UNIVERSITY OF Board of Regents Budget LOUISIANA SYSTEM - PowerPoint PPT Presentation

UNIVERSITY OF Board of Regents Budget LOUISIANA SYSTEM Presentation

20-YEAR MARCH TO NATIONAL COMPETITIVENESS FOR LOUISIANA FUNDING F FUNDING FOR WHA R WHAT?  End Goal = End Goal = A Nationally Competitiv A Nationally Competitive e Louisiana Louisiana  Health Healthy y Balance Balance of of Middle Skill and Middle Skill and High High Skill Skill Jobs/Graduat Jobs/Graduates es  Nationally Competitiv Nationally Competitive e Resear search t to Feed eed Inno Innovation/Commer tion/Commercialization ialization  Educat Educated ed Population pulation with Jobs A with Jobs Available ailable in All Sect in All Sector ors 2

20-YEAR MARCH TO NATIONAL COMPETITIVENESS FOR LOUISIANA ST STABILIT ABILITY— Y— Funding s nding stability i ability in n next 2 xt 2 year ars i s is C Critical itical  Pr Protect the base f ect the base for e r ever ery institution and k y institution and keep tuition re eep tuition revenue nue  Avoid d d dispr spropor portionat ionate c cuts t ts to univer universities for s sities for stability ability BENCHMARK BENCHMARK —Statistical method t —Statistical method to pr prop operly b erly benc nchmar hmark p performance ormance  Fair fight— ir fight—con connect resour ect resources t ces to e expectations of per pectations of performance ormance  Account f Account for mission di r mission differentiation erentiation  Analyses t Analyses to under understand st tand stretch but ac retch but achie hievable goals able goals  We n need better m metrics—fo focus o on w what r really m matters FUNDING ADEQU FUNDING ADEQUACY—T CY—T o meet d et demands o mands of workf workforce and i e and inno nnovation tion  Plan t to r ramp u up i inve vestment t to a achieve eve g goals fo for d delive vering t the graduat graduates an s and resear d research i inno novation tion to fuel nati fuel national com competitiveness eness of Loui of Louisi siana  Comprehensiv mprehensive re e revamp o mp of funding policies—more relat funding policies—more related t d to outc outcomes es 3

PERFORMANCE Retention Rates Graduation Rates 85.0% 45.0% 80.0% 40.0% 75.0% 35.0% 70.0% 30.0% 65.0% 25.0% 60.0% 20.0% Cohort: 1 year prior Cohort: 6 years prior 4

UL SYSTEM TOTAL OPERATING BUDGET FY 2013/14 TOTAL $751.7 million Self-Generated State Funding $251.2 million $500.4 million 33% 67% 5

UL SYSTEM TOTAL OPERATING BUDGET FY 2013/14 FUNDING TREND 100% 90% 80% 63% 63% 70% 62% 62% 67% 67% 58% 58% 56% 56% 61% 61 54 54% 60% 58% 58% 50% 46% 46% 42% 42% 40% 39% 39% 42% 42% 44% 44% 33% 33% 38% 38% 37% 37 30% 20% 10% 0% 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 State Funds Self Generated 6

UL SYSTEM TOTAL OPERATING BUDGET COMPARISON FY08-09 TO FY13-14 Budge Budget Budget Budge Chan Change ge 2008-09 2008-09 20 2013-1 -14 General Fund -$318.7 M $448.9 M $130.2 M Direct Stat Ded $17.7 M $121.0 M $103.3 M Total State $466.3 M 251.2 M -$215.1 M IAT $6.3 M $ .74 M -$6.2 M Self Gen $279.8 M $500.4 M $220.6 M Total -$ .8 M $752.5 M $751.7 M Revenues UNO - $121.5 M - Total w/UNO -$122.3 M $874.0 M $751.7 M 7

SOUTHEASTERN’S OPERATING BUDGET $140,000,000 $140,000,000 - $20 M T $20 M Total tal Fu Funds $120,000,000 $120,000,000 $100,000,000 $100,000,000 $80,000,000 $80,000,000 $60,000,000 $60,000,000 $40,000,000 $40,000,000 - $60 M $60 M General General $20,000,000 $20,000,000 Fund Fu $0 $0 FY 2008-09 FY 2008-09 FY 2013-14 Y 2013-14 8 State Funds State Funds Stat Ded Stat Ded Self-Generated Self-Generated

UNO’S OPERATING BUDGET $140,000,000 $140,000,000 - $19 M T $19 M Total tal Fu Funds $120,000,000 $120,000,000 $100,000,000 $100,000,000 $80,000,000 $80,000,000 $60,000,000 $60,000,000 $40,000,000 $40,000,000 - $53 M $53 M General General $20,000,000 $20,000,000 Fund Fu $0 $0 FY 2008-09 FY 2008-09 FY 2013-14 Y 2013-14 9 State Funds State Funds Stat Ded Stat Ded Self-Generated Self-Generated

FISCAL HEALTH CALCULATIONS Summary Score (0 - Summar Score (0 - 5.00) Based on .00) Based on Three Three Ratios Ratios Viability Expendable ÷ = Plant Debt Ratio Net Assets Primary Total Expendable ÷ = Reserve Operating Net Assets Ratio Expenses Change in Net Income Total ÷ = Total Net Ratio Revenues Assets A composite score at or below 1.75 for two consecutive years would result in an institution being placed on fiscal watch. 10

FISCAL HEALTH CALCULATIONS 5.0 4.5 4.0 3.5 3.0 2.5 2.0 Fiscal Stress 1.5 1.0 0.5 0.0 2009-2010 2010-2011 2011-2012 2012-2013 A composite score at or below 1.75 for two consecutive years would result in an 11 institution being placed on fiscal watch.

SACS ACCREDITATION  Core R Core Requirement 2. quirement 2.11 11 – The institution has a sound financial base and demonstrated financial stability to support the mission of the institution and the scope of programs and services  Comprehensiv Comprehensive Standard 3. e Standard 3.10.0 .0 – The institution’s recent financial history demonstrates financial stability. (Recent financial history generally refers to 3-5 years of financially stable conditions with a focus on such entities as revenue stream, expenses, capital investments, and such. If an institution experiences financial instability, it is important that it understands and explains the causes and has a reasonable plan for remedying the situation.) Ratio Rationale and ale and No Notes s (Financial Stability) Financial stability is an essential component of an institution’s ability to fulfill its mission and is meant to reflect more than a currently balanced budget. Recent financial history generally refers to 3-5 years of financially stable conditions with a focus on such entities as revenue stream, expenses, capital investments, and such. An institution may be overall financially stable, with generally adequate financial and physical resources, and still experience fluctuations in its financial health, such as in funding, enrollment, or expenditures. If an institution experiences financial instability, it is important that it understands and explains the causes and has a reasonable plan for remedying the situation. 12

PEERS FUNDING GAP PER FTE ULS - Funding Gap t ULS - unding Gap to 75th P 75th Peer P eer Percentile entile $0 2006 2007 2008 2009 2010 2011 2012 -$500 -$1,000 -$1,500 -$1,329 -$1,649 -$2,000 -$2,208 -$2,303 -$2,500 -$2,373 -$2,435 -$2,726 -$3,000 -$22.4 Million Total 13

BUDGETED FULL TIME POSITIONS FY 08- FY 08-09 FY 11-1 Y 11-12 FY 1 Y 12-13 FY 1 Y 13-14 Dif iffere rence % Grambling 700 541 562 507 -193 -28% Tech 1,190 1,077 1,042 987 -203 -17% McNeese 870 766 715 689 -181 -21% Nicholls 803 734 661 663 -140 -17% Northwestern 943 763 746 751 -192 -20% Southeastern 1,480 1,154 1,072 1,020 -460 -31% UL Lafayette 1,951 1,939 1,967 2,021 70 4% UL Monroe 1,160 982 924 898 -262 -23% UNO 1,355 963 920 840 -515 -38% UL System 25 15 17 18 -7 -28% TOTAL 10,477 8,934 8,626 8,393 -2,084 -20% -20% 14

$1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $0 $2,581 $2,609 AVERAGE SYSTEM TUITION $3,030 $3,322 $3,536 $3,590 $3,673 $3,834 $4,070 $4,472 $4,919 $5,568 $6,254 15

HISTORICAL ENROLLMENT 17

BOR REQUESTED ISSUE: RESERVES  National benchmark for reserve funds is from 12 to 15 per cent of expenditures, no ULS institution has any reserve balance at June 30, 2013.  The institutions do have restricted fund balances that they have been using to cover operating budget shortfalls. During the 2013-2014 fiscal year institutions report that they will use from $1 million to $7.25 million to offset the reductions in the operating budget. Use of these restricted funds is not sustainable and after this current fiscal year will no longer be available at certain institutions. 18

BOR REQUESTED ISSUE: MANDATED COST  Since 2009 the UL System appropriation has decreased by $122.3 million.  Mandated costs such as retirement, health insurance, and audit charges have continued to increase while the budget has decreased. These increases and inflation have mitigated savings.  For example, since 2009 salaries have decreased by $91 million (20%) but related benefits (retirement and health insurance) have increased by $18 million (13%), even with salary reductions.  In 2014-2015 audit fees will increase by 20%. 19

BOR REQUESTED ISSUE: $10 MILLION  Each management board received the same amount of one-time funding to be used for deferred maintenance and operations. Institutions are identifying projects these funds will support.  The UL Board approved the distribution to its nine institutions, ranging from $624,000 to $2.1 million based upon these factors:  10% fiscal health calculations  10% formula implementation  80% pro rata of state funding (formula) 20