1. Texas Higher Education Coordinating Board November 4, 2011 Ben Ferrell, Jr., Executive Vice President, Finance & Administration Austin Community College THE BUDGETING PROCESS FOR PUBLIC COMMUNITY COLLEGES AND DISTRICTS

2. GENERAL BUDGET DEVELOPMENT STRATEGY 1.Master Plan Developed by President and Staff According to: District Educational Needs State Initiatives (e.g. Access, Success) Capital Needs 2.Supporting Budget Developed by President and Staff 3.Board Approves Master Plan & Budget

3. THINK LONG RANGE Prepare Long-Term Revenue/Expense Estimates for: State Appropriations District Taxes Tuition and Fees Operational Costs Capital Needs

4. What’s going on with the national and state economy? What might the effect be on state appropriations? Sales Tax Revenues up or down? Medicaid, social services, prisons, K-12? What is our taxing district appraised value outlook? What’s going on with financial aid? What is the political climate affecting these areas? REVENUE ESTIMATE QUESTIONS

5. EXAMPLE OF STATE APPROPRIATION TREND

6. APPROPRIATION BILL ANALYSIS

7. EXAMPLE OF NATIONAL TUITION/FEE RATES

9. REVIEW COMPONENTS OF BUDGET PROCESS 1.Master Plan Update 2.Budget Planning Assumptions & Directives 3.Departmental Budget Requests

10. COMPONENTS OF BUDGET PROCESS 1.Master Plan Three year rolling plan, updated annually Records, tracks, & prioritizes major initiatives Focuses on defined strategic goals

11. COMPONENTS OF BUDGET PROCESS 2.Budget Planning Assumptions & Directives Developed by President and Board Officers in early Spring Lays out major budget assumptions and provides strategic direction for budget process

12. DEPARTMENTAL BUDGETS PREPARED IN A BOTTOM UP PROCESS 3.Departmental Budget Requests Requests for funds to address ongoing operational needs Requests for funds related the initiatives in the Master Plan

13. FINAL BUDGET FORMULATION Departmental Requests Reviewed and Prioritized by Executive Team Budget Balancing Actions Formulated Tuition Increase? Tax Increase? Hold the Line? Expense Reductions?

14. BUDGET APPROVAL Budget Summarized and Presented to Board for Discussion Presented in Cumulative Phases or as a Whole Board Approves Elements (or not) Board Approves Final Budget

15. TIMELINE FOR BUDGET PROCESS

16. REVENUE BUDGET EXAMPLE

17. EXPENSE BUDGET EXAMPLE

18. EXAMPLE OF LONG RANGE BUDGET ESTIMATE FISCAL 2011 TO FISCAL 2020

19. CAPITAL BUDGETING Prepare a Facilities Master Plan Based on Population Trends (typically 2.5% of area population). Based on Area Educational Needs Usually Funded by Bonds Issued by District Revenue Bonds (Board approves) General Obligation Bonds (Voters Approve) Several Other Options for Specific Purposes

20. QUESTIONS FOR NEW TRUSTEES TO ASK What are the Board’s budget policies? Do we have a Master Plan including facilities needs? How often is the Master Plan updated? Is the budget tied to the Master Plan? How does our budget process work and its timelines? Bottom up? (Good) Top down? (Bad) What are the long range implications of today’s decisions? Are present practices fiscally sustainable long-term?

21. THANK YOU AND GOOD LUCK! Ben Ferrell, Jr., Executive Vice President, Finance & Administration Austin Community College bferrell@austincc.edu 512-223-1099 ACC Board Policy and Minutes available at: http://www.austincc.edu/board/