Committee Meeting: Financial Health Date: April 13, 2018 Committee Chair: Tim Callan Committee Members: Tim Callan-BOT member, Rebecca Krakowiak-BOT member, Danise Wilson-BOT member, Len Lenihan-BOT member, Dan Hocoy-President, Mike Pietkiewicz-EVP Institutional Advancement and Efficiency, Penny Howard-EVP for Finance and Administration, Rick Washousky-Provost/EVP, Krista Woods-Chief Accountant, Steve Smith-VP of Enrollment Management, Sue Holdaway-Executive Director ASC Mission: Financial Health’s core purpose is to assist the Board of Trustees in fulfilling its fiduciary responsibility in assessing overall financial performance of the college with respect to financial operations. The focus is assembling and monitoring organizational priorities and work with the President to best present and monitor management key financial performance indicators. Vision: Erie Community College Board of Trustees have a current and relevant short and long term financial plan where concise, timely and understandable reporting tools provide Trustees with a clear vision and pathway to institutional financial integrity. AGENDA 1. Call to order 2. Approval of Minutes - Page 2 Motion to approve the minutes of March 30, 2018 Motion: Second: 3. Old Business 4. New Business a. Fundraising Update – Dan Hocoy, Ph.D. b. Quarterly ASC Report – Susan Holdaway, Executive Director ASC - Page 13 c. EFPR Group Report – Penelope Howard, EVPAF - Page 15 d. 2018-2019 Budget – Penelope Howard, EVPAF - Page 48 5. Next Meeting: 1
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Committee Meeting: Financial Health Date: April 13, 2018
Committee Chair: Tim Callan
Committee Members: Tim Callan-BOT member, Rebecca Krakowiak-BOT member, Danise
Wilson-BOT member, Len Lenihan-BOT member, Dan Hocoy-President, Mike Pietkiewicz-EVP
Institutional Advancement and Efficiency, Penny Howard-EVP for Finance and Administration,
Rick Washousky-Provost/EVP, Krista Woods-Chief Accountant, Steve Smith-VP of Enrollment
Management, Sue Holdaway-Executive Director ASC
Mission:
Financial Health’s core purpose is to assist the Board of Trustees in fulfilling its fiduciary responsibility
in assessing overall financial performance of the college with respect to financial operations. The focus
is assembling and monitoring organizational priorities and work with the President to best present and
Increase in OPEB 10,077,563.00 8,022,233.00 4,766,766.00
OPEB Beginning of Year 73,536,371.00 65,514,138.00 60,747,372.00
OPEB End of Year 83,613,934.00 73,536,371.00 65,514,138.00
2016 Valuation:
Per actuarial valuation report—changes in assumptions and methods:
Mortality assumption updated to the RP-2014 Mortality tables, adjusted backwards to 2006
using Scale MP-2014 and then adjusted for mortality improvements using Scale MP-2015.
Update in mortality resulted in decreased liabilities.
Prescription drug short-term trend rate schedule was revised to better reflect future
expectations based on review of published national trend survey data in relation to retiree
health plan offerings. Revised assumption resulted in increase liabilities.
Turnover and retirement assumptions were revised to update the actuarial assumptions for NYS
governmental employers released in 2015. Revised assumption resulted in decreased liabilities.
2017 Valuation:
Per actuarial valuation report—changes in assumptions and methods:
Mortality assumption was revised to the sex-distinct RP-2014 mortality tables, adjusted
backwards to 2006 using Scale MP-2014, and then adjusted for mortality improvements using
the scale MP-2017. The revised assumption resulted in decrease liabilities.
Annual rate of increase in healthcare costs were revised to better reflect future expectations,
including updating long-term rates based on Society of Actuaries long-term healthcare trends
Model v2018_C, with adjustments made based on LMHF expectations for short-term pre-65
medical and Rx Trend. The revised assumption resulted in decrease liabilities.
Rates of turnover and retirement were revised based on 7/1/09 to 6/30/14 experience study
related by the retirement systems for NYS TRS. Revised tables have been used for employees as
of 12/31/17 to better reflect future expectations. Revised assumption results in increase
liabilities.
A delay in Affordable healthcare act excise tax from 2020 to 2022 resulted in decrease liabilities.
Please refer to the attached valuation for further details.
Page 154—Fees for Service expense category is overbudget?
This is due to insufficient funds budgeted to the corporate training program. In 2017,
the program had expenses of $582,149 with a budget of $147,515. The budget for 2018
is $186,000, with current YTD expenses (as of 2.28.18) of $609,372. YTD revenues are
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$477,581, it is anticipated revenues will continued to be collected through 8/31. The
program is profitable and in 2017 generated $205,776 excess revenues over expenses.
Page 169—Vendor inquiry:
PLS III, LLC--$153,750—intercampus shuttle service
BH Photo/Video--$98,325—ITS equipment audio/visual components for smart
classrooms
Page 193-196—What happens to surplus equipment?
Surplus (non-IT equipment); the department will contact maintenance to pick-up. The
equipment is brought to the north campus basement. Erie County personnel periodically come
by to pick through the equipment, anything that the County does not take is scrapped. Funds
that are received from sale of scrap are deposited to an ASC account.
Surplus (ITS equipment); the College has a reverse bid with a company called Maven, who picks
up disposed ITS equipment periodically and provides a certificate of destruction. The College
receives a small percentage of $ for the scrapped equipment and deposits it back into the ITS
budget.
3 Definitions for LMHF from page 5:
Each week, BCBS (medical insurer) and PBD (pharmacy insurer) sends claims invoices to the
LMHF and from this office, we pay those claims to each of the respective carriers. At the end
of the month, BCBS sends us a monthly report evidencing the same, so that we are able to
compare those claims, against what was actually paid. At each monthly LMHF Board meeting,
we present the Board of Directors and Trustees with an account of the financials.
At the top of the report, is the individual group’s maximum (the total amount, per month that
can be spent on claims utilization). At the beginning of the year, rates are set at that maximum.
As you may know, the LMHF is under a Minimum Premium arrangement. There is a per
member, per month rate which sets the max. ECC pays medical claims as they occur, so if a
month happens where there is a surplus, ECC will keep those funds. However, for example: If
ECC has a health surplus through June, but a deficit in July, BCBS can go back and ask to
recover any surpluses that were acquired during prior periods (up to the max) in order to cover
the deficit. The RX account is a little different – the LMHF sends an invoice to ECC for a total
dollar amount, per month, and this office pays claims to PBD from the ECC RX account. If
there are funds left over at the end of the year, ECC will receive those dollars in the form of a
credit against future invoices.
With that being said, here is how to read the monthly report:
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The first section is the income side. What comes into the LMHF.
- Health Admin is invoiced by BCBS and is based on all membership in your population. - Health Max is set by BCBS based on your population (described above - the amount
that ECC will never pay above in any given month for health claims). - RX Premium Max is your RX maximum (the amount that ECC will never pay above in
any given month for RX claims). - RX EGWP Advanced Credit – This is a dollar amount set by PBD that was negotiated
in the rate to offset claims for Medicare Advantage retirees. - RX PBD Advanced Credit – This is the same form of credit but to offset claims for the
Active population.
The next section is what was actually paid:
- Health Admin Paid is the amount billed by BCBS. You will see from the top section “Health Admin”, it is just an in-and-out dollar amount.
- Health Claims Paid are medical claims invoiced and paid. - Stop Loss credit is called out separately to show when credits are received from claims
that have hit the stop loss threshold. These credits are applied to current invoices, as they happen.
- RX claims paid are pharmacy claims billed and paid
The enclosed sections are the health max, against the health claims and surplus or deficit in a
given month or YTD; and the following is the same for the RX.
The overall performance is the health and RX max against the health and RX claims and the
percentage of surplus of deficit.
The very bottom is a running total of rebates that may be used to offset future rate.
4 From page 5, disposal of material:
After speaking with Matt N. in maintenance and Joe L. in ITS that the ITS scrap equipment funds are
coming back to the college budget and maintenance is being deposited to an ASC account for some
reason; I am wondering if the maintenance money should be coming back to the college? Although not a
lot of money, but I believe the funds should be allocated back to the source from which the purchase
was made.
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5 Workday Steering Committee members—Meena Lakhavani, Mike Pietkiewicz, Rick Washousky, Tracey Cleveland, Fabio Escobar, John Elnicky, Nora Clark, George DeRosa, Dan Hocoy, Colleen Quinn, Steven Smith, Penelope Howard, Paul Lamanna
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Auxiliary Services Corporation 4041 Southwestern Blvd. Of Orchard Park, NY 14127
Erie Community College, Inc Phone (716) 851-1260 Fax (716) 851-1261
AUXILIARY SERVICES CORPORATION
QUARTERLY FINANCIAL REPORT DECEMBER 2017 – FEBRUARY 2018
SUBMITTED TO THE FINANCIAL HEALTH SUBCOMMITTEE
OF THE ECC BOARD OF TRUSTEES
Financial summary for the Second Quarter of Fiscal Year 2017/18:
Results of ASC operations for December 2017 through February 2018 indicate a quarterly loss of
$43,685. This is $5095 ahead of the budget for the quarter. Year to date we are operating very
close to budget overall (only down by $5926).
The Business Office revenue for the second quarter is $32,075 less than budget due to decreased
bookstore sales/commissions. Business office expenses are also less than budget by $12,058 due
to obtaining better insurance premiums than we had budgeted for and also receiving a Workers
comp credit from the prior year.
Childcare operations have a positive variance to budget of approximately $33,256 for the second
quarter. This was expected due to the timing of the receipt of the childcare Financial Aid tuition
deferments vs. when they were budgeted.
Food Service sales for the second quarter are below budget by $9849. Several factors
contributed to the lower sales: a snow day closure at South in December, lower than anticipated
sales in the K Kiosk at North in January and February after some classes moved to the STEM
Building, and vending commissions not meeting budget. (The vending commissions will
eventually meet the total annual budget due to minimum guarantees though).
Respectfully Submitted by,
Susan Holdaway
Executive Director of Auxiliary Services
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Auxiliary Services Corporation---2017-2018 Actual Results by Month; YTD Actual, Budget & Variance, Annual Budget.*** YTD
Actual/ 2017-2018Budget Annual
Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug YTD Actual YTD Budget Variance Budget
Certified Public Accountants | 280 Kenneth Drive, Suite 100 | Rochester, New York 14623 | 585.427.8900 | EFPRGroup.com
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The College does not have a position designated as the Budget Director.
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There is a significant deficiency among current personnel in regard to knowledge of how the College’s budget has historically been developed.
The College should consider whether other budgeting methodologies would be beneficial in developing a more accurate and fiscally conservative budget.
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The College does not have a position designated as the Associate Vice President of Finance.
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Appendix A – Current Organization Chart and Appendix B – Proposed Organization Chart
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The Bursar is currently at a management level that is part of the Business Manager’s area of responsibility.
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Appendix A – Current Organization Chart and Appendix B – Proposed Organization Chart
6. As part of this review we documented a number of the Finance Office processes and developed accompanying flow charts. As a result of our procedures we noted the following internal control areas that could be strengthened:
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ECC should consider modifying the monthly financial reporting provided to the Financial Health Committee of the Board of Trustees
Financial reporting to the Financial Health Committee does not appear to include metrics or analysis related to ECC’s strategic plan
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IMPLEMENTATION OF ENTERPRISE RESOURCE PLANNING SOFTWARE:
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The Finance Office appears to utilize a large number of part time staff that creates challenges in securing and/or retaining qualified staff.
Appendix A – Current Organizational Chart
The Accounts Payable process is labor intensive and is comprised of mostly manual procedures with little automation.
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Employee expense reimbursements for business related expenses are currently processed by issuing checks through the Accounts Payable function.
The Ellutian Colleague accounting software has limitations that create inefficiencies for the Grants Management function in complying with the financial reporting requirements of the grant’s sponsors.
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The Grants Management function processes check payments for claims related to the use of grant funds, creating some redundancy with the primary Accounts Payable function.
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APPENDIX CErie Community CollegeProcess Flow Chart
Bank Reconciliation of Operating and Payables Account
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APPENDIX DErie Community CollegeProcess Flow Chart
Bank Reconciliation of Payroll Account
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Erie Community CollegeAPPENDIX E
Process Flow ChartPurchasing
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APPENDIX FErie Community College
Vendor MaintenanceProcess Flow Chart
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APPENDIX HErie Community College
Process Flow Chart Grant Administration
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APPENDIX IErie Community CollegeProcess Flow ChartGrant Disbursements
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APPENDIX JErie Community CollegeProcess Flow ChartBursar Cash Receipts
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APPENDIX KErie Community CollegeProcess Flow Chart
Bursar Cash Disbursements
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APPENDIX MErie Community College
Process Flow ChartAccounts Receivable Allowance for Bad Debts
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APPENDIX NErie Community CollegeProcess Flow Chart
Fixed Asset Inventory
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APPENDIX OErie Community College
Process Flow ChartGeneral Ledger Close and Financial Reporting
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DRAFTAS % PRIOR YR TO
2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 OF TOTAL CURRENT YR % ACTUAL ACTUAL ACTUAL BUDGET BUDGET BUDGET CHANGE
TUITION & FEES
TOTAL STUDENT TUITION 43,056,822$ 42,623,632$ 42,256,621$ 43,808,954$ 43,808,954$ 40.3% 0%
CHARGES TO NON-RESIDENTS 1,096,066$ 1,407,317$ 1,324,441$ 1,389,967$ 1,389,967$ 1.3% 0%
STUDENT SERVICE FEES 10,864,702$ 10,824,095$ 10,948,141$ 10,775,372$ 10,775,372$ 9.9% 0%
GRAND TOTAL 111,956,888$ 109,647,895$ 103,980,391$ 109,595,985$ 111,585,804$ 100.0%
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2019 Capital Budget Request
Department: Business Area: 122Contact :Phone: Email:
Project Name:Rank: 1 of 2 Business Area in which Project will be Budgeted: 122
College-wide Improvements and Renovations
The Capital Projects Committee is beginning its review of capital projects for inclusion in the 2019 Erie County Budget and Capital ImprovementProgram. To submit a proposal for review, please complete this form and return one (1) paper copy to the Capital Projects Committee via Julie Barry,Deputy Commissioner of Environment and Planning NO LATER THAN Friday, April 6, 2018. You must also submit an electronic version (excel file) ofeach request to Scott Bylewski, Deputy Budget Director via email at [email protected]. Please do not submit additional documentation at thistime. Detailed cost estimates with back-up will be required at the time of your meeting to review your requests with the Capital Projects Committee. Anyquestions concerning this form should be directed to Scott Bylewski at (716) 858-2715.
Project Description (include project timeline) NOTE: Construction for the 2019 phase of a project must be complete within three years. You must also be ready to commence your project in 2019.
Continue multi-year phased capital improvements to the College's City, North and South campus buildings, which will include, but not limited to, (a) Exterior Building Envelope Rehabilitation work including but not limited to repair and/or replacement of roofs, masonry, doors, windows and exterior facades; (b) Mechanical, Electrical and Plumbing work including but not limited to power, lighting, communications, energy consumption, plumbing, mechanicals, fire alarm systems, HVAC, backup generators and miscellaneous items; (c) Site work infrastructure improvements including but not limited to road, parking lot, lighting, signage, drainage, sewer, sidewalk, ADA Accessible ramps and curb replacement and repairs as necessary; (d) Life Safety and Code Compliance upgrades and repairs to miscellaneous building components and including the competition pool as necessary to address issues involving ADA, electrical, life safety, environmental and/or asbestos abatement compliance; and other miscellanous items.
Statement of Need:Many of the College's buildings are greatly in need of exterior repairs and maintenance. (a) The building exteriors require repairs to keep them from further deteriorating and causing major environmental issues. Preserving the exterior envelope of the buildings will help improve energy performance and reduce maintenance, operational and energy costs; and preserve the structures for a longer useful life. At North Campus, 88,500 square footage of roof replacement or recoating are still needed. Buildings K,G and L are in need of window and door replacements. (b) The existing HVAC (Heating, Ventilation, Air Conditioning), plumbing (including fuel piping), fire detection and electrical systems in various College buildings are over 30 years in age and are beyond their useful life and must be replaced. The systems operate at reduced capacity and efficiency and at reduced safety levels for electrical systems, especially for fire protection. New systems will reduce the College's maintenance, operational and energy costs. Since 2014, the College has expended in excess of $9.4 million from its operating budget for
4/12/2018 1 of 3Copy of 2018 19 Draft Operating and Capital Budget Requests
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MEP related work. (c) Campus roads and parking lots are generally poor condition reflecting their age. Potholes, cracks, and deteriorated curbing and sewer drains are evident and in need of repair/replacement. The resulting undermining is causing large sink holes throughout the campus. It is estimated replacement/repair of the roadways, parking lots, catch basins and sidewalks would cost $14,765,000 today. The college expended in excess of $3.4 million from its operating budget in the last 6 years. Furthermore, there has been a rise in insurance claims due to disrepair and a hike in the premium. (d) The NY State Education Department of Civil Rights has directed the College with a Letter of Findings identifying several non ADA code‐compliant issues that involve toilet rooms, signage, parking, ramps, concrete curbs that are strongly recommended to be addressed by 2020. In addition, life safety issues has been identified at the Athletic Center's competition pool which will require resurfacing and ADA compliant pool lift
4/12/2018 2 of 3Copy of 2018 19 Draft Operating and Capital Budget Requests
Total Project Cost 13,500,000 13,500,000 13,500,000 13,500,000 13,500,000 13,500,000 81,000,000
RevenueState - Federal - Other -
- Total Non County Revenue - - - - - - -
County Share 13,500,000 13,500,000 13,500,000 13,500,000 13,500,000 13,500,000 81,000,000
Revenue Description Estimated Financial Impact on Annual BasisFees, Fines or chargesState ReimbursementOther Revenue
ExpensePersonnel RelatedSuppliesMaintenance and RentUtilitiesOther
For DPW PROJECTS only - Rating of bridge and traffic count of the road:
Indicate below whether the project is ready to go (construction plans, etc.) and if applicable, are there any "site control" issues, i.e. does the County own the land, is it under some kind of lease, etc.
The work has been started with previous county provided funding and is a continuation of rehabilitation of the various buildings and features. There are no site control issues.
Funding request: Indicate in the chart below, Phase 1 of the project (2019 budget) and any additional cost that may be required for additional phases of the project from 2019-2024. Include revenue estimates where applicable. *Chart below contains formulas
Impact on the Operating Budget: Summarize below, in general categories, how completion of the project will have either a positive or negative impact on the operating budget. Describe the nature of the item and provide cost estimates if reasonable.
4/12/2018 3 of 3Copy of 2018 19 Draft Operating and Capital Budget Requests
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2019 Capital Budget Request
Department: Business Area 122Contact :Phone: Email:
Project Name:Rank: 2 of 2 Business Area in which Project will be Budgeted: 122
College-wide Equipment
The Capital Projects Committee is beginning its review of capital projects for inclusion in the 2019 Erie County Budget and Capital ImprovementProgram. To submit a proposal for review, please complete this form and return one (1) paper copy to the Capital Projects Committee via Julie Barry,Deputy Commissioner of Environment and Planning NO LATER THAN Friday, April 6, 2018. You must also submit an electronic version (excel file) ofeach request to Scott Bylewski, Deputy Budget Director via email at [email protected]. Please do not submit additional documentation at thistime. Detailed cost estimates with back-up will be required at the time of your meeting to review your requests with the Capital Projects Committee. Anyquestions concerning this form should be directed to Scott Bylewski at (716) 858-2715.
Project Description (include project timeline) NOTE: Construction for the 2019 phase of a project must be complete within three years. You must also be ready to commence your project in 2019.
For the past several years all equipment purchased by ECC has been funded by Erie County as a capital project. After multiple conversations with Robert Keating, Erie County Director of Budget and Management, the college requests the conversion of $360,000 of the previously capital annual funding of $1,800,000 be converted to maintenance of effort funding for annual operations, and the remaining balance of $1,440,000 to remain capital for the acquisition of various equipment including vehicles, buildings and grounds equipment, and technology related capital needs, as well as furniture and fixtures.
Statement of Need:Equipment, especially related to technology, requires continuous reinvestment in order to provide the learning environment to offer excellent education experience for students.
4/12/2018 1 of 2Copy of 2018 19 Draft Operating and Capital Budget Requests
Total Project Cost 1,440,000 1,440,000 1,440,000 1,440,000 1,440,000 1,440,000 8,640,000
RevenueState - Federal - Other -
- Total Non County Revenue - - - - - - -
County Share 1,440,000 1,440,000 1,440,000 1,440,000 1,440,000 1,440,000 8,640,000
Revenue Description Estimated Financial Impact on Annual BasisFees, Fines or chargesState ReimbursementOther Revenue
ExpensePersonnel RelatedSuppliesMaintenance and RentUtilitiesOther
For DPW PROJECTS only - Rating of bridge and traffic count of the road:
Indicate below whether the project is ready to go (construction plans, etc.) and if applicable, are there any "site control" issues, i.e. does the County own the land, is it under some kind of lease, etc.
The annual capital allocation is spent down by ECC throughout the year and reimbursed by the county upon submission of equipment invoices totaling $1.8 million. There are no site control issues.
Funding request: Indicate in the chart below, Phase 1 of the project (2019 budget) and any additional cost that may be required for additional phases of the project from 2019-2024. Include revenue estimates where applicable. *Chart below contains formulas
Impact on the Operating Budget: Summarize below, in general categories, how completion of the project will have either a positive or negative impact on the operating budget. Describe the nature of the item and provide cost estimates if reasonable.
Changing $360,000 to maintenance of effort revenue 360,000
4/12/2018 2 of 2Copy of 2018 19 Draft Operating and Capital Budget Requests