Mott Community College Board of Trustees Regular Board Meeting June 25, 2012

1. Mott Community CollegeBoard of TrusteesRegular Board MeetingJune 25, 2012 BUDGET RESOLUTIONS

2. For Consideration and Vote • Final Amended 2011-2012 Budget • Millage Authorization (Operating, Debt) • Tuition Recommendation beginning Winter 2013 • Initial 2012-2013 Budget

3. FINAL FY11-12 AMENDED BUDGET:General Fund

4. Final FY11-12 General Fund Budget • REVENUES: • Tuition & Fees -$588 thousand, -1.5% adj. credit-side enrollment and projections down for Winter and Spring 2012 • Property Taxes -$185 thousand due to projected increased delinquencies • State Aid no change • Other Revenue $354 thousand (auxiliary revenue increased) • =Overall downward amendment to revenue is -$356 thousand • -.47% change from January 2012 amendment

5. Final FY11-12 General Fund Budget • EXPENDITURES: • Amended downward by $770 thousand, a 1% change: • Salaries & Wages and Fringe Benefits --continued holds on open positions. • Non-salary related expenses -- savings in contracted services and material and supplies, with increases in utilities. • Transfers -- increase of designated scholarships and transfers amongst sites to reflect actual anticipated activity.

6. Final FY11-12 General Fund Budget Summary *Target = 5% - 10% of Expenditure budget

7. PROPOSED FY 12-13 BUDGET

8. RELEVANT BOARD POLICIES: _____________________________________________________________________ • 3100 Budget Adoption. “Budget revisions will be brought forward for Board action as necessary, but not less than twice per year in January and June.” • 3920,3930 Financial Stability, Fiscal Reserves. “The College will designate and set aside appropriate fund reserves to support plans for long-term capital and operating commitments.” • 5100 Compensation Philosophy. “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.”

9. PROPOSED FY12-13 BUDGET No Change in Budget Principles. Uncertainty still remains. • Budget must support Strategic Plans • Minimize/offset impact on Students • Avoid overall reduction in Staffing • Maintain Fund Balance/Reserves • Maintain flexibility in Budget • Balanced Approach

10. PROPOSED FY12-13 BUDGET • Key Assumptions Revenues • Property Taxes $ 1,287,950 • State Aid $ 637,810 • Tuition $ 1,612,930

11. PROPOSED FY12-13 BUDGET • Key Assumptions Expenditures • Transfers $ 569,640 • Salaries, Wages and Fringe Benefits $ 489,000 • Contracted Services $ 286,720 • Utilities and Insurance $ 220,200

12. Initial FY12-013 General Fund Budget Summary *Target = 5% - 10% of Expenditure budget 12

13. PROPOSED “OTHER FUNDS” FY12-13 BUDGETS • Main Point is Impact on Operating Budget: • Designated Fund $2.61Million Revenue Budget • (Scholarships, Student Enrichment, Copy Machines, Paid Parking, Designated Technology Fee) • Auxiliary Enterprise Fund--$1 Million Budget • $728,940 Net “profit” supplements General Fund • (Catering, Vending, Bookstore, Computer Lab Printing, Lapeer Campus Auxiliary)

14. PROPOSED “OTHER FUNDS” FY12-13 BUDGETS • Main Point is Impact on Operating Budget: • Debt Retirement Fund • Millage Rate remains at 0.87 mill to meet debt obligations • Capital Funds—repair, upgrade of buildings, equipment, technology, vehicles ($104 million in net value) • Instructional Technology Fee = $1.66 Million per year • $1.24 million per year planned transfer from General Fund (minimum required annual expenses).

15. CAPITAL FUNDING

16. Link to Mission and Strategic Plans • MCC’s mission statement directs the college to… “maintain its campuses, state-of-the-art equipment, and other physical resources that support quality higher education. The college will provide the appropriate services, programs, and facilities to help students reach their maximum potential.”

17. MCC Asset Value vs. Time(Asset Life) Planned Maintenance points Asset Value New Premature End of Life End of Life Extended Life

18. Deferred Maintenance Planned maintenance not performed when scheduled Usually lack of funding Leads to earlier asset replacement due to premature end of life

19. Deferred Replacement Planned asset replacement not performed when scheduled Usually lack of funding “Run-to-failure” mode of operation Uses capital that should be scheduled for other purposes

20. Capital Asset Funding • Current 10 year needs are approximately $85 million • Taxable Values Declining • Availability of Bonds? • Approx. $1.7 million in tech fees annually

21. TUITION PROPOSAL(CALENDAR YEAR 2013)

22. What if Tuition Covered State Aid Losses? Add in Property tax loss = $219.87

23. Tuition Recommendation

24. Tuition & Fees: Local Comparison Cost as based on in district/state rates from the College’s web sites MCC’s annual cost is approximately 45% of that of the next most affordable college/university in our area.

25. 7-YEAR FORECAST

26. 7 Year Forecast at June 2012 Forecasts:>>>>>>>>>>>>>>>>>>> Note: the forecast illustrates proforma data if current trends were to continue. The College is obligated to balance it’s budget each year and will take necessary steps to do so.

27. Mott Community CollegeBoard of TrusteesCommittee of the Whole MeetingJune 25, 2012 Questions or Comments? For More Info.: Contact Larry Gawthrop, CFO (810) 762-0525 or larry.gawthrop@mcc.edu Details Provided with Board Resolutions 1.39 and 1.40