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STATE FUNDING REQUESTED VS. GOVERNOR S PROPOSAL CSU Request $216.6M Proposed by the Governor $119.5M Funding Gap $97.1M 3
ENROLLMENT PLAN 2013/14 2014/15 2015/16 Base Surplus Total Base Surplus Total Base Surplus Total Resident 21,298 1065 22,363 21,748 762 22,510 21,911 744 22,655 Non-res 1,607 248 1,855 1,927 373 2,300 2,400 295 2,695 Total 22,905 1,313 24,218 23,675 1,135 24,810 24,311 1,039 25,350 Enrollment Plan as proposed by Academic Planning & Budgets and approved by Cabinet 1.9.2015. Highlights: 163 additional BASE resident ftes increase (0.7%) 744 surplus resident ftes (3.4% above target) 473 additional BASE non-resident ftes increase 295 surplus non-resident ftes increase 4
HEADCOUNT NUMBERS Summer 2014 Fall 2014 Spring 2015 Total - CY Base One-time Base Enrollment (HC) 140 31,518 28,682 30,170 30,170 Surplus Enrollment (HC) - 990 890 941-941 Total State Support Enrollment [1] 140 32,508 29,572 31,111 30,170 Self-Support Summer [2] 3,800 - - 1,900-1,900 Total Enrollment 3,940 32,508 29,572 33,011 30,170 Summer 2015 Fall 2015 Spring 2016 Total - CY Base One-time Base Enrollment (HC) 215 30,690 28,695 29,800 29,800 Surplus Enrollment (HC) - 1,310 1,242 1,276-1,276 Total State Support Enrollment [1] 215 32,000 29,937 31,076 29,800 Self-Support Summer [2] 3,855 - - 1,928-1,928 Total Enrollment 4,070 32,000 29,937 33,004 29,800 Summer Fall Spring Total - CY Base One-time VARIANCE Base Enrollment (HC) 75 (828) 13 (370) (370) 0 Surplus Enrollment (HC) - 320 352 335-335 Total State Support Enrollment [1] 75 (508) 365 (35) (370) 0 Self-Support Summer [2] 55 - - 28-28 Total Enrollment 130 (508) 365 (7) (370) 0 5
MAJOR BUDGET IMPACTS New Capital Financing Framework: Inclusion of state General Obligation (GO) bond debt service expense to the CSU main appropriations which establishes new CSU financing flexibility related to debt service and moving CSU lease revenue bonds debt service (LRB) from a separately identified appropriation item to the CSU s main appropriation. Student Success Excellence and Technology Fee: frozen at the Fall 2013 level ($295 per semester) with a student survey being conducted to assist the University in making a decision on the fee level. 6
MAJOR BUDGET IMPACTS Student Average Unit Load (AUL): has been increasing slightly over the past few years. Even though FTES are increasing the overall projected student headcount is decreasing. The student average unit load has been steadily increasing. An increase in AUL drives down the amount of tuition per student and revenue for mandatory fees including SSETF, Associated Students, Student Union, and Student Health. Prop 30: will sunset in 2016/17 unless extended by Governor/voters ($5.5M net increase to SJSU: exercise caution in making base allocations) 7
NEW CAPITAL FINANCING FRAMEWORK What does this mean? Previously, CSU (and SJSU) received funding for major and minor capital outlay programs from the State. The State borrowed money and approved projects for the CSU (and SJSU). Each year, CSU campuses submitted a 5-year Capital Improvement Plan to the Chancellor s Office. These plans were incorporated into a comprehensive CSU 5-year Capital Improvement Plan that was submitted to the State for approval. Basically, the CSU Capital needs were combined with all other State department Capital needs and competed for funding. (see next slide for a history of Capital Outlay funding) The new capital financing authorities allow the CSU to pledge any of the CSU s revenues, including general fund, SRB gross revenues, and student tuition fees, to support the financing of capital projects. This program is being designed by CSU Chancellor s Office and the Board of Trustees with 2 categories; 1. CSU funded projects, and 2. Campus funded projects. 8
HISTORY OF FUNDING RECEIVED Clark Hall Renovation SPX Seismic Renovations Major Capital Minor Capital Capital Renewal Deferred Maintenance Outlay Projects Outlay Projects Projects Projects 2005/2006 $ 19,066,000 $ 348,000 $ 2,000,000 $ 964,096 2006/2007 $ - $ 1,342,000 $ 3,880,000 $ 1,606,118 2007/2008 $ - $ 1,234,000 $ 177,000 2008/2009 $ - $ - $ - $ - 2009/2010 $ - $ - $ - $ - 2010/2011 $ 3,240,000 $ - $ 149,504 2011/2012 $ 51,479,000 $ - $ - $ - 2012/2013 2013/2014 $ 1,400,000 2014/2015 $ 4,830,000 Utility Infrastructure New CSU Financing Authority 9
CSU FUNDED PROJECTS The increase in State funding for Capital Financing received by the CSU MUST be used to cover EXISTING debt. There currently is NO available money for new debt. As debt is retired (paid-off) the CSU will have some capacity for new debt. Depending upon the finance industry, this available capacity may not be realized for 4-7 years. The CSU Board of Trustees approved $10 million in the FY2014/15 budget to be used to acquire financing. Current estimate is approximately $130 million. These CSU funds will be allocated to campus priority projects. Priority will be given to projects that address; critical seismic and infrastructure deficiencies, including life/fire safety, utilities infrastructure critical to campus-wide operations, capital renewal, and minor capital outlay in existing facilities. San Jose is expected to receive $4,830,000 for Phase 1A Utilities Infrastructure 10
CAMPUS FUNDED PROJECTS In the past, each campus had the authority to request bond financing to support capital outlay (including new buildings) projects funded from self-support revenues, donations or other auxiliary organization and/or public private partnerships. Some examples of SJSU projects funded through this mechanism; On-Campus Housing: self-support operation for which rents support the repayment of the bond. This would include Joe West Hall, Campus Village, and the new Campus Village Phase 2 project that is underway. Student Union: Student Union fee s (mandatory student fees) are supporting the Student Union Expansion and Renovation project. Student Health Facility: The new Student Wellness center is being supported by the student health facilities fee. 11
CAMPUS FUNDED PROJECTS CSU s new authority expands the old authority to include reserves from operating funds (state appropriation and tuition). CSU is modifying policies and counseling campuses to set aside reserves specifically designated for new capital projects, critical facility renewal projects, and maintenance. It is recommended that campuses incrementally build up in a facility reserve to provide debt service and pay-as-you-go funding for capital projects that are essential to the academic mission of the campus. Reserves (or carryforward funds) can be up to 4 months of operating funds. (SJSU Operating fund is approx. $300 million so 4 months would equal nearly $100 million). 12
BUDGET PLANNING PRIORITIES Vision 2017 goals Helping and Caring Degree Audit (A-G) project funding Helping and Caring Implement Chief Diversity Office Mandatory Costs University Reserve Program: Establish a University Reserve Program that will ensure facilities improvements and financial viability for the University. Provide much needed one-time funding for facilities deferred maintenance. Current deferred maintenance needs exceed $100 million. Provide base reserves that can be used to level out fluctuations in State support, enrollment, and emergency needs Provide base funding to fund capital outlay. Target Goals Over the next three years: Category Base One-time Reserves $3.0M $6.0M Deferred Maintenance $4.0M $10.0M Capital Outlay $5.0M 13
STUDENT SUCCESS, EXCELLENCE AND TECHNOLOGY FEE SSETF for Fall 2015 has not yet been determined. Effective FY 2014/15, SSETF has been unbundled and frozen at the Fall 2013 level. SSETF IRA = $147 per semester SSETF Course Support = $30 per semester SSETF Student Success = $118 per semester Total = $295 per semester Associated students conducted a survey to obtain students opinions on the fee and discussions are on-going. The Fall fee will be announced prior to the start of fall registration in May. At this point we are not anticipating a budget call for proposals during the Spring semester due to this timing of the fee amount being determined. 14
2015/16 FUNDS Revenues(Sources) Base One-time 163 Resident FTES (State Support*) $.7M 636 FTES Base Tuition $ 4.3M 1,039 Total Surplus FTES $ 4.8M 473 Non-res FTES (Non-res Fee) $ 3.8M $ 2.6M Total Revenues $8.8M $ 7.4M * State Support for enrollment growth is estimated based on prior years net of tuition offset. The CSU is exploring new enrollment growth methodologies which may impact the amount of funding received by SJSU for 2015-16. 15
2015/16 COSTS AND CAMPUS PRIORITIES Mandatory Costs Base One-time Instructional Support (636 Base FTEs & 1,039 surplus) State University Grant Total Cost of Attendance ($ 4.4M) ($ 4.4M) ($ 0.8M) ($1.6M) Total Mandatory Costs ($ 5.2M) ($ 6.0M) Campus Priorities: A-G (Degree Audit Project) ($ 1.4M) ($ 0.7M) Chief Diversity Office ($ 1.0M) Total Campus Priorities ($ 2.4M) ($ 0.7M) 16
SUMMARY OF REVENUE & FUNDS AVAILABLE Base One-time 2015/16 Funds $8.8 M $7.4M Prior Year Funds* $ 0 M $ 8 - $10 M Total Funds Available $8.8 M $15.4 M Mandatory Costs ($ 5.2M) ($ 6.0M) Campus Priorities ($ 2.4M) ($ 0.7M) Faculty Salary Equity Adjustments ($0.6M) Staff Salary Equity Adjustments ($0.3M) Deferred Maintenance ($ 2.0M) Reserves ($2.0M) Capital Outlay ($0.3M) ($2.0M) Divisional Needs (note 1) ($ 2.7M) Total Available* $ 0.0M $ 0.0M *Assumes $8M 2014/15 Unallocated one-time funds. Note 1: Divisional needs are available for Student Affairs, University Advancement, and Admin & Finance. Athletics is receiving support for Total Cost of Attendance, and Academic Affairs received $6 million in one-time funds to be used in 2014/15 & 2015/16 to support their Academic Plan. 17
BUDGET COMMUNICATION SCHEDULE March Cabinet approval of Preliminary Budget April May September October November Issue a Budget Update that provides an overview of funding, mandatory costs (including FTES support to AAD), and funds available for distribution. Publish budget preliminary presentation. Education Campaign: Hold an Open Forum Present to Deans and Academic Senate Ex Following Cabinet approval, publish Sources and Uses for Op Fund and SSETF on the Web. Following final budget allocation from CSU in August, publish the Annual Budget Report (which contains final "Sources and Uses"). Senate budget presentation of the Annual Budget Report Cabinet approval of Preliminary FTES used for budgeting Following Trustee approval of the CSU Budget Request, put out a Budget Update to present any significant updates to the current year budget (this would be important in years when we have a mid-year tuition fee increase or other action), and to give a high level snapshot of the CSU Budget Request for the next year (i.e., FTES increases, compensation adjustments, etc.). The value of this Update is to maintain transparency and help people feel they are in the loop. It also lays the groundwork for the January Governor's Budget release, which is the Governor's response to the CSU budget request. 18