PCC BUDGET FORUMS: FISCAL YEAR BUDGET OUTLOOK JANUARY 2018 PRESENTED BY: DR. DAVID BEA

Transcription

1 PCC BUDGET FORUMS: FISCAL YEAR BUDGET OUTLOOK JANUARY 2018 PRESENTED BY: DR. DAVID BEA

2 BOARD APPROVED STRATEGIC PRIORITIES College Strategic Plan Educational Master Plan (EMP) Facilities Master Plan (FMP) Diversity, Equity, and Inclusion Plan Strategic Enrollment Management Plan

3 AGENDA FY18 Budget Recap and Status FY19 Budget Development Financial Indicators Enrollment Update Revenue and Expenditures Projections Expenditure Limitation Projections Calendar and Communication Plan

4 SUMMARY OF FY18 BUDGET HIGHLIGHTS TOTAL RESOURCES: $246.1M GENERAL FUND: $153.1M 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 by year s end

5 BUDGET SCENARIOS Scenario A: Delay Impacts for Now with Larger Tuition Increases Small to no reductions for and Plan for $15 mil reduction in Continue to reduce via attrition Mitigate cost increases and Expenditure Limitation impacts with larger tuition increases No funding to implement EMP/FMP or other strategic changes until Large reduction pending due to Expenditure Limitation Scenario B: Rejuvenate the College Reduce current operations by $5 mil per year in each of next 3 years Identify programs for elimination and begin phasing out Reduce infrastructure/staffing Implement most of the first 5 years of the EMP/FMP Rely on GO Bonds for some EMP/FMP projects Scenario C: Revolutionize the College Reduce current operations by about $10 mil per year in each of next 3 years Identify programs for elimination and begin phasing out Eliminate at least one location Significantly reduce infrastructure/staffing Large and immediate investment in EMP/FMP Ensure future financial stability and ability to grow

6 FY18 GENERAL AND ACADEMIC FUND POSITIONS (AS OF NOVEMBER 13, 2017) Position Type Closed Vacant Filled Grand Total Administrators Faculty Staff Campus Total District Chancellor External Relations Finance/IT Facilities/Police HR Academic/Student Affairs Grand Total , ,278.6 Staff Positions On target to reduce 100 vacant FTE by start of FY19 Reduction of $6.0M in salaries ~40 more vacant FTE to be reduced by February 5

7 FINANCIAL INDICATORS DASHBOARD Key Color Level of Concern Direction Trend Indicator Red Significant Increase Orange Moderate Maintenance Green Minimal to No Decrease

8 FTSE FY PCC FTSE 30,000 25,000 20,000 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 15,000 16,458 15,382 14,779 10,000 5, Fiscal Year

9 PROJECTION: ACTUAL FTSE VS EXPENDITURE LIMITATION FTSE 30,000 25,000 20,000 15,000 10,000 5, Audited FTSE CTE Weight EL FTSE

10 Expenditure Limit (in $1,000s) EXPENDITURE LIMITATION PROJECTIONS 130, , , ,000 90,000 80,000 $10 mil $24 mil 70,000 We are Here 60, Fiscal Year Expenditure Limit Actual Expenses Typical Increases No Tuition Increases FY18 Plan

11 IN-STATE TUITION AND MANDATORY FEES PER CREDIT HOUR: AZ COMMUNITY COLLEGES, FY18 $ $ $ $ $90.00 $80.00 $70.00 $88.00 $87.00 $86.00 $86.00 $85.00 $83.00 $82.00 $82.00 $72.00 $60.00 $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 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 $ $81.00 $81.50 $86.00 $86.00 $85.00 $83.00 $82.00 $82.00 $72.00

12 Tuition per Credit Hour PEER COMPARISON - PER CREDIT HOUR PUBLISHED OUT-OF-STATE TUITION RATES (IPEDS DATA - IC2016_AY) $ $ $ For 2017, PCC had the 16th lowest out-of-state tuition rate among its Peers, AZ CCs, Aspen Winners & Peer City Colleges $ $ $ $-

13 Tuition per Credit Hour PEER COMPARISON - PER CREDIT HOUR PUBLISHED IN-STATE TUITION RATES (IPEDS DATA - IC2016_AY) $ $ $ $ For 2017, PCC had the 7th lowest in-state tuition rate rate among its Peers, AZ CCs, Aspen Winners & Peer City Colleges $ $50.00 $-

14 PROPERTY TAX RATES: AZ COMMUNITY COLLEGES, FY18 (RATES PER $100 NET ASSESSED VALUATION) $3.50 $ $3.00 $2.50 $ $ $ $2.00 $ $ $1.50 $ $ $ $1.00 $ $0.50 $0.00 Graham Yuma/La Paz Pinal Cochise Yavapai Navajo Maricopa Pima Mohave Coconino Secondary Tax Rate $- $ $ $- $ $- $ $- $- $ Primary Tax Rate $ $ $ $ $ $ $ $ $ $0.4816

15 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 3 rd lowest Property Tax rate among AZ Community Colleges Pima County Property Valuation Growth Estimated to be 2.4% ($1.6M) 2% Property Tax Levy increase = $2.3M

16 FY19 REVENUE ESTIMATES (CONTINUED) Other revenue sources State Appropriations State budget provides $0 for PCC 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 & return on investment projects Passport services Space leases PCard/Concur Financial Aid CampusLogic for FAFSA verification

17 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

18 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

19 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 RFP Committee reviews proposals from prospective Financial Advisors January 2018 Select Financial Advisor February 2018 Computer Technology Summit Work with Financial Advisor to select Bond Counsel and Underwriter Begin to Compile information for Official Statement March 2018 Fine Arts Summit Meet with key legislators and other constituents about projects April 2018 Meet with key legislators and other constituents about projects May 2018 Board Approval of Authorizing Resolution for Revenue Bonds Preliminary Official Statement and Legal Documents to Rating Agency Conference call with ratings agency 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

20 FY19 EXPENDITURE PRIORITIES: PERSONNEL Continued Position Reductions Employee Benefits: No cost increase expected for medical/pharmacy Increase to contributions for ASRS (from 11.50% to 11.80%) 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

21 BUDGET CRITERIA Resources will be allocated to ensure the success of the College s priorities as outlined in our Missions, Goals, and Strategic Plans All regulatory and compliance requirements will continue to be met and funded All programs and services will be evaluated in terms of their benefits, costs, relevancy, and impact to our students, and external community, including businesses and transfer institutions Underperforming areas, once identified, should be modified or eliminated As new needs arise, funds will be needed for new programs and services

22 BUDGET CRITERIA (CONTINUED) Human resources should be optimally assigned throughout the district In-house talent, retraining, and cross training may be considered before external hiring occurs Unit functionality and efficiency will be promoted, meaning that employee assignments correspond to real needs, student enrollment, and organizational demands All services need not be offered at all locations Physical assets will be optimally utilized throughout the district Return on investment, process efficiency, and income-generating initiatives need to be explored in order to continuously improve and adapt

23 FY19 BUDGET DEVELOPMENT CALENDAR December 2017 February 5, 2018 February 7, 2018 March 7, 2018 April 11, 2018 May 9, 2018 Activity Governing Board Study Session to discuss the budget outlook and acquire Board direction on potential scenarios and/or key parameters Governing Board Study Session to review the budget model and scenarios based on Board feedback at the December Study Session Governing Board Meeting to review and approve course fees for Academic Year 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 Governing Board Meeting to review the proposed Fiscal Year budget and approve the Publication of Proposed Budget and, if required, Truth in Taxation Notification Public Hearing and Special Board Meeting to set tax levies and rates and adopt the Fiscal Year budget

24 BUDGET MODEL

25 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 January: Numbers newsletter to PimaAll in advance of budget presentations district-wide January: Budget presentations to faculty, staff, administrators, students, and community members Ongoing: Collaboration with the Finance and Audit Committee

26 FEBRUARY 5, 2018 STUDY SESSION Parameters to be addressed in the budget model at the next Board Study Session: Revenues Tuition/enrollment Property taxes Alternate revenue streams Expenditures Salaries Position reductions EL reduction ($0-10M) plans Additional cuts to balance the budget Capital expenses/bonds projects

27 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 Budget Criteria

28 FEEDBACK Please click here to provide feedback on this presentation and/or the College s budget.