Follow-Up Conversation FY 2016 Year-End Budget and

Approach to FY 2017 Budget

March 29, 2016

Take Aways from

March 1, 2016 Budget Discussion
Oil and Gas Production Tax Revenue is decreasing.
Enrollments have decreased.
NM State Budget is experiencing reductions; cuts in
appropriations are expected.
Changes in Property Tax Revenue are uncertain.

Its not just FY 2017

These circumstances are impacting our FY 2016
budget estimates

Impact on Current Year - FY 2016 General Fund Revenue

Oil & Gas Production Tax Revenue is estimated to fall short of
budget by
$350,000
Tuition, General Fee and Workforce Development Revenue is
estimated to fall short of budget by
$822,134
NM Appropriation will be cut at year end by
$151,000
Sales & Services Revenues are estimated to fall short of budgeted
amounts by
$291,530
Property Tax Revenue is estimated to exceed budget by $232,455
Decrease in Resources for FY 2016
$1,382,209

Revenues Changes FY2015 to FY 2016

FY15 Year End

FY16 Mid-Year

Actual

Approved BAR

FY16 Year End

Recommended BAR

Tuition & Fees

11,618,389

13,334,854

12,512,720

NM State Appropriations

25,170,340

25,220,300

25,069,300

Local Taxes - Property & Production

14,880,095

14,115,131

13,997,586

817,567

825,079

533,549

52,486,391

53,495,364

52,113,155

Sales & Services

Total
Decrease from Mid-Year BAR

(1,382,209)

A note about the following recommended measures.

These recommendations were formulated to achieve the following objectives:
Prevent overspending of resources at year end, 6/30/2016
Provide for continued operations for summer semester and lead-in to FY 2017 (in other words,
minimize instructional and service disruptions)

With only three months remaining in the fiscal year, most of our resources have been
spent or are committed.
Most of these tactics are to be considered one-shot measures.

Recommendations to Offset Decrease in

Current Year - FY 2016 General Fund Revenues
Forego budgeted increase in Fund Balance
Reduce transfer to R&R funds
Defer a large portion of Technology purchases
Use undesignated R&R fund balance for
currently planned physical plant projects

$501,881
$250,000
$251,973

Reduce transfer to 3% Scholarships

Charge Auxiliary Enterprise Operations for IT services
and space use (utilities, maintenance, custodial)
Zero-out remaining contingency for pay/benefits
Other minor changes
Total - Measures Recommended to Offset Shortfall

$501,973
$100,000
$241,000
$ 28,785
$ 8,570
$1,382,209

Moving On To FY 2017
Revenue Assumptions
No increase in tuition or general fee rates
Enrollment Level: another 10% decline in headcount;
another 2% decline in semester credit hours
Little or no change in property values
Possible further decrease in Production Tax Revenue
Another cut in NM appropriation is anticipated
Most of the FY2016 year-end revenue decreases will
carryforward to FY2017 and exacerbate the impact of the
above listed assumptions

Estimated Changes in FY 2017 Revenue

Decrease in Revenue from Tuition and General Fees

Increase in Property Tax Revenue
Decrease in Oil & Gas Production Tax Revenue
Reduction in NM Appropriation
Carryforward of FY2016 year-end revenue changes:
Oil & Gas Production Tax Revenue Shortfall
Tuition, General Fee & Workforce Dev. Revenue Shortfall
Reduced Sales & Service Revenue
Increase in Property Tax Revenue

Total Estimated Change in FY2017 Revenue

$550,000
($300,000)
$175,000
$660,000

$350,000
$722,134
$291,530
($232,455)

$1,131,209
$2,216,209

Revenue Changes FY2015 to FY2017

FY15 Y.E.
Actual

FY16 Mid-Year

FY16 Year End

FY17 Initial

Approved BAR Recommended BAR Budget Estimate

Tuition & Fees

11,618,389

13,334,854

12,512,720

12,062,720

NM State Appropriations

25,170,340

25,220,300

25,069,300

24,560,300

Local Taxes - Property & Production

14,880,095

14,115,131

13,997,586

14,122,586

817,567

825,079

533,549

533,549

52,486,391

53,495,364

52,113,155

51,279,155

(1,382,209)

(834,000)

Sales & Services

Total
Decrease from Previous Budget
Total Decrease - FY16 Mid-Year to FY17

(2,216,209)

Cost and Expenditures Assumptions

No increase in wage and salary rates

Change in health benefit cost unknown until July or later

We must make changes in the way we do things, decide what
we cannot do and stay focused on our mission and core
programs and services.

Recommended Changes in FY 2017 Expenditures to Offset

Projected Reductions in Revenue

Reduced Cost of new IT Management & Services contract

$566,240
Sunset KSJE (net of redeployment of 1 employee)
$150,000
Change in Herbarium Operation
$12,500
Savings from turnover - currently known retirements
$220,000
Reduction of 3% Scholarship transfer
$175,000
Energy Savings Initiatives
$50,000
Improvements in Ancillary Staffing Issues & Efficiencies
$1,000,000
Other smaller and minor cost reduction measures
$42,469
Total Measures to Reduce Costs and Offset Reduction in Revenue $2,216,209

Improvements in Ancillary Staffing Issues & Efficiencies

Possible Areas of Exploration And Evaluation
Class Size
Faculty Load
Overloads
Savings From Retirement Turnover
Selective reduction in staffing levels through attrition and
strategic redeployment of talent
Program ROI and Viability

Changing the Way We Do Things to Reduce Costs

Establish Contract Pricing Agreement for Office Supplies

Restrict and Reduce Cell Phone Reimbursements
Explore feasibility of wide-spread use of thin client technology
Evaluate P-card program
Evaluate efficiency and cost effectiveness of motor pool
Reduce travel (cost benefit)
Negotiate lower credit card fees
Reduce or sunset student print credit (encourage electronic documents)
Establish guidelines for institutionally coordinated technology acquisitions

Outlook for FY2018

No further decline in enrollment. Grow enrollment.
Change in property values uncertain. Stability may be anticipated?
No further decrease in Oil & Gas Production Tax Revenue? Small
decrease?
May anticipate further reduction in NM state appropriation. 2.5%? 5%?