GOVERNING BOARD STUDY SESSION FISCAL YEAR 2018-2019 BUDGET OUTLOOK DECEMBER 4, 2017 PRESENTED BY: DR. DAVID BEA
BOARD APPROVED STRATEGIC PRIORITIES • 2017-2021 College Strategic Plan • Educational Master Plan • Facilities Master Plan • Diversity, Equity, and Inclusion Plan • Strategic Enrollment Management Plan
STUDY SESSION AGENDA • FY18 Budget Recap and Status • FY19 Budget Development • Financial Indicators • Enrollment Update • Revenue and Expenditures Projections • Expenditure Limitation Projections • Calendar and Communication Plan • Governing Board/Finance and Audit Committee Discussion • Direction on Budgetary Priorities
SUMMARY OF FY18 BUDGET HIGHLIGHTS TOTAL RESOURCES: $246.1MIL GENERAL FUND: $153.1MIL • Expenditures • Revenues Salaries/Wages: increase of 2.5% • for FY18 • Tuition: increase of $3.00 Debt Service: allocation of $3.6M • per credit hour for ~$45.0M in revenue bonds • Property Taxes: Reallocated in FY18 for Downtown • Campus area property purchases • Primary Tax Rate: increase Enrollment/Marketing Initiative: • allocation of $500K of 3.0% (to levy maximum) Class/Comp Study: delayed • • Secondary Tax Rate: $0.00 Positions: elimination of 100 • vacant staff FTE • $0 State Aid for Operations or STEM
IN-STATE TUITION AND MANDATORY FEES PER CREDIT HOUR: AZ COMMUNITY COLLEGES, FY18 $120.00 $105.00 $110.00 $100.00 $88.00 $86.00 $85.00 $83.00 $87.00 $86.00 $90.00 $82.00 $82.00 $80.00 $72.00 $70.00 $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 $105.00 $81.00 $81.50 $86.00 $86.00 $85.00 $83.00 $82.00 $82.00 $72.00
FY18 GENERAL AND ACADEMIC FUND POSITIONS (AS OF NOVEMBER 13, 2017) Position T ype Closed Vacant Filled Grand T otal Administrators 6.0 42.0 48.0 Faculty 45.0 298.0 343.0 Staff Positions • Staff 39.4 103.7 744.5 887.6 Campus Total 11.0 53.5 331.9 396.4 On target to reduce 100 • vacant FTE by start of District 28.4 50.2 412.6 491.2 FY19 Chancellor 3.6 7.0 10.6 External Relations 7.8 31.0 38.8 Reduction of $6.0M in • Finance/IT 8.0 9.0 120.0 137.0 salaries Facilities/Police 15.4 15.7 168.0 199.1 HR 2.0 7.0 13.0 22.0 Academic/Student Affairs 3.0 7.0 73.6 83.6 Grand T otal 39.4 154.7 1,084.5 1,278.6
PROPERTY TAX RATES: AZ COMMUNITY COLLEGES, FY18 (RATES PER $100 NET ASSESSED VALUATION) $3.50 $ 3.1383 $3.00 $ 2.6210 $ 2.5429 $ 2.3735 $2.50 $ 1.9828 $ 1.8067 $2.00 $ 1.3890 $ 1.4096 $ 1.3430 $1.50 $1.00 $ 0.6142 $0.50 $0.00 Graham Yuma/La Paz Pinal Cochise Yavapai Navajo Maricopa Pima Mohave Coconino Secondary Tax Rate $- $0.3632 $0.3099 $- $0.2001 $- $0.2140 $- $- $0.1326 Primary Tax Rate $3.1383 $2.2578 $2.2330 $2.3735 $1.7827 $1.8067 $1.1956 $1.3890 $1.3430 $0.4816
2004-17 FINANCIAL INDICATORS DASHBOARD Key Level of Trend Color Concern Direction Indicator Red Significant Increase Orange Moderate Maintenance Green Minimal to No Decrease
FY 2002-2017 PCC FTSE 30,000 25,000 22,907 22,907 22,907 22,907 22,021 22,021 22,021 22,021 22,028 22,028 22,028 22,028 20,889 20,889 20,889 20,889 20,611 20,611 20,611 20,611 20,425 20,425 20,425 20,425 20,393 20,393 20,393 20,393 20,222 20,222 20,222 20,222 19,993 19,993 19,993 19,993 19,807 19,807 19,807 19,807 19,514 19,514 19,514 19,514 19,027 19,027 19,027 19,027 20,000 17,963 17,963 17,963 17,963 16,458 16,458 16,458 16,458 15,382 15,382 15,382 15,382 14,779 14,779 14,779 14,779 FTSE 15,000 10,000 5,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Fiscal Year
PROJECTION: ACTUAL FTSE VS EXPENDITURE LIMITATION FTSE 30,000 25,000 20,000 15,000 10,000 5,000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Audited FTSE CTE Weight EL FTSE
EXPENDITURE LIMITATION PROJECTIONS 130,000 120,000 110,000 Expenditure Limit (in $1,000s) 100,000 90,000 $10 mil $24 mil 80,000 We are Here 70,000 60,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Fiscal Year Expenditure Limit Actual Expenses Typical Increases No Tuition Increases FY18 Plan
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% ($1.57M) • 2% Property Tax Levy increase = $2.3M
FY19 REVENUE ESTIMATES (CONTINUED) • Other revenue sources • State Appropriations • Budgeted for $0 increase • 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 • Passport services • Space leases
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 •
SUMMARY OF THE REVENUE BONDS PROCESS Month Activity October 2017 Applied T echnology and Allied Health Summits • • RFP for Financial Advisor issued November 2017 • First Responder EMT/PSESI Summit • RFP for Financial Advisor closed December 2017 • Select Financial Advisor January 2018 • Work with Financial Advisor to select Bond Counsel and Underwriter • Begin to Compile information for Official Statement February 2018 • Computer T echnology Summit March 2018 • Fine Arts Summit Meet with key legislators and other constituents about projects • April 2018 • Board Approval of Authorizing Resolution for Revenue Bonds Preliminary Official Statement and Legal Documents to Rating Agency • • Conference call with ratings agency May 2018 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 •
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
FY19 EXPENDITURE PRIORITIES: PERSONNEL • Employee Benefits: • No cost increase expected for medical/pharmacy • Minimal changes for other benefits • 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
FY19 BUDGET DEVELOPMENT CALENDAR Activity December 2017 Governing Board Study Session to discuss the budget outlook and acquire Board direction on potential scenarios and/or key parameters February 2018 Governing Board Meeting to review and approve course fees for 2018-2019 Academic Y ear Late February/ Governing Board Study Session to review the budget model and scenarios based on Board Early March 2018 feedback at the December Study Session March 2018 Governing Board Meeting to review and potentially approve: Employee Benefits; T uition and Fees; Capital Budget Project List; Salaries and Wages; Budget Priorities; and Proposed Primary T ax Rate and Levy April 2018 Governing Board Meeting to review the proposed Fiscal Y ear 2018-2019 budget and approve the Publication of Proposed Budget and, if required, T ruth in T axation Notification May 2018 Public Hearing and Special Board Meeting to set tax levies and rates and adopt the Fiscal Y ear 2018-2019 budget
BUDGET MODEL
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 December: Numbers newsletter to PimaAll in advance of budget presentations district-wide • January/February: Budget presentations to faculty, staff, administrators, students, and community • members Ongoing: Collaboration with the Finance and Audit Committee •
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