Tuition Policy Advisory Committee Preliminary 6-Year Budget Projection (Meeting #8)

1 4/27/2020 Tuition Policy Advisory Committee

Delivery of Mission

How has UT Austin financed delivery of its mission during this period?

Over the last decade UT Austin has largely funded the delivery of its mission by: • • • • • Deferring plant maintenance, repair and renovation Increasing student fees Granting below market salary increases to employees Expanding research grants and contracts Increasing reliance on gifts and endowments 4/27/2020 Tuition Policy Advisory Committee 2

4/27/2020

6-Year Budget Projection

What is included? What is excluded?

Presentation focuses on budgeted Academic and Administrative activities of the University that are funded by the Educational and General (E&G) and Designated Fund Groups, including: • State General Revenue Appropriations • Statutory & Differential Tuition • Designated Tuition • Investment Income • AUF (Income from the PUF) • Information Technology and Library Fees The funds and activities referred to in the presentation

exclude

Auxiliary and Restricted Funds.

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Budget Projection

Budget Goal – Continue to enhance quality of the University

Budget Components OPERATING BUDGET

+

REPAIR & RENOVATION BUDGET

+

CAPITAL BUDGET

=

CORE UNIVERSITY BUDGET

Funds the basic academic and administrative operating activities Funds repair & renovation activities, including those deferred to subsequent years Funds the capital improvement activities (construction & major renovation) 4/27/2020 Tuition Policy Advisory Committee 4

Operating Budget Projection

($ in Millions)

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

STATUS QUO BUDGET SOURCES 1 GR 2 Tuition & Fees 3,4 AUF Other 5 TOTAL STATUS QUO USES Salaries Other Oper 6 TOTAL

Net Status Quo Deficit

$297.8

153.0

119.3

68.3

638.5

390.3

248.2

638.5

$0.0

$291.8

183.6

109.4

59.5

644.3

386.9

250.1

637.0

$7.2

$291.8

189.8

103.6

60.0

645.2

386.9

262.4

649.3

($4.1)

$291.8

195.5

101.2

61.6

650.1

386.9

271.1

658.0

($7.9)

$291.8

195.5

102.7

61.7

651.8

386.9

277.4

664.3

($12.5)

$291.8

195.5

102.9

64.0

654.2

386.9

283.9

670.8

($16.6)

$291.8

195.5

102.7

66.4

656.4

386.9

290.6

677.5

($21.1)

Quality Requirements Beyond Status Quo Salary Merit Program (3%) 7 Salary Market Adjustments (2%) 7 Reduction of Student/Faculty Ratio 7 Expenses Funded by Incidental Fees (3%) Faculty Start-up Costs & New Programs Initiatives (7.2) (25.6) (9.1) (2.3) (3.2) (11.5) (40.1) (18.8) (4.7) (3.5) (11.8) (55.4) (28.9) (7.1) (3.9) (12.2) (71.4) (39.6) (9.6) (4.2) (12.6) (88.2) (50.8) (12.2) (4.6) (12.9)

OPERATING BUDGET DEFICIT $0.0

$0.0

($55.8) ($86.8) ($120.0) ($153.9)

1 - Enrollment steady at 51.8k students (1.3M SCH) 2 - GR no growth, FY03/04 and ongoing 3 - Tuition: $2 statutory increase in 04-05 & 05-06 to $50 cap (No Designated Tuition Increase) KEY STATUS QUO BUDGET ASSUMPTIONS 4 - Incidental fees held at 03-04 levels 5 - Indirect Cost increased 5% annually 6 - Operating Expenses increased 3% annually 7 - Salary related increases include Fringes

($189.8)

4/27/2020 Tuition Policy Advisory Committee 5

Facility Aging Drives Repair & Renovation (R&R) Requirements

There is a significant bubble of R&R requirements in the near future

.

4/27/2020 A substantial portion of the University’s Plant, those projects built in the 50’s through 80’s, is approaching 30-60 years old and will require substantial repair and renovation.

Total Facility Replacement Cost: $ 2.1B

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Repair & Renovation (R&R) / Deferred Maintenance Budget Projection

E&G FACILITIES ONLY

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

($ in Millions) Annual Repair & Renovation (R&R) Requirement Total Annual R&R Funding* Net Annual Unfunded Amount Proposed Phase In of Annual R&R Funding Requirements Annual Unfunded Amount Cumulative Unfunded Amount (30.0) 6.0

(24.0) (31.0) 6.0

(25.0) (32.0) 6.0

(26.0) (33.0) 6.0

(27.0) 13.0

(11.0)

($11.0)

22.0

(3.0)

($14.0)

25.0

(1.0)

($15.0)

28.0

1.0

($14.0)

(34.0) 6.0

(28.0) 34.0

6.0

($8.0)

(35.0) 6.0

(29.0) 35.0

6.0

($2.0)

* Initial budget of $16M reduced by $10M to fund FY03-04 Benefits expenses 4/27/2020 Tuition Policy Advisory Committee 7

6-Year Capital Budget Projection

($ in Millions)

ACADEMIC

Experimental Science Bldg.

Batts Biomedical Engineering Bldg.

Old Pharmacy Bldg Air Handling in Lab Buildings New Acad Bldg (F11 Bldg) Biological Labs Bldg.

Nanoscience Other Smaller Projects

FIRE & LIFE SAFETY WATER CONTROL & ENVIRONMENTAL HEALTH ISSUES

75.0

18.0

RENEWAL OF EXISTING SPACE ESSENTIAL NEW SPACE TOTAL NEEDED

18.0

60.0

15.0

10.0

25.0

56.0

35.0

75.0

18.0

25.0

18.0

60.0

56.0

15.0

35.0

10.0

INFRASTRUCTURE

Library Storage IT Mirror Sites 15.0

5.0

5.0

15.0

FIRE & LIFE SAFETY

Performing Arts Center Americans w/Disabilities Act Campus Total Budget Requirement 7.6

9.0

38.0

$69.6

$93.0

$103.0

$121.0

7.6

9.0

38.0

$ 386.6

Note: it would take about $39M recurring to generate $390M of capital funds from 30 year bonds.

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Annual Quality Funding Requirements

($ in Millions) Operating Budget Requirements Repair & Renovation Requirements Capital Budget Requirements

Total Annual Recurring Funding Requirements 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

$ $ 55.8

$ 86.8

$ 120.0

$ 153.9

$ 189.8

13.0

22.0

25.0

28.0

34.0

35.0

8.0

16.0

24.0

32.0

39.0

$ 13.0

$ 85.8

$ 127.8

$ 172.0

$ 219.9

$ 263.8

4/27/2020 Tuition Policy Advisory Committee 9

Tuition Increases and Legislative Set Asides

What funds are available from a $1 Tuition increase?

Gross Tuition (1.3M SCH) Scholarship Set Aside

– Undergraduate Tuition (20%) – Graduate Tuition (15%)

B-On-Time Program

– All Tuition (5%)

Available Funds $1.33M

($.23) ($.07)

_______

$1.03M

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