Board of Trustees - NMC · All board meetings are open to the public. May 24, 2010, Oleson Center . June 28, 2010, Great Lakes Campus Room 112 . July 26, 2010, Great Lakes Campus

Posted May 18, 2010, 9:00 a.m.

1701 East Front Street Traverse City, MI 49686

(231) 995-1010 [email protected]

Board of Trustees www.nmc.edu/trustees

Study Session Agenda

Wednesday, May 19, 2010 9:30 a.m. at NMC Hagerty Center, Room A

No action will be taken at this meeting.

I. GENERAL BUSINESS

A. Call to Order B. Roll Call C. Review and Approval of Agenda to include additions, deletions, or rearrangements

II. PUBLIC INPUT

III. DISCUSSION ITEMS D. FY11 Budget

IV. ADJOURNMENT

Upcoming Board Meeting Dates: Meetings are held at 6:30 p.m., with a dinner for trustees at 5:30 p.m., unless otherwise noted. All board meetings are open to the public. May 24, 2010, Oleson Center June 28, 2010, Great Lakes Campus Room 112 July 26, 2010, Great Lakes Campus Room 112 August 23, 2010, Great Lakes Campus Room 112 September 27, 2010, Oleson Center October 25, 2010, Oleson Center November 22, 2010, Oleson Center December 20, 2010, Oleson Center (3rd Monday due to holiday)

Northwestern Michigan College provides lifelong learning opportunities to our communities.

Fiscal Year 2011

3/17/2010

1

Contained in this binder are the assumptions underlying NMC’s

FY11 projected budget. Also included are the documents which

support the basis for those assumptions. These documents not only

provide data, but they give an historical perspective needed to

assess the validity/reliability of the assumptions.

2

NMC Budgeting Process 2010/2011 Fiscal Year Planning

The Planning and Budget Council (PBC) was formed during the 1999-2000 academic year by merging the former Planning Council

and the former Budget Council. Through this merger, NMC continues to more closely align budget resources with operating and

strategic plans. The current chair of the PBC is Stephen Siciliano. The Council meets weekly during the academic year and monthly

during the summer months. Among responsibilities for the Council are:

“…assisting and advising, to the best of our abilities, the Vice President of Finance and Administration

in all budgetary matters, the Vice President for Educational Services in matters related to curriculum and

student services and the Vice Presidents of Institutional Advancement and Lifelong Learning and

Professional Development in matters under their charge.”

Recommendations are made to the President after consultation with the appropriate executive staff.

The primary focus of the Council is on the general operating components of the general fund. Information regarding restricted and

auxiliary funds was reviewed but not considered in the recommendation purview of the Council. A subcommittee of the Council

(COAT: Capital Outlay Allocation Team) was established to recommend the allocation of the annual capital budget.

Through the Planning and Budget Council, shared governance continues to progress and grow at NMC. Openness in budgeting is a

primary and important goal.

Members of this year’s council were:

Marguerite Cotto SGA Representative

Doug Domine Kathleen Guy

Ernest East Keith Overbaugh

Cheri Garvin Pam Palermo

Scott Goethals Jim Press

Cathy Jones Gary Schettek

Julie Hansen Laura Schmidt

Cathy McCall Stephen Siciliano

3

Ground Rules for Planning/Budget Council

1. We agree our purpose is to advise the President of Northwestern Michigan College in all matters related to planning for the

viability of the college as an institution dedicated to serving the learning needs of our communities now and into the future.

2. We will practice the integrity we expect of all members of the college family. These practices include:

Respect for each other and the opinions we express

The need for confidentiality in all matters related to personnel and their right to privacy

The rights of our constituents to be informed, understand and input on all matters that affect the institution’s ability to

fulfill its mission

Should any member of the Council be unable to fulfill their obligation of responsible participation, they will request to

be excused from the Council and their term of membership completed by another member of their constituency,

appointed by the President.

3. Our responsibilities are limited to assisting and advising, to the best of our abilities, the Vice President of Finance and

Administration in all budgetary matters, the Vice President for Educational Services in matters related to curriculum and student

services, and the Vice President of Institutional Advance and the Vice President for Lifelong Learning and Professional Development

in matters under their charge.

4. Deliberation of any topic will proceed in a forthright manner. Input will be limited to related information and questions concerning

the current topic. Expert help will be requested whenever our membership cannot provide the necessary information.

We will take the time to talk before looking for an answer to the problem

Everyone will contribute to the discussion

Contributions will be valued

We will accept responsibility for making a decision

Our decisions will be carefully considered

Everyone will have an equal voice

We will handle conflict by using it to uncover new ideas and information

We will work to understand and make use of the diverse experience of our team members

If a member does not understand, it is their responsibility to ask questions.

4

NMC RESOURCE GUIDELINES: 2010-2011

1 – Strategic and Financial Planning

The budget is a financial plan for the priorities of the institution. The budget proposed to the Board of Trustees for adoption should reflect the

Strategic Plan and the area operational plans, as approved through the College’s shared governance process.

2 – Tuition and Fees

Tuition and fees should be considered within the context of the most reasonable estimates of State, local, and private support, and projected expenses

to support the College’s plans, and projected enrollment and unique program characteristics. Tuition should balance the goal of affordable access to

learning opportunities with the goal of high quality service levels for NMC offerings. Regular tuition increases should be considered as a means to

sustain this portion of the revenue mix, while minimizing the year-to-year increases. Fees should be reviewed regularly and increases considered

when the cost elements to which they contribute increase. Our in-district students will pay less than out-of district students because the College

receives local tax support from Grand Traverse County residents. In some cases, there may be rates in excess of the general tuition and fees.

3 – Salaries and Benefits Equity

Northwestern Michigan College is committed to attracting and retaining a quality workforce. Equity in salary and benefits is part of the NMC culture

and should be expressed within a total compensation package. As part of that package, salary and benefits for faculty, administrative/professional,

technical/paraprofessional and support staff should be equitable when compared to the appropriate peer group of community colleges and/or service

area employers, in accordance with NMC’s compensation policies.

4 – Professional Development

Maintaining and improving the knowledge and skills of the faculty and staff is an investment in the future. Funds should be appropriated annually in

the budget for that purpose. Approximately 2.25% of general fund salaries and wages should be appropriated annually in the budget for that purpose.

5 – Faculty and Staff Composition

The college should balance the full-time and part-time composition of faculty and staff to assure continuity and commitment while maintaining

flexibility to implement strategic directions and complete its strategic initiatives in a timely and effective manner.

6 – Technology, Capital Equipment, Maintenance and Renovation

Providing a quality education requires investment in classroom equipment, facilities, and infrastructure. The annual budgeted allocations should

reflect the approved Area and Maintenance/Facilities Plan. The annual budget should provide for regular maintenance, replacement/upgrade, growth

and contingency funding.

7 – Debt Service

Debt Service obligations must be included in the budgeting process at 100% of their current costs.

5

8 – Reserves The budget should include an appropriate allocation for reserves. The following reserves should be monitored annually. The Board will approve

transfers to the appropriate reserve fund balances.

A – Working Capital Reserves

A fiscally sound organization should have adequate reserves for emergencies and unanticipated cash flow needs. Northwestern Michigan

College funds should maintain a Working Capital Reserve of 10 - 15% of annual budgeted expenditures not included in reserves B through F.

Working Capital Reserves include a reserve for dramatic fluctuations in energy costs that are significantly beyond prudent predictions.

B – Medical Insurance Transition Reserve

The medical and dental coverage for College employees is self-funded. The Insurance Reserve was established to provide employee benefits

during a transition time if fully insured medical and dental insurance were adopted. Northwestern Michigan College should maintain a

reserve equal to 15% of annual claims and administration costs for medical/dental coverage.

C – Reserve For Unexpected Medical and Non-Medical Costs

This is a reserve for dramatic fluctuations in medical and non-medical costs (e.g. term life insurance, long term disability, and worker’s

compensation) that are significantly beyond prudent predictions. The College should maintain funds equal to the difference between the

calculated maximum aggregate claims and expected claims plus three (3) months of non-medical costs.

D – Fund for Transformation

The Fund for Transformation was established for the purpose of responding to emerging opportunities and changes. A fund balance equal to

approximately 2% of General Fund budgeted expenses should be maintained.

E – Physical Plant Major Maintenance

A minimum of 2% of the appraised replacement value-new of the College’s physical assets, including buildings, building equipment, and

built-in fixtures, should be invested or maintained in a fund for major maintenance, renovation, or replacement of those assets. This should

be calculated as the total of major plant maintenance expenditures, operating budget maintenance expenditures on physical plant, and the

Plant Fund balance.

F – Reserve For Unexpected Fluctuation In Energy Costs

This is a reserve for dramatic fluctuations in energy costs that are significantly beyond prudent predictions. The reserve is equal to 10% of the

College’s annual budget for the total energy bill.

G – Reserve For Any Future Reduction in State Appropriation Revenue

This is a reserve for any future reduction in State appropriation revenue. The amount to maintain is 25% of annual State Appropriation.

6

REVENUE CONSIDERATIONS

7

Revenue Considerations FY11

Contained in this section are:

Tuition & Fees Revenues

1. A 7-Year Contact Hours History: Since the single greatest revenue line for NMC is tuition, it is important to understand the contact hours

underlying the tuition revenue indicated in the 8-Year Revenue History. The analysis of contact hours compares the change in actual hours from

the same semester the previous year, the change in budgeted hours from the same semester the previous year, and a comparison of the variance

between hours budgeted versus actual hours.

2. A 7-Year Tuition & Revenue History w/graphs: A year-by-year comparison of in-district, out-of-district, and out-of-state tuition is provided.

This history also provides an analysis of revenue type as a percentage of total revenue. The FY11 tuition has been based on no change to in

district rates and minimal increases to out of district and out of state rates.

3. Tuition Rates for Michigan Universities

4. A 6-Year History of Michigan Community Colleges In District Tuition Rates: Included in the history is the percentage of change from year-

to-year for each community college.

5. A 6-Year History of Michigan Community Colleges Out of District Tuition Rates: Included in the history is the percentage of change from

year-to-year for each community college.

6. A 6-Year History of Michigan Community Colleges Out of State Tuition Rates: Included in the history is the percentage of change from

year-to-year for each community college.

Property Tax Revenues

7. A 7-year Analysis of Property Tax Revenue: Included in the analysis is a comparison of budgeted revenues to actual revenues. The “Total

Taxes & Penalties” line indicates the percentage of variance between total budgeted revenue and actual revenues. Note that the variance between

these amounts was less than 1% for the audited years 2005-2009.

8. A 13-Year History of Property Tax Millage Calculations: Actual millage rates for both the amount authorized and the amount elected are

presented. These rates do not include the bond debt millage. The “Total Millage” column adds the authorized and the elected amounts. The

total represents the actual millage rate for the years 1998-2009 and the estimated millage rate, based on the 13 year trend, for FY11.

8

Northwestern Michigan CollegeContact Hours History w/AnalysisPrepared: February 2010 Key:

FL= FallBudget and Actual contact & credit hours SP=Spring

SU=Summer

Actual Hours % of Change Actual to Actual Budgeted Hours % of Change Budget to Budget Comparison of Hours2004-05

fall 04 48,594.00 fall 04 48,121.25 -472.75 Actual over Budgetspring 05 45,624.00 spring 05 45,220.68 -403.32 Actual over Budgetsummer 05 7,511.00 summer 05 7,519.44 8.44 Budget over Actual

2005-06 fall 05 48,803.00 0.4% % Change FL05 over FL04 fall 05 50,051.82 4.0% % Change FL05 over FL04 1,248.82 Budget over Actualspring 06 46,065.00 1.0% % Change SP06 over SP05 spring 06 46,992.72 3.9% % Change SP06 over SP05 927.72 Budget over Actualsummer 06 6,965.00 -7.3% % Change SU06 over SU05 summer 06 7,736.33 2.9% % Change SU06 over SU05 771.33 Budget over Actual

2006-07fall 06 49,143.00 0.7% % Change FL06 over FL05 fall 06 48,583.70 -2.9% % Change FL06 over FL05 -559.30 Actual over Budgetspring 07 46,421.00 0.8% % Change SP07 over SP06 spring 07 46,065.20 -2.0% % Change SP07 over SP06 -355.80 Actual over Budgetsummer 07 7,245.00 4.0% % Change SU07 over SU06 summer 07 7,201.08 -6.9% % Change SU07 over SU06 -43.92 Actual over Budget

2007-08 fall 07 50,784.00 3.3% % Change FL07 over FL06 fall 07 49,000.00 0.9% % Change FL07 over FL06 -1,784.00 Actual over Budgetspring 08 46,778.00 0.8% % Change SP08 over SP07 spring 08 46,525.00 1.0% % Change SP08 over SP07 -253.00 Actual over Budgetsummer 08 6,938.00 -4.2% % Change SU08 over SU07 summer 08 7,087.00 -1.6% % Change SU08 over SU07 149.00 Budget over Actual

2008-09fall 08 50,645.00 -0.3% % Change FL08 over FL07 fall 08 50,233.00 2.5% % Change FL08 over FL07 -412.00 Actual over Budgetspring 09 49,203.00 5.2% % Change SP09 over SP08 spring 09 47,288.00 1.6% % Change SP09 over SP08 -1,915.00 Actual over Budgetsummer 09 8,441.50 21.7% % Change SU09 over SU08 summer 09 7,355.00 3.8% % Change SU09 over SU08 0.00 FY09 Budget Projection

2009-10 Contact fall 09 56,830.00 12.2% % Change FL09 over FL08 fall 09 52,592.00 4.7% % Change FL09 over FL08 -4,238.00 Actual over Budgetspring 10 56,189.00 14.2% % Change SP10 over SP09 spring 10 50,497.00 6.8% % Change SP10 over SP09 -5,692.00 Actual over Budgetsummer 10 % Change SU09 over SU08 summer 10 7,241.50 -1.5% % Change SU10 over SU09 0.00 FY09 Budget Projection

9

Tuition History

FY07 FY08 % Incr. FY09 % Incr. FY10 % Incr. FY11 % Incr. FY12 % Incr. FY13 % Incr.ACTUAL ACTUAL ACTUAL BUDGETED PROJECTED PROJECTED PROJECTED

In district $71.15 $73.40 3.16% $77.40 5.4% $77.40 0.0% $79.70 3.0% $82.90 4.0% $86.20 4.0%

Out of district $127.10 $132.00 3.86% $142.00 7.6% $146.00 2.8% $151.80 4.0% $157.90 4.0% $164.20 4.0%

Out of State $158.60 $164.00 3.40% $180.40 10.0% $187.00 3.7% $194.50 4.0% $202.30 4.0% $210.40 4.0%

Revenue Actual Actual Actual Budgeted Projected Projected Projected

Tuition and Fees 14,474,376 15,175,809 4.8% 16,739,957 10.3% 18,204,248 8.7% 21,855,033 20.1% 22,619,130 3.5% 22,321,443 -1.3%

Property Taxes 8,345,863 8,860,932 6.2% 9,231,564 4.2% 9,450,988 2.4% 9,361,057 -1.0% 9,270,079 -1.0% 9,221,621 -0.5%

Total Local Sources 22,820,239 24,036,741 5.3% 25,971,521 8.0% 27,655,236 6.5% $31,216,090 12.9% $31,889,209 2.2% $31,543,064 -1.1%

State Sources 8,026,395 8,531,900 6.3% 8,757,200 2.6% 8,682,200 -0.9% 8,410,200 -3.1% 6,728,160 -20.0% 6,728,160 0.0%

Federal Sources 332,813 360,310 8.3% 336,000 -6.7% 418,000 24.4% 475,000 13.6% 575,000 21.1% 575,000 0.0%

Private Sources 246,958 250,300 1.4% 264,581 5.7% 253,581 -4.2% 242,000 -4.6% 242,000 0.0% 242,000 0.0%

Investment Income 616,601 437,763 -29.0% 475,000 8.5% 358,000 -24.6% 358,000 0.0% 358,000 0.0% 358,000 0.0%

Other Sources 452,539 397,786 -12.1% 415,359 4.4% 316,219 -23.9% 300,250 -5.0% 279,859 -6.8% 279,859 0.0%

Total Revenues 32,495,545 34,014,800 4.7% 36,219,661 6.5% 37,683,236 4.0% $41,001,540 9.2% $40,072,228 -2.5% $39,726,083 -0.8%

Percent of Revenue

Tuition and Fees 44.5% 44.6% 46.2% 48.3% 53.3% 56.4% 56.2%

Property Taxes 25.7% 26.1% 25.5% 25.1% 22.8% 23.1% 23.2%

Total Local Sources 70.2% 70.7% 71.7% 73.4% 76.1% 79.6% 79.4%

State Sources 24.7% 25.1% 24.2% 23.0% 20.5% 16.8% 16.9%

Federal Sources 1.0% 1.1% 0.9% 1.1% 1.2% 1.4% 1.4%

Private Sources 0.8% 0.7% 0.7% 0.7% 0.6% 0.6% 0.6%

Investment Income 1.9% 1.3% 1.3% 1.0% 0.9% 0.9% 0.9%

Other Sources 1.4% 1.2% 1.1% 0.8% 0.7% 0.7% 0.7%

Total Revenues 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

3/15/2010 Note: The delayed payment of $768,800 was added to FY07 State Aid and deducted from FY08 State Aid to reflect the payment in the year to which it applied.

`

NMC Tuition & Other Revenue HistoryPercentage of Total Revenue

S:\Administrative Services\Board of Trustees\FY2010\05.19.10 Study Session\05.17.10 BOT Working Budget Binder\4Tuition and other Revenue history.xlsx10

Other4%

Tuition & Fees36%

Property Taxes25%

2002-2003

State Aid35%

Other3%

Property Taxes23%

2010 - 2011

State Aid21%

Other4%

Tuition & Fees56%

Property Taxes23%

2012-2013

State Aid17%

2012-2013

State Aid17%

General Fund - Sources of Revenue

Tuition & Fees 53%

11

MICHIGAN UNIVERSITIES

Current Tuition Rates

IN-STATE

FY09

IN-STATE

FY10

%

CHANGE

OUT-OF-STATE

FY09

OUT-OF-STATE

FY10

%

CHANGE

CENTRAL MICHIGAN UNIVERSITY 304.00 339.00 10% 707.00 789.00 10%

EASTERN MICHIGAN UNIVERSITY 213.00 238.00 11% 627.50 701.00 10%

FERRIS STATE UNIVERSITY 282.00 316.00 11% 530.00 553.00 4%

GRAND VALLEY STATE UNIVERSITY 315.00 375.00 16% 532.00 551.00 3%

LAKE SUPERIOR STATE UNIVERSITY 299.00 341.00 12% 598.00 682.00 12%

MICHIGAN STATE UNIVERSITY 280.00 342.00 18% 742.00 896.00 17%

MICHIGAN TECH UNIVERSITY 327.60 350.00 6% 719.60 759.00 5%

NORTHERN MI UNIVERSITY 256.00 285.00 10% 420.00 467.00 10%

OAKLAND UNIVERSITY 252.50 293.00 14% 587.50 683.00 14%

SAGINAW VALLEY STATE 194.40 215.00 10% 461.90 525.00 12%

UNIVERSITY OF MICHIGAN 405.00 449.00 10% 1288.00 1419.00 9%

WAYNE STATE UNIVERSITY 226.10 252.00 10% 517.80 578.00 10%

WESTERN MICHIGAN COLLEGE 219.00 265.00 17% 537.22 650.00 17%

AVERAGE 274.89 312.31 12% 636.04 711.77 11%

source of data: individual university web pages

1-Feb-10

S:\Administrative Services\Budget Models\FY11 02.01.10 Working binder\Section 3 Revenue Considerations\5Tuition University rates Jan.xlsxcjo

12

In District Tuition History

All Community Colleges

For Years 2003-2009

(Sorted lowest to highest on 2009 tuition)

Tuition % of % of % of % of % of % of

College Basis 2003 2004 Change 2005 Change 2006 Change 2007 Change 2008 Change 2009 Change

Wayne County Community College Credit 54.00 54.00 0.00% 55.50 2.78% 55.50 0.00% 56.80 2.34% 57.65 1.50% 67.65 17.35%

Henry Ford Community College Credit 57.00 57.00 0.00% 57.00 0.00% 57.00 0.00% 60.00 5.26% 65.00 8.33% 70.00 7.69%

Bay De Noc Community College Contact 59.75 61.10 2.26% 64.50 5.56% 71.25 10.47% 77.00 8.07% 77.00 0.00% 82.50 7.14%

Southwestern Michigan College Credit 60.25 61.90 2.74% 67.75 9.45% 74.25 9.59% 78.25 5.39% 82.50 5.43% 88.25 6.97%

Glen Oaks Community College Contact 59.00 60.00 1.69% 64.00 6.67% 68.00 6.25% 70.00 2.94% 72.00 2.86% 77.00 6.94%

Gogebic Community College Credit 64.00 66.00 3.13% 74.00 12.12% 77.00 4.05% 79.00 2.60% 81.00 2.53% 86.00 6.17%

Schoolcraft College Credit 61.00 62.50 2.46% 65.00 4.00% 68.00 4.62% 70.00 2.94% 73.00 4.29% 77.00 5.48%

Muskegon Community College Credit 56.00 57.00 1.79% 60.00 5.26% 63.00 5.00% 67.00 6.35% 69.00 2.99% 72.25 4.71%

Jackson Community College Contact 69.00 70.50 2.17% 74.00 4.96% 78.00 5.41% 82.00 5.13% 86.50 5.49% 90.50 4.62%

Mid-Michigan Community College Contact 59.50 60.86 2.29% 62.30 2.37% 68.50 9.95% 72.60 5.99% 76.50 5.37% 80.00 4.58%

Kalamazoo Valley Community College Credit 51.00 52.15 2.25% 55.00 5.47% 61.00 10.91% 66.00 8.20% 68.00 3.03% 71.00 4.41%

Washtenaw Community College Credit 60.00 60.00 0.00% 62.00 3.33% 64.00 3.23% 67.00 4.69% 70.00 4.48% 73.00 4.29%

Montcalm Community College Contact 60.00 61.00 1.67% 64.00 4.92% 64.00 0.00% 70.00 9.38% 74.00 5.71% 77.00 4.05%

North Central Michigan College Credit 58.00 59.30 2.24% 64.00 7.93% 66.25 3.52% 67.70 2.19% 69.50 2.66% 72.00 3.60%

Grand Rapids Community College Contact 65.00 66.00 1.54% 69.50 5.30% 73.50 5.76% 79.50 8.16% 82.50 3.77% 84.50 2.42%

Oakland Community College Credit 52.50 53.70 2.29% 55.15 2.70% 56.80 2.99% 58.50 2.99% 60.10 2.74% 60.10 0.00%

Monroe County Community College Credit 53.00 54.00 1.89% 58.00 7.41% 60.00 3.45% 64.00 6.67% 67.00 4.69% 67.00 0.00%

Kellogg Community College Credit 57.75 59.00 2.16% 62.00 5.08% 65.00 4.84% 68.50 5.38% 70.50 2.92% 70.50 0.00%

Macomb Community College Credit 60.00 61.00 1.67% 65.00 6.56% 68.00 4.62% 70.00 2.94% 72.00 2.86% 72.00 0.00%

West Shore Community College Credit 61.00 62.40 2.30% 65.00 4.17% 67.00 3.08% 69.00 2.99% 72.00 4.35% 72.00 0.00%

Lake Michigan College Credit 60.00 66.55 10.92% 72.50 8.94% 72.50 0.00% 72.50 0.00% 72.50 0.00% 72.50 0.00%

Lansing Community College Credit 54.00 55.00 1.85% 65.00 18.18% 67.00 3.08% 73.00 8.96% 73.00 0.00% 73.00 0.00%

Northwestern Michigan College Contact 63.20 64.60 2.22% 68.80 6.50% 71.15 3.42% 73.40 3.16% 77.40 5.45% 77.40 0.00%

Kirtland Community College Credit 61.35 62.75 2.28% 66.85 6.53% 70.20 5.01% 73.75 5.06% 77.50 5.08% 77.50 0.00%

Delta College Credit 67.50 69.00 2.22% 72.50 5.07% 76.00 4.83% 78.00 2.63% 79.00 1.28% 79.00 0.00%

Alpena Community College Contact 66.00 67.75 2.65% 72.00 6.27% 76.00 5.56% 80.00 5.26% 84.00 5.00% 84.00 0.00%

Mott Community College Contact 69.00 70.55 2.25% 75.80 7.44% 79.50 4.88% 82.05 3.21% 84.70 3.23% 84.70 0.00%

St. Clair County Community College Contact 64.00 65.45 2.27% 68.50 4.66% 75.25 9.85% 81.50 8.31% 86.50 6.13% 86.50 0.00%

source of data: http://www.michigancc.net/data/tuition/summary.aspx

4-Feb-10

13

Out of District Tuition History


For Years 2003-2009








West Shore Community College Credit 72.00 78.85 9.51% 86.00 9.07% 102.00 18.60% 108.00 5.88% 102.00 -5.56% 126.00 23.53%



Muskegon Community College Credit 100.00 110.00 10.00% 102.00 -7.27% 102.00 0.00% 107.00 4.90% 107.00 0.00% 119.00 11.21%
















Lake Michigan College Credit 86.00 88.00 2.33% 102.00 15.91% 102.00 0.00% 108.00 5.88% 108.00 0.00% 108.00 0.00%

Delta College Credit 110.10 112.60 2.27% 119.92 6.50% 109.00 -9.11% 115.00 5.50% 119.00 3.48% 119.00 0.00%


North Central Michigan College Credit 104.00 112.00 7.69% 112.00 0.00% 112.00 0.00% 115.00 2.68% 120.00 4.35% 118.50 -1.25%

Schoolcraft College Credit 99.00 104.45 5.51% 107.00 2.44% 112.50 5.14% 119.25 6.00% 130.00 9.01% 113.00 -13.08%


4-Feb-10

14

Out of State Tuition History


For Years 2003-2009











Schoolcraft College Credit 134.00 137.00 2.24% 143.00 4.38% 149.00 4.20% 154.00 3.36% 160.00 3.90% 169.00 5.63%


West Shore Community College Credit 125.00 135.00 8.00% 141.00 4.44% 146.00 3.55% 151.00 3.42% 160.00 5.96% 168.00 5.00%

Muskegon Community College Credit 100.00 102.00 2.00% 115.00 12.75% 132.00 14.78% 145.00 9.85% 154.00 6.21% 161.50 4.87%



Lake Michigan College Credit 93.00 105.00 12.90% 114.50 9.05% 136.00 18.78% 142.00 4.41% 136.00 -4.23% 142.00 4.41%

North Central Michigan College Credit 112.00 114.60 2.32% 126.05 9.99% 133.00 5.51% 139.65 5.00% 147.30 5.48% 153.00 3.87%










Delta College Credit 133.50 141.30 5.84% 148.50 5.10% 156.00 5.05% 165.00 5.77% 172.00 4.24% 172.00 0.00%





4-Feb-10

15

Property Tax Analysis

Year Taxable Value

% Change

in TV Millage

% Change in

Millage Budget Actual Difference

% Change in

Budget Amt

Taxes2005 $3,582,498,474 7.18% 2.21 -0.89% 7,335,233 7,328,760 -6,473 -0.09%2006 $3,899,168,734 8.84% 2.18 -1.31% 7,734,322 7,732,958 -1,364 -0.02%2007 $4,186,312,845 7.36% 2.17 -0.64% 8,362,268 8,292,868 -69,400 -0.84%2008 $4,324,888,638 3.31% 2.17 0.00% 8,864,004 8,841,503 -22,501 -0.25%

FY09 Budget 9,218,564 4.00%32,295,827 32,196,089 -99,738

FY10-Proj. $4,389,761,968 1.50% 2.17 0.00% 9,525,783 3.33%FY11-Proj. $4,347,003,397 1.50% 2.15 -0.92% 9,346,057 -1.89%FY12-Proj. $4,324,803,465 2.00% 2.14 -0.47% 9,255,079 -0.97%FY13-Proj. $4,302,159,534 2.00% 2.14 0.00% 9,206,621 -0.52%

Penalties2005 13,500 7,157 -6,343 -88.64%2006 14,243 12,371 -1,871 -15.13%2007 0 15,995 15,995 100.00%

2008 13,000 19,429 6,429 33.09%

FY09 Budget 13,000 18,073 5,073FY10-Proj. 13,000FY11-Proj. 15,000FY12-Proj. 15,000FY13-Proj. 15,000

66,743 73,025 7,780

TOTAL Taxes & Penalties2005 7,348,733 7,335,917 -12,816 -0.17%2006 7,748,565 7,745,329 -3,235 -0.04%2007 8,362,268 8,308,863 -53,405 -0.64%2008 8,877,004 8,860,932 -16,072 -0.18%2009 9,231,5642010 9,538,783

51,106,917 23,390,109 -69,457

TIFs 107,000,000 16

Property Tax Millage CalculationsFor FY11 taken from L-4029(Excludes Bond Debt Millage: Currently .70)

CurrentCur Yr Year Mill Millage

Mill Auth Millage Reduction Rate Perm Millage Max allowby Elec Rate Perm Factor fm Reduced Reduction Millage

or Charter Reduced L-4028 by MCL Fraction Levy Total Millage

2010 Est Law Auth 1.0000 0.8035 0.9889 0.7946 1.0000 0.7946 2.1611 Total 2010 estimated operating millage

2009 Law Auth 1.0000 0.8035 1.0000 0.8035 1.0000 0.8035 2.1700

2008 Law Auth 1.0000 0.8035 1.0000 0.8035 1.0000 0.8035 2.1700

2007 Law Auth 1.0000 0.8086 0.9937 0.8035 1.0000 0.8035 2.1700

2006 Law Auth 1.0000 0.8193 0.9870 0.8086 1.0000 0.8086 2.1838

2005 Law Auth 1.0000 0.8266 0.9912 0.8193 1.0000 0.8193 2.2127

2004 Law Auth 1.0000 0.8403 0.9838 0.8266 1.0000 0.8266 2.2324

2003 Law Auth 1.0000 0.8573 0.9802 0.8403 1.0000 0.8403 2.2693

2002 Law Auth 1.0000 0.8697 0.9858 0.8573 1.0000 0.8573 2.3152

2001 Law Auth 1.0000 0.8825 0.9856 0.8697 1.0000 0.8697 2.3487

2000 Law Auth 1.0000 0.8978 0.9830 0.8825 1.0000 0.8825 2.3832

1999 Law Auth 1.0000 0.9114 0.9851 0.8978 1.0000 0.8978 2.4245

1998 Law Auth 1.0000 0.9198 0.9909 0.9114 1.0000 0.9114 2.4612

2009 Est Election 1.5742 1.3665 1.0000 1.3665 1.0000 1.3665

2008 Election 1.5742 1.3665 1.0000 1.3665 1.0000 1.3665

2007 Election 1.5742 1.3752 0.9937 1.3665 1.0000 1.3665

2006 Election 1.5742 1.3934 0.9870 1.3752 1.0000 1.3752

2005 Election 1.5742 1.4058 0.9912 1.3934 1.0000 1.3934

2004 Election 1.5742 1.4290 0.9838 1.4058 1.0000 1.4058

2003 Election 1.5742 1.4579 0.9802 1.4290 1.0000 1.4290

2002 Election 1.5742 1.4790 0.9858 1.4579 1.0000 1.4579

2001 Election 1.5742 1.5007 0.9856 1.4790 1.0000 1.4790

2000 Election 1.5742 1.5267 0.9830 1.5007 1.0000 1.5007

1999 Election 1.5742 1.5498 0.9851 1.5267 1.0000 1.5267

1998 Election 1.5742 1.5640 0.9909 1.5498 1.0000 1.5498

s:\business\FY09\budget\8property tax calc.xlsx17

SALARIES AND BENEFITS

18

Salary & Benefits Considerations Contained in this section are:

Salaries & Benefits

1. The NMC Salary Plan: This is a narrative which identifies how each employee classification at NMC is compensated. The methodology for

determining how annual increases are derived is also included.

2. Faculty and Staff Headcount History: The headcount history provides a picture of the changing NMC workforce by employee classification. The

headcount is taken the first day of every November. The major changes occurring between 2008 and 2009 are in the adjunct faculty,

paraprofessional/technical, professional, and supplemental employee groups. The change in adjunct faculty and supplemental classifications are the

direct result of an 11% increase in enrollment. The decline in paraprofessional/technical and corresponding increase in professional classifications is

the result of position reclassifications.

3. An Analysis of FY11 Salaries: This analysis provides both the total salaries paid by NMC to each employee group and in total under various

assumptions. The assumptions include: no increases, increases paid according to the plan, increases paid using the scale only, increases paid using the

step only, and increases paid using a fixed percentage applied across all employee groups.

4. An Analysis of FY11 Benefits: This analysis provides the total benefits paid under various assumptions. The assumptions are the same as those for

salaries and include: no increases, increases paid according to the plan, increases paid using the scale only, increases paid using the step only, and

increases paid using a fixed percentage applied across all employee groups.

5. The NMC Benefits Plan: This is a summary report of the College’s insurance benefits and historical costs.

6. A 5-Year History of Salaries and Benefits: This document indicates the trend in both actual salaries and benefits paid over this time frame. For

purposes of this analysis, no increase in FY10 salaries and benefits, other than existing personnel changes and rate changes, are reflected.

19

The NMC Salary Plan

Administrative, Professional and Technical/Paraprofessional Staff

Staff, as this group is collectively known, is paid through the use of a scale only plan. Every three years, benchmark surveys are conducted to compare

external equity. These benchmark surveys adjust the scale either up or down. These surveys may be conducted by NMC, contracted through consultants

and/or use appropriate salary surveys from various sources. Examples include the College and University Professional Association for Human Resources

(CUPA-HR), Michigan Community College Human Resources Association (MCCHRA), and American Society of Employers (ASE). The Staff Salary

Study Committee conducts an annual comparison study of NMC's peer organizations and makes a recommendation on annual salary increase levels for

administrative, professional, technical/paraprofessional, and support staff positions. The peer group for this classification includes:

Delta College Grand Rapids Community College

Henry Ford Community College Jackson Community College

Kalamazoo Valley College Kellogg Community College

Lake Michigan College Monroe Community College

Mott Community College Muskegon Community College

Schoolcraft Community College St. Clair County Community College

Traverse City Area Public Schools Traverse Bay Area ISD

Munson Medical Center

Support Staff

Support Staff are paid on a step and scale plan. The previous year’s total salary increase percentages for comparison organizations are obtained and

averaged. This average changes the scale either up or down. Support staff are also paid on a ten step plan which is equal to a 3.3% annual increase.

Support staff at the top of the step plan, receive a scale increase only. Support Staff who have not reached the top step, are paid an increase equal to the

total of the step and scale increase. The Support Staff peer group of comparable institutions includes the following:

Grand Traverse County City of Traverse City

Munson Medical Center West Shore Community College

Kirtland Community College N. Central Michigan College

TBAISD Wexford County

Charlevoix Area Public Schools Cadillac Area Public Schools

Petoskey Public Schools Traverse City Area Public Schools

20

Faculty

Faculty are paid using a step, scale, and equity adjustment plan. The average salary scale increase given for the current contract year at the comparison

schools (excluding one community college with the highest percent increase and one community college with the lowest percent increase) will be the

base career plan increase recommended for NMC faculty for the next year. NMC’s comparison institutions will be all Michigan community colleges.

When a comparison institution has not reached a salary agreement, it will be removed from the comparisons. The remaining schools will serve as the

comparison institutions. The deadline to be included in the comparison data will be December 1 each year. Because each community college has

differing payment methodologies, the scale is adjusted annually for equity. This adjustment is made using projected earnings over a 30-year career.

NMC’s 30-year earnings are compared to those of the other community colleges and an equity earnings adjustment is made to the scale (either up or

down). If an equity adjustment is necessary to maintain average career earnings, it will be made according to the following schedule: Up to a 1%

adjustment may be made in any year. For the times NMC's career earnings are off more than 1%, an additional adjustment of 50% of the short fall will

be made up to a maximum 1.5%; NMC career earnings that are less than the Michigan Community College average will be added to the annual scale

increase according to the same schedule (listed in a. above). Faculty are also paid on a twenty step plan which is equal to a 3.71% annual increase.

Faculty at the top of the step plan, receive a scale increase only. Faculty who have not reached the top step, are paid an increase equal to the total of the

step and scale increase.

Maintenance/Grounds/Custodians

The college and the union agree to re-negotiate wages each year during Spring Semester. The Office of Human Resources conducts a comparison study

of NMC's peer organizations and makes a recommendation. The recommendation is the starting point for negotiating annual salary increase levels. Peer

organizations are organizations in which comparable positions may be found. For purposes of consistency, the same peer organizations are used for three

years. The peer organizations are:

Grand Traverse County Munson Medical Center

Kirtland Community College North Central Michigan College

West Shore Community College Wexford County

Charlevoix Area Public Schools Cadillac Area Public Schools

Charlevoix Area Public Schools Traverse City Area Public Schools

Petoskey Public Schools TBAISD

Per the current bargaining agreement, the previous year’s total salary increase percentages for the comparison organizations were obtained and averaged,

excluding those organizations that are two standard deviations from the average. The salary scale increase percentage recommended for the coming year

is that average. Effective July 1, 2007, the employee bargaining agreement also includes variable step increases, depending on classification, with the

range being 1.81%-2.69%. There are eleven steps in the plan. Employees within this group at the top of the step plan, receive a scale increase only.

Those who have not reached the top step are paid an increase equal to the total of the step and scale increase.

21

NORTHWESTERN MICHIGAN COLLEGE

FACULTY AND STAFF HEADCOUNT HISTORY

(Headcount as of November 1- General and Auxiliary Funds)

CATEGORY 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 %ChangeAs of 11/01/09 1994 to 2009

Faculty 93 91 91 92 94 92 94 90 88 87 94 95 94 94 97 96Full time 87 84 85 88 91 88 90 88 88 87 92 92 90 86 91 90Part time 6 7 6 4 3 4 4 2 0 0 2 3 4 8 6 6

FTE 89.09 87.42 88.14 89.54 92.04 89.42 91.80 89.00 88.00 1.24% increase between 2001 to 2008

Administrative 28 27 27 23 22 20 22 21 20 21 21 23 23 22 24 28Full time 28 27 27 23 22 20 22 21 20 21 21 23 23 22 24 28Part time 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0


Professional Staff 74 68 63 62 56 56 60 57 51 53 47 56 48 50 42 37Full time 73 67 62 59 53 54 55 55 49 51 44 51 43 43 36 30Part time 1 1 1 3 0 2 5 2 2 2 3 5 5 7 6 7


Paraprofessional/Technical 46 51 49 48 46 44 43 44 40 40 37 26 23 23 21 20Full time 44 49 47 46 44 41 40 42 38 36 34 24 21 22 20 19Part time 2 2 2 2 2 3 3 2 2 4 3 2 2 1 1 1


Support Staff 28 25 25 25 27 32 36 37 38 39 41 43 50 47 47 47Full time 25 22 21 22 25 27 29 31 32 34 36 37 41 40 36 37Part time 3 3 4 3 2 5 7 6 6 5 5 6 9 7 11 10

FTE 26.89 24.11 23.57 24.09 26.42 29.74 33.78 34.78 35.82 -24.93% increase between 2001 to 2008

Maintenance/Custodial 38 40 40 36 36 37 36 35 30 29 31 29 31 31 29 31Full time 38 40 40 36 36 37 36 35 30 29 31 29 31 31 29 31Part time 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0


Total Regular Employees 307 302 295 286 281 281 291 284 267 269 271 272 269 267 260 259Full time 295 289 282 274 271 267 272 272 257 258 258 256 249 244 236 235Part time 12 13 13 12 10 14 19 12 10 11 13 16 20 23 24 24


Adjunct Faculty 206 195 179 179 168 167 178 163 154 153 137 141 148 122 119 125FTE 129.11 93.60 85.60 82.15 72.37 75.46 83.55 72.58 63.24 104.16% increase between 2001 to 2008

Student Employees 130 126 119 112 115 122 119 110 102 112 104 127 140 138 139FTE 46.47 46.70 43.10 43.04 43.41 42.29 39.84 38.97 35.27 31.76% increase between 2001 to 2008

Supplemental Employees 97 83 78 65 70 73 75 77 69 76 52 64 65 80 68 62FTE 51.68 43.46 38.46 34.21 30.01 31.77 31.73 38.01 33.99 52.04% increase between 2001 to 2008

Report total 740 706 671 642 634 643 663 634 592 602 572 581 609 609 585 585 25.00% increase between 2001 to 2008

Fall Student Headcount 5074 4564 4,507 4,393 4,382 4,423 4,358 4,341 4,173 4,075 4,085 4,031 3,894 3,918 3,937 28.88% increase between 1995 to 2008Fall Contact Hours 57144 50645 50,784 49,143 48,803 48,594 46,466 44,968 42,822 41,086 41,527 40,579 38,676 38,741 38,358 48.98% increase between 1995 to 2008Total FTEs 826.68 776.82 745.70 721.25 698.29 697.88 724.26 708.56 660.08 25.24% increase between 2001 to 2008

S:\Administrative Services\Budget Models\FY11 02.01.10 Working binder\Section 4 Salaries & Benefits\4Headcount History 03.11.10.xlsx

22

Analysis of Salaries

Support Warehouse/ AllIncreases Per Plan Faculty Staff Staff Adjunct Overload Custodians Maintenance GroundsStep Increase 3.72% 0.00% 3.30% 5.50% 0.00% 1.81% 2.69% 2.65%Scale Increase 1.21% 2.95% 1.80% 1.83% 1.83% 2.59% 2.49% 2.73%% receiving scale only 51% 100% 54% 92% 100% 28% 47% 20%% rec. step and scale 49% 0% 46% 8% 0% 72% 53% 80%Fixed Rate 1.0%Note: If the step only option is chosen Staff and Overload will not receive an increase.

FY11 FY11 FY11 FY11 FY11Salaries No Increases Plan Scale Only Step Only Fix %

Faculty 6,222,169 6,276,650 6,297,457 6,335,465 6,284,391

Adjunct 2,530,385 2,794,769 2,576,691 2,541,519 2,555,689

Faculty Advising 53,944 66,994 54,995 54,995 54,995 No plan increases

Overload 320,137 374,170 325,996 320,137 323,338

Staff Salaries 7,128,634 7,444,443 7,338,929 7,128,634 7,199,920 Plus movement from Strategic Fund (28,080)

Support Staff 664589 694,207 676,552 674,677 671,235

Warehouse/Custodians 719059 737,580 737,683 728,430 726,250

Maintenance 296758 304,030 304,147 300,989 299,726

Grounds 183974 194,997 188,996 187,874 185,814

Supplemental 538,135 733,342 484,132 484,132 484,132 No plan increases

Incidental wages 21,094 107,498 78,266 78,266 78,266 No plan increases

Student Employees 370,203 411,661 365,203 365,203 365,203 No plan increases

Total Wages 19,049,081 20,140,341 19,429,046 19,200,321 19,228,958

23

Analysis of BenefitsBased on Changes in SalariesPrepared May 2010

FY11 FY11 FY11 FY11 FY11Dollar Based Benefits No Increases Plan Scale Only Step Only Fix %

Total Medical/Dental Exp.(1)/Stop Loss 3,119,209 2,387,579 2,387,579 2,387,579 2,387,579UNUM Long Term Disability 27,143 26,503 26,503 26,503 26,503Term Life 23,388 22,132 22,132 22,132 22,132Executive Life 6,146 6,280 6,280 6,280 6,280Workers Comp Prem. 63,640 64,211 64,211 64,211 64,211Unemployment 18,531 19,672 19,672 19,672 19,672Tuition Benefit 169,410 177,967 177,967 177,967 177,967 Including NMC, 4-year & Exec.Unused Sick & Vacation 21,094 38,262 38,262 38,262 38,262Uniform Allowance 0 0 0 0 0Other 0 0 0 0 0Total Dollar Based Benefits 3,448,561 2,742,606 2,742,606 2,742,606 2,742,606 13.6%

Percent Based BenefitsMPSERS Retirement (2) 2,315,593 2,862,323 2,761,235 2,728,728 2,732,798 58.3%TIAA CREF Retirement 492,469 526,262 507,676 501,700 502,448 10.7%FICA&Medicare 1,394,340 1,520,166 1,466,478 1,449,215 1,451,376 31.0%

Total Percent Based Benefits 4,202,402 4,908,751 4,735,389 4,679,642 4,686,622 24.4%

Total Benefits 7,650,963 7,651,357 7,477,995 7,422,248 7,429,228 38.0%

24

____________________________________________________________________________

To: Board of Trustees

From: Tim Nelson

Date: May 18, 2010

Subject: Issues affecting compensation

There is new information about two issues related to employee compensation since the last

Board of Trustees meeting. These are 1) a change in the MPSERS retirement system and

2) further clarification on health care. I will address each in this memorandum.

MPSERS Retirement

The newly passed SB1227 has immediate impact on NMC and its employees. These are:

NMC has been notified by MPSERS that we have 106 employees eligible to retire

pursuant to the requirements of the bill. These employees must make a decision about

whether or not to retire by June 11, 2010. If the choice is to retire, they must depart

NMC no later than September 1, 2010. We have been reviewing succession planning

goals during the year and are beginning to implement those. Over the coming weeks, it

will become clearer as to how many current employees plan to retire. Clearly, this is a

challenging time for significant retirements to occur in the midst of preparing for

additional growth this fall, and we must work together over the summer to provide the

workforce that is required to meet our learner’s needs. There are mixed opinions as to

whether the plan will save or cost NMC in the short and long run. We have kept our

MPSERS contribution rate in the budget at the 19+% level and have funds built in for

recruitment and replacement of retiring employees.

NMC has 679 full and part-time employees who are in a MPSERS plan. Effective July 1,

2010, each working employee in any MPSERS plan must contribute to a state mandated

retiree health trust as follows:

o Employees earning less than $18,000 last year must contribute 1.5% of their

wages in FY11 and 3% in FY12 and beyond.

o Employees earning more than $18,000 last year must contribute 3% of their

wages in FY11 and beyond.

This is an effective equivalent of a 1.5% or 3% reduction in compensation for our

employees and goes directly to the state mandated retiree health trust fund.

MEMO

President’s Office

25

Health Care

At the last Board meeting, you asked what the “equivalent premium” would be for our health

care plans, given our population, and our experience. We asked Priority Health, our plan

administrator, to provide that information. Attachment H1 illustrates this for each of our two

plans and compares NMC’s “equivalent premium” to a select number of other community

college rates and the state retirement rate for the same employee tiers. Note that NMC’s rates are

below those comparable schools, and, in some cases, significantly below.

I reviewed the previous recommendations and tier structure from the Benefits Advisory

Committee (BAC) with those provided from Priority and proposed that BAC adopt the

approaches shown on Attachment H2. This uses Priority’s tiers and rates and establishes a single

employee contribution of 2.5% with higher contributions for the other tiers.

Total Compensation

NMC’s policy and practice has been to compensate our employees at the average of a defined

comparison group. This year’s average salary increase is approximately 2.1% and is outlined in

the budget binder. I believe this target of average compensation for our employees is still valid.

To help determine the best way to accomplish this in the future taking into account a more

quantitative evaluation of benefits in total compensation, I have built into the budget for next

year funding to hire an outside evaluator to review our total compensation practices. I also have

sequestered the funds generated by the employee contribution to health care premium and will

direct those toward an enhanced “NMC Wellness Program”. This will benefit the employees and

their families as well as the college by having healthier people, we should have lower health care

costs. As at the last meeting, I am aligning the implementation of the contribution with our plan

year start which is January 1. We will thereby have all plan decisions being made at the same

time.

26

H1Northwestern Michigan College - Medical and Prescription DrugsPPO Plan

COBRA Rate Calculation WorksheetEffective 01/01/2010 - 12/31/2010Based on Expected Liability

Expected Annual Plan Cost: $2,568,477

5 Tier Rates Premium Projected Slope Equivalent MPSERS Lansing CC Delta CC Jackson CC Lake Mi CCEnrollees (Tier Ratios) Rates Rates Rates Rates Rates Rates

Single 47 1.00 $413.92 $664.39 $537.08 $433.74 $598.15 $488.05

Employee & Spouse 86 2.10 $869.24 $1,225.30 $1,206.55 $975.87 $1,345.85 $1,063.97

Employee & Child 6 1.40 $579.49

Employee & Children 5 1.90 $786.45 $911.04

Family 97 2.80 $1,158.99 $1,471.96 $1,340.43 $1,214.48 $1,674.93 $1,415.37

Total Monthly Plan Costs 241 517.10 $214,040

Total Annual Plan Costs $2,568,481

Group 4 of ACS category



and similar employee

count to NMC

Group 2 of ACS category and

similar employee count

to NMC

Note: The above COBRA rates are merely suggestions made by Priority Health. NorthwesternMichigan College is responsible for setting COBRA rate levels.

5/18/2010COBRA - Expected PPO, 4Priority Equiv Rates_1.xlsx

27

Northwestern Michigan College - Medical and Prescription DrugsHSA PPO Plan

COBRA Rate Calculation WorksheetEffective 01/01/2010 - 12/31/2010Based on Expected Liability

Expected Annual Plan Cost: $217,722

5 Tier Rates Premium Kellogg Mid-Michigan Projected Slope Equivalent CC CC Jackson CC Lake Mi CCEnrollees (Tier Ratios) Rates Rates Rates Rates Rates

Single 7 1.00 $256.63 $390.10 $397.51 459.91 $509.84

Employee & Spouse 7 2.10 $538.92 $877.69 $894.40 1034.78 $950.73

Employee & Child 1 1.40 $359.28

Employee & Children 0 1.90 $487.59

Family 17 2.80 $718.55 $1,053.28 $1,113.05 1287.87 $1,187.78

Total Monthly Plan Costs 32 70.70 $18,143

Total Annual Plan Costs $217,722


and similar employee

count to NMCGroup 3 of

ACS category

Group 2 of ACS category,

no info on deductible

Pays 100% of deductible back

to employee

Note: The above COBRA rates are merely suggestions made by Priority Health. NorthwesternMichigan College is responsible for setting COBRA rate levels.

5/18/2010COBRA - Expected HSA, 2Priority Equiv Rates_1.xlsx

28

H2

HUMAN RESOURCES OFFICE Director of Human Resources

TO: Planning and Budget Council,

Stephen Siciliano, Chair

FROM: Benefits Advisory Committee

Christine Keenan, Chair

DATE: May 10, 2010

SUBJECT: Health Plan Premiums

Benefits Advisory Committee met on March 2 to review a draft of premium calculations at the request of Planning and Budget Council. After much discussion the committee made a recommendation for employee contributions totaling $64,614. The committee met again on May 10 and examined a five-tiered premium structure supplied for our consideration by Priority Health. Using the five tiers meets our concern about NMC employee’s having a variety of family structures and the impact of premiums. After listening to Tim’s information and examining this different premium structure, the committee is making the following revision to our original recommendation. Based on 2.5% of our

expected annual plan costs for each tier, the new recommendation adds up to $69,654.98 in annual employee contributions. /CK

29

H2

HUMAN RESOURCES OFFICE Director of Human Resources

Annual Plan Cost

$2,568,477

Core Plan Percent of Cost Covered

2.5%

Deductibles

$200/$400

Individual/Family Co-pay

20%

5 Tier

Projected

Tier

Per Employee

Per Employee

Rates Enrollees Ratios Per Month Per Year

Single

47

1.00

10.35

124.18

Employee & Spouse

86

2.10

21.73

260.77

Employee & Child

6

1.40

14.49

173.85

Employee & Children

5

1.90

19.66

235.94

Family

97

2.80

28.97

347.70

241

Annual Plan Cost

$217,722

High Deductible Plan Percent of Cost Covered

2.5%

Deductibles

$1,250/$2,500

Individual/Family Co-pay

0%

After meeting deductible exclusive of prescriptions

5 Tier

Projected

Tier

Per Employee

Per Employee

Rates Enrollees Ratios Per Month Per Year

Single

7

1.00

6.42

76.99

Employee & Spouse

7

2.10

13.47

161.67

Employee & Child

1

1.40

8.98

107.78

Employee & Children

0

1.90

12.19

146.28

Family

17

2.80

17.96

215.57

32

Total Annual Plan Revenues

69,654.98

Benefits Advisory Committee

Ed Bailey Chris Keenan Vicki Sanchez

Duane Barber John Pflughoeft Stephen Siciliano

Ed Blough Alycia Rhein John Zachman

Bobbi Jo Garner Rob Rider Carol Kasper-HR Support

MaryKay Grewe Karen Ruedinger

30

NMC 2010 “Benefits At A Glance” Available Plan Options

Medical Opt Out Medical

(Option I) – 27 Members

Core

(Option II) – 598 Members

High Deductible Health Plan

(Option III) – 98 Members

Medical Insurance

Opting Out – No medical coverage

(Must provide proof of insurance

coverage elsewhere)

$1,400 cash rebate

Deductible: $200 Individual

$400 Family Co-pay: 80% Plan Pays

20% You Pay

Includes Preventative Medical Care

Rx: $2.50 Generic (Generic mandatory rule applies) 40% of brand name cost,

minimum $20 – maximum $40

Deductible – $1,250 Individual

$2,500 Family

100% Medical Paid after Deductible After deductible is met, prescription

co-pay until $1500 Individual/$3000

Family maximum out-of-pocket expense on RX only.

Includes Preventative Medical Care

Health Savings Account (HSA) Employer seed:

$400 for Individual

$800 for Family

Dental Voluntary

(Opt Out Medical)

Voluntary

(Option II and III Medical)

Optional Dental Insurance

50% Preventative 50% Minor Restorative

50% Major Restorative

50% Orthodontia Yearly maximum: $650

Lifetime orthodontia max: $750

100% Preventative 85% Minor Restorative

60% Major Restorative

60% Orthodontia Yearly maximum: $1,800

Lifetime orthodontia maximum: $2,000

Vision Voluntary

Vision

Eye exam annually with no co-pay; $25 co-pay on lenses (excludes cosmetic tints) with $170 allowance on frames every

24 months – or - $200 for contact lenses every 24 months

LTD Core Option I Option II

Long-Term Disability Insurance

Employer provided

Maximum: 60% of earnings, not to

exceed $1,500/mo. Minimum: the greater of $100 or

10%

Employee can purchase


exceed $5,000/mo. Minimum: the greater of $100 or 10%

Employee can purchase


exceed $5,000/mo. Minimum: the greater of $100 or 10%

Life/AD&D Core Voluntary

Employee Group Term Life and Accidental Death & Dismemberment

Insurance

Death Benefit $50,000 Term Life

plus $50,000 Accidental Death & Dismemberment

Employee can purchase additional Term Life/Accidental Death and

Dismemberment Insurance in increments of $10,000, up to maximum $500,000. Some restrictions apply.

Spouse Group Term Life

Spouse can purchase Term Life Insurance in increments of $10,000, up to maximum $500,000. Some restrictions apply.

Child Group Term Life

Employee can purchase Term Life Insurance for dependent children in increments of $2,500, $5,000, $7,500, or $10,000 per child.

Flexible Spending Accounts Medical Options I, II, & III

Dependent Care Available – Priority Health

Medical Options I & II

Health Care Available – Priority Health

Medical Option III

Limited Flexible Spending Account Available - Priority Health

HAS- Health Savings Account Medical Option I – Available through Northwestern Bank 31

Medical 2007 2008 2009 2010

Stop Loss Based Cost Projections January 1 24/12 Contract 24/12 Contract 15/12 Contract 24/12 ContractExpected - Claims and Fixed Cost $2,850,177 $2,961,685 $3,196,652 $3,257,384Maximum - Claims and Fixed Cost $3,648,914 $4,399,447 $3,873,703 $3,932,673

Actual Cost- Claims & Admin (net of copays and deductibles) $3,299,995 $3,106,371 $2,783,747 not availableRx Drug costs included above (decline based on employee education) $652,319 $615,319 $589,163 not availablePrescriptions Filled 6,230 5,997 6,283 not available

Administrative fees included above:Broker Fee paid in commissions^ $94,527Consulting & Wellness Adm. Fees (all insurance products commission free) $54,000 $54,000 $54,000On-Line Enrollment Service & Managmt. $17,000Priority Health Wellness Solution $5,138^Broker Fee paid, included in Actual Costs above for 2007 only

Percentage of Change in Expected Projected Costs between fiscal years 3.90% 7.90% 1.9%Percentage of Change in Actual Costs between fiscal years -5.87% -10.39% not available

TREND COMPARISON 2007 2008 2009 2010**National Trend* 9.05% 8.58% 9.54% 9.15%NMC Experience -5.87% -10.39% not available

*Sources: Avg of Milliman, AON PPO, AON CDHP, Towers Watson, Segal, Mercer, Kaiser PPO Trends**Sources: Avg of Towers Watson, SegalMedical Per Employee Per Month (based on medical plan only) $1,072 $998 $839 not availableMedical Per Member Per Month $424 $393 $322 not availableAverage Annual Employee Enrollment 257 255 271 269

Deductible paid by employees $75,662 $75,660 $134,026.94 not availableCo-pay paid by employees $53,459 $64,572 $68,907.06 not availableCo-insurance paid by employees $157,384 $159,545 $166,760.60 not available

Total $286,505 $299,777 $369,694.60 not available

Kaiser Family Foundation Midwest Data1

Per Family Per Month* $1,009 $1,057 $1,115 not availableEmployee contribution per family per month $236 $249 $265 not availableNet Employer Costs for PPO Plans for firms of 200 or more $773 $808 $849 not availableOnly 26% of employees in PPO plans have general annual deductibles *NMC average is 2.56 members per employee, comparable to Kaiser two tier family plans

Kaiser Family Foundation is a nationally recognized benchmark agency for health care issues. The Foundation works to provide reliable information in a health system in which the issues are increasingly complex and the nation faces difficult challenges and choices

Northwestern Michigan CollegeEmployee Benefit Cost History and Projections

32

Dental 2007 2008 2009 2010*Dental Claims $197,083 $247,181 $253,536 $285,000Dental Administration $10,149 $9,642 $9,096 $10,845

Total $207,232 $256,823 $262,632 $295,845Employee Premiums $94,338 $94,847 $103,033 $139,228

Net Cost to NMC $112,894 $161,976 $159,599 $156,617

Employee Paid Co-pays $51,083 $66,264 $59,190*Estimate based on January enrollment

VisionVoluntary Coverage, Employee only paid premiums $40,561 $36,916*Estimate based January enrollment

Ancillary 2007 2008 2009 2010NMC Core Plan ($50,000 Life plus $50,000 AD&D)

Life/Accidental death & dismemberment (AD&D) $31,239 $26,802 $26,127 $24,843Base LTD (60% of monthly earnings not to exceed $1,500/month) $33,619 $29,206 $29,988 $29,631

$64,857 $56,008 $56,115 $54,474

Employee Paid Optional CoverageLTD Buy-up (60% up to $5,000 or 70% up to $5,000/month) $25,255 $24,693 $25,356 $25,505Vol Life (Additional in $10,000 increments up to $350,000) $11,616 $12,630 $14,916 $16,060Vol AD&D (Additional in $1,233 $1,084 $1,256 $1,263

$38,104 $38,406 $41,528 $42,828

NMC TOTAL PAID FOR THESE BENEFITS $3,572,084 $3,419,203 $3,102,494 not availableEMPLOYEE TOTAL PAID PREMIUMS FOR SAME $132,442 $133,253 $185,122 not availableEMPLOYEE TOTAL PAID DEDUCTIBLES, CO-PAYS AND CO-INSURANCE $337,587 $352,769 $428,885 not available

EMPLOYEE TOTAL PAID $470,029 $486,022 $614,007 not available

Northwestern Michigan CollegeEmployee Benefit Cost History and Projections

33

General Fund OnlySalary Budgets

04-05 05-06 06-07 07-08 08-09 09-10Actual % Change Actual % Change Actual % Change Actual % Change Actual % Change Budgeted

SalariesFaculty

6112 Budget impact 5,728,991 4.23% 5,971,117 -2.02% 5,850,546 0.55% 5,882,519 0.70% 5,923,638 2.00% 6,208,122Adjunct

6114 Budget impact 1,685,737 -1.89% 1,653,830 9.23% 1,806,411 6.14% 1,917,253 3.86% 1,991,188 2.00% 2,530,385Faculty Advising

6115 Budget impact 12,599 243.61% 43,292 -14.05% 37,211 30.92% 48,716 -6.42% 45,586 2.00% 53,944Overload

6116 Budget impact 348,864 -20.71% 276,616 2.61% 283,834 18.03% 335,009 2.64% 343,841 2.00% 320,137Regular Staff

6122-54 Budget impact 6,919,783 -0.04% 6,917,217 8.83% 7,527,734 8.69% 8,182,142 4.15% 8,521,783 2.00% 8,984,110Supplemental

6164 Budget impact 330,815 43.22% 473,807 8.13% 512,327 -1.69% 503,650 25.38% 631,468 2.00% 538,135Incidental wages

6190 Budget impact 0 0 0 0 2.00% 37,058

Total Faculty and Staff 15,026,788 2.06% 15,335,880 4.45% 16,018,063 5.31% 16,869,289 5.31% 17,457,504 6.96% 18,671,8916162 Student Employees 286,236 -7.53% 264,693 -0.40% 263,646 -0.81% 261,523 14.38% 299,139 2.00% 370,203

Total Including Students 15,313,024 1.88% 15,600,573 4.37% 16,281,708 5.22% 17,130,812 3.65% 17,756,643 19,042,094

General Fund OnlyBenefit Budgets

04-05 05-06 06-07 07-08 08-09 09-10Dollar Based Benefits Actual % Change Actual % Change Actual % Change Actual % Change Actual Budgeted

6510 Total Medical/Dental Exp.(1)/Stop Loss 2,385,199 8.07% 2,577,608 3.75% 2,674,391 21.48% 3,248,825 -11.38% 2,879,127 7.87% 3,105,6136522 UNUM Long Term Disability 46,938 -12.49% 41075.30 -9.34% 37,237 -32.70% 25,059 5.63% 26,470 3.00% 26,8786524 Term Life 33,260 -12.52% 29096.32 -0.39% 28,983 13.41% 32,870 -24.35% 24,866 3.00% 24,8826525 Executive Life 301 741.51% 2531.76 70.24% 4,310 8.65% 4,683 -2.18% 4,581 1.00% 6,1186530 Workers Comp Prem. 9,934 251.68% 34936.12 89.63% 66,250 28.32% 85,015 12.22% 95,402 8.00% 59,3146572 Unemployment 24,340 -68.16% 7748.90 171.96% 21,074 2.73% 21,649 4.21% 22,560 8.00% 23,399

6540-42 Tuition Benefit 138,188 9.44% 151,228 19.19% 180,249 -0.88% 178,670 3.33% 184,612 3.00% 210,899 Including NMC, 4-year & Executive

6535 Unused Sick & Vacation 21,999 -10.72% 19641.10 24,441 -38.98% 14,915 -21.76% 11,669 06573 Uniform Allowance 4,918 -3.92% 4725.00 1.90% 4,815 4.36% 5,025 -3.90% 4,829 0

6578-90 Other -64,840 -100.00% 0.00 0 0 0 0Total Dollar Based Benefits 2,600,237 10.32% 2,868,590 6.04% 3,041,750 18.90% 3,616,711 -10.03% 3,254,116 6.24% 3,457,103

Percent Based Benefits6552 MPSERS Retirement (2) 1,593,526 14.02% 1,816,886 -10.35% 1,628,928 26.42% 2,059,371 -1.01% 2,038,575 13.71% 2,318,0526554 TIAA CREF Retirement 416,853 1.54% 423,262 8.52% 459,326 5.86% 486,229 4.10% 506,158 3.00% 492,4696562 FICA&Medicare 1,119,000 2.57% 1,147,746 5.61% 1,212,147 4.07% 1,261,536 2.31% 1,290,631 5.00% 1,395,457

Total Percent Based Benefits 3,129,379 8.26% 3,387,895 -2.58% 3,300,401 15.35% 3,807,136 0.74% 3,835,364 9.66% 4,205,978

TOTAL BENEFITS 5,729,616 9.20% 6,256,485 1.37% 6,342,151 17.06% 7,423,847 -4.50% 7,089,480 8.09% 7,663,081

34

EXPENSE CONSIDERATIONS

35

Expense Considerations

Contained in this section are:

Expenses:

1. An Analysis of Expenses by Category w/graphs: This analysis provides a comparison of all major expense lines within the budget. The

percentage of change and comments explaining the changes are also included. Note that for each category, with the exception of utilities,

the dollar amounts for the category went up. The categories that experienced an increase are those whose accounts have a direct

association to learning (i.e., supplies, professional development); while those that experienced a decline are those whose accounts have an

indirect association- a supportive function to learning (i.e., purchased services, other expenses, and maintenance). Increases are primarily

the result of increased enrollment while declines can be associated with increased efficiency.

2. An RFP Schedule: The RFP schedule is used to track contracts in terms of bid dates, contract rates, and savings obtained through the bid

process.

3. A Facilities Capital Funding Plan: This analysis is used to determine the facilities condition index (FCI) of the college’s infrastructure.

Based on the benchmark, the college has chosen to remain in the GOOD range (2.1%- to 5.0%). The FCI is calculated by taking all

deferred maintenance and dividing it by the replacement value. For purposes of this analysis the halls and apartments were removed from

the totals based on the plan set forth for each of these buildings. The physical education building was also removed from the analysis

pending further discussion. Other properties, such as Appel and the Farm, remain in the analysis, although there are no plans at this time

to expend monies on these properties. The second page of the analysis indicates the level of spending needed to remain within the GOOD

benchmark if the total cost of maintenance is spread over ten years. It is important to note that the analysis does not consider inflation or

the time value of money.

36

NMC - Detailed Expense AccountsActual 2008

Actual 2009

Budget 2010

% Change

Projected Budget 2011

% Change Comments for 2010 Budget Comments for 2011 Budget

7100-Purchased ServicesAudit 67,720 67,495 62,000 -8% 62,000 0%Legal 83,565 56,691 80,300 42% 63,800 -21% Budget based on trends for last two years

Advertising 159,409 150,783 178,915 19% 193,330 8% Public Relations & Maritime Increase in Public Relations & Culinary

Food 24,109 26,655 32,000 20% 85,112 166% Increase in cost of food Increase Maritime sea time

Commissions 775 1,225 1,000 -18% 1,500 50% Fees for bond review are down Fees for bond review

Other Contractual labor 1,192,245 1,128,721 1,438,505 27% 1,514,918 5% Overall increases to annual contracts Increase Sodexo contracts additional staffTOTAL 1,527,823 1,431,570 1,792,720 25% 1,920,660 7%

7200-Supplies & Materials

Office Supplies 123,961 106,895 157,493 47% 149,474 -5% Small amts. in multiple departmentsSmall decreases in several departments based on trends

Software Licenses 177,351 180,452 223,384 24% 248,650 11% Viscom was last year onlyNew agreements for Peopleadmin, Web Red Hat licenses and servers

Perkins Software 3,669 30,414 0 -100% 0 0% Same

Classroom Supplies 344,053 373,525 327,118 -12% 346,967 6%Increase in Culinary (based on enrollment) & Construction trade (CT new this year)

Culinary food costs and Dental department replacement of equipment one-time cost

Fee Related Exp. 244,252 289,853 312,801 8% 411,247 31% Increases in Nursing & Maritime Increases in Construction Trade & Nursing

Field Trip Expense 13,654 15,266 18,600 22% 3,350 -82% Increased efficiencies Moved to Fee related expensesCulinary Alcohol Expense 4,536 5,551 10,000 80% 10,000 0%

General Supplies 303,378 409,909 347,513 -15% 349,217 0%Moved salt costs to general supplies was in snow removal Reduction in Grounds budget based on trends

Perkins Supplies 3,921 14,928 11,726 -21% 9,327 -20% Small decrease in Nursing

Furniture & Fixtures 92,583 80,252 258,075 222% 294,185 14% Small increase in multiple departments Small increases in several departmentsData Equip 53,103 295,202 15,500 -95% 16,500 6%

Vehicles 105,167 46,109 34,000 -26% 36,100 6% Moved budget for gas to fuel line item

Fuel 242,679 352,107 341,332 -3% 374,335 10%Gas costs moved to this line item; departments include Aviation, Facilities, Maritime Maritime increase for increase in sea time

Printing 106,741 104,715 142,066 36% 116,396 -18% Public Relations decrease in printingPublic relations and Instructional Technology decreases

Postage 157,267 168,712 180,211 7% 182,769 1% Increased efficiencies Small Increase based on usage

Electronic Resources 48,480 47,695 42,228 -11% 44,719 6% Same with slight increases to licensing fees Library new eBrary ebook subscription

Periodicals 40,081 30,462 30,650 1% 32,664 7% Movement to electronic resources continues

Books 7,095 5,094 8,989 76% 8,498 -5% Small amount by multiple departments

Document Delivery 1,437 1,390 1,226 -12% 1,400 14% Increase in deliveries Library increase for books on loan

Microfilm 9,252 11,599 14,419 24% 15,226 6% Library related increase Library one year subscription to Record Eagle

Telecourse 10,173 4,845 8,050 66% 6,050 -25% Based on trends Instructional Technology based on trendsTraining 0 15 2,278 15087% 1,778 -22% Human Resources reduced line itemTOTAL 2,092,833 2,574,990 2,487,659 -3% 2,658,852 7%

37


Actual 2009

Budget 2010

% Change



7400-Other ExpensesCommencement 11,947 13,683 15,000 10% 15,000 0%Permits & License 9,252 9,645 13,277 ` 12,272 -8% Reduction based on prior yearsFacility Rentals 32,300 24,216 42,860 77% 42,860 0%Equipment Rental 261,470 286,603 370,686 29% 429,691 16% Plane leases; Facilities Facilities fleet management lease

Freight 5,552 9,437 6,375 -32% 6,625 4% Gas prices are lower Small increase

Transportation 0 0 2,500 100% 7,500 200% Aviation related obligationsMusic department previously did not budget for moving of instruments summer concerts

Finance Charges 151,605 198,349 133,750 -33% 88,250 -34% Based on new banking fees

Collection Costs 30,296 34,676 40,000 15% 40,000 0%Based on expected increase in uncollectible debt

Uncollectible Debt 207,123 215,200 152,250 -29% 300,000 97% Based on expected economic conditions Based on expected economic conditionsStipends & Awards 13,991 10,149 18,650 84% 19,300 3% Human Resources recognition awards

Student Aid 20,929 15,350 11,400 -26% 83,200 630%

EES reduced Construction Trade not in their department will run through Scholarship Funds in FA Maritime scholarships

Recruiting 56,421 56,219 95,775 70% 95,775 0% Maritime; AviationProperty Tax Refund 22,876 25,683 15,000 -42% 15,000 0%

Summer Tax Collection 19,699 27,883 25,000 -10% 25,000 0%

Tuition Discount 4,200 14,057 20,000 42% 20,000 0% Adjustments in tuition from Admissions Office

Senior Discount 13,379 12,996 15,000 15% 15,000 0%Based on predicted increases related to marketing efforts

Native American Tuition Waiver 240,207 261,328 260,700 0% 285,000 9% Increased enrollment

Miscellaneous 4,587 10,073 94,474 838% 93,038 -2% Contingency Water Studies

Events 7,261 5,044 11,000 118% 106,697 870%Consolidated accounts for on-campus and off campus to one account

On Campus Events 57,966 64,558 85,622 33% 0 -100%

Off Campus Events 64,163 63,759 44,150 -31% 0 -100% Cost of inflation increase

Travel 23,230 52,236 30,750 -41% 83,150 170%Training & Research; Water Studies new program cost Maritime travel

TOTAL 1,258,454 1,411,144 1,504,219 7% 1,783,358 19%

7500-UtilitiesElectricity 529,234 524,455 578,600 10% 550,000 -5% Reduction due to building efficiencies

Heating Fuel 331,195 485,864 511,000 5% 400,000 -22% Based on lower consumption and lower rates Gas prices lower and efficiencies

Telephone 116,145 95,104 120,000 26% 120,703 1% Maintenance of equipment moved to 7600

Modem Lines 360 360 460 28% 460 0%Sewer 42,647 40,768 58,000 42% 45,000 -22% Based on estimated costs for 2009 Based on prior year usage

Water 25,237 23,711 28,000 18% 25,000 -11% Based on prior year usage Based on prior year usage

Insurance 490,935 370,190 387,350 5% 434,000 12%Aviation contracts lower & reductions due to RFP Anticipated premium increases

Snow Removal 116,467 188,528 125,000 -34% 125,000 0% Slight increase based on this winter

Waste Collection 27,263 25,429 30,000 18% 30,000 0% Reduced based on average usage last 3 years38


Actual 2009

Budget 2010

% Change



Cable Service 22,556 25,284 33,700 33% 33,700 0% Based on expanded contractual agreementsTOTAL 1,702,038 1,779,693 1,872,110 5% 1,763,863 -6%7600-Maintenance & Renovations

Maintenance of Equipment 584,565 717,267 711,769 -1% 789,481 11%Increase in license agreements for IT & Telephone Equipment moved from 7500

Banner document imaging and Flexible registration

Maintenance of Food Service Equipment 6,229 4,966 10,200 105% 10,200 0%

Maintenance of Facilities 99,560 71,932 123,880 72% 111,880 -10%Facilities reduction based on previous years trends

Maintenance of Grounds 58,546 57,558 48,600 -16% 48,600 0%TOTAL 748,900 851,723 894,449 5% 960,161 7%

7700-Professional DevelopmentMemberships 84,474 87,195 86,557 0 89,330 3% Small increase in several departments

Subscriptions 5,036 1,874 435 -1 2,050 371%Increase based on actual expenses Public relations

Conferences and Events 279,195 309,340 452,334 0 532,296 18%

Increase related to attendance at Chair Academy and Strategic Agenda implementation (i.e., succession planning, training for AQIP project, no smoking policy)

TOTAL 368,705 398,409 539,326 0 623,676 16%

39

Northwestern Michigan College

Expenditures Comparison

General Fund

71%

6%

5%

2%

7% 4%2% 3%

2002 - 2003

Salaries & Benefits Purchased Services

Supplies & Materials Other Expenses

Institutional Expenses Maintenance & Renovation

Events/Trvl/Prof. Devel. Capital Outlay & Plant Fund

68%5%

7%

6%

5%3%

2% 4%2010 - 2011

Salaries & Benefits Purchased Services

Supplies & Materials Other Expenses

Institutional Expenses Maintenance & Renovation

Events/Trvl/Prof. Devel. Capital Outlay & Plant Fund

40

Northwestern Michigan College

Requests for Proposals

Partial 2005 to Present

Contract Contract

Item Last Bid Next Bid Before After Estimated Annual Savings

Date Date RFP RFP And Comments

Facilities Management 11/1/2005 11/1/2010 $386,460 $386,460 $0 bid costs equal, better level of service

Audit Fees 5/1/2006 7/1/2010 $65,000

Snow Removal 9/21/2006 7/1/2012 $218,000 $150,000 $68,000

Elevator Upgrades 11/14/2007 as needed $87,200 $62,200 $25,000

Utility Trucks 11/27/2007 as needed $52,000 $27,000 $25,000 vs. cost of 2 trucks

Food Service/Vending 2/1/2009 2/1/2012 $594,680 $590,000 $23,400

Property & Liability Insurance 1/24/2008 1/1/2011 $320,572 $230,572 $90,000

Elevator Maintenance 1/1/2010 12/31/2012 $41,000 $19,000 $22,000

Harbor Dredging 3/11/2008 as needed $66,500 $61,500 $5,000

Workman's Compensation Insurance 3/20/2008 1/1/2011 $95,959 $63,709 $32,250

Aviation Insurance 4/1/2008 1/1/2011 $163,220 $91,945 $71,275

Copy Machines & Maintenance 5/1/2009 7/1/2010 $102,500 $51,000 $51,500

Security Services 4/17/2008 5/1/2011 $194,830 $184,830 $10,000

Maritime Insurance (Ships) 5/1/2008 5/1/2010 $38,500 $23,000 $15,500

Office Supplies 5/1/2009 5/1/2010 $58,700 $47,000 $11,700

Health Insurance 5/1/2008 1/1/2012 $2,900,000 $2,600,000 $300,000 each year for 3 years

Parking Lot Cleaning & Sealing 8/1/2009 as needed $48,900 $45,000 $3,900

Waste Collection 9/1/2009 8/31/2012 $53,000 $35,177 $17,823

Class Schedules (EES & Academic) 7/1/2009 as needed $38,000 $36,000 $2,000

Low Voltage/Data Network Repairs 12/1/2008 12/1/2010 $20,000 $16,000 $4,000

Fleet Management 12/1/2008 12/1/2013 $73,255 $50,000 $23,255 60 month contract - 4 more yrs.

Electrical Savings (new boiler and integrated systems) $254,000 $51,134 in energy savings w/new eqt.

Banking Fees unknown 7/1/2010 $120,000 first RFP in several years

Routine Electrical Work/Repairs 7/1/2010 $15,000 first RFP of this type

Routine Mechanical/HVAC Repairs 7/1/2010 $13,250 first RFP of this type

TOTALS $5,380,066 $4,383,933 $1,055,603 one year's savings

$786,620 future year's savings

Upcoming or unknown items $1,842,223 total savings all years

9-Mar-10

41

Northwestern Michigan CollegeFacilities Captial Funding Plan(Based on Sodexho Analysis)

Facility Index Range (FCI) From ToExcellent (E) 0.0% 2.0%

Good (G) 2.1% 5.0%

Fair (F) 5.1% 10.0%

Poor (P) 10.0%

*Deferred Maintenance Funding by Type of NeedADA/ Improve/ DM* DM* DM* DM* -Repair/ Replacement

Buidling Name Code Function Aesthetics Integrity Energy Replace Cyclical Total ValueDennos Museum 0 66,750 0 0 750,000 371,250 45,000 1,233,000 10,759,900

Scholars Hall 0 7,050 0 0 45,501 142,500 20,625 215,676 12,712,300

Oterlin Library 0 76,350 30,000 45,000 0 83,250 0 234,600 9,918,800

Power House 0 52,500 0 0 0 531,000 12,000 595,500 1,749,900

Tanis10 247,500 0 0 0 719,250 15,000 981,750 2,987,736

Health/Science 0 73,500 0 0 0 75,000 8,250 156,750 14,908,680

Founders Hall 0 4,500 0 0 0 135,000 0 139,500 971,100

East Hall 0 306,503 18,750 525,000 0 924,660 61,523 1,836,436 9,677,400

West Hall 0 157,500 0 487,500 260,000 302,250 1,207,250 13,016,100

Clock Tower 0 0 0 0 0 0 6,000 6,000 1

Fine Arts 0 82,500 0 0 27,000 151,253 56,250 317,003 3,896,300

Apartment A 0 7,500 45,000 135,000 0 307,875 61,125 556,500 1,447,300

Apartment B 0 7,500 30,000 135,000 0 315,375 50,625 538,500 1,447,300

Apartment C 0 28,500 30,000 135,000 0 280,875 40,650 515,025 1,447,300

James J. Beckett 0 25,001 0 375,000 247,500 0 647,501 6,799,100

Oleson Center 0 0 0 0 0 0 0 0 1,824,500

Rajkovich Phys. Education 5,025 147,782 52,500 210,000 0 729,300 71,250 1,215,857 4,553,300

Farm 0 22,500 0 0 0 450,000 0 472,500 47,800

Facilities Maintenance 0 37,500 0 0 0 0 0 37,500 852,300

University Center 0 349,050 0 0 0 415,500 339,000 1,103,550 10,888,300

Great Lakes Campus 0 198,500 0 0 0 202,500 547,500 948,500 17,750,400

Automotive Technology 0 1,026,000 0 0 0 15,000 197,850 1,238,850 2,636,700

Rogers Observatory 0 165,000 0 0 0 135,000 0 300,000 319,300

M-TEC 0 70,350 0 0 225,000 150,000 16,500 461,850 12,105,800

Aviation 0 82,752 0 0 0 189,750 48,750 321,252 1,901,200

Appel 0 11,250 0 15,000 0 219,750 0 246,000 115,400

Athletic Fields 0 208,875 0 0 0 0 0 208,875 52,500

Campus General 0 2,898,302 0 0 75,000 972600 675,825 4,621,727 24,465

Utility Tunnels 0 0 0 0 0 0 0 0 1,514,200

Biederman 0 20,250 0 0 0 385,004 75,000 480,254 6,211,950

TOTALS 5,025 6,381,265 206,250 2,062,500 1,122,501 8,409,192 2,650,973 20,837,706 152,537,332

Apartments- On Hold 0 43,500 105,000 405,000 0 904,125 152,400 1,610,025 4,341,900

Halls - On Hold 0 464,003 18,750 1,012,500 0 1,184,660 363,773 3,043,686 22,693,500

Expenditures to Rajkovich 0 147,782 52,500 210,000 0 729,300 71,250 1,215,857 4,553,300

Farm 0 22,500 0 0 0 450,000 0 472,500 47,800

Appel 0 11,250 0 15,000 0 219,750 0 246,000 115,400

TOTALS 5,025 5,692,230 30,000 420,000 1,122,501 4,921,357 2,063,550 14,249,638 120,785,43242

Deferred

Cost of 10-yr Plan FY10 FY11 FY12 FY13 FY14 Total Need

ADA/Code 352 352 352 352 352 1,759 3,266

Improve/Functionality 398,456 398,456 398,456 398,456 398,456 1,992,281 3,699,950

DM Aesthetics 2,100 3,900 3,900 3,900 3,900 10,500 19,500

DM Integrity 29,400 29,400 29,400 29,400 29,400 147,000 273,000

DM Energy 78,575 78,575 78,575 78,575 78,575 392,875 729,626

DM Repair/Replacement 344,495 444,495 544,495 729,495 994,495 1,722,475 3,198,882

Cyclical 144,449 144,449 144,449 144,449 144,449 722,243 1,341,308

TOTAL 997,826 1,099,626 1,199,626 1,384,626 1,649,626 4,989,132 9,265,531

Deferred Maintenance 6,039,288 5,937,488 5,837,488 5,652,488 5,387,488

Other Maintenance 7,217,549 7,217,549 7,217,549 7,217,549 7,217,549

Total 13,256,837 13,155,037 13,055,037 12,870,037 12,605,037

Facilites Index Calculations Per Year 5.00% 4.92% 4.83% 4.68% 4.46%

Other Factors to consider:

^ Time Value of Money

$457,500 of total maintenance is related to Appel and the Farm; there are no plans at this time to expend that money on these properties.

43

BUDGET MODEL WITH ASSUMPTIONS

44

FY11- FY13 Budget Model with Varying Assumptions

Contained in this section is the budget model for fiscal years 2011, 2012, and 2013. Various assumptions have been made throughout the model

concerning revenues, salaries and benefits, and expenses. The assumptions made have been highlighted. Only the scenario developed by Planning

and Budget Council has been included.

45

Assumptions for FY10-FY13 budget model:Note: Bolded items can be changed and will flow through to bottom line calculation

Cr. Hrs. Cr. Hrs.Tuition:FY10 FY08 FY09 % of Chg FY10 % of Chg GLMA HVAC

General Actual FY0954% In district $73.40 $77.40 5.4% $77.40 0.0% $318.00 $100.00 57,144.00 A30% In state $132.00 $142.00 7.6% $146.00 2.8% $184.00 53,474.00 A16% Out-of-state $164.00 $180.40 10.0% $187.00 3.7% $234.00 7,959.00 B

Tuition:FY11 FY11 % of Chg % Tuition $ Tuition HVAC HVAC GLMA GLMA

General Inc./Dec. Increase Increase % $ % $54% In district $79.70 3.0% 60,744 Fall contact Hours 6.3% 3.0% $2.30 3.00% $3.00 4.0% $12.70 ID30% In state $151.80 4.0% 56,843 Spring contact Hours 6.3% 4.0% $9.80 4.02% $7.40 IS16% Out-of-state $194.50 4.0% 8,460 Summer contact Hours 6.3% 4.0% $14.10 4.02% $9.40 OS

Ct./Cr. Hours-Fall 51,043Ct./Cr. Hours-Sp 47,142Ct. Cr. Hours-SU 7,596

Michigan College Tuition Tax CreditTuition & Fees FY11 $2,811.70

Programmatic GLMA HVAC Aviation Culinary Nursing Tuition & Fees FY10 $2,740.40In district $330.70 $103.00 $79.70 $79.70 $79.70 Percentage of Change 2.6%In state $191.40 $151.80 $151.80 $151.80Out-of-state $243.40 $194.50 $194.50 $194.50 CPI-U 0.0%Ct./Cr. Hours-Fall 1,345 446 1,149 3,640 3,121Ct./Cr. Hours-Sp 1,345 446 1,149 3,640 3,121Ct. Cr. Hours-SU 386 15 173 116 174

Tuition:FY12 FY12 % of Chg Inc./Dec. % Tuition $ Tuition HVAC HVAC GLMA GLMA

General 60,744 Fall contact Hours 0.0% Increase Increase % $ % $54% In district $82.90 4.0% 56,843 Spring contact Hours 0.0% 4.0% $3.20 3.98% $4.10 4.0% $13.20 ID30% In state $157.90 4.0% 8,460 Summer contact Hours 0.0% 4.0% $6.10 4.02% $7.70 IS16% Out-of-state $202.30 4.0% 4.0% $7.80 3.99% $9.70 OS


Michigan College Tuition Tax CreditTuition & Fees FY12 $2,910.90

Programmatic GLMA HVAC Aviation Culinary Nursing Tuition & Fees FY11 $2,811.70In district $343.90 $107.10 $82.90 $82.90 $82.90 Percentage of Change 3.5%In state $199.10 $157.90 $157.90 $157.90Out-of-state $253.10 $202.30 $202.30 $202.30 CPI-U 2.6%Ct./Cr. Hours-Fall 1,345 446 1,149 3,640 3,121Ct./Cr. Hours-Sp 1,345 446 1,149 3,640 3,121Ct. Cr. Hours-SU 386 15 173 116 174

The data in this model belongs to NMC. The model has been copyrighted as of 2004. All rights to the model are reserved. 46

Tuition:FY13 FY13 % of Chg % Tuition $ Tuition HVAC HVAC GLMA GLMA

General Inc./Dec. Increase Increase % $ % $54% In district $86.20 4.0% 60,137 Fall contact Hours -1.0% 4.0% $3.30 4.01% $4.30 4.0% $13.80 ID30% In state $164.20 4.0% 56,274 Spring contact Hours -1.0% 4.0% $6.30 4.02% $8.00 IS16% Out-of-state $210.40 4.0% 8,376 Summer contact Hours -1.0% 4.0% $8.10 3.99% $10.10 OS


Michigan College Tuition Tax CreditProgrammatic GLMA HVAC Aviation Culinary Nursing Tuition & Fees FY11 $3,013.20In district $357.70 $111.40 $86.20 $86.20 $86.20 Tuition & Fees FY10 $2,910.90In state $207.10 $164.20 $164.20 $164.20 Percentage of Change 3.5%Out-of-state $263.20 $210.40 $210.40 $210.40Ct./Cr. Hours-Fall 1,345 446 1,149 3,640 3,121 CPI-U 2.6%Ct./Cr. Hours-Sp 1,345 446 1,149 3,640 3,121Ct. Cr. Hours-SU 386 15 173 116 174

Fees FY08-10 FY08 $ FY08 # FY09 $ FY09 # % inc/dec FY10 $ FY10 # % inc/dec

GLMA Cruise Fee 33,000 per KF Head Ct.GLMA Technology Fee 129,500 per KFAcademic Course Fees 760,902Campus Maintenance Fees 4,000Applications $20.00 2,479 $20.00 2,834 14.3% $20.00 2,834 0.0%Graduation $5.00 525 $0.00 0 -100.0% $0.00 0 0.0%Health Fee $18.00 7,010 $20.00 7,172 13.7% $20.00 7,418 3.4%Transcripts $5.00 2,600 $5.00 4,100 57.7% $5.00 4,100 0.0%General $11.00 89,290 $11.00 92,593 3.7% $11.00 93,548 1.0%Fitness Fee $40.00 470 $40.00 513 9.1% $40.00 450 -12.3%

Fees FY11-13 FY11 $ FY11 # % inc/dec FY12 $ FY12 # % inc/dec FY13 $ FY13 # % inc/dec

GLMA Cruise Fee $70,500 - 113.6% $123,500 - 75.2% $123,500 - 0.0% Summer $750/st:Fall $500/st.GLMA Technology Fee $151,500 - 17.0% $177,500 - 17.2% $177,500 - 0.0% $500 Fall&Sprinig/stAcademic Course Fees $979,464 - 28.7% $1,008,848 - 3.0% $998,759 - -1.0% Estimate (does not include $1,000 culinary fee)Applications $20.00 3,000 5.9% $20.00 2,895 -3.5% $20.00 2,866 -1.0% Head Ct.Health Fee $24.00 9,953 61.0% $24.00 10,252 3.0% $24.00 9,953 -2.9% $24/per st. in spring 10Transcripts $5.00 4,500 9.8% $5.00 4,100 -8.9% $5.00 4,100 0.0% EstimateGeneral $11.00 119,745 28.0% $11.00 119,745 0.0% $11.00 118,548 -1.0% Contact HoursFitness Fee $40.00 400 -11.1% $40.00 402 0.5% $40.00 402 0.0% Resident Students Fall&SpringParking Fee $0.00 0 $0.00 0 $0.00 0Nursing Fee $183,225.00 $183,225.00 $183,225.00Culinary Fee $125,584.00 $125,584.00 $125,584.00


State Aid FY10 FY11 FY12 FY13Budget Prior 8,757,200 8,682,200 8410200 6728160Less: Reduction (75,000) 0 0 0Projected Act. 8,682,200 8,682,200 8,410,200 6,728,160Percent Inc/(Dec) 0.0% -3.1% -20.0% 0.0%Budget Current 8,682,200 8,410,200 6,728,160 6,728,160

FY10 FY11 FY12 FY13Projected change in Property Tax Values 1.5% 1.5% 2.0% 2.0%Projected millage per thousand $2.15 $2.15 $2.14 $2.14

FY10 FY11 FY12 FY13Projected change in Salaries 1 19,070,175 19,648,887 2.1% 20,140,109 2.5% 20,643,612 2.5% 1 equals benchmark plan

Projected change in benefits 7,659,519 7,522,718 -1.8% 7,635,559 1.5% 7,750,092 1.5% 2 equals scale only

Employee Contributions to Healthcare 30,683 69,500 69,500 3 equals step only

Plus: New Position Salaries (adj/ov/adv/std/supp) 0 491,454 0 0 4 equals fixed percent 1.0%

Plus: New Position Benefits 0 129,940 26.4% 0 26.4% 0 26.4% 5 equals same as FY10

Less: Retirements/Vacant Salaries/Enrollment Decline Impact 0 0 201,401 1.0% 206,436 1.0%

Less: Retirements/Vacant Salaries/Enroll Decline Impact-Benefits 0 0 26.4% 53,170 26.4% 54,499 26.4%

FY10 FY11 FY12 FY13

Expense Inflator - budget amts. 1.5% 1.5%

Changes in Expenses:Purchased Services 0 73,000 0 0

Supplies & Materials 0 0 0 0

Internal Services 0 0 0 0

Other Expenses 0 0 0 0Institutional Expenses 0 0 0 0Maintenance & Renovation 0 0 0 0Events/Trvl/Prof. Devel. 0 0 0 0

Transfers (FY10) Include: FY10 FY11 FY12 FY13Strategic Funds $350,000 $350,000 $350,000 $350,000Funds for Transformation $50,000 $50,000 $50,000 $50,000Internal Loans to Plant Fund $122,082 $61,913 $61,913 $61,913Internal Loan from PF-Property $200,000Lease Payments $86,408 $42,743 $42,743 $42,743Additional Surplus $0Use of Surplus -$ -$

$608,490 $504,656 $504,656 $704,656


Northwestern Michigan CollegeBudget Model for FY11General Fund-Only Approved Approved Proposed Proposed Proposed

FY07 FY08 FY09 FY10 FY11 FY12 FY13

Budget Budget Budget Budget Budget Budget Budget

Revenue

Tuition & Fees 14,483,481 15,418,487 16,739,957 18,204,249 21,855,033 22,619,130 22,321,443

Property Taxes 8,362,268 8,877,004 9,231,564 9,450,989 9,361,057 9,270,079 9,221,621

Local Sources 22,845,749$ 24,295,491$ 25,971,521$ 27,655,238$ $31,216,090 $31,889,209 $31,543,064

State Sources 8,441,900 8,441,900 8,757,200 8,682,200 8,410,200 6,728,160 6,728,160

Federal Sources 318,000 218,000 336,000 418,000 475,000 575,000 575,000

Private Sources 183,000 189,000 264,581 253,581 242,000 242,000 242,000

Investment Income 475,000 475,000 475,000 358,000 358,000 358,000 358,000

Other Sources 406,032 403,615 415,359 316,218 300,250 279,859 279,859

Total Revenues 32,669,681$ 34,023,006$ 36,219,661$ 37,683,237$ $41,001,540 $40,072,228 $39,726,083

Expenditures

Salaries and Wages _ Regular 16,697,645$ 17,297,785$ 18,087,135$ 19,042,095$ 20,140,341$ 19,938,708$ 20,437,176$

Benefits_Regular 6,877,079 7,206,020 7,498,933 7,663,080 7,621,975 7,512,889 7,626,093

Employees to Support Initiatives 575,000 - -

71 Purchased Services 1,363,107 1,338,485 1,614,073 1,792,720 1,920,660 1,949,470 1,978,712

72 Supplies & Materials 2,458,192 2,370,156 2,590,362 2,719,224 2,658,852 2,698,734 2,739,215

73 Internal Services 67,455 42,852 214,098 206,883 250,875 254,638 258,458

74 Other Expenses 969,315 1,071,200$ 1,379,081 1,504,219 1,783,358 1,810,108 1,837,260

75 Institutional Expenses 2,024,501 1,877,385 2,010,353 1,872,110 1,763,863 1,790,321 1,817,176

76 Maintenance & Renovation 990,569 944,568 824,648 894,449 960,161 974,563 989,182

77 Events/Trvl/Prof. Devel. 507,625 506,448 522,678 539,326 623,676 633,031 642,526

79 COAT 292,344 292,344 292,344

For Master Planning & Parking 200,000

For Security (One-Card System) 100,000

For Campus Development (Financial Aid, UC, Tanis Lower Level) 100,000

For Support of Technology Consultant Findings 98,000

Capital Plant Funding 614,841 869,810 885,695 1,099,626 1,199,626 1,384,626

Total Expenditures 31,955,488 33,269,740 35,611,171 37,119,801 40,188,731 39,054,433 40,002,768

Transfers 714,192$ 753,264$ 608,490$ 563,436$ 504,000 504,656 704,656

Transfer premiums to wellness 30,683 69,500 69,500

Program Specific Reserves 308,809 308,809 308,809

Revenues Over (Under) Expenses $1 $2 $0 $0 0$ 204,330 (1,290,150)

700,000 700,000

Current Reserves

Surplus FY09 (moved to Plant Fund)

Surplus FY10 (designated to Working Capital and FY10 Plant Fund 885,910

Surplus FY11 (designated within FY11 Budget)

Remaining Reserves

Total 911,080 911,080 1,115,410

Addition To/Use of Reserves - 204,330 (1,290,150)

Amount Remaining 911,080 1,115,410 (174,739)

Note: Program specific reserves are not included in reserves available for operations. 49

Documents

Board of Trustees - NMC · All board meetings are open to the public. May 24, 2010, Oleson Center . June 28, 2010, Great Lakes Campus Room 112 . July 26, 2010, Great Lakes Campus