.2) $(51.1)

Cumulative Budget Reductions Since FY 2013

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FY 2016-2017 Proposed Budget Summary $ 247.8 million (all funds, in $ millions)

General Fund $153.9 62% Restricted Fund $58.3 23% Capital Fund $19.1 8% Designated Fund $14.0 6% Auxiliary Fund $2.5 1%

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FY 2016-2017 Proposed Budget Expenditures $247.8 million (all funds, in $ millions)

Administrative Personnel $6.4 2% Faculty $23.1 9% Additional Compensation- Faculty $1.4 1% Adjunct Faculty $11.9 5% Classified Staff $54.3 22% Other Compensation $4.9 2% Student Employment $0.5 0% Fringe Benefits $31.5 12%

Communications and Utilities $6.2 3%

Travel $3.1 1% Contractual Services $17.0 7% Supplies and Materials $9.1 4% Current Fixed Charges $2.1 1% Other Expenditures $2.5 1% Student Financial Aid $39.0 16% Capital Equipment $25.0 10% Contingency and Reserves $9.8 4%

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