FISCAL YEAR 2018-2019 PROPOSED BUDGET

MAY 9, 2018

PRESENTED BY: DR. DAVID BEA

BOARD APPROVED STRATEGIC PRIORITIES

• 2017-2021 College Strategic Plan

• Educational Master Plan

• Facilities Master Plan

• Diversity, Equity, and Inclusion Plan

• Strategic Enrollment Management Plan

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

EXPENDITURE LIMITATION PROJECTIONS

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

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

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

$112.146%

Grants, Contracts, Financial Aid

$53.222%

Tuition & Fees$48.2

19%

College Equity$27.8

11%

Other Revenue$4.82%

Proposed Fiscal Year 2019 Budget Revenues - $300.6M

(all funds, in $ millions)

Property Tax Revenue

$116.539%

Grants, Contracts, Financial Aid

$47.716%

Tuition & Fees$48.8

16%

College Equity$23.8

8%

Bond Proceeds$56.0

19%

Other Revenue$7.82%

PRIMARY PROPERTY TAX LEVY DETAIL – PROPOSED

FY 2018FY 2019

Levy NeutralFY 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

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

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)

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%

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%

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%

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

QUESTIONS?

ADDITIONAL CHARTS, INFORMATION, &

RESOURCES

PROJECTION: ACTUAL FTSE VS. EXPENDITURE LIMITATION FTSE

0

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

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%

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

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

0

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

FT

SE

Dolla

rs

*FY 2018 FTSE is estimated

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

0

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

200

400

600

800

1,000

1,200

1,400

1,600

1,800

FT

SE

# o

f Posi

tions

*FY 2018 FTSE is estimated

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$74.825%

Designated Fund$14.1

5%

Debt Fund$5.62%

Auxiliary Fund$2.21%

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

Total $ 153.1 $ 154.9 $ 1.8

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

Total $ 15.4 $ 14.1 $ -1.3

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

Total $ 53.0 $ 49.0 $ -4.0

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

Technology 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

Total 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

Total 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

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

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

RECONCILIATION OF PROPOSED FY 2018-2019 BUDGET

TO PUBLISHED STATE FORMAT (ALL FUNDS, IN $ MILLIONS)

PCC Budget

as presented Transfers

PCC Budget

on 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

Total $ 300.6 $ 0.0 $ 300.6

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

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