MCC Budget Source: BRT

Budget Response Team (BRT)

The MCC Budget Response Team is a shared governance group established by then-chancellor Jackie Snyder to provide input on proposed budget solutions. BRT members represent their constituents’ interests by disseminating information shared by the chancellor's office and providing feedback on that information.

The members of the BRT are as follows:

Staff

Faculty

Administrators

Officers

Please contact a member of the BRT with any questions or input on the budget information.

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Links to BRT Summarries from 4/29/11 and 5/12/11

4/29/11 BRT Summary

5/12/11 BRT Summary
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April 14, 2011

Below is the updated version of a spreadsheet that was originally presented to the Budget Response Team in December and was revised on April 14. (The old version, which is now obsolete, is accessible from a link near the bottom of this page.)

Closing the gap 4.14.2011

To view this slide in a larger format, click on the "view on SlideShare" icon in the lower right-hand corner.

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April 4, 2011

These are the recommendations regarding early retirement options and BRT membership that the BRT presented to the chancellor after the group's March 25 meeting.

BRT Recommendations

March 25, 2011

I. EARLY RETIREMENT

a. The BRT recommends that the Chancellor propose to the board the MCC Rule of 80 Health/Incentive option to be exercised within 1 year of reaching Rule of 80. This change would become effective July 1, 2013.

i. Key Details of the New Early Retirement Plan:

1. Criteria for Eligibility:

a. 20 years of consecutive full-time benefit-eligible service to MCC, and

b. MCC’s rule of 80 = age plus benefit-eligible service years at MCC.

c. The option to early retire must be exercised within 1 year of meeting the rule of 80 or the benefit is lost.

2. Early Retirement Benefit:

a. The employee would be given a choice of their early retirement benefit.

i. Health Insurance - The health insurance would be provided for themselves only covered at a rate equivalent to that of current employees until the age of 65 and/or Medicare availability.

ii. Incentive Payment - The incentive payment would be equal to 50% of their final contract or salary capped at $50,000. The basis for calculating the incentive payment excludes over-time pay, overload pay, etc.

3. Estimated Cost of Plan:

a. The present value of this proposal is $22 million.

b. The estimated cost of this plan is around $ 1 million annually.

II. BRT Membership

a. The BRT recommends that the Chancellor consider making the faculty liaison representative on the BRT a non-voting member. This is being proposed to equalize the number of “voting” members from each governance group on the BRT.

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March 11, 2011 BRT Meeting Summary

(NOTE: The information below is based on the state of the budget at the time of the Budget Response Team's March 11 meeting. Some of the information may have been updated since that date.)

Members Present: Beverly Jennings, Melissa Marr, Sherry Skinner, Cheryl Winter, Elliott Schimmel, Lynn Canaday, Craig Bartholomaus, Jon Burke, Elizabeth Lindquist, Reinhard Weglarz, Tuesday Stanley and Tom Vansaghi

Others Present: Patricia Amick & Jane Smeltzer

I. Approval of Minutes from 2-11-11 Budget Response team meeting. Minutes were approved with one change as noted.

II. Update on Early Retiree Concerns: An early retiree will make a presentation at the March 17, 2011 MCC Board of Trustees meeting to communicate their concerns about proposed policy changes.

III. Question: How does MCC determine the hire date for employees? Answer: It is based on the first date of actual work.

IV. Summary of Fiscal Impact of Early Retiree Proposals:

a. Dr. Stanley distributed an actuarial report summarizing each of the early retirement scenarios. (See handout.) The Hay Group put the following actuarial scenarios together:

i. Scenario A: current plan includes a $65,631,096 cost to MCC.

ii. Scenario B: rule of 80/health or incentive payment is a cost of $22,238,416 to MCC.

iii. Scenario C: no health and no incentive plan is $12,766,388 cost to MCC.

iv. Scenario D: rule of 80- incentive only with 1 year option is a $24,451,238 cost to MCC.

v. Scenario E: rule of 80- health insurance only with 1 year option is a $20,036,986 cost to MCC.

vi. Scenario F: rule of 80- health option with 3 year option is a $27,711,429 cost to MCC.

b. Consensus of BRT members at February 11, 2011 meeting focused primarily on either providing a health insurance or an incentive option.

i. Dr. Stanley distributed a document with the actuarial values of each of the scenarios on the annual MCC budget from 2010 – 2028. She distributed another spreadsheet with the impact of the scenarios on MCC’s balance sheet (assets versus liabilities).

ii. Dr. Stanley handed out a recap of the information that is in the current MCC budget book from 2011 through 2016, which includes a breakdown of each of both retirement scenarios and the impact on the total budget.

iii. Feedback/Suggestions/Discussion:

1. A suggestion was made to provide a one-time incentive for all employees in place on July 1, 2013 to offset future early retirement benefit losses. The rationale behind this would be to provide short-term incentive to current employees because they would give up long-term benefits. The suggestion was discussed but not adopted as an official position to get feedback on.

2. A suggestion was made to continue with some level of early retirement benefits until the budget can absolutely not handle it.

3. Concerns were raised about continued new employees being hired in the current climate. There is a notion that MCC can’t stop doing business and needs to move priority areas forward—especially if new positions generate revenue to fund themselves.

4. BRT members raised concerns about taking away all early retirement benefits. Concerns were raised about the fairness.

iv. A suggestion was made to adopt Scenario B (Rule of 80 with the choice of health or incentive pay) for all current employees and terminate all retirement benefits for employees hired after July 1, 2013.

v. Based on the actuarial reports and financial data, discussion focused on adopting Scenario C, which would discontinue the early retirement plan completely (no health or incentive).

vi. A suggestion was made to adopt Scenario C but continue reviewing the relevance of an early retirement plan each year going forward depending on the financial climate. An early retirement incentive could be used on a short-term basis.

vii. The BRT will continue to consider these options. The handouts will be sent to BRT members to send to their constituents and place them on the MCC Budget Source site.

viii. Discussion on March 25 will focus on a recommendation of the group.

V. College Allocation Model Document Feedback

a. Under, item I. A. 1. Distance Education--There is a question about how this will be managed and administered. See above comment item.

b. Under item I. A. 5 it should be “Workforce Development” (instead of Workforce Development)

c. Under item I. A. 17 add ESL.

d. Add a new item in I. A. (number 19) ABLE

e. Add a new item in I. A. (number 20) First Year Experience/Instructional

f. Under item I. C. number under item number 3 “First Year Experience” add “Instructional”

g. Under item I. C. add a new number 12 called “student employment services”

h. Under item I.C. Add a new number 13 called “access office”

i. Concerns were raised about a proposed online expansion program because the credit hour generation at the district could directly impact campus funds.

VI. Next Meeting and Next Steps

a. The next BRT meeting will be held on Friday, March 25, 2011 from 1:00 till 3:00 PM at MCC-Penn Valley in room 502.

b. An item for the agenda will include “Next Steps for BRT” to begin working on next set of budget priorities once this round of budget issues are addressed.

Feb. 11, 2011 BRT Meeting Summary

(NOTE: The information below is based on the state of the budget at the time of the Budget Response Team's February 11 meeting. Some of the information may have been updated since that date.)

Others Present: Patricia Amick, Steve Frommelt, Michelle Schmiedeler & Jane Smeltzer

I. Early Retirement Feedback

a. Create an option for employees to take health insurance or incentive payment instead of one or the other. Employees want choice as they will select the one that maximizes their individual benefits.

b. If you reduce premium pay incentives, how does that impact individual decisions to retire? If you grandfather the premium pay incentives how would this impact the savings to the college?

c. Early retirees feel that they are under-represented in the decision to eliminate their current premium pay benefits. Can there be a change in the manner in which early retirees are compensated? Can there be a grandfathering elimination of the premium pay program?

d. Any new plan or options put out to consider relating to early retiree premium pay for faculty should be presented to staff and administrators as well as faculty to consider.

e. Early retirees may be open to a new early retirement premium pay plan to be at a reduced rate but more compensation than regular adjunct rate. Staff would like a phased-plan for premium pay as well but at some point it must end.

f. Relating to the future of the early retiree program, could there be an option to offer an alternative to the Rule of 80? Could there be a Rule 80 to 86 to give employees more choice.

g. Is there a way to provide some kind of reward for employees who have spent the majority of their career at MCC (15 years +)? This could be a way to provide some type of an incentive to employees who will miss the early retiree incentive program currently offered.

i. When should these benefit changes go to MCC’s Board of Trustees?

ii. The BRT agreed to allow the benefit changes to go the board at the April board meeting (April 14), which means the BRT should finalize its recommendations by the end of March.

II. Overview of Budget Deficit for MCC

a. Dr. Stanley provided an overview of a budget presentation that is being presented on the campuses.

III. Allocation Model Framework

a. Dr. Stanley provided an overview of a document outlining an allocation model with principles that the officers have developed to begin discussions related to reframing the budget allocation model at MCC.

b. Dr. Stanley asked the members of the BRT to solicit input on these principles. Questions to consider include: If we could build a college for tomorrow how would we do it? Are there things we should stop doing? Are there better ways to accomplish these things?

c. Send your budget allocation model feedback to Dr. Tuesday Stanley.

IV. Overview of the MCC Budget Source Site

a. Michelle Schmiedeler presented a summary of the MCC Budget Source Web site.

b. Members of the BRT recommended a couple of suggestions to the content.

V. MCC Athletic Report: Dr. Stanley issued a charge to a committee to review expenses and streamline the budget while continuing to offer a meaningful experience for athletics. Drs. Brian Bechtel and Jon Burke will co-chair a district-wide committee to work on this charge.

VI. Can MCC find a way to incentivize cost saving suggestions. In other words, if someone comes up with a suggestion that saves a half million dollars it would be nice to provide an incentive to them for pointing out this suggestion.

VII. Next Budget Response Team Meetings:

a. March 11, 2011 from 1:00 till 3:00 PM

b. March 25, 2011 from 1:00 till 3:00 PM

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December 17, 2010 BRT Meeting Summary

(NOTE: The information below is based on the state of the budget at the time of the Budget Response Team's December 17 meeting. Some of the information may have been updated since that date.)

Metropolitan Community College-Kansas City

Budget Response Team (BRT)

Summary of December 17, 2010 Meeting

2012 (Begins July 1, 2011) Budget Deficit = $5.8 million.

See attached handout (page 1) for full summary of project budget deficits through 2016.

General Fee

Replacement of transcript/graduation fee with a general fee (see 11-19 BRT summary for full summary of plan): include non-credit students in this proposal, which would mean $80,000 more revenue for MCC. However, this does not apply to community education students.
BRT supports recommendation.

Health Insurance RFP

MCC will go out for bid for an insurance carrier in February. The health insurance committee meets on February 4th to discuss the components to include in the RFP. The committee meets again on February 18, 2011 to review the RFP before it is sent. MCC’s insurance committee will review bids in late April and recommend a carrier at the June 2011 Board of Trustee meeting.

Early Retirement Proposal

Three proposals to MCC’s current early retirement plan and corresponding cost savings were distributed and discussed. The BRT is charged with getting feedback from constituent groups about which option is preferred by MCC employees and returning to next BRT meeting on February 11, 2011.
See attached handouts (page 2) for summary of current early retirement plan
MCC employees should provide feedback on whether they prefer an incentive payment only, insurance benefit only or no early retirement plan.
All three options include elimination of premium pay for retirees over two years meaning that on July 1, 2011 200 units of premium pay would be available (7,936.5 hours) and on July 1, 2012 there would be zero hours available. This equates to 3 units per person or 120 hours for administrators and staff for fiscal year 2012. This policy change would NOT be grandfathered for current employees or early retirees—everyone would be impacted beginning July 1, 2011. This change will be taken to the board and does not require feedback from the BRT
All three options eliminate bumping rights. This change will be taken to the board and does not require feedback from the BRT
Early Retirement Eligibility (for all three proposals):
Early Retirement Plan—Option One (page 3 of slide)
Early Retirement Plan—Option Two (page 4 of slide)
Early Retirement Plan—Option Three (page 5 of slide)

Handouts:

BRT financial plan closing the gap 2010 Dec17

BRT November 19, 2010 Meeting Summary

(NOTE: The information below is based on the state of the budget at the time of the Budget Response Team's November 19 meeting. Some of the information may have been updated since that date.)

Metropolitan Community College-Kansas City

Budget Response Team (BRT)

Summary of 11-19-10 Meeting

BRT Roles with Constituents

Members of the BRT are expected to take feedback from BRT meetings to respective constituency groups (staff, faculty and administrators) to inform and obtain feedback.
BRT members are expected to bring feedback from respective constituencies to BRT meetings for discussion and consideration.
Feedback will be summarized and bulleted for consistent communication purposes.

Salary Negotiations

MCC will enter negations with employee groups regarding salary and benefits in spring of 2011.
It is crucial that the process reach a successful conclusion by October of 2011 or the MCC Board of Trustees will set the salary schedules accordingly.

General Fee Proposal

Eliminate both current transcript and graduation fees and replace with a general fee ($10.00 per term).
$10.00 general fee would be charged to both credit/non-credit students each term.
Estimated financial impact will be $437,000 increase in revenue.
[Click here for analysis of replacing transcript/graduation fee with a general fee]

Flex Reallocation Changes

MCC has traditionally allowed employees to utilize the MCC provided flex benefit funds to reduce their dental and vision premiums. It has been determined that this practice will need to cease to bring MCC into compliance with flex spending regulations.
Currently there are 129 employees (20%) who utilize flex benefits to reduce their premiums.
This recommendation will need to be approved by the MCC Health Insurance Committee before this is finalized.
Flex spending is not going away but it simply will no longer be available for reducing premiums.
This change would be effective beginning with the January 2012 benefit year.

Health Insurance Options

MCC’s health insurance costs will rise dramatically due to enormous rate increases.
MCC’s Health Insurance Committee will soon be reviewing new options and rates that will give MCC employees choices including a basic plan (that mirrors current 80/20 plan), a premier plan (that is similar to the 90/10 PPO plan) and a qualified HDHP plan (a high deductible plan).
An RFP for a new health insurance plan will go to the marketplace in February 2011 and would go into effect January 1, 2012.
More details will be forthcoming following Health Insurance Committee reviews and discussions.

BRT August 27, 2010 Meeting

(NOTE: The information below is based on the state of the budget at the time of the Budget Response Team's August 27 meeting. Some of the information may have been updated since that date.)

BRT Aug 27 handout

View more presentations from Metropolitan Community College-Kansas City.

Pages

BRT

Budget Response Team (BRT)

December 17, 2010 BRT Meeting Summary

Handouts:

BRT November 19, 2010 Meeting Summary