1 / 58

FY 2019/2020 Budget Review

FY 2019/2020 Budget Review. Finance & Investment Committee 5/10/19 Board of Directors – 5/17/19. FY 2019/2020 Budget Agenda. Action Items General Assumptions/Key Drivers Campus Contributions Financial Summary and Statements Operating Statements (Detailed Hand Out)

Download Presentation

FY 2019/2020 Budget Review

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. FY 2019/2020 Budget Review Finance & Investment Committee 5/10/19 Board of Directors – 5/17/19 FY 2019/2020 Budget Review

  2. FY 2019/2020 BudgetAgenda • Action Items • General Assumptions/Key Drivers • Campus Contributions • Financial Summary and Statements • Operating Statements (Detailed Hand Out) • Capital Expense and Funding (Hand out) • Cash Flow, Liabilities and Assets • Reserves • Issues/Recap FY 2019/2020 Budget Review

  3. Action Items

  4. FY 2019/2020 BudgetAction Items • Seeking Approval of: • FY 2019/2020 Operating Budget • Operating Contribution of $308,677 • Reported Net Contribution of $888,677 • Individual Corporate Donations in excess of $2,500 • Capital Funding • FY 2019/2020 Capital Request - $821,200 • FY 2018/2019 Unbudgeted Expenditures -$12,573 • $26,135 FY 2017/2018 Budgeted Carryover • Reserve Funding • Fund Designation in the amount of $15,039,000 • CalPER Unfunded Liability Options FY 2019/2020 Budget Review

  5. General assumptions &key activities

  6. FY 2019/2020 Budget General Assumptions • Enrollment up 2.3% per Campus Forecast • Executing to contracts in place • Full Occupancy rate for Housing • All known rate increases accounted for • Annual insurance/contribution increases of 5-8% • Health Insurance, Workers Comp, PERS, Liability, etc. • Labor per California Law • Campus Allocations per EO-1000, Utilities • General price increases in most areas FY 2019/2020 Budget Review

  7. FY 2019/2020 BudgetKey Activities - Drivers • Minimum Wage and Salary Labor increase • Residential Dining – 2.8% Contract Rate increase • $3.2M in Campus Contributions • $300K Additional Donations • Textbook Sales Reduction FY 2019/2020 Budget Review

  8. FY 2019/2020 Budget Key Activities Minimum Wage Administration • California Minimum Wage Increase • $13.00/hour on January 1,2020 (period 7) • 8.3% escalation from $12.00/hour • Tiered Increase for those between $13.50 - $15.50 • Re-baseline hourly Salary Grades • Estimated 6% increase • California Salary Exempt Law – 1/1/20 • 2X Minimum Wage - $54,080 FY 2019-2020 Budget Overview

  9. FY 2019/2020 Budget Key Activities – Labor Impact • $350K+ Minimum Wage Impact • Affects All Students and Part Time/Temp employees • $150K - 3% Salaried Pool Increase planned • Salaried and Full Time Hourly FY 2018/2019 Budget Review

  10. FY 2019/2020 BudgetKey Activities – Other Financial • $142,400 - Outpost Bond Interest Expense • Plus $90,000 Principal • Estimated 3.5% Investment Return • $400K Incentive Comp placeholder in G&A • PERS Minimum Unfunded Liability Payment • $441,024 Due July 2019 (Balance Sheet only) FY 2019/2020 Budget Review

  11. Campus CONTRIBUTIONSAllocated through out)

  12. FY 2019-2020 BudgetCampus Contribution Summary FY 2019/2020 Budget Review

  13. Campus ContributionsDonations & Partnership Detail FY 2019/2020 Budget Review

  14. Campus ContributionsReimbursed Services & Capital FY 2019/2020 Budget Review

  15. Financial summary and division OPERATING STATEMENTS(see Hand out)

  16. FY 2019/2020 Budget Summary Operating Statement FY 2019/2020 Budget Review

  17. FY 2019/2020 Budget Operating Statement Trend FY 2019/2020 Budget Review

  18. FY 2019/2020 Budget Divisional Operating Statement FY 2019/2020 Budget Review

  19. FY 2019/2020 BudgetGeneral & Administrative (G&A) • Contains Corporate Donations of $513,190 • Approval Action for items >$2,500 (See detail) • Include Japanese Garden & HFHM Chair • Contains Employee & Retiree Related Expense • $400,000 Incentive place holder (inclusive of tax) • $481,300 Medical Retiree Health Premiums FY 2019/2020 Budget Review

  20. FY 2019/2020 BudgetCorporate DonationsApproval Required >$2,500@ • All Other Donations in the $25-$1,500 Range • Jewels of the night, HFHM, Athletics, Alumni, Relay for Life, etc. • $97,500 Coke Sponsorship included in Athletics Contract • $134,808 Meal Plan donation – National Merit/Faculty in Residence • Part of Residential Dining Contract FY 2019/2020 Budget Review

  21. FY 2019/2020 BudgetBookstore/Computer Store FY 2019/2020 Budget Review • Sales Flat from Current Forecast at $14.9M • Traditional Textbook Sales down 10% • $5,481,451 Compared to $6,110,119 this year • Anticipated D1DA Digital Growth of $100K • Retail and Gradfair $’s increasing • Other Revenue Activities • Campus Print Shop Management • Amazon Locker • Cal Maritime Support

  22. FY 2019/2020 BudgetRetail Food Sales FY 2019/2020 Budget Review • Retail Dining/C-Stores Sales Flat at $10.8M • Incremental 4% growth over this year • Down from FY18/19 Budget • Business Remains Price/Cost Challenged • Large percentage of Minimum wage employees • High Credit Card fees and Facilities Cost • Completed Inventory System Implementation • Starbucks Remodeled – New Depreciation • Japanese Garden - new Business in Flux • Not Budgeted

  23. FY 2019/2020 Budget Residential Dining • 2.8% Meal Plan increase per Contract • Based on Higher Education Pricing Index (HEPI) • Anticipate continued full Res Hall occupancy • Planned Occupancy of 2,550 Residents • 2,600 Fall/2,500 Spring • Campus Contributions • $899,591- Housing Commission • $134,808K - Meal Donations FY 2019/2020 Budget Review

  24. FY 2019/2020 Budget Residential Dining Plan Rates FY 2019/2020 Budget Review

  25. FY 2019/2020 Budget Division 5-ID Card Office • Pass-Through program to Campus • No P&L Impact • Blackboard Contract renewal through CO • Current Year Billing still Pending • Relocating Server to Campus ITS • Moving to Campus Domain • Business Continuity/Disaster Recovery • Expanded use for Laundry & Door Locks FY 2019/2020 Budget Review

  26. APPROVAL REQUIRED (See Hand out) CAPITAL FUNDING

  27. FY 2019/2020 BudgetCapital Summary FY 2019/2020 Budget Review

  28. FY 2019/2020 Budget FY2018/2019 Capital Status • Action Item – Approval Required • Unbudgeted item(s) - $12,573 (to be expensed) • Carry Over - $26,135 (Reference only) • Current Year Planned Expenditures of $443K • Anticipate $7K balance for the year • Major Projects • Library Starbucks Completed • UDP Starbucks Interim refresh • UDP Sewer Emergency Repair • Bookstore A/C Deferred - No breakdown FY 2019/2020 Budget Review

  29. FY 2019/2020 Budget Capital Funding Request • ACTION ITEM • Requesting Capital funds of $821,200 • Approval Required* • See Memo (detail) • Mid Level Projects planned • Contingencies for • UDP Repair • Elevator Retrofit • Japanese Garden treated as donation FY 2019/2020 Budget Review

  30. Cash flow, assets and liabilities

  31. FY 2019/2020 Budget Cash Flow • Projecting Positive Cash flow - $640,929 • 3.5% Net Investment return factored in • Conservative Capital budget • Capital Investment less than Depreciation • Ongoing PERS Unfunded Liability Payments • $441,024 due July 2019 – Per Actuarial • Outpost Bond Principal & Interest ($232,400) • $90,000 Debt Payment • $142,400 Interest (In Operating Statement) FY 2019/2020 Budget Review

  32. FY 2019/2020 BudgetFYE Cash Flow Projection FY 2019/2020 Budget Review

  33. FY 2019/2020 BudgetCash/Investment Balance Trend FY 2019/2020 Budget Review

  34. FY 2019/2020 BudgetLong Term Liabilities • Long Term Liabilities of $11,963,785 (6/19 Est) • Anticipated Reduction • PERS Unfunded Liability - $5,964,920 • $441,024 Payment required in July 2019 • Moving to 20 Year Pay Down Terms (See PERS report) • SRB Principal (Outpost) -$3,280,957 • FY2019/2020 pay down $90K • Remaining Term to 2039 • Medical Post Retirement liability past its peak • Currently at $2,717,908 • VEBA Funding Plan Mitigating This Exposure Long Term FY 2019/2020 Budget Review

  35. FY2019/2020 BudgetLong Term Liabilities FY 2019/2020 Budget Review

  36. FY2019/2020 BudgetLong Term Liabilities FY 2019/2020 Budget Review

  37. FY 2019/2020 Budget VEBA Trust Status • Board Approved $4M investment - 2010 • Funding complete per plan • Initial Plan assumed $5.3M balance after 7 Years • Medical Costs have outpaced inflation • Actuarial assessment has us a year out • Current YE Balance estimated $5,550K • Projected FY19/20 holdings of $5,788K FY 2019/2020 Budget Review

  38. FY2019/2020 BudgetVEBA Trend FY 2019/2020 Budget Review

  39. FY2019/2020 BudgetLong Term Assets and Liabilities Comparison Outpost & Starbucks FAS106 Retiree Medical PERS GASB68 Reserve Plan VEBA Set Up Bookstore Bond Paid off Investment Portfolio FY 2019/2020 Budget Review

  40. Cash Designation & Funding Reserves

  41. FY2019/2020 Budget Reserve Planning • Per Reserve Policy accommodations needed for: • Working Capital • Annual Capital Replacement and Major Maintenance • Post-Retirement Medical • CalPERS Unfunded Liability • New Projects/Other • Accounting Standards Update – ASU 2016-14 • “Designating” funds for existing liabilities and future needs • Liquidity Reporting FY 2019/2020 Budget Review

  42. FY2019/2020 Budget Reserve Planning(Cont’d) • Adequate funds on hand for Midterm Support • Planned Positive Cash Flow • PERS Unfunded Liability largest debt/risk • Accrued Interest exceeds Operating ROI • VEBA funding (Off Balance Sheet) • Mitigates Long Term Retiree Medical Liability • Assumes no additional investment • No Facility Set Aside Funding in Place FY 2019/2020 Budget Review

  43. FY 2019/2020 BudgetReserve Recommendation • Recommend That Monies be Designated as Assets Without Donor Restrictions in the amount of $15,039,000 • $10,339,000 - Priority 1 • Committed and Incurred Liability • Non-Asset backed Liabilities • $4,700,000 - Priority 2 • Incurred Liability & Asset Backed • Designation subject to Holdings Limit • No available funds for Priority 3 • Estimated $35M for Future Repair/Replacement FY 2019/2020 Budget Review

  44. FY 2019/2020 BudgetReserve DesignationsApproval Required FY 2019/2020 Budget Review

  45. FY 2019/2020 BudgetReserve Matrix Build up FY 2019/2020 Budget Review

  46. FY 2019/2020 BudgetReserve DesignationsFuture Consideration FY 2019/2020 Budget Review

  47. FY2019/2020 Budget CalPERS Actuarial Update • Unfunded Accrued Liability (UAL) - $5,964,920 • Legacy employee participant plan • Shrinking participant funding pool ongoing • CalPERS GASB 68 Publications – March 2019 • Miscellaneous Risk Pool Measurement update • Measurement Date of June 30, 2018 • Baselines Liabilities and Assets for YE June 2019 • Public Agency Schedules • Employer Allocation for Components of Net Pension Liability FY 2019/2020 Budget Review

  48. FY2019/2020 Budget PERS Liability Reduction • Annual payments increasing to $700K • $441,024 – July 2019, $687,000 – July 2024 • Current schedule incurs $6.2M in interest • Discount rate of 7% • See Backup Slides 56-57 • CalPERS adopting a 20 year minimum schedule • Recommend a Pay-down Plan similar to VEBA FY 2019/2020 Budget Review

  49. FY 2019/2020 BudgetCalPERS UAL FundingAction For BOD Submittal • Proposing Several Funding profiles • Annual amounts are above and beyond the Mandated Annual Employer Contributions (Slide 56) • Considers $441,024 Payment Due July 2019 • UAL Pay-Down Options • $1M Initial Payment - $500K/Year for 7 years • $2M down, $500K for 6 years (Recommended) • $3M down, $500K for 3 years • Actuarial Will Address Ongoing Status FY 2019/2020 Budget Review

  50. Issues and concerns

More Related