General Fund Budget
Recommendations
FY 2014 - 2015
David J. Cummins Vice President for Finance & Administra9on/CFO Finance & Administra9on Commi<ee June 11, 2014 Ohio Ranking State Support
State Appropriations per
FTE 2004-2013
$ Per FTE Adjusted for HECA
$14,000 $12,000 $ Per FTE $10,000 $8,000 $6,000 40
42
44
44
41
46
47
45
$4,000 46
41
Low Ohio High $2,000 $-­‐ Source: SSDB
Low '04-'11 = VT
Low '12-'13 = NH
High '04-'13 = WY
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year State support in Ohio fell 18.2% from FY 2008-13; yet that ranked
Ohio 15th best in the nation over that period
Source: SHEEO
2 Educational Appropriations/FTE, % Change by State
FY’s 2008-13
Source: SHEEO
3 FY 2015 Starting Point Assumptions
•  Assume continued enrollment decline (4%) for FY 15
•  Earmark funds for increased scholarships and/or
reduction in tuition for access programs
•  Restore some reductions from prior years, and address
other priorities such as high-demand academic programs,
salaries, marketing, non-discretionary items
•  Modest increase in State Share of Instruction based on FY
14 actual earnings
•  Assume 2% tuition increase per State Biennial Budget
cap
4 FY 2015 Budget Balancing
•  Starting Point identified the need to reduce/reallocate
nearly $15 million based on enrollment decline and
strategic priorities
•  Each Unit was given a starting allocation and directed to
develop a budget within that amount
–  What actions are necessary to balance to the allocation
amount?
–  What is the impact on service levels?
–  Are there revenue enhancement opportunities that can
offset reductions?
•  Submissions were discussed among Unit Administrators,
COO and EVP
•  Proposals were shared with UC Budget & Finance
Committee which recommended acceptance of the unit
plans
5 FY 2015 Major Resource Adjustments
•  Increase Tuition and Fees
–  Undergraduate and Graduate 2%
•  No increase for Wayne, Summit College associate
degree programs, Law School
–  Miscellaneous fees tied to specific programs and/or services
•  Preliminary increase in State Share of Instruction is $2.6
million, 2.8% above FY 2014 actual
• 
Impact of performance funding that rewards degrees
•  Reallocate to the General Fund 50% of the School of
Law tuition earmark from the Building Fund
•  Draw from existing fund balances to support the year’s
debt service related to the Energy Savings project
6 FY 2015 Major Expense Adjustments
•  Net reduction of $5.5 million in compensation
•  Operating budgets reduced $1.7 million
•  Scholarships increased $1.7 million to support
recruitment and Under-represented Scholarships
•  Debt Service increased $1.8 million to adjust to prior
spending level and lost refinancing opportunity
–  Plus first year of debt service on the Performance Contract
adds $4.5 million net expense
7 UC Budget & Finance Score Card
FY 15 Original
FY 15 UC B&F
$ Reduction % Reduction $ Reduction % Reduction
STARTING POINT ASSUMPTIONS
Tuition Shortfall
(9.0)
(9.0)
Restore 1-­‐time Reductions in FY 2014
Increase Scholarships/ Access
(5.0)
(2.0)
(2.0)
0.0
(4.4)
(20.4)
(2.5)
(13.5)
Other Adjustments
Negative Starting Point
Additions
FY 15 STARTING POINT
REVENUE INCREASES
2% Undergraduate Tuition Increase-­‐Net
2% Graduate Tuition Increase -­‐ Net
1.5
(18.9)
1.5
(12.0)
3.7
2.7
0.4
0.4
SUBTOTAL
4.1
SUBTOTAL
ACADEMIC SUPPORT
Reduction Target
Adjusted for Revenue Enhancements
SUBTOTAL
ACADEMIC
Reduction Target
Adjusted for Revenue Enhancements
SUBTOTAL
TOTAL ADJUSTMENTS
BALANCE
0.0
1.8%
3.1
Comments
Assumed 4% Enrollment Decline
Achieving Distinction, Wayne College Overhead, Interest on Debt
Scholarships
Strategic Investments ($2.9M), Student Doubtful Accounts($1M), Student Recruitment($0.5M)
Fall Reconciliation
$ Reduction % Reduction
???
Increase in SSI above original FY 14 projection
0.0
Freeze Associate-­‐level Courses at Summit and Wayne.
Freeze Law School Tuition
1.4%
2.7
0.4
3.1
1.4%
CENTRAL OBLIGATIONS
5.7
0.0
0.0
6.2%
4.8
3.7
4.8
5.3%
4.1%
4.8
3.7
4.8
5.3%
4.1%
9.1
6.7%
3.3%
2.6%
5.2%
4.5
3.5
4.5
12.4
12.4
3.3%
2.6%
9.1
18.9
(0.0)
4.5
3.5
4.5
12.4
0.4
5.7
3.4%
3.4%
8 Reductions Summary
Target
Total Adjustments
Shortfall
FY 15
$14,788,415
$9,290,393
($5,498,022)
Personnel Reductions
Operating Reductions
Revenue Increases
Total Adjustments
$5,516,919
$1,663,685
$2,109,790
$9,290,393
Temporary Savings
FY 16 Estimated Savings
$1,503,712
$1,170,823
FY 16
$1,170,823
$895,923
$154,900
$120,000
$1,170,823
9 FY 2014 General Fund Revenues
FY 2013-­‐14
Revised Projected Budget FY 2014-­‐15
Proposed Budget Adjustments Proposal FY14 FY14 Budget Projecte
to FY15 d to FY15 REVENUES
Tuition/Gen Svc Fees (gross)
Other Fees
Total Tuition and Fees
$226,499
24,863
$251,362
$228,093
24,830
$252,923
($3,731)
(63)
($3,794)
$222,768
24,800
$249,129
-1.6%
-0.3%
-0.9%
-2.3%
-0.1%
-1.5%
State Share of Instruction
$90,762
$92,257
$4,149
$94,911
4.6%
2.9%
Inc. from Inv/Endowments
Dept'l Sales/Svc Revenues
Indirect Cost Revenue
Miscellaneous
Total Other Revenue
$3,429
12,505
4,575
1,550
$22,059
$4,420
12,000
4,900
1,300
$22,620
$0
(1,065)
0
561
($505)
$3,429
11,440
4,575
2,111
$21,555
0.0%
-8.5%
0.0%
36.2%
-2.3%
-22.4%
-4.7%
-6.6%
62.4%
-4.7%
Total Revenue
$364,183
$367,800
($150)
$364,034
0.0%
-1.0%
Transfers-­‐in
Total Current Resources
$406
$364,590
$406
$368,207
$2,594
$2,444
$3,000
$367,034
638.1% 638.1%
0.7%
-0.3%
10 UA’s Shift in Revenue from FY06 - FY15
FY 2006 Resources Total = $270.4 million •  The 10 year
comparison illustrates
the shift in support
from the State to
Tuition and Fees.
•  At the University of
Akron, the student
share of the cost has
risen from 60% to 67%
in FY15 over the past
10 years.
Tui9on & Fees (Gross) 60% Other 3% Dept. Sales 3% State -­‐ SSI 33% Inv/Endow 1% FY 2015 Resources Total = $367.0 million Tui9on & Fees (Gross) 67% Other 3% Dept. Sales Inv/
3% Endow 1% State -­‐ SSI 26% 11 FY 2014 General Fund Expenditures
FY 2013-­‐14
Revised Projected Budget FY 2014-­‐15
Proposed Budget Adjustments Proposal FY14 FY14 Budget Projecte
to FY15 d to FY15 EXPENDITURES
Total payroll
Fringe Benefits
Total Compensation
$159,694
53,924
213,618
$163,171
52,200
215,371
($4,791)
(661)
($5,452)
$154,903
53,263
$208,166
-3.0%
-1.2%
-2.6%
-5.1%
2.0%
-3.3%
Nonpersonnel operating
Central Obligations
Scholarships
Utilities
Total nonpersonnel
$15,019
36,686
48,727
7,689
$108,121
$18,700
32,065
47,221
7,500
$105,486
($1,145)
1,689
1,651
231
$2,426
$13,875
38,375
50,378
7,920
$110,547
-7.6%
4.6%
3.4%
3.0%
2.2%
-25.8%
19.7%
6.7%
5.6%
4.8%
$34,075
1,626
7,205
1,395
1,000
$45,301
($621)
(800)
1,843
0
5,048
0
$5,470
$364,590
$366,158
$2,444
$367,033
$0
$2,049
$0
$0
Aux. Support (incl. debt svc.)
Set-­‐aside for Law bldg
Debt service (excl. aux.)
Enrollment Reserve
Performance Contract
Plant Fund
Total transfers out
Total e xpenditures
Net Surplus/Deficit
$34,075
1,626
6,150
(0)
1,000
$42,851
$33,453
826
7,993
(0)
5,048
1,000
$48,321
-1.8%
-1.8%
-49.2% -49.2%
30.0%
10.9%
0.0% #DIV/0!
#DIV/0! 261.9%
0.0%
0.0%
12.8%
6.7%
0.7%
0.2%
12 UA’s Shift in Expenditures from FY06 -FY15
FY 2006 Expense Components • 
• 
While compensation remains
the largest component of
expenses, it dropped from
62% of the budget in FY06 to
57% in FY15.
Departmental operating
budgets (non-personnel) is
declining from 8% to 4%.
Total = $273.7 million Compensa9on 62% Debt Svc & Aux. 5% Central Obliga9ons 14% Dept. Scholarships Opera9ng 9% 8% Misc. Transfers-­‐out 2% FY 2015 Expense Components Total = $367.0 million • 
The largest shift was the
commitments to debt service
and support of auxiliaries.
Some of this shift reflects an
accounting change related to
Misc. the General Services fees
Transfers-­‐
out since FY06.
0% Compensa9on 57% Debt Svc & Aux. 13% Central Obliga9ons 12% Scholarships 14% Dept. Opera9ng 13 4% FY 2015 Budget Development
•  Budget Proposal
–  Revenue Increases of $5.2 million
•  Including $3.1 million from approved Tuition increase
–  Unit Reductions of $7.2 million
–  Tuition and Fees revenue projection still based on 4%
enrollment decline
•  Necessary Board Actions
–  Approval of FY 2015 General Fund and Auxiliary Budgets
–  Approve reduction in transfer of Law School Tuition to the
Law School Building Fund
–  Use of up to $3 million of fund balance to support the first
year’s debt service related to the Energy Savings
Performance Contract
•  Will be reimbursed once the project is complete
14 Recap
•  Minimal adjustments from one-time or short-term sources
–  Some anticipated savings in future years replace short-term
savings
•  Balanced to Base Resources if enrollment stabilizes
•  Only draw on fund balance is to address timing of
Performance Contract project
•  Outstanding issues:
–  Minimal strategic investments within the budget
–  Not all reductions from FY 2014 implemented
•  Will reassess the status of the budget at the end of the
first quarter with actual summer and fall enrollments
15 Questions?
16