Hillsborough Community College

State of the BudgetFall 2008

FY 2008-09 Adopted Revenues (General Operating Fund)

Operating Revenues = $91,237,506

FY 2007-08 (Actual)

Student Tuition/Fees

35.8%

State Appropriations

59.8%

Other4.3%

State Appropriations

56.6%

Student Tuition/Fees

39.6%

Other3.8%

FY 2008-09(Adopted)

Two Year Operating Budget Comparison

http://davegranlund.com/cartoons/2008/08/13/school-budgets/

FY 2008-09 Adopted Expenditures (General

Operating Fund)

Personnel68.9%

Current Expenses

26.5%

Capital4.6% Chart Title

Operating Expenditures = $95,130,077

Two Year Operating Expenditure Comparison

Personnel71.8%

Current Expenses25.5%

Capital2.6%

Personnel68.9%

Current Expenses

26.5%

Capital4.6%

FY 2007-08 Actuals FY 2008-09

Adopted

$4.4 million in Capital Costs, $3.9 of this Funded

through Fund BalanceFY 2008-09Adopted Revenues =

$91,237,506

Adopted Expenditures =$95,237,506

Diff. from Fund Balance = ($3,892,571)

Fund BalanceWhy do Public Organizations need

Fund Balances? Revenues are not always timed to

match expenditure cycle (tuition revenue 3 times per year, yet payroll runs every 2 weeks)

Ability to build reserves for large capital projects without debt financing.

A contingency for the unexpected (e.g., hurricane) or an unfunded opportunity.

HCC’s Unallocated, Unreserved Fund Balance

at June 30, 2009 Projected Unallocated/Unreserved

Fund Balance at June 30, 2009 = $11,187,905

Average Monthly Personnel Expenditures = +$5.4 million

Average Monthly Operational Expenditures = + $7.9 million

Unallocated, Unreserved Fund balance approximates 42 Days of Operations

Current Budget Projection is not Sustainable in Future

Years

FY 2006-07 FY 2007-08 Adopted 2008-09 Projected 2009-10

Projected 2010-11

$85,000,000

$90,000,000

$95,000,000

$100,000,000

HCC RevenuesHCC Expenditures

Funding Gap

Preparing Now for 2009-2010 Balanced Budget

While too early to know, State Revenues May Decline another $2 to $5 Million Dollars Next Year

How do we sustain our Core mission, maintain equipment and facilities, and fund new Initiatives?

FY 2008-09 Personnel Costs $65,511,244

FT Salaries, $39,430,819, 60%

PT Salaries, $13,196,158, 20%

Health Insurance, $4,388,450, 7%

Payroll Taxes, $8,495,817, 13%

FY 2008-09 Current Expenses $25,198,352

Travel; 914544; 4%

Utilities; 4838235; 19%

Other Services; 7611866; 30%

Prof. Fees; 1492932; 6%Supplies; 2185753;

9%

Other Curr. Ex-pense; 8155022;

32%

Telecommunications, Repairs, Insurance, Postage, Rentals,

Housekeeping , Security Contracts, Grounds, Memberships, Advertising, Etc.

Hillsborough Community College General Fund Revenue History, Adopted FY

2008-09Revenues FY 2006-07

ActualsFY 2007-08

ProjectedFY 2008-09

Adopted ChangePercentage

ChangeAll Student Fees

$31,217,463

$33,579,891

$36,152,230

$2,572,339 7.66%

State Funds

$52,144,244

$53,094,507

$51,635,276

($1,459,231)

-2.75%

Other Revenue

$3,782,053 $3,647,900 $3,450,000 ($197,900) -5.43%

Total $87,143,760

$90,322,298

$91,237,506

$915,208

1.01%

6% Tuition Increase included in Projected Student Fee Total, with no increase in enrollmentOther Revenue Includes Interest Income, Rental Income, Auxiliary Transfers in, and other Misc. Revenues

HCC Overview of State Funding

$52,153,801

$55,868,707

$53,594,507

$51,862,219

$48,231,864

$44,000,000

$46,000,000

$48,000,000

$50,000,000

$52,000,000

$54,000,000

$56,000,000

FY 2006-07 FY 2007-08Adopted

FY 2007-08Final

FY 2008-09Adopted

FY 2008-09Reality?

Potential State Aid Reductions of 4 to 10 %

State Appropriations

$51,635,276

Tuition & Fees $36,152,23

0

4% Reduction

$2,065,411

A 5.7% increase in tuition revenue is needed, with no increase in costs, to make up for this shortfall

7% Reduction

$3,614,469

A 10% increase in tuition revenue is needed, with no increase in costs, to make up for this shortfall.

10% Reduction

$5,163,528

A 14.3% increase in tuition revenue is needed, with no increase in costs, to make up for this shortfall.

The Perfect Storm? Flat or Declining Revenues while

Salaries and Benefit Costs Increase TECO Energy rates expected to

Increase 10 to 20% beginning January 2009 (College’s Electricity Budget is $4,066,916 in FY 2008-09)

First Full-year of SouthShore Operation Other inflationary increases driven by

rising fuel costs

ATTEMPTS TO ADDRESS

GATHERING STORM

How we had Addressed the Problem

Early Planning– Board Adopted Goal to Reduce Percentage of Budget for Institutional Support FY 2003-04 19.30% FY 2004-05 20.56% FY 2005-06 22.00% FY 2006-07 20.87% FY 2007-08?

Eliminated 15 Non-Instructional Positions

7 From District Functions 1 from Brandon 2 from Dale Mabry 2 from Plant City 1 from SouthShore 2 from Ybor City

Other 2007-08 Budget Reductions

Campuses and District Functions reduced by varying percentages to spare direct instruction as much as possible:

Campus $ Reduction % Reduction

Brandon ($75,252) -0.86%

Dale Mabry ($232,000) -0.96%

Plant City ($225,978) -3.26%

Ybor City ($211,749) -1.62%

South Shore ($85,000)-6.74%

District ($1,118,576) -4.15%

TOTAL ($2,148,555) -2.64%

2008-09 Reductions Included

Decrease in Insurance Premium ≈ $163,556

Reduction in Copier Lease (moved to Purchase) ≈ $150,000

Collection Costs Recovered from Students ≈ $75,000

Payoff of WT Edwards Loan ($78,000 in recurring debt service payments)

Elimination of non-faculty positions, salary savings and reorganizations ≈ $802,000

Other Considerations Examining Utilities– Rules of

thumb--for every degree change in AC or heating there is a cost impact of 2% savings or increase.

At current rates, 2% reduction yields $80,000!

As a result of various cost-cutting measures we were able to set aside $3 million in non-recurring dollars for various future projects

$3,000,000 in Non-Recurring Projects

$750,000 for Enrollment Growth Contingency

$350,000 for Enhanced Web-based Student Services

$300,000 for Strategic Planning Objectives

$475,000 for Disaster Recovery, Phase II $345,000 for Imaging Project, Year 3 $500,000 for Improved Infrastructure to

support Security Operations $280,000 for Non-Instructional

Equipment & Technology

Why are we building and renovating buildings during difficult financial times?

Why are we purchasing new and replacement equipment in classrooms and labs?

Different funding streams support different College activities.

Most large construction projects are 100% supported by State Public Education Capital Outlay (PECO) funding.

The Student’s Capital Improvement Fee (currently $6.26 per credit hour for Residents) funds classroom equipment and capital improvements, and will raise $2.8 million this year.

The Student Activity Fee, also currently $6.26 per hour, is expected to raise $2.8 million in FY 2008-09.

2007-08 Actual Expenditures by Fund Type

$0$10$20$30$40$50$60$70$80$90

Exp

endi

ture

s in

Mill

ions

CurrentFund

Unrestricted

CurrentFund

Restricted

AuxiliaryFund

ScholarshipFund

Plant Fund DebtService

Fund

So What’s Next?

We Want to Hear from You!

We Need Your Input How do we collectively address the

College’s financial challenges and emerge as a stronger institution? Gathering ideas (through College and campus

meetings and in the Budget Ideas Forum Blog on Campus Cruiser)

Reporting back to the College community on which ideas may be implemented, with projected costs or new revenues resulting from them.

Planning for a balanced budget for 2009-10 “Lack of money is no obstacle. Lack of an idea is

an obstacle.”- Ken Hakuta

QUESTIONS?