Transcript The University of Toledo FY 2016 Consolidated Budget Draft-4/14/2015 Overview of FY 2015 Budget  FY15 Budget Target $18M  Right sizing budget $4.5M  Administrative Cuts $6M  Main.

The University of Toledo
FY 2016 Consolidated Budget
Draft-4/14/2015
Overview of FY 2015 Budget

FY15 Budget Target $18M

Right sizing budget $4.5M

Administrative Cuts $6M

Main Campus improvements $2.7M

Health Science Campus improvements $1.6M

UTMC improvements $3.3M

FY15 Budget – Actual Results

Fall/Spring enrollment below budget

Scholarship expense increase

Salary increases for staff

Investments in patient satisfaction, quality and safety

Healthcare costs increased

Increase in Supply expense

Patient service revenue higher than budget

Grant activity trending lower than budget
Highlights of the 2016 Budget
Budget Target $14M
 Creates a break-even Cash Flow and an
increase in Net Assets
 Is all inclusive and includes all funds of UT.
 An additional GASB format schedule
 Invests in enrollment growth and other
strategic areas
 Resolves base budget issues within areas
 Strengthens compliance oversight

Budget Objectives
All Inclusive Budget (met)
 GASB format (met)
 Invest in enrollment growth, net patient
revenue growth and other key areas (met)
 Make good business decisions (met)
 Strengthen customer service to our
students/patients (met)
 Strengthen compliance oversight (met)
 Address core budget issues within areas
(met)

Budget Objectives
Budget Investment Income at level which
reflects annual averages over time. (met)
 Close the gap between capital investment
and annual depreciation (not met)
 Increase net assets equal to investment
income plus the principal payment on
debt (not met)

Close the Gap between Capital
Investment and Annual Depreciation
•
The FY 2016 Budget does not allow UT to fund
capital investments (out of operating) equal to or
greater than depreciation, which is a minimal
requirement over the long run.
•
In FY 2016 the budgeted capital investment from
various sources is 25% of annual depreciation.
•
Our Five Year Plan has UT significantly closing this
gap over the five year period of FY2016-Fy2020,
up to 73% by 2020 (ideally at 1.2 x)
Investment in Enrollment and Other
Key Areas
•
•
•
We strategically increased and
redistributed scholarships to focus on
better prepared students with higher
retention rates and graduation rates.
The investment will result in future
increased net tuition and State subsidy for
in-state students.
We implemented a discount for students
opting to live on campus beyond their
Freshman year.
Investment in Enrollment and Other
Key Areas
Academic resources were realigned to focus on
colleges that were growing enrollment and
improving student outcomes
• Colleges and departments were allowed to
increase revenue as a way to meet our budget
challenges. In many cases this was limited to 25%
of their target.
• Human Resources received a strategic budget
increase to allow a focused effort towards
reduction in the growth of employee benefit
expense, improved customer service and
increased operating efficiency.
•
Making Good Business Decisions
We did not make across-the-board cuts to
meet our budget challenges.
• Non academic areas were given greater %
targets than academic areas.
• We worked with the Senior Leadership,
Deans,VPs and Department Heads to
minimize cuts which would have a negative
affect on student/customer service, which
did not make good business sense, or merely
transferred expense within the University.
•
Strengthening Student Services
•
•
•
•
•
Extended food service hours to improve student
satisfaction
Additional dining locations/services added; more
convenient locations for students
Additional Success Coaches and Advisors hired
Extended Library hours upon students’ request
2 new Living Learning Community Choices
•
•
•
Doctors without Boarders
Peace and Sustainability
STARFISH – Student Success and Retention
Tracking Software
Budget Investment Income At a Level Which
Reflects the Expected Return Over Time
Investment income is budgeted at a 5.5% increase,
which is a conservative reflection of investment income
over a 10 year period.
• We are committed to budget future years at the same
level.
• While we are striving to not include investment income
(as a way to balance our cash flow budget) we are
including it this year to balance the budget. Investment
income should be above and beyond.
•
INVESTMENT INCOME – FY 16 Budget Compared to Previous Years (in millions)
$60.0
$40.0
$20.0
$$(20.0)
$(40.0)
Investment Income
FY 16
Budget
FY 07
FY 08
FY 09
FY 10
FY 11
FY 12
FY 13
FY14
FY16
Budget
$26.3
$3.7
$(32.7)
$17.1
$32.4
$(5.3)
$31.7
$40.7
$11.0
Strengthen Compliance Oversight
•
Funding for oversight of compliance
regulations was increased as a way to
improve our compliance with the ever
increasing regulations related to NCAA
regulations, the Clery Act, Title IX, The
Higher Learning Commission, and JC.
Address Core Budget Issues Within
Areas
•
•
As we reviewed each operating area core
budget issues were addressed.
By doing this, we will minimize Deans,VPs
and Department Heads coming forth
during the year to ask for funding that
was not resolved as part of the budget
process, thus minimizing the use of
contingency.
Confidence in the Budget
•
•
•
We have made every effort to be
conservative in our estimates of revenue
and expenses.
We have reduced the contingency to $4
million, $1million reduction from FY2015
(as a result of correcting core budget
issues).
Overall, we are very confident that we
will meet our cash flow margin.
Future Challenges/Opportunities
As indicated in our Five Year Forecast we
have challenges that must be addressed in
the next five years. These challenges
include the following:
• Growing enrollment 2-3% per year.
• Reducing the UT “physical footprint” by
up to 15%.
• Affiliation agreement; College of Medicine
• Reducing UT’s total cost of benefits.
Future Challenges/Opportunities
•
•
•
•
•
Addressing the major shortfall in unfunded
deferred maintenance.
Investing in capital improvements equal to or
greater than annual depreciation.
Strengthening our “balance sheet” to have a
positive impact on our S&P and Moody’s bond
ratings.
Attract and Retain top talent through competitive
Reward and Recognition Programs.
Eliminating waste through changes in procedures,
realignment of resources, and increased use of
technology.
Future Challenges/Opportunities
•
•
•
Reducing the cost of attendance for our
students by allowing them to meet
graduation requirements in a more timely
manner, managing the tuition/fee
increases, strategically investing in
scholarships, discounting room and board.
Improving Auxiliary Net Revenues
Increasing our unrestricted donations and
gifts.
Capital Spending (all Sources)
Project
Parking Garage Stabilization and Maintenance
UC Data Center
North Engineering HVAC Replacement
Bridge Repairs/Replacement
Building Envelop/Water Project
IT projects
Emergency Power-Phase 2
CT Scanner replacement
Total Amount
$
1.5
3.0
3.0
2.0
1.8
8.1
1.8
1.5
EMR updates (ED, PT/OT, oncology)
$
$
Likely timing of cash outflow
FY15
FY16
FY17
0.7 $
0.8
0.3
2.7
0.3
1.5 $
1.2
2.0
1.8
7.0
1.1
0.9
0.9
1.5
Telecom coverage
0.8
0.9
0.8
0.5
0.4
Kobacker - Peds
0.5
0.3
0.2
Ultrasound
0.1
0.1
Ambulatory investment
3.8
0.4
Total Capital Funding
$
28.7
$
4.3
2.0
$
FY2016 Budget –Funding from Operations
State Capital Appropriations
Capital from Carry Forward
Total FY2016 Budgeted Capital Spend
Board approved Supplemental Capital (see above)
Prior Year Approved Capital (to be spent in FY2016)
Routine Capital
Bond Funded
State Appropriations
Total FY2016 Capital Spend (all sources)
Total FY2016 Capital Spend (all sources) as a % of Depreciation is 80%
Total FY2016 Budgeted Capital Spend as a % of Depreciation is 25%
20.8
1.4
$
$ 0.0M
$11.8M
$ 3.4M
$15.2M
$20.8M
$ 6.0M
$ 1.0M
$ 5.0M
$48.0M
3.7
Future Challenges/Opportunities
•
•
•
•
We had forecasted a $38M deficit by
2020 if no permanent management
actions were taken
The plan is to close the gap over a 5 year
period.
The 2016 Budget addresses $6M of the
deficit while still investing strategically
Capital Investments were forecasted at
52% in 2016 Budget but will be spending
at 25% instead