LINN  — State Tech VP of Finance Jenny Jacobs told Regents at their June 6 meeting that the college is set to end fiscal year 2023 with a surplus of $179,902 as the board approved a revised total unrestricted budget $35,143,826, compared to the initially approved budget of $33,270,940.

Several factors played a role in creating the surplus, including a 4% growth in credit hours over budgeted credit hours. Jacobs noted that she budgeted conservatively, expecting no increase from the credit hours billed in 2022. However, State Tech billed 69,733 hours, up 2,838 or 4% over budget, which equates to $545,653 in additional revenue.

In sales and services, the Missouri One Start program generated $535,000 in revenue over budget, but Jacobs said an offsetting expense of $465,000 leaves $70,000 in additional funds that are restricted for the program. 

State Tech also saw interest income of $512,403, up a staggering $477,403 over projections. “This was a huge win,” said Jacobs. “We really benefited from the climb in interest rates early this spring.”

FY23 revenue from other sources was $86,477 more projected due to the discount available for prepayment of the school’s MOSERS employer contribution.

Jacobs also told Regents that she budgeted $4 million for capital appropriations, but due to final FY 22 figures, only $3,755,247 needed re-appropriation. There is an equal offset in expenses. Private gifts totaling $288,337 were $203,337 over the $85,000 budgeted, which Jacobs noted was related to funds used to offset expenditures for Osage County Community Center projects.

Several areas were under budget on spending, including instructional ($466,129), academic support ($188,923), student services ($90,887), institutional support ($1,360,099), and debt retirement ($1,867). Underspending was primarily due to savings from unfilled positions. During FY 24, 24 positions were vacant for at least a portion of the year, resulting in $800,000. Jacobs explained she budgeted for a 10% increase in health insurance in January, but there was a 2% decrease, which resulted in expenses being $100,000 under budget.

Also, Jacobs noted the academic program discretionary budget was underspent by roughly $200,000 and will roll forward to FY 24. 

Due to revenue over budget and savings from unfilled positions, the non-academic program discretionary budget was able to cover $3 million in extraordinary expenses, including a $2 million Ag Innovation Grant match and $1 million in CTG building construction expenses.

In the auxiliary budget, Jacobs noted that Student Government Association, student activity, and parking fees were over budget by $76,383 due to increased credit hour production.

Housing will put roughly an additional $70,000 in net revenue. Jacobs said summer housing revenue is extra because she only budgets full capacity for fall and spring.

Cafeteria net revenue was about $70,000 under budget.  The college only cashed in $200,000 of the $250,000 in capital investment available from the new contract with Aladdin Dining.

Activity Center revenues were $8,000 under budget, primarily because of the floor damage to the basketball courts. Jacobs is working with the insurance carrier to recoup some of that lost revenue that could have resulted in revenue being over budget.

Bookstore net revenue was about $300,000 over budget. Jacobs said internal sales, inclusive access revenue, and tools and books revenue were all over budget.

Country Club revenue was $175,000 over budget; Jacobs noted it was hard to predict at the beginning of FY 23.

Auxiliary will place approximately $1,102,900 in reserves, which includes the required bond covenant coverage.

Jacobs told Regents the college would complete its payout of the direct US Department of Education Coronavirus Aid, Relief, and Economic Security (CARES) Act funds by the June 30 deadline.

In total, State Tech received $186,353 from Osage County, $7,499,296 from the US Department of Education (half of which was distributed directly to students), $1,362,060 in additional CARES funding from various sources, and $29,000 from the FAA for airport improvements.

In the restricted grants budget, Jacobs noted that federal grant revenue ($2 million), match ($2 million), and grant expenses ($4 million) were all related to the Ag Innovation Grant.

The restricted aid budget finished $1,201,644 ahead of estimates. Federal Pell Grants came in $565,020 higher, and state grants were up $705,437, including A+ funding.

FY 2024 BUDGET ADOPTED

Regents adopted an unrestricted operating budget of $35,989,745, estimated to be $845,919 higher than the revised 2023 budget.

Jacobs explained that the board’s January approval of tuition rates would generate an additional $1,010,650 in projected revenues.

Jacobs noted that capital appropriations represent the MOExcel project, Safety Village, a total project cost of $4 million, including a $1,995,500 match and $2 million in funds budgeted to be generated through fundraising.  Operating budget expenses include an 8% salary increase with accompanying benefits. Jacobs told Regents the salary increase would cost an additional $850,000, and benefits would cost $300,000, a total of $1,150,000. The budget includes nine growth positions, primarily academic, at a cost of $740,000. Jacobs reminded the board that no state funds would be available to offset State Tech’s MOSERS contribution rate increase, meaning the college will pick up the entire $545,000 additional expense in this year’s budget.

She budgeted health insurance conservatively, estimating a 10% increase as of Jan. 1, 2024.

Academic discretionary budgets are funded entirely by tier fees and built on the same assumptions as revenues.

In the non-academic discretionary budget, Jacobs said the largest department budgets were increased by a 9% ($138,145) Cost of Living Adjustment.

The plant budget increased $50,000, from $350,000 to $400,000, a State Tech commitment for the last three years.

Non-discretionary plant expenses increased by $45,000 to cover known rate increases, including utilities, property, and casualty insurance.

The Auxiliary budget does not reflect any rate increases for Student Government Association, student activity, and parking fees, which are based on FY 23 credit hours.

Housing, however, will see an 8% increase, from $1,850 to $2,000 per semester for a double room, generating $21,600 in additional revenue for fall and spring. This rate hadn’t increased since the fall of 2020. 

Cafeteria meal plan and door rates will increase by 10%.  The rate increase should allow for FY 24 activity to break even. Capital investment will only be $50,000 compared to $200,000 in FY 23. 

Jacobs left Activity Center, bookstore, and country club budgeted revenues at the same levels as FY 23.

Auxiliary expenses include a salary/benefit increases and $50,000 for special projects in housing, the activity center, and the bookstore.

Auxiliary reserves are budgeted to meet the required bond covenants, which total $544,928, and represent 1.2 times the bond debt service.

In the grant budget, Jacobs noted that federal grant revenues increased by $30 million, $20 million in FY 23 American Rescue Plan Act (ARPA) funds re-appropriated, and $10 million in FY 24 ARPA funds. She explained these  funds may be used to support the growth of the college.

State enhancement grant awards will be significantly affected in FY 24. The Department of Elementary and Secondary Education (DESE) limited the award to each institution to $750,000, much less than the FY 23 award of $2,118,607. 

Total revenues and expenditures from this budget are $31,745,709, a difference of $23,32766,116 from FY 23.

The restricted aid budget anticipates revenues and expenditures of $15,630,507, an increase of $783,651 from FY 23.

Remaining business will be presented next week.