Grand Rapids Community College Board of Trustees 2018-19 Budget Work Session May 8, 2018

AGENDA 2017-18 Budget Update 2018-19 Preliminary GF Scenario Significant assumptions Position changes Next Steps

2017-18 Budget Update Enrollment: Property Taxes & State Aid: Summer 2018 billing hours are currently running about 4% behind Summer 2017. The relatively small enrollment in Summer and a swing toward out-district billing units somewhat mitigates the fiscal impact Approx. 60% of Summer 2018 tuition/fees will be included in 2017-18. Property Taxes & State Aid: Total revenues on track with the midyear budget

2017-18 Budget Update Salaries/fringes: Non salary/fringe expenses: On track with the midyear budget. Savings from open positions (either transiently or for the entire year) is expected to meet or exceed the $500,000 budget. Non salary/fringe expenses: We again anticipate under-spending in controllable line items. The budget assumes $500,000, and we anticipate, based on past experience, to exceed that amount .

2018-19 Preliminary GF Scenario Significant Assumptions - Revenues Enrollment: 3.3% reduction in billing units from 2017-18 midyear Total budgeted billing units = 284,059 Tuition at rates as adopted by the BOT in March Property Taxes: Estimated at 4.8% increase in ad valorem taxes Headlee Rollback factor of .9957 State Aid: 0% increase in base appropriation (Exec Budget), plus estimated Renaissance Zone reimbursement and MPSERS health offset MPSERS unfunded liability estimated at 2017-18 level of $5.9m

2018-19 Preliminary GF Scenario Significant Assumptions – Salaries & Fringes CEBA, Faculty, APSS and POLC: based on most current contract info. Meet & Confer: Up to 2.5%, based on merit. Continued savings from open positions of $500,000. Fringes: State health ins. “cap” increase = 3.4%. Expense projected based on Jan 2018 enrollment demographics. Includes adjustment to move plan to a calendar year renewal. Highest MPSERS rate increases from 25.56% to 26% on 10/1/18 Minor adjustments in other line items based on anticipated changes.

2018-19 Preliminary GF Scenario Significant Assumptions – Non-wage Expenses Other Expenses: Reversed one-time contingency items. Restored contingency budget to 0.25% of total revenues, $280,000. Assumed under-spending of controllable lines of $500,000. Added $25,000 for commencement to better reflect actual costs. Added $15,000 for loan default aversion services.

2018-19 Preliminary GF Scenario Position Changes Position changes included in the proposed budget: Preschool Community Liaison previously funded by grant. Added funding to cover cost of position reclassifications in preschool classrooms. Biology Dept. Lab Coordinator position increased to full time. Three new positions funded through reallocation of current vacancies: Coordinator of K-12 Partnership Records Office Support Financial Aid Office Support

2018-19 Preliminary GF Scenario Summary Total Projected Revenues $112,266,435 Total Projected Expenditures & Transfers $110,689,139 Surplus (Deficit) $1,577,296 Beginning Net Assets $15,539,771 Ending Net Assets $17,117,067 % of Total Revenues (BOT goal: 10%-15%) 15.25%

Next Steps June 4 BOT work-session: Review complete budget (all funds). Update for final summer enrollment, 2018 property tax values, state appropriations and final grant match requirements Approve 2018 tax levy. June 18 BOT meeting: Adopt 2018-19 budget Other: Effective June 30, 2018 we will be required to reflect a new liability in our financial statements for post-employment retirement benefits (in addition to pensions). The state estimates this reduction of our net assets balance to be $50 million.

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