GOVERNING BOARD STUDY SESSION

FISCAL YEAR 2018-2019 BUDGET DISCUSSION

FEBRUARY 5, 2018

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

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 5, 2018 Governing Board Study Session to review the budget model and scenarios based on Board

feedback at the December Study Session

February 7, 2018 Governing Board Meeting to review and approve course fees for 2018-2019 Academic Year

March 7, 2018 Governing Board Meeting to review and potentially approve: Employee Benefits;

Tuition and Fees; Capital Budget Project List; Salaries and Wages; Budget

Priorities; and Proposed Primary Tax Rate and Levy

April 11, 2018 Governing Board Meeting to review the proposed Fiscal Year 2018-2019 budget and approve

the Publication of Proposed Budget and, if required, Truth in Taxation Notification

May 9, 2018 Public Hearing and Special Board Meeting to set tax levies and rates and adopt the Fiscal Year

2018-2019 budget

STUDY SESSION AGENDA

• Board Direction on FY19 Budget:

• Salaries & Wages

• Tuition

• Property Taxes

• Revenue Enhancements

• Expenditure Reductions

FY18 BUDGET SCENARIOS

Scenario A: Delay Impacts for Now with Larger Tuition Increases

• Small to no reductions for 17-18 and 18-19. Plan for $15 mil reduction in 19-20

• Continue to reduce via attrition

• Mitigate cost increases and Expenditure Limitation impacts with larger tuition increases

• No funding to implement EMP/FMP or other strategic changes until 19-20

• Large reduction pending due to Expenditure Limitation

Scenario C: Revolutionize the College

• Reduce current operations by about $10 mil per year in each of next 3 years

• Identify programs for elimination and begin phasing out

• Eliminate at least one location

• Significantly reduce infrastructure/staffing

• Large and immediate investment in EMP/FMP

• Ensure future financial stability and ability to grow

Scenario B: Rejuvenate the College

• Reduce current operations by $5 mil per year in each of next 3 years

• Identify programs for elimination and begin phasing out

• Reduce infrastructure/staffing

• Implement most of the first 5 years of the EMP/FMP

• Rely on GO Bonds for some EMP/FMP projects

FY18 GENERAL AND ACADEMIC FUND POSITIONS (AS OF NOVEMBER 13, 2017)

Position Type Closed Vacant Filled Grand Total

Administrators 6.0 42.0 48.0

Faculty 45.0 298.0 343.0

Staff 39.4 103.7 744.5 887.6

Campus Total 11.0 53.5 331.9 396.4

District 28.4 50.2 412.6 491.2

Chancellor 3.6 7.0 10.6

External Relations 7.8 31.0 38.8

Finance/IT 8.0 9.0 120.0 137.0

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 Total 39.4 154.7 1,084.5 1,278.6

• Staff Positions

• On target to reduce 100

vacant FTE by start of

FY19

• Reduction of $6.0M in

salaries

PROJECTION: ACTUAL FTSE VS. EXPENDITURE LIMITATION FTSE

0

5,000

10,000

15,000

20,000

25,000

30,000

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

60,000

70,000

80,000

90,000

100,000

110,000

120,000

130,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Expenditure

Lim

it (

in $

1,0

00s)

Fiscal Year

Expenditure Limit Actual Expenses Typical Increases No Tuition Increases FY18 Plan

$10 mil $24 mil

We are Here

SUMMARY OF BUDGET CRITERIA

• Ensure success of the College’s Mission and Strategic Plan

• Meet all regulatory and compliance requirements

• Evaluate all programs and services for modification or elimination

• Optimally assign human resources and physical assets across the District

• Encourage Return on Investment (ROI), process efficiency, and income-generating initiatives

BUDGET CRITERIA IN ACTION

Budget Criterion Examples

Ensure success of the College’s Mission and Strategic Plan • Center of Excellence Community Summits

• Scheduling Software – System Purchase & Implementation

• Catalog & Curriculum Management System

Meet all regulatory and compliance requirements • Academic Leadership Training

• Crisis Management Training

Evaluate all programs and services for modification or

elimination

• Program Viability

• Program Review

• Service Review

• Reorganization Plans

Optimally assign human resources and physical assets across

the District

• Summer Scheduling

• Space Leasing

• Reorganization Plans

• Passport Services

Encourage Return on Investment (ROI), process efficiency, and

income-generating initiatives

• CampusLogic – Financial Aid Verification

• Enterprise Systems

• Concur

POTENTIAL REVENUE ENHANCEMENTS

• Space Leasing & Partnerships

• Property Taxes

• Tuition Increase

• State Aid

• Charge Fee for Payment Plans

• Charge for Merchant Services Fees

• Parking Fees

• Revenue Bonds

• Increase Employee Benefits Contribution

PROPERTY TAX RATES: AZ COMMUNITY COLLEGES, FY18 (RATES PER $100 NET ASSESSED VALUATION)

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

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$3.1383

$2.6210 $2.5429$2.3735

$1.9828$1.8067

$1.4096 $1.3890 $1.3430

$0.6142

IN-STATE TUITION AND MANDATORY FEES PER CREDIT HOUR:

AZ COMMUNITY COLLEGES, FY18

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

$105.00

$88.00 $87.00 $86.00 $86.00 $85.00 $83.00

$82.00 $82.00

$72.00

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

$100.00

$110.00

$120.00

PEER COMPARISON - PER CREDIT HOUR PUBLISHED OUT-OF-STATE

TUITION RATES 2016-17 (IPEDS DATA - IC2016_AY)

$-

$100.00

$200.00

$300.00

$400.00

$500.00

$600.00

Tuit

ion p

er

Cre

dit

Hour

For 2017, PCC had the 16th lowest

out-of-state tuition rate among its

Peers, AZ CCs, Aspen Winners &

Peer City Colleges

PEER COMPARISON - PER CREDIT HOUR PUBLISHED IN-STATE

TUITION RATES 2016-17 (IPEDS DATA - IC2016_AY)

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

Tuit

ion p

er

Cre

dit

Hour For 2017, PCC had the 7th

lowest in-state tuition rate

among its Peers, AZ CCs,

Aspen Winners & Peer

City Colleges

TOTAL PCC TUITION & FEES VS. MAX PELL AWARD(FOR IN-STATE STUDENTS TAKING 12 CREDITS IN BOTH FALL AND SPRING)

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total Tuition and Fees $1,256 $1,304 $1,352 $1,412 $1,532 $1,652 $1,724 $1,844 $1,974 $2,046 $2,118

Remaining Pell $3,475 $4,046 $4,198 $4,138 $4,018 $3,898 $3,921 $3,886 $3,801 $3,769 $3,802

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Max

Pell

Aw

ard

TUITION

• Increase of $1.00 per credit to

In-state/Resident tuition rate = $450K

• Guaranteed Tuition

• Tuition Cap at 15 hours

• Tuition Cap at 12 hours

• Tuition Tiers

POTENTIAL EXPENDITURE REDUCTIONS

• Positions

• Salaries & Wages

• Cell Phone Stipends

• Contracts/Schedules

• Recess Pay

• Employee Recognition/Events

• Sponsorships

• Professional Development Allocations

• Contractual Services

• Athletics

LONG TERM REDUCTIONS

• $2.5M from Student Services

• $2.5M from Instruction

• $5.0M from Operations

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

• January: Numbers newsletter to PimaAll

• January: Budget presentations to faculty, staff, administrators, students, and community members

• Ongoing: Collaboration with the Finance and Audit Committee

BUDGET MODEL

RESOURCES

• Budget Criteria

• February 2017 Expenditure Limitation presentation to the Governing Board

• June 2017 Adoption of Tax Levies and Rates and Budget for FY18

• FY18 General Fund Budget Detail

• November 2017 Report to the Governing Board – Proposed FY19 Budget Calendar

• November 2017 Preliminary Budget Presentation to Student Leadership

• December 4, 2017 FY19 Budget Outlook Presentation to the Governing Board

• January 2018 Budget Forums Presentation