governing board study session fiscal year 2018 …...• 11/16/17: discussion with student...
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GOVERNING BOARD STUDY SESSION
FISCAL YEAR 2018-2019 BUDGET OUTLOOK
DECEMBER 4, 2017
PRESENTED BY: DR. DAVID BEA
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BOARD APPROVED STRATEGIC PRIORITIES
• 2017-2021 College Strategic Plan
• Educational Master Plan
• Facilities Master Plan
• Diversity, Equity, and Inclusion Plan
• Strategic Enrollment Management
Plan
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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
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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
of 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
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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
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FY18 GENERAL AND ACADEMIC FUND POSITIONS (AS OF NOVEMBER 13, 2017)
Position Type Closed Vacant Filled Grand Total
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 Total 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
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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
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2004-17 FINANCIAL INDICATORS DASHBOARD
Key
Color
Level of
Concern Direction
Trend
Indicator
Red Significant Increase
Orange Moderate Maintenance
Green Minimal to No Decrease
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FY 2002-2017 PCC FTSE
19,027
20,611 20,425 20,393 19,993 19,807 20,22220,889
22,02122,907
22,028
19,514
17,963
16,45815,382
14,779
19,027
20,611 20,425 20,393 19,993 19,807 20,22220,889
22,02122,907
22,028
19,514
17,963
16,45815,382
14,779
19,027
20,611 20,425 20,393 19,993 19,807 20,22220,889
22,02122,907
22,028
19,514
17,963
16,45815,382
14,779
19,027
20,611 20,425 20,393 19,993 19,807 20,22220,889
22,02122,907
22,028
19,514
17,963
16,45815,382
14,779
0
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
FT
SE
Fiscal Year
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PROJECTION: ACTUAL FTSE VS EXPENDITURE LIMITATION FTSE
0
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
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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
Lim
it (
in $
1,0
00s)
Fiscal Year
Expenditure Limit Actual Expenses Typical Increases No Tuition Increases FY18 Plan
$10 mil $24 mil
We are Here
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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
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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
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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
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SUMMARY OF THE REVENUE BONDS PROCESS
Month Activity
October 2017 • Applied Technology 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 Technology 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
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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
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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
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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 Year
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;
Tuition and Fees; Capital Budget Project List; Salaries and Wages; Budget
Priorities; and Proposed Primary Tax Rate and Levy
April 2018 Governing Board Meeting to review the proposed Fiscal Year 2018-2019 budget and approve
the Publication of Proposed Budget and, if required, Truth in Taxation Notification
May 2018 Public Hearing and Special Board Meeting to set tax levies and rates and adopt the Fiscal Year
2018-2019 budget
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BUDGET MODEL
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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
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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?
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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