AGENDA FINANCE SUB-COMMITTEE MEETING OF THE BOARD OF TRUSTEES

Transcription

1 AGENDA FINANCE SUB-COMMITTEE MEETING OF THE BOARD OF TRUSTEES Committee Members Trustee Neeta Sane, Chair Trustee Christopher W. Oliver Dr. Adriana Tamez Alternate Member Trustee Robert Glaser June 24, :30 p.m. HCC Administration Building 3100 Main, 2 nd Floor, Seminar Room B Houston, Texas 77002

2 Strategic Plan Creating Opportunities for Our Shared Future (Approved by the HCC Board of Trustees, June 22, 2012) Mission Houston Community College is an open-admission, public institution of higher education offering a high-quality, affordable education for academic advancement, workforce training, career and economic development, and lifelong learning to prepare individuals in our diverse communities for life and work in a global and technological society. Vision Houston Community College will be the most relevant community college in the country. We will be the opportunity institution for every student we serve essential to our community s success Strategic Initiatives Initiative #1: Initiative #2: Initiative #3: Initiative #4: Initiative #5: Initiative #6: Initiative #7: Increase Student Completion Respond to Business and Industry Develop 21st Century Learners Support Faculty/Staff Professional Development and Student Leadership Support Innovation Support Entrepreneurialism Leverage Partnerships

3 NOTICE OF A MEETING OF THE FINANCE SUB-COMMITTEE OF THE BOARD OF TRUSTEES HOUSTON COMMUNITY COLLEGE June 24, 2014 Notice is hereby given that a Meeting of the Finance Sub-Committee of the Board of Trustees of Houston Community College will be held on Tuesday, the twenty-fourth (24 th ) day of June 2014 at 1:30 p.m., or after, and from day to day as required, at the HCC Administration Building, 2nd Floor, Seminar Room B, 3100 Main, Houston, Texas. The items listed in this Notice may be considered in any order at the discretion of the Committee Chair and items listed for closed session discussion may be discussed in open session and vice versa as permitted by law. Actions taken at this Meeting do not constitute final Board action and are only Committee recommendations to be considered by the Board at the next Regular Board meeting. I. Call to Order II. Topics for Discussion and/or Action: A. Budget Workshop Regarding Proposed Budget (Unrestricted Funds) for Fiscal Year III. Adjournment to closed or executive session pursuant to Texas Government Code Sections , and , the Open Meetings Act, for the following purposes: A. Litigation and Legal Matters 1. Consultation with System attorney concerning matters in which the attorney's duty to the System under the Texas Disciplinary Rules of Professional Conduct clearly conflicts with the Texas Open Meetings laws B. Personnel Matters 1. Deliberate the appointment, employment, evaluation, reassignment, duties, leave, discipline, contract status, or dismissal or to hear complaints or charges against the chancellor, employees or board members The Houston Community College Board of Trustees (the "Board") will not consider or act upon any item before this committee. This meeting is not a Regular Meeting of the Board but because a quorum of the Board may attend, the meeting of this committee is also being posted as a Meeting of the Board. Page 1 of 2

4 Houston Community College Finance Sub-Committee June 24, 2014 C. Real Estate and Property Matters 1. Deliberate the purchase, exchange, lease, or value of real property for Agenda items if deliberation in an open meeting would have a detrimental effect on negotiations IV. Reconvene in Open Meeting V. Consider Directives or Actions for Recommendation to the Board Regarding Agenda Items, including Closed Session Matters VI. Adjournment Certificate of Posting or Giving of Notice On this 20 th day of June, 2014, at or before 4:00 p.m., this Notice was posted at a place convenient to the public and readily accessible at all times to the general public at the following locations: (1) Administration Building of the Houston Community College, 3100 Main, First Floor, Houston, Texas 77002; (2) the Harris County's Criminal Justice Center, 1201 Franklin, Houston, Texas 77002; (3) the Fort Bend County Courthouse, 401 Jackson, Richmond, Texas 77469; and (4) the Houston Community College website, The Houston Community College's Fort Bend County public meeting notices may be viewed after hours (i.e. between the hours of 5:30 p.m. and 7:30 a.m.) on the kiosk located on the west side of the new Fort Bend County Courthouse (the "William B. Travis Building"), located at 309 South Fourth Street, Richmond, Texas Sharon R. Wright, Manager Board Services Page 2 of 2

5 REPORT ITEM Meeting Date: June 24, 2014 ITEM NO. ITEM TITLE PRESENTER A Budget Workshop Regarding Proposed Budget (Unrestricted Funds) for Fiscal Year Dr. Cesar Maldonado Teri Zamora DISCUSSION Budget workshop regarding the proposed budget (Unrestricted Funds) for fiscal year to discuss the following: (1) Review proposed operating budget for fiscal year (2) Review budget priorities and recommended changes for fiscal year DESCRIPTION OR BACKGROUND Section , Annual Operating Budget, Texas Education Code, Higher Education provides that "the governing board of each institution shall approve on or before September 1 of each year an itemized budget covering the operation of the institution for the fiscal year beginning on September 1 of each year". STRATEGIC GOAL ALIGNMENT Strategic Initiative: Support Innovation Attachment: Proposed Budget Scenarios (FY ) This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /23/2014 1:50 PM

6 BUDGET WORKSHOP Dr. Cesar Maldonado Chancellor Ms. Teri Zamora Vice Chancellor, Finance & Planning Houston Community College Board of Trustees June 24, 2014 February 24, 2014

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8 Current Unrestricted Budget 3

9 FY Revenue and Budget Surplus History Current Unrestricted Current Budget FY Year End Projection FY Difference REVENUES State Appropriations $ 69,202,364 $ 69,202,364 $ - Ad Valorem Taxes 101,478, ,151,493 10,673,386 Tuition, Net 41,453,277 39,134,179 (2,319,098) Fees 64,922,582 63,275,428 (1,647,154) Tuition & Fee, Net -- Extended Learning 6,565,665 6,565,665 - Other Local Income 2,543,140 2,247,796 (295,344) Grant Revenue 434, , ,253 Total Revenues $ 286,599,545 $ 293,196,588 $ 6,597,043 EXPENSES $ 308,103,514 $ 302,920,757 $ (5,182,757) NET REVENUE FROM OPERATIONS $ (21,503,969) $ (9,724,169) $ 11,779,800 FUND BALANCE CARRY-FORWARDS 2013 Purchase Order Rolls $ 6,772,578 $ 6,772,578 $ - Assigned Fund Balance Transfers In $ 14,731,391 $ 2,951,591 $ (11,779,800) NET REVENUES $ - $ - $ - 4

10 FY Proposed Revenue Options Current Unrestricted Scenario A Scenario B Scenario C Scenario D Increase in Tuition None $1 per SCH $1 per SCH None Increase in Fees None $1 per SCH $1 per SCH None Increase in M&O Tax Rate None None (Tax effect on home valued at $250,000) 0 0 $3 $6 REVENUES State Appropriations $ 69,202,364 $ 69,202,364 $ 69,202,364 $ 69,202,364 Ad Valorem Taxes 112,151, ,151, ,151, ,151,493 Increase for Added Assessed Value 2,816,588 2,816,588 2,816,588 2,816,588 Increase for Increase in Tax Rate - - 2,000,810 4,000,810 Total Ad Valorem Taxes 114,968, ,968, ,968, ,968,081 Tuition, Net 39,134,179 40,134,179 40,134,179 39,134,179 Fees 63,275,428 64,275,428 64,275,428 63,275,428 Tuition & Fee, Net -- Extended Learning 6,565,665 6,565,665 6,565,665 6,565,665 Other Local Income 2,247,796 2,247,796 2,247,796 2,247,796 Grant Revenue 619, , , ,663 Total Revenues $ 296,013,176 $ 298,013,176 $ 300,013,986 $ 300,013,986 Incr (Decr) from FY Budget 9,413,631 11,413,631 13,414,441 13,414,441 Incr (Decr) from FY Year-End Projection 2,816,588 4,816,588 6,817,398 6,817,398 5

11 Comparative Average Cost of Attendance Selected Texas Community Colleges Residency/Credit Hours Dallas CCCD Average Tuition and Fee Rates for 6 and 12 Credit Hours HCC San Jacinto Tarrant CC HCC Scenarios Lone Star Alamo Coll Austin CC B and C In- District: 6 units units Out-of-District: 6 units ,127 1, units 1,164 1,148 1,032 1,679 1,703 1,688 2,253 3,114 Out-of-State: 6 units , ,165 1, units 1,836 1,748 2,460 1,877 1,901 1,868 4,329 3,948 Source: Texas Association of Community Colleges (TACC), Spring 2014 Tuition and Fees Texas Community Colleges 6

12 Ad Valorem Tax Rates as Compared to HCC Peers CC District Tax Rate(¹) M&O(²) Debt Service(³) Tax Effect on Home Valued at $250,000 Total M&O Debt Austin $ $ $ HCC - Current $ $ $ HCC - Scenarios A&B $ $ $ $ 27 $ - $ 27 HCC - Scenario C $ $ $ $ 30 $ 3 $ 27 HCC - Scenario D $ $ $ $ 33 $ 6 $ 27 Lone Star $ $ $ Dallas $ $ $ Alamo $ $ $ Tarrant $ $ $ San Jacinto $ $ $ Recommended Tax Rates - Scenario D $ $ $ (1) Proposed tax increases will not trigger the rollback provision (2) Scenarios A and B include no M&O tax rate Scenario C includes M&O increase of Scenario D includes M&O increase of (3) All scenarios include increase to debt service portion of tax rate committed for bond issue 7

13 FY Expense History Current Unrestricted Year End Current Budget FY Projection FY Difference REVENUES Total Revenues $ 286,599,545 $ 293,196,588 $ 6,597,043 Fund Balance Carry-Forward $ 21,503,969 $ 9,724,169 $ (11,779,800) Total Available Funding 308,103, ,920,757 (5,182,757) EXPENSES Salaries and Benefits 192,074, ,417,247 $ (2,657,010) Debt 25,124,426 25,124,426 $ - Utilities and Maintenance 13,265,822 12,168,082 $ (1,097,740) Capital Outlay 9,973,571 9,743,677 $ (229,894) Contract Services 27,092,894 27,092,894 $ - All Other Expenses 40,572,544 39,374,431 $ (1,198,113) Total Expenses $ 308,103,514 $ 302,920,757 $ (5,182,757) NET REVENUES $ - $ - $ - 8

14 FY Proposed Expense Options Current Unrestricted Scenario A Scenario B Scenario C Scenario D Increase in Tuition None $1 per SCH $1 per SCH None Increase in Fees None $1 per SCH $1 per SCH None (Effect on students at 12 SCH - per semester 0 $24 $24 0 Increase in M&O Tax Rate None None (Tax effect on home valued at $250,000) 0 0 $3 $6 (Tax effect on home valued at $250,000 >65) 0 0 $2 $4 EXPENSES Salaries and Expenses 188,553, ,553, ,553, ,553,352 Debt 25,811,105 25,811,105 25,811,105 25,811,105 Utilities and Maintenance 11,557,841 11,557,841 12,557,841 12,557,841 Capital Outlay 5,218,308 5,218,308 6,218,308 6,218,308 Contract Services 25,493,455 25,493,455 25,493,455 25,493,455 All Other Expenses 39,379,115 39,379,115 39,379,115 39,379,115 Total Expenses $ 296,013,176 $ 298,013,176 $ 300,013,176 $ 300,013,176 9

15 NACUBO Expenditure Code Definitions Instruction - The instruction category includes activities that are part of the College's instruction program to communicate educational content for credit and non-credit courses, including general academic, vocational/technical, special session, community education and preparatory/remedial activity. This category excludes academic program administration (e.g. academic deans), except where instructional activities constitute an important role of the administrator. Research - The research category includes activities specifically organized to produce research outcomes whether commissioned by an agency external to the College or separately budgeted by an organizational unit within the College. This category would include expenses for scientific, technical, and humanistic investigation. It includes institutes and research centers as well as individual and/or project research. Public Service - The public service category includes activities established primarily to provide non-instructional services which are beneficial to individuals and groups external to the College. It includes such services as cooperative extension service, community service, and public broadcasting services. Academic Support - The academic support category includes activities that provide support services for the College's primary missions: instruction, research, public service, and economic development. It includes departmental administration, libraries, museums, educational media services, academic computing support, academic administration, academic personnel development, and course and curriculum development. Student Services - The student services category includes activities for offices of admissions and the registrar and activities with the primary purpose of contributing to the student's emotional and physical well-being and intellectual, cultural, and social development outside the context of the formal instructional program. It includes student services administration, social and cultural development (intramural athletics, student newspapers, student organizations), counseling and career guidance, financial aid administration, student health services, and student admissions and records. Institutional Support - The institutional support category includes central, executive-level activities concerned with the management and long-range planning for the entire College, as opposed to support of specific programs or units. This includes College-wide executive management (governing board, planning, programming, legal functions), fiscal services (investment, financing, business, audit functions), general administrative and logistical services (human resources, space management, procurement, parking, communications, stores, printing/photographic, safety functions), administrative computing services, and constituency relations (community, alumni, governmental, fund raising relations). Operation and Maintenance of Plant - The operation and maintenance of plant category includes expenditures of current operating funds for the operation and maintenance of physical plant. It includes plant administration, building and grounds maintenance, preservation and protection of the College's physical plant, custodial services, and utilities, exclusive of auxiliary enterprises, hospitals, and independent operations. Scholarships - Scholarships are classified as resources restricted to provide financial support to students based on academic achievement, need, or other criteria. Scholarships also include outright financial aid and tuition and fee waivers which are used to aid students in the pursuit of their studies (i.e., these payments are typically used by the students to offset educational expenses such as tuition, fees, room & board, books, school supplies, etc.). Recipients of scholarships are not expected to render services to the institution as a consideration for their scholarship, nor are they expected to repay their scholarships. 10

16 Comparative Average Functional Costs per Contact Hour Selected Texas Community Colleges Alamo College Austin CC Dallas CCCD Houston CC Lone Star College Tarrant CC Instruction Faculty Salaries Departmental Operating Expenses Subtotal Instruction Research Academic Support Student Services Institutional Support Scholarships Equipment Depreciation Local Benefits Total $ $ $ 8.45 $ 8.62 $ 8.93 $ Source: Texas Higher Education Coordinating Board (THECB), Fiscal Year 2013 Report of Fundable Operating Expenses 11

17 Budget Scenarios Four Budget Scenarios are presented for your consideration. Each scenario is based upon a conservative revenue projection, and includes a different options regarding revenues. Scenario Revenue Expense Scenario A No new revenues Contains additional cuts in positions Scenario B Increase in Tuition and Fees Lessens cuts in positions Scenario C Increase in M&O Tax Lessens cuts in positions, Adds funding for Maintenance and IT Scenario D Increase in M&O Tax Lessens cuts in positions, Adds funding for Maintenance and IT 12

18 Budget Scenarios 13

19 FY Proposed Budget Overview Scenario A - Tuition Increase None Fee Increase None M&O Tax Increase None EXPENSES REVENUES Proposed Budget Item# FY2015 REVENUES 1 State Appropriations $ 69,202,364 2 Ad Valorem Taxes 112,151,493 2a Increase for Added Assessed Value 2,816,588 2b Increase for Increase in Tax Rate - Total Ad Valorem Taxes 114,968,081 3 Tuition, Net 39,134,179 4 Fees 63,275,428 5 Tuition & Fee, Net -- Extended Learning 6,565,665 6 Other Local Income 2,247,796 7 Grant Revenue 619,663 Total Revenues $ 296,013,176 Item# Proposed Budget FY2015 EXPENSES Current Year FY Expense Budget $ 308,103,514 Changes to Expenses: Includes budget reductions from current budget year and increases for new items, as described below 8 Salaries (5,270,679) 9 Employee Benefits 1,749, Supplies Gen Exp (309,031) 11 Travel (8,395) 12 Marketing Costs 321, Rental & Leases (897,730) 14 Insurance/Risk Mgmt 211, Contract Services (1,599,438) 16 Utilities (1,148,575) 17 Other Departmental Expenses (305,490) 18 Instructional & Other Materials 1,360, Maintenance & Repair (559,406) 20 Transfers 1,083, Debt 686, Opportunity Fund (2,649,864) 23 Capital Outlay (4,755,263) Total Changes to Expenditures $ (12,090,338) Total Proposed Budget FY $ 296,013,176 14

20 FY Proposed Budget Summary Scenario A - Tuition Increase None Fee Increase None M&O Tax Increase None $ Increase (Decrease) Proposed Budget FY2015 % Increase (Decrease) Budget FY2014 REVENUES State Appropriations $ 69,202,364 $ - $ 69,202,364 0% Ad Valorem Taxes 101,478,107 10,673, ,151,493 Increase for Added Assessed Value - 2,816,588 2,816,588 Increase for Increase in Tax Rate Total Ad Valorem Taxes 101,478,107 13,489, ,968,081 13% Tuition, Net 41,453,277 (2,319,098) 39,134,179-6% Fees 64,922,582 (1,647,154) 63,275,428-3% Tuition & Fee, Net -- Extended Learning 6,565,665-6,565,665 0% Other Local Income 2,543,140 (295,344) 2,247,796-12% Grant Revenue 434, , ,663 43% Total Revenues $ 286,599,545 $ 9,413,631 $ 296,013,176 3% EXPENSES Salaries and Benefits 192,074,257 (3,520,905) 188,553,352-2% Debt 25,124, ,679 25,811,105 3% Utilities and Maintenance 13,265,822 (1,707,981) 11,557,841-13% Capital Outlay 9,973,571 (4,755,263) 5,218,308-48% Contract Services 27,092,894 (1,599,439) 25,493,455-6% All Other Expenses 40,572,545 (1,193,430) 39,379,115-3% Total Expenses $ 308,103,514 $ (12,090,338) $ 296,013,176-4% Net Revenues from Operations $ (21,503,969) $ 21,503,969 $ - 15

21 FY Proposed Budget Overview Scenario B - Tuition Increase $1 per SCH Fee Increase $1 per SCH M&O Tax Increase None EXPENSES REVENUES Proposed Item# Budget FY2015 REVENUES 1 State Appropriations $ 69,202,364 2 Ad Valorem Taxes 112,151,493 2a Increase for Added Assessed Value 2,816,588 2b Increase for Increase in Tax Rate - Total Ad Valorem Taxes 114,968,081 3 Tuition, Net 40,134,179 4 Fees 64,275,428 5 Tuition & Fee, Net -- Extended Learning 6,565,665 6 Other Local Income 2,247,796 7 Grant Revenue 619,663 Total Revenues $ 298,013,176 Item# Proposed Budget FY2015 EXPENSES Current Year FY Expense Budget $ 308,103,514 Changes to Expenses: Includes budget reductions from current budget year and increases for new items, as described below 8 Salaries (3,270,679) 9 Employee Benefits 1,749, Supplies Gen Exp (309,031) 11 Travel (8,395) 12 Marketing Costs 321, Rental & Leases (897,730) 14 Insurance/Risk Mgmt 211, Contract Services (1,599,438) 16 Utilities (1,148,575) 17 Other Departmental Expenses (305,490) 18 Instructional & Other Materials 1,360, Maintenance & Repair (559,406) 20 Transfers 1,083, Debt 686, Opportunity Fund (2,649,864) 23 Capital Outlay (4,755,263) Total Changes to Expenditures $ (10,090,338) Total Proposed Budget FY $ 298,013,176 16

22 FY Proposed Budget Summary Scenario B - Tuition Increase $1 per SCH Fee Increase $1 per SCH M&O Tax Increase None $ Increase (Decrease) Proposed Budget FY2015 Increase (Decrease) vs. Prior Yr Budget FY2014 REVENUES State Appropriations $ 69,202,364 $ - $ 69,202,364 0% Ad Valorem Taxes 101,478,107 10,673, ,151,493 Increase for Added Assessed Value 2,816,588 2,816,588 Increase for Increase in Tax Rate - - Total Ad Valorem Taxes 101,478,107 13,489, ,968,081 13% Tuition, Net 41,453,277 (1,319,098) 40,134,179-3% Fees 64,922,582 (647,154) 64,275,428-1% Tuition & Fee, Net -- Extended Learning 6,565,665-6,565,665 0% Other Local Income 2,543,140 (295,344) 2,247,796-12% Grant Revenue 434, , ,663 43% Total Revenues $ 286,599,545 $ 11,413,631 $ 298,013,176 4% EXPENSES Salaries and Benefits 192,074,257 (1,520,905) 190,553,352-1% Debt 25,124, ,679 25,811,105 3% Utilities and Maintenance 13,265,822 (1,707,981) 11,557,841-13% Capital Outlay 9,973,571 (4,755,263) 5,218,308-48% Contract Services 27,092,894 (1,599,439) 25,493,455-6% All Other Expenses 40,572,545 (1,193,430) 39,379,115-3% Total Expenses $ 308,103,514 $ (10,090,338) $ 298,013,176-3% Net Revenues from Operations $ (21,503,969) $ 21,503,969 $ - 17

23 FY Proposed Budget Overview Scenario C - Tuition Increase $1 per SCH Fee Increase $1 per SCH M&O Tax Increase $ EXPENSES REVENUES Proposed Budget Item# FY2015 REVENUES 1 State Appropriations $ 69,202,364 2 Ad Valorem Taxes 112,151,493 2a Increase for Added Assessed Value 2,816,588 2b Increase for Increase in Tax Rate 2,000,000 Total Ad Valorem Taxes 116,968,081 3 Tuition, Net 40,134,179 4 Fees 64,275,428 5 Tuition & Fee, Net -- Extended Learning 6,565,665 6 Other Local Income 2,247,796 7 Grant Revenue 619,663 Total Revenues $ 300,013,176 Item# Proposed Budget FY2015 EXPENSES Current Year FY Expense Budget $ 308,103,514 Changes to Expenses: Includes budget reductions from current budget year and increases for new items, as described below 8 Salaries (3,270,679) 9 Employee Benefits 1,749, Supplies Gen Exp (309,031) 11 Travel (8,395) 12 Marketing Costs 321, Rental & Leases (897,730) 14 Insurance/Risk Mgmt 211, Contract Services (1,599,438) 16 Utilities (1,148,575) 17 Other Departmental Expenses (306,300) 18 Instructional & Other Materials 1,360, Maintenance & Repair 441, Transfers 1,083, Debt 686, Opportunity Fund (2,649,864) 23 Capital Outlay (3,755,263) Total Changes to Expenditures $ (8,090,338) Total Proposed Budget FY $ 300,013,176 18

24 FY Proposed Budget Summary Scenario C - Tuition Increase $1 per SCH Fee Increase $1 per SCH M&O Tax Increase $ $ Increase (Decrease) Proposed Budget FY2015 Increase (Decrease) vs. Prior Yr Budget FY2014 REVENUES State Appropriations $ 69,202,364 $ - $ 69,202,364 0% Ad Valorem Taxes 101,478,107 10,673, ,151,493 Increase for Added Assessed Value 2,816,588 2,816,588 Increase for Increase in Tax Rate - 2,000,000 2,000,000 Total Ad Valorem Taxes 101,478,107 15,489, ,968,081 15% Tuition, Net 41,453,277 (1,319,098) 40,134,179-3% Fees 64,922,582 (647,154) 64,275,428-1% Tuition & Fee, Net -- Extended Learning 6,565,665-6,565,665 0% Other Local Income 2,543,140 (295,344) 2,247,796-12% Grant Revenue 434, , ,663 43% Total Revenues $ 286,599,545 $ 13,413,631 $ 300,013,176 5% EXPENSES Salaries & Benefits 192,074,257 (1,521,715) 190,552,542-1% Debt 25,124, ,679 25,811,105 3% Utilities and Maintenance 13,265,822 (707,171) 12,558,651-5% Capital Outlay 9,973,571 (3,755,263) 6,218,308-38% Contract Services 27,092,894 (1,599,439) 25,493,455-6% All Other Expenses 40,572,545 (1,193,430) 39,379,115-3% Total Expenses $ 308,103,514 $ (8,090,338) $ 300,013,176-3% Net Revenues from Operations $ (21,503,969) $ 21,503,969 $ - 19

25 FY Proposed Budget Overview Scenario D - Tuition Increase None Fee Increase None M&O Tax Increase $ EXPENSES REVENUES Proposed Budget Item# FY2015 REVENUES 1 State Appropriations $ 69,202,364 2 Ad Valorem Taxes 112,151,493 2a Increase for Added Assessed Value 2,816,588 2b Increase for Increase in Tax Rate 4,000,000 Total Ad Valorem Taxes 118,968,081 3 Tuition, Net 39,134,179 4 Fees 63,275,428 5 Tuition & Fee, Net -- Extended Learning 6,565,665 6 Other Local Income 2,247,796 7 Grant Revenue 619,663 Total Revenues $ 300,013,176 Item# Proposed Budget FY2015 EXPENSES Total Expenses FY $ 308,103,514 Changes to Expenditures: Includes budget reductions from current budget year and increases for new items, as described below 8 Salaries (3,270,679) 9 Employee Benefits 1,749, Supplies Gen Exp (309,031) 11 Travel (8,395) 12 Marketing Costs 321, Rental & Leases (897,730) 14 Insurance/Risk Mgmt 211, Contract Services (1,599,438) 16 Utilities (1,148,575) 17 Other Departmental Expenses (306,300) 18 Instructional & Other Materials 1,360, Maintenance & Repair 441, Transfers 1,083, Debt 686, Opportunity Fund (2,649,864) 23 Capital Outlay (3,755,263) Total Changes to Expenditures $ (8,090,338) Total Proposed Budget FY $ 300,013,176 20

26 FY Proposed Budget Summary Scenario D - Tuition Increase None Fee Increase None M&O Tax Increase $ $ Increase (Decrease) Proposed Budget FY2015 Increase (Decrease) vs. Prior Yr Budget FY2014 REVENUES State Appropriations $ 69,202,364 $ - $ 69,202,364 0% Ad Valorem Taxes 101,478,107 10,673, ,151,493 Increase for Added Assessed Value 2,816,588 2,816,588 Increase for Increase in Tax Rate - 4,000,000 4,000,000 Total Ad Valorem Taxes 101,478,107 17,489, ,968,081 17% Tuition, Net 41,453,277 (2,319,098) 39,134,179-6% Fees 64,922,582 (1,647,154) 63,275,428-3% Tuition & Fee, Net -- Extended Learning 6,565,665-6,565,665 0% Other Local Income 2,543,140 (295,344) 2,247,796-12% Grant Revenue 434, , ,663 43% Total Revenues $ 286,599,545 $ 13,413,631 $ 300,013,176 5% EXPENSES Salaries & Benefits 192,074,257 (1,521,715) 190,552,542-1% Debt 25,124, ,679 25,811,105 3% Utilities and Maintenance 13,265,822 (707,171) 12,558,651-5% Capital Outlay 9,973,571 (3,755,263) 6,218,308-38% Contract Services 27,092,894 (1,599,439) 25,493,455-6% All Other Expenses 40,572,545 (1,193,430) 39,379,115-3% Total Expenses $ 308,103,514 $ (8,090,338) $ 300,013,176-3% Net Revenues from Operations $ (21,503,969) $ 21,503,969 $ - 21

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28 Composite Financial Index 23

29 Composite Financial Index (CFI) Definitions The Texas Higher Education Coordinating Board has been calculating the Composite Financial Index (CFI) and sharing related data with the community college districts since The CFI includes the following core ratios: Primary Reserve Ratio measures financial strength and flexibility by comparing expendable net assets to total expenses. This measure answers the question, How long can the institution survive without additional net assets generated by operating revenue? The 2013 statewide ratio for public community colleges is.39, which is a slight decrease from.40 in A ratio of 0.14 or greater is the standard used in this report. The standard was met by 47 of the 50 districts. Viability Ratio measures the financial health of the institution by comparing total expendable net assets to certain noncurrent liabilities. The 2013 statewide ratio for public community colleges is 1.08, which is an increase from 1.03 in A ratio of 0.42 or greater is the standard used in this report. The standard was met by 44 of the 50 districts. Return on Net Assets measures total economic return during the fiscal year. The 2013 statewide ratio for public community colleges is 3.86 percent, which is a decrease from 7.10 percent in A positive return is the standard used in this report. The standard was met by 40 of the 50 districts. Operating Margin indicates an operating surplus or deficit in the given fiscal year. The 2013 statewide margin for public community colleges is 5.13 percent, which is a decrease from 7.32 percent in A positive margin is the standard used in this report. The standard was met by 39 of the 50 districts. Equity Ratio An equity ratio is a comparison of net assets to total assets and is used when institutions have no outstanding indebtedness. The 2013 statewide ratio for the public community colleges is 48.1 percent, which is a decrease from 49.5 percent in A ratio of 20 percent or greater is the standard used in this report. The standard was met by 49 of the 50 districts. Leverage Ratio - The leverage ratio measures the amount of debt in relation to net assets and provides an indication of the amount of debt service the institution must absorb into the future relative to existing resources. General obligation bonds are excluded for this calculation. The 2013 statewide ratio for the public community colleges is.32, which is a slight decrease from.33 in A ratio of less than 2.0 is the standard used in this report. The standard was met by 48 of the 50 districts. Composite Financial Index CFI numbers generally range from 0.0 to 10.0, although it is possible to have a number higher than It is also possible to have a CFI below zero. The 2013 combined CFI for public community colleges is 3.06, which is a decrease from 3.63 in An index number of 2.0 or greater is the standard used in this report. The standard was met by 37 of the 50 districts. 24

30 Composite Financial Index (CFI) Financial Condition Analysis 2013 Statewide Average THECB Index Standard HCC Primary Reserve Ratio Viability Ratio Return on Net Assets 3.86% Positive return 2.15% Operating Margin 5.13% Positive return 10.14% Equity ratio 48.1% 20% or greater 22.6% Leverage ratio 0.32 less than Composite Financial Index (CFI) or greater

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32 Proposed Tax Impact 27

33 Scenario C Proposed Budget Estimated Impact of Proposed Tax Increase to Homeowner Home Value Scenario C - Proposed Increase in M&O Tax Rate Current Tax Rate Annual Increase M & O Rate Senior Exemption Homestead Exemption Tax for Senior Other Rate Senior Exemption Homestead Exemption Tax for Senior Other Senior Other 50,000 $ $ 90,000 $ 5,000 $ - $ $ $ 90,000 $ 5,000 $ - $ $ - $ 1 75,000 $ $ 90,000 $ 7,500 $ - $ $ $ 90,000 $ 7,500 $ - $ $ - $ 1 90,000 $ $ 90,000 $ 9,000 $ - $ $ $ 90,000 $ 9,000 $ - $ $ - $ 1 100,000 $ $ 90,000 $ 10,000 $ - $ $ $ 90,000 $ 10,000 $ - $ $ - $ 1 125,000 $ $ 90,000 $ 12,500 $ $ $ $ 90,000 $ 12,500 $ $ $ 0 $ 2 150,000 $ $ 90,000 $ 15,000 $ $ $ $ 90,000 $ 15,000 $ $ $ 1 $ 2 175,000 $ $ 90,000 $ 17,500 $ $ $ $ 90,000 $ 17,500 $ $ $ 1 $ 2 200,000 $ $ 90,000 $ 20,000 $ $ $ $ 90,000 $ 20,000 $ $ $ 1 $ 2 250,000 $ $ 90,000 $ 25,000 $ $ $ $ 90,000 $ 25,000 $ $ $ 2 $ 3 300,000 $ $ 90,000 $ 30,000 $ $ $ $ 90,000 $ 30,000 $ $ $ 2 $ 4 400,000 $ $ 90,000 $ 40,000 $ $ $ $ 90,000 $ 40,000 $ $ $ 4 $ 5 500,000 $ $ 90,000 $ 50,000 $ $ $ $ 90,000 $ 50,000 $ $ $ 5 $ 6 Scenario C -Proposed Increase in Total Tax Rate Current Tax Rate Annual Increase Home Value Rate Senior Exemption Homestead Exemption Tax for Senior Other Rate Senior Exemption Homestead Exemption Tax for Senior Other Senior Other 50,000 $ $ 90,000 $ 5,000 $ - $ $ $ 90,000 $ 5,000 $ - $ $ - $ 6 75,000 $ $ 90,000 $ 7,500 $ - $ $ $ 90,000 $ 7,500 $ - $ $ - $ 9 90,000 $ $ 90,000 $ 9,000 $ - $ $ $ 90,000 $ 9,000 $ - $ $ - $ ,000 $ $ 90,000 $ 10,000 $ - $ $ $ 90,000 $ 10,000 $ - $ $ - $ ,000 $ $ 90,000 $ 12,500 $ $ $ $ 90,000 $ 12,500 $ $ $ 3 $ ,000 $ $ 90,000 $ 15,000 $ $ $ $ 90,000 $ 15,000 $ $ $ 6 $ ,000 $ $ 90,000 $ 17,500 $ $ $ $ 90,000 $ 17,500 $ $ $ 9 $ ,000 $ $ 90,000 $ 20,000 $ $ $ $ 90,000 $ 20,000 $ $ $ 12 $ ,000 $ $ 90,000 $ 25,000 $ $ $ $ 90,000 $ 25,000 $ $ $ 18 $ ,000 $ $ 90,000 $ 30,000 $ $ $ $ 90,000 $ 30,000 $ $ $ 24 $ ,000 $ $ 90,000 $ 40,000 $ $ $ $ 90,000 $ 40,000 $ $ $ 36 $ ,000 $ $ 90,000 $ 50,000 $ $ $ $ 90,000 $ 50,000 $ $ $ 48 $ 60 HCC senior exemption is $90,000 for individuals over 65. Homestead Exemption is for all Texas residents who have resided for more than 1 year: Equals larger of $5,000 or 10% of the value of the home. 28

34 Scenario D Proposed Budget Estimated Impact of Proposed Tax Increase to Homeowner Scenario D - Proposed Increase in M&O Tax Rate Current Tax Rate Annual Increase Home Value M & O Rate Senior Exemption Homestead Exemption Tax for Senior Other Rate Senior Exemption Homestead Exemption Tax for Senior Other Senior Other 50,000 $ $ 90,000 $ 5,000 $ - $ $ $ 90,000 $ 5,000 $ - $ $ - $ 1 75,000 $ $ 90,000 $ 7,500 $ - $ $ $ 90,000 $ 7,500 $ - $ $ - $ 2 90,000 $ $ 90,000 $ 9,000 $ - $ $ $ 90,000 $ 9,000 $ - $ $ - $ 2 100,000 $ $ 90,000 $ 10,000 $ - $ $ $ 90,000 $ 10,000 $ - $ $ - $ 2 125,000 $ $ 90,000 $ 12,500 $ $ $ $ 90,000 $ 12,500 $ $ $ 1 $ 3 150,000 $ $ 90,000 $ 15,000 $ $ $ $ 90,000 $ 15,000 $ $ $ 1 $ 4 175,000 $ $ 90,000 $ 17,500 $ $ $ $ 90,000 $ 17,500 $ $ $ 2 $ 4 200,000 $ $ 90,000 $ 20,000 $ $ $ $ 90,000 $ 20,000 $ $ $ 2 $ 5 250,000 $ $ 90,000 $ 25,000 $ $ $ $ 90,000 $ 25,000 $ $ $ 4 $ 6 300,000 $ $ 90,000 $ 30,000 $ $ $ $ 90,000 $ 30,000 $ $ $ 5 $ 7 400,000 $ $ 90,000 $ 40,000 $ $ $ $ 90,000 $ 40,000 $ $ $ 7 $ ,000 $ $ 90,000 $ 50,000 $ $ $ $ 90,000 $ 50,000 $ $ $ 10 $ 12 Scenario D -Proposed Increase in Total Tax Rate Current Tax Rate Annual Increase Home Value Rate Senior Exemption Homestead Exemption Tax for Senior Other Rate Senior Exemption Homestead Exemption Tax for Senior Other Senior Other 50,000 $ $ 90,000 $ 5,000 $ - $ $ $ 90,000 $ 5,000 $ - $ $ - $ 7 75,000 $ $ 90,000 $ 7,500 $ - $ $ $ 90,000 $ 7,500 $ - $ $ - $ 10 90,000 $ $ 90,000 $ 9,000 $ - $ $ $ 90,000 $ 9,000 $ - $ $ - $ ,000 $ $ 90,000 $ 10,000 $ - $ $ $ 90,000 $ 10,000 $ - $ $ - $ ,000 $ $ 90,000 $ 12,500 $ $ $ $ 90,000 $ 12,500 $ $ $ 3 $ ,000 $ $ 90,000 $ 15,000 $ $ $ $ 90,000 $ 15,000 $ $ $ 7 $ ,000 $ $ 90,000 $ 17,500 $ $ $ $ 90,000 $ 17,500 $ $ $ 10 $ ,000 $ $ 90,000 $ 20,000 $ $ $ $ 90,000 $ 20,000 $ $ $ 13 $ ,000 $ $ 90,000 $ 25,000 $ $ $ $ 90,000 $ 25,000 $ $ $ 20 $ ,000 $ $ 90,000 $ 30,000 $ $ $ $ 90,000 $ 30,000 $ $ $ 26 $ ,000 $ $ 90,000 $ 40,000 $ $ $ $ 90,000 $ 40,000 $ $ $ 40 $ ,000 $ $ 90,000 $ 50,000 $ $ $ $ 90,000 $ 50,000 $ $ $ 53 $ 66 HCC senior exemption is $90,000 for individuals over 65. Homestead Exemption is for all Texas residents who have resided for more than 1 year: Equals larger of $5,000 or 10% of the value of the home. 29

35 Debt Service Payment Schedule Trend FY

36 Debt Service Payment Schedule FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Total Funding from Current Operations $ 25,124,425 $ 25,811,105 $ 26,074,779 $ 26,169,211 $ 29,070,548 Total Funding from Debt Service Tax 28,852,217 47,926,024 48,645,174 49,373,074 48,755,608 Total Debt Service $ 53,976,642 $ 73,737,128 $ 74,719,953 $ 75,542,285 $ 77,826,156 $ Change vs. Prior Year FY 2015 FY 2016 FY 2017 FY 2018 Total Funding from Current Operations $ 686,680 $ 263,674 $ 94,432 $ 2,901,337 Total Funding from Debt Service Tax $ 19,073,807 $ 719,150 $ 727,900 $ (617,466) Total Debt Service $ 19,760,486 $ 982,824 $ 822,332 $ 2,283,871 % Change vs. Prior Year FY 2015 FY 2016 FY 2017 FY 2018 Total Funding from Current Operations 3% 1% 0% 11% Total Funding from Debt Service Tax 66% 2% 1% -1% Total Debt Service 37% 1% 1% 3% 31

37 Blank Page 32

38 Supplementary Information 33

39 Supplementary Page for Item #2 Ad Valorem Tax Revenue FY2014 Adjusted Budget (as of April 30, 2014) $ 101,478,107 Variances: Explanation Department Name Amount Item# 1 Increase for change in assessed value in FY14 10,673, Increase for estimated change in assesed value for FY15 2,816,588 2a 3 Scenarios A and B - No M&O Tax Increase $ 114,968, Increase in M&O Tax Rate of $ ,000,000 2b 6 Scenario C $ 116,968, Increase in M&O Tax Rate of an additional $ ,000,000 2b 3 Scenario D - Total increase of $ $ 118,968, Other 17,489,974 34

40 Supplementary Page for Item #3 Tuition, Net FY2014 Adjusted Budget (as of April 30, 2014) $ 41,453,277 Variances: Explanation Department Name Amount 1 Decrease in FY14 Revenue due to enrollment decline (2,319,098) 2 Scenarios A and D - no Tuition Increase $ 39,134, Increase in FY15 for proposed $1/hr increase in tuition rate 1,000,000 5 Scenarios B and C - $1 Tuition Increase $ 40,134,179 (1,319,098) 35

41 Supplementary Page for Item #4 Fees FY2014 Adjusted Budget (as of April 30, 2014) $ 64,922,582 Variances: Explanation Department Name Amount 1 Decrease in FY14 Fee Revenue due to enrollment decline (1,647,154) 2 Scenarios A and D - no Fee Increase $ 63,275, Increase in FY15 for proposed $1/hr increase in fee rate 1,000,000 5 Scenarios B and C - $1 Fee Increase $ 64,275,428 (647,154) 36

42 Supplementary Page for Item #6 Other Local Income FY2014 Adjusted Budget (as of April 30, 2014) $ 2,543,140 Variances: Explanation Department Name Amount 1 Gain or Loss on Investments decreased in FY14 (est.) 133,839 2 Fines and Penalties decreased in FY14 (est.) (353,873) 3 Decrease in interest and dividend income (52,868) Other Decreases below $10,000 (81,905) Other Increases below $10,000 59,463 Total (295,344) FY2015 Proposed Budget $ 2,247,796 37

43 Supplementary Page for Item #7 Grant Revenue FY2014 Adjusted Budget (as of April 30, 2014) $ 434,410 Variances: Explanation Department Name Amount 1 Increase in IDC from federal grants* 185,253 Total 185,253 FY2015 Proposed Budget $ 619,663 Note: *This category includes revenue received from Charges applied to federal grants for 38

44 Supplementary Page for Item #8 Salaries FY2014 Adjusted Budget (as of April 30, 2014) $ 173,919,537 Variances Explanation Department Name Amount Proposed Cost Savings-Reduce PT Staff-Reviewed FY budget vs. actual expenses to identify budgets with remianing balances exceeding $5,0000 (246,242) 1 consistantly in all 3 years. 2 Proposed Savings- FT Staff-Reduce Overtime for Aministration departments under location Main. (148,923) 3 Placeholder Staff Positions in FY15 Budget not yet filled. (1,465,690) 4 Proposed Cost Savings - Do not fill FY New FT Faculty Positions (1,300,000) 5 Increases/Decreases below $100K (109,824) 6 Scenarios B, C and D $ 170,648, Additional positions cuts to be identified 9 Scenario A (2,000,000) $ 168,648, (5,270,679) 39

45 Supplementary Page for Item #9 Employee Benefits FY2014 Adjusted Budget (as of April 30, 2014) $ 18,154,720 Variances Explanation Department Name Amount 1 Increase due to TRS change 1,749,774 Other Increases/Decreases below $100K Total $ 1,749,774 FY2015 Proposed Budget $ 19,904,494 40

46 Supplementary Page for Item #10 Supplies and General Expenses FY2014 Adjusted Budget (as of April 30, 2014) $ 6,191,390 Variances: Explanation Department Name Amount 1 The value is an estimated decrease in the Other Gen Instl Expend $ (120,000) cost of Credit Card and Tele check Expenses. The amount was estimated after the Budget Interaction Meetings based on information received during May. 2 Value represents PaperCut Funds College Operations/0283 $ (53,709) generated through copy machine usage at each campus. These funds will be allocated after Sept 01, Value represents PaperCut Funds generated through copy machine usage at each campus. These funds will be allocated after Sept 01, College Operations/0285 $ (38,952) 4 Value is from a budget adjustment to cover Procurement Card Expenses for the remainder of FY14. Director Foundation $ (38,000) 5 Value represents PaperCut Funds generated through copy machine usage at each campus. These funds will be allocated after Sept 01, College Operations/0282 $ (37,005) 6 Value represents the transfer back of funds in the FY 14 budget to the System Building Operations Office for one time purchases. This change occurred after the Budget Interaction Meeting. Eastside Campus $ (25,000) 7 Value represents PaperCut Funds generated through copy machine usage at each campus. These funds will be allocated after Sept 01, College Operations/0286 $ (24,181) 8 Value matches three budget adjustments totaling $24,000 from this line in the Vice Chancellor's dept. $9,000 was reallocated from the dept. contingency line. $15,000 was reallocated from Other Contract Services. VC Instruction $ (24,000) 9 Value represents the charges for a Data Cable Installation during FY Value represents the transfer back of funds in the FY 14 budget to the System Building Operations Office for one time purchases. This change occurred after the Budget Interaction Meeting. College Operations/0285 $ (21,224) College Operations Officer $ (20,422) 11 Dollars moved from Supplies & General Office of Sec For Adm & Expenses to the Secretary Part time Salary Tech line to continue funding current positions. $ (19,670) 12 Value represents PaperCut Funds COLLEGE OPERATIONS $ (18,931) generated through copy machine usage at OFFICER each campus. These funds will be allocated after Sept 01, Value represents the transfer back of COLEMAN COMPUS $ (18,331) funds in the FY 14 budget to the System Building Operations Office for one time purchases. This change occurred after the Budget Interaction Meeting. 14 The budget line was removed from this Chancellor $ (18,150) dept. (Permanent Chancellor Search). The line is not moving forward into FY Value is from a budget adjustment to cover Procurement Card Expenses for the remainder of FY14. College Operations Officer $ (15,120) 16 Value represents an adjustment within the same department from Supplies into Repairs and Maintenance Services. SYSTEM MAINTANCE MGMT $ 30, Funds for the maintenance repairs of Facilities Operations Mgmt $ 86,984 various buildings were added after the Budget Interaction Meeting as an adjustment. Other Increases/Decreases below 15K $ 66,680 Total $ (309,031) FY2015 Proposed Budget $ 5,882,359 41

47 Supplementary Page for Item #12 Marketing FY2014 Adjusted Budget (as of April 30, 2014) $ 1,293,337 Variances: Explanation Department Name Amount 1 Value represents a reallocation of dollars within President's Office 11,000 Southeast College as part of the pre-planning phase of the budget process. 2 Value represents the reallocation of funds as of April 1 into contracted services within the same department. AVC Communications 127,140 3 Value represents a reallocation of funds from within Southeast College as part of pre-planning phase of the budget process. Dir Enrollment Services 4 Value includes six separate budget adjustments Associate Dean made to various departments at Northeast College Northeast after the Budget Interaction Meeting. They cover overload, lease, other dept expenses, part time salary and equipment budget lines. 5 Value represents the reallocation of funding within the same department to the construction line via two budget adjustments. 6 Value represents the reallocation of funds from the Supplies line into Marketing within the same department. 7 Six separate budget adjustments made to various departments at Northeast College to cover overload, lease, other dept expenses, part time salary and equipment budget lines. 8 Reallocation of funds to Contract Services within the same department. Offshore Drilling Training Ctr 20,000 17, ,938 Public Relations 13,000 Public Relations- Dir.CT Market 25,617 Chancellor (12,000) 9 Value represents a reallocation to other line items Employment Office (28,623) within Human Resources as part of the preplanning phase of the budget process. Other Increases/Decreases below 10K (39,160) Total $ 321,283 FY2015 Proposed Budget $ 1,614,620 42

48 Supplementary Page for Item #13 Rentals and Leases FY2014 Adjusted Budget (as of April 30, 2014) $ 3,798,332 Variances Explanation Department Name Amount 1 FY14 Rolled POs (16,453) 2 Reallocation of funds from the Preplanning phase of the budget process from the IT area. An IT contract from Key Government Finance, Inc. is IT CONTRACTS (829,520) ending. Funds were returned to the fund balance. Other Increases/Decreases below $100K (51,757) Total $ (897,730) FY2015 Proposed Budget $ 2,900,602 43

49 Supplementary Page for Item #14 Insurance/Risk Management FY2014 Adjusted Budget (as of April 30, 2014) $ 7,052,698 Variances: Explanation Department Name Amount 1 Insurance costs are estimated to Other Gen Instl 211,548 increase by 3% in FY15. Expend Other Increases/Decreases below $100K - Total $ 211,548 FY2015 Proposed Budget $ 7,264,246 44

50 Supplementary Page for Item #15 Contracted Services FY2014 Adjusted Budget (as of April 30, 2014) $ 27,092,894 Variances: Explanation Department Name Amount 1 FY14 Rolled POs (1,345,231) 2 Contractual increases for FY15 (est.) 1,217,934 4 new FT Staff positions were hired for Sign- Language Interpreters. The estimated cost Sign-Language reduction to contracted services for FY15 is Interpreters (900,000) 3 $900K. The decrease is mainly due to the reallocation of funds to better categorize expenses during the Budget Meeting (move to Instructional & IT CONTRACTS (579,160) 4 Other Materials) Resource Reallocation - due to ending of Hyperion & Version Upgrade Resource Reallocation - due to decrease of HRMS Upgrade Resource Reallocation - due to partial decrease in consulting services for Staff Augmentation PS FMS Version Upgrade (IT Depart.) (419,417) PS HRMS Version Upgrade (IT (320,263) Depart.) IT Department (204,830) The decrease is mainly due to the reallocation of funds within the department (move to IT Department (179,739) 8 Other Departmental Expenses). The decrease is mainly due to the reallocation of funds within the department (move to INTRANET (132,240) 9 Instructional & Other Materials). Budget Adjustment done after the Budget 10 Meeting (timing issue) AVC Communication (127,140) Budget Adjustment done after the Budget 11 Meeting (timing issue) WEB REDESIGN (103,487) Budget Adjustment done after the Budget Offshore Drilling 12 Meeting (timing issue) Training Ctr 134,960 Increase in Tax Collection Fee, Commission on Other Gen Instl 13 Tax collection, and Attorney Fee. Expend 168,052 The increase is mainly due to the reallocation of funds to better categorize expenses during IT DEVELOPMENT 309, the Budget Meeting. Budget Adjustment done after the Budget System Maintance 15 Meeting (timing issue) Mgmt. 353,646 Other Increases/Decreases below $100K 527,756 Total $ (1,599,439) FY2015 Proposed Budget $ 25,493,455 45

51 Supplementary Page for Item #16 Utilities FY2014 Adjusted Budget (as of April 30, 2014) $ 11,369,205 Variances: Explanation Department Name Amount 1 (22,627) 2 Utilities budget vs. expenses were System (1,125,948) reveiwed for the last thee years. There has been a remaining balance of approx. 1.1M. Uttility budget has been reduced by this amount. Other Increases/Decreases below $100K - Total $ (1,148,575) FY2015 Proposed Budget $ 10,220,630 46

52 Supplementary Page for Item #17 Other Departmental Expenses FY2014 Adjusted Budget (as of April 30, 2014) $ 2,557,524 Variances: Explanation Department Name Amount 1 Reallocations of $39,822 moved into the budget from VC Instruction (64,836) the Vice Chancellor's contingency line to pay for institutional expenses. $450 dollars moved into the budget to offset other institutional fees. $23,887 difference between current adjusted budget and the base budget for the next fiscal year. 2 Reallocated dollars within the same budget to the College Operations 18,163 following expense categories: $5,500 to Marketing, $1,500 to Supplies and $1663 to Minor Equipment. Reallocated dollars from this budget to Supplies Dept 0386 for $r500 for Supplies in Dept 0796, the Fraga Campus for $2,000 and $10,000 Dept 7016, Library for Learning Resources. Officer 3 Reallocated dollars within the same budget: $37,740 for Other Institutional Expenses, $226,001 for an Electric Bill and $42,000 for Election Expenses. $148,000 difference in base budget as the department was not part of the Budget Interaction Meeting process. Other Gen Instl Expend (453,741) 4 Pre-Budget Interaction Meeting reallocation made during the planning phase of the budget process for $25,337 from within the Northeast College Budget. Also, Reallocated $200 to Supplies and Materials in Dept 5324 between Feb and April. ASSOCIATE DEAN NORTHEAST 26,537 5 Reallocation of three adjustments in for $17,500 for GHP membership, $1,000 NISOD membership, $1,000 for other institutional expenses into this budget. Other Gen Instl Expend 6 Budget adjustments totaling $35,263 for contracted services reallocated within this budget. Additionally, $135,000 Pre-Budget Interaction Meeting reallocation made during planning phase of the budget process. $135,000 returned to fund balance. PS HRMS Version Upgrade 7 Pre-Budget Interaction Meeting reallocation made during the planning phase of the budget process. Dollars returned to fund balance. 8 Pre-Budget Interaction Meeting reallocation made during the planning phase of the budget process. Dollars returned to fund balance. 9 Pre-Budget Interaction Meeting reallocation made during the planning phase of the budget process. Dollars returned to fund balance. PS FMS Version Upgrade (19,500) 99, ,000 Data Warehouse 50,000 Office of Sec For Adm & Tech 15,114 Other Increases/Decreases below 15K (77,006) Total $ (305,490) FY2015 Proposed Budget $ 2,252,034 47

53 Supplementary Page for Item #18 Instructional and Other Materials FY2014 Adjusted Budget (as of April 30, 2014) $ 9,512,242 Variances Explanation Department Name Amount 1 FY14 Rolled POs (1,825,518) 2 Department reallocated funds into Offshore Drilling 127,889 different rollup Training Ctr 3 Construction Business 129,986 Development Contract 4 Resource Reallocation due to ELM PS HRMS Version 217,484 training & tracking Module project implementation Upgrade (IT Dept.) 5 Department reallocated some of IT CONTRACTS 567,674 the funds to contact services for ebuilder integration & Procure to Pay. 6 Resource Reallocation for IT CONTRACTS 845,716 Instructional Software Licenses Other Increases/Decreases below $100K 1,297,172 Total $ 1,360,403 FY2015 Proposed Budget $ 10,872,645 48

54 Supplementary Page for Item #19 Maintenance and Repair FY2014 Adjusted Budget (as of April 30, 2014) $ 1,896,617 Variances Explanation Department Name Amount 1 FY14 Rolled POs (373,305) SYSTEM Resource Reallocation (227,177) MAINTANCE MGMT 2 Other Increases/Decreases below $100K 41,076 Total $ (559,406) FY2015 Proposed Budget $ 1,337,211 49

55 Supplementary Page for Item #20 Transfers FY2014 Adjusted Budget (as of April 30, 2014) $ 5,622,940 Variances Explanation Department Name Amount 1 Increase in mandatory transfers related to statutory matches for grants and scholarips 1,083,846 Total $ 1,083,846 FY2015 Proposed Budget $ 6,706,786 50

56 Supplementary Page for Item #21 Debt FY2014 Adjusted Budget (as of April 30, 2014) $ 25,124,426 Variances Explanation Department Name Amount 1 Increase in student fee revenue bonds for FY15 630,579 Increase in interest portion of Alief lease 2 revenue bonds for PFC 56,100 Total $ 686,679 FY2015 Proposed Budget $ 25,811,105 51

57 Supplementary Page for Item #22 Budget Commitments FY2014 Adjusted Budget (as of April 30, 2014) $ 3,299,864 Variances Explanation Department Name Amount 1 Added new FT Faculty Positions for FY15 1,300, Cost Savings-rescind unfilled positions given in FY14 for student services staff (1,199,864) Cost Savings-rescind unfilled positions 4 given in FY14 for police staff (800,000) 5 Cost Savings-Rescind new FT Faculty Positions for FY15 (1,300,000) 6 Removed position management (679,185) Other 29,185 Total $ (2,649,864) FY2015 Proposed Budget $ 650,000 52

58 Supplementary Page for Item #23 Capital Outlay FY2014 Adjusted Budget (as of April 30, 2014) $ 9,973,571 Variances Explanation Department Name Amount 1 FY14 Rolled POs (3,366,667) 2 Security Upgrades Campus Security 116,458 3 Computer Upgrades System 1,200,000 4 System Calculation Error IT DEVELOPMENT 392,843 5 Budget Adjustment done after the Budget Meeting (timing issue) Offshore Drilling Training Ctr (862,105) 6 Budget Adjustment done after the Budget Meeting (timing issue) System Computer Replacement Pl (1,088,465) Commercial Truck FY14 -- One-time use funds 7 Driving (153,995) Budget FY14 -- One-time use funds Commitments (Southwest 8 College) (185,000) Learning Resources FY14 -- One-time use funds 9 Center (350,000) 10 Funded based on original budget, not adjusted budget Budget Adjustment done after the Budget Meeting (timing issue) Telecom & Instrl Compute (125,000) SYSTEM MAINTANCE MGMT (112,074) 11 Other Increases/Decreases below $100K (221,258) Total $ (4,755,263) FY2015 Proposed Budget $ 5,218,308 53

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60 Annual Planning and Budget Development Calendar 55

61 Annual Planning and Budget Development Calendar FY Date October November Activity Chancellor requests ideas and proposals from Board of Trustees on objectives for the prospective annual plan. A preliminary draft of the annual plan is derived from the strategic initiative action items detailed in the Strategic Plan. A draft of the Annual Plan is circulated to the Presidents and Vice Chancellors for feedback and modifications. Board of Trustees reviews and adopts the final draft of the Annual Plan November - January Introduction of the Annual Planning & Budget Development Process begins: The Office of Fiscal Planning & Budget holds meetings at each college and 3100 Main to train on the Annual Planning & Budget Development Process for the new fiscal year. Pre-Development Activities begin: Departmental Units prepare their Unit Plans for the coming year Senior Administrators meet with cost center managers to review and discuss objectives for the new fiscal year and identify/explore efficiencies and critical resource needs. Budget Development Process Unit Level: Cost Center budgets are created and entered into the Hyperion Planning System Historical and current year budget and expense data trends are reviewed Schedule of class offerings is developed for the upcoming fiscal year Resource needs for the next two years are identified; ensuring alignment with the Unit s goals and objectives as outlined in the Unit Annual Plan. Existing resources can be reallocated as needed based on unit objectives. Requests for new funding in excess of existing budget are prioritized and justified using the Request for Additional Funds form. Cost Center budget requests are then submitted to Campus and Administrative Executive Teams for review. 56

62 Annual Planning and Budget Development Calendar FY , cont. January - February March - April Review and Reallocation Executive Level: College and Administrative Executive Teams review all planning and budget requests for their respective college/campus or administrative division. Further reallocation of existing resources is done as needed. Requests for additional funds are further prioritized. Annual Plans and prioritized Additional Funds Requests forms for the Division are then submitted to the Office of Fiscal Planning & Budget. Deadline for submission is February 28, Quarterly Board Budget Workshop Budget Data Collection: May The Office of Fiscal Planning and Budget meet with colleges and administrative departments to discuss class sections and expenses and to input necessary changes into the Hyperion Planning System. Budgets and Additional Funds Requests are compiled and submitted to the Planning & Budget Committee. Review Process Begins: The Planning & Budget Committee (PBC) is responsible for recommending the district-wide priority investments. Planning & Budget Committee reviews all plans and budgets A Budget Prioritization Process is held by the PBC Unit Managers/Presidents make brief presentations to the committee; further justifying their requests. PBC prioritizes all requests at an institutional level PBC makes a recommendation to the Vice Chancellor Finance & Planning regarding priorities for the next fiscal year. Budget Planning process is complete 57

63 Annual Planning and Budget Development Calendar FY , cont. June Quarterly Board Budget Workshop Draft Budget is presented to the Board Board Meeting to approve the Budget September December Quarterly Board Budget Workshop Quarterly Board Budget Workshop 58

64 Annual Planning and Budget Development Calendar for a Zero Based Budget FY Date September Activity Board of Trustees discussses the tax rate for next calendar year October Chancellor requests ideas and proposals from Board of Trustees on objectives for the prospective annual plan A preliminary draft of the annual plan is derived from the strategic initiative action items detailed in the Strategic Plan A draft of the Annual Plan is circulated to the Presidents and Vice Chancellors for feedback and modifications Board approves the tax rate for next calendar year November Board of Trustees reviews and adopts the final draft of the Annual Plan November - January Introduction of the Annual Planning & Budget Development Process begins (Zero Based): The Office of Fiscal Planning & Budget holds meetings at each college and 3100 Main to train on the Annual Planning & Budget Development Process for the new fiscal year. Pre-Development Activities begin: Departmental Units prepare their Unit Plans for the coming year Senior Administrators meet with cost center managers to review and discuss objectives for the new fiscal year and identify/explore efficiencies and critical resource needs. Budget Development Process Unit Level: Cost Center budgets are created and entered into the Hyperion Planning System Historical and current year budget and expense data trends are reviewed Schedule of class offerings is developed for the upcoming fiscal year Resource needs for the next two years are identified; ensuring alignment with the Unit s goals and objectives as outlined in the Unit Annual Plan Resources can be requested as needed based on unit objectives Requests are prioritized and justified Cost Center budget requests are then submitted to Campus and Administrative Executive Teams for review. 59

65 Annual Planning and Budget Development Calendar for a Zero Based Budget FY , cont. January - February March - April Review Executive Level: College and Administrative Executive Teams review all planning and budget requests for their respective college/campus or administrative division Further justification and prioritization of resources is done Requests for funds are further prioritized Annual Plans and prioritized Funds Requests forms for the Division are then submitted to the Office of Fiscal Planning & Budget. Quarterly Board Budget Workshop Budget Data Collection: May The Office of Fiscal Planning and Budget meet with colleges and administrative departments to discuss class sections and expenses and to input necessary changes into the Hyperion Planning System. Budgets and Funding Requests are compiled and submitted to the Planning & Budget Committee. Review Process Begins: The Planning & Budget Committee (PBC) is responsible for recommending the district-wide priority investments. Planning & Budget Committee reviews all plans and budgets A Budget Prioritization Process is held by the PBC Unit Managers/Presidents make brief presentations to the committee; further justifying their requests. PBC prioritizes all requests at an institutional level PBC makes a recommendation to the Chancellor and Vice Chancellor Finance & Planning regarding priorities for the next fiscal year. Budget Planning process is complete 60

66 Annual Planning and Budget Development Calendar for a Zero Based Budget FY , cont. June Quarterly Board Budget Workshop Draft Budget is presented to the Board Board Meeting to approve the Budget September December Quarterly Board Budget Workshop Quarterly Board Budget Workshop 61

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