1. Grand Rapids Community College Board of Trustees
Budget Work Session
May 8, 2018

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

3. 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
Property Taxes & State Aid:
Total revenues on track with the midyear budget

4. 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 .

5. 2018-19 Preliminary GF Scenario Significant Assumptions - Revenues
Enrollment:
3.3% reduction in billing units from 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 level of $5.9m

6. 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.

7. 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.

8. 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

9. 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%

10. 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 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.

11. Questions/Comments