Transcript Board of Trustees Meeting Focus Discussion July 20, 2007 General Fund Budget Fiscal Year 2007-2008

Board of Trustees Meeting
Focus Discussion
July 20, 2007
1
General Fund Budget
Fiscal Year 2007-2008
2
Overview

Budget and Appropriations History
◦ Fiscal Year 2006-07 Total Operating Budget
◦ Fiscal Year 2006-07 General Fund Budget
◦ Appropriation funding history
◦ Budget reduction history

Fiscal Year 2006-07 One-time funding needs

Fiscal Year 2007-08 Base Budget needs

Tuition summary
3
Total Resources Operating Budget
Total - $178.3 million
Other Auxiliary
Activities
4.6%
Designated
Operations
3.8%
Residence Life
5.8%
Dining Revenues
5.9%
State Appropriation
26.0%
Other Income and
Carry-over Balances
9.9%
Gifts, Grants, and
Contracts
12.2%
Tuition and Fees
31.8%
4
Total General Fund Resources Budget
Total - $96.0 million
State Appropriation
43.8%
Tuition and Fees
54.0%
Other income and
carry-over balances
2.0%
Other income and
carry-over balances
2.2%
Tuition and fees*
49.6%
State Appropriation
48.3%
**This graph displays total resources net of Scholarships costs.
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Total General Fund Resources
Tuition and Fees
27.1%
Tuition and Fees
27.0%
State Appropriation
69.4%
State Appropriation
69.8%
Other income and
carry-over balances
3.5%
Other income and
carry-over balances
4.2%
1981
1991
To maintain financial reporting consistency with fiscal years ’81, ’91, and ’01 data,
financial aid was not deducted from ’06 tuition and fee revenue.
Tuition and Fees
36.1%
State Appropriation
43.8%
Tuition and Fees
54.0%
Other income and
carry-over balances
1.6%
State Appropriation
62.3%
Other income and
carry-over balances
2.2%
2001
2006
6
2003
2007
$3.5
2006
* FY2003 appropriation after both Executive Orders and
the State Supplemental
1997
1998
1999
2000
2001
2002
2003
2004
$3.0
2005
$2.6
2002
$2.5
2001
$2.2
2000
$2.1
1999
$1.8
$45.2
1998
$1.4
$45.1
1997
$1.1
$45.0
2004
$1.3
$45.2
$50.2
$4.1
(shown in 000,000’s)
$52.0
State Mandates *
(shown in 000,000’s)
$51.3
Appropriation History
$48.8
$47.2
$45.9
$44.2
Appropriation
2005
2006
2007
* State mandates include Michigan Public School Employee Retirement System
(MPSERS), Indian tuition waiver, minimum wage, and MI-OSHA requirements.
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2002
2003
2004
2005
$4,820
$5,290
$5,307
$5,517
2001
$5,355
2000
$6,281
1999
$6,739
$6,931
1998
$6,844
$6,966
1997
$6,751
$6,876
Appropriation per FYES
2006 2007 * 2007
**
* Appropriation per FYES if NMU receives $4.2 million delayed appropriation
** Appropriation per FYES if NMU does not receive $4.2 million delayed appropriation
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Budget Reduction History

General Fund budget cuts/reallocations of $13.8 million
since 2003
◦
◦
◦
◦

FY2003-04:
FY2004-05:
FY2005-06:
FY2006-07:
$6.5 million
$2.8 million
$1.5 million
$3.0 million
Organizational efficiency – consolidation of organization
structure and increased productivity = lower cost
◦ 5 vice presidents to 2
◦ 5 academic colleges to 3

NMU faculty and staff are the most productive among the 15
public universities (student-to-staff ratio)
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General Fund Budget Assumptions

FY2006-07 One-time funds
◦ Reduced payment of FY2006-07 appropriation
($807,000 or 1.7%)
◦ Delayed August 2007 payment of $4.2 million

FY2007-08 base budget
◦ Base appropriation reduction from FY2006-07 (1.7%)
◦ No further reduction in appropriation
◦ Return of $4.2 million delayed FY2006-07 appropriation
payment in October 2007
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General Fund One-time
Funding Needs
Fiscal Year 2006-2007
11
FY2006-07 General Fund One-time Needs
ONE-TIME BUDGET NEEDS - FY2007
FY07 Reduction: -1.7%
Delayed Payment: $4.2M
FY07 CASH FLOW -- APPOPRIATION REDUCTION
SOURCES:
Revenues in excess of budget
Delayed academic equipment upgrades, replacement of obsolute
equipment, staff hirings, and building maintenance and improvements
Total
-$5,027,000
$506,000
$4,521,000
$5,027,000
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General Fund Budget
Fiscal Year 2007-2008
13
Base Revenue Adjustments for FY2006-07
(adjusted for FY2007-08)
BASE REVENUE ADJUSTMENTS FROM 2007:
Tuition and fees
Scholarships/financial aid
Investment income
Rental income
Total Base Revenue Adjustments from 2007
% change in budget
$217,000
-$95,000
$350,000
$34,000
$506,000
0.5%
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Projected Cost Adjustments
(Fiscal Year 2007-08)
Inflationary cost increases:
Compensation
USOEC (additional net tuition revenues)
Software maintenance/license fees (i.e., Oracle, SCT)
Athletic transportation/team travel costs
Credit/Debit card fees
Printing/postage
Faculty and staff recognition awards
Hazardous waste disposal
Total Inflationary
% change in total university budget
$2,750,000
$96,000
$77,000
$75,000
$68,000
$33,000
$25,000
$10,000
$3,134,000
3.3%
15
Budget Reductions/Reallocations
(Fiscal Year 2007-08)
Budget reduction/reallocations:
Departmental personnel and support costs
Operation and maintenance (heating plant)
Debt service/loan retirement
Subtotal-Budget Reductions/Reallocations
% change in total university budget
-$870,000
-$300,000
-$122,000
-$1,292,000
-1.3%
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State Mandate Increases
(Fiscal Year 2007-08)
State mandates:
Michigan Public School Employee Retirement System (MPSERS) (FY07: $3,334,000)
Minimum wage (FY07: $464,000)
Indian tuition waiver (FY07: $338,000)
MIOSHA compliance (eye wash annual testing)
Total Mandates
% change in total university budget
$250,000
$75,000
$55,000
$16,000
$396,000
0.4%
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Initiatives
(Fiscal Year 2007-08)
Initiatives:
Instructional staffing and support:
$940,000
Faculty staffing (enrollment) adjust - FY08 ($840,000)
Graduate stipends ($100,000)
Facility maintenance and equipment (Deferred maintenance $87.3M)
$657,000
Long-term building maintenance ($507,000)
Capital equipment replacement ($150,000)
Administrative staffing and support:
$206,000
Grant development ($160,000)
Internationalization ($40,000)
Extended library hours for students ($6,000)
Total Initiatives
% change in budget
$1,803,000
1.9%
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Tuition and Fees
Fiscal Year 2007-2008
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Tuition and Fee Rates
MTU MSU UM-D AVG WSU WMU FSU
$5,543
$6,184
$6,638
$6,733
OU
$6,752
EMU
$6,948
$6,956
$7,200
$7,265
$7,350
$7,398
$7,516
$8,936
Annual resident undergraduate tuition and fee rates
$6,956
UMAA
$9,660
$10,341
Fiscal Year 2006-2007
UM-F GVSU LSSU CMU NMU* SVSU
**
* NMU includes portion of Freshmen Student Athletic Fee
** CMU Freshmen rate is $7,530
Source: State of Michigan HEIDI Database
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Tuition and Fee Percentage Increases
Annual resident undergraduate tuition and fee rates
OU
MTU UM-D UM-F
FSU
AVG LSSU EMU WMU GVSU MSU WSU
UMAA
4.8%
4.9%
5.1%
5.5%
5.8%
5.9%
5.9%
6.0%
6.0%
6.4%
6.5%
6.8%
7.9%
8.5%
8.7%
9.1%
Fiscal Year 2006-2007
CMU SVSU NMU
Source: Presidents Council Tuition and Fees Report
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Tuition and Fee Semester Increases
Fiscal Year 2007-2008
Annual resident undergraduate tuition and fee increases per semester
(based on media reports)
University
CMU*
FSU**
OU
MTU
MSU
GVSU
LSSU
EMU
UM-AA
UM-D
UM-F
NMU
WSU
SVSU
WMU
Per Semester
Increase
Per Semester
% Increase
$795
21.1%
$750
20.8%
$486
13.9%
$460
9.5%
$427
9.6%
$326
9.9%
$309
9.3%
$279
8.0%
To be announced - July 19
To be announced - July 19
To be announced - July 19
To be announced - July 20
To be announced - July 25
To be announced - July 27
To be announced
*For new students Fall 2007
**Fall 2006 to Fall 2007 Comparison (6.7% summer to fall)
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Tuition Guideline
(Fiscal Year 2007-08)
Recover appropriation reduction
(1.7% tuition = 1.7% appropriation)
Recover expected appropriation increase
(3.2%CPI + 1% growth/initatives)
Tuition and fee inflation
(3.2% CPI + 1% growth/initiatives)
Tuition Percentage Increase
1.7%
4.2%
4.2%
10.1%
*The 10.% assumes NMU receives the $4.2 million delayed appropriation.
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General Fund Budget Model Summary
(Fiscal Year 2007-08)
BASE BUDGET -- FY2008
Scenario 1
Scenario 2
Scenario 3*
$506,000
$506,000
$506,000
-$3,134,000
-$3,134,000
-$3,134,000
$1,292,000
$1,292,000
$1,292,000
-$396,000
-$396,000
-$396,000
Instructional staffing and support
-$940,000
-$811,000
-$750,000
Facility maintenance and equipment
-$657,000
-$557,000
-$465,000
Administrative staffing and support
-$206,000
-$206,000
-$206,000
-$1,803,000
-$1,574,000
-$1,421,000
-1.7%
-1.7%
-1.7%
-$807,000
-$807,000
-$807,000
0.00%
0.00%
0.00%
$0
$0
$0
9.50%
9.00%
9.25%
$4,342,000
$4,113,000
$3,960,000
$0
$0
$0
BASE REVENUE ADJUSTMENTS From FY2007 (0.5%)
PROJECTED COSTS --INFLATIONARY (3.3%)
BUDGET REDUCTIONS/REALLOCATIONS (1.3%)
STATE MANDATES (0.4%)
INITIATIVES (1.9%):
Total Initiatives
APPROPRIATION % change
Appropriation adjustment
ENROLLMENT % change
Enrollment revenue adjustment
TUITION AND FEES % rate change
Tuition and fees adjustment
BUDGET BALANCE
* Scenario 3: nonresident increase same dollar amount as resident
24
Annual Tuition and Fee Rates
(Fiscal Year 2007-08)
FY07 -- Resident undergraduate (30 credits)
FY08 -- Resident undergraduate (30 credits)
FY08 -- Annual increase
FY08 -- Per semester increase
FY07 -- Nonresident undergraduate (30 credits)
FY08 -- Nonresident undergraduate (30 credits)
FY08 -- Annual increase
FY08 -- Per semester increase
9.5% NR%=R % 9.0% NR%=R %
Scenario 1
Scenario 2
$6,141.00
$6,141.00
$6,724.00
$6,694.00
$583.00
$553.00
$292.00
$277.00
$10,077.00
$11,034.00
$957.00
$479.00
$10,077.00
$10,984.00
$907.00
$454.00
9.25% NR$=R $
Scenario 3
$6,141.00
$6,709.00
$568.00
$284.00
$10,077.00
$10,645.00
$568.00
$284.00
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General Fund Budget
(if $4.2M is not received)

Eliminate initiatives ($1.3 million)

$2.9 million balance – staffing and programming
reductions and delayed university improvements
and/or mid-year tuition and fee increase
◦ $2.9 million is the equivalent of eliminating 50 positions
or an additional 6.3% in tuition and fees
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Tuition and Fees

Competitive with our peers

Maintain quality, access, and affordability

Move forward with strategic initiatives
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