Florida Atlantic University

1. Funding Opportunities for Strategic Priorities Florida Atlantic University

2. Florida Atlantic University2005-2006 Initial Operating Budget* * Including Budget Transfers

3. Florida Atlantic University Potential Sources to Fund Strategic Priorities • Educational and General • Contracts and Grants • Auxiliary Enterprises • Student Government Limited Funding Opportunities • Student Financial Aid • Athletics Local • Concessions

4. Educational andGeneral Budget

5. Florida Atlantic University Educational and General Budget • The Educational and General Budget consists of state • appropriated General Revenue, Enhancement (lottery) • funding, and student tuition and matriculation payments. • Incremental funding is provided by three primary mechanisms: • Enrollment Growth • Tuition Increases • Special Legislative Appropriations

6. Florida Atlantic University Enrollment Growth Budget • Funding to support the University’s growth in enrollment is appropriated by the Legislature based upon the Board of Governors’ approved enrollment plan and on a funding formula adopted in 2004. • Funding is used to support instruction, research, technology infrastructure, library staffing and resources, student services, partner campus operations, and university support.

7. Florida Atlantic University Enrollment Growth Funding • The amount of funding received is determined by applying the funding formula to the total FTE (Full-time Equivalent) enrollment growth by level (lower level, upper level and graduate). • Approximate formula funding by level is: Lower level $ 6,550 per FTE Upper level $ 9,250 per FTE Graduate $15,300 per FTE • For 2005-2006, FAU received enrollment growth funding of $2,004,327 to support 73 lower level FTE and 165 upper level FTE. No graduate funding was received.

8. Florida Atlantic University Enrollment Growth Funding 2005-2006 Funded FTE Enrollment Plan Lower Level 4,514 Upper Level 7,896 Graduate 2,140 Total 14,550 2012-2013 Projected Funded FTE Enrollment Plan Lower Level 6,074 Upper Level 9,622 Graduate 2,608 Total 18,304

9. Florida Atlantic University Enrollment Growth Funding Average Annual FTE Growth Rates: 2005-2006 to 2012-2013 Lower Level 4.33 percent Upper Level 2.86 percent Graduate 2.87 percent Combined Overall 3.33 percent

10. Florida Atlantic University Enrollment Growth Funding Enrollment New YearGrowth FTEFunding 2006-2007 1,143 $ 8,338,550 2007-2008 334 $ 3,212,100 2008-2009 575 $ 5,492,300 2009-2010 636 $ 6,050,950 2010-2011 267 $ 2,588,550 2011-2012 478 $ 4,570,500 2012-2013 321$ 3,090,550 Total 3,754 $33,343,900

11. Florida Atlantic University Enrollment Growth Funding Key Issues and Concerns • Enrollment growth funding is needed to support additional enrollments. • Maintain or improve quality of programs while meeting FTE targets. • Where pedagogically sound and appropriate: • Increase class sizes in limited cases. • Increase faculty instructional assignments. • Increase use of well qualified adjunct faculty and instructors. • Examine partner campus program expansion. • Examine partner campus course duplication. • Expand use of technology to lower costs. • Reallocate existing resources to achieve greater efficiency/productivity.

12. Florida Atlantic University Tuition Increase Funding • The Florida Legislature establishes tuition for undergraduate Florida residents. • The Florida Atlantic University Board of Trustees establishes non-Florida resident and graduate tuition subject to parameters established by the Florida Legislature. • In 2005-2006, undergraduate, graduate and non-resident tuition increased by 5 percent, generating approximately $2.6 million in new funding.

13. Florida Atlantic University Tuition Increase Funding • Estimated funding associated with five percent per year tuition increases adjusted for funded enrollment plan: • Amount • Year Generated • 2006-2007 $ 3,000,000 • 2007-2008 $ 3,250,000 • 2008-2009 $ 3,500,000 • 2009-2010 $ 3,800,000 • 2010-2011 $ 4,100,000 • 2011-2012 $ 4,400,000 • 2012-2013 $ 4,700,000 • Total $26,750,000

14. Florida Atlantic University Tuition Increase Funding Key Issues and Concerns • Florida resident undergraduate tuition is second only to Nevada in terms of affordability ($108.64 per credit hour for 2005-2006 tuition and fees). • National Average $183 • Nevada $ 86 • Pennsylvania $280 • Florida ranted 45 in 2004 per capita tax appropriations (state and local) for higher education. • Florida $165.21 • Nevada (ranked 32) $215.26

15. Florida Atlantic University Tuition Increase Funding • Average annual tuition and fee increases since 2000-2001: Undergraduate Residents 6.34 percent Undergraduate Non-residents 10.98 percent Graduate Residents 9.32 percent Graduate Non-residents 11.28 percent • Non-resident tuition may be at short-term limit to maintain competitiveness. • Elasticity of demand. • $46 million reduction for unfunded change-in-mix system-wide since 2002-2003 ($3.5 million reduction for FAU).

16. Florida Atlantic University Tuition Increase Funding • Florida Bright Futures Program. • Florida Pre-paid Program. • Legislative Mandates on Use of Tuition Increases.

17. Florida Atlantic University Special Legislative Appropriations • Legislative appropriations tied to specific University requested projects. • Funding is based upon University’s Legislative Budget Request and may be recurring or non-recurring. Examples: • FAU-UMMSM Medical Partnership Program - $2 million recurring 2005-2006 • St. Lucie Charter Lab School - $500,000 non-recurring 2004-2005

18. Florida Atlantic University Special Legislative Appropriations 2006-2007 Legislative Budget Request Need-based Financial Aid $4,000,000 Deferred Maintenance $3,500,000 Professional and Workforce Needs $7,000,000 Faculty Salaries and Start-up Expenses $5,500,000 Technology Support $4,000,000 Access to and Production of Degrees $6,500,000 Increased Retention, Reduce Time-to-Degree $2,000,000 Support Services and Infrastructure $6,500,000 Medical Partnership Program $8,000,000 World Class Academic Programs $3,000,000 and Research Capacity Library Collection $1,850,000 Meeting Community Needs $1,250,000 Branch Campus Operating Costs $5,400,000

19. Florida Atlantic University Special Legislative Appropriations Key Issues and Concerns • Limited Support by BOG and Legislature for Special Issues. • Issues of system-wide importance may have a greater chance of success: • Financial Aid • Critical Needs • Technology Support • Market Salaries • Deferred Maintenance • Utilities

20. Contracts and Grants Budget

21. Florida Atlantic University Contracts and Grants Budget • The Contracts and Grants Budget consists of funding from Federal agencies, State agencies, Foundations, and private sources that enables the University to conduct specific research projects or to provide specific services or deliverables. • Expenditures to support grants include: • Direct Costs such as salaries, wages, and benefits of research personnel, materials, supplies, travel, equipment, and rental of space that are directly attributed to the research project.

22. Florida Atlantic University Contracts and Grants Budget • Indirect Costs such as building and equipment use and depreciation, physical plant and maintenance, hazardous waste disposal, libraries, general administration costs (legal, purchasing, accounting), janitorial services, and utilities. • Indirect costs are not included in the direct costs of a specific research project because they are incurred for common projects or activities of the University. • Indirect costs related to the overall research program of the University must be paid regardless of a specific project and must be applied to all contracts and grants.

23. Florida Atlantic University Contracts and Grants Budget • Federal Grant awards generally allow for indirect cost recovery rates, currently 41.5 percent. • Many Federal, State, Foundation and Private Grant Awards do not provide for full or partial recovery of indirect costs: State: 5 percent limit Foundations: 0-25 percent Private: Negotiated

24. Florida Atlantic University Contracts and Grants Budget 2004-2005 Total Expenditures: $45,950,718 2004-2005 Indirect Costs Recovered: $ 5,537.850 Average Indirect Cost Recovered: 12.05 percent

25. Florida Atlantic University Contracts and Grants Budget • Moneys received for overhead or indirect costs shall be applied to the cost of operating the Division of Sponsored Research. Any surplus moneys shall be used to support other research or sponsored training programs in any area of the university (F.S. 1004.22(5)). • 32 percent of indirect costs recovered are returned to the colleges as reinvestment in research. • 68 percent of indirect costs recovered are used to support the Division of Sponsored Research, Administration and Environmental Health and Safety.

26. Florida Atlantic University Contracts and Grants Budget Key Issues and Concerns • Florida Statutes limit how indirect cost recovery is expended. • The majority of the indirect cost recovery is needed to support the administration of the Division of Sponsored Research. • Funds returned to the colleges should be directed to strategic priorities.

27. Auxiliary Enterprises Budget

28. Florida Atlantic UniversityAuxiliary Enterprises Budget The Auxiliary Enterprises Budget consists of University business operations that are self-supporting through user fees, payments and charges. These budgets include:

29. Florida Atlantic UniversityAuxiliary Enterprises Budget Florida Statute 1011.47: • “Auxiliary Enterprises” includes activities that directly and indirectly provide a product or service, or both, to a university or its students, faculty, or staff and for which a charge is made. • These Auxiliary Enterprises are business activities of a university which require no support from the General Revenue Fund.

30. Florida Atlantic UniversityAuxiliary Enterprises Budget • Expenditures to support Auxiliary Enterprises include: • Direct costs such as salaries, wages, and benefits of personnel, materials, supplies, travel, equipment and debt service directly attributed to the enterprise operation. • Auxiliary overhead charges to cover the costs of support services such as security, payroll, purchasing, facilities planning, grounds, utilities, personnel services, computing services, and finance and accounting functions.

31. Florida Atlantic UniversityAuxiliary Enterprises Budget • Overhead charges are administered by a University Auxiliary Fees and Chargeback Committee. • Overhead charges range from 0 percent to 8.26 percent of expenditures depending upon the services provided by the auxiliary and university costs incurred in the administration of the auxiliary.

32. Florida Atlantic UniversityAuxiliary Enterprises Budget 2004-2005 Total Expenditures: $49,904,018 (including Athletics) 2004-2005 Overhead Charges: $ 1,711,822 Average Overhead Charged: 3.43 percent

33. Florida Atlantic UniversityAuxiliary Enterprises Budget Key Issues and Concerns • Increase the overhead rate to include a tax or profit payment to the university to fund strategic priorities. • Elasticity of demand and affordability of auxiliary services. • Users of auxiliary services could pay a disproportional share of the cost of university-, community-, or state-wide strategic priorities.

34. Student Government Budget

35. Florida Atlantic University Student Government Budget • Funds from student Activities and Services (A&S) fees to support student government operations and student activities such as clubs and organizations. • The Activity and Service fee of $10.00 per credit hour generates approximately $5,700,000 per year. The Student Government Budget consists of:

36. Florida Atlantic University Student Government Budget Florida Statute 1009.24: • The Student Activity and Services fees shall be expended for lawful purposes to benefit the student body in general. • The allocation and expenditure of the fund shall be determined by the Student Government Association of the University, except that the President of the University may veto any line item or portion thereof within the budget when submitted by the Student Government Association legislative body.

37. Florida Atlantic University Student Government Budget Key Issues and Concerns • To the extent a specific priority benefits the student body in general, the Student Government Association MAY consider funding the request in order to meet strategic University goals. • Any subsequent increase in the Activity and Services fee must be recommended by a committee, at least one-half of whom are students appointed by the student body president. • The sum of the Activity and Services fee, health fee, and athletic fee may not exceed 40 percent of the tuition established by law or in the General Appropriations Act.

38. Capital Funding

39. Florida Atlantic University Sources of Capital Funding • Public Education Capital Outlay (PECO) – Funded by the Gross Receipts Tax, which is a 2.5 percent levy on the gross receipts of electric, gas and telecommunications. This tax is devoted entirely to the Public Education Capital Outlay and Debt Service Trust fund (PECO) and is the major state source of revenue dedicated to repair, renovation and expansion of public schools (K-12), community colleges and state universities. • Building and Capital Improvement Trust Fund Fee (CITF) – Funded by student fees that are remitted to appropriate funds for distribution as required for debt service or used to fund student related projects approved by the Florida Legislature.

40. Florida Atlantic University Sources of Capital Funding Key Issues and Concerns • PECO appropriations to Universities are not growing. • SUS Presidents and BOG are currently reviewing proposals to solve Fixed Capital Outlay deficiencies. • Expand tax base (internet access). • Increase PECO levy. • Increase CITF fees. • Establish statutory percentage of PECO allocated to SUS. • Delegation of DSO bonding to BOT. • Expand Fixed Capital flexibility.

41. Florida Atlantic University Summary • University sources of funding to support strategic priorities are available but limited. • Budget reductions of approximately $30 million over the past 11 years have greatly restricted financial flexibility. • All funding and budgetary consideration will involve trade-offs. • Direct Support Organizations, such as the Florida Atlantic University Foundation, Inc., may provide additional funding opportunities. • Statutory changes in tuition and fees may provide additional flexibility to fund strategic priorities (technology fee).