OPERATING BUDGET FOR FY 2016-2017 Presented to Staff Council: May 10, 2016 1
AGENDA • SMC Budget Realities • Private Higher Education Environment – Global, PACCON, and SMC • Changes to Prior Budget Assumptions • Major Budget Assumptions, Projections, and Trends • Budget Stress Points • Questions 2
REVENUE BUDGET REALITIES Student Related Revenues (Net Tuition, Fees, and • Auxiliary Enterprises) Comprise 90% of Total Operating Revenue and Reflect the Award of $53.5 Million in College Funded Financial Aid ($47.2 million) and Athletic Grants-in-aid ($6.3 million) • Endowment Income (6%) and Unrestricted Gifts (2%) Comprise 8% of Total Operating Revenue All Other Revenue Sources Comprise 2% of Total • Operating Revenue 3
EXPENSE BUDGET REALITIES By Object of Expense , Salaries (50%) and Employee • Benefits (15%) Comprise 65% of Total Operating Expense with Non-Salary Expenses Comprising the Remaining 35% By Functional Expense , Instruction (39%), Academic • Support (9%), Student Services (8%), Auxiliary Services (8%), and Athletics (6%) Comprise 70% of Total Operating Expense, with Administration (13%), Physical Plant (7%), Technology (4%), Debt Service (3%), and Other (2%) Comprising the Remaining 30% of Total Operating Expense 4
HIGHER EDUCATION ENVIRONMENT - GLOBAL • Growing Public Concern Over Affordability, Student Loan Debt Levels, Employability, and Funding • Continued Federal Oversight of Higher Education Including President Obama’s College Score Card • Increased Transparency and Competition in Net Tuition Pricing • Somewhat Stagnant Domestic Stock Valuations, Increased Volatility in Global Financial Markets, and Very Slowly Rising Interest Rates 5
HIGHER EDUCATION ENVIRONMENT - PACCON • PACCON Includes 29 Private West Coast Comprehensive and Liberal Arts Institutions • Most Institutions Did Not Meet Some Aspect of Fall 2015 Enrollment and/or Financial Aid Targets with Graduate Programs Experiencing Flat or Down Enrollments; Law Schools Down up to 40% • Net Asset Growth Minimally Positive for FY 2015 • Institutions Adjusting to No/Slow Revenue Growth Environment with Emphasis on Reduction and/or Reallocation of Existing Resources 6
HIGHER EDUCATION ENVIRONMENT - SMC • Higher than Projected 4-Year UG Graduation Rate for Spring 2015 • Lower than Budgeted Total Undergraduate and Total Graduate Enrollments for Fall 2015 • Higher than Budgeted New Undergraduates for Fall 2015, with Higher than Budgeted Financial Aid • In-State Enrollment Growth Projected for UC System for Fall 2016 through Fall 2018 7
HIGHER EDUCATION ENVIRONMENT - SMC • Freshmen and Transfer Apps./Deposits for Fall 2016 Trending Behind Fall 2015, with NTR Trending Higher • Vibrant SF Bay Area Economy with High Real Estate Prices, Low Unemployment, and Increased Turnover • Increased Efforts to Reallocate and Reduce Operating Expenses with Emphasis on Workforce Planning for Vacant Staff Positions • Strategic Plan Provides Guidance in Allocation and Reallocation of Financial and Physical Resources 8
CHANGES TO PRIOR FY 2016-2017 BUDGET ASSUMPTIONS FORMULATED IN JAN. 2015 • Little Change in Total Fall 2016 Undergraduate Enrollment (2,779 vs 2,784) and Lower Undergraduate Comprehensive Fee Increases (3.2% vs 3.7%) • Higher New Undergraduate Student Tuition Discount Rate (40.0% vs 38.0%, but Lower than Current Year 43.6%) with Lower Net Tuition Revenue (NTR) Per New UG Student • Higher Net Income from Graduate and Professional Programs ($8.6 million vs $8.3 million) • Use of Prior Year Funds ($1.0 million) as Offsets 9
CHANGES TO PRIOR FY 2016-2017 BUDGET ASSUMPTIONS FORMULATED IN JAN. 2015 • Lower Base Salary Increases (2.0% vs 2.5%) • Higher Levels of Faculty and Staff Salary Savings ($2.3 million vs. $1.3 million) • Lower Level of Increase in Employer Contribution to Health Insurance (5% vs 6%) • Lower Strategic Initiative Funding ($0.9 million vs $1.2 million) • Reductions in Non-Salary Expense ($1.5 million) and Facility Renewal Expense ($2.7 million vs $3.9 million) 10
11
12
Graduate and Undergraduate Fall 10-Year Headcount Enrollment Trends Fall 2006 through Fall 2015 4500 4241 4207 4160 4088 4097 4006 3900 3905 4000 3823 3622 3500 2873 2853 3000 2823 2778 2754 2699 2621 2611 2514 2379 2500 2000 1461 1368 1354 1500 1319 1309 1289 1284 1265 1252 1243 1000 500 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Graduate and Professional Undergraduate Total 14
Undergraduate Fall Headcount Enrollment 5 Yr. Trends and 5 Yr. Projections Fall 2011 through Fall 2020 3500 Projected Fall Enrollment Actual Fall Enrollment 2,938 2,899 2873 3000 2853 2,847 2,805 2778 2,779 2,760 2754 2500 2,128 2,089 2047 2,037 2006 1992 1,995 1977 1,969 1,926 2000 1500 1000 648 653 635 635 635 635 635 623 626 581 500 203 199 181 181 175 175 175 175 175 175 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Enrollment-New Freshmen Enrollment - Transfer Enrollment-Returning Total Enrollment 15
Undergraduate Net Tuition Revenue January Approved Budget vs Actual Fiscal Years Ended 2012-2015 75,000,000 $70,557,000 $70,187,000 70,000,000 $69,246,000 $67,203,000 $66,174,000 65,000,000 $63,967,000 $63,686,000 60,000,000 55,000,000 $54,793,000 50,000,000 2011-2012 2012-2013 2013-2014 2014-2015 Undergraduate January Budget (Net) Undergraduate Actual Revenue (Net) 16
Graduate Net Income Budget vs Actual Fiscal Years Ended Fiscal Years Ending 2012-2015 9000000 $8,559,577 8500000 $8,205,796 8000000 7500000 $7,424,000 7000000 $6,848,000 $6,834,000 6500000 $6,455,106 $6,298,000 $6,215,000 6000000 5500000 5000000 2011-2012 2012-2013 2013-2014 2014-2015 Graduate and Professional Projections Net Graduate and Professional Actuals - Net 17
BUDGET STRESS POINTS • Eliminate Reliance on Prior Year Funds (Addressed over 3 years) • Provide Greater Net Income Margin to Buffer Future Enrollment Related Variances (3 years) • Increase Funds for Renewal of Existing Facilities (3 years) • Restore Full Funding for Strategic Plan Initiatives (1 year) 18
BUDGET STRESS POINTS • Reduce Faculty and Staff Salary Savings Targets ($0.3 million and $2.0 million reductions target – 1 to 4 years) • Moderate Increases in Net Income from Graduate and Professional Programs (2 years) • Restore Non-Salary Operating Budget Levels ($1.5 million reduction target - not addressed) 19
Questions? May 10, 2016 20
FY 2016-2017 OPERATING BUDGET PIE CHARTS 21
OPERATING BUDGET REVENUES Fiscal Year Ended June 30, 2017 $131,213,000 Other 1.9% Graduate and Professional Programs Revenue Net Undergraduate 23.2% Tuition and Fees 50.7% Gift Revenue 1.6% Endowment Income 5.9% Auxiliary Enterprises 16.7% 22
OPERATING BUDGET EXPENSES BY OBJECT Fiscal Year Ended June 30, 2017 $130,900,000 Strategic Initiatives Depreciation 0.6% Other Expenses Funding 0.7% 0.6% Faculty Salary Non-Salary 24.9% Expenses 29.9% Debt Service 3.0% Staff Salary Employee Benefits 25.1% 15.2% 23
OPERATING BUDGET EXPENSES BY FUNCTION Fiscal Year Ended June 30, 2017 $130,900,000 Debt Service Strategic Initiatives 3.0% 0.6% Other Expenses Plant Operations 0.7% 7.2% Plant Renewal 0.6% Auxiliary Services 8.2% Instruction Athletics 39.1% 6.3% Student Services 7.5% Academic Support 9.0% Administration Information 13.4% Technology 4.2% 24
Recommend
More recommend
