Four Components: 1. Revenue Model 2. Cost Structure 3. Margin Model 4. Resource Velocity

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2 Four Components: 1. Revenue Model 2. Cost Structure 3. Margin Model 4. Resource Velocity

3 } Property Tax } State Aid } Tuition and Fees } Other Revenues Contracts Grants Auxiliary Miscellaneous Money. Photography. Encyclopædia Britannica ImageQuest. Web. 20 Jan

4 } Property Tax Levy amount is not enrollment based } Absorbs growth in new property } Impacts residential and commercial property Assessment ratios differ by property type } Can increase 2 percent per year with Truth in Taxation Process and BOG approval Housing Downturn Spurs Unfinished Development and Labor Surplus in American Southwest. Photographer. Encyclopædia Britannica ImageQuest. Web. 20 Jan

5 } Operating and STEM funding formulas are enrollment based FTSE used in operational funding formulas is 2 years in arrears due to audit cycle STEM funding is not fully appropriated State budget cuts (beyond enrollment impacts) LIKELY Still recovering from FY FY 2012 reductions Meat cleaver. Photography. Encyclopædia Britannica ImageQuest. Web. 20 Jan e

6 $140,000,000 $120,000,000 $100,000,000 Dollars $80,000,000 $60,000,000 $40,000,000 $20,000,000 $- FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Projection FY 2016 Estimate Expenditure Limitation $122,989,612 $125,892,320 $126,021,541 $115,829,735 $112,293,950 $114,358,079 Expenditures subject to limit $94,761,198 $98,116,932 $105,131,326 $108,736,672 $115,129,422 $114,500,000 Expenditure Limitation based on Actual FTSE $107,526,720 $104,253,986 $94,588,861 $89,622,641 $83,063,347

7 } Product of: 1. In State enrollment credits 2. Out of State enrollment credits 3. Tuition Rates In State: $70.50 per unit Out of State: $ per unit } Student Fees Cost Recovery, not a profit center Student & Processing Fees: Athletics } Course Fees Cost Recovery, not a profit center

8 } Contract net revenue Cost center model } Grants Revenue comes with obligations/restrictions } Auxiliary net revenue } Miscellaneous Income Investments Philanthropy Assorted US coins. Photo. Encyclopædia Britannica ImageQuest. Web. 20 Jan

9 } How costs are allocated. Includes: Cost of key assets Direct costs Indirect costs Economies of scale

10 } Fixed Cost Costs that are constant regardless of the quantity of goods or services produced Examples: leases, debt } Variable Cost Costs that change with the quantity of goods or services produced Examples: adjunct faculty labor costs or health insurance } Marginal Cost The cost of adding one extra item of a product

11 } Fixed Costs Facility intensive structure, dispersed throughout County 6 Campuses + 3 significant locations + learning centers Depreciation Heavy Personnel-based expenses 49% of total, all funds, budget 78% of operating budget (General + Designated Funds) Static 9.7 years - average years of service for current regular College employees Employee Benefits

12 Staffing 2,000 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1, Administrators - Regular Faculty - Regular Staff - Regular ,022 1,043 1,059 1,017 1, ,023 1,047 1,016 1,037 1,059 1, Audited FTSE 14,997 16,652 17,404 17,819 18,027 19,026 20,611 20,425 20,393 19,993 19,806 20,222 20,889 22,021 22,906 22,027 19,515 17,963 25,000 20,000 15,000 10,000 5,000 - FTSE Notes: 1. Figures for Regular positions are based on budgeted full-time equivalents. Figures for Adjunct, Temporary & Student positions are based on estimates from actual costs. 2. Prior to 1997, Personnel Statistics were calculated using a different methodology.

13 } Variable Adjunct Faculty Funding Resource Allocation Model FTSE 25,000 20,000 15,000 10,000 5,000 Audited Full-time Student Equivalents (FTSE) vs. Estimated Full-time Equivalent Adjunct Faculty Positions (Fiscal Years ) Audited FTSE 19,806 20,222 20,889 22,021 22,906 22,027 19,515 17,963 Adjunct Faculty Estimated Full-time Equivalent Adjunct Faculty Positions

14 } Marginal Revenue and Costs In-State For each added in-state FTSE (no course added): Revenue Cost Net $2,115 $0 $2,115 Out-of-State For each added out-of-state FTSE (no course added): Revenue Cost Net $9,870 $0 $9,870

15 } Marginal Revenue and Costs (continued) In-State For each added CRN (in-state, 21.1 student/faculty ratio): Revenue Cost Net $4,463 $2,616 $1,847 Out-of-State For each added CRN (out-of-state, 21.1 student/faculty ratio): Revenue Cost Net $20,826 $2,616 $18,210

16 } Marginal Revenue and Costs (continued) In-State For each added 1,000 in-state FTSE (47 new CRNs created): Revenue Cost Net $2,115,000 $55,198 $2,059,802 Out-of-State For each added 1,000 out-of-state FTSE (47 new CRNs created): Revenue Cost Net $9,870,000 $55,198 $9,814,802

17 } Marginal Revenue and Costs (continued) Change FTSE / FTFE classroom ratio from 21.1 to: 19.1, costs increase $2.1 million 20.1, costs increase $1.1 million 22.1, costs decrease $0.9 million 23.1, costs decrease $1.8 million

18 } Brainstorming Ideas for increasing revenue Ideas for decreasing costs Human brain. Photography. Encyclopædia Britannica ImageQuest. Web. 21 Jan

19 } More Students = More Revenue } More Students = More Spending Capacity } Be engaged in reducing costs } Be engaged in implementing actual efficiencies } Be engaged in generating revenue