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MCC Daily Tribune

Independent MCC Financial Forecast

Earlier this year, the MCC Board of Trustees asked President Kress and Chief Financial Officer Simmons to engage an external firm in presenting an independent review of the College's current and future financial state. The Board's desire was to have an in-depth review of the financials so the trustees and all interested parties could more completely understand the College's current and future financial position and the variables that influence it.

The Bonadio Group conducted the review. We selected them based on their knowledge of and experience with community colleges--Bonadio has conducted MCC's yearly financial audits and has extensive experience with SUNY community colleges--and their reputation as thorough, respected auditors. The Bonadio Group presented its report at the Board's February 4, 2019 meeting.

Bonadio's presentation laid out the College's fiscal picture based on five assumption categories: enrollment; tuition; state and local appropriations; employee headcount; and salaries and benefits for current employees and retirees. The data points associated with each of these assumptions were provided by the College and affirmed by Bonadio. In the end, the message was clear: enrollment and revenues have decreased while expenses have increased, and the continuation of these trends threatens the College's fiscal health.

Key aspects of Bonadio's analysis include:

  1. Although there have been declines in enrollment over recent years, the College has maintained a reasonable fund balance and done a good job managing its financial affairs thus far.
  2. Declining enrollment trends are expected to continue into the near future.
  3. Approximately 84% of the College's expenses are payroll and related benefits.
  4. Unless trends change--whether enrollment, amount of payroll, or funding sources--the College will have more expenses than revenues and will exhaust its fund balance within three years.

While some may present this report as a dire prediction of the College's future, we see it as a clear depiction of the trend lines we must re-set if we are to remain fiscally strong. Declining enrollments? We must retain and recruit more students. Soaring expenses? We need to be more aggressive in managing employee head count given that personnel costs make up 84% of our operating budget expenses. As Board members, we have fiduciary responsibility for this College and a responsibility to ensure its fiscal health today and into the future.

We share this with you because we know you are committed to this College and want to help move the College forward. Please find The Bonadio Group's presentation attached.

If you have any questions or ideas for impacting the trend lines, please do not hesitate to reach out to President Kress or CFO Simmons.

Barbara P. Lovenheim, Ph.D., Chair, MCC Board of Trustees

Ronald S. Ricotta, Chair, Finance and Facilities Committee, MCC Board of Trustees

P.S. The attached document is the February 4 presentation with the addition of the footnote on pages 2-14, added by The Bonadio Group. Beyond the footnote, no other changes have been made.

Attached Files:
MCC Forecast Power Point.pdf

Linda Hall
Secretary, Board of Trustees
02/25/2019