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Manhattan College’s Revenue Increases Despite Large Increase in College Reserve

Manhattan College’s revenue increased by 11 percent in the fiscal year of 2013-2014, which ended June 30th, 2014, according to the Statement of Activities report issued at the Manhattan College Senate Meeting on Nov. 18.

Among its revenue increase, MC saw a $1.9 million increase (60 percent) from the previous fiscal year in contributions to the school, according to the report.

In its expenses, MC had a $28.7 million increase in the renewal and replacement of the physical plant. The $30.7 million spent was a 1,411 percent increase from the previous fiscal year.

The money was used to fund repairs to keep existing buildings running. Not all of the money was spent last fiscal year. Larger projects may require the money to be spent over two or three years.

“The fact that we could put some additional funds into the renewal and replacement of the college means that we are less likely to get surprises that could throw our budget off,” Michael Masch, the college’s vice president for finance, said at the meeting.

Fiscal Year

2013-2014

Fiscal Year

2014-2015

Change From

FY13 to FY14

Renewal & Replacement $2,031,011 $30,688,195 1,411%

Graph by Chris Cirillo

The decision to increase the funding was sparked by a surprise the college had to cope with last year. A $700,000 boiler in the Leo engineering building needed to be replaced, and the money was not in the budget. The unexpected expense needed to be paid for, so the school had to make an additional payment that was not in the plan.

The large increase in funding for the renewal and replacement is part of the campus master plan for the college that concluded it was underinvesting in that category in the past. The increase is also due to the operation of the Kelly Commons and increase in electricity rates.

The wealth of MC’s assets increased 20 percent as a result of the building of the Commons. The Commons value, however, will depreciate each year if more money isn’t invested to add repairs and additions. The school believed the increase in renewal and replacement would also help the value of the buildings.

Masch, who is in his second year as the vice president for finance at MC, was not responsible for the planning of the budget for the 2012-2013 fiscal year. His planning for this year’s funding was part of a plan involving larger investments than previous years.

“I would tell you that we did not put enough into reserves [renewal and replacement for the physical plant] the year before,” Masch said. “I would say that was a mistake in terms of long-term planning.”

MC also had a 33 percent increase in long-term debt in its liabilities in the previous fiscal year as a result from the funding for the Commons, according to the balance sheet issued at the meeting. The $97.1 million in the budget this year was $23.9 million more than last year’s funding.

2013 2014 13-14 Change %
Long-term Debt $73,228,163 $97,104,022 33%

Graph by Chris Cirillo.

The Commons was paid for by gifts, but all donors promised to pay over an extended period of time. As MC was forced to make monthly payments, it borrowed money from the banks that will eventually be paid off when the donors fulfill their promises. The $97.1 million should eventually dwindle to nearly $73.2 million in 2013.

As The Quadrangle previously reported on Oct. 7, 2014, approximately $43 million out of $45 million dollars for the Commons has raised. Fundraising is expected to be completed by June of 2015.

The substantial amount of debt the previous year was also due to the construction of the Commons.

“We did take on additional debt, but much of that additional debt is going to roll off pretty quickly in the next couple of years,” Masch said.

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