budgets Changed date to 4th Monday in June Board of Trustees Committee of the Whole Meeting - June 26, 2017 Larry Gawthrop – Chief Financial Officer

For Consideration and Vote Final Amend 2016-2017 Budget Initial 2017-2018 Budget Millage Authorization (Operating, Debt) Changed dates

FINAL FY 16-17 AMEND BUDGET General Fund 01 Changed date

Final FY16-17 General Fund Budget Revenues: Overall downward amendment to revenue is $380,375; (-.51%) change from February 2017 amendment. Tuition and Fees $621,000: Error in calculation with conversion to BudgetPak. Property Taxes $478,000: Reclassification to State Aid revenue. State Aid $468,000: Reclassification from property taxes, slight adjustment for overestimation on Renaissance reimbursement. Changed date only, needs to be updated

Final FY16-17 General Fund Budget Expenditures: Amended upward by $842,000; (1.15%). Salary & Fringe Benefits Contracted Services Transfers $324,000: Course section management & release of open position pool offset by the lump sum payout. $312,000: Vacant positions filled by Kelly temps and increase in professional fees. $884,000: Transfer to Maintenance & Replacement & reserves. Offset by lump sum. Changed date only, needs to be updated

Final FY16-17 General Fund Budget SUMMARY 15-16 Actual 16-17 Amend #1 16-17 Amend #2 Revenues $ 74,259,584 $ 74,942,137 $74,561,762 Expenditures 73,924,785 73,459,022 74,301,066 Surplus/(Deficit) 334,799 1,483,115 260,696 Budgeted Increase in Net Assets 0.00 250,000 Final Surplus/(Deficit) 1,233,115 10,696 Net Assets– Beginning $ 6,607,341 $ 6,901,017 $6,942,140 Net Assets – Ending $ 6,942,140 $ 8,384,132 $7,202,836 Net Asset Balance Percent* 9.39% 11.4% 9.69% Column 1 from YE spiral bound fin stmt, Column 2 from K Drive 2015/16 Final Files, Need numbers for Column 3 * Target = 5% - 10% of expenditure budget

Reserves Required by Board Policy #3930 Fund 01 72 78 Fund Name General Operating Reserve Maintenance & Replacement Fund Building & Site Fund Requires 5-10% of annual operating expenses 1-3% of College depreciated assets or $910 million 16-17 Amend Budget Reserve 9.69% $2.3 million $1.5 million Amount Needed to Fully Fund $430 thousand $1.23 million Use Net depreciated assets.

Recent Financial & operating trends Changed date

Funding Sources 2017 -2018 State Aid Tuition Property Taxes Changed date

THEN and NOW State Funding State Funding $15,813,494 $16,229,838 Use Amend 2 budget info State Funding $15,813,494 State Funding $16,229,838

Projected Property Tax Funding FYE 2010 through FYE 2018 ($19.4 Million lost between 09/10 and 13/14) $3.1 M $1.3 M $1.3 M $500K Update current year’s numbers. What is the source of the data? Added column for 2016/17

Percentage of TOTAL FUNDING: Property Tax and State Aid Purpose is to show percentage of funding that has to be made up with tuition? What is source of date? Added 6/2016 column

Salaries/Benefits as % of Budget See narrative for 15 #s

Tuition & Financial Aid Total aid comprises 82% of MCC’s total tuition revenue (FY ended 6/16) NEED TO UPDATE

Proposed Fiscal Year 2017-2018 Budget Changed date

Relevant Board Policies Budget revisions will be brought forward for Board action as necessary, but not less than twice per year. 3100 Budget Adoption The College will designate and set aside appropriate fund reserves to support plans for long-term capital and operating commitments 3920 Financial Stability & 3930 Fiscal Reserves The Board has determined based on long-term budget projections, and other related budget data, that total compensation/ benefits should not exceed 77% of the total operating budget 5100 Compensation Philosophy No change

Strategic Plan 7-0 Budget/Finance 7-1 Focus on controllable revenues and costs to sustain our current reputation and facilities and provide funding for strategic priorities 7-2 Maintain short and long term budget and finance priorities that provide a balanced approach to the needs of a learning organization with the flexibility to realign resources 7-3 Continually review the comprehensive strategy that addresses the long term deficit which enables us to provide affordable high quality education 7-4 Continue to provide relevant and accurate financial information to college stakeholders in a timely manner in order to facilitate effective decision making, maximizing student success 7-5 Seek and cultivate alternative resources to supplement and/or increase existing revenue streams and funding sources No change

Proposed FY17-18 General Fund Budget Revenues – Key Assumptions Tuition and Fees Property Taxes Grants & Other ($350,000): enrollment decline $177,000: property taxes $325,000: future funding transfer Need update. Only change date

Proposed FY17-18 General Fund Budget Expenditures – Key Assumptions Salaries and Fringes Transfers $821,000: Restore open positions, step increases, minimal increase in health insurance (hard cap), blended MPSERS rate $799,000: budgeted minimum transfers to reserves. Decreased compared to 16/17 final budget which included Designated Transfers

Initial FY17-18 General Fund Budget 16-17 Amend #2 Initial 17-18 Revenues $ 74,561,762 $ 74,650,867 Expenditures 74,301,066 74,392,350 Surplus/(Deficit) 260,696 258,517 Budgeted Increase in Net Assets 250,000 Final Surplus/(Deficit) 10,696 8,425 Net Assets– Beginning $ 6,942,140 $ 7,202,836 Net Assets– Ending $ 7,461,353 Net Asset Percent* 9.69% 10.03% Needs update. Only changed header date * Target = 5% - 10% of expenditure budget

Proposed “Other Funds” FY 17-18 Budgets Designated Fund (Fund 02) $4.7 Million Revenue Budget Scholarships, Student Enrichment, Copy Machines, Paid Parking, Designated Technology Fee, Future Funding, Student Success and Professional Development Auxiliary Enterprise Fund (Fund 03) $861,000 Budget $500,000 Net “Profit” Supplements General Fund Catering, Vending, Bookstore, Computer Lab Printing, Day Care and College Initiatives Needs update. Only changed header date

Proposed “Other Funds” FY 17-18 Budgets Debt Retirement Fund (Fund 73) Millage rate stayed the same at 0.82 mills to meet debt obligations Capital Fund (Fund 72) repair, upgrade of buildings, equipment, technology & vehicles Instructional Technology Fee = $1.36 Million per year $797,000 per year planned transfer from General Fund (minimum required annual expenses plus reserves) Building & Site (Fund 78) $500,000 planned transfer from General Fund Needs update. Only changed header date

Projected Reserve Balances June 30, 2014 Actual $6,287,873 GF $750,000 Rainy Day $3,226,911 Capital Reserve Balance $10,264,784 June 30, 2015 $250,000 GF $0 Rainy Day ($232,998) Capital Reserve1 Balance $10,351,927 June 30, 2016 $334,799 GF $100,000 Capital Reserve Balance $12,224,854 June 30, 2017 Projected $260,696 GF $2,128,000 Capital Reserve Balance $14,380,552 June 30, 2018 Projected $600,000 Capital Reserve Balance $15,230,552 1Lapeer Installment Purchase Payment

Questions? Changed date