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Board of Governors of the Colorado State University System Finance Committee October 1, 2009

Board of Governors of the Colorado State University System Finance Committee October 1, 2009. Agenda Item #1: Global Campus Report. Academic Higher Learning Commission accreditation status Letter of PIF submission receipt received 9/11, 60 days for acceptance evaluation

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Board of Governors of the Colorado State University System Finance Committee October 1, 2009

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  1. Board of Governors of the Colorado State University SystemFinance CommitteeOctober 1, 2009

  2. Agenda Item #1:Global Campus Report • Academic • Higher Learning Commission accreditation status • Letter of PIF submission receipt received 9/11, 60 days for acceptance evaluation • CEO search process started; job description drafted and ready for posting • Successful initial Curriculum Committee meeting, all fall courses approved • Cash • Undergraduate programs remain above plan, graduate programs below plan; net income projection for October start remains unchanged • Complete model rework to current students, revenue and cost structure and improved assumptions in process. New base case compared to old available mid October. Will not ask Board for more funds at October meeting • Facilitating faster growth • Approached by Accretive LLC of NY regarding their desire to invest $15-$25 million in Global Campus – meeting at Global done, proposed follow up in NYC 10/21 • Approached 3 different groups about value chain partnerships with them sharing risks on marketing, sales and enrollment costs for faster growth

  3. Global Campus Enrollment & Financial Update for Fall C 10/26 Start as of 9-27-09 * March UG b-plan students and CH/s in (), mix changed but total CH remains the same ** March G b-plan students and CH/s in (), mix changed but total CH remains the same

  4. Agenda Item #2: Review of Facility Program Plan-Morgan LibrarySee Material in Appendix A

  5. Agenda Item #3: Legislative Council September Revenue Forecast • This forecast information was just becoming available on September 21 as you last met. • FY2010 • The FY 2010 revenue shortfall is projected to be $560.7M compared to $384M in June. • The Governor on 8/18 addressed $320M of this shortfall with his recent budget cuts. • This leaves $240M which still must be addressed in the coming months. • Because of federal law, and the acceptance of stimulus funds, additional reductions in higher education will be difficult and cannot be accomplished without a waiver. Current base is FY 2005-06 (555.3M in total and $113M for CSUS) • FY 2011 • In FY 2011 (next budget year), the projected shortfall grows to $1.33B. This is $458M more than was projected in June. • FY 2012 – the Cliff • The cumulative shortfall in FY2011 or FY 2012 does not take into consideration the $320M in current cuts or the need for $345M in new funding for projected caseloadincreases in the Department(s) of Human Services, Medicaid, Corrections, and K-12.

  6. Agenda Item #4: Tuition, Enrollment, and other Revenue/Budget Issues

  7. The Challenge:Funding Higher Education Adequately • Colorado ranks 49th in the nation in terms of state and local support for higher education and 48th in the nation in higher education spending per capita • CSU Fort Collins’ resident, undergraduate tuition rate is 81% of the average rate charged by peers • Current tuition rates are more than $1,067 lower than the average rate • CSU Pueblo’s resident, undergraduate tuition is 61% of the average rate charged by peers • Current tuition rates are $2,227 lower than the average rate

  8. FY 2009 CSU Peer Tuition Comparison

  9. FY 2009 CSU-Pueblo Peer Tuition Comparison

  10. Agenda Item #4: Summary of Revenue Development Issues/Discussion from September 21 Finance Committee Meeting. The “cliff” for higher education still looms in FY 2012 and is larger than ever at this point.  At the last Finance Committee meeting on September 21, 2009 solutions were discussed and can be categorized into three broad areas: • Generate new or greater amounts of revenue. • Tuition: differentials, higher base tuition increases, change in-state/out-of-state mix, charge more for high cost and high demand programs, close the credit hour window in Ft. Collins • Global Campus • Real estate • Treasury Investments (starting a CSU System investment pool-on hold for now) • Increasing unrestricted donor funds • Begin carbon trading and qualification • Reexamine the use of institutional financial aid • Restructure expenses.  Reduce expenses at each campus and the System office thereby resetting our expenditure base. • Review current structures and look for greater efficiencies by reexamining such items as personnel, benefits, defined contribution plans, and other insurances to make sure the greatest efficiency is being achieved. • Strive for greater flexibility and control for the Board of Governors by being proactive with ideas and concepts with the General Assembly.  These include: • Asking for greater operational flexibility and less regulation.  • Independent tuition setting authority • Continuing to engage in the debate about an overall solution and strategy for the state’s budget.  • Being prepared to support various tax proposals concerning the elimination of tax exemptions or adding new taxes.  • Expanding the voice of the CSU System and higher education with the public, elected officials, and others. 

  11. Changing the Paradigm Higher education must reinvent itself and bold steps need to be taken if we are to survive. • Funding: Restructurehigher educationfunding. Create a public admissions“cap” that only allows a number of students equal to state funding divided by the cost to educate a student to receive a discounted tuition rate. Others would have to pay market based rates to enter. • Privatization: Begin privatizing a large portion of the CSU system and removing it from state control.  The “privatized colleges” within the system will perform better by being able to charge a competitive rate and control their own destiny. Leave some lower cost alternatives open for the state to regulate and oversee in each college. • Reorganization: Create a two tiered (instead of three) higher education system consolidating all colleges into either the research or community college systems. • Political: Be more aggressive through the coalition started last year with CU, UNC, and Colorado School of Mines to craft “common ground” strategies and solutions and prevent other agencies and/or agendas from cutting higher education. • Flexibility: Prepare for the worst and through legislation providewide ranging flexibility that allows the Board to rapidly respond to a changing funding environment. Run legislation that grants “broad authority” to the Board to take any necessary actions to ensure the System’s survival.

  12. Appendix AColorado State University Morgan Library Program Plan and Other Information

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