Fiscal Year 2018 Proposed Budget Governing Board Meeting May 10, 2017 Presenter: David Bea, Ph.D.
Foundational Elements to the Fiscal Year 2018 Proposed Budget Stewardship and Financial Health Indicators Financial and Operational Health Metrics Enrollment Trends College Business Model Expenditure Limitation Revenue Source Realities Competition Cost Drivers Future Needs Educational Master Plan and Strategic Reinvestment Other Organizational Challenges
Proposed 2017-2021 Strategic Plan Institutional goal for 2030: Achieve 60 Pima County Strategic Direction 1: Improve student success Strategic Direction 2: Enrich the community through engagement Strategic Direction 3: Cultivate institutional excellence through continuous improvement
Fiscal Year 2018 Budget Calendar December 2016 January 2017 February 2017 March 2017 April 2017 Fiscal Year 2018-2020 Budget Scenarios developed by ELT Fiscal Year 2018-2020 Budget Scenarios feedback at a Governing Board study session Fiscal Year 2018-2020 Budget Outlook presentations at numerous College locations Fiscal Year 2018-2020 Budget Scenarios presented to the Finance and Audit Committee Fiscal Year 2018 Budget Outlook and Tuition presented to student leaders Property tax levy letter was received from Pima County Fiscal Year 2018 Budget Outlook presented to the community Fiscal Year 2018 Budget Outlook and Tuition presented to the Finance and Audit Committee Employee benefits contracts for Fiscal Year 2018 were presented to the Governing Board and approved Academic Year 2017-2018 tuition and fees presented to the Governing Board Fiscal Year 2018 Budget Outlook presented to the community Fiscal Year 2018 Budget Update and Tuition and budget model presented at a Governing Board study session Academic Year 2017-2018 tuition and fees approved by the Governing Board Fiscal Year 2018 Capital Budget and Projects approved by the Governing Board Fiscal Year 2018 Budget Outlook and Property taxes presented to the Finance and Audit Committee
Fiscal Year 2018 Budget Calendar (continued) May 2017 June 2017 Fiscal Year 2018 Budget Overview presented to the Executive Leadership Team Proposed Fiscal Year 2018 preliminary budget, tax rate, and tax levy with a request for approval to allow publication according to statutory guidelines are presented to the Governing Board Proposed Fiscal Year 2018 budget and 'Truth in Taxation Notice of Tax Increase' (if necessary) are published and a press release is distributed as required by Arizona Revised Statutes Proposed Fiscal Year 2018 budget and 'Truth in Taxation Notice of Tax Increase' (if necessary) are published as required for a second time as required by Arizona Revised Statutes A Public Hearing is scheduled on the proposed budget, property tax rates, and levies A Special Meeting is scheduled to vote on the budget and property tax levies and rates. A roll call vote to levy the proposed property tax and vote to approve the proposed budget occurs The documents are transmitted to the Property Tax Oversight Commission as required by Arizona Revised Statutes July 2017 Fiscal Year 2018 budget is implemented on July 1
Budget Communications Budget Outlook Presentations provided to: Student Leaders Governing Board Finance and Audit Committee Executive Leadership Team Faculty and Staff at locations College-wide Community Members at three Learning Center locations Survey tool collected feedback from presentations Presentations posted online to Fiscal Year 2018 Budget Calendar and Documents Numbers! PCC s Finance Newsletter
Expenditure Limitation Projections
Budget Scenarios Scenario A: Delay Impacts for Now with Larger Tuition Increases Small to no reductions for 17-18 and 18-19. Plan for $15 mil reduction in 19-20 Continue to reduce via attrition Mitigate cost increases and Expenditure Limitation impacts with larger tuition increases No funding to implement Educational Master Plan or other strategic changes until 19-20 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 Educational Master Plan (EMP) Rely on revenue bonds for some EMP 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 Educational Master Plan Ensure future financial stability and ability to grow
Revenues http://www.jpacaz.org/index.asp
FY 2018 Revenue Summary Tuition and Fees $3.00 increase to in-state resident tuition, from $78.50 per unit to $81.50 per unit New $75.00 per/semester fee for international students Property Tax Primary Growth of 1.43%, $1.5 million Max Levy Increase of 3.01%, $3.3 million Secondary $0.00 No Debt! State-Based Funding $0.00 - Operating State Aid $0.00 - STEM and Workforce programs State Aid
Primary Property Tax Levy Detail Proposed FY 2017 FY 2018 Levy Neutral FY 2018 Proposed Net Taxable Value Current Year ($100s) $ 78,166,998 $ 80,749,577 $ 80,749,577 Overall Change in Valuation 2.58% 3.30% 3.30% Change from New Property 1.89% 1.43% 1.43% Estimated Primary Tax Rate Authorization (per $100 net assessed valuation) $ 1.3733 $ 1.3484 $ 1.3890 Primary Tax Levy $ 107,346,737 $ 108,882,730 $ 112,161,162 Change from previous fiscal year $ 1,535,993 $ 4,814,425 Truth in Taxation Levy Increase $ 3,278,432
PCC Primary, Secondary, and Combined Tax Rates (Fiscal Years 2000-2018*) 1.7500 1.5000 1.2500 1.0000 1.3696 Proposed 1.3890* Levy Neutral 1.3484 0.7500 0.5000 0.2500 0.0000 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018* Primary Property Tax Rate 1.1626 1.1709 1.1455 1.1530 1.1358 1.1143 1.0930 1.0570 1.0191 0.9787 0.9356 0.9755 1.0846 1.1484 1.2746 1.3344 1.3689 1.3733 1.3890 Secondary Property Tax Rate 0.2070 0.3865 0.4015 0.3803 0.3526 0.2285 0.2184 0.1945 0.1654 0.1502 0.1414 0.1093 0.0248 0.0257 0.0187 0.0000 0.0000 0.0000 0.0000 Combined Primary + Secondary Tax Rates 1.3696 1.5574 1.5470 1.5333 1.4884 1.3428 1.3114 1.2515 1.1845 1.1289 1.0770 1.0848 1.1094 1.1741 1.2933 1.3344 1.3689 1.3733 1.3890 * proposed
Fiscal Year 2017 Tax Rates for All Arizona CCs (Rates Per $100 Net Assessed Valuation. Combined rates are shown) $3.50 $3.00 $2.50 $2.00 $1.50 $3.0768 $2.6269 $2.6255 $2.2860 $2.0561 $1.7884 $1.4651 $1.3733 $1.3288 $1.00 $0.50 $0.6214 $0.00 Graham Pinal Yuma/La Paz Cochise Yavapai Navajo Maricopa Pima Mohave Coconino Primary Tax Rate Secondary Tax Rate
Truth in Taxation
Budget Comparison Adopted Fiscal Year 2017 vs. Proposed Fiscal Year 2018 Adopted Fiscal Year 2017 Budget Revenues - $247.8 million (all funds, in $ millions) College Equity $28.8 12% Other Revenue $5.5 2% Proposed Fiscal Year 2018 Budget Revenues - $246.1 million (all funds, in $ millions) College Equity $27.8 11% Other Revenue $4.8 2% Tuition & Fees $48.2 20% Property Tax Revenue $107.3 43% Tuition & Fees $48.2 19% Grants, Contracts, Financial Aid $58.0 23% Grants, Contracts, Financial Aid $53.2 22% Property Tax Revenue $112.1 46%
FY 2008-2018* Budget Revenue and Fund Balance by Source (all funds, in $ thousands; *Proposed) $325,000 $300,000 $275,000 $250,000 $225,000 $200,000 $175,000 $150,000 $125,000 $100,000 $75,000 $50,000 $25,000 $- FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 College Equity Grants, Contracts & Financial Aid Other Revenue Tuition and Fees Property Tax Levy State Aid (Operations + Capital)
FY 2017-2018 Proposed General Fund Revenues by Source (in $ millions) FY17 Proposed FY18 Change Property Tax Levy $ 107.3 $ 112.1 $ 4.8 Tuition and Fees 40.4 40.4 0.0 Other Revenue 0.6 0.6 0.0 College Equity 5.6 5.3-0.3 Total Resources $ 153.9 $ 158.4 $ 4.5 Tuition and Fees 25.5% Other Revenue 0.4% College Equity 3.3% Property Tax Levy 70.8%
Budgeted General Fund Revenue Sources as a percent of Total Revenue (Excludes College Equity like use of fund balance / reserves / savings to more clearly show revenue from external sources) 80% 70% 60% 50% 40% 30% 20% 10% 0% FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Property Tax 59% 61% 62% 60% 62% 62% 64% 66% 69% 72% 73% Tuition 24% 24% 24% 28% 32% 32% 31% 29% 31% 27% 26% State Aid 15% 13% 13% 11% 5% 5% 5% 4% 0% 0% 0% Other 2% 1% 1% 0% 1% 1% 1% 1% 0% 0% 0%
Expenditures http://www.jpacaz.org/index.asp
FY 2018 Budget Expenditure Priorities Employee Benefits: No increase or decrease expected Contractual Obligations: +$ 1.4 million Wages: Proposed 3.0% increase to Salary Pools Debt Service Lease Financing: IT and various capital project equipment Implementation of the Educational and Facilities Master Plans: $45.0 million in revenue bonds ($3.6 million debt service) Operational/Position Reductions Closure of Existing Vacant Positions: $6.3 million
Vacant Positions as of March 2017 (General Fund) Budgeted FTE Filled FTE Vacant FTE Administrators 48 41 7 Faculty 355 307 48 Currently Filled and Vacant Positions (Total FTE) Vacant 14.6% Administrators 3.2% Faculty 23.8% Staff 886.8 753 133.8 Total 1289.8 1101 188.8 Staff 58.4% Administrators Faculty Staff Vacant
Budgeted PCC Staffing Levels 2007-2018 (General Fund) Staffing 1,400 1,200 1,000 800 600 400 200-2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018** Staff 779.8 785.1 791.3 815.2 785.1 796.8 811.0 835.7 858.6 889.6 886.8 756.8 Faculty 378.0 380.0 380.0 381.0 383.0 387.0 387.0 370.0 373.0 373.0 355.0 345.0 Administrators 51.0 57.0 57.0 49.5 50.5 49.5 51.5 51.0 51.0 54.0 48.0 46.0 Notes: * Number of positions funded as of December 31, 2016. ** Projected FY 2018 positions. - All figures are budgeted full-time equivalent regular positions in the General Fund.
PCC Staff Positions (Filled or Vacant, General Fund only) Number of Positions 900 800 700 600 500 400 300 200 100 0-100 All Staff Positions, 886.8 FY 2017 Number of Positions 900 800 700 600 500 400 300 200 100 0-100 Filled Staff Positions, 756.8 FY 2018 Critical Positions, 30 Budgeted Vacant Positions, -60 Eliminated Positions, -40 Note: As of April 2017, there were 886.8 total staff positions in the General Fund, including 130 open/vacant positions - 14.7%
General Fund Expenditures (in $ millions) FY 2017 Proposed FY 2018 Change Administrators $ 6.2 $ 6.2 $ 0.0 Faculty 22.8 22.7-0.1 Staff-Classified 43.3 40.1-3.2 Other Compensation 4.9 3.7-1.2 Fringe 25.9 24.6-1.3 Subtotal 103.1 97.3-5.8 Operations 26.5 26.6 0.1 Capital 0.5 0.5 0.0 Transfers (net) Designated Fund Debt Service Capital Miscellaneous Contingency / Reserves 5.2 6.9 1.7 Total $ 153.9 $ 158.4 $ 4.5 18.6 13.1 0.7 2.9 1.9 27.1 13.1 5.3 6.4 2.3 8.5 0.0 4.6 3.5 0.4
Designated Fund Summary (by program, in $ millions) FY 2017 Proposed FY 2018 Change Professional Development $ 0.8 $ 0.9 $ 0.1 Athletics 2.2 2.1-0.1 Course Fees 1.8 2.3 0.5 Academic Programs 14.2 13.6-0.6 Center for Training & Development 2.9 2.7-0.2 Contract Training 0.9 2.1 1.2 Prison Program 0.6 0.7 0.1 Public Safety Institute 0.8 0.7-0.1 Community Education 0.4 0.5 0.1 Other 1.1 1.5 0.4 Contingency / Reserves 1.4 1.4 0.0 Transfers -13.1-13.1 0.0 Total $ 14.0 $ 15.4 $ 1.4
Auxiliary Fund Summary (in $ millions) FY 2017 Proposed FY 2018 Change Food Service 0.2 0.1 $ -0.1 Business Relations 0.2 0.2 0.0 Rentals 0.0 0.2 0.2 Transfers 0.7 0.7 0.0 Contingency / Reserves and Other 1.4 1.1-0.3 Total $ 2.5 $ 2.3 $ -0.2
Restricted Fund Summary (in $ millions) FY 2017 Proposed FY 2018 Change Student Financial Aid $ 37.2 $ 33.4 $ -3.8 Workforce Development (Prop 301) 2.4 2.0-0.4 Grants Health Profession Opportunity Grant (HPOG) 3.0 3.0 0.0 Adult Education 3.7 3.9 0.2 Title III Improving graduation rates, particularly STEM 0.4 1.1 0.7 Title V Developing Hispanic Serving Institutions 1.2 1.7 0.5 TRIO (Upward Bound, Student Support Services, Talent Search) 2.1 2.9 0.8 Other 1.7 2.0 0.3 New Grants 6.6 3.0-3.6 Total $ 58.3 $ 53.0 $ -5.3
Capital Fund Summary (in $ millions) FY 2017 Proposed FY 2018 Change Budget Year Projects General Capital Projects $ 1.9 $ 4.7 $ 2.8 Technology Fee Projects 0.6 1.4 0.8 Proposition 301 Projects 2.8 1.6-1.2 Contract/Auxiliary Projects 0.5 0.0-0.5 Total Budget Year Projects $ 5.8 $ 7.7 $ 1.9 Carry Forward Projects 16.0 15.0-1.0 Contingency / Reserves 2.2 2.1-0.1 Total All Projects $ 24.0 $ 24.8 $ 0.8 Less Transfers from Other Funds Proposition 301 Funding -2.2-1.6 0.6 General Fund Transfer -2.9-6.4-3.5 Other Funds Support (including grants) 0.2 0.2 0.0 Net Budget $ 19.1 $ 17.0 $ -2.1
FY 2017-2018 Proposed Budget By Fund, $ 246.1 million (all funds, in $ millions) Designated Fund $15.4 6% Capital Fund $17.0 7% Auxiliary Fund $2.3 1% Restricted Fund $53.0 22% General Fund $158.4 64%
FY 2017-2018 Proposed Budget Expenditures, $246.1 million (all funds, in $ millions) Student Financial Aid, $34.6, 14% Contingency and Reserves, $14.5, 6% Capital Equipment, $23.1, 9% Administrative Personnel, $6.5, 3% Faculty, $22.9, 9% Additional Compensation-Faculty, $1.5, 1% Adjunct Faculty, $11.7, 5% Other Expenditures, $6.9, 3% Current Fixed Charges, $1.6, 1% Supplies and Materials, $9.3, 4% Classified Staff, $50.4, 21% Other Compensation, $5.0, 2% Contractual Services, $18.0, 7% Student Employment, $0.5, 0% Communications and Utilities, $6.0, 2% Travel, $3.4, 1% Fringe Benefits, $30.2, 12%
FY 2017-2018 Proposed General Fund Expenditures Budget, $ 158.4 million (in $ millions) Capital $0.5 0% Contingency / Reserves $6.9 4% Transfers $27.1 17% Administrators $6.2 4% Faculty $22.7 15% Operations $26.6 17% Staff-Classified $40.1 25% Fringe Benefits $24.6 16% Other Compensation $3.7 2%
Next Steps Governing Board to endorse the Fiscal Year 2018 Proposed Budget as presented or make recommendations for tax levy and rate, estimated debt, and/or salary pool increases Property Taxes (Primary Tax Rate) Chancellor s Recommendation Finance and Audit Committee s Recommendation 3.01% Increase to Levy Max 3.01% Increase to Levy Max Salary 3% Increase to Salary Pools 2% FY18 Stipend (to be divided across the total number of annual pay periods for each employee) Estimated Debt $45.0 million - Governing Board s Recommendation June 2017 Public Hearing and Special Board Meeting to adopt budget and set tax levies and rates
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