Transcript Illinois’ Plan for Protecting our Excellence

An Update on the
Financial Status of
Our Campus
Urbana-Champaign Campus
Today’s Discussion:
• State of the State
• Strengthening our Financial Foundation
• Moving Forward
– Investing in Illinois
– Planning for FY12 & beyond
The Condition of the State has
Changed
State Financial Issues
• The state’s General Revenue Fund budget for
operations is approximately $26 billion.
• Started FY 2011 with >$3 billion in unpaid vouchers.
There is no revenue source to pay these past due bills.
• One-time funds ($5.7 billion from borrowings, $2
billion stimulus funds, $300 million fund sweeps)
used to help cover FY10’s costs.
• Many one-time funds no longer available
The state started FY11 with a minimum
shortfall of $13 billion—50% of the
state’s operating appropriation!
The 11th Hour Tax Increase
• Tax increase should cover structural deficit
• Borrowing for payment catch-up was not yet
approved—maybe later in spring
• Until then, some cash flow issues remain
While it will take weeks to fully sort out
implications of increase, the State’s
financial position has improved
dramatically
While Risks Remain, Campus has
Taken Decisive Action
Campus Planning Efforts:
Taking action so that Illinois can thrive
• Protecting our ability to:
– Hire & retain the best faculty—our reputation
depends on it
– Protect quality and access for our students
– Ensure Illinois remains a leader in higher
education
Strengthening our Foundation
Through interconnected efforts to:
Ensure Financial Stability
Reduce Central
Costs
Reduce College
Costs
Enhance Our
Revenue Base
Enhancing Financial Stability
Improving our Balance Sheet
• Increased financial oversight:
– With Business & Financial Services, monitor
financial health of units
– Colleges aggressively eliminating deficits
– Central involvement required for some
deficits
• Utilities
• IP discovery and patent defense
Improved cash position will facilitate a
smoother transition to lower GRF
Managing Human Resources:
Our Largest Cost
• Reducing staff size to control costs and
accelerate efficiencies:
– Incentive program reduced staff levels by 420 people
– $17m in net savings anticipated
– Constrained hiring tied to critical needs
• Development of service centers, consolidation of
responsibilities and elimination of non-essential
activities
Net effect: 585 FTE decrease on state/tuition
since FY09!
Reducing Central Costs
• Implementing sunset provisions for
centrally funded projects
• Investing in energy conservation—$8m+ in
annual savings
• Expanding central & cross-college service
centers
• Advancing IT initiatives to save millions
• unified communications
• server consolidation
Reducing College Costs
• Colleges are accountable for their finances
• Colleges are reducing administrative costs:
– Consolidating HR, Business & IT services
– Extension reorganization—from 70 to 30 offices
– Administrative consolidation—School of
Languages & Literature; Education (3 units); School
of Earth, Society & Environment; others
Allowing reallocation of funds to
highest academic priorities
Stewarding Excellence Projects
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IT @ Illinois
Public Engagement
Scholarships
Teaching Support
Small Academic Units
Aviation
Police Training Inst.
Initiatives & Small
Centers
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Graduate College
Revenue Generation
Extension
Advancement
Biology Education
Library
VC Research
Space Utilization
Utilities
Two new projects: Beckman & IGB and
NCSA
Stewarding Excellence @ Illinois
Savings/Income from Selected Efforts
• IT projects: ~$20-25 Million over 5 years
One Example: FY 11 est. savings for
servers/server rooms consolidation
Campus Savings (Utilities): $149,640
Unit Savings (capital, maintenance): $532,375
Cost Avoidance: $303,000
Stewarding Excellence @ Illinois
Savings/Income from Selected Efforts
• PTI—self-supporting or closure:
~$900,000
• Institute of Aviation: $500,000-$750,000
• Scholarships: $500,000 over 5 years
$500,000 in tuition waivers reallocated from
DIA to general student population
Stewarding Excellence @ Illinois
Savings Through Transformation
• All of the SE@I projects investigated
opportunities for structural, programmatic
or process changes
• Additional savings, revenue streams and
increased efficiencies (cost avoidance) are
anticipated as a result of several SE@I
reviews.
Stewarding Excellence @ Illinois
When it ends
• Process is winding down—perhaps one
more project
• However, in depth self examination will
continue:
– Graduate College review of doctoral programs
launched this year
– Instituting ongoing academic program review
Enhancing Revenue
• International student tuition and fees
– Pay for additional costs
– Offset declining GRF
– Fund increase in Illinois resident financial aid
• Summer session—on-line programs keep
this revenue at Illinois
• Self-supporting master’s programs
Conservation of Cash
• Campus cash management efforts
• Limited hires and deferred expenditures
allowed units to build needed reserves
• Greater focus on financial control
throughout campus
• College revenues grew while costs declined
Year-end Outcomes
• Cash balances held by academic units increased
significantly
• Deficits were reduced by 23% this past year
Our permanent & cash set-asides, held by
college & campus, will allow us to move
forward in a deliberative manner
Investing to Protect & Advance our
Campus
Protecting Access and the
Student Experience
• Financial Aid
– Significant investment—growing by $4.5m
– Access Illinois—the final major theme for “Brilliant
Futures”
• Expansion of James Scholars program
• College efforts—iFoundary, LAS OnLine, Library Learning
Commons, FAA career services. . .
• Expanding small UG classes (Discovery &
others) & establishment of UG research office
Protecting Quality of Life
• Investing in Scholarship
– Research Board
– Center for Advanced Study
– Humanities & Arts Research Fund
– Expansion of Turing Cluster
– Library collection catch-up
• Supporting research compliance & safety
• Supporting Classroom Technology
• Improving our facilities
Hiring and Retaining the Best
Faculty
FY11 preventive retention program
Increased campus promotion increment
Supporting aggressive retention efforts
Faculty searches approved across campus
in FY11
• VRP program will allow strategic hires in
critical areas (133 faculty approved)
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Planning for FY12 and Beyond
Macro Level Planning
• Macro level planning—looking at new
costs and revenue over a multi-year period
• New costs driven by:
– Core operations: salary program, financial aid,
facilities costs. . .
– Strategic needs: retention of faculty, diversity,
protecting quality programs, selected
investments
Actions guided by strategic
planning
Macro Level Planning (cont.)
• Revenue projections:
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UA’s 3-year GRF estimates
Tuition estimates showing declining growth
ICR growth based on current trends
Highly differentiated unit assessments
• Improve financial position will allow multi-year
phase-in of reductions
We have the resources & ability to move
forward in a manner that protects our
quality
What we have learned
Beginnings of Cultural Change
• Financial sustainability—we can’t deficit
spend our way to excellence
• Making choices regarding new directions—
few institutions can do everything
• The capacity to adjust our footprint—we
have a long history of new ventures but are
just learning how to make difficult
decisions & adjust our scope
Moving Forward
• Nationwide, higher education is facing
continuing challenges—Illinois is no
exception
– Texas, California, Indiana and other states are
calling for a new round of major cuts to higher
education
– While challenges remain, a NY Times editorial
says: “the Illinois Legislature has begun to
show residents and corporate leaders that it is
serious about fixing the budget” (1/16/11)
Some Final Thoughts
• As an institution, we are learning new
skills and changing our culture—that takes
time
• However, in this remarkably challenging
period, we have shown the capacity to take
necessary steps to protect & advance our
institution