GOVERNING BOARD STUDY SESSION FISCAL YEAR 2018-2019 BUDGET OUTLOOK - - PowerPoint PPT Presentation

GOVERNING BOARD STUDY SESSION FISCAL YEAR 2018-2019 BUDGET OUTLOOK

DECEMBER 4, 2017 PRESENTED BY: DR. DAVID BEA

BOARD APPROVED STRATEGIC PRIORITIES

• 2017-2021 College Strategic Plan
• Educational Master Plan
• Facilities Master Plan
• Diversity, Equity, and Inclusion Plan
• Strategic Enrollment Management

Plan

STUDY SESSION AGENDA

• FY18 Budget Recap and Status
• FY19 Budget Development
• Financial Indicators
• Enrollment Update
• Revenue and Expenditures Projections
• Expenditure Limitation Projections
• Calendar and Communication Plan
• Governing Board/Finance and Audit Committee

Discussion

• Direction on Budgetary Priorities

SUMMARY OF FY18 BUDGET HIGHLIGHTS TOTAL RESOURCES: $246.1MIL GENERAL FUND: $153.1MIL

• Revenues
• Tuition: increase of $3.00

per credit hour

• Property Taxes:
• Primary Tax Rate: increase
• f 3.0% (to levy maximum)
• Secondary Tax Rate: $0.00
• $0 State Aid for

Operations or STEM

• Expenditures
• Salaries/Wages: increase of 2.5%

for FY18

• Debt Service: allocation of $3.6M

for ~$45.0M in revenue bonds

• Reallocated in FY18 for Downtown

Campus area property purchases

• Enrollment/Marketing Initiative:

allocation of $500K

• Class/Comp Study: delayed
• Positions: elimination of 100

vacant staff FTE

Coconino Mohave Pima Maricopa Pinal Graham Yavapai Yuma/La Paz Cochise Navajo FY 2018 Fees Per Unit $0.00 $7.00 $5.50 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 FY 2018 Tuition Per Unit $105.00 $81.00 $81.50 $86.00 $86.00 $85.00 $83.00 $82.00 $82.00 $72.00 $105.00 $88.00 $87.00 $86.00 $86.00 $85.00 $83.00 $82.00 $82.00 $72.00 $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 $110.00 $120.00

IN-STATE TUITION AND MANDATORY FEES PER CREDIT HOUR: AZ COMMUNITY COLLEGES, FY18

FY18 GENERAL AND ACADEMIC FUND POSITIONS

(AS OF NOVEMBER 13, 2017)

Position T ype Closed Vacant Filled Grand T

• tal

Administrators 6.0 42.0 48.0 Faculty 45.0 298.0 343.0 Staff 39.4 103.7 744.5 887.6 Campus Total 11.0 53.5 331.9 396.4 District 28.4 50.2 412.6 491.2 Chancellor 3.6 7.0 10.6 External Relations 7.8 31.0 38.8 Finance/IT 8.0 9.0 120.0 137.0 Facilities/Police 15.4 15.7 168.0 199.1 HR 2.0 7.0 13.0 22.0 Academic/Student Affairs 3.0 7.0 73.6 83.6 Grand T

• tal

39.4 154.7 1,084.5 1,278.6

• Staff Positions
• On target to reduce 100

vacant FTE by start of FY19

• Reduction of $6.0M in

salaries

PROPERTY TAX RATES: AZ COMMUNITY COLLEGES, FY18

(RATES PER $100 NET ASSESSED VALUATION)

Graham Yuma/La Paz Pinal Cochise Yavapai Navajo Maricopa Pima Mohave Coconino Secondary Tax Rate $- $0.3632 $0.3099 $- $0.2001 $- $0.2140 $- $- $0.1326 Primary Tax Rate $3.1383 $2.2578 $2.2330 $2.3735 $1.7827 $1.8067 $1.1956 $1.3890 $1.3430 $0.4816 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50

$3.1383 $2.6210 $2.5429 $2.3735 $1.9828 $1.8067 $1.4096 $1.3890 $1.3430 $0.6142

2004-17 FINANCIAL INDICATORS DASHBOARD

Key

Color Level of Concern Direction Trend Indicator Red Significant Increase Orange Moderate Maintenance Green Minimal to No Decrease

FY 2002-2017 PCC FTSE

19,027 20,611 20,425 20,393 19,993 19,807 20,222 20,889 22,021 22,907 22,028 19,514 17,963 16,458 15,382 14,779 19,027 20,611 20,425 20,393 19,993 19,807 20,222 20,889 22,021 22,907 22,028 19,514 17,963 16,458 15,382 14,779 19,027 20,611 20,425 20,393 19,993 19,807 20,222 20,889 22,021 22,907 22,028 19,514 17,963 16,458 15,382 14,779 19,027 20,611 20,425 20,393 19,993 19,807 20,222 20,889 22,021 22,907 22,028 19,514 17,963 16,458 15,382 14,779

5,000 10,000 15,000 20,000 25,000 30,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

FTSE Fiscal Year

PROJECTION: ACTUAL FTSE VS EXPENDITURE LIMITATION FTSE

5,000 10,000 15,000 20,000 25,000 30,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Audited FTSE CTE Weight EL FTSE

EXPENDITURE LIMITATION PROJECTIONS

60,000 70,000 80,000 90,000 100,000 110,000 120,000 130,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Expenditure Limit (in $1,000s) Fiscal Year

Expenditure Limit Actual Expenses Typical Increases No Tuition Increases FY18 Plan

$10 mil $24 mil We are Here

FY19 REVENUE ESTIMATES

• Tuition & Fees
• Fall 2017 tuition is up by $600K, principally due to tuition increase
• Tuition Revenue based on enrollment is estimated to be flat for FY 2019 (will plan

contingency for growth)

• Increase of $1.00 per credit to In-state/Resident tuition rate = $450K
• Property Tax
• 3rd lowest Property Tax rate among AZ Community Colleges
• Pima County Property Valuation Growth
• Estimated to be 2.4% ($1.57M)
• 2% Property Tax Levy increase = $2.3M

FY19 REVENUE ESTIMATES (CONTINUED)

• Other revenue sources
• State Appropriations
• Budgeted for $0 increase
• Contingency if STEM or other funding is appropriated
• Bookstore guaranteed annual minimum commission decreased from $1.25M to $0.7M
• Santa Cruz County Provisional Community College District
• Potential new revenue streams
• Passport services
• Space leases

FY19 EXPENDITURE ESTIMATES

• Contractual Obligations, +$250K
• Systems Maintenance and Licenses
• Utilities
• Debt Service
• Other Contractual Services
• Strategic Priorities, +$2.0M
• Capital
• Operations
• Personnel expenses, TBD
• Salaries and Wages
• Benefits

SUMMARY OF THE REVENUE BONDS PROCESS

Month Activity October 2017

• Applied T

echnology and Allied Health Summits

• RFP for Financial Advisor issued

November 2017

• First Responder EMT/PSESI Summit
• RFP for Financial Advisor closed

December 2017

• Select Financial Advisor

January 2018

• Work with Financial Advisor to select Bond Counsel and Underwriter
• Begin to Compile information for Official Statement

February 2018

• Computer T

echnology Summit March 2018

• Fine Arts Summit
• Meet with key legislators and other constituents about projects

April 2018

• Board Approval of Authorizing Resolution for Revenue Bonds
• Preliminary Official Statement and Legal Documents to Rating Agency
• Conference call with ratings agency

May 2018

• Joint Committee on Capital Review (JCCR) of bond financed projects
• Bond ratings and bond insurance bids received

June 2018

• Pricing of bonds
• Draft closing documents

July 2018

• Closing and delivery of the bonds

FY19 EXPENDITURE PRIORITIES: STRATEGIC PRIORITIES

• EMP/FMP: Centers of Excellence
• Diversity Initiatives
• PCC Foundation
• Classroom Funding Model
• Faculty Leadership
• Adjunct Faculty Funding Allocation
• Scheduling Software
• Financial Aid

Verification Automation

• Catalog and Curriculum Management System

FY19 EXPENDITURE PRIORITIES: PERSONNEL

• Employee Benefits:
• No cost increase expected for medical/pharmacy
• Minimal changes for other benefits
• Salary Options:
• Remove 2.5% increase: $2.3M reduction in wages
• Continue 2.5% increase (temporary for FY19 or permanent)
• Additional increase: approximately $1.0M per 1.0% increase in regular staff,

faculty, and administrator salaries and wages

FY19 BUDGET DEVELOPMENT CALENDAR

Activity December 2017 Governing Board Study Session to discuss the budget outlook and acquire Board direction on potential scenarios and/or key parameters February 2018 Governing Board Meeting to review and approve course fees for 2018-2019 Academic Y ear Late February/ Early March 2018 Governing Board Study Session to review the budget model and scenarios based on Board feedback at the December Study Session March 2018 Governing Board Meeting to review and potentially approve: Employee Benefits; T uition and Fees; Capital Budget Project List; Salaries and Wages; Budget Priorities; and Proposed Primary T ax Rate and Levy April 2018 Governing Board Meeting to review the proposed Fiscal Y ear 2018-2019 budget and approve the Publication of Proposed Budget and, if required, T ruth in T axation Notification May 2018 Public Hearing and Special Board Meeting to set tax levies and rates and adopt the Fiscal Y ear 2018-2019 budget

BUDGET MODEL

BUDGET COMMUNICATION PLAN

• 11/03/17: Budget Development calendar reviewed with the Finance and Audit Committee
• 11/07/17: Discussion with the ELT regarding the FY19 budget outlook
• 11/08/17: Budget Development calendar submitted to the Governing Board
• 11/16/17: Discussion with Student Leadership regarding the FY19 budget outlook
• 12/04/17: Governing Board Study Session, held in conjunction with the Finance and Audit Committee,

to review the FY19 budget outlook and discuss parameters for the February/March Study Session

• December: Numbers newsletter to PimaAll in advance of budget presentations district-wide
• January/February: Budget presentations to faculty, staff, administrators, students, and community

members

• Ongoing: Collaboration with the Finance and Audit Committee

DIRECTIVES FROM THE BOARD FOR FY19 BUDGET

What parameters should be addressed in the budget model at the next Board Study Session?

• Revenues
• Tuition
• Property Taxes
• Expenditures
• Salaries
• Position reductions
• EL Reduction ($0-10M)
• Additional cuts to balance the

budget

• Continue enrollment/marketing

initiative?

• Class/Comp Study?

RESOURCES

• February 2017 Expenditure Limitation presentation to the

Governing Board

• June 2017 Adoption of Tax Levies and Rates and Budget for FY18
• FY18 General Fund Budget Detail
• November 2017 Report to the Governing Board – Proposed

FY19 Budget Calendar

• November 2017 Preliminary Budget Presentation to Student

Leadership