1 Financial Planning and Accounting for Q2S Ms. Lisa Eason Mr. Ken Kincaid 1

2 Three Questions  How’d we get into this ?  How do we prepare for this?  How do we make it through the first year?

3 How’d we get into this ?  Academic folks said: Convert to semesters and it will be good for students  Business folks said: But this is a huge project, we’re just recovering from mergers, state revenue has crashed, it will impact the entire system’s operations, it’s very expensive, enrollment will drop, and the Regents’ experience has spooked everyone who witnessed it.

4 Conversion will be Good for Students  But it will be expensive  There are no state funds for this  We’ll need Other Funds: tuition, fees, etc  Tuition will need to go up $5 per hr in FY11  Tuition will need to go up $5 per hr in FY12  We’ll need tuition at $50 per quarter hr to make this happen

5 OK. We’ll raise tuition. The conversion will be good for students

6 Not Enough Money. Conversion may cost $80M+ -3% Enrollment, -8% FTE -7% Enrollment, -13% FTE-9% Enrollment, -15% FTE $54,000,000 $81,000,000 $92,000,000

7 Conversion will be Good for Students  Need Accumulated Reserves  Not enough Other Funds annually  Need to accumulate funds over two years  Carryover statute must be renewed  Carryover statute should include tuition revenue  Caps on reserves must be high enough to cover at least $80M cost of conversion

8 OK. We’ll fix the carryover. The conversion will be good for students HB 1128 as Passed OCGA Revenue collected by any or all institutions under the Technical College System of Georgia from tuition, departmental sales or services, continuing education fees, technology fees, or indirect cost recoveries shall not lapse. The amount of revenue from tuition that shall not lapse under this Code section shall not exceed 15 percent of the tuition collected. This Code section shall stand repealed on June 30, "

9 But there will be fewer terms… Longer terms.  All course-related costs and credits will have to be recalculated  Tuition  Fees  Course load  Credit hours

10 OK. Recalculate the rates. The conversion will be good for students

11 Enrollment will drop. Revenue will fall.  Cost Model produced the following scenarios: Scenario A—Enrollment decline of 3%; FTE decline of 8% Scenario B—Enrollment decline of 7%; FTE decline of 13% Scenario C—Enrollment decline of 9%; FTE decline of 15%

12 Conversion will be Good for Students  Maintaining enrollment is critical  Student Advisement can maintain FTE’s  Public information  System-wide education  Advisement software  Leadership Summit

May 11-12, 2010 Q2S L EADERSHIP S UMMIT T ECHNICAL C OLLEGE S YSTEM OF G EORGIA

14 How do we prepare for this?  Supporting role, once again  Maintaining FTE levels is critical to funding  Advisement is critical to maintaining FTE levels  Supporting Advisement is critical  Conversion will be good for students  If done right, it could also be good for the business office.

15 Good Advisement, Good Investment

16 Poor Advisement, Very Expensive

17 Excellent Advisement, Very Rewarding

18 Enrollment’s Impact on Fee Revenue

19 Hold on to Headcount

20 Summary of Advisement Payback

21 Advisement is Critical  Poor advisement could result in a loss of $60M  Good advisement could result in a gain of $18M  System stake is $78M  Will you support the implementation of the student advisement plan at your college?  YES is the correct answer.

22 How do we make it through the first year?  Plan  Support student advisement  Salvage something out of the transitional half- quarter  Support year-round programs  Don’t panic

23 The Transitional Half-Quarter

24 The Transitional Half-Quarter

25 Fall Semester FY 12 - Enrollment

26 Fall Semester FY 12 - Revenue

27 Spring Semester FY 12 - Enrollment

28 Spring Semester FY 12 - Revenue

29 Summer Semester FY 12 - Enrollment

30 Summer Semester FY 12 - Revenue

31 Summary of FY12 Revenue Model

32 After the First Year  No transitional half-quarter  Credit hours recover from conversion drop  Carryover statute in place  Higher tuition  Less dependent on state funding  Financial situation stabilizes

33 Mission Accomplished  Conversion is good for students.  It doesn’t have to be bad for the business office  Stand by for more information on deferring revenue for summer semester 2012