Messiah College FY13 Financial Plan FY13 Parameters January 4, 2012
Messiah College FY13 Financial Plan FY13 ParametersJanuary 4, 2012.
Dec 27, 2015
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Messiah College FY13 Financial Plan
FY13 Parameters January 4, 2012
FY13 Budget Forum
• Budget Methodology
• Revenue Sources
• Expense Drivers
• Financial Planning
• Q & A
Budget Methodology
• Budget now focuses on cash flows and controllable expenditures.
• Operating budget no longer includes depreciation, a non-cash expenditure.
• Budget includes capital spending and total debt service.
• Total debt service includes principal and interest.
• Depreciation funding targeted at 70%.
Revenue Sources
• Undergraduate Enrollment
• Tuition and Fee Increases
• Financial Aid (Discount Rate)
• Auxiliary (Room, Board, Campus Store)
• Graduate Programs
• Endowment
• Other (Conferences, Camps etc.)
• Gifts
UG Net Tuition& Fees (NTR)
(>1/2 of Total Revenue)
(=1/4 of Total Revenue)
Net Tuition and Fees
59%
Endowment Income
7%
Interest & Trust Income
1%
Gov't Ap-propriations
1%
Gifts2%
Other Revenue
5%
Auxiliary Enterprises
26%
Revenue Distribution
06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15
First-Time (Fall) 736 723 709 698 721 694 725 725 730
Transfer/Returning 95 120 102 76 120 108 105 110 110
50
150
250
350
450
550
650
750
850
Messiah CollegeNew Undergraduate Student Enrollment (Fall)
831 843 811774
841802 830 835 840
06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15
UG 2750 2730 2713 2677 2682 2707 2695 2699 2713
2,650
2,670
2,690
2,710
2,730
2,750
Messiah College Undergraduate FFTE(Financial Full-Time Equivalent Enrollment)
Pricing Strategy
• Middle of the pack relative to Peer Group
• Price sensitivity - what will the market bear?
• Sufficient increase to meet revenue needs
• 3.9% increase to comprehensive fee proposed (slightly higher than last year)
05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15
Messiah 0.057 0.05 0.048 0.039 0.039 0.031 0.032 0.0391 0.0391 0.0391
Median 0.054 0.06 0.057 0.045 0.045 0.042 0.04 NaN NaN NaN
0.5%
1.5%
2.5%
3.5%
4.5%
5.5%
Comprehensive Fee IncreaseMessiah College vs. Competitor Median
05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13
Messiah 0.057 0.05 0.048 0.039 0.039 0.031 0.032 0.0391
CPI 0.03 0.038 0.026 0.037 0.014 0.01 0.02 NaN
HEPI 0.039 0.051 0.028 0.05 0.023 0.009 0.023 NaN
0.5%
1.5%
2.5%
3.5%
4.5%
5.5%
Comprehensive Fee IncreaseMessiah College vs. CPI and HEPI
HEPI – Higher Education Price Index CPI – Consumer Price Index
Messiah Nat’l Average* Difference
2011-12 $36,776 $38,589 ($1,813)
*Source: The College Board. For private nonprofit four-year private colleges/universities.
Tuition, Fee, Room & Board Increases
FY11 FY12 FY13Gross Tuition 26,680 27,536 28,638SGA Fee 230 230 230Room 4,320 4,460 4,638Board 3,840 3,960 4,118Student Services Fees 570 590 590Comprehensive Fee 35,640 36,776 38,214
FY11 % Incr FY12 % Incr FY13% IncrGross Tuition 3.01% 3.21% 4.00%SGA Fee 0.00% 0.00% 0.00%Room 3.60% 3.24% 4.00%Board 3.50% 3.13% 4.00%Student Services Fees 0.00% 3.51% 0.00%Comprehensive Fee 3.07% 3.19% 3.91%
* Excludes Graduate Programs
Actual Actual Actual Budget Proj. Proj. Proj. Proj.FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$23,908$25,775
$28,189$30,633
$32,470 $33,334 $33,956 $35,003
$48,420 $48,144 $48,248 $49,627 $50,521$52,272
$54,638$57,414
$72,328$73,919
$76,437
$80,260$82,991
$85,606$88,595
$92,417Analysis of Gross and Net Tuition & Fees and Fi-nancial Aid (in 000s)
Financial Aid Net Tuition and Fees Tuition and Fee Revenue, Gross
07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15
Fresh-man
0.407 0.42 0.427 0.464 0.464 0.46 0.455 0.45
All 0.344 0.355 0.37300000000000
1
0.39500000000000
1
0.411 0.419 0.422 0.418
2.5%7.5%
12.5%17.5%22.5%27.5%32.5%37.5%42.5%47.5%
Undergraduate Financial Aid Discount Rates(Institutional Aid ÷ Tuition and Fees)
Graduate ProgramsProjected Operating Results (in 000s)
FY13 FY14 FY15
FFTE 211 244 270
Revenue $2,126 $2,516 $2,892
Compensation ($1,569) ($1,904) ($2,054)
Direct Operating Expenses ($297) ($300) ($306)
Gross Margin $260 $312 $531
Includes projections for the following programs:
Art EducationConductingCounselingEducationHigher EducationYouth & Young Adult Ministries
Other Revenue
• Auxiliary Revenue (Dining, Housing, Campus Store) fee and revenue increases average 4.0% ($713,000)
• Endowment, and federal and state aid appropriations increased modestly ($225,000)
• Modest projected increases in other revenue sources (gifts, summer conferences, etc: $175,000)
Revenue Summary (in 000s)
FY13 FY12 $ % Budget Budget Change Change
Net Tuition and Fees* $50,744 $50,142 $602 1.2% Endowment Income 6,085 5,894 191 3.2% Interest & Trust Income 555 617 (62) -10.0% Gov't Appropriations 741 727 14 2.0% Gifts 1,359 1,294 65 5.0% Other Revenue 4,448 4,338 110 2.5%Auxiliary Enterprises 22,489 21,670 819 3.8% Total Revenue $86,421 $84,682 $1,739 2.1%
* Includes graduate programs.
Key Expense Drivers
• Salary & Wages
• Benefits
• Inflation (CPI and HEPI)
Projected Wage & Benefit Increases
FY13Projected Compensation Increases:
Faculty Salary Pool Increase 4.00%
Staff/Admin Salaries & Wages Pool Increase 3.50%Benefits Increase 7.76%
Total Compensation Increase 4.75%
•Percentages above exclude impact of Graduate Programs.
Projected Wage & Benefit Increases
•3.0% increase to faculty base
•Health Insurance increase forecasted at 12% •FY13 Total Salaries, Wages & Benefits:
$52.0 million
• 58.0% of total expenses
FY13 Expense Distribution
Salary and Benefits
58%
Services and Supplies
22%
Purchases5%
Utilities5%
Debt Service5% Capital
5%
Expense Summary (in 000s)
FY13 FY12 $ % Budget Budget Change Change
Salary and Benefits $50,396 $47,979 $2,417 5.0% Services and Supplies 19,256 19,052 204 1.1% Purchases 3,988 3,949 39 1.0% Utilities 4,112 4,027 85 2.1% Debt Service 4,649 4,544 105 2.3%
Capital 4,020 5,131 (1,111) -21.6% $86,421 $84,682 $1,739 2.0%
Balanced Budget (in 000s)
FY13 FY12 $ % Budget Budget Change Change
Net Tuition and Fees* $50,744 $50,142 $602 1.2% Endowment Income 6,085 5,894 191 3.2% Interest & Trust Income 555 617 (62) -10.0% Gov't Appropriations 741 727 14 2.0% Gifts 1,359 1,294 65 5.0% Other Revenue 4,448 4,338 110 2.5%Auxiliary Enterprises 22,489 21,670 819 3.8% Total Revenue $86,421 $84,682 $1,739 2.1%
Salary and Benefits $50,396 $47,979 $2,417 5.0% Services and Supplies 19,256 19,052 204 1.1% Purchases 3,988 3,949 39 1.0% Utilities 4,112 4,027 85 2.1% Debt Service 4,649 4,544 105 2.3% Capital 4,020 5,131 (1,111) -21.6% Total Expense $86,421 $84,682 $1,739 2.0% Net Income 0 0
FY13 Budget Summary (in 000s)
Sources of Funds: Tuition and Fee Increase $2,439 Decreased Capital Spending 1,111 Auxiliary Enterprises 820 Endowment & Other Revenue 317 $4,687 Uses of Funds: Increased Financial Aid (1,837)Salary & Wage Increases (1,454)Benefits Increase (963)Services & Supplies Increase (204)Utilities, Debt Service & Purchases (229) $(4,687) Total Net $0
Financial Planning
Reserves Coverage
Return on Net Assets
“A Balanced Budget”
Assets to Debt
1. NTR
2. Giving
3. Efficiencies
4. Entrepreneurial
KPMG,NACUBO “Ratio Analysis in Higher Education”
Financial Planning
• Long-term planning – multi-year perspective.
• Link to strategic planning.
• More effective predictive modeling.
• Match funding to strategic initiatives.
Key Takeaways – FY13 Budget
• Undergraduate FFTE 725, 105 transfers.
• First year discount rate 46%.
• Comprehensive fee increase 3.91%.
• Salary, wage and benefits increase 4.75%.
• Depreciation funding reduced to 70%.
Questions & Answers
Projected Wage & Benefit Increases
FY12 FY13Proposed Compensation Increases:
Faculty Salary Increase 3.20% 4.00%
Staff/Admin Salaries & Wages Increase 2.50% 3.50%Benefits Increase 5.76% 7.76%
Total Compensation Increase 3.53% 4.75%
•Percentages above exclude impact of Graduate School
FTE Students Tuition NTR Disc Rate
725.0 $25,000 $9,787,500 46%711.8 $25,000 $9,787,500 45%699.1 $25,000 $9,787,500 44%686.8 $25,000 $9,787,500 43%675.0 $25,000 $9,787,500 42%
FY12 FY13 FY14 FY15 FY16
-$5,000
-$4,000
-$3,000
-$2,000
-$1,000
$0
$1,000
$2,000
($1,266)
($3,634)
($4,567)
($3,600)
($2,538)
$641
$0
($244)
$232
$1,550
Comparison of Changes in Cash Flow and Net Assets
Change in Net Assets Net Cash Flow
FY12 FY13 FY14 FY15 FY16 $0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$9,677
$10,454
$11,598$12,062
$12,544
Depreciation Expense (in thousands)
FY12 FY13 FY14 FY15 FY16 0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
81%
66%63%
69% 68%
53%
38% 37%43% 41%
Depreciation Funding Analysis
Funded Depreciation (cap exp + prin on debt) Funded Depreciation (cap exp)Strategic Plan Goal
FY07 FY08 FY09 FY10 FY11$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$100
$930
$125
$1,584
$448
$2,504
$1,400 $3,098
$2,202
$1,543
Designation of Year-end Cash Flow Surplus (in thousands)
Other Initiatives Reserve Fund
Sensitivity Parameters
Approximate Sensitivity Parameters
Estimated value of a 1% change FY12 data
1% tuition $610,000 (net of fin. aid)
1% FTFTFr fin aid $225,000 (i.e., 44% to 45%)
1% Enrollment $425,000
1% R&B $155,000
1% All Salaries $400,000 (w/benefits)
1% faculty $155,000 (w/benefits)
1% staff/admin $212,000 (w/benefits)
1% student $33,000
1% variable costs $113,000
Competitor Institutions
Calvin CollegeCedarville UniversityEastern Mennonite UniversityEastern UniversityElizabethtown CollegeGeneva CollegeGordon CollegeGrove City CollegeHoughton CollegeLebanon Valley CollegeLiberty UniversityRoberts Wesleyan CollegeSusquehanna UniversityWheaton CollegeYork College
Glossary of Terms
Higher Education Price Index (HEPI) – Measures increases in cost of goods and services purchased by institutions of higher education. Compensation is a major factor.
Gross Tuition – Price charged to a student for attendance.
Net Tuition – Price to be paid by the student/family after aid.
Cost – Resources expended by the institution to provide the full educational experience to each student.
Net Tuition Revenue – Tuition and fees less financial aid.
CPI-W versus Wage & Salary Increases
Prior Multi-Yr Wg & Sal Incr 3-yr 5-yr
Faculty Base 5.3% 11.2%
Fac avg w/step/promo/ret.** 7.3% 15.9%
Assistant Professor 10.2% 20.7%
Associate Prof (w/steps) *** 9.3% 19.1%
Full Professor 8.5% 17.6%
Prior 3 YR Prior 5 YR
CPI-W CPI-W
5.6% 12.1% Est.
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