1 June 2008 Finance and Budget Presentation President Nancy L. Zimpher Monica Rimai, Senior VP,...

1

June 2008Finance and Budget

Presentation

President Nancy L. Zimpher

Monica Rimai, Senior VP, Administration and Finance

June 24, 2008

2

Presentation Agenda

•FY 2008 Close• Operating

• Capital

•FY 2009 Budget• Operating

• Capital

•Status on 3-5 Year Plan

3

FY 2008 Year End Projection University of Cincinnati

Uptown Campus General FundsFY 2008 Year End Projection

For Period Ending May 31, 2008

2008

CurrentBudget

2008YTD

Actuals

UncommittedBudget

Balance

Projected Year End

Revenue 477,760,429 466,805,150 10,955,279 477,760,429

Expenses 429,055,100 371,775,885 57,279,215 429,055,100

Transfers 48,705,329 47,739,357 965,971 48,705,329

Net Change 0 47,289,907 (47,289,907) 0

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Raymond Walters General FundsFY 2008 Year End Projection


2008

CurrentBudget

2008YTD

Actuals

UncommittedBudget

Balance

Projected Year End

Revenue 28,685,391 28,119,928 565,463 28,685,391

Expenses 27,885,892 23,929,128 3,956,764 27,885,892

Transfers 799,499 787,606 11,893 799,499

Net Change 0 3,403,194 (3,403,194) 0

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Clermont College General FundsFY 2008 Year End Projection


2008

CurrentBudget

2008YTD

Actuals

UncommittedBudget

Balance

Projected Year End

Revenue 17,904,367 17,475,229 429,138 17,904,367

Expenses 17,843,871 13,925,318 3,918,553 17,843,871

Transfers 60,496 232,590 (172,093) 60,496

Net Change 0 3,317,321 (3,317,321) 0

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Campus Services AuxiliaryFY 2008 Year End Projection


2008

CurrentBudget

2008YTD

Actuals

UncommittedBudget

Balance

Projected Year End

Revenue 48,733,000 58,905,321 3,767,000 62,672,321

Expenses 31,774,000 36,651,564 5,083,949 41,735,513

Net Transfer 20,017,000 20,365,808 0 20,365,808

Change in Fund Balance (3,058,000) 1,887,949 (1,316,949) 571,000

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Parking AuxiliaryFY 2008 Year End Projection


2008

CurrentBudget

2008YTD

Actuals

UncommittedBudget

Balance

Projected Year End

Revenue 16,376,993 13,330,868 3,046,125 16,376,993

Expenses 7,998,299 5,179,927 2,818,372 6,640,561

Net Transfer 9,736,431 9,546,646 189,786 9,736,431

Change in Fund Balance (1,357,738) (1,395,705) 37,967 0

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AthleticsFY 2008 Year End Projection


2008

CurrentBudget

2008YTD

Actuals

UncommittedBudget

Balance

Projected Year End

Revenue 22,758,161 14,097,205 8,660,956 20,777,900

Expenses 30,793,276 29,288,495 1,504,781 28,277,582

Net Transfer (5,372,182) (5,281,148) (91,035) (4,816,283)

Change in Fund Balance (2,662,933) (9,910,142) 7,247,210 (2,683,399)

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Designated fundsFY 2008 Year End Projection


2008

CurrentBudget

2008YTD

Actuals

UncommittedBudget

Balance

Projected Year End

Revenue 97,371,346 100,711,922 (3,340,576) 112,245,000

Expenses 142,464,092 99,316,526 43,147,566 119,117,000

Net Transfer (11,923,290) (55,135,175) 43,211,885 (55,135,175)

Change in Fund Balance (33,169,456) 56,530,571 (89,700,027) 48,263,175

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Restricted FundsFY 2008 Year End Projection


2008

CurrentBudget

2008YTD

Actuals

UncommittedBudget

Balance

Projected Year End

Revenue 308,270,114 296,250,298 12,019,816 326,719,108

Expenses 349,680,533 285,125,341 64,555,192 314,160,000

Net Transfer 8,146,194 11,512,515 (3,366,322) 12,559,108

Change in Fund Balance (49,556,612) (387,559) (49,169,054) 0

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FY 2008 Major Capital Projects

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Major Projects in Design and Construction During FY 2008 Project Name Phase

Board Approval

FY Capital Budget

ApprovedFY 2008

Expenditures

Total Expenditures

to Date

Education and General Projects

Kettering Preclinical Science Lab Renovation

Construction

$ 2,760,000 2007

$ 653,344

$ 756,956

Langsam Library Roof ReplacementConstructio

n $

2,700,000 2008

560,783

560,783

McMicken Perimeter Heating SystemConstructio

n $

2,200,000 2007

1,109,743

1,246,336

MSB Rehabilitation Ph 1, CARE, & Eden Quad

Construction

$ 214,245,000 1999-2008

37,607,358

183,675,415

MSB Rehabilitation Ph 2 - 5 Design $

204,000,000 2005 & 2008

3,276,254

9,307,355

Teachers College/Dyer Renovation Phase 2

Construction

$ 18,900,000

2002, 2003, &

2005

9,157,882

12,101,915

Zimmer RehabilitationConstruction Closeout

$ 3,100,000 1999 2,605,831

3,130,231

Auxiliary Project

Clifton Court GarageConstructio

n $

6,000,000 2007 2,041,312

2,392,910

Total $

453,905,000 $

57,012,507 $

213,171,901

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Kettering Preclinical Science Lab Renovation

Description: Renovation of space for research labs on Level 200

Justification: To meet the need for additional research space for the Department of Environmental Health

Funding: Debt

Total Project: $2.76 million

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Langsam Library Roof

Description: Roof replacements

Justification: Complete replacement of roofs required to protect library

Funding: Debt


15

McMicken Perimeter HeatingDescription: Heating system upgrades

Justification: Only half of this 1948 building’s heating systems have been replaced - the south portion in 2007

Funding: State


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MSB Rehabilitation Ph 1, Center for Academic Research Excellence (CARE), and Eden QuadDescription: Renovation of 171,000 sq ft for the medical library and

student service space and 240,000 of new academic & research and swing space

Justification: To address research space needs and upgrades to existing MSB systems.

Funding: State, Debt, Federal Grants, Gifts, Local


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MSB Rehabilitation Phases 2-5

Description: Renovation of mechanical and building systems for the 940,000 gross sq ft Medical Sciences Building

Justification: The existing systems are extensive, deteriorated, and at the end of their useful life. Lab air requirements have changed

Funding: State, Debt, Federal Grants, Gifts, Local


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Teachers College/Dyer Renovation - Phase 2

Description: Major renovation of approximately 1/3rd of the total complex of three buildings originally built between the 1930’s and 1950’s

Justification: Major renovation needed to address deteriorated systems, windows, and building envelope; and to respond to current teaching needs and standards

Funding: State, Debt, Gifts, Local


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Zimmer Rehabilitation – Phase 1

Description: Renovation of the large lecture hall, and supporting HVAC, life-safety, and audio-visual systems

Justification: Furniture, finishes, audio visual, and systems dated to original construction in the 1970’s. Fire suppression of the large auditorium necessary

Funding: State & Debt


20

Clifton Court Garage Renovation

Description: Replace top deck, replace concrete & structural steel, upgrade electric and ventilation systems

Justification: Major structural repairs needed for this 1960’s-era garage

Funding: State & Debt


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FY 2009 Budget

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FY 2009 University Current Funds Budget Plan

Auxiliary Enterprises7%

Other Resources19%

Govt. & Private Grants & Contracts

24%

State Appropriations21%

Net Tuition, Fees & Other Student

Charges29%

Summary of Budgeted ResourcesTotal UniversityResources by Source

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Auxiliary Enterprises7%

Nonmandatory Transfers4%

Mandatory Transfers8%

Scholarships & Fellow ships4%

Operation & Maintenance of Plant5%

Institutional Support7%

Student Services4%

Academic Support9% Public Service

6%

Separately Budgeted Research

15%

Instructional & General31%

FY 2009 University Current Funds Budget PlanSummary of Budgeted Expenditures

Total UniversityExpenditures by Function

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FY 2009 Budget Process

•Transparency• President’s Budget Advisory Committee

(PBAC)

• Fiscal Coordinating Committee (FCC)

• Academic Operations Committee (AOC)

• Faculty Senate

• Cabinet

• Executive Committee

• Board of Trustees (BOT)

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FY 2009 Income Assumptions• State Appropriation Increase of 9.8%

$14.9MState Share of Instruction Uptown Campus

152,367,382

145,115,081

167,299,921

144,219,588

144,188,235

140,384,295 140,076,481

130,000,000

140,000,000

150,000,000

160,000,000

170,000,000

FY03 FY04 FY05 FY06 FY07 FY08Projected

FY09Projected

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• Tuition & Fees• Resident Undergraduate – frozen

– State Mandate

• Non-Resident Undergraduate – no increase – University Decision

• Gross Tuition Inflation$2.3M

– All Graduate Programs – increase 2%– Professional Schools – increase 2%

• College of Medicine – increase additional 2%

• FY08 Core Tuition Adjustment 600K

• Enrollment Increase per IEP Goals 3.9M

Total$6.8M

FY 2009 Income Assumptions

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FY 2009 New Expenditure Allocation Highlights

• Achieving Academic & Research

Excellence• Academic Priorities $ 1.1M

• Supporting Enrollment Growth

500K

• UC|21 – 21st Century Learning

1.4M

• Academic Salaries 7.2M*

• Funding the Research Initiative

3.0M

• Library Acquisition 267K

• Academic Building & Lab Integrity

1.6M

• Revenue Generating Programs

3.5M

*This figure represents the permanent AAUP salary increase for both FY 2008 and FY 2009

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FY 2009 New Expenditure Allocation Highlights

•Other University Expenditure

Highlights• 2% Salary Increase – unrepresented staff $

2.0M

• Union Contract Salary Increase – non-faculty

650K

• Performance-Based Budgeting

258K

• University Diversity Initiative

350K

• University-Wide Roof Repair 500K

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Revenue: FY 09

Gross Tuition Inflation1 2,328,000 FY 08 Core Tuition Adjustment 600,000 Enrollment Increase per IEP Goals Less Revenue Generating Increases 400,000 Revenue Generating Increases 3,512,395 (Increase)/Decrease in Graduate Scholarships (UGS) 1,629,000 Less Undergraduate Scholarships - Total Net Tuition 8,469,395

State Investment in Instruction2 14,951,098 Challenges Reduction (37,000)Total Revenue 23,383,493

Expenses and Transfers: Expenses and Transfers Academic Priorities & Salaries 12,619,231 Revenue Generating Expenses 3,512,395 Unrepresented Staff Increases & UC|21 Initiatives 8,222,377 Other Priorities 0Total Expenditures 24,354,003

FY Surplus/(Deficit) after Expenses and Transfers (970,510)BUDGET REALLOCATION 970,510

Assumptions:

2 SSI increased by 2% in FY 10 and FY 11.Note: SII and tuition projections for FY 10 and FY 11 are unpredictable at this point due to a total revamp of the funding formula at the state level and legislative tuition setting policies.

FY 09 - FY 11 Incremental Revenue & Expense Recommendation & ProjectionsINCLUDING REVENUE GENERATING ADDITIONS

1 Tuition increase of 2% for Graduate and Professional Students in FY 09. Tuition increase of 3% for all students in FY 10 and FY 11.

FY 2009 Summary

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FY 2009 Capital Budget

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Criteria for Projects

• Academic Priorities• STEMM• Highest and Best Use of Existing Space • Renovations of Existing Academic Space• Sustainability

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State Capital Appropriations2009-2010 Biennium

• Uptown Campus– Medical Science Building Rehabilitation –

$26.4M– Basic Renovations - $10.7M

◦ The Procter Hall Façade Replacement project has been allocated $4.0M

◦ The remaining $6.7M has been allocated to small renovation projects below the threshold for Board approval

– Instructional Equipment - $1.7M

• Clermont College– Capital Allocation – $751K– Basic Renovations - $326K– Instructional Equipment - $87K

• Raymond Walters College– Capital Allocation – $1.6M– Basic Renovations - $501K– Instructional Equipment - $130K

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Projects for Budget ApprovalFunding Sources

Project Name

Approval

Request

Project Amount State Debt

Education and General Projects

Energy Savings Projects (Ongoing) Part 2 $10,000,00

0 $10,000,00

0

Kettering North Demolition/Site Preparation Initial 3,000,000 3,000,000

Procter Hall Façade Replacement Initial 4,000,000$4,000,00

0

Rieveschl 500 Level Teaching Labs Renovation Initial 6,000,000 6,000,000

Teachers College / Dyer Renovation Phase 2A Initial 2,500,000 2,500,000

Auxiliary Project

Morgens & Scioto Residence Hall Upgrades Initial 10,000,000 10,000,000

Total $35,500,0

00$4,000,0

00$31,500,0

00

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Projects for Budget Approval Energy Savings Projects (Ongoing)Description: Projects to improve plant efficiencies, improve existing

systems’ efficiencies and operations, and to provide major upgrades to facilities

Justification: To reduce energy use, to comply with the mandates of HB 251, and to meet the commitments of the American College and University Presidents’ Climate Commitment

Funding: Debt proceeds


36

Projects for Budget Approval Kettering North Wing Demolition/Site Preparation

DRC Comments:• Agreement with building

assessment• Recommend demolition approval

Description: Demolition of North Wing Lab building

Justification: Unused facility is not structurally sound and does not provide appropriate space for future research

Funding: Debt


37

Projects for Budget Approval Procter Hall Façade Replacement

Description: Replacement of existing panels with new sun control façade

Justification: Existing panels contain asbestos and bird-droppings

Funding: State Basic Renovation funds


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Projects for Budget ApprovalRieveschl 500 Level Teaching Labs RenovationDescription: Renovation of approximately 5,000 sq ft of existing

chemistry teaching labs

Justification: Labs have not been upgraded since original construction in 1970’s - systems, equipment, and finishes outdated and deteriorated, current teaching needs and standards need to be met

Funding: Debt proceeds


39

Projects for Budget Approval Teachers College/Dyer Renovation Phase 2A

Description: Departmental and faculty office renovations, teaching lab renovations, consolidation of College operations in Edwards, and restoration of site and perimeter access

Justification: Allows mission-critical College operations that are split to function in most effective manner until Phase 3 funding can be secured

Funding: Debt


40

Projects for Budget Approval Morgens & Scioto Residence Hall Upgrades

Description: A series of separate projects to upgrade fire alarms, install fire suppression, replace furnishings, and improve apartment interiors

Justification: The buildings are not fire-suppressed, alarms need upgrading, and furnishings need replacement

Funding: Debt


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Status on 3-5 Year Plan

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•Guiding Principles• Transparency

• Speaking the Truth

• Collaboration

• Building Capacity

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Cost Containment and Efficiency

•INITIATIVES TO INCREASE REVENUE

•INITIATIVES TO IMPROVE ACADEMIC QUALITY

•INITIATIVES TO USE OUR LIMITED

HUMAN AND FISCAL RESOURCES

MORE EFFECTIVELY

45

•Recovery Factors• Creation of A&F

• Cash Policy

• University-Wide Approach

• Accountability

• Financial Policies

• Business Reviews

• Realistic Budgeting


46

•Creation of Administration and Finance

• Checks and Balances

• Internal Audit

• General Counsel

• Speak the Truth


47

•Operating Cash Policy• Board approved in November 2006

• Established operating cash balance levels

• Disciplined payoffs of existing deficit funds

• No new deficit funds permitted without approval


48


Average Minimum

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•University-Wide Approach• Campus Services – ahead of schedule

• College of Medicine – paid off Milliennium

Plan

• Athletics – work in progress

• Utilities – ahead of schedule

• West Campus Colleges – making headway

• Research – good start

• Benefits – deferred


50

Recovery Plan Cash Reserve Update

•Quasi-Endowment and Designated Funds• Quasi transferred to Cash Reserve in FY 2007 -

$38.6M

• Funding used in FY 2008 to pay off deficits while adhering to underlying donor restrictions - $18.1M

• College of Medicine - $15.7M• College of Engineering - $1.3M• Various other colleges - $1.1M

• Current Quasi Cash Reserve balance - $20.5M

• 1% of Monthly Operations Cash Balance

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•Restructure of June 2008 and Future Restructure of June 2009 Principle Payments

• FY 2008 Cash Reserves increased by $26.7M

• FY 2009 Cash Reserves to be increased by $26.7M

Restructure of Debt

52

•Financial Policies• Eight new policies• Approximately 1300 trained to date• Easy access; policy question

“hotline”• Policy on Policies


53

•Business Reviews• Campus Services

• Parking

• Utilities

• Athletics


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Campus Services Budget Overview

•Consolidated Financial Overview

Fiscal Year Budgeted Net (loss)

Actual Net Surplus/(loss)

2007 ($7,900,000) ($3,600,000)

2008 ($2,953,000) $571,000*

* projected

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Campus Services Budget Overview•Revenue Enhancements

• Housing Occupancy – moved from 93% to 95% yearly average plus rate increases

• Food Services – increased sales of independent meal plans, commissions, and profit-sharing

• Campus Recreation – increases to non-student membership, program and rental revenue

• Retail – improved upon guarantee from operator• Kingsgate – maintained occupancy, improved

margin, rate increases• University Conferencing – growth in number of

conferences managed• MainStreet – Catskellar and Cinema

improvements, food sales growth• Campus Life fee – growth due to enrollment

increase

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Campus Services Budget Overview•Cost Containment and Reduction

• Food Service – lowered meal plan costs

• Housing – reduced O&M costs by reducing frequencies of cleaning, reducing staff, reducing phones (land-lines), reduced cost of resident staff, and other costs

• Eliminated travel and staff development expenses

• Reduced programming expenses at both MainStreet and Campus Recreation

• Overall reduction in positions since end of 2006 – 60

• Utility savings in auxiliary buildings with more hands-on management

• Operational savings based on contribution margin analysis

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•Realistic Budgeting• All-university process

• Tied to academic priorities


58

•Going Forward• Pay Back on Quasi Draw

• Enterprise Risk Management

• Enrollment Plan with refined forecasting

• 5-10 year Financial Plan with accurate, refined forecasting


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The Credits…

Provost OfficeDeansAHCEC

PBACFCCBMOFPDC

DCCS

BCS FMCU

UCitGC

PDCPSIABACDFSIOPCRO

VP’sBOTNZ

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•Vision• Balanced budget based on

Academic Priorities will be norm


1 June 2008 Finance and Budget Presentation President Nancy L. Zimpher Monica Rimai, Senior VP,...

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