Audited Financial Statements and Other Financial ...Jun 30, 2016 · The discussion and analysis of the financial statements of Delta College (the College) provides an overview of

Audited Financial Statements

and Other Financial Information

June 30, 2016

DELTA COLLEGE

AUDITED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION

JUNE 30, 2016

CONTENTS

Audited Financial Statements Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-12 Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-15 Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Statements of Revenue, Expenses and Changes in Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-19 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-47 Required Supplementary Information Schedule of Proportionate Share of Net Pension Liability and Contributions for Michigan Public School Employees’ Retirement System (MPSERS), and Notes to Required Supplementary Information

. . . . . . . . . . . . . . . . . . . . .

48

Supplemental Schedules of Other Financial Information Consolidating Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Consolidating Statement of Revenue, Expenses and Changes in Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Details of Certain General Fund Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Details of General Fund Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52-54 Details of Designated Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Details of Auxiliary Activities Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Details of Expendable Restricted Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Details of Endowment Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58-61

1

MANAGEMENT’S DISCUSSION AND ANALYSIS

DELTA COLLEGE YEAR ENDED JUNE 30, 2016 The discussion and analysis of the financial statements of Delta College (the College) provides an overview of the College’s financial activities for the years ended June 30, 2016, 2015 and 2014. Management has prepared the financial statements and the related footnote disclosures along with the discussion and analysis. Responsibility for the completeness and fairness of this information rests with the College’s management. Using This Report These financial statements are prepared in accordance with the Governmental Accounting Standards Board (GASB) Statement No. 35, Basic Financial Statements - and Management’s Discussion and Analysis - for Public Colleges and Universities. The financial statements are prepared under the accrual basis of accounting, whereby revenues and assets are recognized when the service is provided and expenses and liabilities are recognized when others provide the service, regardless of when cash is exchanged. Capital expenditures are capitalized on the Balance Sheet instead of recording as an expense, and depreciation is recorded. Activities are reported as either operating or nonoperating in accordance with the GASB Statement No. 35. Charges for services are recorded as operating revenues. Essentially all other types of revenue, including state appropriations, property tax levies and Pell federal grant revenue are nonoperating. A public community college’s reliance on state funding, local property taxes and Pell federal grant assistance to students will result in reporting an operating deficit. This annual financial report complies with these requirements and includes this management’s discussion and analysis, the report of independent auditors, the financial statements, notes to financial statements, required supplementary information, and supplemental information similar to commercial enterprises and private-sector institutions. Over time, increases or decreases in net position provide one indication of the financial health of an organization. To assess the overall health of the College, many other non-financial factors also need to be considered such as trends in enrollment, condition of facilities, attention to workforce needs, success of graduates, and the strength of the faculty and staff. Financial Highlights During the year ended June 30, 2015, the College implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. The provisions of these standards resulted in the College recognizing its calculated share of the pension liability and related expenses and deferred inflows and outflows for the Michigan Public School Employees’ Retirement System (MPSERS). The College’s initial net pension liability and deferred outflows of resources effective July 1, 2014, respectively, were $85.8 million and $4.2 million, for a reduction in beginning unrestricted net position of $81.6 million. The 2015 activity included a reduction in the net pension liability of $5.1 million, which included negative pension expense of $78,000, an increase in deferred outflows of resources of $3.9 million, and an increase in deferred inflows of resources of $8.9 million. The 2016 activity resulted in an increase in the net pension liability of $7.0 million, decreases in both deferred outflows and deferred inflows of resources, respectively, of $1.0 million and $7.3 million, and an increase in pension expense of $781,000. As of June 30, 2016 and 2015, respectively, the impact of these standards resulted in a reduction in unrestricted net position for the College of $82.3 million and $81.5 million. Excluding the significant and distorting effects of implementing the MPSERS pension adjustments in accordance with aforementioned GASB Statements No. 68 and No. 71, the College’s financial position improved during both fiscal years ended June 30, 2016 and 2015, respectively, with net position increasing by $1.1 million and $7.0 million. This equates to approximately a 1% annual increase in net position in 2016 and a 4% annual increase in 2015.

2

MANAGEMENT’S DISCUSSION AND ANALYSIS - Continued

DELTA COLLEGE YEAR ENDED JUNE 30, 2016

Financial Highlights - Continued For 2016, the $1.1 million overall net increase in net position noted in the preceding paragraph was primarily related to a $1.2 million increase in unrestricted net position before accounting for the effects of GASB Statements No. 68 and No. 71. The College also experienced a $403,000 net increase in capital assets, which was offset by a $547,000 decrease in restricted net position. Enrollment decreased again this year, by approximately 11,400 credit hours, or 5.7%, and Pell grant revenue also decreased by $2.2 million; however, total tuition and fee revenue increased by $1.4 million. For 2015, the College had a $3.8 million increase in restricted net position, primarily due to the $4.0 million gift from the Dow Foundation for the STEM Explorer Program vehicle and endowment, a $4.0 million increase in unrestricted net position from operations before accounting for the pension effects of GASB Statements No. 68 and No. 71, and a $800,000 decrease in investment in capital assets. Enrollment continued to decrease this year by approximately 10,600 credit hours, or 5.1%, and the College experienced a decrease in Pell grant revenue of $1.5 million; however, a mid-year academic tuition increase held the decline in total tuition and fee revenue to $550,000, the majority of which related to a decrease in Delta College Corporate Services training. The Auxiliary Activities Fund increased by $630,000, of which $571,000 was net income generated by the Bookstore. The following chart provides a graphical breakdown of net position by category for the fiscal years ending June 30, 2016, 2015 and 2014, in millions:

-$100.0-$50.0

$0.0$50.0

$100.0$150.0$200.0

2016 2015 2014

100.1 99.7 100.5

4.6 4.9 3.6 14.4 14.6 12.154.9 53.7

49.7-82.3 -81.5

Net Investment in Capital Assets Restricted - Expendable

Restricted - Endowments Unrestricted - Other

Unrestricted - MPSERS Liability

3

MANAGEMENT’S DISCUSSION AND ANALYSIS - Continued DELTA COLLEGE YEAR ENDED JUNE 30, 2016

Summary of Selected Financial Data

Following is a summary of the major components of the financial position of the College as of June 30, 2016, 2015 and 2014, in millions:

June 30, 2016: During the year ended June 30, 2016, total assets increased by $682,000 and total liabilities increased by $6.6 million. The primary change in assets was reflected by a $3.2 million overall increase in the combination of cash and cash equivalent and short-term and long-term investments, which was offset by a $1.1 million decrease in appropriation receivable from the State of Michigan primarily related to the final payments received during the year on the Health Professionals Building Renovation Project and an overall decrease of $1.4 million in pledges receivable primarily due to final payment received on the Dow STEM Explorer project during the year. The increase in liabilities was caused by a $7.0 million increase in the MPSERS net pension liability. June 30, 2015: During the year ended June 30, 2015, total assets increased by $7.4 million and total liabilities increased by $81.1 million. The primary change in assets was reflected by a $6.0 million increase in the combination of cash and cash equivalents and short-term investments, and another $1.3 million increase in appropriation receivable from the State of Michigan related to the final payments due on completion of the Health Professionals Building Renovation Project. The $81.1 million increase in liabilities was due to the $80.7 million MPSERS net pension liability recognized beginning in 2015.

2016

2015

2016-2015 Change

2014

2015-2014 Change

Current Assets

$ 59.3

$ 53.9

$ 5.4

$ 45.3

$ 8.6

Long-Term Assets: Capital Assets, Net of Depreciation 100.1 99.7 .4 100.5 (.8) Other 22.8 28.0 (5.2) 28.4 (.4)

Total Assets 182.2 181.6 .6 174.2 7.4

Deferred Outflows of Resources 7.1 8.1 (1.0) - 8.1

Current Liabilities 8.3 8.7 (0.4) 8.3 0.4 Non-Current Liabilities 87.7 80.7 7.0 - 80.7

Total Liabilities 96.0 89.4 6.6 8.3 81.1

Deferred Inflows of Resources 1.6 8.9 (7.3) - 8.9

Net Position:

Net Investment in Capital Assets 100.1 99.7 .4 100.5 (.8)

Restricted – Expendable 4.6 4.9 (.3) 3.6 1.3 Restricted – Endowments 14.4 14.6 (.2) 12.1 2.5

Unrestricted (27.4) (27.8) .4 49.7 (77.5)

Total Net Position $ 91.7 $ 91.4 $ .3 $ 165.9 $ (74.5)

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MANAGEMENT’S DISCUSSION AND ANALYSIS - Continued DELTA COLLEGE YEAR ENDED JUNE 30, 2016 Summary of Selected Financial Data - Continued The following summarizes the major components of the College’s operating results for the years ended June 30, 2016, 2015 and 2014, in millions:

2016

2015

2016-2015 Change

2014

2015-2014 Change

Operating Revenue: Tuition and Fees $ 23.8 $ 22.4 $ 1.4 $ 23.0 $ (.6) Grants and Contracts 6.0 5.9 .1 4.7 1.2 Public Broadcasting Gifts .6 .6 - .7 (.1) Auxiliary Services 5.0 5.4 (.4) 5.7 (.3) Other 1.0 .9 .1 1.3 (.4)

Total Operating Revenue 36.4 35.2 1.2 35.4 (.2) Operating Expenses:

Instruction 41.8 40.3 1.5 38.7 1.6 Public Services 2.6 2.6 - 2.6 - Instructional Support 8.4 7.8 .6 7.7 .1 Student Services 21.5 22.7 (1.2) 24.2 (1.5) Institutional Administration 8.5 8.2 .3 8.2 - Operation and Maintenance of Facilities 6.6 7.2 (.6) 9.9 (2.7) Depreciation 4.8 4.6 .2 4.5 .1

Total Operating Expenses 94.2 93.4 .8 95.8 (2.4)

Operating Loss (57.8) (58.2) .4 (60.4) 2.2 Nonoperating Revenue (Expenses)

State Appropriations 18.5 17.3 1.2 15.8 1.5 Property Taxes 23.0 23.0 - 22.8 .2 Pell Federal Grant Revenue 14.8 17.0 (2.2) 18.5 (1.5) Other .2 4.5 (4.3) 3.5 1.0

Net Nonoperating Revenue (Expenses) 56.5 61.8 (5.3) 60.6 1.2

(continued on next page)

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MANAGEMENT’S DISCUSSION AND ANALYSIS - Continued DELTA COLLEGE YEAR ENDED JUNE 30, 2016 Summary of Selected Financial Data - Continued

(continued from previous page)

2016

2015 2016-2015

Change

2014

2015-2014 Change

Other Revenue Capital Gifts, Grants and Appropriations $ - $ 2.1 $ (2.1) $ 7.1 $ (5.0) Additions to Permanent Endowments 1.6 1.4 .2 .3 1.1

Total Other Revenue 1.6 3.5 (1.9) 7.4 (3.9)

Increase in Net Position .3 7.1 (6.8) 7.6 (.5) Net Position – Beginning of Year Beginning of Year 91.4 165.9 (74.5) 158.3 7.6 Adjust for Change in Accounting Principle - (81.6) 81.6 - (81.6)

Net Position – Beginning of Year, as Restated 91.4 84.3 7.1 158.3 (74.0)

Net Position – End of Year

$ 91.7

$ 91.4

$ .3

$ 165.9

$ (74.5)

Operating Revenue

Operating revenue includes all transactions that result in the sales and/or receipts from providing goods and services, such as tuition and fees, food service and bookstore operations. In addition, certain federal, state, and private gifts and grants are considered operating if they are not for capital purposes and are considered a contract for services or are program-specific. June 30, 2016: Operating revenue changes are highlighted by the following factors for the year ended June 30, 2016:

The 2016 academic in-district tuition rate increased by $2.00 per credit hour, an increase of 2.1%. Enrollment totaled 187,318 credit hours, which was a decrease of 5.7% from 2015. The net impact of these changes resulted in a $844,000 increase in tuition and fee revenues generated by academic programs, net of scholarship allowance. Additionally, as noted below, related Pell grant (non-operating) revenues and corresponding operating expenses also decreased by $2.2 million.

Of the $23.8 million in tuition and fees, which was net of $6.9 million in offsetting scholarship allowances, and the $6.0 million in grants and contracts operating revenue, Corporate Services provided administration, education and training of $2.8 million and $2.8 million, respectively. Corporate Services tuition and fee revenue increased by $382,000 from the prior year, which was offset by a $125,000 decrease in grants and contracts revenue.

The Auxiliary services revenue consists primarily of sales in the Bookstore of $4.7 million, which had offsetting scholarship allowances approximating $1.2 million, Food Services of $1.0 million, and Fitness & Recreation Center of $342,000. Bookstore sales dropped by $649,000, or 12%, Food Services sales declined by 7%, and Fitness & Recreation Center revenue increased by 6% during the year.

6

MANAGEMENT’S DISCUSSION AND ANALYSIS - Continued DELTA COLLEGE YEAR ENDED JUNE 30, 2016 Operating Revenue - Continued June 30, 2015: Operating revenue changes are highlighted by the following factors for the year ended June 30, 2015:

The 2015 academic in-district tuition rate increased by $3.20 per credit hour for fall 2014 semester, and a mid-year increase raised it another $2.80, for an average increase of around 5.1%. Enrollment totaled 198,701 credit hours, which was a decrease of 5.1% from 2014. The net impact of these changes caused a $134,000 decrease in tuition and fee revenues generated by academic programs, net of scholarship allowance. Additionally, as noted below, related Pell grant (non-operating) revenues and corresponding operating expenses also decreased by $1.5 million.

Of the $22.4 million in tuition and fees, which was net of $7.7 million in offsetting scholarship allowances, and the $5.9 million in grants and contracts operating revenue, Corporate Services provided administration, education and training of $2.4 million and $2.9 million, respectively. Corporate Services tuition and fee revenue decreased by $400,000 from the prior year, which was offset by a $500,000 increase in grants and contracts revenue.

The Auxiliary services revenue consists primarily of sales in the Bookstore of $5.4 million, which had offsetting scholarship allowances approximating $1.5 million, Food Services of $1.1 million, and Fitness & Recreation Center of $323,000. Bookstore sales dropped by $403,000, or 7%, Food Services sales declined by 3%, and Fitness & Recreation Center revenue decreased by 7% during the year.

The following is a graphic illustration of operating revenues by source for the years ended June 30, 2016, 2015 and 2014:

65%

1%

5%

10%16%

3%

2014

Tuition & Fees State Grants

Other Operating Federal Grants

Auxiliary Local Grants

64%

2%

4%

12%15%

3%

2015




65%

3%

5%

11% 14%

2%

2016




7


Operating Expenses

Operating expenses are all the costs necessary to perform and conduct the programs and primary purposes of the College. June 30, 2016: Operating expense changes are highlighted by the following factors for the year ended June 30, 2016

Base salary increases approximated 1.0%, and employee contribution toward medical insurance increased to 20%. Under the self-funded employee medical coverage contract with Blue Cross Blue Shield (BCBS) of Michigan, the College pays for actual claims incurred, up to a maximum $125,000 per claim, a stop-loss insurance premium for claims in excess of $125,000, and a monthly administrative fee. The College experienced increased claims during 2016, which resulted in an increase in employee health insurance expense of $556,000.

Public Act 300 of 2012 enacted by the State of Michigan legislature made significant reforms to the MPSERS that are designed to reduce overall benefit costs, but the cost reduction impact of the changes will not be experienced by employers for many years. During 2016, the College’s overall retirement expense for MPSERS was $11.6 million, an increase of $1.0 million from 2015. Of this total, $7.9 million was for contributions to MPSERS, and $3.7 million was due to the annual Unfunded Actuarial Accrued Liability (UAAL) Rate Stabilization Payment that was appropriated by legislature. The UAAL Rate Stabilization Payment was paid to the College for pass-through to the MPSERS for purposes of offsetting the UAAL cap that was put into place via Public Act 300 of 2012. The $3.7 UAAL retirement expense was directly offset by the same amount of increase in state aid non-operating revenue, as noted below. The College also recorded an accrual adjustment increasing annual pension expense by $781,000 due to implementation of the new GASB Statement No. 68. Refer to Note 6 for more information regarding the College’s retirement plans.

Overall operating expenses increased by close to $800,000, mostly due to the GASB Statement No. 68 pension expense adjustment noted above. There was also a $2.2 million reduction in Pell grants expensed under the student services functional category, which was offset by a $1.3 million increase in instruction expenses primarily related to the restricted gifts, grants and contracts received for STEM and other vocational educational programs.

June 30, 2015: Operating expense changes are highlighted by the following factors for the year ended June 30, 2015:

Base salary increases approximated 1.7%, and employee contribution toward medical insurance remained at 17.5%. In conjunction with the self-funded employee medical coverage contract with BCBS of Michigan, the College experienced increased claims during 2015, which resulted in an increase in employee health insurance expense of $576,000.

During 2015, the College’s overall retirement expense for MPSERS was $10.6 million, an increase of $1.1 million from 2014. Of this total, $7.9 million was for contributions to MPSERS, and $2.7 million was due to the annual UAAL Rate Stabilization Payment that was appropriated by legislature. The $2.7 UAAL retirement expense was directly offset by the same amount of increase in state aid non-operating revenue, as noted below. The College also recorded an accrual adjustment reducing annual pension expense by $78,000 due to implementation of the new GASB Statement No. 68. Refer to Note 6 for more information regarding the College’s retirement plans.

Overall operating expenses decreased by $2.4 million. This decrease was primarily related to a $2.7 million decrease in operation and maintenance of facilities due to substantial completion of the Health Professions Building renovation project in the prior year. There was also a $1.5 million reduction in Pell grants expensed under the student services functional category, which was offset by a $1.6 million increase in instruction expenses primarily related to the restricted gifts, grants and contracts received for STEM and other vocational educational programs.

8

MANAGEMENT’S DISCUSSION AND ANALYSIS - Continued DELTA COLLEGE YEAR ENDED JUNE 30, 2016 Operating Expenses - Continued The following is a graphic illustration of operating expenses by function for the years ended June 30, 2016, 2015 and 2014:

Nonoperating Revenue (Expenses) Nonoperating revenue includes all revenue sources that are primarily non-exchange in nature. They consist primarily of state appropriations, property tax revenue, investment income (including realized and unrealized gains and losses), gifts and grants, including Pell grants to students, and contracts that do not require any services to be performed. Nonoperating expenses are those that are not primarily incurred for operating purposes. June 30, 2016: Nonoperating revenue and expense changes are highlighted by the following factors for the year ended June 30, 2016:

Base state appropriations totaled $14.8 million, an increase of $200,000 over 2015. As discussed above, an additional $3.7 million was received specifically for pass-through to the Michigan Public School Employees’ Retirement System for purpose of the UAAL Rate Stabilization payment. The 2016 UAAL payment was $1.0 million higher than what was received in 2015.

Final taxable value of property within the district remained almost unchanged from 2015, and the College recognized property tax revenue of $23.0 million in 2016 at a levy rate of 2.0427 mills.

The College recognized net investment income of $148,000. This consisted of a combined net loss on investments and investment fee expenses in the Endowment Fund totaling $450,000, which was offset by general investment earnings of $598,000, the majority of which was due to increases in short-term interest rates related to the College’s general investments.

Pell grants awarded to students were $14.8 million, a decrease of $2.2 million, or 13%, from 2015.

40%

3%

8%25%

9%

10%

5%

2014

Instruction

Public Services

Instructional Support

Student Services

Institutional Administration

Operation & Maintenance of Facilities

Depreciation

43%

3%

8%24%

9%

8%

5%

2015

Instruction

Public Services


Student Services



Depreciation

44%

3%

9%23%

9%

7%

5%

2016

Instruction

Public Services


Student Services



Depreciation

9

MANAGEMENT’S DISCUSSION AND ANALYSIS - Continued DELTA COLLEGE YEAR ENDED JUNE 30, 2016 Nonoperating Revenue (Expenses) - Continued

June 30, 2015: Nonoperating revenue and expense changes are highlighted by the following factors for the year ended June 30, 2015:

Base state appropriations totaled $14.6 million, an increase of $500,000 over 2014. As discussed above, an additional $2.7 million was received specifically for pass-through to the Michigan Public School Employees’ Retirement System for purpose of the UAAL Rate Stabilization payment. The 2015 UAAL payment was $1.1 million higher than what was received in 2014.

Final taxable value of property within the district increased slightly for the year, resulting in property tax revenue of $23.0 million in 2015 at a levy rate of 2.0427 mills, for a revenue increase of .6%.

The College recognized net investment income of $989,000, the majority of which related to the Endowment Fund investments. The market values of the College’s long-term U.S. Agency security portfolio continued to remain stable during 2015.

Pell grants awarded to students were $17.0 million, a decrease of $1.5 million, or 8%, from 2014. The following is a graphic illustration of nonoperating revenue by source for the years ended June 30, 2016, 2015 and 2014:

Other Revenue Other revenue consists of items that are typically nonrecurring, extraordinary, or unusual to the College. Examples would be state capital appropriations, capital gifts and grants, additions to permanent endowments, and transfers from related entities. June 30, 2016: Changes in other revenue are highlighted by the following factors for the year ended June 30, 2016:

Additions to permanent endowments for the year were $1.6 million, which included another $1.0 million for continued support of the Dow Foundation STEM Explorer project.

June 30, 2015: Changes in other revenue are highlighted by the following factors for the year ended June 30, 2015:

Final state capital appropriations related to completion of the Health Professions Building Renovation Project were $2.1 million.

New gifts to the College during the year provided approximately $1.4 million in additions to permanent endowments, which included $1.0 million received from the Dow Foundation to establish an endowment for continued support of the STEM Explorer project.

37% 28%

28%7%

2015

Property Taxes

State Appropriations

Pell Federal Grant Revenue

Investment Income & Other

38% 26%

30%6%

2014

Property Taxes




40% 33%

26%1%

2016

Property Taxes




10

MANAGEMENT’S DISCUSSION AND ANALYSIS - Continued DELTA COLLEGE YEAR ENDED JUNE 30, 2016 Statement of Cash Flows

The primary purpose of the Statement of Cash Flows is to provide relevant information about the cash receipts and cash payments of an entity during a period. The Statement of Cash Flows also helps users assess:

The ability to generate future net cash flows

The ability to meet obligations as they come due

Needs for external financing The following summarizes the major cash flow components for the College for the years ended June 30, 2016, 2015 and 2014, in millions:

2016

2015

2016-2015 Change

2014

2015-2014 Change

Cash Provided by (Used in): Operating Activities $ (52.0) $ (54.0) $ 2.0 $ (57.2) $ 3.2

Noncapital Financing Activities 59.2 60.2 (1.0) 58.3 1.9 Capital and Related Financing Activities (4.1) (2.4) (1.7) (2.4) - Investing Activities (12.5) 6.9 (19.4) (3.6) 10.5

Net Increase (Decrease) in Cash

(9.4)

10.7

(20.1)

(4.9)

15.6

Cash and Cash Equivalents – Beginning of Year 30.2 19.5 10.7 24.4 (4.9)

Cash and Cash Equivalents – End of Year

$ 20.8

$ 30.2

$ (9.4)

$ 19.5

$ 10.7

June 30, 2016: Cash and cash equivalents decreased by $9.4 million during the year ended June 30, 2016, although the College’s combined cash and cash equivalents and short and long term investments increased in total by $3.2 million. Due to increases in short term investment interest rates, the College reduced its long term investments and allocated more funds into short term commercial paper investments during the year, and accordingly, experienced a positive impact on its general investment earnings. June 30, 2015: Cash and cash equivalents increased by $10.7 million during the year ended June 30, 2015. Overall, the College gained $4.8 million in total liquid assets as the result of the increase in net position of $7.0 million from operations (excluding the impact of implementing GASB Statements No. 68 and No. 71, as discussed previously). Additionally, due to continued low yield rates, $4.8 million of short-term investments and $1.1 of long-term investments from 2014 were reinvested with shorter-term maturities of three months or less, which resulted in an increase in cash equivalents as of the end of the year.

11


Capital Assets At June 30, 2016, the College had $161.2 million invested in capital assets, which net of accumulated depreciation of $61.1 million, resulted in a book value of $100.1 million. Capital assets increased by $403,000 in 2016, which included net additions of $5.2 million, less annual depreciation charges of $4.8 million. Details of these assets, shown net of accumulated depreciation, as of June 30, 2016, 2015 and 2014 are as follows, in millions:

2016

2015

2016-2015 Change

2014

2015-2014 Change

Land and Improvements

$ 7.8

$ 6.6

$ 1.2

$ 6.9

$ (.3)

Infrastructure 6.4 5.8 .6 6.2 (.4)

Buildings 79.2 80.9 (1.7) 82.2 (1.3)

Furniture and Equipment 6.2 5.2 1.0 4.8 .4 Construction in Progress .5 1.2 (.7) .4 .8

Totals

$ 100.1

$ 99.7

$ .4

$ 100.5

$ (.8)

In accordance with the College’s Five-Year Capital Outlay Master Plan and Sustainability Strategic Initiative, the College focused on the following capital construction and maintenance projects during 2016 and 2015:

During the summer of 2015, the College redesigned and resurfaced the west parking lot and roadway, with total project capital costs of $2.7 million, incurring $1.8 million in 2016 and another $927,000 during 2015, which was included in Construction in Progress as of June 30, 2015.

The College began construction on its Health Professional Building Renovation Project in March 2013, and the project was substantially completed by the end of August 2013. As of June 30, 2015, final expenses for the project totaled $18.0 million, 50% of which was funded by the State of Michigan, and the other 50% was funded by $5.7 million in donations raised for the project, as well as $3.3 million from College reserves.

The College also implemented and/or completed various smaller capital maintenance, improvement, and spatial design projects, with total capital expenditures approximating $1.5 million and $1.4 million, respectively, during 2016 and 2015. The primary 2016 projects included the MEDC CCSTEP classroom upgrades and continuation of the Emergency Power and Backup Generator System projects, respectively, with total capitalized costs of $463,000 and $840,000. Some of the more significant 2015 projects included the Domestic Water Heaters Replacement Project, the X-1 Building Upgrade Project, and additional Emergency Power and Backup Generator System projects, respectively, with total capitalized costs of $324,000, $571,000, and $565,000.

Debt During the year ended June 30, 2012, the College became involved in the Michigan New Jobs Training Program (MNJTP), which was authorized by state legislature in 2008. Under this program, the College may enter into agreements with employers to provide worker education and job training that is funded by state income tax withholdings on the new employees hired by the employers. The agreements provide for the employer to prepay to the College the costs for the training and education, and the College then issues non-interest bearing revenue bonds payable to the employer equal to the prepayments. The employer remits state income tax withholdings for these new employees directly to the College. The College then remits these state income tax withholdings back to the employer on a quarterly basis to reimburse the employer for the costs of the training, thus reducing the College’s MNJTP bonds payable. As of June 30, 2016, the College has outstanding MNJTP bonds payable of $40,000. Refer to Note 7 for more detailed information about the MNJTP program.

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Economic Factors That Will Affect the Future

The economic position of the College is closely tied to that of the State of Michigan. The State appropriated $14.9 million in base funding for 2016-17, which is an increase of $204,000 over the prior year. After years of strong and record enrollment, the regional economy continues to slowly recover and with that, enrollment has been declining. This trend is evident at community colleges across the State as non-traditional students return to the workforce. Enrollment management plan initiatives are in place at the College with goals to attract an increased percentage of the declining K-12 graduates and adults seeking new skills. However, on top of the 63,900 decline in generated credit hours experienced by the College since 2009-10, more than one-half of which occurred in the past three years, another drop of 7,700 credit hours has been projected for the 2016-17 year. Delta’s Board of Trustees, Budget Cabinet and administration have a long history of focusing on tuition affordability, and accordingly, planned an indistrict tuition rate increase of $3.00, or 3.1%.

The College’s preliminary property tax base increased very slightly for 2016-17, and projected property tax revenue has been budgeted at $23.2 million. Property tax revenues continue to be an area of concern for the College, with expected continued demands for lower property tax valuations, as well as greater capture and abatement of College tax revenues to fund economic development. Additionally, recent legislation approved reductions in the property tax base for levying taxes on personal property, which as of 2015-16, provided over $3.0 million in property tax revenues to the College. However, with the passage of Proposal 1 on August 5, 2014 in Michigan, the revenue lost from the elimination of these personal property taxes is expected to be replaced. In addition to national concerns of rising medical costs, the state-mandated contributions to fund both the pension and medical components of the Michigan Public School Employees Retirement System pension fund continue to be a concern. The 2012 MPSERS Reform Act made significant changes to the retirement system in order to better control and ultimately reduce the overall cost to employers to fund employee retirement benefits. Due to the System’s significant unfunded liability, the full effect of these changes will not be realized for many years. The College’s contribution rate to the retirement system averages around 26%, and when combined with required employer FICA and Medicare contributions, the College pays approximately 34% of each covered payroll dollar toward these government-mandated employee benefits. Current financial plans and recent capital investments continue to strategically prepare the College to pursue our Mission and Vision:

MISSION: Delta College serves the Great Lakes Bay Region by educating, enriching and empowering our diverse community of learners to achieve their personal, professional and academic goals.

VISION: Delta College is our communities’ first choice to learn, work and grow. State fiscal challenges will likely continue for some years. The College is prepared to face the forecasted changes in enrollment, operating costs and the demand for services. The College will continue to provide excellent learning opportunities and great value for the educational dollar to create positive futures for the students and communities it serves.

13

Report of Independent Auditors

Board of Trustees Delta College

Report on the Financial Statements

We have audited the accompanying financial statements of Delta College (the College) as of and for the years ended June 30, 2016 and 2015, and the related notes to the financial statements, as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

AUBURN HILLS | BAY CITY | GRAND RAPIDS | GREATER LANSING | MIDLAND | OWOSSO | SAGINAW

ANDREWS HOOPER PAVLIK PLC

5300 GRATIOT ROAD | SAGINAW, MI 48638

p: 989.497.5300 | f: 989.497.5353 | www.ahpplc.com

14

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Delta College as of June 30, 2016 and 2015, and the changes in financial position and cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As discussed in Note 6 and Note 15 to the financial statements, the College implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. These statements require the College to report its net pension obligation and associated deferred outflows of resources, deferred inflows of resources, and pension expense. The College has restated their July 1, 2014 net position accordingly. Our opinion is not modified with respect to these matters.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 1 through 12 and the Required Supplementary Information on page 48 (Schedule of Proportionate Share of the Net Pension Liability, Schedule of Contributions for Michigan Public School Employees’ Retirement System, and Notes to Required Supplementary Information) be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Supplementary Information

Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The supplemental schedules of other financial information are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.

15

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated October 27, 2016 on our consideration of Delta College’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the College’s internal control over financial reporting and compliance.

Saginaw, Michigan October 27, 2016

BALANCE SHEETS

DELTA COLLEGE

2016 2015

ASSETS

CURRENT ASSETS

Cash and cash equivalents (Note 2) 20,765,578$ 30,254,825$

Short-term investments (Note 2) 31,462,629 14,486,019

Property taxes receivable 304,405 226,679

State appropriations receivable (Note 5) 3,340,402 4,432,780

Federal and state grants receivable 1,389,533 1,362,857

Accounts receivable, net of allowance of $3,734,938 in 2016 and $3,582,685 in 2015 592,134 659,792

Pledges receivable (Note 3) 424,333 921,402

Inventories 936,562 1,167,001

Prepaid expenses and other assets 119,538 399,656

TOTAL CURRENT ASSETS 59,335,114 53,911,011

LONG-TERM INVESTMENTS (Note 2) 22,423,607 26,697,269

LONG-TERM PLEDGES RECEIVABLE (Note 3) 420,990 1,292,560

CAPITAL ASSETS (Note 4) 100,097,714 99,694,278

TOTAL ASSETS 182,277,425 181,595,118

DEFERRED OUTFLOWS OF RESOURCES (Note 6) 7,102,397 8,140,847

LIABILITIES

CURRENT LIABILITIES

Accounts payable 1,894,740 2,578,122

Accrued payroll and other compensation 5,333,427 4,943,791

Unearned revenue 1,076,901 1,206,188

Current portion of MNJTP bonds payable (Note 7) 40,006 7,085

TOTAL CURRENT LIABILITIES 8,345,074 8,735,186

NON-CURRENT LIABILITIES

Net pension liability (Note 6) 87,735,519 80,695,808

TOTAL LIABILITIES 96,080,593 89,430,994

DEFERRED INFLOWS OF RESOURCES (Note 6) 1,623,759 8,920,954

NET POSITION

Net investment in capital assets 100,097,714 99,694,278

Restricted for:

Donor-restricted endowments 14,371,893 14,604,646

Expendable scholarships and awards 1,122,040 1,034,049

Instructional department uses 2,031,283 2,182,324

Public broadcasting activities 1,063,311 816,853

Other restricted uses 368,746 866,581

Unrestricted (Note 1) (27,379,517) (27,814,714)

TOTAL NET POSITION 91,675,470$ 91,384,017$

The accompanying notes are an integral part of these statements.

JUNE 30,

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STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN NET POSITION

DELTA COLLEGE

2016 2015

OPERATING REVENUE

Tuition and fees, net of scholarship allowance of $6,883,388 in 2016 and $7,711,906 in 2015 23,781,445$ 22,453,957$

Federal grants and contracts 4,029,386 4,410,750

State grants and contracts 1,200,380 558,859

Local and nongovernmental grants and contracts 772,424 888,063

Public broadcasting gifts 646,950 626,566

Auxiliary activities, net of scholarship allowance of $1,211,928 in 2016 and $1,544,590 in 2015 4,989,605 5,388,203

Miscellaneous 955,203 915,945

TOTAL OPERATING REVENUE 36,375,393 35,242,343

OPERATING EXPENSES

Instruction 41,844,223 40,303,334

Public services 2,578,657 2,558,923

Instructional support 8,377,059 7,793,010

Student services 21,453,870 22,695,860

Institutional administration 8,492,690 8,253,296

Operation and maintenance of facilities 6,629,010 7,249,469

Depreciation expense 4,808,744 4,582,680

Fundraising expenses 25,670 39,294

TOTAL OPERATING EXPENSES 94,209,923 93,475,866

OPERATING LOSS (57,834,530) (58,233,523)

NONOPERATING REVENUE (EXPENSES)

State appropriations 18,463,695 17,337,374

Property tax levy 23,034,150 22,931,569

Pell federal grant revenue 14,806,794 16,992,112

Gifts 222,187 3,799,757

Special events, net of expenses of $58,737 in 2016 and $53,122 in 2015 92,188 69,829

Investment income, net of investment expense of $160,346 in 2016 and $149,866 in 2015 165,574 988,888

Loss on disposition of capital assets (147,769) (183,995)

Foundation grants and distributions to or for Delta College (73,818) (160,640)

NET NONOPERATING REVENUE (EXPENSES) 56,563,001 61,774,894

NET INCOME (LOSS) BEFORE OTHER REVENUE (1,271,529) 3,541,371

OTHER REVENUE

State capital appropriations 890 2,069,343

Capital gifts and grants 5,863 -

Additions to permanent endowments 1,556,229 1,447,632

TOTAL OTHER REVENUE 1,562,982 3,516,975

NET INCREASE IN NET POSITION 291,453 7,058,346

NET POSITION - BEGINNING OF YEAR

Beginning of year 91,384,017 165,879,939

Adjustment for change in accounting principle (Note 15) - (81,554,268)

NET POSITION - BEGINNING OF YEAR, AS RESTATED 91,384,017 84,325,671

NET POSITION - END OF YEAR 91,675,470$ 91,384,017$


YEAR ENDED JUNE 30,

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STATEMENTS OF CASH FLOWS

DELTA COLLEGE

2016 2015

CASH FLOWS FROM OPERATING ACTIVITIES

Tuition and fees 23,617,673$ 22,088,913$

Grants and contracts 5,996,383 5,245,725

Public broadcasting gifts 646,950 626,566

Payments to suppliers (48,753,173) (48,167,136)

Payments to employees (39,455,812) (40,102,891)

Auxiliary enterprise charges 4,989,605 5,388,242

Other 954,560 904,705

NET CASH USED IN OPERATING ACTIVITIES (52,003,814) (54,015,876)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES

State appropriations 18,258,987 17,044,444

Local property taxes 22,956,424 22,953,200

Pell federal grant revenue 14,785,067 16,957,744

Gifts and contributions for other than capital purposes 3,231,922 3,483,330

Foundation special events receipts 76,688 113,329

Foundation grants and distributions to or for Delta College (73,818) (160,640)

Agency fund transactions (36,751) (159,538)

NET CASH PROVIDED BY NONCAPITAL FINANCING ACTIVITIES 59,198,519 60,231,869

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Proceeds from capital gifts, grants and appropriations 1,244,089 1,546,639

Purchase of capital assets (5,360,082) (3,989,745)

Proceeds from disposition of capital assets 133 13,112

Proceeds from issuance of MNJTP bonds 539,515 331,365

Principal paid on MNJTP bonds (568,021) (302,859)

NET CASH USED IN CAPITAL AND RELATED FINANCING ACTIVITIES (4,144,366) (2,401,488)

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sales and maturities of investments 68,982,118 45,047,122

Investment income 436,439 538,805

Purchase of investments (81,958,143) (38,614,728)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (12,539,586) 6,971,199

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (9,489,247) 10,785,704

CASH AND CASH EQUIVALENTS - Beginning of year 30,254,825 19,469,121

CASH AND CASH EQUIVALENTS - End of year 20,765,578$ 30,254,825$


YEAR ENDED JUNE 30,

18

STATEMENTS OF CASH FLOWS - Continued

DELTA COLLEGE

2016 2015

RECONCILIATION OF OPERATING LOSS TO

NET CASH USED IN OPERATING ACTIVITES:

Operating loss (57,834,530)$ (58,233,523)$

Adjustment to reconcile operating loss to net cash

used in operating activities:

Depreciation 4,808,744 4,582,680

Allowance for uncollectible accounts 152,253 436,447

(Increase) decrease in assets:

Federal and state grants receivable (4,949) (588,283)

Accounts receivable (53,461) (488,365)

Inventories 230,439 (69,422)

Prepaid expenses and other assets 265,238 (107,873)

(Increase) decrease in deferred outflows of resources 1,038,450 (3,904,751)

Increase (decrease) in liabilities:

Accounts payable (626,339) 701,103

Accrued payroll and other compensation 389,637 (258,743)

Unearned revenue (111,812) 88,456

Net pension liability 7,039,711 (5,094,556)

Increase (decrease) in deferred inflows of resources (7,297,195) 8,920,954

NET CASH USED IN OPERATING ACTIVITIES (52,003,814)$ (54,015,876)$


YEAR ENDED JUNE 30,

19

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NOTES TO FINANCIAL STATEMENTS DELTA COLLEGE JUNE 30, 2016 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES Reporting Entity Delta College is a Michigan community college whose financial statements have been prepared in accordance with the generally accepted accounting principles as applicable to public colleges and universities outlined in Governmental Accounting Standards Board (GASB) Statement No. 35, Basic Financial Statements – and Management’s Discussion and Analysis – for Public Colleges and Universities, and the Manual for Uniform Financial Reporting – Michigan Public Community Colleges, 2001. The College reports as a Business Type Activity, as defined by GASB Statement No. 35. Business Type Activities are those that are financed in whole or in part by fees charged to external parties for goods or services. The accompanying financial statements have been prepared in accordance with criteria established by GASB Statement No. 61, The Financial Reporting Entity: Omnibus – an amendment to GASB Statements No. 14 and No. 34, and GASB Statement No. 39, Determining Whether Certain Organizations Are Component Units, for determining the various governmental organizations to be included in the reporting entity. These criteria include significant operational or financial relationships with the College. Based on application of the criteria, the Delta College Foundation discussed in Note 14 is included in the College’s reporting entity. Significant accounting policies followed by Delta College are described below to enhance the usefulness of the financial statements to the reader: Accrual Basis The financial statements of Delta College have been prepared on the accrual basis of accounting, whereby revenue is recognized when earned and expenditures are recognized when the related liabilities are incurred and certain measurement and matching criteria are met. Cash and Cash Equivalents Cash and cash equivalents consist of all highly liquid investments with an initial maturity of three months or less when purchased. Investments and Fair Value Measurements The GASB issued GASB Statement No. 72, Fair Value Measurement and Application, which provides governments with guidance for determining fair value measurement and applying fair value to certain investments and disclosures related to all fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The College performs a detailed analysis of assets and liabilities subject to authoritative guidance and uses valuation techniques that maximize the use of observable, market corroborated inputs (level 1) and minimizes the use of unobservable inputs (level 3). Financial assets and liabilities recorded at fair value will be classified and disclosed in one of the following three categories:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that a government can access at the measurement date.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly or indirectly.

Level 3 – Unobservable inputs for an asset or liability.

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NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES – Continued Investments and Fair Value Measurements – Continued The fair value of the following financial instruments was determined using the methods and assumptions described:

Investments excluding endowment fund investments – These investments are comprised of government agency notes, commercial paper and certificates of deposit. The fair value of similar instruments can be obtained in the market classifying them as a level 2 valuation.

Endowment Investments – These investments are comprised of corporate bonds, corporate convertible bonds, government and agency bonds, bond funds, preferred stock, equities, and international equities. The fair value of equities and international equities (collectively referred to as equities) are derived from quoted prices for identical assets in active markets classifying them as a level 1 valuation. The fair value of corporate bonds, corporate convertible bonds, government and agency notes and bond funds (collectively referred to as bond funds) and preferred stock are obtained from similar investments obtained in the market, classifying them as a level 2 valuation. The fair value of alternative investments are based on pricing obtained from our Endowment Fund service provider classifying them as a level 3 valuation.

There have been no changes in valuation techniques used that have a significant impact on the results for the year ending June 30, 2016 or 2015. Refer to Note 2 for fair value classification balances for these various types of investments held by the College as of June 30, 2016 and 2015. Gifts and Pledges Gifts are recorded when received. Voluntary nonexchange transactions (pledges) are recognized in accordance with the GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions. GASB Statement No. 33 requires recognition of the entire pledge in the first period that use is permitted and all applicable eligibility requirements have been satisfied. Such pledges are recorded at their discounted present value, net of allowance for uncollectible pledges. Inventories Inventories are stated at the lower of cost or market using the first-in, first-out method. Capital Assets Capital assets are recorded at cost or, if acquired by gift, at the acuisition value as of the date of acquisition. Expenditures for maintenance and repairs are expensed as incurred. Depreciation is calculated on property and equipment using the straight-line method over the estimated useful lives of the assets. The American Health Association’s Estimated Useful Lives of Depreciable Hospital Assets was utilized as a guide in establishing useful lives of the College’s property and equipment. Compensated Absences Compensated absences represent the accumulated liability to be paid under the College’s current vacation policy. Under the College’s policy, employees accrue vacation on a bi-weekly basis at a rate that is dependent on the employee’s pay class.

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NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES – Continued Pensions For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Michigan Public School Employees’ Retirement System (MPSERS) and additions to/deductions from MPSERS fiduciary net position have been determined on the same basis as they are reported by MPSERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Unrestricted Net Position As of June 30, 2016 and 2015, the College has designated the use of unrestricted net position as follows: 2016 2015

Designated for potential contingency in state appropriations $ 3,340,402 $ 3,135,694 Designated for Corporate Services activities 1,055,889 1,019,120 Designated for future capital outlay 29,780,713 28,539,215 Designated for funds functioning as endowments 5,769,705 5,991,047 Other designated fund activities 4,007,250 3,957,623 MPSERS pension liability (82,256,881) (81,475,915) Unrestricted and unallocated 10,923,405 11,018,502

Total Unrestricted Net Position

$ (27,379,517)

$ (27,814,714)

Revenue Recognition State appropriations for operations are recognized as revenue on a proportionate basis over the period for which they are appropriated (see Note 5). Restricted Fund revenue is primarily recognized only to the extent expended. Revenue received prior to year-end that is related to the next fiscal year is recorded as unearned revenue. As of June 30, 2016 and 2015, unearned tuition and fee revenue for the summer semester, which begins in late June or early July and ends in August, was approximately $641,000 and $718,000, respectively. Additionally, advance payments approximating $251,000 for the fall 2016 semester were received before June 30, 2016 and recorded as unearned revenue. As of June 30, 2015, advance payments approximating $170,000 for the fall 2015 semester were received before year end and recorded as unearned revenue. Internal Service Activities Revenue and expenses related to internal service activities approximating $677,000 and $658,000 for 2016 and 2015, respectively, have been eliminated. These activities include services provided by the College’s Bookstore, Food Services, Fitness & Recreation Center, and Planetarium Gift Shop & Conference Services, as well as the use of printing and copy services, and college vehicles.

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NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016

NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS The College considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The College considers all investments maturing within one year or less as of the balance sheet date to be short-term. The College’s deposits and investments are included on the balance sheet at June 30 under the following classifications:

2016 2015

Cash and cash equivalents $ 20,765,578 $ 30,254,825 Short-term investments 31,462,629 14,486,019 Long-term investments 22,423,607 26,697,269

Total $ 74,651,814 $ 71,438,113

The amounts in the previous chart are classified in the following categories:

Bank Deposits The above deposits at June 30, 2016 and 2015 were reflected in the accounts of the bank (without recognition of checks written but not cleared, or of deposits in transit) at $15,401,201 and $9,173,189, respectively. Of these bank deposits, approximately $2,159,000 and $1,750,000, respectively, was covered by federal depository insurance, and the remainder was uninsured and uncollateralized. The College believes that due to the dollar amounts of cash deposits and the limits of FDIC insurance, it is impractical to insure all bank deposits. As a result, the College evaluates each financial institution within which it deposits College funds and assesses the level of risk of each. Only those institutions with an acceptable estimated risk level are used as depositories. Investments – Excluding Endowment Fund Investments Credit Risk – Credit Risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The College’s policy for reducing credit risk is to invest surplus funds, excluding Endowment Fund monies, in accordance with the provisions set forth in Michigan Public Act 331 of 1996, as amended through 2014. This Act allows the College to invest in: bonds, bills or notes of the United States or its agencies; obligations of the State of Michigan or any of its political subdivisions rated as investment grade by at least one standard rating service; corporate commercial paper rated prime by at least one of the standard rating services; bankers acceptances issued by and certificates of deposit of financial institutions which are members of the Federal Deposit Insurance Corporation; mutual funds and investment pools that are composed of authorized investment instruments; and certain repurchase agreements. The College does not have a formal investment policy further limiting its investment options. Endowment Fund investments are subject to a separate investment policy which is discussed in detail later in this footnote.

2016 2015

Bank deposits (checking accounts, savings accounts and certificates of deposit)

$ 14,650,425

$ 9,206,939

Investments in securities and similar instruments 59,946,539 62,176,324 Petty cash and cash on hand 54,850 54,850

Total $ 74,651,814 $ 71,438,113

24

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS – Continued Investments – Excluding Endowment Fund Investments – Continued Interest Rate Risk – Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The College does not have a formal policy limiting investment maturities; however, the College manages its exposure to interest rate risk by limiting the significant majority of investment maturities to less than three years. Investments in longer-term securities are managed through a laddered-maturity and step-rate portfolio in order to obtain some of the higher interest rates offered on the market. Concentration of Credit Risk – Concentration of credit risk is the risk of loss attributed to the magnitude of the organization’s investment in a single issuer. The College does not have a policy limiting the amount the College is allowed to invest in any one issuer; however, the College evaluates each issuer in which it invests College funds and assesses the level of risk of each. The College invests with only those issuers with an acceptable estimated risk level. Custodial Credit Risk – Custodial credit risk for investments is the risk that, in the event of a failure of the counterparty, the College will not be able to recover the value of the investments that are in the possession of an outside party. The College does not have a formal policy addressing custodial credit risk; however, all of the College’s investments are issued in the name of the College. Custody of the College’s certificates of deposit remains with the financial institutions from which they were purchased, while the agency notes, bonds and commercial paper are held in safekeeping by either PNC Capital Markets LLC or Morgan Stanley Smith Barney LLC. In the event that PNC Capital Markets LLC or Morgan Stanley Smith Barney LLC were to become insolvent, and the College’s investment account assets were not fully accounted for, each of these accounts would be protected up to a maximum of $500,000 through Securities Investor Protection Corporation (SIPC). Cash balances in Morgan Stanley investment accounts that are swept into bank accounts with affiliated banks through Morgan Stanley’s Bank Deposit Program (BDP) are covered by FDIC insurance up to $250,000 per client per bank. In addition, in the event that SIPC coverage is not adequate to cover a client’s loss, Morgan Stanley Smith Barney LLC also carries supplemental insurance protection subject to an aggregate loss limit maximum of $1.0 billion for the firm, with a no per client limit for securities and a $1.9 million per client limit for the non-BDP cash portion of any remaining shortfall. The following tables present the investments and maturities that the College held at June 30, 2016 and 2015, including certificates of deposit and commercial paper classified as cash equivalents, and excluding the Endowment Fund investments:

June 30, 2016: By Maturity

Investment Type

S&P Quality

Ratings

Fair Value

Less Than One Year

1-3 Years

More Than

3 Years

Certificates of Deposit N/A $ 2,021,330 $ 2,021,330 $ - $ - U.S. Agency Securities AA+ 3,006,978 - - 3,006,978 Commercial Paper A1+/P1 to A2/P2 37,436,674 37,436,674 - -

Total Investments $ 42,464,982 $ 39,458,004 $ - $ 3,006,978

25

NOTES TO FINANCIAL STATEMENTS - Continued

DELTA COLLEGE JUNE 30, 2016

NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS – Continued Investments – Excluding Endowment Fund Investments – Continued


Investment Type

S&P Quality

Ratings

Fair Value

Less Than One Year

1-3 Years

More Than

3 Years

Certificates of Deposit N/A $ 2,008,374 $ 2,008,374 $ - $ - U.S. Agency Securities AA+ 7,726,105 - - 7,726,105 Commercial Paper A1+/P1 to A2/P2 34,972,749 34,972,749 - -

Total Investments $ 44,707,228 $ 36,981,123 $ - $ 7,726,105

The College’s investments at June 30, 2016 and 2015 were invested as follows, including commercial paper classified as cash equivalents and excluding the Endowment Fund investments: June 30, 2016 June 30, 2015

Investment Percentage of Percentage of

Issuer Type Fair Value Total Fair Value Total

Federal Farm Credit Bank Notes $ 1,006,553 2% $ - - Federal Home Loan Bank Notes 999,993 2% 3,850,674 9% Federal National Mortgage Assn. Notes 1,000,432 2% 3,875,431 9% Abbey Nat’l North America LLC Commercial Paper 3,983,665 9% 3,498,974 8% AKZO Nobel NV Commercial Paper - - 1,999,620 5% Apple Inc. Commercial Paper 1,999,060 5% - - Bell Canada Commercial Paper - - 999,920 2% Campbell Soup Co. Commercial Paper - - 2,998,950 7% Catholic Health Initiative Commercial Paper 1,999,580 5% - - Chevron Corp. Commercial Paper 1,986,860 5% - - Coca Cola Commercial Paper - - 1,995,500 4%

(continued on next page)

26



NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS – Continued Investments – Excluding Endowment Fund Investments – Continued

(continued from previous page)

June 30, 2016 June 30, 2015

Investment Percentage of Percentage of Issuer Type Fair Value Total Fair Value Total

Credit Agricole CIB NY Commercial Paper $ 1,993,451 5% $ - - Dominion Resources Inc. Commercial Paper - - 999,920 2% Duke Energy Corp. Commercial Paper - - 1,999,180 4% Ford Motor Credit Commercial Paper 1,995,420 5% - - General Electric Capital Commercial Paper 1,998,775 5% 999,100 2% Hyundai Capital America Commercial Paper - - 3,998,460 9% ING US Funding LLC Commercial Paper 2,499,175 6% 1,999,200 5% JP Morgan Securities LLC Commercial Paper 1,999,400 5% - - Magellan Mid Partners Commercial Paper - - 1,999,980 5% Mondelez International Commercial Paper 1,997,960 5% - - Nataxis NY Branch Commercial Paper 3,996,327 9% - - National Grid USA Commercial Paper 1,996,280 5% - - Nationwide Building Soc. Commercial Paper 1,996,580 5% 1,999,840 5% Prudential Financial Inc. Commercial Paper - - 1,499,445 3% Prudential PLC Commercial Paper 3,996,980 9% 1,998,740 4% Tate & Lyle Int’l Finance PLC Commercial Paper - - 3,999,280 9% Toyota Credit Puerto Rico Commercial Paper 999,254 2% - - Toyota Motor Credit Corp. Commercial Paper 1,997,907 5% Vodafone Group PLC Commercial Paper - - 1,986,640 4% Independent Bank Certificate of Deposit 1,006,952 2% 1,003,187 2% Wolverine Bank Certificate of Deposit 1,014,378 2% 1,005,187 2%

Total Investments

$ 42,464,982

100%

$ 44,707,228

100%

27



NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS – Continued Endowment Fund Investments Credit Risk – The College has attempted to mitigate credit risk associated with Delta College Endowment Fund (The Fund) investments by contracting with Morgan Stanley Wealth Management LLC to manage the investments of The Fund. The College has established a formal investment and distribution policy that Morgan Stanley Wealth Management LLC must adhere to in their management of the Endowment Fund. The investment and distribution policies of the Endowment Fund, as well as the investment returns, are established, monitored and evaluated by the College’s Investment Advisory Committee, which reports directly to the Board of Trustees. The Delta College Endowment Fund Investment and Distribution Policy limits investment of Endowment Fund monies to the following instruments: bonds, notes or treasury bills of the United States, or its agencies; corporate bonds rated investment grade by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation; certificates of deposit of institutions which are members of the Federal Deposit Insurance Corporation; commercial paper rated prime as A1 by Moody’s Investors Service, Inc. and/or P1 by Standard & Poor’s Corporation; certain bankers acceptances; common stock traded on a major stock exchange; international equity investments and American Depository Receipts (ADR’s); mutual funds; convertible securities, bonds and preferred stocks; and alternative investments made using mutual funds, exchange traded funds or separately managed accounts to ensure that daily valuations and liquidity are maintained. Alternative investments may not exceed 30% of the total fund measured by market value. The fixed income portfolio shall maintain a weighted average quality of investment grade. Additionally, all investments in the Fund must have a readily ascertainable market value and must be readily marketable. The following investments are only authorized as alternative investment strategies in accordance with the preceding paragraph: short sales; put and call option strategies; commodities futures; direct investment in tangible assets such as real estate, oil and gas, and precious metals; private placements; venture capital financing; and hedge funds. The following investments are prohibited: margin purchases and securities of the Investment Manager including proprietary mutual funds. Interest Rate Risk – In order to limit interest rate risk, the Endowment Fund investment policy stipulates various maturity limits. Commercial paper maturities may not exceed 270 days, bankers’ acceptances are limited to 180-day maturities, and the average weighted maturity of the fixed income portfolio shall fall within a range of 3-10 years. Concentration of Credit Risk – The Delta College Endowment Fund Investment and Distribution Policy limits the investment in individual securities of any one issuer or in any one alternative investment strategy to 5% of the market value of the assets of the Fund, except for convertible securities, which may not exceed 15% of the Fund. This 5% limit also does not apply to money market funds, mutual funds, except the mutual funds that are classified as alternative investments, or obligations of the United States government or its agencies. Additionally, the Fund is limited to a maximum composite of 20% invested in international equities and ADR’s, and a maximum composite of 30% invested in alternatives. As of June 30, 2016 and 2015, the Endowment Fund did not hold any securities of any one issuer in excess of these limits. Custodial Credit Risk – The Endowment Fund investment policy does not address the issue of custody. The Endowment Fund investments are held by Morgan Stanley Smith Barney LLC as custodian, and are listed under the account name Delta College Endowment Fund. Morgan Stanley Smith Barney LLC’s investor protection coverage has been described on the previous page in the Custodial Credit Risk section related to the College’s investments outside of the Endowment Fund.

28



NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS – Continued Endowment Fund Investments – Continued Foreign Currency Risk – All foreign investments held by the Endowment Fund are in the form of ADR’s and are denominated in U.S. currency. At June 30, 2016 and 2015 the Endowment Fund had the following investments and maturities:

* Due to the convertible feature of these investments, they are generally not held to maturity.


Investment Type

S&P Quality

Ratings

Fair Value

Less Than One Year

1-5 Years

6-10 Years

More Than 10 Years

Corporate Bonds Corporate Bonds Corporate Convertible Bonds *

AA+ to A- BBB+ to BBB-

A to A-

$ 483,854 290,782 238,302

$ 36,153 -

30,578

$ 164,529 49,504 46,920

$ 218,416 185,589

-

$ 64,756 55,689

160,804 Corporate Convertible Bonds * BBB+ to B 844,015 44,389 497,049 62,657 239,920 Corporate Convertible Bonds * Unrated 148,800 - 148,800 - - International Bonds BBB+ 37,086 - 37,086 - - Government & Agency Bonds N/A 1,546,332 234,593 466,079 188,698 656,962

3,589,171 $ 345,713 $ 1,409,967 $ 655,360 $ 1,178,131

Bond Funds N/A 2,024,881 Preferred Stock N/A 189,814 Equities N/A 11,281,454 International Equities N/A 2,331,309

Total Investments $ 19,416,629

29


DELTA COLLEGE JUNE 30, 2016 NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS – Continued Endowment Fund Investments – Continued

* Due to the convertible feature of these investments, they are generally not held to maturity.


Investment Type

S&P Quality

Ratings

Fair Value

Less Than One Year

1-5 Years

6-10 Years

More Than 10 Years

Corporate Bonds Corporate Bonds Corporate Convertible Bonds *

AA- to A- BBB+ to BBB-

A+ to A-

$ 336,228 86,577

387,277

$ - - -

$ 134,717 45,102

60,280

$ 201,511 41,475 91,899

$ - -

235,098 Corporate Convertible Bonds * BBB+ to B 916,812 241,011 366,864 16,293 292,644 Corporate Convertible Bonds * Unrated 187,149 - 187,149 - - Government & Agency Bonds N/A 789,954 46,050 567,929 - 175,975

2,703,997 $ 287,061 $ 1,362,041 $ 351,178 $ 703,717

Bond Funds N/A 1,016,320 Preferred Stock N/A 102,455 Equities N/A 9,697,856 International Equities N/A 2,798,067 Alternative Investment Funds N/A 2,652,469

Total Investments $ 18,971,164

30


DELTA COLLEGE JUNE 30, 2016 NOTE 2. CASH AND CASH EQUIVALENTS AND INVESTMENTS – Continued Fair Value Measurement of Investments The fair value of assets measured on a recurring basis at June 30, 2016 and 2015 are as follows:

June 30, 2016:

Fair Values

Quoted Prices in Active Markets for Identical Assets

(Level 1)

Significant Other Observable

Inputs (Level 2)

Significant Other Unobservable

Inputs (Level 3)

Investments excluding endowment fund investments Endowment Investments: Equities Bond funds

$ 42,464,982

13,612,763 5,614,052

$ -

13,612,763 -

$ 42,464,982

- 5,614,052

$ -

- -

Preferred stock 189,814 - 189,814 -

Total investments by fair value

$ 61,881,611

$ 13,612,763

$ 48,268,848

$ -

June 30, 2015:

Fair Values

Quoted Prices in

Active Markets for Identical Assets

(Level 1)

Significant Other

Observable Inputs

(Level 2)

Significant Other

Unobservable Inputs

(Level 3)

Investments excluding endowment fund investments Endowment Investments: Equities Bond funds

$ 44,707,228

12,495,923 3,720,317

$ -

12,495,923 -

$ 44,707,228

- 3,720,317

$ -

- -

Preferred stock 102,455 - 102,455 -

Alternative investments 2,652,469 - - 2,652,469

Total investments by fair value

$ 63,678,392

$ 12,495,923

$ 48,530,000

$ 2,652,469

31


DELTA COLLEGE JUNE 30, 2016 NOTE 3. PLEDGES RECEIVABLE As of June 30, 2016 and 2015, donors to the College (including the Delta College Foundation) have made unconditional promises to give (pledges) approximating $860,000 and $2,238,000, respectively. Such pledges are discounted to their present value, assuming their respective terms, at applicable discount rates with total discounts at June 30, 2016 and 2015, respectively, of approximately $8,000 and $18,000. Management has also established an allowance for uncollectible pledges approximating $7,000 and $6,000, respectively, as of June 30, 2016 and 2015. Pledges deemed uncollectible are charged against the allowance in the period that determination is made. Collection of pledges receivable, net of discount and allowance, as of June 30 are scheduled as follows:

2016 2015

Less than one year $ 424,333 $ 921,402 One to five years 420,064 1,291,672 Greater than five years 926 888

Total $ 845,323 $ 2,213,962

NOTE 4. CAPITAL ASSETS

The following tables present the changes in the various capital asset class categories for the years ended June 30, 2016 and 2015: Year Ended June 30, 2016: Estimated Beginning Additions/ Ending

Useful Life Balance Depreciation Deletions Balance

Depreciable Capital Assets:

Buildings 40 years $ 118,813,330 $ 1,361,235 $ 286,725 $ 119,887,840 Land improvements 20-40 years 8,320,070 1,678,989 200,726 9,798,333 Infrastructure 20-25 years 11,064,471 1,022,058 135,073 11,951,456 Furniture and equipment 5-20 years 15,904,718 2,050,434 261,402 17,693,750 Non-depreciable Capital Assets: Construction in progress 1,195,865 3,309,648 4,062,282 443,231 Land 1,351,560 - - 1,351,560 Fine art collection 88,752 - - 88,752

Total Capital Assets 156,738,766 9,422,364 4,946,208 161,214,922

Less Accumulated Depreciation: Buildings 37,881,067 2,942,990 153,375 40,670,682 Land improvements 3,114,699 468,259 197,385 3,385,573 Infrastructure 5,230,088 425,124 132,813 5,522,399 Furniture and equipment 10,818,634 972,371 252,451 11,538,554

Total Accumulated Depreciation 57,044,488 $ 4,808,744 $ 736,024 61,117,208

Capital Assets, Net $ 99,694,278 $ 100,097,714

32

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 4. CAPITAL ASSETS – Continued Year Ended June 30, 2015: Estimated Beginning Additions/ Ending

Useful Life Balance Depreciation Deletions Balance

Depreciable Capital Assets:

Buildings 40 years $ 117,698,931 $ 1,814,490 $ 700,091 $ 118,813,330 Land improvements 20-40 years 8,265,949 73,115 18,994 8,320,070 Infrastructure 20-25 years 11,101,075 2,919 39,523 11,064,471 Furniture and equipment 5-20 years 14,832,146 1,279,414 206,842 15,904,718 Non-depreciable Capital Assets: Construction in progress 376,058 2,710,331 1,890,524 1,195,865 Land 1,351,560 - - 1,351,560 Fine art collection 88,752 - - 88,752

Total Capital Assets 153,714,471 5,880,269 2,855,974 156,738,766

Less Accumulated Depreciation: Buildings 35,474,523 2,914,779 508,235 37,881,067 Land improvements 2,745,003 388,687 18,991 3,114,699 Infrastructure 4,884,150 385,453 39,515 5,230,088 Furniture and equipment 10,126,475 893,761 201,602 10,818,634

Total Accumulated Depreciation 53,230,151 $ 4,582,680 $ 768,343 57,044,488

Capital Assets, Net $ 100,484,320 $ 99,694,278

NOTE 5. RECOGNITION OF STATE APPROPRIATIONS The College records revenue from state operating appropriations in accordance with the accounting method described in the annual funding bill passed by the State of Michigan legislature, which provides that state appropriations are recorded as revenue in the period for which they were appropriated. Accordingly, the College recognizes 100% of the state’s fiscal year appropriations as revenue during the College’s fiscal year. Also, since state appropriations are distributed over an 11-month period, October through August, the College records a receivable at June 30 each year for the subsequent payments received in July and August. The accrued state appropriation receivables at June 30, 2016 and 2015, respectively, are $3.3 million and $4.4 million, and include $667,000 and $500,000, respectively, to be passed through to MPSERS for the UAAL Stabilization payment. Additionally, the 2015 receivable includes $1.3 million for the Health Professions Building Project capital appropriation.

Based on past experience, for each of the years ended June 30, 2016 and 2015, the College has designated a portion of its unrestricted net position equal to the July and August payment amounts as estimates of the potential contingency in the event that the State were to change its method of distributing state appropriations that would cause the College to experience a permanent deferral or elimination of state appropriation revenue, as occurred during the 2006-2007 fiscal year.

33

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 6. RETIREMENT PLANS MPSERS Defined Benefit Pension and Defined Contribution Plans Plan Description – The majority of College employees participate in the MPSERS, a statewide multiple employer cost-sharing public school employee retirement system governed by the State of Michigan that provides retirement, survivor and disability benefits to plan members and their beneficiaries. Until July 1, 2010, MPSERS provided two defined benefit plans, the Basic Plan and the Member Investment Plan. An employee who participates in the Basic Plan may retire at age 55 with 30 or more years of credited service or at age 60 with 10 or more years of credited service with a retirement benefit, payable monthly for life, equal to either 1.25% or 1.50%, as opted by the employee, of his or her final average compensation multiplied by the number of years of credited service. Final average compensation is the employee’s highest total wages earned during a period of 60 consecutive calendar months. An employee who participates in the Member Investment Plan (MIP) may retire at any age with 30 years of service, or at age 60 with 5 years of credited service, provided the member has worked through his or her 60th birthday and has credited service in each of the five school fiscal years immediately preceding the retirement allowance effective date, with a retirement benefit, payable monthly for life, equal to either 1.25% or 1.50%, as opted by the employee, of the participant’s final average compensation multiplied by the number of years of credited service. Final average compensation is the employee’s highest total wages earned during a period of 36 consecutive calendar months. Benefits under both plans, which are established by state statute, are fully vested upon reaching 10 years of service. Vested employees with less than 30 years of service may retire at age 55 under reduced benefits. In accordance with Public Act 75 of 2010, on July 1, 2010, MPSERS introduced a hybrid retirement plan called the Pension Plus Plan. New members who began working on or after July 1, 2010, but before September 4, 2012, were required to participate in the Pension Plus Plan. This plan is a combination of the defined benefit MIP Plan, as previously described, and a newly created Defined Contribution Plan administered by Voya Financial. Both components of the Pension Plus Plan include member and employer contributions. Employer contributions to the MIP defined benefit component of the Pension Plus Plan are at a slightly reduced rate than the employer contribution rate required for participants in the Basic and MIP Plans. Public Act 300 of 2012, commonly referred to as MPSERS Reform 2012, was enacted on September 4, 2012. This legislation made significant changes to the retirement system, for both existing members and new members, in order to better control and ultimately reduce the overal l cost to employers to fund employee retirement benefits. The primary changes included providing one-time irrevocable plan options for existing members in regards to both pension and retirement healthcare benefits, expansion of the defined contribution components of the system, general increases in the share of contribution required to be paid by active members, and elimination of retirement healthcare insurance for new members hired on or after September 4, 2012. Although the MPSERS Reform 2012 changes were initially established to begin effective October 1, 2012, due to some legal delays, the changes did not become fully effective until February 1, 2013. The MPSERS Reform 2012 legislation also capped at 20.96% the portion of the employer contribution rate assessed for purposes of covering the system’s unfunded actuarial accrued liability (UAAL), and the State has been providing additional appropriation funding to the College for pass-through to MPSERS for purposes of covering the UAAL in excess of the 20.96% cap. For the years ended June 30, 2016 and 2015, respectively, the College received from the State and paid to MPSERS $3.7 million and $2.7 million for the additional UAAL.

34

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 6. RETIREMENT PLANS – Continued MPSERS Defined Benefit Pension and Defined Contribution Plans – Continued Plan Description (continued) – The MPSERS Reform 2012 legislation also introduced two new options under the Defined Contribution Plan: the new Personal Healthcare Fund (PHF), a defined contribution savings plan administered by Voya Financial and designed to supplement retiree healthcare costs; and the 100% Defined Contribution Plan option, also administered by Voya Financial. All new MPSERS participants hired after September 4, 2012 by default are placed in the Pension Plus Plan, but may opt to retroactively elect the 100% Defined Contribution Plan within 75 days. New members are also automatically placed into the PHF fund, as the former retirement health insurance option has been eliminated for all new employees. Additionally, existing members had the one-time irrevocable option to convert from their current pension and healthcare insurance benefit plan to either or both the PHF and the 100% Defined Contribution Plan. The Defined Contribution Plan, including the PHF, provide for both member and employer contributions. Participants are immediately 100% vested in all employee contributions to the Defined Contribution Plan. Vesting in employer contributions to the Defined Contribution Plan is on a graduated scale: 50% at 2 years, 75% at 3 years, and 100% at 4 years. Eligibility for retirement distributions from the Defined Contribution Plan also vary from the Basic, MIP, or Pension Plus defined benefit plans, and follow standard IRS guidelines for 457 and 401(k) plan distributions. MPSERS issues a publicly available comprehensive annual financial report (CAFR) that includes financial statements and required supplementary information for the pension and post-employment health care plans. That report may be obtained by writing to MPSERS at P.O. Box 30171, Lansing, MI 48909-7671, or on their website at http://www.michigan.gov/orsschools/. Post Employment Benefits – MPSERS Reform 2012 also made some changes relative to post-employment healthcare benefits. Specifically, retirees participating in MPSERS have the option of continuing health, prescription drug, dental and vision coverage, but the portion of the retiree insurance premium subsidized by MPSERS has changed. Retirees having these coverages contribute an amount equivalent to the monthly cost for Part B Medicare and 20% to 70% of the monthly premium amount for the health, dental, and vision coverages, depending on their years of service. Required contributions for post-employment healthcare benefits are included as part of the College’s total contribution to MPSERS, plus the employee contributions to the Healthcare Insurance Trust, as discussed below. Funding Policy – Employer contributions to MPSERS result from the effects of implementing the School Finance Reform Act (ACT). Under the ACT, each College is required to contribute the full actuarial funding contribution amount to fund pension benefits, plus an additional amount to fund retiree healthcare benefit amounts on a cash disbursement basis. Public Act 75 of 2010, in conjunction with Public Act 77, also required all MPSERS members, effective July 1, 2010, to begin contributing a mandatory 3.0% to an irrevocable Healthcare Insurance Trust for purposes of funding retiree healthcare insurance benefits. Members earning less than $18,000 annually were allowed to contribute 1.5% during the 2010-11 year, but their required contribution increased to 3.0% as of July 1, 2011. These mandatory contributions are nonrefundable. Not soon after this legislation was enacted, a lawsuit was filed against the State claiming that the mandatory contribution was unlawful, and thus far, court rulings have supported this claim. This decision, however, continues to be appealed, and until the lawsuit is resolved, reporting units are required to continue to withhold and contribute the 3.0%. It is anticipated that the MPSERS Reform 2012 actions made by legislature will negate this legal claim.

http://www.michigan.gov/orsschools/

35

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 6. RETIREMENT PLANS – Continued MPSERS Defined Benefit Pension and Defined Contribution Plans – Continued Following are the employer and employee contribution rates associated with the MPSERS system for the year ended June 30, 2016: July 1, 2015 – September 30, 2015

Plan Description

Employer Defined Benefit

Employee Defined Benefit

Employer Defined Contribution

Employee Defined Contribution

Basic with Health Insurance Trust (HI) 25.78% - - - Basic converted to Personal Healthcare Fund (PHF) 25.27% - - - Basic 4% with HI 25.78% 4% - - Basic 4% converted to PHF 25.27% 4% - - Basic converted to DC with HI 21.47% - 4% Elective up to IRS limit Basic converted to DC with PHF 20.96% - 4% Elective up to IRS limit MIP Fixed with HI 25.78% 3.9% - - MIP Fixed converted to PHF 25.27% 3.9% - - MIP Graded with HI 25.78% 3.0–4.3% - - MIP Graded converted to PHF 25.27% 3.0–4.3% - - MIP Plus with HI 25.78% 3.0–6.4% - - MIP Plus converted to PHF 25.27% 3.0–6.4% - - MIP Fixed/Graded/Plus 7% with HI 25.78% 7.0% - - MIP Fixed/Graded/Plus 7% converted to PHF 25.27% 7.0% - - MIP Fixed/Graded/Plus converted to DC with HI 21.47% - 4% Elective up to IRS limit MIP Fixed/Graded/Plus converted to DC with PHF 20.96% - 4% Elective up to IRS limit Pension Plus with HI 24.70% 3.0–6.4% 50% match up to 1% Automatically enrolled at 2%,

but can elect to change Pension Plus with PHF 24.19% 3.0–6.4% 50% match up to 1% Automatically enrolled at 2%,

but can elect to change 100% Defined Contribution 20.96% - 50% match up to 3% Automatically enrolled at 6%,

but can elect to change Healthcare Insurance Trust (HI) - 3.0% - - Personal Healthcare Fund (PHF) - - 100% match up to 2% Automatically enrolled at 2%,

but can elect to change

36

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 6. RETIREMENT PLANS – Continued MPSERS Defined Benefit Pension and Defined Contribution Plans – Continued

October 1, 2015 – June 30, 2016

Plan Description

Employer Defined Benefit

Employee Defined Benefit

Employer Defined Contribution

Employee Defined Contribution

Basic with Health Insurance Trust (HI) 25.78% - - - Basic converted to Personal Healthcare Fund (PHF) 25.35% - - - Basic 4% with HI 25.78% 4% - - Basic 4% converted to PHF 25.35% 4% - - Basic converted to DC with HI 21.39% - 4% Elective up to IRS limit Basic converted to DC with PHF 20.96% - 4% Elective up to IRS limit MIP Fixed with HI 25.78% 3.9% - - MIP Fixed converted to PHF 25.35% 3.9% - - MIP Graded with HI 25.78% 3.0–4.3% - - MIP Graded converted to PHF 25.35% 3.0–4.3% - - MIP Plus with HI 25.78% 3.0–6.4% - - MIP Plus converted to PHF 25.35% 3.0–6.4% - - MIP Fixed/Graded/Plus 7% with HI 25.78% 7.0% - - MIP Fixed/Graded/Plus 7% converted to PHF 25.35% 7.0% - - MIP Fixed/Graded/Plus converted to DC with HI 21.39% - 4% Elective up to IRS limit MIP Fixed/Graded/Plus converted to DC with PHF 20.96% - 4% Elective up to IRS limit Pension Plus with HI 24.56% 3.0–6.4% 50% match up to 1% Automatically enrolled at 2%,

but can elect to change Pension Plus with PHF 24.13% 3.0–6.4% 50% match up to 1% Automatically enrolled at 2%,

but can elect to change 100% Defined Contribution 20.96% - 50% match up to 3% Automatically enrolled at 6%,

but can elect to change Healthcare Insurance Trust (HI) - 3.0% - - Personal Healthcare Fund (PHF) - - 100% match up to 2% Automatically enrolled at 2%,

but can elect to change

37

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 6. RETIREMENT PLANS – Continued MPSERS Defined Benefit Pension and Defined Contribution Plans – Continued The following table discloses pertinent information relative to MPSERS funding for the three-year period beginning July 1, 2013 through June 30, 2016. The table includes pension and healthcare benefit data combined for all four components of the MPSERS retirement system: the Basic Defined Benefit Plan, the MIP Defined Benefit Plan, the Pension Plus Defined Benefit Plan, and the Defined Contribution Plan administered by Voya Financial. It also includes the required employee contributions to the irrevocable healthcare trust that were effective beginning July 1, 2010. Year Ended June 30, 2016 2015 2014 Employer funding percentage range 24.13%-27.35% 24.19%-27.27% 23.20%-26.96% Total College payroll $39.3 million $40.0 million $40.3 million MPSERS covered compensation $30.3 million $30.7 million $31.4 million College contributions $7.9 million $7.9 million $7.9 million Employee contributions $2.2 million $2.2 million $2.2 million Measurement of the MPSERS Net Pension Liability – The plan’s net pension liability is to be measured as the total pension liability, less the amount of the pension plan’s fiduciary net position. In actuarial terms, this will be the accrued liability less the market value of assets (not the smoothed actuarial value of assets that is often encountered in actuarial valuations performed to determine the employer’s contribution requirement). MPSERS Plan Net Pension Liability –Non-University – The MPSERS total non-university net pension liability for the plan years ended September 30, was as follows:

2015 2014

Total pension liability $ 66,312,041,902 $ 65,160,887,182

Plan fiduciary net position 41,887,015,147 43,134,384,072

Net pension liability $ 24,425,026,755 $ 22,026,503,110

Plan fiduciary net position as a percentage of total pension liability 63.17% 66.20%

Net pension liability as a percentage of covered employee payroll 292.61% 250.11%

38


NOTE 6. RETIREMENT PLANS – Continued

MPSERS Defined Benefit Pension and Defined Contribution Plans – Continued

Proportionate Share of Net Pension Liability, Deferrals, and Pension Expense – At June 30, 2016 and 2015, respectively, the College reported a liability of $87.7 million and $80.7 million for its proportionate share of the net pension liability of MPSERS. The 2016 net pension liability was measured as of September 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation rolled forward from September 30, 2014, which was the measurement date for the 2015 net pension liability. The College’s proportion of the 2016 net pension liability was determined by dividing each employer’s statutorily required pension contributions to the system during the measurement period by the percent of pension contributions required from all applicable employers during the measurement period. The College’s proportion of the 2015 net pension liability was based on a projection of its long-term share of contributions to the pension plan relative to the projected contributions of all participating reporting units, actuarially determined. At September 30, 2015, the College’s proportion was .35920%, a decrease of .00716% from its proportion measured as of September 30, 2014, which was .36636%. For the year ended June 30, 2016 and 2015, respectively, the College recognized MPSERS pension expense of and $7.1 million and $6.5 million, and reported deferred outflows of resources and deferred inflows of resources related to the MPSERS pension from the following sources:

Year Ended June 30, 2016 Year Ended June 30, 2015

Deferred Outflows

of Resources

Deferred Inflows

of Resources

Deferred Outflows

of Resources

Deferred Inflows

of Resources

Changes of assumptions $ - $ 290,606

$ 2,977,503

$ -

Differences between expected and actual experience 2,160,234 -

-

-

Net difference between projected and actual earnings on pension plan assets 447,819 -

-

8,920,954

Changes in proportion and differences between College contributions and proportionate share of contributions

337,993

1,333,153

2,063

-

College contributions subsequent to the measurement date

4,156,351

-

5,161,281

-

Total $ 7,102,397 $ 1,623,759 $ 8,140,847 $ 8,920,954

39

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 6. RETIREMENT PLANS – Continued MPSERS Defined Benefit Pension and Defined Contribution Plans – Continued Proportionate Share of Net Pension Liability, Deferrals, and Pension Expense (continued) – The College reported deferred outflows of resources related to pension contributions subsequent to the measurement date of $4.2 million and $5.2 million, respectively, as of June 30, 2016 and 2015 that will be recognized as a reduction of the net pension liability in the College’s respective subsequent fiscal year. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Rate of Return, Discount Rate and Long-term Expected Rate of Return – The discount rate used to measure the total pension liability was 8.0% for the Basic and MIP Plans and 7.0% for the Pension Plus Plan for both valuation years, September 30, 2015 and 2014, and was based on the long term expected rate of return on pension investments. The projection of cash flows used to determine this discount rate assumed that employee member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the employee member rate. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. The long-term expected rate of return on pension plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

Year Ending June 30, Amount

2017

$ (21,495)

2018 (21,495) 2019 (138,713) 2020 1,503,990

Total $ 1,322,287

40

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 6. RETIREMENT PLANS – Continued MPSERS Defined Benefit Pension and Defined Contribution Plans – Continued Rate of Return, Discount Rate and Long-term Expected Rate of Return (continued) – Best estimates of arithmetic real rates of return for each major asset class included in the pension plan’s target asset allocation as of September 30, 2015 are summarized in the following table:

Investment Category

Target Allocation

Long-term Expected Real Rate of Return

Domestic Equity Pools

28.0%

5.9%

% Alternative Investment Pools 18.0 9.2 International Equity 16.0 7.2 Fixed Income Pools 10.5 .9 Real Estate & Infrastructure Pools 10.0 4.3 Absolute Return Pools 15.5 6.0 Short-Term Investment Pools 2.0 0.0

Total 100.0%

Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the College’s proportionate share of the net pension liability, calculated using the discount rate of 8.0% for the Basic and MIP Plans and 7.0% for the Pension Plus Plan, as well as what the College’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1.0% point lower (7.0% for the Basic and MIP Plans and 6.0% for the Pension Plus Plan) or 1.0% point higher (9.0% for the Basic and MIP Plans and 8.0% for the Pension Plus Plan) than the current rates:

Net Pension Liability at 1.0% Decrease

(7.0% for Basic and MIP Plans, and 6.0% for Pension Plus Plan)

Net Pension Liability at Current Discount Rate (8.0% for Basic and MIP

Plans, and 7.0% for Pension Plus Plan)

Net Pension Liability at 1.0% Increase

(9.0% for Basic and MIP Plans, and 8.0% for Pension Plus Plan)

Year Ended June 30, 2016 $ 113,113,575 $ 87,735,519 $ 66,340,779

Year Ended June 30, 2015 $ 106,390,396 $ 80,695,808 $ 59,047,738

The Basic and MIP Plans are non-hybrid plans. Pension Plus is a hybrid plan, with a defined benefit component and a defined contribution component.

41

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 6. RETIREMENT PLANS – Continued MPSERS Defined Benefit Pension and Defined Contribution Plans – Continued

Actuarial Valuations and Assumptions – An actuarial valuation to determine the total pension liability is required to be performed every year. If the actuarial valuation is not calculated as of the plan’s fiscal year end, the total pension liability is required to be rolled forward from the actual valuation date to the pension plan’s fiscal year end. Actuarial valuations for the pension plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions (ARC) are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing the benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

The total pension liability in the September 30, 2014 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Actuarial cost method Entry age normal cost actuarial cost method

Assumed investment rate of return 8.0% for Basic and MIP Plans and 7.0% for Pension Plus Plan, net of investment and administrative expenses

Wage inflation rate

3.5%

Projected rate of pay increases

3.5 to 12.3%, including wage inflation at 3.5%

Cost-of-living pension adjustments

3% annual non-compounded for MIP members

Mortality basis

RP-2000 Combined Healthy Mortality Table, adjusted for mortality improvements to 2025 using projection scale BB. This assumption was first used for the September 30, 2014 valuation for the MPSERS system. For retirees, 100% of the table rates were used. For active members, 80% of the table rates were used for males and 70% of the table rates were used for females.

42

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 6. RETIREMENT PLANS – Continued Actuarial Valuations and Assumptions (continued) – Assumption changes as a result of an experience study for the period 2007 through 2012 have been adopted by the MPSERS system for use in the annual pension valuations beginning with the September 30, 2014 valuation. The total pension liability as of September 30, 2015 is based on the results of an actuarial valuation date of September 30, 2014, and rolled forward using generally accepted actuarial procedures, including the experience study, and the total pension liability as of September 30, 2014 is based on the results of an actuarial valuation date of September 30, 2013 and rolled forward using generally accepted actuarial procedures. The recognition period for liabilities is the average of the expected remaining service lives of all employees, which is 4.7158 years and 4.8457 years, respectively, for valuation years September 30, 2015 and 2014, and the recognition period for assets is 5 years for both valuation years. Full actuarial assumptions are available in the 2015 MPSERS Comprehensive Annual Financial Report (CAFR), which is available online at www.michigan.gov/mpsers-cafr. Pension Plan Fiduciary Net Position – Detailed information about the MPSERS pension plan’s fiduciary net position is available in the separately issued MPSERS CAFR, as previously noted. Payable to the Pension Plan – As of June 30, 2016 and 2015, respectively, the College reported a payable of $663,000 and $745,000 for the outstanding amount of required contributions to MPSERS for the year then ended, which included the UAAL pass-through payments due to MPSERS. ORP Defined Contribution Plan As an alternative pension option, the College offers all full-time faculty and full-time salaried administrative, professional and Corporate Services employees the opportunity to participate in an Optional Retirement Plan (ORP) administered by Teachers’ Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF). Upon eligibility to participate in the ORP, employees have 90 days in which to elect participation in either the ORP or the MPSERS plan. The election becomes irrevocable after the 90-day period. Funding for the ORP consists entirely of employer contributions of 10% of each participating employee’s includable compensation. Participants are immediately 100% vested in all ORP contributions. Participating employees elect their own allocation of contributions among the available investment vehicles offered by TIAA-CREF. ORP retirement benefits are based on the accumulation of contributions and the related investment income for each participant. Distribution of retirement benefits is available under the ORP when participants attain age 55, or upon separation of employment. During the years ended June 30, 2016 and 2015, compensation covered under the ORP approximated $7.2 million and $7.4 million, respectively, which resulted in contributions by the College of approximately $722,000 and $739,000.

http://www.michigan.gov/mpsers-cafr

43

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 7. MNJTP BONDS PAYABLE During the year ended June 30, 2012, the College became involved in the Michigan New Jobs Training Program (MNJTP). This program was created by the State of Michigan Public Acts 359 and 360 of 2008, and authorizes community college districts to enter into an agreement with an employer to (1) provide worker education and job training in order to create new jobs, and (2) establish a funding mechanism to pay for the education and training for persons employed in new jobs with the employer. The employer prepays training costs to the College, and the College subsequently issues non-interest bearing revenue bonds payable to the employer equal to the prepayments. The employer remits state income tax withholdings for these new employees directly to the College. The College then remits the state income tax withholdings back to the employer on a quarterly basis to reimburse the employer for the costs of the training, thus reducing the College’s MNJTP bonds payable. Any outstanding bonds payable to the employer are offset by a state income tax receivable from the company of an equal amount. In connection with this program, during the year ended June 30, 2012, the College entered into a MNJTP agreement with Xalt Energy MI, LLC (formerly Dow Kokam MI, LLC), which provided for a maximum bond principal amount of $6,190,000. Under this agreement, during the years ended June 30, 2016 and 2015, respectively, the College issued bond principal to the company totaling $562,000 and $303,000 and repaid bond principal of $523,000 and $317,000. The College had outstanding MNJTP bonds payable and offsetting accounts receivable of $39,000 as of June 30, 2016, all which was due to be repaid in less than one year. There were no outstanding MNJTP bonds payable and offsetting accounts receivable with Xalt Energy as of June 30, 2015. As of June 30, 2016, total bonds issued to date under this agreement total $1,416,000. During the year ended June 30, 2013, the College entered into a MNJTP agreement with ECO-Bio Plastics Midland, Inc., with the maximum bond principal issue amount of $200,000. For the year ended June 30, 2016, The College issued bond principle to the company totaling $11,000, whereas no bond principal was issued during the year ended June 30, 2015. Additionally, for each year 2016 and 2015, respectively, the College repaid bond principal of $17,000 and $14,000, and had outstanding MNJTP bonds payable and offsetting accounts receivable of $1,000 and $7,000, all which was due to be repaid in less than one year. As of June 30, 2016, total bonds issued to date under this agreement total $50,000. NOTE 8. OPERATING LEASE OBLIGATIONS The College leases various training facilities under short-term operating leases, with total lease expense approximating $31,000 and $30,000, respectively, for the years ended June 30, 2016 and 2015. At June 30, 2016, the College has noncancellable future lease payments totaling $31,000 scheduled to be paid during the year ending June 30, 2017. NOTE 9. CONTINGENT LIABILITIES In the normal course of activities, the College is party to various legal actions. The College is of the opinion that the outcome of asserted claims outstanding will not have a material effect on the financial statements.

44


NOTE 10. RISK MANAGEMENT The College participates in the Michigan Community College Risk Management Authority (Authority) with other Michigan-based community colleges for claims relating to auto, property and liability. The Authority provides a risk pool program that operates as a claims servicing pool for amounts up to member retention limits, and operates as a common risk-sharing management program for losses in excess of member retention amounts up to maximum coverage limits. The College pays an annual premium to the Authority and is responsible for a deductible and all costs, including damages, indemnification, and allocated loss adjustment expenses, for each claim that is within the College’s Self-Insured Retention (SIR) limit. The College also participates in the stop loss provision of the program, which is designed to limit the member’s maximum cash payments during each July 1 through June 30 year to costs falling within the College’s SIR limit. Reinsurance is purchased by the Authority to further limit the risk of loss. In addition, the College purchases commercial insurance for employee medical benefits and employee injuries (workers’ compensation). NOTE 11. CONTRACTUAL COMMITMENTS The College has outsourced the management and operational support of its information technology services. At its September 2016 meeting, the College’s Board of Trustees approved and accepted a contract renewal with Ellucian, with the new contract period beginning November 1, 2016 and ending October 31, 2023. The 7-year contract includes the expansion of services relating to technology support in the Health Professions Building, training support for standard software used College-wide and support of all classroom technology and audio visual support for special events. The 7-year contract fee schedule calls for monthly payments ranging from $187,000 to $201,000 through October 2023, with a total contractual commitment of $16.9 million over the 7-year contract period. The contract also provides for an annual payment adjustment based on the Consumer Price Index. NOTE 12. CAPITAL CONSTRUCTION PROJECTS In December 2010, the State of Michigan approved planning for the Health Professions Building Renovation Project. In June 2012, the State approved funding for this $20.0 million project, which was 50% funded by the State, with the balance covered by donations and College reserves. The College began construction in March 2013, and the project was substantially completed by the end of August 2013 for the start of the 2013 fall semester. As of June 30, 2015, final project expenses totaled $18.0 million, toward which the College received $5.7 million in donations and pledges and $9.0 million in state capital appropriations. The College was required to spend its 50% share of the total project cost before any of the State funds were received, and recognized State capital appropriation revenue of $2.1 million during 2015, and had a related receivable of $1.3 million due from the State as of June 30, 2015. NOTE 13. ENDOWMENT SPENDING RATE POLICY The Investment and Distribution Policy for Endowment Funds as adopted by the Board of Trustees authorizes spending of the net appreciation (realized and unrealized) of the investments of endowment funds. Any net appreciation that is distributed is required to be spent for the purposes for which the endowment was established. Under the policy established by the Board, four percent of the previous five-year quarterly moving average market value of each individual endowment is authorized to be distributed annually, although actual distribution is limited to not decrease the individual endowment balances below that of the cumulative original value of the endowment contributions.

45

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 14. DELTA COLLEGE FOUNDATION The Delta College Foundation (the Foundation) is an independent tax-exempt 501(c)(3) corporation formed for the purpose of receiving funds for the sole benefit of the College. Contributions received by the Foundation are transferred to the College to be used in the support of the College’s educational programs. Such activities include contributing funds to the College’s scholarship programs and endowment funds, supplementing or paying for professional development activities of the College’s faculty and staff, and transferring donated equipment to the College to be used in general and occupational education programs. The College provides personnel support, supplies and equipment to the Foundation. Based on the criteria set forth in GASB Statement No. 61, the Foundation is considered a component unit of Delta College. Accordingly, the activity and financial position of the Foundation have been blended with the College’s in the accompanying financial statements. The Delta College Foundation issues a financial report that includes financial statements and supplementary information. That report may be obtained by writing to Delta College Foundation at 1961 Delta Road, University Center, MI 48710. Condensed financial information for the Foundation is provided below:

Delta College Foundation Condensed Balance Sheets

June 30, 2016 2015

Assets Current assets $ 1,185,207 $ 1,794,433 Long-term assets 420,990 1,292,560

Total Assets 1,606,197 3,086,993 Liabilities Current liabilities 28,712 48,098 Net Position Donor-restricted endowments 67,271 1,109,900 Restricted-expendable 1,154,242 1,604,734 Unrestricted 355,972 324,261

Total Net Position $ 1,577,485 $ 3,038,895

46

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 14. DELTA COLLEGE FOUNDATION – Continued

Delta College Foundation Condensed Statements of Revenue, Expenses and Changes in Net Position

Year Ended June 30, 2016 2015

Operating Revenue $ - $ - Operating Expenses Institutional administration 66,896 109,438 Fundraising 25,670 39,294

Total Operating Expenses 92,566 148,732

Operating Loss (92,566) (148,732) Nonoperating Revenue (Expenses) Gifts 1,792,616 5,138,084 Special events 92,188 69,829 Investment income 86,915 85,560 Foundation grants and distributions to or for Delta College

(3,346,426)

(3,846,049)

Net Nonoperating Revenue (Expenses) (1,374,707) 1,447,424

Net Income (Loss) Before Other Revenue (1,467,273) 1,298,692 Other Revenue Capital gifts and grants 5,863 -

Increase (Decrease) in Net Position (1,461,410) 1,298,692 Net Position Beginning of year 3,038,895 1,740,203

End of year $ 1,577,485 $ 3,038,895

47

NOTES TO FINANCIAL STATEMENTS - Continued DELTA COLLEGE JUNE 30, 2016 NOTE 14. DELTA COLLEGE FOUNDATION – Continued

Delta College Foundation Condensed Statements of Cash Flows

Year Ended June 30, 2016 2015

Net Cash Used in Operating Activities

$ (96,452)

$ (147,153)

Net Cash Used in Noncapital Financing Activities

(38,734)

(356,720)

Net Cash Provided (Used) by Capital and Related Financing Activities

(63,886)

490,925

Net Cash Provided by Investing Activities 86,915 85,560

Net Increase (Decrease) in Cash and Cash Equivalents

(112,157)

72,612

Cash and Cash Equivalents Beginning of year 873,031 800,419

End of year $ 760,874 $ 873,031

NOTE 15. ADOPTION OF NEW STANDARD The GASB issued GASB Statement No. 68, Accounting and Financial Reporting for Pensions and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. Statement No. 68 requires governments providing defined benefit pensions to recognize their unfunded pension benefit obligation as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. Statement No. 71 is a clarification to GASB Statement No. 68 requiring a government to recognize a beginning deferred outflow of resources for its pension contributions, if any, made subsequent to the measurement date of the beginning of the net pension liability. The Statements also enhance accountability and transparency through revised note disclosures and required supplementary information (RSI). In accordance with the statement, the College has reported a net pension liability of $85.8 million and a deferred outflow of resources of $4.2 million as a change in accounting principle adjustment that reduced unrestricted net position as of July 1, 2014 by $81.6 million.

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY AND CONTRIBUTIONS FOR MICHIGAN

PUBLIC SCHOOL EMPLOYEES' RETIREMENT SYSTEM (MPSERS), AND NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

DELTA COLLEGE

JUNE 30, 2016

2016 2015

Delta College's proportion of the collective MPSERS

net pension liability:

As a percentage 0.35920% 0.36636%

Amount 87,735,519$ 80,695,808$

Delta College's covered employee payroll 30,587,339$ 30,260,280$

Delta College's proportionate share of the collective

pension liability, as a percentage of the

College's covered employee payroll 286.8% 266.7%

MPSERS fiduciary net position, as a percentage of

the total pension liability 63.17% 66.20%

Delta College's statutorily required contributions 5,928,279$ 6,412,460$

Delta College's contributions in relation to the actuarily

determined contractually required contribution 5,928,279 6,412,460

Delta College's contribution deficiency (excess) -$ -$

Delta College's covered employee payroll 30,304,431$ 29,660,019$

Delta College contributions as a percentage of

covered employee payroll 19.6% 21.6%

Changes of benefit terms: There were no changes of benefit terms in 2016.

Changes of assumptions: There were no changes of benefit assumptions in 2016.

SCHEDULE OF PROPORTIONATE SHARE OF MPSERS NET PENSION LIABILITY

SCHEDULE OF MPSERS CONTRIBUTIONS

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

48

SUPPLEMENTAL SCHEDULES OF OTHER FINANCIAL INFORMATION

CONSOLIDATING BALANCE SHEET

DELTA COLLEGE

JUNE 30, 2016MPSERS

AUXILIARY EXPENDABLE RETIREMENT

COMBINED GENERAL DESIGNATED ACTIVITIES RESTRICTED ENDOWMENT PLANT GASB 68 DEBT AGENCY

TOTAL ELIMINATION FUND FUND FUND FUND FUND FUND FUND FUND FUND FOUNDATION

ASSETS

CURRENT ASSETS

Cash and cash equivalents 20,765,578$ -$ 3,694,774$ 837,924$ 1,469,755$ 2,219,798$ 642,908$ 11,043,965$ -$ -$ 95,580$ 760,874$

Short-term investments 31,462,629 - 4,989,220 2,985,284 5,004,409 499,835 - 17,983,881 - - - -

Property taxes receivable 304,405 - 304,405 - - - - - - - - -

State appropriations receivable 3,340,402 - 3,340,402 - - - - - - - - -

Federal and state grants receivable 1,389,533 - 82,772 402,012 - 904,749 - - - - - -

Accounts receivable 592,134 - 3,010 533,620 8,213 2,285 - 5,000 - 40,006 - -

Pledges receivable 424,333 - - - - - - - - - - 424,333

Inventories 936,562 - 172,711 - 763,851 - - - - - - -

Prepaid expenses and other assets 119,538 - 45,563 24,000 - - 20,140 29,835 - - - -

Due from (to) other funds - - - (68,332) - 68,332 - - - - - -

TOTAL CURRENT ASSETS 59,335,114 - 12,632,857 4,714,508 7,246,228 3,694,999 663,048 29,062,681 - 40,006 95,580 1,185,207

LONG-TERM INVESTMENTS 22,423,607 - 999,993 1,000,432 - - 19,416,629 1,006,553 - - - -

LONG-TERM PLEDGES RECEIVABLE 420,990 - - - - - - - - - - 420,990

CAPITAL ASSETS

Land and improvements 11,149,893 - - - - - - 11,149,893 - - - -

Infrastructure 11,951,456 - - - - - - 11,951,456 - - - -

Buildings 119,887,840 - - - - - - 119,887,840 - - - -

Furniture and equipment 17,693,750 - - - - - - 17,693,750 - - - -

Fine art collection 88,752 - - - - - - 88,752 - - - -

Construction in progress 443,231 - - - - - - 443,231 - - - -

Allowance for depreciation (61,117,208) - - - - - - (61,117,208) - - - -

TOTAL CAPITAL ASSETS 100,097,714 - - - - - - 100,097,714 - - - -

TOTAL ASSETS 182,277,425 - 13,632,850 5,714,940 7,246,228 3,694,999 20,079,677 130,166,948 - 40,006 95,580 1,606,197

DEFERRED OUTFLOWS OF RESOURCES 7,102,397 - - - - - - - 7,102,397 - - -

LIABILITIES

CURRENT LIABILITIES

Accounts payable 1,894,740 - 1,270,633 112,546 6,425 120,323 - 288,521 - - 95,580 712

Accrued payroll and other compensation 5,333,427 - 4,723,011 326,215 150,331 133,870 - - - - - -

Unearned revenue 1,076,901 - 820,843 213,040 - 9,668 5,350 - - - - 28,000

Current portion of MNJTP bonds payable 40,006 - - - - - - - - 40,006 - -

TOTAL CURRENT LIABILITIES 8,345,074 - 6,814,487 651,801 156,756 263,861 5,350 288,521 - 40,006 95,580 28,712

NON-CURRENT LIABILITIES

Net pension liability 87,735,519 - - - - - - - 87,735,519 - - -

TOTAL LIABILITIES 96,080,593 - 6,814,487 651,801 156,756 263,861 5,350 288,521 87,735,519 40,006 95,580 28,712

DEFERRED INFLOWS OF RESOURCES 1,623,759 - - - - - - - 1,623,759 - - -

NET POSITION

Net investment in capital assets 100,097,714 - - - - - - 100,097,714 - - - -

Restricted for:

Donor-restricted endowments 14,371,893 - - - - - 14,304,622 - - - - 67,271

Expendable scholarships and awards 1,122,040 - - - - 846,340 - - - - - 275,700

Instructional department uses 2,031,283 - - - - 1,414,102 - - - - - 617,181

Public broadcasting activities 1,063,311 - - - - 1,063,311 - - - - - -

Other restricted uses 368,746 - - - - 107,385 - - - - - 261,361

Unrestricted (27,379,517) - 6,818,363 5,063,139 7,089,472 - 5,769,705 29,780,713 (82,256,881) - - 355,972

TOTAL NET POSITION 91,675,470$ -$ 6,818,363$ 5,063,139$ 7,089,472$ 3,431,138$ 20,074,327$ 129,878,427$ (82,256,881)$ -$ -$ 1,577,485$

49


CONSOLIDATING STATEMENT OF REVENUE, EXPENSES AND CHANGES IN NET POSITION

DELTA COLLEGE

YEAR ENDED JUNE 30, 2016 MPSERS

AUXILIARY EXPENDABLE RETIREMENT

COMBINED GENERAL DESIGNATED ACTIVITIES RESTRICTED ENDOWMENT PLANT GASB 68

TOTAL ELIMINATION FUND FUND FUND FUND FUND FUND FUND FOUNDATION

OPERATING REVENUE

Tuition and fees, net of scholarship allowance

of $6,883,388 in 2016 and $7,711,906 in 2015 23,781,445$ (6,883,388)$ 26,972,463$ 3,573,141$ -$ -$ -$ 119,229$ -$ -$

Federal grants and contracts 4,029,386 - - - - 4,029,386 - - - -

State grants and contracts 1,200,380 - - - - 1,200,380 - - - -

Local and nongovernmental grants and contracts 772,424 - - - - 772,424 - - - -

Public broadcasting gifts 646,950 - - - - 646,950 - - - -

Auxiliary activities, net of scholarship allowance -

of $1,211,928 in 2016 and $1,544,590 in 2015 4,989,605 (1,211,928) - - 6,201,533 - - - - -

Current year expenditures for capital -

equipment and facility improvements - (5,360,082) - - - - - 5,360,082 - -

Miscellaneous 955,203 (133) 426,913 315,879 - 202,995 - 9,549 - -

TOTAL OPERATING REVENUE 36,375,393 (13,455,531) 27,399,376 3,889,020 6,201,533 6,852,135 - 5,488,860 - -

OPERATING EXPENSES

Instruction 41,844,223 (1,826,474) 34,530,521 3,009,683 - 5,626,461 - 29,815 474,217 -

Public services 2,578,657 (188,542) 1,099,754 1,386 - 1,645,927 - - 20,132 -

Instructional support 8,377,059 (3,680) 8,043,850 92,217 - 165,267 - - 79,405 -

Student services 21,453,870 (8,242,783) 7,122,465 112,404 5,898,551 16,214,583 - 269,870 78,780 -

Institutional administration 8,492,690 (153,648) 7,490,906 748,531 - - - 270,904 69,101 66,896

Operation and maintenance of facilities 6,629,010 (3,040,271) 6,174,685 - - 2,228 - 3,433,037 59,331 -

Depreciation expense 4,808,744 - - - - - - 4,808,744 - -

Fundraising expenses 25,670 - - - - - - - - 25,670

Other expenses - (634,519) - - - - 634,519 - - -

TOTAL OPERATING EXPENSES 94,209,923 (14,089,917) 64,462,181 3,964,221 5,898,551 23,654,466 634,519 8,812,370 780,966 92,566

OPERATING INCOME (LOSS) (57,834,530) 634,386 (37,062,805) (75,201) 302,982 (16,802,331) (634,519) (3,323,510) (780,966) (92,566)

NONOPERATING REVENUE (EXPENSES)

State appropriations 18,463,695 - 18,463,695 - - - - - - -

Property tax levy 23,034,150 - 23,034,150 - - - - - - -

Pell federal grant revenue 14,806,794 - - - - 14,806,794 - - - -

Gifts 222,187 (3,056,065) 13,610 210,706 - 1,144,487 116,833 - - 1,792,616

Special events, net of expenses of -

$58,737 in 2016 and $53,122 in 2015 92,188 - - - - - - - - 92,188

Investment income (loss), net of Endowment Fund investment -

expense of $160,346 in 2016 and $149,866 in 2015 165,574 (617,426) 351,394 96,606 - 426,673 (450,009) 271,421 - 86,915

Loss on disposition of capital assets (147,769) 133 - - - - - (147,902) - -

Foundation grants and distributions to or for Delta College (73,818) 3,272,608 - - - - - - - (3,346,426)

NET NONOPERATING REVENUE (EXPENSES) 56,563,001 (400,750) 41,862,849 307,312 - 16,377,954 (333,176) 123,519 - (1,374,707)

NET INCOME (LOSS) BEFORE OTHER REVENUE (1,271,529) 233,636 4,800,044 232,111 302,982 (424,377) (967,695) (3,199,991) (780,966) (1,467,273)

OTHER REVENUE

State capital appropriations 890 - - - - - - 890 - -

Capital gifts and grants 5,863 (233,636) - - - - - 233,636 - 5,863

Additions to permanent endowments 1,556,229 - - - - - 1,556,229 - - -

TOTAL OTHER REVENUE 1,562,982 (233,636) - - - - 1,556,229 234,526 - 5,863

INCREASE (DECREASE) IN NET POSITION 291,453 - 4,800,044 232,111 302,982 (424,377) 588,534 (2,965,465) (780,966) (1,461,410)

TRANSFERS IN (OUT) - - (4,771,448) (145,715) (253,678) 560,442 - 4,610,399 - -

NET INCREASE (DECREASE) IN NET POSITION 291,453 - 28,596 86,396 49,304 136,065 588,534 1,644,934 (780,966) (1,461,410)

NET POSITION - BEGINNING OF YEAR, AS RESTATED 91,384,017 - 6,789,767 4,976,743 7,040,168 3,295,073 19,485,793 128,233,493 (81,475,915) 3,038,895

NET POSITION - END OF YEAR 91,675,470$ -$ 6,818,363$ 5,063,139$ 7,089,472$ 3,431,138$ 20,074,327$ 129,878,427$ (82,256,881)$ 1,577,485$

50


DETAILS OF CERTAIN GENERAL FUND REVENUES

DELTA COLLEGE

YEAR ENDED JUNE 30, 2016

TUITION AND FEES

Tuition 20,075,411$

Registration fees 834,560

Course and program fees:

Excess contact hour fees 2,111,702

Technology fees 2,632,490

Nursing & Dental Hygiene program fees 172,389

Online course fees 974,829

Auto course fees 74,857

Other fees 96,225

TOTAL TUITION AND FEES 26,972,463$

MISCELLANEOUS REVENUE

Collegiate ads 8,962$

Credit by exam 5,570

Live scan fees 18,785

Miscellaneous 190,986

Parking fines 463

Planetarium ticket sales 59,250

Rental of college facilities 79,121

Reserve parking 11,338

Testing 52,438

TOTAL MISCELLANEOUS REVENUE 426,913$

51

DELTA COLLEGE


PROFESSIONAL

FRINGE SUPPLIES CAPITAL DEVELOPMENT

SALARIES BENEFITS & SERVICES EXPENDITURES & TRAVEL TOTAL

INSTRUCTION

Social Sciences 3,063,510$ 1,563,097$ 31,148$ -$ 30,060$ 4,687,815$

Humanities 2,115,674 1,086,734 46,385 - 20,000 3,268,793

English 2,791,948 1,488,771 27,055 - 27,823 4,335,597

Mathematics & Computer Science 1,867,672 1,037,009 29,147 - 16,965 2,950,793

Sciences 3,377,459 1,646,984 105,434 - 34,335 5,164,212

Business & Information Technology 2,690,403 1,364,025 22,365 - 23,000 4,099,793

Health & Wellness 3,897,639 2,150,643 259,298 - 38,376 6,345,956

Technical Trades & Manufacturing 1,824,984 965,979 254,433 - 20,161 3,065,557

Instructional Equipment - - 550,480 61,525 - 612,005

TOTAL INSTRUCTION 21,629,289 11,303,242 1,325,745 61,525 210,720 34,530,521

PUBLIC SERVICES

Television 350,186 228,853 - - 2,675 581,714

Public Radio 73,286 43,531 - - 294 117,111

Planetarium and Learning Center 214,230 132,143 36,797 - 3,964 387,134

President's Speakers Series - - 13,795 - - 13,795

TOTAL PUBLIC SERVICES 637,702 404,527 50,592 - 6,933 1,099,754

INSTRUCTIONAL SUPPORT

Office of Vice President of Instruction & Learning Services 187,439 64,989 4,447 - 9,180 266,055

Division Chairs 1,205,774 742,742 52,718 - 14,563 2,015,797

Academic Deans 376,508 226,876 18,643 - 6,727 628,754

Faculty Secretarial & Instructional Support 95,383 56,601 69,878 - 275 222,137

Instructional Support Information Technology - - 1,331,764 - - 1,331,764

Computer & Multimedia Laboratories 238,528 67,352 66,251 - 775 372,906

Library & Learning Resources Center 512,693 298,535 165,994 - 5,687 982,909

Teaching Learning and WRIT Centers 368,536 195,319 1,428 - 5,241 570,524

Academic Testing Center 132,673 79,742 723 - 2,246 215,384

Instructional Media Technology 114,850 40,033 9,651 - 125 164,659

Fitness & Aquatics Center Instructional Support 119,661 54,908 33,480 3,680 495 212,224

Developmental Education - - 569 - 1,753 2,322

Teaching Enhancement Centers 14,729 8,671 39,784 - 12,702 75,886

Center for Organizational Success 51,430 38,777 25,486 - 375 116,068

Accreditation & Assessment - - 18,370 - - 18,370

Community Development & Strategic Partnerships 122,172 89,010 3,513 - 3,934 218,629

Service Learning & Community Engagement 94,675 80,596 37,984 - 7,530 220,785

Honors Program - - 12,470 - 681 13,151

eLearning 131,843 84,713 148,018 - 30,952 395,526

TOTAL INSTRUCTIONAL SUPPORT 3,766,894 2,128,864 2,041,171 3,680 103,241 8,043,850


DETAILS OF GENERAL FUND OPERATING EXPENSES

52

DELTA COLLEGE


PROFESSIONAL




DETAILS OF GENERAL FUND OPERATING EXPENSES - Continued

STUDENT SERVICES

Office of Vice President of Student & Education Services 239,439$ 124,140$ 22,961$ -$ 8,890$ 395,430$

Dean of Students 62,084 18,636 35,148 - 811 116,679

Dean of Enrollment Services 95,179 32,623 737 - 1,375 129,914

Admissions 330,399 238,085 67,589 - 3,876 639,949

Records & Registration 305,262 197,805 30,621 - 7,183 540,871

Counseling & Advising 793,748 483,106 10,654 - 6,025 1,293,533

Financial Aid 479,381 328,584 17,392 - 7,694 833,051

Enrollment Management & Student Goodwill - - 55,239 - 27,692 82,931

Student Engagement, Leadership, & Organizations 100,492 63,592 36,737 - 10,619 211,440

Career & Employment Services 163,776 88,994 40,429 - 2,037 295,236

Marketing & Publications - - 473,449 - 3,418 476,867

Veteran Services 68,269 46,358 527 - 525 115,679

Student Services Support Information Technology - - 500,036 - - 500,036

Collegiate Student Newspaper 47,491 4,655 10,961 - 7,742 70,849

Disability Resources 76,872 47,825 38,803 - 4,234 167,734

Commencement & Student Awards - - 16,749 - - 16,749

Possible Dream Program 48,576 29,371 262 - 500 78,709

Student Testing & Assessment 53,810 33,939 9,785 - 445 97,979

Scholarships & Grants - - 254,485 - - 254,485

Ricker Center 85,138 54,213 93,494 - 605 233,450

Midland Center 57,927 43,722 2,033 - 500 104,182

Learning Centers & Innovative Programs - - 55 - - 55

Athletic Programs 169,720 85,761 137,082 - 74,094 466,657

TOTAL STUDENT SERVICES 3,177,563 1,921,409 1,855,228 - 168,265 7,122,465

53

DELTA COLLEGE


PROFESSIONAL




DETAILS OF GENERAL FUND OPERATING EXPENSES - Continued

INSTITUTIONAL ADMINISTRATION

Board of Trustees -$ -$ 13,605$ -$ 18,855$ 32,460$

Development Office 272,560 183,776 33,740 - 4,245 494,321

Equity Office 30,345 19,925 2,104 - 902 53,276

President's Office 379,470 227,310 12,403 - 16,489 635,672

Memberships - - 113,381 - 4,064 117,445

Miscellaneous - - 49,896 - 2,406 52,302

Strategic Planning - - 18,830 - 14,459 33,289

Legal - - 62,620 - - 62,620

Audit - - 53,204 - - 53,204

Bank Fees, Collection Expenses & Bad Debts - - 620,836 - - 620,836

Insurance, Unemployment & Other - 57,431 422,738 - - 480,169

Communications Technology 78,070 54,664 124,171 - 375 257,280

Business Services 269,308 184,273 8,346 - 1,450 463,377

Finance Office 740,989 446,932 39,856 - 10,571 1,238,348

Administrative Support Information Technology 40,460 24,536 964,754 - 175 1,029,925

Human Resources & Staff Recruitment 406,201 247,697 59,615 - 9,405 722,918

Senate 29,702 19,825 2,723 - 2,102 54,352

Post Office 54,702 30,262 3,516 - 275 88,755

Institutional Advancement 300,829 192,599 10,631 - 11,334 515,393

Institutional Research 284,239 164,760 6,730 - 3,295 459,024

Wellness & Professional Development - 3,776 22,164 - - 25,940

TOTAL INSTITUTIONAL ADMINISTRATION 2,886,875 1,857,766 2,645,863 - 100,402 7,490,906

OPERATION AND MAINTENANCE OF FACILITIES

Public Safety 394,329 216,126 47,241 20,749 3,448 681,893

Facilities Management 571,138 351,102 7,446 - 10,594 940,280

Facility Operations 1,533,022 1,008,499 238,807 31,992 1,875 2,814,195

Utilities - - 1,195,493 - - 1,195,493

Facility Maintenance & Improvements - - 276,080 - - 276,080

Off-Campus Centers & President's House - - 266,744 - - 266,744

TOTAL OPERATION AND MAINTENANCE OF FACILITIES 2,498,489 1,575,727 2,031,811 52,741 15,917 6,174,685

TOTAL GENERAL FUND OPERATING EXPENSES 34,596,812$ 19,191,535$ 9,950,410$ 117,946$ 605,478$ 64,462,181$

54


DETAILS OF DESIGNATED FUND

DELTA COLLEGE

YEAR ENDED JUNE 30, 2016 EXPENSES

ENDOWMENT PROFESSIONAL

NET AND SUPPLIES DEVELOPMENT NET INCREASE NET

POSITION TUITION MISCELLANEOUS INVESTMENT TOTAL FRINGE AND CAPITAL AND TOTAL TRANSFERS (DECREASE) IN POSITION

JULY 1, 2015 AND FEES REVENUE GIFTS INCOME REVENUE SALARIES BENEFITS SERVICES EXPENDITURES TRAVEL EXPENSES IN(OUT) NET ASSETS JUNE 30, 2016

INSTRUCTION

Corporate Services 1,019,120$ 2,202,804$ -$ -$ -$ 2,202,804$ 1,205,676$ 439,042$ 521,040$ -$ 277$ 2,166,035$ -$ 36,769$ 1,055,889$

Criminal Justice Training Programs (315,945) 404,843 - - - 404,843 218,285 91,722 67,518 6,000 3,835 387,360 - 17,483 (298,462)

Lifelong Learning & 50+ Just Like Gold Programs (475,089) 279,381 - - - 279,381 238,908 120,699 44,207 - 1,215 405,029 - (125,648) (600,737)

Kid's College & Youth Camps 46,298 85,249 - - - 85,249 26,182 8,711 16,366 - - 51,259 - 33,990 80,288

TOTAL INSTRUCTION 274,384 2,972,277 - - - 2,972,277 1,689,051 660,174 649,131 6,000 5,327 3,009,683 - (37,406) 236,978

PUBLIC SERVICES

Global Awareness 15,239 - - - 1,372 1,372 - - 35 - - 35 - 1,337 16,576

Delta Productions 7,257 - 3,080 - - 3,080 - - 599 - - 599 - 2,481 9,738

Dental Hygiene Powerbrush Program - - 150 - - 150 - - - - - - - 150 150

2YC3 Chemistry Conference 114 - - - - - - - 114 - - 114 - (114) -

Michigan MATYC Conference - - - - - - - - 145 - - 145 2,000 1,855 1,855

Telelearning Network 9,066 150 - - - 150 - - - - - - - 150 9,216

Sailing Program (71,731) - - - 1,057 1,057 - - 493 - - 493 - 564 (71,167)

TOTAL PUBLIC SERVICES (40,055) 150 3,230 - 2,429 5,809 - - 1,386 - - 1,386 2,000 6,423 (33,632)


President's Scholarship Program 341,048 - - 300 70,191 70,491 - - - - - - (85,440) (14,949) 326,099

President's Innovation Projects 85,157 - - - - - 100 8 15,050 - 2,081 17,239 50,000 32,761 117,918

MEDC MEDC MAT2 Project 686 - 4,725 - - 4,725 3,995 1,289 - - 127 5,411 - (686) -

Faculty & Instructional Development 62,522 - 41,999 - - 41,999 - - 9,420 - 10,646 20,066 1,432 23,365 85,887

Developmental Education 4,156 - - - - - - - - - - - - - 4,156

Library Resource Replacement 11,528 - 5,266 - - 5,266 - - 3,396 - - 3,396 - 1,870 13,398

Photography Lab Printing 3,307 - 1,477 - - 1,477 - - 1,989 - - 1,989 - (512) 2,795

Kenya Partnership 22,385 - 19,675 - - 19,675 - - 41,906 - - 41,906 - (22,231) 154

Art & Archive Projects 37,067 - - - 11,209 11,209 - - 2,210 - - 2,210 - 8,999 46,066

TOTAL INSTRUCTIONAL SUPPORT 567,856 - 73,142 300 81,400 154,842 4,095 1,297 73,971 - 12,854 92,217 (34,008) 28,617 596,473

STUDENT SERVICES

Student Engagement & Service Learning Activities 9,306 - 1,532 - - 1,532 - - 4,109 - 100 4,209 1,000 (1,677) 7,629

Computer Rental Program 5,490 - 1,160 - - 1,160 - - - - - - - 1,160 6,650

Math Calculator Rental Program 5,106 - 6,125 - - 6,125 - - 1,706 - - 1,706 (2,000) 2,419 7,525

Student Skills Achievement Programs 4,468 - 3,264 3,500 - 6,764 - - 4,412 - - 4,412 - 2,352 6,820

President's Honors Scholarship - - - - - - - - - - - - 35,529 35,529 35,529

Pioneer Athletic Fundraisers 11,117 - 73,175 35,444 - 108,619 - - 72,721 - 29,356 102,077 - 6,542 17,659

TOTAL STUDENT SERVICES 35,487 - 85,256 38,944 - 124,200 - - 82,948 - 29,456 112,404 34,529 46,325 81,812

INSTITUTIONAL ADMINISTRATION

Corporate Services Administration - 600,714 - - - 600,714 269,837 97,183 80,623 - 4,835 452,478 (148,236) - -

Whiting Projects 77,469 - - - - - - - - - - - - - 77,469

UNUM Projects 681,667 - - - 12,777 12,777 - - - - - - - 12,777 694,444

Flexible Spending & Healthcare Reform Administration 199,550 - 936 - - 936 - - 45,284 - - 45,284 - (44,348) 155,202

Administrative Development & Techology Projects 211,756 - 44,571 - - 44,571 - - 63,542 - 1,249 64,791 - (20,220) 191,536

Administrative Reserve for Tax Appeals 76,721 - - - - - - - - - - - - - 76,721

Self Insurance 2,891,908 - 108,744 - - 108,744 - - 14,516 - - 14,516 - 94,228 2,986,136

Gifts In Kind - - - 171,462 - 171,462 - - 164,462 7,000 - 171,462 - - -

TOTAL INSTITUTIONAL ADMINISTRATION 4,139,071 600,714 154,251 171,462 12,777 939,204 269,837 97,183 368,427 7,000 6,084 748,531 (148,236) 42,437 4,181,508

TOTAL DESIGNATED FUND 4,976,743$ 3,573,141$ 315,879$ 210,706$ 96,606$ 4,196,332$ 1,962,983$ 758,654$ 1,175,863$ 13,000$ 53,721$ 3,964,221$ (145,715)$ 86,396$ 5,063,139$

55

REVENUES


DETAILS OF AUXILIARY ACTIVITIES FUND

DELTA COLLEGE


EXPENSES

NET SUPPLIES OPERATING NET

POSITION OPERATING FRINGE AND CAPITAL TOTAL INCOME TRANSFERS POSITION

JULY 1, 2015 REVENUES SALARIES BENEFITS SERVICES EXPENSES EXPENSES (LOSS) IN(OUT) JUNE 30, 2016

AUXILIARY ACTIVITIES

Bookstore 5,166,455$ 4,748,925$ 447,856$ 160,537$ 3,792,329$ -$ 4,400,722$ 348,203$ (250,000)$ 5,264,658$

Food Services 489,105 1,032,306 386,913 130,332 512,726 - 1,029,971 2,335 (3,202) 488,238

Fitness & Recreation Center 616,837 342,447 207,607 70,838 47,833 7,272 333,550 8,897 (476) 625,258

Carlyon Farmhouse 5,325 - - - - - - - - 5,325

Planetarium Gift Shop & Conference Services 319 20,447 9,589 1,320 13,414 - 24,323 (3,876) - (3,557)

Learning Resources Vending 17,337 29 - - 394 - 394 (365) - 16,972

TOTAL AUXILIARY ACTIVITIES 6,295,378 6,144,154 1,051,965$ 363,027$ 4,366,696$ 7,272$ 5,788,960 355,194 (253,678) 6,396,894

INTERNAL SERVICE OPERATIONS

Internal Service Operations 744,790 734,616 161,228$ 86,397$ 399,008$ 140,195$ 786,828 (52,212) - 692,578

Elimination of Rebilled Charges - (677,237) (677,237) - - -

NET INTERNAL SERVICE OPERATIONS 744,790 57,379 109,591 (52,212) - 692,578

TOTAL 7,040,168$ 6,201,533$ 5,898,551$ 302,982$ (253,678)$ 7,089,472$

56


DETAILS OF EXPENDABLE RESTRICTED FUND

DELTA COLLEGE

YEAR ENDED JUNE 30, 2016 REVENUES EXPENSES

LOCAL AND ENDOWMENT PROFESSIONAL

NET FEDERAL STATE NONGOVERNMENTAL AND SUPPLIES DEVELOPMENT NET INCREASE NET

POSITION GRANTS AND GRANTS AND GRANTS AND MISCELLANEOUS INVESTMENT TOTAL FRINGE AND CAPITAL AND TOTAL TRANSFERS (DECREASE) IN POSITION

JULY 1, 2015 CONTRACTS CONTRACTS CONTRACTS REVENUE GIFTS INCOME REVENUE SALARIES BENEFITS SERVICES EXPENDITURES TRAVEL EXPENSES IN(OUT) NET ASSETS JUNE 30, 2016

INSTRUCTION

Corporate Services Grants 78,361$ 2,772,098$ -$ 9,333$ -$ 91,000$ -$ 2,872,431$ 969,418$ 526,454$ 1,376,709$ -$ 9,879$ 2,882,460$ -$ (10,029)$ 68,332$

Motorcycle Safety Training Programs 388 - 76,980 - 17,975 - - 94,955 63,397 22,214 9,362 - - 94,973 - (18) 370

Endowed Teaching Chair Program 46,426 - - - - 666 22,339 23,005 - - 366 - 6,975 7,341 (1,432) 14,232 60,658

NSF TUES Grants - 8,339 - - - - - 8,339 6,065 1,376 898 - - 8,339 - - -

League for Innovation Global Skills Grants 2,882 - - - - - - - - - 73 - - 73 - (73) 2,809

MEDC CCSTEP Grant - - 1,056,021 - - - - 1,056,021 78,280 24,235 271,523 1,109,604 562 1,484,204 428,183 - -

Wickes Diesel Program Startup - - - - - 242,008 - 242,008 - - 29,109 9,660 - 38,769 - 203,239 203,239

Wickes Foundation Instructional Program Projects 554 - - - - - - - - - - - - - - - 554

Middle School Manufacturing Experience Program 35,029 - - - - - - - 4,500 1,494 14,207 - - 20,201 - (20,201) 14,828

Dow Foundation STEM Explorer Program 1,241,936 - - - - 505,000 18,186 523,186 86,827 41,120 121,775 501,906 458 752,086 - (228,900) 1,013,036

Gerstacker STEM Talent Project - - - - - 100,000 - 100,000 37,336 12,664 1,131 - 593 51,724 2,000 50,276 50,276

Perkins Voc Ed Grant - Instructional Equipment - 286,291 - - - - - 286,291 - - 148,512 137,779 - 286,291 - - -

TOTAL INSTRUCTION 1,405,576 3,066,728 1,133,001 9,333 17,975 938,674 40,525 5,206,236 1,245,823 629,557 1,973,665 1,758,949 18,467 5,626,461 428,751 8,526 1,414,102

PUBLIC SERVICE

Possible Dream Program 98,805 - - - - 30,790 62,038 92,828 4,154 344 56,567 - - 61,065 (438) 31,325 130,130

Humanties Learning Center 4,646 - - - - - - - - - 93 - - 93 - (93) 4,553

MCC Venture Service Learning Grant - - - 3,442 - - - 3,442 - - 3,442 - - 3,442 - - -

Michigan State Police Campus Sexual Assault Grant - - 15,117 - - - - 15,117 5,040 1,268 8,809 - - 15,117 - - -

Planetarium Be A Star 161,734 - - - - - 22,962 22,962 - - 8,725 - - 8,725 - 14,237 175,971

Public Broadcasting - Television 733,901 - - 753,965 185,020 473,511 7,274 1,419,770 171,491 71,924 959,930 143,302 12,342 1,358,989 (1,889) 58,892 792,793

Public Broadcasting - Radio 82,952 - - - - 173,440 3,578 177,018 51,470 17,596 82,738 45,240 1,452 198,496 - (21,478) 61,474

TOTAL PUBLIC SERVICE 1,082,038 - 15,117 757,407 185,020 677,741 95,852 1,731,137 232,155 91,132 1,120,304 188,542 13,794 1,645,927 (2,327) 82,883 1,164,921


Water Treatment Instruction Development 3,132 - - - - - - - - - 111 - - 111 - (111) 3,021

Kettering Foundation "The Democracy Commitment" Grant - - - 2,973 - - - 2,973 - - 2,973 - - 2,973 - - -

Perkins Voc Ed Grant - Professional & Curriculum Dev - 162,183 - - - - - 162,183 94,030 59,264 250 - 8,639 162,183 - - -

TOTAL INSTRUCTIONAL SUPPORT 3,132 162,183 - 2,973 - - - 165,156 94,030 59,264 3,334 - 8,639 165,267 - (111) 3,021

STUDENT SERVICES

Perkins Voc Ed Grant - Special Needs - 178,954 - - - - - 178,954 152,575 63,931 6,500 - 830 223,836 44,882 - -

MICUP/MTU Partnership Grant - - 6,381 - - - - 6,381 940 309 1,088 - 4,044 6,381 - - -

Michigan Nursing Board Scholarships Grant - - 22,145 - - - - 22,145 - - 22,145 - - 22,145 - - -

MEDC Career Liason Grant - - 22,514 - - - - 22,514 13,811 6,490 1,628 - 585 22,514 - - -

Pell Grants - 14,806,794 - - - - - 14,806,794 - - 14,806,794 - - 14,806,794 - - -

Supplemental Educational Opportunity Grant - 380,805 - - - - - 380,805 - - 380,805 - - 380,805 - - -

Federal Workstudy Grant - 223,116 - - - - - 223,116 276,414 - 15,162 - - 291,576 68,460 - -

Job Locator and Development Grant - 17,600 - - - - - 17,600 12,507 4,993 - - 100 17,600 - - -

Federal Workstudy Off-Campus - - - 3,324 - - - 3,324 - - - - - - (3,324) - -

SVSU Youth-in-Transition Life Skills Program - - - 1,670 - - - 1,670 1,250 420 - - - 1,670 - - -

Scholarships & Awards 798,284 - - - - 175,022 290,296 465,318 5,600 408 435,254 - - 441,262 24,000 48,056 846,340

TOTAL STUDENT SERVICES 798,284 15,607,269 51,040 4,994 - 175,022 290,296 16,128,621 463,097 76,551 15,669,376 - 5,559 16,214,583 134,018 48,056 846,340

OPERATION AND MAINTENANCE OF FACILITIES

Sustainability Grants 4,511 - - (2,283) - - - (2,283) 901 293 1,034 - - 2,228 - (4,511) -

Michigan Justice Training & Drug Enforcement Grants 1,532 - 1,222 - - - - 1,222 - - - - - - - 1,222 2,754

TOTAL OPERATION AND MAINTENANCE OF FACILITIES 6,043 - 1,222 (2,283) - - - (1,061) 901 293 1,034 - - 2,228 - (3,289) 2,754

TOTAL EXPENDABLE RESTRICTED FUND 3,295,073$ 18,836,180$ 1,200,380$ 772,424$ 202,995$ 1,791,437$ 426,673$ 23,230,089$ 2,036,006$ 856,797$ 18,767,713$ 1,947,491$ 46,459$ 23,654,466$ 560,442$ 136,065$ 3,431,138$

57

SUPPLEMENTAL SCHEDULE OF OTHER FINANCIAL INFORMATION

DETAILS OF ENDOWMENT FUND

DELTA COLLEGE

Year Ended June 30, 2016

NET EARNINGS & NET

ASSETS GIFTS & NET GAIN (LOSS) INVESTMENT ASSETS

JULY 1, 2015 TRANSFERS ON INVESTMENTS DISTRIBUTIONS FEES JUNE 30, 2016

ENDOWMENT FUNDS

Margaret Adams Scholarship 10,752$ -$ (177)$ (389)$ (86)$ 10,100$

Charleen T. Adcock Scholarship 54,191 - (896) (1,824) (431) 51,040

Anderson Family Delta Sculpture Walk 104,049 - (1,720) (4,035) (828) 97,466

Anderson Family Scholarship 36,425 3,500 (558) (1,125) (304) 37,938

Athletic Scholarship 359,836 - (5,947) (12,851) (2,864) 338,174

M. Seth Babcock Scholarship 16,248 - (269) (588) (129) 15,262

Mary Ann (McGregor) Badour Scholarship 38,926 - (643) (1,404) (310) 36,569

James & Joy Baker Scholarship 39,338 - (650) (1,386) (313) 36,989

Ormond Barstow/Ludo Frevel Award for Scholarly Achievement 30,253 - (500) (1,095) (241) 28,417

Baxandall Scholarship 189,339 15,000 (2,782) (5,513) (1,536) 194,508

Bay City Central Class of '41 Scholarship 67,555 6,000 (902) (2,419) (569) 69,665

Elzie & Muriel Beaver Scholarship 139,043 - (2,298) (5,025) (1,107) 130,613

Leonard & Esther Bergstein Scholarship 53,371 - (882) (1,134) (425) 50,930

Darrell R. Berry Scholarship 30,248 - (500) (1,085) (241) 28,422

Alfred J. Bladecki Scholarship 10,249 - (169) (371) (82) 9,627

Martin & Emma Block Scholarships 465,907 - (7,700) (16,814) (3,708) 437,685

Peter & Barbra Boyse Program (Restricted) 30,494 1,000 (503) (1,047) (243) 29,701

Peter D. Boyse President's Scholar Program 1,949,128 100 (32,209) (70,191) (15,513) 1,831,315

Louise K. Brentin Scholarship - 16,259 236 - (26) 16,469

Business Division Scholarship 147,928 135 (2,440) (5,342) (1,178) 139,103

Carlyon Farmhouse Maintenance 217,457 - (3,593) (7,862) (1,731) 204,271

Donald & Betty Carlyon Scholarship 146,722 6,711 (2,254) (4,433) (1,184) 145,562

Donald & Betty Carlyon Endowed Teaching Chair 205,849 - (3,402) (7,444) (1,638) 193,365

DeeMona Chatman Scholarship 23,457 - (387) (841) (187) 22,042

William R. Collings Award for Outstanding Service & Academic Achievement 37,719 - (624) (1,361) (300) 35,434

Lynn Conway Athletic Scholarship 26,023 360 (422) (895) (208) 24,858

Gilbert A. Currie Estate Scholarships 309,525 - (5,116) (11,207) (2,463) 290,739

Ilau & Phillip Dean Scholarship 39,146 3,000 (609) (1,349) (324) 39,864

Delta Deltah's Scholarship 5,839 - (97) (211) (46) 5,485

Delta College Employee-Sponsored Scholarship 114,867 - (1,898) (4,158) (914) 107,897

Delta College Planetarium Fund 656,086 6,107 (10,544) (22,962) (5,255) 623,432

Robert DeVinney Endowed Teaching Chair 140,670 75 (2,323) (5,074) (1,120) 132,228

Dixon Family Scholarship 67,536 - (1,117) (2,435) (537) 63,447

Herbert Doan Scholarship 9,052 - (150) (328) (72) 8,502

B. Joe & Margery (Knepp) Dodson Scholarship 30,082 - (498) (1,045) (239) 28,300

Frances Dolinski Scholarship 66,333 4,500 (1,069) (2,044) (537) 67,183

Henry Dolinski Scholarship 73,404 4,500 (1,186) (2,297) (593) 73,828

Dr. Louis W. Doll & Patricia Drury Scholarship 41,179 100 (679) (1,483) (328) 38,789

Tom Dostal Memorial Scholarship 26,368 350 (427) (183) (211) 25,897

Dow Chemical Company Michigan Operations Award for Physical Science 25,590 - (423) (923) (204) 24,040

The Herbert H. & Grace A. Dow Foundation Science Education 1,023,386 1,000,000 912 (13,196) (11,102) 2,000,000

Herbert H. & Barbara C. Dow Fund 43,129 - (713) (1,562) (343) 40,511

Jerry & Terry Drake Scholarship & Broadcasting Program Support 235,824 - (3,898) (8,511) (1,877) 221,538

Draper Family Scholarship 15,171 - (251) (549) (121) 14,250

Gene R. Duckworth Scholarship 30,588 100 (503) (1,100) (244) 28,841

Fred E. Dulmage Award for Engineering & Technology 22,481 - (371) (812) (179) 21,119

58


DETAILS OF ENDOWMENT FUND - Continued

DELTA COLLEGE


NET EARNINGS & NET



ENDOWMENT FUNDS - Continued

Eldon Enger & Fred Ross Scholarship 24,017$ 325$ (390)$ (845)$ (192)$ 22,915$

English Division Guest Lecturer 24,922 - (412) (888) (198) 23,424

James E. & Leanne Lutz Erickson Scholarship 22,676 1,006 (352) (793) (182) 22,355

Faculty Executive Committee Award 5,092 - (84) (184) (41) 4,783

Fettig Family Scholarship 21,918 - (363) (147) (174) 21,234

Arthur J. & Bette L. Fisher Scholarship 288,091 - (4,761) (10,378) (2,293) 270,659

Isabella M. Flynn Scholarship - 268,000 3,352 - (1,074) 270,278

Peter & Suzanne Frantz Award for Art 26,072 - (432) (939) (207) 24,494

Dr. John & Joanne Fuller Scholarship 30,495 - (504) (965) (243) 28,783

David R. Gamez Scholarship 75,664 - (1,251) (2,651) (602) 71,160

Gerace Construction Scholarship 136,350 - (2,254) (4,921) (1,085) 128,090

Gerity Broadcasting Company Scholarship 107,741 - (1,781) (3,901) (857) 101,202

Gerstacker Faculty Recognition Award 33,813 - (559) (1,219) (269) 31,766

Global Education Program 37,905 - (626) (1,372) (302) 35,605

Robert M. Gohlke Scholarship 32,247 200 (528) (1,168) (257) 30,494

Jean Goodnow Scholarship 27,979 1,000 (404) (1,006) (229) 27,340

Gougeon Brothers, Inc. Award for Applied Industrial/Technical 24,922 - (412) (888) (198) 23,424

Patricia L. & Robert W. Grant Jr. Scholarship & Humanities Program 264,579 - (4,372) (4,253) (2,106) 253,848

Great Lakes Bay Manufacturers' Association Scholarship 41,236 - (682) (1,474) (328) 38,752

Russell B. & Grace H. Green Scholarship 44,124 - (729) (1,593) (351) 41,451

Priscilla Bogi Guritza Memorial Scholarship 25,122 - (415) (910) (200) 23,597

Beki Gray Hadley Scholarship 44,130 - (729) (1,534) (351) 41,516

David & Jackie Hall Scholarship - 20,012 1,176 - (126) 21,062

Hammond Family Scholarship - 20,000 463 - (38) 20,425

Sarah Hansen Scholarship 12,128 - (200) (436) (97) 11,395

Joan B. Harry Scholarship 26,561 - (439) (982) (211) 24,929

Harry Hawkins Scholarship 18,048 - (298) (653) (144) 16,953

Robert & Joyce Hetzler Family Award for Outstanding Service & Leadership 25,288 - (419) (911) (201) 23,757

Hilde & Walter Heyman Scholarship 20,199 - (334) (729) (161) 18,975

Ada E. Hobbs Scholarship 12,771 - (211) (462) (102) 11,996

Don Holzhei Memorial Scholarship 25,636 200 (419) (902) (204) 24,311

Home Builders Association of Bay, Midland & Saginaw Counties 21,397 - (354) (773) (170) 20,100

Honors Student Scholarship 84,828 - (1,403) (3,071) (675) 79,679

James R. & Anita H. Jenkins Family Scholarship 125,227 - (2,069) (3,553) (997) 118,608

Phyllis E. Jones Memorial Scholarship 21,522 - (356) (777) (171) 20,218

S. Preston & Dr. Betty B. Jones International Scholarship 95,154 1,610 (1,537) (3,218) (760) 91,249

Dan E. Karn Memorial Scholarship 4,334 - (72) (157) (34) 4,071

Kaufmann Family Scholarship 20,350 - (336) (734) (162) 19,118

Robert F. Keicher Memorial Scholarship 24,037 75 (396) (862) (192) 22,662

Dale & Alma Keyser Scholarship 31,506 500 (514) (1,101) (253) 30,138

Walter J. & Sophia M. Kilar Scholarship 24,616 - (407) (891) (196) 23,122

International Order of King's Daughters & Sons Scholarship 28,339 - (468) (1,026) (226) 26,619

Oscar W. Kloha Scholarship 41,026 - (677) (1,485) (327) 38,537

Robert I. & Marjorie H. Knepp Scholarship 224,666 - (3,714) (8,027) (1,788) 211,137

W.R. & Edith Knepp Scholarship 231,867 - (3,833) (8,395) (1,845) 217,794

W.R. Knepp, Jr. Scholarship 175,493 - (2,901) (6,354) (1,397) 164,841

59



DELTA COLLEGE


NET EARNINGS & NET




Daniel P. Kubiak Scholarship 21,075$ -$ (348)$ (761)$ (168)$ 19,798$

Gary Laatsch Scholarship 40,217 200 (662) (1,437) (321) 37,997

Jack LaBreck Scholarship 6,316 - (105) (229) (50) 5,932

Ilene M. Lane Nursing Scholarship 59,488 - (984) (2,066) (473) 55,965

Dr. Thomas H. Lane & Janis E. Landry-Lane Scholarship 84,836 - (1,402) (2,960) (675) 79,799

Edward & Kathryn (Dunn) Langenburg Award for Education 26,189 200 (431) (941) (209) 24,808

Thomas & Rose Mary Laur Scholarship 87,214 - (1,441) (2,012) (694) 83,067

Leo & Evelyn Levy Scholarship 24,122 50 (399) (864) (192) 22,717

Denise Lovay-Gravlin Memorial Scholarship 22,437 195 (366) (798) (179) 21,289

Edward & Kathleen Lunt Scholarship 147,820 10,000 (2,211) (4,976) (1,196) 149,437

Karen MacArthur Endowed Teaching Chair 129,104 400 (2,110) (4,628) (1,030) 121,736

Thomas & Brenda Mahar Scholarship 26,270 - (434) (948) (209) 24,679

Margaret McAlear Scholarship 40,068 - (662) (1,446) (319) 37,641

James R. McIntyre Award for Health Sciences 25,801 - (427) (930) (205) 24,239

Aceie & Thelma Micho Scholarship 85,870 10,487 (1,292) (2,212) (694) 92,159

Rhea Miller Scholarship 47,571 - (786) (1,717) (379) 44,689

Richard & Gloria Miller Scholarship 30,745 1,394 (476) (989) (247) 30,427

Frances Goll Mills Award for Nursing 28,789 - (476) (1,024) (229) 27,060

Dorothy & Robert Monica Scholarship - 65,543 3,000 - (335) 68,208

Monitor Sugar Scholarship 20,350 - (336) (734) (162) 19,118

Paul Moore Social Science Division Award 22,255 270 (366) (786) (177) 21,196

Morley Foundation Award for Business Management 26,419 - (437) (957) (210) 24,815

Virginia Morrison Scholarship 39,835 - (659) (94) (317) 38,765

Wendell & Ethel Mullison Scholarship 25,660 - (424) (929) (204) 24,103

W. Brock Neely Scholarship 41,602 2,000 (662) (1,320) (339) 41,281

William H. "Buddy" Oates Scholarship 31,160 - (515) (1,126) (248) 29,271

Oscar P. & Louise H. Osthelder Scholarship 113,689 10,000 (1,754) (3,811) (945) 117,179

Jesse J. Oswald Scholarship 31,744 - (524) (1,126) (253) 29,841

Marguerite Scull Parker Scholarship 26,033 - (430) (939) (207) 24,457

Otto C. Pressprich Fund 107,741 - (1,781) (3,901) (857) 101,202

Cecelia Randall Scholarship 22,270 - (368) (806) (177) 20,919

Alfonso Rasch-Isla Scholarship 24,121 - (398) (902) (192) 22,629

Newell Remington Scholarship & TLC Support 42,762 1,275 (689) (1,488) (345) 41,515

Skip Renker Award for Creative Writing 20,684 - (341) (742) (165) 19,436

Renee Rookard Scholarship 74,693 - (1,235) (2,700) (594) 70,164

Harold & Norine Rupp Scholarship 19,990 - (331) (721) (159) 18,779

Saginaw County Child Development Centers Program Scholarship 17,055 - (281) (616) (136) 16,022

Cliff & Grace Saladine Scholarship 26,908 - (445) (974) (214) 25,275

Dawn Schmidt Award for Mathematics 26,751 75 (441) (985) (213) 25,187

Peggy A. Scott Scholarship 35,917 2,000 (569) (1,112) (294) 35,942

Ralph I. & Archie M. Selby Family Scholarship 21,476 - (355) (758) (171) 20,192

Gene F. Shrum & Dee Dee (Shrum) Wacksman Scholarship 19,400 - (321) (694) (154) 18,231

Van Dewitt & Ruth Simmons Scholarship 168,441 - (2,784) (6,099) (1,341) 158,217

John M. Smith & William Wolgast Family Softball Scholarship 21,560 - (356) (780) (172) 20,252

Paul Sowatsky Scholarship/Award 29,009 - (479) (1,050) (231) 27,249

James Stark Scholarship 3,673 - (61) (133) (29) 3,450

60



DELTA COLLEGE


NET EARNINGS & NET




Eileen & Hugh Starks Scholarship 32,356$ -$ (535)$ (1,167)$ (258)$ 30,396$

James & Elizabeth Stoddard Scholarship 20,468 20,000 (78) (149) (241) 40,000

Sturm Family Broadcast Programming Fund 176,351 - (2,914) (6,385) (1,404) 165,648

SunGard Higher Education Endowed Teaching Chair 143,680 - (2,375) (5,193) (1,144) 134,968

SunGard Higher Education Possible Dream Program 86,409 - (1,427) (2,458) (688) 81,836

Julius & Irene Sutto Award for Life Sciences 25,221 - (416) (908) (201) 23,696

Paul & Margaret Thompson Scholarship 33,897 - (560) (1,223) (270) 31,844

Willie E. Thompson Scholarship 31,100 110 (514) (1,050) (248) 29,398

Margaret Timm Award for English 26,752 100 (440) (965) (213) 25,234

Wesley Timm Award for Social Science 31,812 100 (524) (1,146) (253) 29,989

Jim & Janis Van Tiflin Award 24,501 - (405) (872) (195) 23,029

Ken & "Miss Mona" White Scholarship 69,844 7,500 (1,061) (1,801) (586) 73,896

Lola Bishop Whitney Award for Foreign Language 114,481 - (1,892) (4,145) (911) 107,533

David & Carol Williams Scholarship 20,134 9,000 (220) - (196) 28,718

Alice & Jack Wirt Scholarship 210,757 - (3,484) (7,630) (1,677) 197,966

Teresa Plackowski-Witucki Scholarship 21,735 - (359) (771) (173) 20,432

Wolverine Bank Scholarship 37,899 - (626) (1,370) (302) 35,601

Robert R. Zimmerman "Dr. Bob" Scholarship 74,371 13,876 (641) (2,082) (655) 84,869

Dr. Robert R. "Dr. Bob" Zimmerman Teaching Chair 56,190 20,729 (929) - (447) 75,543

Alton, Sr., Alma & Alton, Jr. Zucker Scholarship 80,544 - (1,332) (2,916) (641) 75,655

Melvin & Hilda Zuehlke Scholarship and Special Needs Assistance Fund 140,263 - (2,319) (5,072) (1,116) 131,756

TOTAL ENDOWMENT FUNDS 13,494,746 1,556,229 (193,962) (439,955) (112,436) 14,304,622

FUNDS FUNCTIONING AS ENDOWMENTS

Etcyl H. & Ruth Blair CGA 18,051 - 814 - (175) 18,690

Peter & Barbra Boyse Program 257,568 - (4,257) (9,274) (2,050) 241,987

Coca-Cola Scholarship 65,676 - (1,085) (2,370) (523) 61,698

Gilbert A. Currie Fund 378,426 - (6,254) (13,732) (3,012) 355,428

Delta College Public Radio Fund 72,280 - (1,195) (3,497) (575) 67,013

Delta College Foundation Fund 905,280 142,818 (26,213) (35,351) (7,205) 979,329

Delta College Foundation Student Scholarships 246,913 15,240 (3,832) (7,237) (2,000) 249,084

Delta College Endowed Teaching Chair Challenge Grant Fund 134,870 (138,357) 9,021 (4,461) (1,073) -

Delta College Public TV Fund 658,598 12,632 (10,885) (10,504) (5,242) 644,599

Alden B. Dow Fund 51,347 - (849) (1,859) (409) 48,230

Laughner Award 18,054 - (298) (652) (144) 16,960

Possible Dream Program 1,909,324 84,500 (29,601) (59,580) (15,357) 1,889,286

Sailing School Program 29,250 - (483) (1,057) (233) 27,477

UNUM Projects 352,887 - (5,832) (12,777) (2,809) 331,469

Macauley & Helen Whiting Fund 892,523 - (14,752) (32,213) (7,103) 838,455

TOTAL FUNDS FUNCTIONING AS ENDOWMENTS 5,991,047 116,833 (95,701) (194,564) (47,910) 5,769,705

TOTAL 19,485,793$ 1,673,062$ (289,663)$ (634,519)$ (160,346)$ 20,074,327$

61

Documents

Audited Financial Statements and Other Financial ...Jun 30, 2016 · The discussion and analysis of the financial statements of Delta College (the College) provides an overview of