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Budget Update October 22, 2010

Budget Update October 22, 2010. Today’s Presentation Budget Summaries FY2010 Results FY2011 Update FY2012 Projection Next Steps. Budget Updates – Town Hall Meetings September 19, 2008 November 7, 2008 March 13, 2009 March 5, 2010 October 22, 2010 (Today)

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Budget Update October 22, 2010

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  1. Budget UpdateOctober 22, 2010

  2. Today’s Presentation • Budget Summaries • FY2010 Results • FY2011 Update • FY2012 Projection • Next Steps

  3. Budget Updates – Town Hall Meetings • September 19, 2008 • November 7, 2008 • March 13, 2009 • March 5, 2010 • October 22, 2010 (Today) All presentations are posted on the Finance and Administration web site under “What’s New” http://www.southernct.edu/finadm/whatsnew/

  4. SCSU Personal Services History

  5. SCSU Expenditure History

  6. SCSU Revenue History

  7. FY 2010

  8. FY2010

  9. FY2010

  10. Budget Update Brenda L. Sisco, Acting Secretary for the Office of Policy and Management outlined the following in her letter to State agency heads on August 13, 2010: “The fiscal and economic situation facing the state will present extraordinary challenges for the next biennium.” The State of Connecticut: • Has borrowed over $900 million to close the FY2009 deficit • Balanced the FY2009 – 2011 biennium by exhausting the $1.3 billion rainy day fund and using approximately $1.7 billion in federal stimulus funds (that will not be available in the next biennium FY2011 – 2013). • Did not fully fund the state’s pension obligations • Is planning to borrow approximately $700 million to balance the FY2011 budget.

  11. Budget Update What are some of the actions that have occurred since we last met: • May 7, 2010 - Governor signs legislation that $13 million in non-General Fund moneys will be transferred to the State in FY2011. SCSU’s share of the transfer was $3,812,567. • June 15, 2010 - CSUS was notified by the Office of Policy and Management that the General Fund block grant was reduced by $246,129. SCSU’s share was $72,183. • July 21, 2010 - BOT approves SCSU’s FY2011 Spending Plan and the CSUS’s FY2011 – 2013 Biennial Budget Current Services Request. • August 5, 2010 - Universities are asked to present reduction plans to Trustee Angelo J. Messina. • August 13, 2010 – CSUS received instructions from the Office of Policy and Management for the FY2011 – 2013 Biennium Budget Request. Instructions included an option for a 15% reduction.

  12. Budget Update August 5, 2010 Budget Presentation to Trustee Messina and Chancellor Carter The following strategies were presented to close a 20% reduction representing $14,116,722: • $3,280,000 Represents reduction of SCSU’s OE base that has already occurred as part of the ongoing cost containment program • $2,000,000 Proposed reductions that will be implemented in FY2011 • Reduction of credit card fees • Realignment of expenses from University’s operating fund to self-supporting activities • Other efficiencies • $1,380,000 Increase FY2012 enrollment by 2% • Increase transfer students • Increase graduate students • Increase continuing students through retention efforts • $3,505,213 Capture FY2011 turnover savings (salary and fringe) that will be applied to FY2012. Note that this is a one-time strategy. • $3,951,479 Reduce full-time positions by 42 – 50 positions

  13. FY 2011

  14. FY 2011 Budget adjustments that have occurred in FY2011 • SCSU is required to transfer $3,812,567 in fund balance to the State General Fund. • SCSU State Appropriation reduced by $72,183.

  15. FY 2011 Fall 2010 Enrollment as of the Third Week Census: • Freshman cohort: 1,248 students; just two short of 1,250 goal • New transfer students: a record 947 students • Overall Graduate students: up 2% from Fall 2009 (1,000 students) • Part time Undergraduate students: up 4.4% or 54 students • Part time Graduate students: down 2.4% or 53 students Retention: • First Year retention rate was 78.3% (down 1.4% from previous year) • Second Year retention rate of 67.2% (up 4.6% from previous year) • Third Year retention rate of 58.3% (up 4.3% from previous year) Results/impact • Overall head count is up 1.3 % or 149 students • Overall FTE is up 2 % or 183 FTE’s

  16. FY 2011 Spending Plan: * position count is 952 as of 09/23/10 payroll.

  17. FY 2012

  18. FY 2012

  19. FY 2012 The CSUS was required to submit a budget option for a 15% reduction in its State Appropriation. SCSU’s Share is: SCSU Share:

  20. FY 2012 What are some of the important budget actions that will occur this year? • On or before November 15th the Office of Policy and Management will present the Governor elect with a proposed FY2011 – 2013 biennial budget. • Early February 2011 the Governor will present his recommended Biennial Budget to the Legislature for its review and approval. • Either at the close of the legislative session or in special session the FY2011 – 2013 Biennial Budget will be approved. • Governor will approve/sign the budget to open the new fiscal year 2012. • July 2011 Board of Trustees will approve the FY2012 Spending Plan.

  21. FY 2012 SPENDING PLAN ASSUMPTIONS • State Appropriation reduced by 15% • 2%FT Enrollment Increase • No Tuition & Fee Increase (except Insurances) • Full Time PS budget fully annualized • Full Time PS reflects no furlough days • Full Time PS reflects BU increases • PS includes 27th Payroll • OE base reduced by $3,280,000-cost containment program already in place • OE base reduced by $2,000,000 OE-additional cost containment initiatives in FY2011 • OE base after above reductions reflects 1.1% inflation • Financial Aid set-aside is at 15% When the above assumptions are applied to SCSU’s Spending Plan, the projected deficit is $5,994,946

  22. Guiding Principles (March 2009) • Support and enhance the student academic experience • Support and enhance the student life experience on campus • Provide for sufficient qualified faculty and staff and an academically sound faculty/student ratio to support the teaching-learning mission of the university • Prevent lay-offs of full-time faculty and staff • Address budgetary gaps caused by vacancies (e.g., early or scheduled retirements) in a manner consistent with advancement of the USP • Maintain enrollment to reflect appropriate mix of students (11,800 and 12,300 students –distributed through retention, transfer students, part-time students and a growing graduate student population, with a maximum enrollment of 1,350 for full-time entering freshman) • Maintain a healthy (both physical and psychological) campus environment • Maintain appropriate student, faculty, and staff access to the campus and University services, such that student success and learning are not impinged • Ensure that University assets are safeguarded • Comply with all governing laws, policies and procedures set forth by governing bodies (Federal, State, NEASC, CSUS BOT) and accrediting bodies for academic programs/schools within the University

  23. Guiding Principles (March 2009) • Make budget decisions that are driven by facts, data, and reasonable projections without ignoring core values as identified in the USP • Do not eliminate a function that we think would have to be reinstated in the near future (2 years) • No use of reserves (balanced budget FY2010) • Reduce costs in areas that focus on one time expenditures and can be reinstated quickly when the economy changes (positively) • Establish alternative revenue streams • Before functions (resources, services, programs) are cut, alternative ways of meeting the needs those functions provide must be determined as expeditiously as possible • Support faculty and staff efforts to receive external grants • In dire budget crises where functions that advance the University Strategic Plan are adversely impacted by cost saving or revenue producing measures (e.g. increased student enrollment with decreased human resources to meet academic and support needs of those students), those functions will be given priority consideration for reallocation/allocation of resources when the economy changes positively • Continue support for our University’s academic and/or programmatic “unique strengths” • Maintain efforts to prepare students to meet the workforce needs of the Nation, and particularly the State of Connecticut

  24. These Principles give us guidance but do not solve (close) the gap.

  25. Options to close the Gap • Hold positions vacant • Increase Enrollment • Other Efficiencies

  26. This gap of $5,994,996 might be closed by the following: Hold Vacant 61 full time positions • x $ 99,077 * = $6,043,697 * Median salary with fringe benefits

  27. Example of Possible Solutions 50 Undergraduate students (in-state) generate 50 x $6,049 = $302,450 • Graduate students (in-state) generate 50 X $6,889=$344,450 Every additional 100 students generate additional revenue of $646,900, which funds an average of 6.5 full time positions.

  28. WHAT IS THE BIGGEST CHALLENGE IN CLOSING THE GAP? The biggest challenge will be determining what positions are to be held permanently vacant. Guiding Principles (March 2009) “Address budgetary gaps caused by vacancies (e.g., early or scheduled retirements) in a manner consistent with advancement of the USP”

  29. Planning Process: • Nov 2010 to Jan 2011 Administrative budget review Academic program review • February 2011 Vice Presidents’ recommendations for divisional 5%, 10%, 15% and 20% reductions Cabinet Review • March 2011 Town Hall Meetings

  30. Please send your comments & suggestions to http://www.southernct.edu/yourideas/ Or email: Mr. James Blake – Blakej2@southernct.edu

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