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Bot Workshop 6 1 09 Final Bot Workshop 6 1 09 Final Presentation Transcript

  • The Florida International University Board of Trustees Budget Workshop Operating Budget FY 09-10 June 1, 2009 1
  • THE FLORIDA INTERNATIONAL UNIVERSITY Board of Trustees AGENDA  E&G Budget Assumptions FY09-10 (Maidique/Martinez)  Legislative Update  Gap Analysis  E&G Budget Rolling Reduction Plans (Wartzok/Miller)  Budget Cut Methodology  Rolling Three Year Budget Reduction Plans  College of Medicine Update (Maidique)  Non-E&G Funds Budget FY09-10 (Miller)  Construction Plan (Maidique) 2
  • THE FLORIDA INTERNATIONAL UNIVERSITY Board of Trustees AGENDA  E&G Budget Assumptions FY09-10 (Maidique/Martinez)  Legislative Update  Gap Analysis  E&G Budget Rolling Reduction Plans (Wartzok/Miller)  Budget Cut Methodology  Rolling Three Year Budget Reduction Plans  College of Medicine Update (Maidique)  Non-E&G Funds Budget FY09-10 (Miller)  Construction Plan (Maidique) 3
  • LEGISLATIVE BUDGET UPDATE Funding Unfavorable Enhancements Impacts  Tuition increase of 8% for undergraduate  General Revenue net 15% reduction  Undergraduate differential tuition up to 7%  $27.2M recurring reduction after offset additional of $1.2M non recurring  College of Medicine 100% funded  Lotto funds reduction of $2.5M - uncertainty about future collections  $10.9M additional recurring funds  PECO funding reduced by $31.2M over last  $0.9M one time Federal Stabilization funds year  Additional ONE TIME funding from Federal  Courtelis Facility and Challenge Grants Stabilization fund $14M matching will not be funded  Excluded from 2% state employee salary cut RESULT : CONTINUE WITH BUDGET REDUCTION PLANS 4
  • RESTRICTIONS ON STABILIZATION FUNDS Federal Guidelines One Time Funds As Temporary Bridge  Endowments Prohibitions *  Maintenance of systems, equipment, or facilities  Maintenance costs, new construction, modernization of athletic facilities or religious facilities  Restoring or supplementing a quot;rainy dayquot; fund  Education and General expenditures Possible  Modernization, renovation, or repair of instructional, research, or Uses student housing facilities Strategically directed to strengthen FIU going forward on non recurring critical investments Source: Guidance on the State Fiscal Stabilization Fund Program, U.S. Department of Education Washington, D.C. 20202, April 2009 (Page 26-30) 5 * The list of prohibitions is not meant to be all-inclusive; uses and prohibitions are also subject to ARRA (American Recovery and Reinvestment Act) and other applicable requirements.
  • STABILIZATION FUNDS Non Recurring Critical Investments Research & Student & Green Efficiency Compliance Graduate Education University Support Initiatives Example: Example: Example: Example:  Research Start-up  Strengthen library  Modernize low efficiency  Strengthen Environmental Funds resources & infrastructure buildings Health & Safety 6
  • MULTI-YEAR OPERATING GAP (Cumulative amounts) State Cuts are in addition to an $11.3M cut received in FY07-08, which resulted in units’ cuts of $8.1M UNFUNDED UNIVERSITY STATE CRITICAL UNITS' CUTS ADDITIONAL TUITION OPERATIONS/ MITIGATION NET GAP CUTS INVESTMENTS 08-09 plan CUTS OBLIGATIONS *** FY 08-09 ($13.0) $6.1 ($12.0) ($11.0) $14.9 ($15.0) $15.0 FY 09-10* ** ($47.3) $18.5 ($20.6) ($17.4) $32.2 ($34.7) $23.2 $11.4 FY10-11 ($51.7) $30.2 ($24.5) ($21.7) $19.0 ($48.7) $35.7 $13.0 FY11-12 ($51.7) $43.9 ($26.5) ($29.8) $10.8 ($53.3) $35.7 $17.6 * FY 09-10 State Cut assumes current cut of $30.4M in GR and Lotto appropriations plus a contingency of $3.9M for possible future reductions. Incremental funding received for new space ($1.5M)and insurance increases ($2.3M) that are directly allocated to the units were excluded ** Assumes 8% tuition increase in undergrad, 10% increase in grad, 15% increase in law and 7.6% increase in undergraduate 7 differential tuition (net of 30% need-based Financial Aid allocation) *** Includes carry forward funds and salary float
  • ENROLLMENT BUDGET ASSUMPTIONS FY09-10 Continued focus on managing undergraduate enrollment while increasing graduate enrollment FTE FTE FTE 24,084 24,392 24,758 366, 1.5% 47, 8% 170, 5% 242, 2% (93), -1% 8
  • E & G INCREMENTAL REVENUE FY09-10 Net tuition revenue increase of $12.4M (volume and price)* helps make critical investments to close the on-going Budget Gap FTE FTE FTE FTE 24,637 24,084 24,392 24,758 $125.2M Law $1.0M Grad $3.5M Differential $2.6M $112.7M Undergrad $5.3M $107.1M $109.4M $12.4M *Includes the effects of enrollment growth. Revenue amounts are net of Financial Aid and waivers. Excludes College of Medicine Tuition. 9
  • CRITICAL INVESTMENTS FY09-10 Despite financial crisis, FIU continues to invest in quality $17.4M* Teaching Research Employees  Advisory services  Faculty hiring and start  Retain employees up funds  Faculty hiring  Attract talent  Graduate Assistant  Graduate Assistant stipends stipends  Classroom renovations  On-line infrastructure  Improve quality  Strengthen national  Maintain stability  Increase graduation and research ranking retention rates  Increase revenue 10 *Cumulative investment amount through FY09-10
  • THE FLORIDA INTERNATIONAL UNIVERSITY Board of Trustees AGENDA  E&G Budget Assumptions FY09-10 (Maidique/Martinez)  Legislative Update  Gap Analysis  E&G Budget Rolling Reduction Plans (Wartzok/Miller)  Budget Cut Methodology  Rolling Three Year Budget Reduction Plans  College of Medicine Update (Maidique)  Non-E&G Funds Budget FY09-10 (Miller)  Construction Plan (Maidique) 11
  • BUDGET REDUCTION Planning Methodology  Multi-year state budget cuts expected Three Year Rolling  Continue making investments in critical strategic areas Plans  Stabilization funds directed towards one time critical investments  Lessen immediate impact to students, faculty and staff through the University use of one time funds Mitigation  Shared savings from new & replacement positions  Savings and revenues from new university-wide ideas  Reduction amounts allocated proportionately to executive areas Units’ Reductions  Reductions distributed to each unit based on strategic prioritization  All units created their own three year plans for submission 12
  • MULTI-YEAR OPERATING GAP (Cumulative amounts) State Cuts are in addition to an $11.3M cut received in FY 07-08, which resulted in units’ cuts of $8.1M UNFUNDED UNIVERSITY CRITICAL UNITS' CUTS ADDITIONAL STATE CUTS TUITION OPERATIONS/ MITIGATION NET GAP INVESTMENTS 08-09 plan CUTS OBLIGATIONS *** FY 08-09 ($13.0) $6.1 ($12.0) ($11.0) $14.9 ($15.0) $15.0 FY 09-10* ** ($47.3) $18.5 ($20.6) ($17.4) $32.2 ($34.7) $23.2 $11.4 FY10-11 ($51.7) $30.2 ($24.5) ($21.7) $19.0 ($48.7) $35.7 $13.0 FY11-12 ($51.7) $43.9 ($26.5) ($29.8) $10.8 ($53.3) $35.7 $17.6 * FY 09-10 State Cut assumes current cut of $30.4M in GR and Lotto appropriations plus a contingency of $3.9M for possible future reductions. Incremental funding received for new space ($1.5M)and insurance increases ($2.3M) that are directly allocated to the units were excluded ** Assumes 8% tuition increase in undergrad, 10% increase in grad, 15% increase in law and 7.6% increase in undergraduate 13 differential tuition (net of 30% need-based Financial Aid allocation) *** Includes carry forward funds and salary float
  • UNIVERSTIY WIDE REDUCTION PLANS FY08-09 Plan Summary Initial 3 Year Plan Reduces Budget by $35.7M Academic Allocation to Operational Incremental Restructure Appropriate Funding Efficiency Revenue  Curriculum changes  Reconfirm E&G funds  Lower operational costs:  Expand Graduate not used to cover (revise processes, redefine Tuition Plus  Degree program expenses of other service model, renegotiate closures based on funds such as vendor agreements, create  Expand Self sustainability criteria Contracts & partnerships, leverage Supporting Grants, Construction, purchasing) Programs  Center & Institute and Auxiliaries. closure and reductions  Consolidate operations:  Increase Private based on approved increase internal shared Support for Museum policy services Operations  Reduce non-critical support services Saves $12.1M Saves $6.9M Saves $13.9M Generates $2.8M 14
  • ACADEMIC AFFAIRS GROUP STRUCTURE FY09-10 Incremental Reduction Plan Criteria Relative Importance / Definition  Strategic to FIU 10 As defined in FIU strategic plan  Return on Investment 7 Total of all funding divided by E&G support – tuition, research, gifts, and auxiliaries  Cost 5 College level analysis using Delaware study benchmark  Faculty Investment 3 Faculty cost plus startup dollars expectation  PhD Production 2 Three year average PhDs awarded divided by Tenure-Tenure track faculty 15
  • ACADEMIC AFFAIRS BUDGET REDUCTION PLAN FY09-10 Incremental Reduction Plan ADDITIONAL BUDGET REDUCTION PLAN Cumulative Percentages 09-10 10-11 11-12 Group 1 (overall score > 60) 3.3% 3.6% 5.0% Arts & Sciences (64), Business (61), Engineering & Computer Sciences (64), Public Health & Social Work (66) Group 2 (overall score 40 – 59) 4.1% 4.6% 6.2% Hospitality (54), Nursing & Health Sciences (54), Education (49) Group 3 (overall score < 39) 5.1% 5.6% 7.7% Architecture & the Arts (38), Journalism (37), Law (38) Group 4 (overall score not applicable) 5.3% 5.9% 8.0% Library, Honors, Museums, Student Affairs and all other Provost areas 16 Reductions for planning purposes, subject to change
  • ACADEMIC AFFAIRS CUT STRATEGIES FY09-10 Incremental Reduction Plan Incremental Multifaceted 3 Year Plan to Reduce Budget by $13.7M Shift to Other Funding/Revenue Lower Operational Sources Costs  Private support for museum Consolidate or reduce administrative functions – Eliminating operations Continuing and Professional Studies; 4 Vice Provost positions  Reallocate operating expenses to Consolidate six departments into three grants, overhead and fees Reduce library purchases, reduce travel, service hours in  Reallocate operating expenses to enrollment services, convert print materials to library on line auxiliary funds where appropriate access, computer replacements, marketing in select programs, recruitment events, permanent and temporary staff Change instructional mix of summer courses, decreased use of adjuncts by increasing class size, and eliminate faculty through vacancy/attrition Impacts 66 Positions: Saves $9.3M Saves $3.4M Attrition 25, Vacancy 19, Elimination 22 17 17
  • ACADEMIC AFFAIRS CUT STRATEGIES FY 09-10 Incremental Reduction Plan Incremental Multifaceted 3 Year Plan to Reduce Budget by $13.7M Degree Program Closure Education Arts & Sciences Recreation &Sports Management ( B-62, M-19) Religious Studies (B-87,M-33) English Ed MAT (M-6) Mathematical Sciences (B-24) French Ed (B-0) French Ed MAT (M-2) Mathematics Ed MAT (M-4) Nursing & Health Sciences Science Ed MAT (M-2) Athletic Training (M-25) Social Studies Ed MAT (M-5) Occupational Therapy (B-0) Spanish Ed (B-0) Physical Therapy (M-0) Spanish Ed MAT (M-0) *Adult Education (M-9) *Adult Education & Human Resource Development (D-27) *Higher Education Administration (M-82,D-53) Bold text = Faculty Senate opposition to closure *International Education (M-19) Normal text = agreement by the Faculty Senate with the proposal *Urban Education (M-11) Italicized text = administrative agreement with Faculty Senate recommendations Degree level: B – Bachelor ; M – Master; D - Doctorate *Degrees will be subsumed under existing degree program Impacts 20 positions: Saves $1M Elimination 20 18
  • NON- ACADEMIC AFFAIRS OPERATIONS FY09-10 Incremental Reduction Plan Budget of $83M, or 24% of Total E&G Budget Implications:  Utilities account for 17% of total budget  Another 18% is contractually committed or infrastructure specific and cannot be immediately reduced  Therefore, significant savings must be absorbed from Personnel, OPS and Other Expenses and Other Support Areas 19 *Other Support Areas include Advancement, External Relations, Govt. Relations, Presidents Office and General Counsel
  • NON-ACADEMIC AFFAIRS OPERATIONS* FY09-10 Incremental Reduction Plan Group 1: Compliance and University-Wide Strategic Projects Prioritization Examples: Equal Opportunity Program, IT Security, BioChemical Receiving Group 2: Essential Services where service will be reduced or contractual commitments renegotiated Examples: IT Support Center, Media Technology Services, PeopleSoft Group 3: Areas where efficiencies gained from a change in current business processes or in customer service delivery method Examples: Purchasing Services, Student Payment Services (Online) Group 4: Less Essential Services where current levels cannot be afforded Example: Groundskeeping Incremental  Planned cuts range from 1% to 7% by FY 2011-12 Planned Cuts  Group 4 cuts could exceed 35%  $3.9M in additional cuts  55 Positions: 7 Attrition, 21 Vacancy, 19 Eliminated** and 8 Reassigned *Includes Finance & Administration, Advancement, Community Relations, General Counsel, Government Relations, BOT Office, President’s Office 20 ** Includes 2 replacement positions in HR
  • PERSONNEL IMPACT E&G Reduction Plans Through 2012 FY08-09 FY09-10 FY10-11 FY11-12 Attrition 27 65 80 84 Vacancy 26 87 134 157 Elimination 43 52 65 76 Shift to Non-E&G 29 94 99 100 Funding Sources Total Position 125 298 378 417 Reduction Faculty 36 91 123 140 Non-Faculty 89 207 255 277 Total Position 125 298 378 417 Reduction 21 Cumulative FTE
  • THE FLORIDA INTERNATIONAL UNIVERSITY Board of Trustees AGENDA  E&G Budget Assumptions FY09-10 (Maidique/Martinez)  Legislative Update  Gap Analysis  E&G Budget Rolling Reduction Plans (Wartzok/Miller)  Budget Cut Methodology  Rolling Three Year Budget Reduction Plans  College of Medicine Update (Maidique)  Non-E&G Funds Budget FY09-10 (Miller)  Construction Plan (Maidique) 22
  • . COLLEGE OF MEDICINE FY09-10 Update  130 faculty on board, 14 of 15 chairs identified Faculty &  1st and 2nd year curriculum completed Students  43 students accepted from 3,332 applicants  Students begin orientation August 3, 2009  Provisional accreditation obtained in record time  Agreements in place with:  Jackson Public Health Trust Affiliations  Leon Medical Centers  Mercy Hospital  Miami Children’s Hospital  Mount Sinai Medical Center  State funds increase of 100% to $22M State Funds/  Over $53M in donations to date; $14M expected in FY09-10 Gifts/Grants  $10M gift from Benjamin Leon Jr. and Family  $10M gift from Miami-Dade County for an ambulatory facility  $2.4M in new and transferred grant awards  $2.7M in Stimulus related applications as of April 2009 Faculty Practice  Starting Faculty/Staff clinic on University Park campus Plan 23
  • THE FLORIDA INTERNATIONAL UNIVERSITY Board of Trustees AGENDA  E&G Budget Assumptions FY09-10 (Maidique/Martinez)  Legislative Update  Gap Analysis  E&G Budget Rolling Reduction Plans (Wartzok/Miller)  Budget Cut Methodology  Rolling Three Year Budget Reduction Plans  College of Medicine Update (Maidique)  Non-E&G Funds Budget FY09-10 (Miller)  Construction Plan (Maidique) 24
  • FIU UNIVERSITY BUDGET FY09-10 Expenditures OPERATING BUDGET $685M* Activity & Service, $12M, E&G State Funds, 2% Athletics, $19M, $219M, 31% 3% Technology Fee, $6M, 1% Scholarships, $88M, 12% Sponsored Research, $89M, 13% Auxiliary Enterprises, $107M, 15% DSO's, $13M, 2% Fiscal Stabilization E&G Tuition, Funds, $15M, 2% $126M, 18% * Net of interfund adjustments, includes College of Medicine 25
  • ACTIVITY & SERVICE FY09-10 Budget Recommended fee increase of $1.08/credit hour brings total fee to $11.60/credit hour  Fee is charged equally to all levels of students Allocation to fund student life  70% supports student programs and infrastructure like Graham and Wolfe Centers  30% supports student activities and groups  Renovations in Graham Center and Wolfe Incremental Fee University Center and UP Recreation Center Uses  Additional operations for BBC Pool  Increase allocations of funds for student groups and affinity programs 26
  • ATHLETICS ENTERPRISE FY09-10 Budget  Net loss of $1.6M in FY08-09 covered by Athletics reserve balance Operation  Net loss expected to be at the same level in FY09-10 using majority of the reserve balance  Construction nearing completion Field House  Academic use approved by BOG allowing for matching of donor gift  Bridge financing still pending  Risk of breach on debt covenant if revenue Athletics Finance generation from special event sales, stadium Corp naming rights and sponsorships do not materialize  Major League Soccer contract will not materialize adding additional pressure on other revenue sources 27
  • FINANCIAL AID SCHOLARSHIPS FY09-10 Budget  Need-based Scholarships projected to increase $8.0M Need Based Activity  Pell grant maximum award increased by $619 per student to $5,350  Differential Tuition allocation of 30% to Need Based Aid  Non Need-based Scholarships projected to increase $5.3M Non-Need Based Activity  An increase in the number of students receiving Bright Futures  Additional funds allocated toward Athletic Scholarships 28
  • SPONSORED RESEARCH FY09-10 Budget  Revenues to increase by $4.1M to $90M ($110M)* Operations  Increase in number of awards received in FY08-09  Impact of Federal stimulus awards which are required to be spent within 18 months of receipt  Higher indirect cost rate  Growing from 42% to 44%  Effective rate will increase by 2% to 20%, targeting industry benchmark of 50% of the federal rate  Grants Module implementation to be completed Investments July 2009 29 * National Science Foundation survey of research and development expenditures is projected at $110M
  • AUXILIARY ENTERPRISES FY09-10 Budget Revenues remain relatively flat in FY09-10 while expenses increase to absorb investments and properly align costs  Investments 130  Expansion of Parking garages - $2M  Replacement of obsolete network 120 infrastructure - $2M $11 M  Housing capital improvements 110 In $ Millions $0.7M 100 Increasing cost of operations (filling $118 $120 vacant positions and Utilities costs) - $2M $116 90 $111 $107 $105 $100 Realignment of E&G expenses - $3M 80 $87 70 Actuals 06-07 Actuals 07-08 Forecast 08-09 Budget 09-10 Revenue Expenses Note: Expenses include debt service 30
  • TREASURY OPERATIONS FY09-10 Budget FIU Portfolio - April 2009 Portfolio Since Fixed Cash & Short Performance FY Inception Income, $61. Term 8 M, 30% Securities, $1 04.1 M, 50% FY 05-06 3.3% 3.3% FY 06-07 7.3% 6.3% FY 07-08 2.3% 4.5% FY 08-09 Equity, $18.6 (4.2%) 1.8% (thru 4/30) M, 9% Alternatives, FY 09-10 $23.1 4.0% --- (Budget) M, 11% 31
  • FIU FOUNDATION FY09-10 BUDGET Highlights: Scholarships & Programs Non- Endowed and Non-endowment Building Funds Scholarship & Program revenues are Endowed $4M $0.2M (1%) (15%) forecasted to be $8M for new gift agreements and expected pledge payments. Reduction due to delay of Endowments State Match for Courtelis program $4M (15%) expected in future years. Pledged Investment returns based on 5% return Admnistrative Revenue $11M Fee on $95M (41%) $1M (1%) Pledged revenues totaling $11M Annual Fund included committed contracts of $18M $0.4M (1%) net of 25% allowance and $7M in Investment anticipated payments. Returns $5M MARC Building (15%) Rental Income $1M (5%) 32
  • THE FLORIDA INTERNATIONAL UNIVERSITY Board of Trustees AGENDA  E&G Budget Assumptions FY09-10 (Maidique/Martinez)  Legislative Update  Gap Analysis  E&G Budget Rolling Reduction Plans (Wartzok/Miller)  Budget Cut Methodology  Rolling Three Year Budget Reduction Plans  College of Medicine Update (Maidique)  Non-E&G Funds Budget FY09-10 (Miller)  Construction Plan (Maidique) 33
  • FIU UNIVERSITY BUDGET FY09-10 Construction Plan Construction Funds $249M  Major construction projects in progress:  Nursing & Allied Health (Molecular Biology)  Satellite Chiller Plant  Social Science Building (International Studies)  Parking Garage V / Public Safety Building  Science Classroom Complex  Graduate Classroom/Research Building  International Hurricane Research Center  Field House Total University Budget $934M 34
  • UNFUNDED MATCH TO DATE Facilities $1.2 Endowment $9.0 New Funds (FY 08-09) $4.9 TOTAL $15.1 AMOUNT IN MILLIONS 35
  • THE FLORIDA INTERNATIONAL UNIVERSITY Board of Trustees AGENDA  E&G Budget Assumptions FY09-10 (Maidique/Martinez)  Legislative Update  Gap Analysis  E&G Budget Rolling Reduction Plans (Wartzok/Miller)  Budget Cut Methodology  Rolling Three Year Budget Reduction Plans  College of Medicine Update (Maidique)  Non-E&G Funds Budget FY09-10 (Miller)  Construction Plan (Maidique) 36