[PPT] - FISCAL YEAR 2018-2019 PROPOSED BUDGET MAY 9, 2018 PRESENTED BY: PowerPoint Presentation

SLIDE 1

FISCAL YEAR 2018-2019 PROPOSED BUDGET

MAY 9, 2018 PRESENTED BY: DR. DAVID BEA

SLIDE 2

BOARD APPROVED STRATEGIC PRIORITIES

2017-2021 College Strategic Plan
Educational Master Plan
Facilities Master Plan
Diversity, Equity, and Inclusion Plan
Strategic Enrollment Management Plan

SLIDE 3

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 Revenue Bonds for

some EMP/FMP projects

SLIDE 4

EXPENDITURE LIMITATION PROJECTIONS

SLIDE 5

KEY BUDGET COMPONENTS - REVENUES

Approved Tuition and Fees
$82.50 per credit in-state resident rate, +$450K
Credit Card Convenience Fee, +$400K
$10 fee per payment plan, +$100K
Proposed Property Tax Levy Increase of 2% (levy max), +$2.4M
Proposed Revenues – All Funds $300.6M
Proposed Revenues – General Fund $154.9M

SLIDE 6

KEY BUDGET COMPONENTS - EXPENDITURES

Reduction of approximately 3 administrator, 51 staff, and 10

instructional faculty positions

Maintenance of the 2.5% increase to salaries
Capital Budget of $10.3M
Revenue Bond Debt of $4.5M
Lease Purchase Debt of $1.1M
Proposed Expenditures – All Funds $300.6M
Proposed Expenditures – General Fund $154.9M

SLIDE 7

BUDGET COMPARISON – ADOPTED FISCAL YEAR 2018 VS. PROPOSED FISCAL YEAR 2019

Adopted Fiscal Year 2018 Budget Revenues - $246.1M

(all funds, in $ millions) Property Tax Revenue $112.1 46% Grants, Contracts, Financial Aid $53.2 22% Tuition & Fees $48.2 19% College Equity $27.8 11% Other Revenue $4.8 2%

Proposed Fiscal Year 2019 Budget Revenues - $300.6M

(all funds, in $ millions) Property Tax Revenue $116.5 39% Grants, Contracts, Financial Aid $47.7 16% Tuition & Fees $48.8 16% College Equity $23.8 8% Bond Proceeds $56.0 19% Other Revenue $7.8 2%

SLIDE 8

PRIMARY PROPERTY TAX LEVY DETAIL – PROPOSED

FY 2018 FY 2019 Levy Neutral FY 2019 Proposed Net Taxable Value Current Year ($100s) $ 80,749,577 $ 83,338,929 $ 83,338,929 Overall Change in Valuation 3.30% 3.21% 3.21% Change from New Property 1.43% 1.86% 1.86% Estimated Primary Tax Rate Authorization

(per $100 net assessed valuation)

$ 1.3890 $ 1.3709 $ 1.3983 Primary Tax Levy $ 112,161,162 $ 114,249,338 $ 116,532,824 Change from previous fiscal year $ 2,088,176 $ 4,371,662 Truth in Taxation Levy Increase $ 2,241,800

SLIDE 9

AZ COMMUNITY COLLEGES PROPERTY TAX RATES FY 2018

(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

SLIDE 10

FY 2009-2019* BUDGETED REVENUE AND FUND BALANCE BY SOURCE

(ALL FUNDS, IN $ THOUSANDS, *PROPOSED)

$- $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $325,000 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019*

Bond Proceeds Fund Balance Grants, Contracts & Financial Aid Other Revenue Tuition & Fees Property Taxes State Aid (Operations + Capital)

SLIDE 11

BUDGET COMPARISON – FISCAL YEAR 2018 VS. FISCAL YEAR 2019* GENERAL FUND REVENUES BY SOURCE (IN $ MILLIONS, *PROPOSED)

FY18 Proposed FY19 Change Property Tax Levy $ 112.1 $ 116.5 $ 4.4 Tuition and Fees 40.4 40.9 0.5 Other Revenue 0.6 0.6 0.0 College Equity 5.3 2.5

2.8

Total Resources $ 158.4 $ 160.5 $ 2.1 Debt Fund Transfer

5.6

Total $ 154.9

Property Tax Levy 72.6% Tuition and Fees 25.5% Other Revenue 0.4% College Equity 1.6%

SLIDE 12

FY 2018-2019 PROPOSED BUDGET EXPENDITURES – GENERAL FUND, $154.9M (IN $ MILLIONS)

Administrators $6.0 4% Faculty $21.6 14% Staff-Classified $39.0 25% Other Compensation $2.7 2% Fringe Benefits $23.5 15% Operations $27.6 18% Contingency / Reserves $9.2 6% Capital $0.5 0.3% Transfers $24.8 16%

SLIDE 13

FY 2018-2019 PROPOSED BUDGET EXPENDITURES, $300.6M (ALL FUNDS, IN $ MILLIONS)

Administrative Personnel, $6.3, 2% Faculty, $21.8, 7% Additional Compensation-Faculty, $1.0, 0% Adjunct Faculty, $13.1, 4% Classified Staff, $48.8, 16% Other Compensation, $4.9, 2% Student Employment, $0.5, 0% Fringe Benefits, $29.1, 10% Capital Equipment, $82.2, 27% Communications and Utilities, $5.8, 2% Travel, $3.7, 1% Contractual Services, $18.1, 6% Supplies and Materials, $8.6, 3% Current Fixed Charges, $1.7, 1% Other Expenditures, $6.7, 2% Student Financial Aid, $30.7, 10% Contingency and Reserves, $17.6, 6%

SLIDE 14

COMMUNICATION AND NEXT STEPS

May 28 and June 4, 2018 publication in the Arizona Daily Star
Proposed Budget
Truth in Taxation – Notice of Tax Increase
May 28, 2018 Press Release on the proposed budget and

Truth in Taxation

June 13, 2018 Public Hearing and Special Board Meeting to

adopt the FY 2019 budget and set property tax levies and rates

SLIDE 15

QUESTIONS?

SLIDE 16

ADDITIONAL CHARTS, INFORMATION, & RESOURCES

SLIDE 17

PROJECTION: ACTUAL FTSE VS. EXPENDITURE LIMITATION FTSE

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

SLIDE 18

BUDGETED GENERAL FUND REVENUE SOURCES AS A PERCENT OF TOTAL REVENUE

(EXCLUDES COLLEGE EQUITY LIKE USE OF FUND BALANCE / RESERVES / SAVINGS TO MORE CLEARLY SHOW REVENUE FROM EXTERNAL SOURCES, *PROPOSED) FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019* Property Tax 62% 60% 62% 62% 64% 66% 69% 72% 73% 74% Tuition 24% 28% 32% 32% 31% 29% 31% 27% 26% 26% State Aid 13% 11% 5% 5% 5% 4% 0% 0% 0% 0% Other 1% 0% 1% 1% 1% 1% 0% 0% 0% 0%

0% 10% 20% 30% 40% 50% 60% 70% 80%

SLIDE 19

PCC PRIMARY, SECONDARY, & COMBINED TAX RATES

(FISCAL YEARS 2000-2019*)

FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019* Primary Property Tax Rate 1.1626 1.1709 1.1455 1.1530 1.1358 1.1143 1.0930 1.0570 1.0191 0.9787 0.9356 0.9755 1.0846 1.1484 1.2746 1.3344 1.3689 1.3733 1.3890 1.3983 Secondary Property Tax Rate 0.2070 0.3865 0.4015 0.3803 0.3526 0.2285 0.2184 0.1945 0.1654 0.1502 0.1414 0.1093 0.0248 0.0257 0.0187 0.0000 0.0000 0.0000 0.0000 0.0000 Combined Primary + Secondary Tax Rates 1.3696 1.5574 1.5470 1.5333 1.4884 1.3428 1.3114 1.2515 1.1845 1.1289 1.0770 1.0848 1.1094 1.1741 1.2933 1.3344 1.3689 1.3733 1.3890 1.3983

1.3696 Proposed 1.3983* 0.0000 0.2500 0.5000 0.7500 1.0000 1.2500 1.5000 1.7500 Levy Neutral 1.3709

* proposed

SLIDE 20

PCC SALARIES & FTSE FY 2003-2018

(BUDGETED, ALL FUNDS BY FISCAL YEAR)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* Staff $32,133,946 $34,280,875 $35,868,297 $37,682,081 $39,483,632 $42,778,944 $43,181,009 $37,953,841 $42,148,993 $45,599,991 $47,060,059 $46,831,669 $49,453,273 $53,645,008 $54,411,915 $54,845,091 Faculty $17,595,382 $17,943,050 $19,985,652 $20,930,328 $21,801,158 $23,072,134 $23,442,431 $23,461,655 $24,227,479 $23,858,356 $24,294,337 $24,508,824 $25,025,370 $24,647,440 $22,941,718 $23,102,563 Administrators $4,743,030 $4,983,465 $5,269,538 $5,494,824 $5,774,937 $6,816,417 $7,135,400 $6,291,692 $6,701,482 $6,553,160 $6,844,161 $6,973,001 $7,196,004 $6,643,627 $6,414,826 $6,451,207 FTSE* 20,611 20,425 20,393 19,993 19,807 20,222 20,889 22,021 22,907 22,028 19,514 17,963 16,458 15,382 14,779 14,900

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 $0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000,000 $70,000,000 $80,000,000 $90,000,000

FTSE Dollars

*FY 2018 FTSE is estimated

SLIDE 21

PCC POSITIONS & FTSE FY 2003-2018

(BUDGETED, ALL FUNDS BY FISCAL YEAR)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* Staff 1,043 1,059 1,017 1,020 927 1,023 1,047 1,016 1,037 1,059 1,019 1,051 1,090 1,121 1,084 1,083 Faculty 378 361 380 380 362 387 389 388 392 391 391 391 390 391 360 359 Administrators 48 48 51 56 56 62 53 53 53 54 55 56 56 51 48 49 FTSE* 20,611 20,425 20,393 19,993 19,807 20,222 20,889 22,021 22,907 22,028 19,514 17,963 16,458 15,382 14,779 14,900

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 200 400 600 800 1,000 1,200 1,400 1,600 1,800

FTSE # of Positions

*FY 2018 FTSE is estimated

SLIDE 22

FY 2018-2019 PROPOSED BUDGET BY FUND, $300.6M (ALL FUNDS, IN $ MILLIONS)

FY 2018 Proposed FY 2019 Change General Fund $ 153.1 $ 154.9 $ 1.8 Capital Fund 17.0 74.8 57.8 Restricted Fund 53.0 49.0

4.0

Designated Fund 15.4 14.1

1.3

Auxiliary Fund 2.3 2.2

0.1

Debt Fund 5.3 5.6 0.3 Total $ 246.1 $ 300.6 $ 54.5

General Fund $154.9 51% Restricted Fund $49.0 16% Capital Fund $74.8 25% Designated Fund $14.1 5% Debt Fund $5.6 2% Auxiliary Fund $2.2 1%

SLIDE 23

GENERAL FUND SUMMARY

(BY PROGRAM, IN $ MILLIONS, PROPOSED FY 2019)

FY 2018 Proposed FY 2019 Change Administrators $ 6.1 $ 6.0 $ -0.1 Faculty 22.5 21.6

0.9

Staff-Classified 39.7 39.0

0.7

Other Compensation 3.6 2.7

0.9

Fringe 24.4 23.5

0.9

Subtotal 96.3 92.8

3.5

Operations 26.6 27.6 1.0 Capital 0.5 0.5 0.0 Transfers (net) Designated Fund Capital Miscellaneous 21.7 13.3 6.3 2.1 24.8 15.6 6.7 2.5 3.1 2.3 0.4 0.4 Contingency / Reserves 8.0 9.2 1.2 T

tal

$ 153.1 $ 154.9 $ 1.8

SLIDE 24

DESIGNATED FUND SUMMARY

(BY PROGRAM, IN $ MILLIONS, PROPOSED FY 2019)

FY 2018 Proposed FY2019 Change Professional Development $ 0.9 $ 0.9 $ 0.0 Athletics 2.1 2.1 0.0 Course Fees 2.3 2.3 0.0 Academic Programs 13.6 16.3 2.7 Center for Training & Development 2.7 2.6

0.1

Contract Training 2.1 1.6

0.5

Prison Program 0.7 0.6

0.1

Public Safety Institute 0.7 0.4

0.3

Community Education 0.5 0.5 0.0 Other 1.5 1.2

0.3

Contingency / Reserves 1.4 1.4 0.0 Transfers

13.1
15.8
2.7

T

tal

$ 15.4 $ 14.1 $ -1.3

SLIDE 25

RESTRICTED FUND SUMMARY

(IN $ MILLIONS, PROPOSED FY 2019)

FY 2018 Proposed FY 2019 Change Student Financial Aid $ 33.4 $ 29.5 $ -3.9 Workforce Development (Prop 301) 2.0 2.3 0.3 Grants Health Profession Opportunity Grant (HPOG) 3.0 3.0 0.0 Adult Education 3.9 3.5

0.4

Title III – Improving graduation rates, particularly STEM 1.1 0.7

0.4

Title V – Developing Hispanic Serving Institutions 1.7 1.8 0.1 TRIO (Upward Bound, Student Support Services, Talent Search) 2.9 2.4

0.5

Federal Funds Contracts 0.0 0.6 0.6 Other 2.0 2.2 0.2 New Grants 3.0 3.0 0.0 T

tal

$ 53.0 $ 49.0 $ -4.0

SLIDE 26

CAPITAL FUND SUMMARY

(IN $ MILLIONS, PROPOSED FY 2019)

Budget Year Projects FY 2018 Proposed FY 2019 Change General Capital Projects 4.7 4.8 0.1 T echnology Fee Projects 1.4 0.6

0.8

Proposition 301 Projects 1.6 2.3 0.7 Capital Lease Projects 0.0 2.6 2.6 T

tal Budget

Year Projects $ 7.7 $ 10.3 $ 2.6 Bond Projects 0.0 56.0 56.0 Carry Forward Projects 15.0 15.0 0.0 Contingency / Reserves 2.1 1.9

0.2

T

tal All Projects

$ 24.8 $ 83.2 $ 58.4 Less Transfers from Other Funds Proposition 301 Funding

1.6
2.3
0.7

General Fund Transfer

6.4
6.7
0.3

Other Funds Support (including grants) 0.2 0.6 0.4 Net Budget $ 17.0 $ 74.8 $ 57.8

SLIDE 27

AUXILIARY FUND SUMMARY

(IN $ MILLIONS, PROPOSED FY 2019)

FY 2018 Proposed FY 2019 Change Food Service 0.1 0.1 $ 0.0 Business Relations 0.2 0.1

0.1

Rentals 0.2 0.3 0.1 Transfers 0.7 0.7 0.0 Contingency / Reserves and Other 1.1 1.0

0.1

Total $ 2.3 $ 2.2 $ -0.1

SLIDE 28

DEBT FUND SUMMARY

(IN $ MILLIONS, PROPOSED FY 2019)

FY 2018 Proposed FY 2019 Change Lease Purchases 1.7 1.1 $ -0.6 Revenue Bonds 3.6 4.5 0.9 Total $ 5.3 $ 5.6 $ 0.3

SLIDE 29

RECONCILIATION OF PROPOSED FY 2018-2019 BUDGET TO PUBLISHED STATE FORMAT (ALL FUNDS, IN $ MILLIONS)

PCC Budget as presented Transfers PCC Budget

n State

Forms

General $ 154.9 Designated 14.1 Total General Fund $ 169.0 $ -5.3 $ 163.7 Auxiliary 2.2

0.7

1.5 Restricted 49.0

2.4

46.6 Capital 74.8 8.4 83.2 Debt Service 5.6 0.0 5.6 T

tal

$ 300.6 $ 0.0 $ 300.6

SLIDE 30

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

SLIDE 31

RESOURCES (CONTINUED)

January 2018 Budget Forums Presentation
February 2018 Governing Board Study Session
March 2018 Governing Board Meeting
FY19 Tuition and Key Budget Parameters
Actual Expenditures vs. Expenditure Limitation and Most Significant Reduction Strategies

by Year

April 2018 Governing Board Presentation – Proposed Revenue Bond Projects
April 2018 All College Meeting
Budget FAQ