Transcript June 2008 Finance and Budget Presentation President Nancy L. Zimpher Monica Rimai, Senior VP, Administration and Finance June 24, 2008

June 2008
Finance and Budget
Presentation
President Nancy L. Zimpher
Monica Rimai, Senior VP, Administration and Finance
June 24, 2008
1
Presentation Agenda
• FY 2008 Close
• Operating
• Capital
• FY 2009 Budget
• Operating
• Capital
• Status on 3-5 Year Plan
2
FY 2008 Year End Projection
University of Cincinnati
Uptown Campus General Funds
FY 2008 Year End Projection
For Period Ending May 31, 2008
Revenue
2008
Current
Budget
477,760,429
2008
YTD
Actuals
466,805,150
Uncommitted
Budget
Balance
10,955,279
477,760,429
Expenses
429,055,100
371,775,885
57,279,215
429,055,100
Transfers
48,705,329
47,739,357
965,971
48,705,329
0
47,289,907
Net Change
3
(47,289,907)
Projected
Year End
0
FY 2008 Year End Projection
University of Cincinnati
Raymond Walters General Funds
FY 2008 Year End Projection
For Period Ending May 31, 2008
Revenue
2008
Current
Budget
28,685,391
2008
YTD
Actuals
28,119,928
Expenses
27,885,892
23,929,128
Transfers
Net Change
799,499
787,606
0
3,403,194
4
Uncommitted
Projected Year
Budget
End
Balance
565,463
28,685,391
3,956,764
27,885,892
11,893
799,499
(3,403,194)
0
FY 2008 Year End Projection
University of Cincinnati
Clermont College General Funds
FY 2008 Year End Projection
For Period Ending May 31, 2008
Revenue
2008
Current
Budget
17,904,367
2008
YTD
Actuals
17,475,229
Expenses
17,843,871
13,925,318
Transfers
Net Change
Uncommitted
Projected Year
Budget
End
Balance
429,138
17,904,367
3,918,553
60,496
232,590
(172,093)
0
3,317,321
(3,317,321)
5
17,843,871
60,496
0
FY 2008 Year End Projection
University of Cincinnati
Campus Services Auxiliary
FY 2008 Year End Projection
For Period Ending May 31, 2008
Revenue
2008
Current
Budget
48,733,000
2008
YTD
Actuals
58,905,321
Expenses
31,774,000
36,651,564
Net Transfer
20,017,000
20,365,808
Change in Fund Balance
(3,058,000)
1,887,949
6
Uncommitted
Projected Year
Budget
End
Balance
3,767,000
62,672,321
5,083,949
41,735,513
0
20,365,808
(1,316,949)
571,000
FY 2008 Year End Projection
University of Cincinnati
Parking Auxiliary
FY 2008 Year End Projection
For Period Ending May 31, 2008
Revenue
2008
Current
Budget
16,376,993
2008
YTD
Actuals
13,330,868
Expenses
7,998,299
5,179,927
Net Transfer
Change in Fund Balance
Uncommitted
Projected Year
Budget
End
Balance
3,046,125
16,376,993
2,818,372
6,640,561
9,736,431
9,736,431
9,546,646
189,786
(1,357,738)
(1,395,705)
37,967
7
0
FY 2008 Year End Projection
University of Cincinnati
Athletics
FY 2008 Year End Projection
For Period Ending May 31, 2008
Revenue
2008
Current
Budget
22,758,161
2008
YTD
Actuals
14,097,205
Expenses
30,793,276
29,288,495
Net Transfer
(5,372,182)
(5,281,148)
Change in Fund Balance
(2,662,933)
(9,910,142)
8
Uncommitted
Projected Year
Budget
End
Balance
8,660,956
20,777,900
1,504,781
(91,035)
7,247,210
28,277,582
(4,816,283)
(2,683,399)
FY 2008 Year End Projection
University of Cincinnati
Designated funds
FY 2008 Year End Projection
For Period Ending May 31, 2008
Revenue
2008
Current
Budget
97,371,346
2008
YTD
Actuals
100,711,922
Expenses
142,464,092
99,316,526
43,147,566
119,117,000
Net Transfer
(11,923,290)
(55,135,175)
43,211,885
(55,135,175)
Change in Fund Balance
(33,169,456)
56,530,571
(89,700,027)
48,263,175
9
Uncommitted
Projected Year
Budget
End
Balance
(3,340,576)
112,245,000
FY 2008 Year End Projection
University of Cincinnati
Restricted Funds
FY 2008 Year End Projection
For Period Ending May 31, 2008
Revenue
2008
Current
Budget
308,270,114
2008
YTD
Actuals
296,250,298
Uncommitted
Budget
Balance
12,019,816
326,719,108
Expenses
349,680,533
285,125,341
64,555,192
314,160,000
8,146,194
11,512,515
(3,366,322)
12,559,108
(49,169,054)
0
Net Transfer
Change in Fund Balance
(49,556,612)
(387,559)
10
Projected
Year End
FY 2008 Major Capital Projects
11
Major Projects in Design and
Construction During FY 2008
Project Name
Phase
Board Approval
FY Capital Budget
Approved
FY 2008 Expenditures
Total Expenditures to
Date
Education and General Projects
Kettering Preclinical Science Lab Renovation
Construction
$
2,760,000
2007
$
653,344
$
756,956
Langsam Library Roof Replacement
Construction
$
2,700,000
2008
560,783
560,783
McMicken Perimeter Heating System
Construction
$
2,200,000
2007
1,109,743
1,246,336
MSB Rehabilitation Ph 1, CARE, & Eden Quad
Construction
$ 214,245,000
1999-2008
37,607,358
183,675,415
MSB Rehabilitation Ph 2 - 5
Design
$ 204,000,000
2005 & 2008
3,276,254
9,307,355
Teachers College/Dyer Renovation Phase 2
Construction
$
18,900,000
2002, 2003, & 2005
9,157,882
12,101,915
Zimmer Rehabilitation
Construction
Closeout
$
3,100,000
1999
2,605,831
3,130,231
Construction
$
6,000,000
2007
2,041,312
2,392,910
Auxiliary Project
Clifton Court Garage
Total
$ 453,905,000
12
$ 57,012,507
$ 213,171,901
Kettering Preclinical Science Lab Renovation
Description: Renovation of space for research labs on Level 200
Justification: To meet the need for additional research space for the
Department of Environmental Health
Funding: Debt
Total Project: $2.76 million
13
Langsam Library Roof
Description: Roof replacements
Justification: Complete replacement of roofs required to protect library
Funding: Debt
Total Project: $2.7 million
14
McMicken Perimeter Heating
Description: Heating system upgrades
Justification: Only half of this 1948 building’s heating systems
have been replaced - the south portion in 2007
Funding: State
Total Project: $2.2 million
15
MSB Rehabilitation Ph 1, Center for Academic
Research Excellence (CARE), and Eden Quad
Description: Renovation of 171,000 sq ft for the medical library and
student service space and 240,000 of new academic & research and
swing space
Justification: To address research space needs and upgrades to
existing MSB systems.
Funding: State, Debt, Federal Grants, Gifts, Local
Total Project: $204.8 million
16
MSB Rehabilitation Phases 2-5
Description: Renovation of mechanical and building systems for the
940,000 gross sq ft Medical Sciences Building
Justification: The existing systems are extensive, deteriorated, and at
the end of their useful life. Lab air requirements have changed
Funding: State, Debt, Federal Grants, Gifts, Local
Total Project: $204.0 million
17
Teachers College/Dyer Renovation - Phase 2
Description: Major renovation of approximately 1/3rd of the total complex
of three buildings originally built between the 1930’s and 1950’s
Justification: Major renovation needed to address deteriorated systems,
windows, and building envelope; and to respond to current teaching
needs and standards
Funding: State, Debt, Gifts, Local
Total Project: $18.9 million
18
Zimmer Rehabilitation – Phase 1
Description: Renovation of the large lecture hall, and supporting
HVAC, life-safety, and audio-visual systems
Justification: Furniture, finishes, audio visual, and systems dated
to original construction in the 1970’s. Fire suppression of the
large auditorium necessary
Funding: State & Debt
Total Project: $3.1 million
19
Clifton Court Garage Renovation
Description: Replace top deck, replace concrete & structural steel,
upgrade electric and ventilation systems
Justification: Major structural repairs needed for this 1960’s-era garage
Funding: State & Debt
Total Project: $4.6 million
20
FY 2009 Budget
21
FY 2009 University Current Funds Budget Plan
Summary of Budgeted Resources
Total University
Resources by Source
Auxiliary Enterprises
7%
Net Tuition, Fees &
Other Student
Charges
29%
Other Resources
19%
Govt. & Private Grants
& Contracts
24%
22
State Appropriations
21%
FY 2009 University Current Funds Budget Plan
Summary of Budgeted Expenditures
Total University
Expenditures by Function
Auxiliary Enterprises
7%
Nonmandatory Transfers
4%
Instructional & General
31%
Mandatory Transfers
8%
Scholarships & Fellow ships
4%
Operation & Maintenance of
Plant
5%
Institutional Support
7%
Student Services
4%
Academic Support
9%
Public23
Service
6%
Separately Budgeted
Research
15%
FY 2009 Budget Process
• Transparency
• President’s Budget Advisory Committee (PBAC)
• Fiscal Coordinating Committee (FCC)
• Academic Operations Committee (AOC)
• Faculty Senate
• Cabinet
• Executive Committee
• Board of Trustees (BOT)
24
FY 2009 Income Assumptions
• State Appropriation Increase of 9.8%
$14.9M
State Share of Instruction Uptown Campus
170,000,000
167,299,921
160,000,000
152,367,382
150,000,000
144,219,588
145,115,081
144,188,235
140,000,000
140,384,295
140,076,481
130,000,000
FY03
FY04
FY05
25
FY06
FY07
FY08
Projected
FY09
Projected
FY 2009 Income Assumptions
• Tuition & Fees
• Resident Undergraduate – frozen
– State Mandate
• Non-Resident Undergraduate – no increase
– University Decision
• Gross Tuition Inflation
$2.3M
– All Graduate Programs – increase 2%
– Professional Schools – increase 2%
• College of Medicine – increase additional 2%
• FY08 Core Tuition Adjustment
• Enrollment Increase per IEP Goals
Total
26
600K
3.9M
$6.8M
FY 2009 New Expenditure
Allocation Highlights
• Achieving Academic & Research Excellence
• Academic Priorities
$ 1.1M
• Supporting Enrollment Growth
500K
• UC|21 – 21st Century Learning
1.4M
• Academic Salaries
7.2M*
• Funding the Research Initiative
3.0M
• Library Acquisition
267K
• Academic Building & Lab Integrity
1.6M
• Revenue Generating Programs
3.5M
*This figure represents the permanent AAUP salary increase for both FY 2008 and FY 2009
27
FY 2009 New Expenditure
Allocation Highlights
• Other University Expenditure Highlights
• 2% Salary Increase – unrepresented staff
$
2.0M
• Union Contract Salary Increase – non-faculty
650K
• Performance-Based Budgeting
258K
• University Diversity Initiative
350K
• University-Wide Roof Repair
500K
28
FY 2009 Summary
FY 09 - FY 11 Incremental Revenue & Expense Recommendation & Projections
INCLUDING REVENUE GENERATING ADDITIONS
Revenue:
FY 09
1
Gross Tuition Inflation
FY 08 Core Tuition Adjustment
Enrollment Increase per IEP Goals Less Revenue Generating Increases
Revenue Generating Increases
(Increase)/Decrease in Graduate Scholarships (UGS)
Less Undergraduate Scholarships
Total Net Tuition
2,328,000
600,000
400,000
3,512,395
1,629,000
8,469,395
State Investment in Instruction2
Challenges Reduction
Total Revenue
14,951,098
(37,000)
23,383,493
Expenses and Transfers:
Expenses and Transfers
Academic Priorities & Salaries
Revenue Generating Expenses
Unrepresented Staff Increases & UC|21 Initiatives
Other Priorities
Total Expenditures
12,619,231
3,512,395
8,222,377
0
24,354,003
FY Surplus/(Deficit) after Expenses and Transfers
BUDGET REALLOCATION
(970,510)
970,510
Assumptions:
1
Tuition increase of 2% for Graduate and Professional Students in FY 09. Tuition increase of 3% for all students
in FY 10 and FY 11.
2
SSI increased by 2% in FY 10 and FY 11.
Note: SII and tuition projections for FY 10 and FY 11 are unpredictable at this point due to a total revamp of the funding
29
formula at the state level and legislative tuition setting policies.
30
FY 2009 Capital Budget
31
Criteria for Projects
•
•
•
•
•
Academic Priorities
STEMM
Highest and Best Use of Existing Space
Renovations of Existing Academic Space
Sustainability
32
State Capital Appropriations
2009-2010 Biennium
• Uptown Campus
– Medical Science Building Rehabilitation – $26.4M
– Basic Renovations - $10.7M
◦ The Procter Hall Façade Replacement project has been allocated $4.0M
◦ The remaining $6.7M has been allocated to small renovation projects below
the threshold for Board approval
– Instructional Equipment - $1.7M
• Clermont College
– Capital Allocation – $751K
– Basic Renovations - $326K
– Instructional Equipment - $87K
• Raymond Walters College
– Capital Allocation – $1.6M
– Basic Renovations - $501K
– Instructional Equipment - $130K
33
Projects for Budget Approval
Funding Sources
Project Name
Approval
Request
Project Amount
State
Debt
Education and General Projects
Energy Savings Projects (Ongoing)
Part 2
$10,000,000
$10,000,000
Kettering North Demolition/Site Preparation
Initial
3,000,000
3,000,000
Procter Hall Façade Replacement
Initial
4,000,000
Rieveschl 500 Level Teaching Labs Renovation
Initial
6,000,000
6,000,000
Teachers College / Dyer Renovation Phase 2A
Initial
2,500,000
2,500,000
Initial
10,000,000
10,000,000
$4,000,000
Auxiliary Project
Morgens & Scioto Residence Hall Upgrades
Total
$35,500,000
34
$4,000,000
$31,500,000
Projects for Budget Approval
Energy Savings Projects (Ongoing)
Description: Projects to improve plant efficiencies, improve existing
systems’ efficiencies and operations, and to provide major
upgrades to facilities
Justification: To reduce energy use, to comply with the mandates of
HB 251, and to meet the commitments of the American College and
University Presidents’ Climate Commitment
Funding: Debt proceeds
Total Project: $10.0 million
35
Projects for Budget Approval
Kettering North Wing Demolition/Site Preparation
Description: Demolition of North Wing Lab building
Justification: Unused facility is not structurally sound and does not
provide appropriate space for future research
Funding: Debt
Total Project: $3.0 million
DRC Comments:
• Agreement with building assessment
• Recommend demolition approval
36
Projects for Budget Approval
Procter Hall Façade Replacement
Description: Replacement of existing panels with new sun control façade
Justification: Existing panels contain asbestos and bird-droppings
Funding: State Basic Renovation funds
Total Project: $4.0 million
37
Projects for Budget Approval
Rieveschl 500 Level Teaching Labs Renovation
Description: Renovation of approximately 5,000 sq ft of existing
chemistry teaching labs
Justification: Labs have not been upgraded since original construction in 1970’s - systems,
equipment, and finishes outdated and deteriorated, current teaching needs and standards
need to be met
Funding: Debt proceeds
Total Project: $6.0 million
38
Projects for Budget Approval
Teachers College/Dyer Renovation Phase 2A
Description: Departmental and faculty office renovations, teaching lab renovations,
consolidation of College operations in Edwards, and restoration of site and perimeter access
Justification: Allows mission-critical College operations that are split to
function in most effective manner until Phase 3 funding can be secured
Funding: Debt
Total Project: $2.5 million
39
Projects for Budget Approval
Morgens & Scioto Residence Hall Upgrades
Description: A series of separate projects to upgrade fire alarms,
install fire suppression, replace furnishings, and improve
apartment interiors
Justification: The buildings are not fire-suppressed, alarms need
upgrading, and furnishings need replacement
Funding: Debt
Total Project: $10.0 million
40
Status on 3-5 Year Plan
41
42
Status on 3-5 Year Plan
• Guiding Principles
• Transparency
• Speaking the Truth
• Collaboration
• Building Capacity
43
Cost Containment and Efficiency
•INITIATIVES TO INCREASE REVENUE
•INITIATIVES TO IMPROVE ACADEMIC QUALITY
•INITIATIVES TO USE OUR LIMITED
HUMAN AND FISCAL RESOURCES
MORE EFFECTIVELY
44
Status on 3-5 Year Plan
• Recovery Factors
• Creation of A&F
• Cash Policy
• University-Wide Approach
• Accountability
• Financial Policies
• Business Reviews
• Realistic Budgeting
45
Status on 3-5 Year Plan
• Creation of Administration and Finance
• Checks and Balances
• Internal Audit
• General Counsel
• Speak the Truth
46
Status on 3-5 Year Plan
• Operating Cash Policy
• Board approved in November 2006
• Established operating cash balance levels
• Disciplined payoffs of existing deficit funds
• No new deficit funds permitted without
approval
47
Status on 3-5 Year Plan
Average
48
Minimum
Status on 3-5 Year Plan
• University-Wide Approach
• Campus Services – ahead of schedule
• College of Medicine – paid off Milliennium Plan
• Athletics – work in progress
• Utilities – ahead of schedule
• West Campus Colleges – making headway
• Research – good start
• Benefits – deferred
49
Recovery Plan Cash Reserve Update
• Quasi-Endowment and Designated Funds
• Quasi transferred to Cash Reserve in FY 2007 - $38.6M
• Funding used in FY 2008 to pay off deficits while
adhering to underlying donor restrictions - $18.1M
• College of Medicine - $15.7M
• College of Engineering - $1.3M
• Various other colleges - $1.1M
• Current Quasi Cash Reserve balance - $20.5M
• 1% of Monthly Operations Cash Balance
50
Restructure of Debt
• Restructure of June 2008 and Future
Restructure of June 2009 Principle Payments
• FY 2008 Cash Reserves increased by $26.7M
• FY 2009 Cash Reserves to be increased by $26.7M
51
Status on 3-5 Year Plan
• Financial Policies
•
•
•
•
Eight new policies
Approximately 1300 trained to date
Easy access; policy question “hotline”
Policy on Policies
52
Status on 3-5 Year Plan
• Business Reviews
• Campus Services
• Parking
• Utilities
• Athletics
53
Campus Services Budget Overview
• Consolidated Financial Overview
Budgeted Net
(loss)
Actual Net
Surplus/(loss)
2007
($7,900,000)
($3,600,000)
2008
($2,953,000)
$571,000*
Fiscal Year
* projected
54
Campus Services Budget Overview
• Revenue Enhancements
• Housing Occupancy – moved from 93% to 95% yearly
average plus rate increases
• Food Services – increased sales of independent meal
plans, commissions, and profit-sharing
• Campus Recreation – increases to non-student
membership, program and rental revenue
• Retail – improved upon guarantee from operator
• Kingsgate – maintained occupancy, improved margin,
rate increases
• University Conferencing – growth in number of
conferences managed
• MainStreet – Catskellar and Cinema improvements,
food sales growth
• Campus Life fee – growth due to enrollment increase
55
Campus Services Budget Overview
• Cost Containment and Reduction
• Food Service – lowered meal plan costs
• Housing – reduced O&M costs by reducing frequencies
of cleaning, reducing staff, reducing phones (landlines), reduced cost of resident staff, and other costs
• Eliminated travel and staff development expenses
• Reduced programming expenses at both MainStreet
and Campus Recreation
• Overall reduction in positions since end of 2006 – 60
• Utility savings in auxiliary buildings with more hands-on
management
• Operational savings based on contribution margin
analysis
56
Status on 3-5 Year Plan
• Realistic Budgeting
• All-university process
• Tied to academic priorities
57
Status on 3-5 Year Plan
• Going Forward
• Pay Back on Quasi Draw
• Enterprise Risk Management
• Enrollment Plan with refined forecasting
• 5-10 year Financial Plan with accurate,
refined forecasting
58
The Credits…
Provost Office
Deans
AHC
EC
PBAC
FCC
BMO
FPDC
DC
CS
BCS
FM
CU
UCit
59
Status on 3-5 Year Plan
• Vision
• Balanced budget based on Academic
Priorities will be norm
60