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<p>As promised at the February 6th Town Hall Meeting on MCC's Budget, FY22 budget development will include a campus-wide process to be announced after meeting with the Shared Governance Task Force later this week.</p>
<p><strong>Standard Budget Development Practices<br /></strong>Following well established timelines, budget development for FY21 began in earnest in December 2019 with enrollment projections and plans to distribute budgets to senior leadership no later than February 14, 2020.</p>
<p>During this six-week period, MCC's Budget Office: (1) prepared budgeted revenue options taking into account enrollment estimates, tuition/fee pricing, state and county support expectations, and planned use of allocated reserve; (2) revised detailed position budgets for full-time, permanent employees taking into account contractual increases, revisions for voluntary separations from service, salary changes, etc.; and, (3) facilitated revisions to divisional budgets ("caps") and institutional set-aside funds.</p>
<p>Through an iterative and collaborative process with College officers, budgeted revenues and expenditures were critiqued, reallocated, and balanced before formal distribution to the campus community and, eventually, to the MCC Board of Trustees and Monroe County elected officials.</p>
<p><strong>The 2020-2021 Process: Closing the Budget Gap<br /></strong>This year's development process posed both significant challenges and opportunities. Early revenue and expense options showed an initial FY21 budget deficit of nearly $8.2 million. While certainly a "worst case" scenario, projections clearly indicated that significant actions were required to address the projected shortfall. Due to the opportunities and challenges presented by the FY21 budget, efforts were made to build transparency and add targeted expertise to the budget process. As a result of these efforts, the College was able to close a significant budget gap by reducing FY21 budget expenditures by $6.1 million and reducing the projected use of fund balance or reserves to $2 million.</p>
<p>Following are action steps taken by MCC during this year's budget process:</p>
<ol>
<li>Expanded transparency by including representation from the College's collective bargaining units and Faculty Senate at all budget office meetings with College officers.</li>
<li>Added additional financial expertise by including the Controller, Senior Financial Specialist - Academic Services and Assistant to the President for Human Resources and Organizational Development in all meetings.</li>
<li>Engaged Government and Community Relations to develop an internal and external communications plan.</li>
<li>Beginning on February 3rd, participated with the MCC Interim President in focused cost-reduction work sessions with senior leadership.</li>
<li>Conducted an all-college Town Hall Meeting on MCC's Budget on February 13 where College officers delivered a presentation on the state of the budget, followed by questions and answers.</li>
<li>With the consent of MCC Trustees, began developing a three-year financial plan (FY20, FY21, and FY22) to realign college costs with revenues such that FY20 and FY21 would utilize no more than $2 million of fund balance (reserves) in each fiscal year and that the FY22 budget will be balanced without any use of fund balance. This goal was a priority based on both SUNY and accepted accounting reserve amounts.</li>
<li>Completed a Voluntary Separation Incentive Program (VSIP), yielding 29 positions for early retirement. Of these positions, 21 have been eliminated while 8 are being replaced resulting in a $2.1 million savings in salaries and benefits.</li>
<li>Examined open positions and positions up for reappointment across the College, identifying an additional 36 positions for elimination, resulting in a savings of $2.8 million in salaries and benefits.</li>
<li>Made permanent approximately $500,000 in FY2020 contractual expense/equipment budget cuts.</li>
<li>Convened work sessions with key stakeholders to identify additional cross-divisional reductions in contractual expenses, particularly travel, software, memberships, parking space rentals, administrative supplies, non-consumables, and various facilities costs, resulting in a savings of $1 million.</li>
</ol>
<p>In tabular form, cost-reducing actions are summarized as follows:</p>
<p><strong>PERSONNEL COSTS</strong> (salaries and benefits): <br />Positions eliminated:</p>
<ul>
<li>VSIP (21): $2.1 million</li>
<li>Other open positions (31): $2.3 million</li>
<li>Positions not renewed (5): $500,000</li>
<li>Other adjustments: ($300,000)</li>
</ul>
<p>Net reduction in personnel costs: $4.6 million</p>
<p><strong>NON-PERSONNEL COSTS:</strong></p>
<ul>
<li>FY20 budget cuts made permanent: $500,000</li>
<li>FY21 College-wide reductions: $1 million</li>
</ul>
<p>Net reduction in non-personnel costs: $1.5 million</p>
<p><strong>TOTAL BUDGETED COST REDUCTIONS: $6.1 million</strong></p>
<p>In conjunction with the foregoing cost reductions, a remaining shortfall of $2.1 million is anticipated to be covered by additional revenues, primarily governmental support. To this end, <em>Budget Option C-5 </em>increases the College's FY21 budget to $119.9 million, reflecting $2.1 million in revenues not included in the earlier options. These assumptions include:</p>
<ul>
<li>Flat year-on-year funding in state base aid: $1.7 million.</li>
<li>Increase in county support: $250,000, the first increase in years.</li>
<li>Net other increases: $150,000.</li>
</ul>
<p>Should these revenues not come to fruition, strategies include additional budget reductions and/or other revenues generated to produce a balanced FY21 budget, which still meets the MCC Board of Trustees' requirement of using no more than approximately $2 million in allocated fund balance.</p>

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MCC Daily Tribune

Actions Taken to Eliminate Budget Deficits: Update to the Campus Community

In our continued commitment to transparency, I hope you find this summary of MCC's budget development process useful. The summary also includes steps taken this year to close a $6.1 million deficit in the 2020-2021 (FY21) operating budget with minimal use of fund balance. Please direct questions to me or Darrell Jachim-Moore (Administrative Services) at 292-2185 or djachim-moore@monroecc.edu.

As promised at the February 6th Town Hall Meeting on MCC's Budget, FY22 budget development will include a campus-wide process to be announced after meeting with the Shared Governance Task Force later this week.

Standard Budget Development Practices
Following well established timelines, budget development for FY21 began in earnest in December 2019 with enrollment projections and plans to distribute budgets to senior leadership no later than February 14, 2020.

During this six-week period, MCC's Budget Office: (1) prepared budgeted revenue options taking into account enrollment estimates, tuition/fee pricing, state and county support expectations, and planned use of allocated reserve; (2) revised detailed position budgets for full-time, permanent employees taking into account contractual increases, revisions for voluntary separations from service, salary changes, etc.; and, (3) facilitated revisions to divisional budgets ("caps") and institutional set-aside funds.

Through an iterative and collaborative process with College officers, budgeted revenues and expenditures were critiqued, reallocated, and balanced before formal distribution to the campus community and, eventually, to the MCC Board of Trustees and Monroe County elected officials.

The 2020-2021 Process: Closing the Budget Gap
This year's development process posed both significant challenges and opportunities. Early revenue and expense options showed an initial FY21 budget deficit of nearly $8.2 million. While certainly a "worst case" scenario, projections clearly indicated that significant actions were required to address the projected shortfall. Due to the opportunities and challenges presented by the FY21 budget, efforts were made to build transparency and add targeted expertise to the budget process. As a result of these efforts, the College was able to close a significant budget gap by reducing FY21 budget expenditures by $6.1 million and reducing the projected use of fund balance or reserves to $2 million.

Following are action steps taken by MCC during this year's budget process:

  1. Expanded transparency by including representation from the College's collective bargaining units and Faculty Senate at all budget office meetings with College officers.
  2. Added additional financial expertise by including the Controller, Senior Financial Specialist - Academic Services and Assistant to the President for Human Resources and Organizational Development in all meetings.
  3. Engaged Government and Community Relations to develop an internal and external communications plan.
  4. Beginning on February 3rd, participated with the MCC Interim President in focused cost-reduction work sessions with senior leadership.
  5. Conducted an all-college Town Hall Meeting on MCC's Budget on February 13 where College officers delivered a presentation on the state of the budget, followed by questions and answers.
  6. With the consent of MCC Trustees, began developing a three-year financial plan (FY20, FY21, and FY22) to realign college costs with revenues such that FY20 and FY21 would utilize no more than $2 million of fund balance (reserves) in each fiscal year and that the FY22 budget will be balanced without any use of fund balance. This goal was a priority based on both SUNY and accepted accounting reserve amounts.
  7. Completed a Voluntary Separation Incentive Program (VSIP), yielding 29 positions for early retirement. Of these positions, 21 have been eliminated while 8 are being replaced resulting in a $2.1 million savings in salaries and benefits.
  8. Examined open positions and positions up for reappointment across the College, identifying an additional 36 positions for elimination, resulting in a savings of $2.8 million in salaries and benefits.
  9. Made permanent approximately $500,000 in FY2020 contractual expense/equipment budget cuts.
  10. Convened work sessions with key stakeholders to identify additional cross-divisional reductions in contractual expenses, particularly travel, software, memberships, parking space rentals, administrative supplies, non-consumables, and various facilities costs, resulting in a savings of $1 million.

In tabular form, cost-reducing actions are summarized as follows:

PERSONNEL COSTS (salaries and benefits):
Positions eliminated:

  • VSIP (21): $2.1 million
  • Other open positions (31): $2.3 million
  • Positions not renewed (5): $500,000
  • Other adjustments: ($300,000)

Net reduction in personnel costs: $4.6 million

NON-PERSONNEL COSTS:

  • FY20 budget cuts made permanent: $500,000
  • FY21 College-wide reductions: $1 million

Net reduction in non-personnel costs: $1.5 million

TOTAL BUDGETED COST REDUCTIONS: $6.1 million

In conjunction with the foregoing cost reductions, a remaining shortfall of $2.1 million is anticipated to be covered by additional revenues, primarily governmental support. To this end, Budget Option C-5 increases the College's FY21 budget to $119.9 million, reflecting $2.1 million in revenues not included in the earlier options. These assumptions include:

  • Flat year-on-year funding in state base aid: $1.7 million.
  • Increase in county support: $250,000, the first increase in years.
  • Net other increases: $150,000.

Should these revenues not come to fruition, strategies include additional budget reductions and/or other revenues generated to produce a balanced FY21 budget, which still meets the MCC Board of Trustees' requirement of using no more than approximately $2 million in allocated fund balance.

Katherine Douglas
Office of the President
02/26/2020