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January 16, 2019

Clemson University House Ways & Means Presentation Higher Education & Technical Colleges Subcommittee. January 16, 2019. Executive Summary. Tab A. Clemson Continues Tradition of Excellence. Recent Accolades and Rankings

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January 16, 2019

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  1. Clemson University House Ways & Means Presentation Higher Education & Technical Colleges Subcommittee January 16, 2019

  2. Executive Summary Tab A

  3. Clemson Continues Tradition of Excellence Recent Accolades and Rankings Clemson has been nationally recognized for providing students with an excellent education in a cost effective manner that results in a good return on investment. This value proposition, combined with a strong student environment with a high quality of life has continued to attract students. • Carnegie R1 Classification • US News & World Report • #24 - public national university (11th consecutive year in Top-25) • #3 - alumni giving percentage for public universities • Top 5% among national universities for efficiency • New York Times College Access Index: #1 in South Carolina • Kiplinger Best College Values: #31 for In-State Students, #35 for Out-of-State Students • Payscale.com: Top 9% (in-state) & top 15% (out-of-state) for 20-year Net ROI for all public and private universities • Princeton Review: • #1 - Students who love their college • #2 - Career services program • #7 - Happiest students

  4. Clemson Continues Tradition of Excellence • Strong Student Demand & Quality • For Fall 2018 admission, Clemson received the largest number of freshmen applications in University history (28,845 – a 10% increase vs prior year) • Average SAT score has increased 81 points from 1230 in 1998 to 1311 in 2018 • Quality, Affordable Education with Strong Student Outcomes • Highest freshman to sophomore retention rate in University history (93.3%) • 83% 6-year graduation rate remains significantly higher than the national average of 59% • Over 91% of surveyed graduates are employed full-time, enrolling in graduate school, or participating in service/military organizations within 6 months of graduation • Most of Clemson’s graduates (54%) have NO DEBT compared to 35% nationally • Student loan default rates (1.9%) are significantly lower than the national average (10.8%), indicating students are better able to repay loans after graduation

  5. Clemson Continues Tradition of Excellence • Clemson has demonstrated a commitment to Access, Affordability, and Excellence for South Carolinians • Clemson educates over 30% more (3,118) in-state undergraduate students now (13,380) compared to 2008 (10,262) • In FY 2018, 99.7% of enrolled in-state freshman received financial aid from the Palmetto Fellows, Life, or Hope Scholarship programs • Average out of pocket costs for first-time in-state freshman are 36% of sticker price • Over 48% of living alumni reside in South Carolina • Top 9% (in-state) for 20-year Net ROI for all public and private universities (Payscale.com)

  6. Clemson Continues Tradition of Excellence Clemson’s financial excellence has been recognized by all three bond ratings agencies, which affirmed Clemson’s financial health in FY18 following last year’s upgrade by S&P. All three agencies have assigned Clemson a stable outlook Clemson is a critical South Carolina institution with strong market position • “Good student demand and quality, highlighted by increasing freshman applications and test scores, as well as strong state funding of scholarships and grants that make Clemson very affordable to in-state students.” • “Under its strategic plan, the university remains focused on providing relevant degrees and research for the emerging economy, which will entail focusing on its areas of strength - science, technology, energy and engineering.” • “Clemson University has an excellent market profile that will continue to allow it to invest in programs and remain competitive.” Clemson is financially strong • “Management's efforts to diversify revenue and demonstrated willingness to control expenses are hallmarks of its effective planning practices that materially bolster the university's long-term credit prospects.” • “Clear strategic direction and planning discipline supports likelihood of maintaining operating performance strength” Clemson has strong leadership and is well-positioned strategically • “Clemson's budgeting discipline and strategic clarity remain core credit positives” • “Management continues to use long-range financial planning metrics to adjust its operations, which we view as a best practice.

  7. Clemson’s Economic Impact to South Carolina • $4.6 BillionEconomic Impact to the State of South Carolina • Nearly 39,000 jobs • A net return of tax revenues to the state taxpayers of $111.7 million • Over $1.7 Billion of additional disposable income

  8. Partnerships Diversify and Strengthen Market Position • Clemson University International Center for Automotive Research (CU-ICAR) • $250M in investments from multinational companies, the State and EDA with no debt to Clemson; includes BMW, Michelin, Koyo Bearings, Timken, The Furman Company, & Sun Microsystems • 23 on-site Campus partners & over 40 research partners: BMW, Intel, Michelin, Mazda, General Motors, Bosch, Fiat Chrysler, Toyota, Borg Warner, Verizon, GE Energy, amongst others • CU-ICAR is an increasingly critical asset to South Carolina as it continues to attract automotive industry • Clemson University Restoration Institute • $150M capital investment through public/private partnerships including: State of South Carolina, US DOE, Duke Energy, SCANA, Santee Cooper, Zucker Family, TECO Westinghouse, UL, Shell

  9. Partnerships Diversify and Strengthen Market Position • Partnership with Greenville Health System • Named Greenville Health System’s primary healthcare research partner; Over $8M in active awards • Partnership on GHS campus is expected to more than double Nursing enrollment over next 6 years and provide clinical experience to address a projected shortage of 6,400 nurses in South Carolina by 2028 • Partnership with Medical University of South Carolina • Collaboration to provide joint degrees and accelerated medical degrees, reducing student debt burden and increasing the workforce in the rapidly growing field of biomedical data science and informatics • AIG Risk Engineering & Analytics Partnership • AIG - initial $4M investment to develop risk engineering & analytics center • Center will create next-generation workforce skilled in risk engineering & systems analytics, develop innovative technology-based tools to mitigate risk exposure, & facilitate use of big data to make critical decisions

  10. Efficiency: Clemson is dedicated to Cost Management • LEAN initiatives & cost saving measures continue to mitigate the need for tuition and fee increases • Over $13M in Strategic Sourcing & Procurement Savings in FY 18 • $5.1M in Academic Reallocations in FY 18 to support mission critical investments • Projected $2.5M in Additional Academic Reallocations & LEAN efforts in FY 19

  11. Efficiency: Clemson is dedicated to Cost Management • Clemson’s cost per FTE is 38% lower than the top-25 public universities • Clemson’s cost per FTE has decreased 14% compared to 2008 (adjusted for inflation)

  12. State Budget & Financial Management Tab B

  13. E&G State Appropriations Revenue History (in thousands) 0.5% 7.9% 0.0% 0.3% 11.2% 8.6% 8.8% 10.5% 10.6% 80.4% 80.9% 80.3% 908,422 955,808 1,091,405 TOTAL • Recurring amount does not include recurring allocation for Health Insurance & Retirement Benefits of $1,330. • Other Funds include fund balance resources, $23.8 million Source: Clemson Submission to State for Revenue; Excludes PSA revenues/appropriations

  14. Total FY 18-19 Budget for Revenues

  15. Total FY 18-19 Budget for Expenses Estimated by Program

  16. Recurring State Appropriations FY 18-19 • Call Me MISTER $500,000 • Expand existing program to provide more scholarships to students across participating four-year institutions in South Carolina • Increases in scholarships for 32 new students and 51 current students • Access and Affordability for In-State Students $2,868,740 • Mitigate tuition for in-state students

  17. Nonrecurring State Appropriations FY 18-19 • Critical Investment in South Carolina’s Advanced Materials Industrial Competitiveness and STEM Equipment - $5,300,000 • Electron Microscopy: Clemson’s Electron Microscopy Facility will add three advanced microscopy machines, including the world’s most advanced scanning electron microscope, used in product development in the aerospace, automotive, manufacturing, energy, and textile industries, among others. Expected to be online in late spring, this equipment provides a unique platform for faculty research and student education and is available for use by the private sector looking to invent or improve product lines. • Composite Manufacturing Equipment: The Clemson Composite Center will add a high-pressure resin transfer molding machine to design, manufacture, test and commercialize a spectrum of composite products and components used by automotive and advanced-manufacturing companies to improve cost, performance and efficiency. The center works closely with the private sector to fuel real-world innovation and with Greenville Tech to help educate a highly skilled workforce.

  18. Nonrecurring State Appropriations FY 18-19 • Critical Investment in South Carolina’s Advanced Materials Industrial Competitiveness and STEM Equipment - $5,300,000 (continued) • Connected Automated Vehicle platform: This virtual simulation system and hardware-in-the-loop Autonomous Vehicle Testbed will serve as a testbed for automated vehicle systems and intelligence infrastructures to develop new technologies that will stimulate economic advancement and to provide experiential learning opportunities that will equip a next-generation workforce for jobs of the future. • Light Imaging: Clemson’s Light Imaging Facility will add a powerful new live-cell imaging tool particularly valuable for advancements in health care, among other industries. The facility is available to the private sector for product development and innovation. • STEM: Virtual reality and other tools for Science, Technology, Engineering and Mathematics (STEM) education and workforce development initiatives in advanced manufacturing and advanced materials.

  19. Other/Federal Funds FY 18-19 FY 2018-19 Projected Expenses include an estimate of $50M for the net pension liability impact. Net Position/Carry Forward figures above include net pension liability.

  20. Net Pension Impact Directly Affects Budgetary Requests • GASB 68 requires that a proportionate share of the State’s total pension liability be budgeted and expensed • This is a non-cash expense but is required to be budgeted and expensed • Net pension adjustment has grown every year and is expected to increase by $10.0M in FY19 • $446.6M net position adjustment in FY 14 • $4.3M increase in FY 15 • $10.6M increase in FY 16 • $21.2M increase in FY17 • $30.8M increase in FY18 • GASB 78 requires that a proportionate share of the State’s total post employment benefit liability be budgeted and expensed • $589.5M net position adjustment in FY 18

  21. Capital Plan & State Requests Tab C

  22. Capital Projects Reflect Critical Priorities • The tables below summarize the status of active capital projects as well as those projects with more than $1M in remaining project balances as of December 2018 • See Appendix A for open capital project listing, including account balances and funding sources

  23. Planned Maintenance • Clemson has a robust planned and preventative maintenance program to responsibly maintain its physical assets • Utilizes external inspections, data-driven evaluations, and comprehensive studies and assessments • System-by-system review of each building and enables a rigorous maintenance plan and allows the University to maximize existing assets • Ensures that University and State assets stewarded properly • In 2017, Clemson University invested ~$42M in routine repair and maintenance, maintenance stewardship, and space renewal projects  • Over the past five years, the University has spent over $250 million in maintenance and renewal investments

  24. FY 2020 State Budget Requests Tab D

  25. Recurring State Appropriations Request FY 19-20 Clemson University Center for Advanced Manufacturing (CAM)- $3,500,000 Why It’s Important to SC: • Establish Clemson University and the State of South Carolina as a leader in advanced manufacturing technological innovation • Drive efficiency and productivity growth in advanced manufacturing through technological innovation How: • Serve as a focal point for education, research, partnerships, and engagement with industry to move new technology to reality, benefiting the people of South Carolina • Leverage and build upon Clemson’s science and technology excellence and growing research productivity • Expand the Center for Advanced Manufacturing by hiring a combination of tenured, tenure-track, and research faculty • Establish matching funds for competitive research and development grants at the federal level and for industry

  26. Recurring State Appropriations Request FY 19-20 Clemson University Health Innovation – Extension Programming - $1,214,200 Why It’s Important to SC: • Change what is possible in health services delivery and preventive care in South Carolina through health extension and outreach • Improve the health of South Carolina families, which should lead to reduced chronic care Medicaid costs and lead to a healthier workforce that will drive economic growth How: • Partner with MUSC to have a greater collective impact on the need for health services in South Carolina • Utilize mobile health vans to deliver primary health screenings and labs, providing lifestyle education and wellness counselling, and follow-up clinical care to South Carolinians living without health insurance or in communities where few health resources exist • Provide four enhanced programs in three counties coupled with expanded cancer screening and preventive care in nine additional counties • Deliver primary health screenings and labs, expand the SC Mother’s Milk Bank, and other programs aimed at combatting infant mortality, expand childhood obesity programs in schools, and combat opioid addiction through innovation in non-opioid care of chronic pain management patients

  27. Nonrecurring Equipment State Request FY 19-20 Clemson University Center for Advanced Manufacturing: Robotics Lab and Facility Startup -$4,000,000 Why It’s Important to SC: • Establish Clemson University and the State of South Carolina as a leader in advanced manufacturing technological innovation • Drive efficiency and productivity growth in advanced manufacturing through technological innovation How: • Serve as a focal point for education, research, partnerships, and engagement with industry to move new technology to reality, benefiting the people of South Carolina • Leverage and build upon Clemson’s science and technology excellence and growing research productivity • Provide funding for upfit costs for the robotics and teaching labs associated with the center and for startup packages to attract world-class faculty

  28. Nonrecurring Equipment State Request FY 19-20 Expanding Clemson’s Mobile Health Clinic Outreach into Underserved Rural Communities of South Carolina -$900,000 Why It’s Important to SC: • Change what is possible in health services delivery and preventive care in South Carolina through health extension and outreach • Improve the health of South Carolina families, which should lead to reduced chronic care Medicaid costs and lead to a healthier workforce that will drive economic growth How: • Partner with MUSC to have a greater collective impact on the need for health services in South Carolina • Provide funding to procure two multipurpose, telemedicine-equipped, smaller mobile health vans to complement Clemson’s larger van to deliver primary health screenings and labs, providing lifestyle education and wellness counselling, and follow-up clinical care to South Carolinians living without health insurance or in communities where few health resources exist • Deliver primary health screenings and labs, expand the SC Mother’s Milk Bank, and other programs aimed at combatting infant mortality, expand childhood obesity programs in schools, and combat opioid addiction through innovation in non-opioid care of chronic pain management patients

  29. State Capital Requests FY 19-20 • The table below summarizes the University’s capital requests for FY19-20 • These projects are all strategic priorities identified in the University’s Comprehensive Permanent Improvement Plan (CPIP) and will enable Clemson to continue maximizing its existing assets

  30. State Capital Requests FY 19-20 Lehotsky Hall Renovation -$30,000,000 • Constructed 42 years ago and one of Clemson’s least energy efficient buildings on campus • Building systems are original to the facility and do not meet current building code requirements • Renovate 94,000 existing square feet of the building that houses the School of Agriculture, Forestry and Environmental Sciences and the Department of Parks, Recreation and Tourism Management • Replace HVAC system, making structural reinforcements, installing a fire sprinkler system, making electrical, plumbing, information technology, and ADA improvements, and upgrading the building envelope and building finishes • Reprogramming portions of the interior space and reconfigure floorplans to meet functional and academic needs Long Hall Renovation -$26,000,000 • Current 71,000 square-foot academic building was constructed in 1937 for the Agriculture department • Renovate the envelope of the building including tuck pointing the brick and replacing roof sheathing/tiles • Replace HVAC, plumbing and electrical systems • Interior upgrades include energy efficient lighting, IT cabling and equipment, and ADA compliant bathrooms

  31. Other/Federal Fund Expenditure Authorization Request FY 19-20 • $50,586,640 increase to E&G Unrestricted - Other Earmarked Funds • Increased enrollment • Tuition and Fees (traditional, online, distance education, summer school) • Rising mandatory costs such as retirement and health insurance • Non-cash impact of the pension and retiree health benefits accrual required by GASB 68/75 • $4,595,288 increase to E&G Restricted - Other Earmarked Funds • SC Palmetto Fellows and privately funded scholarships • $12,979,542 increase to Auxiliary Enterprises - Other Earmarked Funds • Athletic revenues such as ticket sales, ACC conference distribution, bowl games, corporate sponsorships, scholarships • Revenues for dining, housing, and parking • $4,987,017 increase to E&G Restricted - Federal Restricted Funds • Federally sponsored research and scholarship programs • $678,540 increase to E&G Unrestricted - Federal Funds • Indirect cost recoveries

  32. Projection - Total FY 19-20 Budget Request for Revenues

  33. Projection - Total FY 19-20 Budget Request for Expenses by Program Includes Health Insurance allocation projection

  34. FY 19-20 FTE Requests • Total FTE request of 39 FTEs with new State Appropriations request: • Base Appropriations Increase – 23 FTEs • Professors (11) • Law Enforcement and Fire Safety Officers, Communications Specialist, and Program Coordinator (12) • Clemson University Center for Advanced Manufacturing – 8 FTEs • Tenured, tenure-track, and research faculty • Clemson University Health Innovation – Extension Programming – 8 FTEs • Registered Nurses and Nurse Practitioner (4) • Health Educators and Program Assistant (4) • Total FTE request of 78.5 FTEs for Other Earmarked Funds: • E&G Unrestricted: Unclassified Positions (45) Classified Positions (33.5)

  35. FY 19-20 FTE Requests • Total FTE request of 78.5 FTEs for Other Earmarked Funds: • I.A E&G Unrestricted: • Unclassified Positions (45) • Faculty (22) to support science and engineering programs • Faculty (14) to support Business programs (MBA, cyberinfrastructure, big data, energy, transportation and human resilience, and the Erwin Center for Brand Communications) • Faculty (4) to support the expansion of Clemson’s Nursing Program (Greenville, SC) • Positions (5) to provide analytical and IT support to the colleges, cultivate corporate partnerships, support student engagement and provide support for research growth • Classified Positions (33.5) • IT/Data and Analytical support (6) for the University’s colleges • Student Services Program Coordinators (4) to support ClemsonForward goals of student retention and increasing underrepresented minority SC students • Communication & Brand Strategy positions (6) to focus on marketing, communications, and web and graphic design • Corporate partnership engagement positions (2) to expand research and student engagement opportunities • Grant and Contracts position (1) to support increased volume • HR positions (10) to support compliance, compensation analysis, recruitment, retention and engagement, faculty relations, IT, and strategic consulting • Program Manager (1) to support Emerging Scholars expansion in the low country • Student success and administrate positions (2) to support the expansion of Clemson’s Nursing Program • Financial/Procurement and Administrative positions (1.5)

  36. FTEs • The University (H120) currently has 466.82 vacant E&G FTEs, of which 272.07 are in the recruitment process. The remaining 194.75 FTEs are being evaluated for recruitment and refill. This leaves Clemson with only 5.6% of its total FTE authorization available for new positions. The University has insufficient FTE resources for the FY 2019-20 strategic plan to hire 78.5 new faculty and staff which will be funded with Other Earmarked Funds. As student enrollment grows, more faculty and staff are necessary to provide quality services to students. • Additionally, Clemson has requested $12.7 million in recurring state appropriations, of which approximately $9.6million will be used for salaries and fringe benefit expenses for 39 FTEs. The University will be unable to implement new state-funded priorities without the additional FTE resources. Note: Figures for Vacant FTEs are prior to State’s Vacant FTE Deletion Process

  37. FY 19-20 FTE Requests – Proviso 11.14 As required by Proviso 11.14, Clemson University ensured that the FY 19-20 budget request was sufficient to include salary and fringe benefits for new FTEs as well as future salary and fringe increases for existing FTEs. See table below for demonstration. • Excludes requested State Appropriations Dollars or FTEs • Fringe includes request for Pension Liability Growth - GASB 68

  38. Conclusions • Clemson is accessible • 30% increase in-state enrollment over 10 years – over 3,118 student increase • Clemson is affordable • Out-of-pocket costs remain low at 36% of sticker price • Most of Clemson’s graduates (54%) have NO DEBT compared to 35% nationally • Loan default rates (1.9%) significantly lower than national average (10.8%) • 99.7% of enrolled in-state freshmen received financial aid • Clemson provides high quality/national caliber education within South Carolina • Ranked in the Top 25 public institutions for 11 consecutive years • 93.3% freshman retention rate • 83.0% 6-year graduation rate, compared to 59% national median

  39. Conclusions • Clemson is important to South Carolina • Clemson educates 71% more engineers, 65% more scientists, 44% more business students, & 52% more agriculture, forestry, and life science students than in 2008 • Over 91% of surveyed graduates are employed full-time, enrolling in graduate school, or participating in service/military organizations within 6 months of graduation • Partnerships support all of the State’s business and industry • ~$4.6 Billion economic impact to the State of South Carolina • Clemson is efficient • Adjusted for inflation, Clemson’s FY 18 cost per student FTE has decreased over 14% since 2008 • Ranked in the Top 5% in the US News & World Report’s Ranking of Efficient Universities, recognizing schools that produce the highest education but spend relatively less to achieve that quality

  40. APPENDIX

  41. Student Demand & Enrollment Information Tab E

  42. Undergraduate Student Demand

  43. Clemson is Committed to Educating In-State Students • Clemson educates more In-State students than ever before • In-State enrollment has grown 30% over the last 10 years and represents 68% of the total undergraduate student body Note: FTE is not calculated by Residency. Estimates based on Headcount Distribution.

  44. Total Enrollment by College Differences in FTE vs Headcount are due to the fact that headcount is determined by program, where FTE is determined by course discipline

  45. Fall 2018 Student Diversity

  46. Graduation Rate Demonstrates Commitment to Quality • 6-year graduation rate increased from 75.0% (2000 Cohort) to 83.0% (2012 Cohort) and remains significantly higher than the national median of 59% • In 2018, Clemson graduated 86% more undergraduate students and 97% more graduate students than in 2000 • 48% (or 74,840) of Clemson’s living alumni reside South Carolina

  47. Tuition & Fees and Affordability Tab F

  48. Modest Tuition & Fee Increases Support Strategic Plan FY 16 – FY 17 Increase: 3.14% Resident 4.27% Non-Resident FY 17 – FY 18 Increase: 2.75% Resident 4.25% Non-Resident FY 18 – FY 19 Increase: 1.75% Resident 3.0% Non-Resident FY 13 – FY 14 Increase: 3.0% Resident 3.0% Non-Resident FY 14 – FY 15 Increase: 3.0% Resident 3.19% Non-Resident FY 15 – FY 16 Increase: 3.24% Resident 4.25% Non-Resident

  49. 2019 Undergraduate Tuition & Fee Schedule

  50. 2019 Undergraduate Tuition & Fee Schedule

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