Financial Operating. & Capital Plan Reviews FY Budget Forum. February 14, FY 2014 Budget Forum - February

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1 Financial Operating & Capital Plan Reviews FY 2014 Budget Forum February 14, 2013 FY 2014 Budget Forum - February

2 University Budget Council (UBC) Bob Warren, Chair VP Administration & Finance Dennis Jacobs Provost & VP for Academic Affairs Charles Erekson Vice Provost for Planning & Administration Harry Fong Associate VP for Finance Rob Gunsalus VP for University Relations James Hall Faculty Representative Barbara Moloney President, Faculty Senate Godfrey Mungal Dean, School of Engineering Robin Reynolds University Budget Director Michael Sexton VP for Enrollment Management Julie Stone President, Staff Senate FY 2014 Budget Forum - February

3 FY 2014 Revenue Budget Auxiliaries 8% Endowment Income 8% Private Gifts 4% Other 4% Undergrad Tuition & Fees 54% Graduate & Other Tuition & Fees 22% Total: $387.4M FY 2014 Budget Forum - February

4 Revenue Assumptions Undergraduate Program 4,825 full time students - Maintain current enrollment budget level Future enrollment may be adjusted pending Capacity Study results 3.5% Undergraduate Cost of Education increase - Composite Tuition, Room & Board rate increase Financial aid increased from 26% to 27% to support enrollment goals FY 2014 Budget Forum - February

5 Revenue Assumptions Graduate & Professional Programs Enrollment decreases in some programs with Engineering and JST maintaining current levels Two new Master of Science programs in Leavey School of Business Tuition increases: - Rate increases driven by market considerations 4.2% Education & Counseling Psychology 3.0% Law School, Leavey School of Business Evening MBA and MSIS, Engineering 2.5% Jesuit School of Theology 1.0% Leavey School of Business Executive MBA FY 2014 Budget Forum - February

6 Revenue Assumptions Endowment & Annual Giving Endowment spending growth remains flat Annual giving increase of 10% with a focus on support for financial aid Auxiliaries 2.2% Room & Board rate increases FY 2014 Budget Forum - February

7 FY 2014 Expense Budget Capital Renewals Debt 5% Repayment 4% Financial Aid 19% Library Acquisitions 1% Operating Expenses 19% Contingency 1% Endowment Reinvestment 0% Student Wages 1% Staff Salaries & Benefits 25% Reserve Transfers 0% Faculty Salaries & Benefits 24% FY 2014 Budget Forum - February

8 Expense Assumptions Faculty Compensation 2% average salary merit increase pool Strategic Priorities: - Convert 12 academic year fixed term faculty to renewable term lecturers Final phase of three - Additional funding to address priority equity adjustments FY 2014 Budget Forum - February

9 Expense Assumptions Staff Compensation 2% average salary merit increase pool Strategic Priorities: - New fundraising positions to support the future Capital Campaign - Additional funding for staffing core positions supporting the three University Centers of Distinction - Phase 3 of three phases - Additional support for key University, undergraduate and graduate priorities FY 2014 Budget Forum - February

10 Expense Assumptions Operating Expenses Additional funding for information security, internet capacity and personnel recruitment and compliance reporting Increased funding to recognize higher legal and insurance costs FY 2014 Budget Forum - February

11 Expense Assumptions Financial Aid Undergraduate and graduate financial aid increases to keep pace with tuition rate increases Debt Repayment / Capital Reserves Funding commitments to existing debt obligations and to provide reserves for maintaining and renovating University facilities, technology, and equipment FY 2014 Budget Forum - February

12 Expense Assumptions Contingency General University contingency reserve for unanticipated revenue shortfalls or one-time expense increases Endowment Reinvestment Reinvestment of underwater and < $50K endowment funds per investment policy Reserve Transfers Planned contribution to or use of operating reserves in schools and Centers of Distinction General University contribution to reserves to set aside funds for future facility and technology capital improvement projects FY 2014 Budget Forum - February

13 FY 2014 Operating Budget - $ in Millions REVENUE TUITION & FEES $ ENDOWMENT INCOME 29.1 AUXILIARIES 32.2 PRIVATE GIFTS 16.5 OTHER 17.2 TOTAL REVENUE $ EXPENSE FACULTY SALARIES 69.1 STAFF SALARIES 72.1 STUDENT WAGES 5.4 TOTAL SALARIES & WAGES $ BENEFITS 48.4 TOTAL SALARIES & BENEFITS $ OPERATING EXPENSES 72.9 LIBRARY ACQUISITIONS 5.8 FINANCIAL AID 75.1 DEBT REPAYMENT 16.7 CAPITAL RENEWALS 17.3 TOTAL EXPENDITURES $ CURRENT OPERATING RESULTS 4.6 CONTINGENCY 4.0 ENDOWMENT REINVESTMENT 0.5 RESERVE TRANSFERS 0.1 NET OPERATING RESULTS $ 0 FY 2014 Budget Forum - February

14 Capital Budget Assumptions Capital Improvements / New Construction General University Facilities - Art & Art History Building - New Parking Structure (approved in FY 2013 budget) FY 2014 Budget Forum - February

15 FY 2014 Capital Budget - $ in Millions Capital Capital Gifts & Grants Funding Line Item Budget Reserves Debt Actual Goal Total Capital Renewal General University Facilities Auxiliaries Technology Other Equipment Subtotal Renewal Capital Improvements General University Facilities Physical Environment Program Change Modifications All Other Total Facilities Auxiliaries Improvements Technology Other Equipment Subtotal Improvements New Construction SOURCE OF FUNDS General University Facilities Art & Art History Building Subtotal New Construction Grand Total FY 2014 Budget Forum - February

16 Art and Art History Building FY 2014 Budget Forum - February

17 Appendix FY 2014 Budget Forum - February

18 Budget Process (September February) President and Vice Presidents establish Strategic Plan priorities and Operating Budget strategies University Budget Council (UBC) meets to discuss: - Budget requests, projections, and plans presented by key University departments - Operating budget issues and strategies - Different scenarios and assumptions established to develop pro forma planning models Trustee Finance Committee reviews draft Operating & Capital Budget Proposal and makes recommendations Board of Trustees review and approve final Budget Proposal FY 2014 Budget Forum - February

19 UBC Meeting Schedule Date Topic Sept. 12, 2012 Overview of FY 2013 Budget and FY 2014 Budget Process Oct. 3, 2012 Enrollment, Tuition & Financial Aid Strategies Oct. 17, 2012 Auxiliaries, Endowment, Annual Giving Nov. 14, 2012 Faculty & Staff Compensation & Benefits Nov. 28, 2012 FY 2013 Enrollment Update Dec. 5, 2012 Preliminary Financial Operating & Capital Plan Reviews Dec. 14, 2012 Finance Committee Chair Briefing FY 2014 Budget Forum - February