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Budget Update September 19, 2008

Budget Update September 19, 2008. FY 2008 Spending Plan. TODAY’S BUDGET DISCUSSION WILL FOCUS ON FY2008 AND FY2009 OPERATING BUDGETS – This does not include funding for: Capital Projects (new building) Federal, State, and private grants (student aid) Endowment – Scholarships.

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Budget Update September 19, 2008

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  1. Budget UpdateSeptember 19, 2008

  2. FY 2008 Spending Plan

  3. TODAY’S BUDGET DISCUSSION WILL FOCUS ON FY2008 AND FY2009 OPERATING BUDGETS – This does not include funding for: • Capital Projects (new building) • Federal, State, and private grants (student aid) • Endowment – Scholarships

  4. WHERE DOES THE UNIVERSITY RECEIVE ITS RESOURCES? FY2008 • Student Tuition and Fees $78,400,258 • Student Housing & Food 19,420,806 • Other Student Fees (app fee, cont. enrollment fee) 4,536,083 • Total Collected from Students $102,357,147 (57%) • State Appropriation $48,371,011 • Fringe Benefits (state contribution for employee benefits)24,357,107 • Total State Support $72,728,118 (40%) • Other Revenue (rental, interest earnings, commission)$5,645,238 (3%) • Total Revenue FY2008 $180,730,503 100%

  5. 95.3% OF SOUTHERN’S REVENUE IS ENROLLMENT DRIVEN • Total Collected from Students $102,357,147 • Appropriation based on enrollment 69,849,793 $172,206,940 $172,206,940 / $180,730,503 = 95.3%

  6. HOW ARE THE RESOURCES SPENT? PERSONNEL • Full Time Personnel $65,510,293 • Part Time Personnel 16,911,256 • Additional Compensation (overtime, longevity) 4,159,384 • Fringe Benefits 32,092,294 * • Total Personnel Costs $118,673,227 (66%) * State support is $24,357,107

  7. OPERATING EXPENSES • Utilities $8,704,094 • Institutional Financial Aid 7,259,423 • Professional Services 5,556,605 • Food Service Contract 5,255,285 • Insurance 3,204,938 • Repairs/maintenance Supplies 2,880,674 • Library Materials/Books 2,204,510 • Equipment 2,034,669 • Other Expenses (travel, advertising, office supplies, postage)12,667,266 Total Operating Expenses $49,767,464 (27%)

  8. DEBT SERVICES (per BOT Policies) • System Debt Service $7,062,542 • Parking/Residence Hall Debt Service 4,906,068 Total Debt Service $11,968,610 (7%) Total Expenses $180,409,301 100% Total Favorable $321,202 * * 1/5th of 1.0% of total budget

  9. HOW ARE SCSU’S DISCRETIONARY DOLLARS USED TO SUPPORT FUNCTION/PROGRAM? • Instruction $63,851,016 43.50% • Research 2,449,208 1.67% • Academic Support 8,727,242 5.95% • Library 6,449,292 4.39% • Scholarships, Loans 7,668,049 5.22% • Student Support Services 19,664,996 13.40% • Institutional Support (Admin) 20,588,593 14.03% • Physical Plant (Facilities) 16,952,650 11.54% • Public Service 435,553 0.30%

  10. FY 2008 NEW BUDGET INITIATIVES (1.4 million)

  11. FY2008 SUMMARY • 95.3% funding – student driven • 61% of current budget – spent in support of academic programs • 70% of new dollars = new faculty

  12. FY 2009 Spending Plan

  13. BUDGET DEVELOPMENT FOR FY2009 December 2007 – January 2008 • FY2008 mid-year review • Established 08-09 AY financial aid budget • Established guidelines for divisional budgets

  14. February 2008 – April 2008 • Received preliminary FY2009 Spending Plan guidelines from CSU System Office • Estimated State Appropriation • Final enrollment numbers for state supported funding • Office of Policy & Management (OPM) Inflation factors

  15. THE ORIGINAL BASE BUDGET FOR FY 2009 IDENTIFIED A SHORTFALL OF $4.8 MILLION ($ WE NEED VS $ WE RECEIVE) WHY? Original enrollment targets for FY 2008 were not achieved + Other CSUS Universities exceeded their enrollment goals = Reduced share of State Appropriation from fundable enrollment

  16. OTHER FACTORS THAT CONTRIBUTED TO SHORTFALL: • Revised CSUS distribution ($500,000 lost revenue) • The original budget assumed no vacant positions Therefore…

  17. Reexamined FY 2009 enrollment targets with the Enrollment Management Council • FT undergraduate > +1.0% • FT graduate > flat Resulted in $500,000 increased revenue • Staggered hiring; kept some staff positions vacant resulting in $1.7 million • Reduced operating expenditures by $1.4 million • Utilize $1.2 million from Unrestricted Reserve Balance NOTE: Reserves continue to be in compliance with BOT policy.

  18. ESTIMATED CURRENT UNRESTRICTED RESERVES Debt Service $8,600,544 Required per BOT Policy 9,303,668 Designated Reserves 4,373,251 TOTAL $22,277,463

  19. May 2008 – July 2008 • Balanced FY09 Spending Plan was presented to the Board of Trustees • June 13, 2008 Reviewed by BOT • July 17, 2008 BOT approves FY2009 Spending Plan

  20. JULY 2008–GOVERNOR INITIATES A 3% RESCISSION IMPACT BY EXPENSE CATEGORY Full Time (turnover) ($200,000) University Assistants (295,948) Part Time Staff (193,534) Overtime (189,213) All Other P.S. (shift differential) (107,034) Fringe Benefits (667,719) Other Expenses (consulting & prof. services) ( 383,268) Total ($2,036,716)

  21. STRATEGIES THAT ARE BEING APPLIED TO MANAGE THE BUDGET: • Focus of budget management is adherence to Strategic Plan • Enrollment teams: • Enrollment Management Council • Enrollment Operations Committee • Summer Enrollment Committee • Graduate Council • Deans Council

  22. Energy Conservation: • Locked rate for electricity • Planned reverse auction for natural gas • Conservation initiatives (switches, controls, temp. regulation & light bulbs) • New electrical & mechanical systems for Earl Hall, Jennings & Lyman • Facility Usage: • Ensure that we are recovering our costs for outside facility rental • Pursue opportunities to increase other revenue streams • Vigilance on the expense side of the budget

  23. HIRING FREEZE - EFFECTIVE MAY 29, 2008 • All administration and faculty positions are covered by the freeze • University may request an exemption for public health and safety reasons • Every effort must be made to minimize overtime expense • There will be no relief from the part-time cap in the current AAUP collective bargaining agreement • Use of outside consultants will be closely scrutinized • Any management positions that become vacant in the Fall 2008 will remain vacant at least until January 2009

  24. OUT-OF-STATE TRAVEL – RESTRICTION May 29, 2008 – Chancellor Carter requested the university presidents to authorize out-of-state travel requests that are “deemed essential to university business.” • Exceptions are: • Contractually–mandated travel • Student clubs/organizations funded from student activity funds • Grant funded travel • Quarterly reports to demonstrate savings • If savings are not apparent, then an overall moratorium will be placed on out-of-state travel

  25. WHERE ARE WE NOW? • Expecting another 2% rescission • Developing strategies to increase enrollment where we have interest and capacity (Graduate School) • Focusing on recruitment of transfer students (Compac Agreements) • Working to retain undergraduate students through to graduation

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