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University of Missouri System Board of Curators January 31, 2013 FINANCE COMMITTEE

University of Missouri System Board of Curators January 31, 2013 FINANCE COMMITTEE. Strategic Financial Planning Assumptions and Three-year Budget Projections UM. FY2014 – 2016 Strategic Financial Planning Assumptions – Three Questions. What are the strategic financial planning assumptions?

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University of Missouri System Board of Curators January 31, 2013 FINANCE COMMITTEE

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  1. OPEN – GB – INFO 2 University of Missouri SystemBoard of CuratorsJanuary 31, 2013FINANCE COMMITTEE Strategic Financial Planning Assumptions and Three-year Budget Projections UM

  2. FY2014 – 2016 Strategic Financial Planning Assumptions – Three Questions • What are the strategic financial planning assumptions? • Why does the University prepare the assumptions? • What are they used for?

  3. OPEN – GB – INFO 2 Revenue Drivers that Impact Strategic Financial Planning • Revenue Drivers • State Appropriations for Operations • Tuition and Fee Rates • Enrollment • Other Miscellaneous Revenue

  4. OPEN – GB – INFO 2 Expense Drivers that Impact Strategic Financial Planning • Expenditure Drivers • Salary and Wage Changes • Cost of Employee Benefits • Maintenance and Repair • Other Costs of Doing Business

  5. Financial Objectives • Strategic Reallocation – 1%-2% per year growing to 3%-4% • Operating Results – Range 4.5%-5.9% • Net Assets – 8.0%-12.1% • Expenditure Reductions to Achieve Budget Equilibrium • Revenue Generation to Achieve Budget Equilibrium

  6. OPEN – FIN – INFO 2 Drivers & Results : Base Case

  7. Results : Base Case

  8. Scenario Summary

  9. Section 1: Setting the Financial Stage Section 3: Preliminary FY2014 Budget

  10. FY 2014 UM Preliminary Budget Issues • Revenues • Flat state support • Constraints on tuition increases • Expenses • Increase in salaries and wages: merit & market • Increase in medical costs and the required contribution to Retirement Fund • Increase in M & R • Control rate of increase in expenses relative to revenues

  11. Other Issues on the Horizon • State support based on performance funding • Limited capacity to increase tuition & fees • Pressure to reduce costs and increase productivity • Funding for strategic investment • Pressure to increase output • Retention rates • Graduation rates • # of Degrees Granted • A new financial model for the future

  12. Projected Marginal Costs for FY2014 Budget - $51.2 million $ in Millions

  13. Projected Marginal Revenues for FY2014 Budget - $21.1 million $ in Millions

  14. Preliminary Funding Gap of $30.1 million

  15. Questions?

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