budget 2013/14 and business plan town hall march 7, 2013 annual budget 2013/14

Budget 2013/14 and

Business Plan Town Hall

March 7, 2013

ANNUAL BUDGET 2013/14

Presentation Outline

• Financial Health of the College• Challenges Ahead• Annual Budget 2013/14

Annual Budget 2013/14

2March 7, 2013

Financial Health – Ratio Analysis

1. Quick Ratio

2. Total Debt to Assets Ratio

3. Debt Servicing Ratio

4. Net Assets to Expense Ratio

5. Net Income to Revenue Ratio

6. Net Asset Summary


3March 7, 2013

Quick Ratio

March 7, 2013


4

Objective: • Fiscal performance indicator testing the college’s ability to pay its short term maturing

obligations (e.g. biweekly payroll payments).

Benchmark: • Less than 1.00 is typically a concern because it begins to indicate that a college may not be

able to meet its short term obligations.

Note: When including surplus cash invested in longer term investments (greater than 1 year) Algonquin’s Quick Ratio is in the range of 1.75 to 2.00

Compare with 2003/04 Quick Ratio of 0.8

2009/10 2010/11 2011/12 2012/13 Q3 Projection

Proposed 2013/14 Budget

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

College Benchmark

Qui

ck R

atio

Total Debt to Assets Ratio

March 7, 2013


5

Objective: • Measures the proportion of total assets that are financed by debt. A high or increasing value

may be predictive of future liquidity problems or a reduced ability to borrow money in the future.

Benchmark: • Greater than 35% leads to a concern as this may indicate that a college will not be able to

finance their ongoing operations due to the debt burden.

Note: Compare with 2003/04 Total Debt to Assets Ratio of 52%

2009/10 2010/11 2011/12 2012/13 Q3 Projection


15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

College Benchmark

Tota

l Deb

t to

Ass

ets

Rati

o

Debt Servicing Ratio

March 7, 2013


6

Objective: • This ratio measures the College’s spending on servicing the debt portfolio and could be used

as an indicator that the college may be over-leveraged in debt.

Benchmark: • A ratio greater than 3% indicates that the college is spending less than 97% on core services

which leads to a possibility that the college may be over-leveraged with debt payments.

Note: Compare with 2003/04 Debt Servicing Ratio of 2.7%

2009/10 2010/11 2011/12 2012/13 Q3 Projection


0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

College Benchmark

Deb

t Ser

vici

ng R

atio

Net Assets to Expense Ratio

March 7, 2013


7

Objective: • A traditional indicator to ascertain the ability of a college to continue operations in the event there is a

delay in revenue streams.

Benchmark: • Less than 60% may be a concern since it could indicate that a college may not have sufficient internally

accumulated resources in the future to fund operations and may be heading towards a deficit position. A negative percentage indicates the college is already in a deficit position.

Note: Compare with 2003/04 Net Assets to Expense Ratio of 48%

2009/10 2010/11 2011/12 2012/13 Q3 Projection


50.00%

55.00%

60.00%

65.00%

70.00%

75.00%

80.00%

85.00%

90.00%

95.00%

100.00%

College Benchmark

Net

Ass

ets

to E

xpen

se R

atio

Net Income to Revenue Ratio

March 7, 2013


8

Objective: • This ratio is an indicator of fiscal performance that measures the extent of a balanced

budget.

Benchmark:• Less than 1.5% may be a concern because it may indicate that the college may not be able

to recover from a deficit position in a reasonable period of time.

Note: Compare with 2003/04 Net Income to Revenue Ratio of (0.24)%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

College Benchmark

Net

Inco

me

to R

even

ue R

atio

Net Asset Summary

March 7, 2013


9

Objective: • To measure a net asset balance for operating purposes.

Benchmark:• Less than zero indicates an accumulated deficit.

Note: Compare with 2003/04 Net Assets Summary of $(5,143k)

2009/10 2010/11 2011/12 2012/13 Q3 Projection


-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Net Assets

Net

Ass

et S

umm

ary

(Col

lege

) ($

000'

s)

Financial Health – Results

Algonquin College is in

Good Financial Health


10March 7, 2013

CHALLENGES AHEADBudget 2013/14 and Business Plan Town Hall


March 7, 2013

Date

PowerPoint Presentation Title

Public Funding vs. Other Revenues


13March 7, 2013

2014 Pro-posed Budget

2013 Q3 Report

2012 2011 2010 2002 $-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

Total Grants and Reimbursements

Total Other Revenues

Fund

ing/

Reve

nue

($ 0

00's

)

58% 62% 66%64%

71%

44%42%

38%

58% 62% 66%64%

71%

44%42%

38%

37% 38% 40%39%

41%

64%63%

62%

60%61%

59%36%

College Funding Framework


14March 7, 2013

FY10 FY11 FY12 FY13 (projected) FY14 (budget) 3,700

4,200

4,700

5,200

5,700

170,000

180,000

190,000

200,000

210,000

220,000

230,000

GRA

NTS

/FTE

($)

OPE

RATI

NG

EXP

END

ITU

RES

($ 0

00'S

)

4.21%

4.76%

4.45%

3.37%

Budget Challenges

March 7, 2013


15

• Ontario Economy and Fiscal Uncertainty• Deficits projected up until 2017/18• Revised Tuition Fee Framework• No Indication of New Capital Funding

• Budget Measures Implemented: Annual Algonquin Impact

of Funding Reductions Provincial Budget Measure 2013/14 2014/15 International Student Recovery Fee $ 340,000 $ 923,000 Elimination of Small Northern and Rural Grant 900,000 1,800,000 ‘Policy Levers’ – Operating Grant Reductions 1,000,000 2,000,000 International Student Municipal Tax 86,000 86,000 Elimination of Ontario Special Bursary Program _______TBD* ______TBD* TOTAL IMPACT ON ALGONQUIN COLLEGE $ 2,326,000 $ 4,809,000 *Dependent on impact of Ontario Tuition Grant

Seeking Solutions

March 7, 2013


16

• Growth of Funded and Non-Funded Activities• New Programs• Mobile/Online/Hybrid/Applied• International Opportunities• Corporate and Contract Training• College Ancillary Services

• Technology and Automation of Processes• Core vs. Non-Core functions• Partnerships• Business Process Review• Responsibility Centre Management


17March 7, 2013

Budget Highlights

March 7, 2013


18

• BALANCED BUDGET: • Funded Activity - Aligned the College’s

operating expenditures and revenues within the provincial funding and tuition fee framework

• Non-Funded Activities generating surpluses to fund Strategic Investment Priorities

• Projected enrolment increase of 3.1%• Expansion of Mobile Learning Programs• New faculty and staff positions to

accommodate growth• $2.5M for Professional Development of

faculty and staff

Date

PowerPoint Presentation Title

19

RevenueAnnual Budget 2013/14

March 7, 2013


20

Grants $104,166

Tuition Fees $90,820

Contract Educational

Services $28,168

College Ancillary Service

Sales$40,285

Other $20,461

ExpendituresAnnual Budget 2013/14

March 7, 2013


21

Academic Salaries & Benefits$87,611

Support Salaries & Benefits $47,589

Administration Salaries & Benefits $26,344

Other Operat-ing

$103,618

Strategic Investment Priorities (SIP)Annual Budget 2013/14

March 7, 2013


22

Digital College $3,900

College Technologies

$2,650 College Space & Infra-

structure $2,650 New Program Ini-tiatives $1,000

Academic & Other

Equipment $1,800

Initiatives & Opportunities

$4,433

QUESTIONS?


March 7, 2013

budget 2013/14 and business plan town hall march 7, 2013 annual budget 2013/14

Documents

ratio greater

expense ratio

total debt

net assets summary

balanced budget

net asset summaryannual

net income

debt payments