SUNY Broome Recent Budget and Finance Developments December 2015 and January 2016

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Gwendoline Cooper
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1 2.2 SUNY Broome Recent Budget and Finance Developments December 2015 and January 2016 SUNY Board of Trustees Passes Resolutions to Increase Minimum Wage to $15/Hour For Non-Union Hourly Paid Employees This week the SUNY Board of Trustees passed two resolutions on the minimum wage. The first is for state-operated campuses, and it approved a gradual increase in the wage for nonunion, hourly paid employees to $15.00 per hour by July 1, 2021 with an accelerated schedule by December 31, for those state-operated campuses within NYC. The second resolution that passed calls for the Boards of Trustees of the 30 community colleges and of Alfred Ceramics and Cornell University to do the same. The Governor did not include funding in his proposed budget for any increase in the minimum wage for nonunion employees. The cost to the operating budget would be $117K maximum per year if bargaining unit employees are included. Non-union student workers cost would be $260K ($43K/year for 6 years). ESPA bargaining unit employees who earn less than $15/hour would be $446K ($74K/year) less negotiated increases (if 2%, it would cut this number in half to $37K a year). Also Grant cost (non-union student workers) would be $112K ($19K/year for 6 years). Governor Cuomo s Recommended Budget Includes no Increase in Basic Aid Governor Cuomo released his recommended budget yesterday. It did not include any increase in basic state aid per student. The recommendation for no increase is typical, with funds historically being added by the Senate and Assembly. In addition, the Governor s recommended budget eliminated GAP funding, and child care funds have been greatly reduced. 25 of the 30 NYS community colleges will experience state aid reductions if the budget is approved at this level due to enrollment declines. SUNY Broome s state aid will increase by an estimated $368k the largest NYS community college increase Budget Development Underway Budget Scenarios to be Explored in Coming Months The budget development process has been underway since mid-december, with department s putting together their detailed proposals, which will be emerging in the coming weeks and will be prioritized by the deans and the executive team. As priorities emerge, budget scenarios modeling a variety of enrollment, state aid, tuition, and spending levels will be developed and presented for discussion at the February, March, and April Board of Trustees meetings. At this month s meeting, we will be discussing the level of detail Board members desire be presented along with the budget scenarios.

2 SUNY Broome Recent Budget and Finance Developments December 2015 and January 2016 Page 1A Spring 16 Enrollment Decline Improving 3.9% decline compared with last spring, steadily improving from 9.4% decline in early weeks of registration At this time two weeks before the start of the spring semester student enrollment is down by 3.9% compared to last year at this time. This is a steadily improving position compared with the early weeks of registration, when it was down 9.4%. With two weeks of registration remaining, and upcoming spring Fast Forward enrollments; there is still opportunity for growth. The Fast Forward program for the fall semester was key to sustaining near flat enrollment and may have a similar impact for the spring semester. Spring Fast Forward enrollments will be finalized by mid-march. For now it has been assumed that our spring revenue and (flat) enrollment targets will be met. They will be updated in March once actual enrollments and revenues are known. Due to growth in out-of-state and other NYS county enrollments, additional revenues are available to offset a 3.9% enrollment decline if it is sustained. Winter 16 Enrollment Grew 19.2% Our winter term enrollments are continuing to see growth year after year. Currently we are up 13 FTEs for the winter term. Fund Balance Watch The latest forecast provides an ending fund balance of $4.5M, or 9.1% of the current net operating budget. SUNY Broome has been able to increase our fund balance by careful management of current expenditures, health insurance savings, and favorable retirement system rates. SUNY Broome s fund balance forecast suggests that we are achieving our goal of 10%. External Audit Wrapping Up Our external audit is wrapping up, and our auditors will report at the February BOT meeting. Tax Form Security Improved This year we will be issuing all tax forms using pressure sealed forms rather than window envelopes. This addresses the concern of being able to pull on the window envelope enough to see information. Developed by R, Losinger, VPAFA; J. Tillotson, Associate VP and Controller; and L. Allen, Budget and Institutional Effectiveness Specialist, January 13, 2016

3 operating expenses Budget, YTD commitments, and forecast on January 13, 2016 (37% budget year) page 2 Current budget * YTD commitments Uncommitted Annual cost forecast Total % budget Total (More) or less % budget Paid Encumbered Committed Committed cost than forecast Discussion (paid & enc) forecast budget PERSONNEL: Full-time $21,433,000 $6,832,000 12,785,000 $19,617, % $1,816,000 $21,236,000 $197, % Temp help - Non Instructional 2,108, ,000 1,099,000 1,982, % 126,000 2,108, % Temp help - Instructional 6,065,000 2,919,000 8,000 2,927, % 3,138,000 6,065, % Student assistants 271,000 94, , , % 32, , % Overtime 126,000 53,000-53, % 73, , % Retirement and separation incentives, and 1x lump sums 230, , , % 97, , % TOTAL PERSONNEL $30,233,000 $10,914,000 14,037,000 $24,951, % $5,282,000 $30,036,000 $197, % FT forecast based upon known vacancies and estimated hires; assumes salary negotiations will be settled at budgeted amount FRINGE BENEFITS: Health insurance - employees $ $5,154,000 $1,580,000 $1,580, % 3,574,000 $4,824,000 $330, % Health insurance - retirees 3,255, ,000 2,589,000 3,114, % 141,000 3,150, , % Retirement - ORP 1,371, , , % 928,000 1,348,000 23, % Retirement - NYS ERS 1,702, , , % 882,000 1,560, , % Retirement - NYS TRS 1,053, , , % 723, , , % FICA and medicare 2,280, , , % 1,500,000 2,215,000 65, % Workers compensation 286,000 99,000 99, % 187, , % Dental 219,000 75,000 54, , % 90, ,000 2, % Tuition reimbursement 200, , , % 99, ,000 4, % Life insurance 8,000 2,000 2, % 6,000 6,000 2, % Unemployment 40,000 5,000 35,000 40, % - 40, % Disability 43,000 12,000 12, % 31,000 38,000 5, % Other compensation 32,000 23,000 23,000 9,000 32,000 - TOTAL FRINGE BENEFITS $15,643,000 $4,795,000 2,678,000 $7,473, % $8,170,000 $14,730,000 $913, % EQUIPMENT 366,000 32,000 92, , % 242, ,000 (189,000) 151.5% CONTRACTUAL EXPENSES 8,052,000 2,506,000 2,728,000 5,234, % 2,818,000 8,010,000 42, % TOTAL EXPENDITURES $ $54,294,000 $18,247,000 19,535,000 $37,782, % $16,512,000 $53,331,000 $963, % Health savings forecast due to no rate increase 2015 (5% ERS and TRS favorable forecast resulted from reduced rates Vacancy savings Guild retirement payouts are deposited into tax deferred accounts, which have been determined to be fringe benefits Contractual expense & Equipment forecast assumes 3% will not be spent, but that the additional $400k approved to be shifted here by BOT for small facilities renovation projects is spent (half in equipment, half in contractual) * reflects budget transfers and includes prior year-end encumbrances carried over prepared by Larry Allen Favorable expense forecast - spending is anticipated < budget Being taken to fund balance (per BOT discussions) to build it back up towards 10% of budget, mid-range of 5% - 15% budget recommended by SUNY and GASB

4 page operating revenues Budget, YTD actuals, and forecast on January 13, 2016 (37% budget year) Budget Actuals YTD Annual forecast % budget More or (less) % budget $ achieved $ than budget achieved STUDENT ENROLLMENT FTE 5,134 3, % 5, % REVENUES: Student tuition $22,465,000 $21,080, % $22,465,000 $ % Out-of-state tuition 1,819,000 2,433, % 1,928,000 $109, % Basic state aid will be slightly less than budget State aid due to prior summer enrollment increase being Basic aid 13,333,000 3,333, % 13,281,000 $(52,000) 99.6% Rental of physical space 245,000 57, % 229,000 (16,000) 93.5% SUNY approved rental aid % less than budget Performance based (job linkage) 110, ,000 6,000 due to increased rentals across NYSCCs Total state aid $13,688,000 $3,390, % $13,626,000 $(62,000) 99.5% Flat enrollment budgeted fall and spring, actuals slightly less than flat: Fall enrollment -0.2%; Winterim 38% > last year; spring enrollment forecast is flat; summer enrollment forecast is flat Tuition forecast reflects current fall & winter revenues. Spring and summer at flat Broome county support 7,118, % 7,118, % Charges to other NY counties 4,145,000 2,027, % 4,431, , % Miscellaneous revenues 4,763,000 2,854, % 4,763, % Chargeback revenue forecast > budget due to 8.3% fall increase in other county enrollments miscellaneous revenue forecast assumed = budget at this point Total revenues $53,998,000 $31,784, % $54,331,000 $333, % Encumbrance fund balance reserve 145, ,000 Fund balance appropriated 151,000 n/a (1,145,000) It is forecast that fund balance will increase (intentionally) per discussion with BOT to move towards restoring it to middle of 5% to 15% of budget range recommended by SUNY and GASB Total revenues and fund balance $54,294,000 $31,784,000 $53,331,000

5 Undesignated fund balance forecast (pending discussions and goal setting with BOT) on January 13, 2016 (37% budget year) page 4 Fund balance last year ( ) = 7.3 % of net operating budget $3,456,000 Reserve for encumbrances last year 145,000 + forecast current year operating revenues 54,331,000 - forecast current year operating expenses and encumbrances (53,331,000) Forecast fund balance end of this budget year ( ) = ~ 9% of net operating budget $4,601,000 Less: Fund balance budgeted for use next fiscal year (16/17) tbd ~ SUNY and GASB recommend that undesignated fund balance be maintained at a level = 5% to 15% of net operating budget Fund balance forecast risks and opportunities things that will alter the forecast if they occur What And what will happen $ risk $ opportunity Tuition - spring If spring (flat) enrollment target is not met (Fall was met); each % = $120k -6% risk / +2% opportunity estimated (720,000) 240,000 Supplies and contractual expenses If they vary from current forecast (100,000) 300,000 Student write-offs If impact of steps taken to improve student bad debt is felt sooner than anticipated - 200,000 Negotiated salary increases If they differ from what is budgeted tbd tbd Miscellaneous revenues If they differ from current forecast (200,000) 200,000 Temporary instruction The actual need for adjunct and overload will be known as year unfolds and will be updated at end of spring semester (200,000) 200,000 Chargeback to other NYS county revenues If Spring 2015 enrollments from other counties also increase by 8.3% like Fall ,000 Tuition - summer If summer enrollment target isn't reached risk at - 8% opportunity + 8%, Each % =11k revenues (88,000) 88,000 If winter enrollment > +49 FTE currently estimated (38%) enrollment growth; each FTE = $4k, opportunity estimated at additional 18 Tuition - winter FTE 72,000 "The unknowns" if they happen?? Total fund balance forecast risks and opportunities $(1,308,000) $1,586,000

Phased Retirement Policy

Phased Retirement Policy (Rev. 8/2/16, 2/7/14, Original 7/10/07) Purpose: SUNY Cortland has developed a voluntary Phased Retirement Program designed to give eligible members of the academic and professional staff an opportunity