Finance & Administration Committee · 4th Week Winter Enrollment. 4th Week Winter Enrollment Budget...

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Finance & Administration Committee

March 16th, 2016

Agenda

• Call to Order/Roll/Declaration of Quorum• Consent Agenda• Budget Reports• Dashboard Update• Capital Projects• Compensation Philosophy• HECC Budget Request• Multi-year Scenarios• Tuition Recommendation• Questions and Comments

Approval of Minutes

February 4, 2016 Meeting

F&A CommitteeAnnual Goals 2015-16

1. Review internally prepared financial statements on a quarterly basis, including budget to actual performance;

2. Present a proposed list of financial indicators in a dashboard format;

3. Explore best practices for financial policies related to limits of authority, unbudgeted spending, long-term contractual relationships;

4. Debate alternative revenue sources;5. Construct a University Reserve Policy.

BudgetUpdates

• Total headcount is -0.1% compared to Winter 2015

• Budgeted an annual 1.6% Student Credit Hour (SCH) increase maintaining current resident/non-resident split

• Fourth week data shows -0.2% SCH change winter to winter

• However, Summer was down 6.7% while Fall was only up 0.2% in SCH

• The Fall trend generally carries through to the Winter and Spring

4th Week Winter Enrollment

4th Week Winter Enrollment

BudgetUpdates

Budget to Forecasted Actuals

BudgetUpdates

2015-16 All Funds Budget

BudgetUpdates

Total University Fiscal Year 2015-2016 Budget

Dollars in 000s E&GDesignated Operations

Service Departments

Auxiliary Enterprises

Restricted Funds Total All Funds

Revenue

Student Fees $212,422 $2,703 $ - $47,550 $ - $262,674

Government Resources & Allocations 77,578 973 78,551

Gifts Grants and Contracts 11,326 2,614 120,789 134,729

Internal Sales 5,252 3 2,761 7,075 15,091

Sales and Services Revenue 1,266 3,954 1,152 41,913 48,284

Investment/Debt/Debt Service 2,180 225 150 2,555

Other Revenue 360 2,300 2,660

Total Revenue $310,383 $9,499 $3,912 $99,960 $120,789 $544,544

Expense

Salaries & Wages $161,118 $3,433 $1,336 $18,569 $14,223 $198,679

OPE (fringes) 80,046 1,430 564 9,003 6,842 97,885

Services & Supplies (net of transfers) 63,610 4,830 1,935 72,692 99,724 242,791

Depreciation 323 7,482 7,805

Total Expense $304,773 $9,693 $4,158 $107,745 $120,789 $547,159

Hold for Central Reserves/Risk Abatement 5,610 $5,610

Net $ - ($194) ($246) ($7,785) $ - ($8,225)

• Gross Tuition revenue down by $1.6 million offset by increases in student fees (E&G)

• Other revenues up (exception of auxiliaries)

• Broadway purchase eliminates $900k in auxiliary revenue and expenses

• Salaries & Wages on target for E&G due to Strategic Investments

• OPE Expenditures lower than budget, notably in E&G

• Other categories of expenditures trending with revenue changes

• Net Impact – still predicting an increase to E&G fund balance

Quarter Two Update

BudgetUpdates

2015-16 Q2 All Funds Forecast

BudgetUpdates

Total University Fiscal Year 2015‐16 Quarter 2 Forecast

Dollars in 000s E&GDesignated Operations

Service Departments

Auxiliary Enterprises

Restricted Funds Total All Funds

Total All Funds 2015‐16 Budget

FY15 Q2 Actuals

FY16 Q2 Actuals

Revenue

Student Fees $211,723 $2,624 $‐ $39,750 $‐ $254,097 $262,674 $170,813 $174,488

Government Resources & Allocations 83,810 1,002 137 84,949 78,551 39,202 50,100

Gift Grants and Contracts 11,940 2,337 11 3 127,913 142,205 134,729 59,138 75,503

Internal Sales 4,713 71 2,804 7,149 14,737 15,091 6,851 7,072

Sales and Services Revenue 1,551 4,480 1,098 43,322 9 50,460 48,284 27,986 28,682

Investment/Debt/Debt Service 2,700 854 150 104 3,808 2,555 1,802 1,916

Other Revenue 512 27 75 1,341 ‐ 1,955 2,660 1,860 1,094

Total Revenue $316,950 $10,393 $3,989 $92,717 $128,163 $552,212 $544,544 $307,653 $338,855

Expense

Salaries & Wages $161,070 $3,678 $1,413 $18,621 $28,220 $213,002 $198,679 $93,517 $99,516

OPE (fringes) 74,385 1,380 554 8,224 11,610 96,152 97,885 42,513 44,410

Service & Supplies (net of transfers) 64,379 4,782 1,582 63,750 88,333 222,826 248,401 119,913 122,495

Depreciation 231 8,819 9,050 7,805 3,999 4,521

Total Expense $299,833 $9,840 $3,780 $99,414 $128,163 $541,030 $552,769 $259,941 $270,942

Management Reserve Expenses $7,855 $7,855 $4,347 $3,132

Net $9,262 $552 $209 ‐$6,697 $‐ $3,326 ‐$8,225 $47,712 $67,913

2015-2016 Budget vs. Forecast Education and General

BudgetUpdates

FY15 Actual FY16 BudgetFY16 Q2 Forecast

FY16 Budget to Q2 Forecast FY15 Q2

ActualsFY16 Q2 ActualsDollars Percent

Revenue

Student Tuition and Fees $205,314 $212,422 $211,723 ‐$698 ‐0.30% $140,884 $145,515

Government Resources & Allocations 67,994 77,578 83,810 6,232 7.40% 38,650 49,518

Gifts Grants and Contracts 10,626 11,326 11,940 614 5.10% 4,752 6,224

Internal Sales 5,167 5,252 4,713 ‐538 ‐11.40% 2,509 2,157

Sales and Services Revenue 1,399 1,266 1,551 285 18.40% 603 777

Investment/Debt/Debt Service 2,782 2,180 2,700 520 19.30% 1,452 1,502

Other Revenue 445 360 512 152 29.70% 154 285

Total Revenue $293,727 $310,383 $316,950 $6,567 2.10% $189,005 $205,977

Expense

Salaries & Wages $149,441 $161,118 $161,070 ‐$48 0.00% $67,316 $71,584

OPE (fringes) 69,825 80,046 74,385 ‐5,661 ‐7.60% 31,980 33,438

Service & Supplies (net of transfers) 58,783 69,220 64,379 ‐4,841 ‐7.50% 31,339 31,694

Depreciation

Total Expense $278,049 $310,383 $299,833 ‐$10,551 ‐3.50% $130,636 $136,716

Management Reserve Expenses $8,848 $‐ $7,855 ‐$7,855 $4,347 $3,132

Net $6,830 $‐ $9,262 $9,262 $54,022 $66,128

2015-2016 Budget vs. Forecast Designated Operations

BudgetUpdates


FY16 Budget to Q2 Forecast

FY15 Q2 Actuals FY16 Q2 ActualsDollars Percent

Revenue

Student Tuition and Fees $2,863 $2,703 2,624 ‐$79 ‐3.00% $1,591 $1,495

Government Resources & Allocations ‐ ‐

Gifts Grants and Contracts 2,882 2,614 2,337 ‐277 ‐11.80% 1,177 710

Internal Sales 104 3 71 68 95.30% 13 64

Sales and Services Revenue 4,376 3,954 4,480 527 11.80% 2,452 2,443

Investment/Debt/Debt Service 558 225 854 629 73.60% 246 355

Other Revenue 113 27 27 100.00% 1 31

Total Revenue $10,896 $9,499 $10,393 $894 8.60% $5,481 $5,098

Expense

Salaries & Wages $3,782 $3,433 3,678 $245 6.70% $2,090 $2,084

OPE (fringes) 1,340 1,430 1,380 ‐50 ‐3.60% 718 679

Service & Supplies (net of transfers) 5,087 4,830 4,782 ‐48 ‐1.00% 2,613 2,037

Depreciation

Total Expense $10,208 $9,693 $9,840 $147 1.50% $5,421 $4,799

Net $688 ‐$194 $552 $747 $60 $299

2015-2016 Budget vs. Forecast Service Centers

BudgetUpdates


FY16 Budget to Q2 Forecast

FY15 Q2 Actuals FY16 Q2 ActualsDollars Percent

Revenue

Student Tuition and Fees $‐ $‐ $‐ $‐ $‐ $‐

Government Resources & Allocations

Gifts Grants and Contracts 23 11 11 100.00% 11

Internal Sales 2,661 2,761 2,804 43 1.50% 1,259 1,263

Sales and Services Revenue 1,032 1,152 1,098 ‐54 ‐4.90% 372 479

Investment/Debt/Debt Service 0 0

Other Revenue 75 75 100.00%

Total Revenue $3,715 $3,912 $3,989 $76 1.90% $1,631 $1,754

Expense

Salaries & Wages $1,066 $1,336 $1,413 $77 5.50% 586 $772

OPE (fringes) 420 564 554 ‐10 ‐1.80% 249 257

Service & Supplies (net of transfers) 1,785 1,935 1,582 ‐353 ‐22.30% 904 1,113

Depreciation 341 323 231 ‐92 ‐39.80% 177 117

Total Expense $3,612 $4,158 $3,780 ‐$378 ‐10.00% $1,916 $2,259

Net $102 ‐$246 $209 $454 ‐$285 ‐$505

2015-2016 Budget vs. Forecast Auxiliary Operations

BudgetUpdates


FY16 Budget to Q2 ForecastFY15 Q2 Actuals

FY16 Q2 ActualsDollars Percent

Revenue

Student Tuition and Fees $41,583 $47,550 39,750 ‐$7,800 ‐19.60% 28,338 $27,479

Government Resources & Allocations 973 973 1,002 29 2.90% 486 512

Gifts Grants and Contracts 56 3 3 100.00% 55 3

Internal Sales 6,737 7,075 7,149 74 1.00% 3,070 3,587

Sales and Services Revenue 43,451 41,913 43,322 1,409 3.30% 24,553 24,977

Investment/Debt/Debt Service 187 150 150 ‐ 0.00% 93

Other Revenue 4,495 2,300 1,341 ‐958 ‐71.40% 1,705 778

Total Revenue $97,481 $99,960 $92,717 ‐$7,243 ‐7.80% $58,300 $57,336

Expense

Salaries & Wages $18,266 $18,569 18,621 $52 0.30% 8,915 $9,445

OPE (fringes) 8,093 9,003 8,224 ‐779 ‐9.50% 3,967 4,075


Depreciation 8,779 7,482 8,819 1,337 15.20% 3,822 4,404

Total Expense $104,573 $107,745 $99,414 ‐$8,331 ‐8.40% $52,157 $53,677

Net ‐$7,091 ‐$7,785 ‐$6,697 $1,088 $6,142 $3,659

2015-2016 Budget vs. Forecast Restricted Funds

BudgetUpdates

FY15 Actual FY16 Budget FY16 Q2 Forecast

FY16 Budget to Q2 Forecast FY15 Q2

ActualsFY16 Q2 ActualsDollars Percent

Revenue

Student Tuition and Fees $‐ $‐ $‐ $‐ $‐ $‐

Government Resources & Allocations 710 137 137 100.00% 66 70

Gifts Grants and Contracts 127,344 120,789 127,913 7,124 5.60% 53,153 68,555

Internal Sales 1 ‐

Sales and Services Revenue 12 9 9 100.00% 6 7

Investment/Debt/Debt Service 104 104 104 100.00% 11 59

Other Revenue 1 ‐ ‐ ‐

Total Revenue $128,172 $120,789 $128,163 $7,374 5.80% $53,237 $68,691

Expense

Salaries & Wages $28,141 $14,223 $28,220 $13,997 49.60% $14,611 $15,631

OPE (fringes) 11,577 6,842 11,610 4,768 41.10% 5,598 5,961


Depreciation

Total Expense $127,803 $120,789 $128,163 $7,374 5.80% $69,812 $73,491

Net $369 $‐ $‐ $‐ ‐$16,575 ‐$4,800

Dashboard Update

HECC 2017 Capital Project Request

2017CapitalProjectRequest

UCB

Science Building One

4th & Montgomery

4th &Lincoln

Top Priority4th & Montgomery (New Construction)Approximately:

Space:• 90,000SF of PSU E&G space

• Graduate School of Education (GSE)• Additional classrooms or space for other departments

• 14,000SF of Retail space, owned by PSU• 100-150,000SF occupied by other organizations

PSU Funding Sources:• $46 million in G bonds (state debt)• $6 million in F bonds (PSU debt)


Project Benefits:

• Land is owned by the Portland Development Commission who has agreed to transfer ownership to PSU at no cost if it is developed

• City of Portland has agreed to occupy at least 30,000 square feet (funds for space can serve as a match for state bonds)

• A non-profit organization that works closely with GSE who needs 50,000sf has signed a Letter of Intent to be a co-owner in the building (funds for space can serve as a match for state bonds)

• Will allow us to save approximately $1 million in annual lease costs.

4th & Montgomery (New Construction)


OtherE&GprojectsinPSU’sRequestScience Building One (Renovation & Expansion)

$60M in Q bonds (state debt)$5M in G bonds (state debt)$5M in philanthropy$70M Project Budget

4th & Lincoln (New Construction)$25M in Q bonds (state debt)$25M in G bonds (state debt)$10M in F bonds (PSU debt)$25M in matching funds from a building co-owner$85M Project Budget


PSUDebtOnlyRequest

University Center Building

• Request, for the 3rd biennium in a row, to allow PSU to take on debt to purchase the University Center Building and its land in the event that the owners are willing to sell the property.

• Approximate request will likely be between $10 and $15 million.

• PSU currently leases the land, and in 2023, the lease expires and PSU will no longer own the building.


UpcomingSchedule• Mar. 16, 2016 – Presentation to Board F&A committee

• Mar. 31, 2016 – Presentation to full Board

• May 1, 2016 – Request submitted to HECC

• May - Aug. 2016 – Prioritization by HECC of higher education institution requests

• Fall 2016 – Recommended budget developed by Governor’s Office

• January - June 2017 – Legislative session

• June 2017 – Legislature approves capital funding bill


Sky Bridge Lease

• Demolition of a skybridge between School of Business Administration and University Services Building (USB)

• Construction of a new skybridge- maintain USB accessibility

• New and old skybridge are in airspace over city controlled right of way- SW Montgomery Street

• 20 Year lease; $4,000 annually; 9% increase every 5 years

• Options for 2 more 20 year leases

SkyBridgeLease

Compensation Philosophy

Growth of tenured and tenure-track faculty• Tenured and tenure-track faculty grew by ~28% between 2004-2015

• On average, approximately ~72% of tenure-related faculty hold tenure. This ratio has been steady.

FacultyTurnoverData

Tenured and tenure-track faculty separation rate is low• The average separation rate for tenure-related faculty across all ten years is ~ 2.2%

FacultyTurnoverData

HECC Budget Request

HECC Budget Development

April 2016University budget

request submission

April-July 2016 HECC budget request review

Aug-Dec 2016 Budget submission

HECC finalized

Dec 2016 Governor’s

recommended budget submitted

Feb 2017 Co-Chairs Framework

May 2017Legislature approves budget

Biennial Budget Development Timeline

2017‐19BiennialRequest

Cost Drivers for 2017-19 Estimated Current Service Level


Funding Scenarios


Multi-year Scenarios

Six Year Forecast: Normal Inflation + PERS

Multi‐yearBudgetForecast

Six Year Forecast: Inflation held to 2% + PERS

Multi‐yearBudgetForecast

• Estimated 2017-19 Impact on Education and General Funds - $0.9 million

• This overstates the FTE impact because it assumes no change in salaries/pay since FY2015

• Compression not modeled

MinimumWage

• Three distinct buckets of funding with a four year phase-in. • Mission Differential (Base Funding)• Student Credit Hours (SCH)• Outcomes Based Funding (Degrees)

• Stop Loss/Stop Gain to phase out by 2020 • Increases to the Public University Support Fund (PUSF) benefit

all Universities• All other changes are a zero-sum game

Student Success and Completion Model

HECC‐ SSCM

Tuition Recommendation

Student Presentations

BudgetUpdates

• Flat Enrollment

• Net Operating Income Goal – 1.6%

• Tuition and Mandatory Fees Goal – less than or equal to 3.5%

• Revenue and Cost Drivers for FY17

TuitionRecommendation

Assumptions

Multi-year E&G Budget Forecast Scenario 1


Fiscal Years 2016‐2019 2015‐Biennium 2017‐19 Biennium

(Dollars in Thousands) FY16 FY17 FY18 FY19

Revenues:

Gross Tuition and Fees 231,318 229,959 229,959 229,959

Tuition Remissions ‐18,896 ‐8.20% ‐19,146 ‐8.30% ‐19,146 ‐8.30% ‐19,146 ‐8.30%

Net Tuition and Fees 212,422 210,813 210,813 210,813

State General Fund(includes SELP) 77,578 88,797 86,543 89,984

Other (F&A recovery, interest, misc. income) 20,384 20,384 20,384 20,384

Total Revenues 310,383 319,994 317,740 321,181

Expenditures:

Salaries & Wages 161,118 171,300 179,223 186,067

Other Payroll Expenses (fringes) 80,046 82,823 89,985 93,212

Operating Expenses & Net Transfers 63,610 66,517 67,598 68,950

Held for Reserves/Risk Abatement 5,610 5,000 0 0

Total Expenditures & Net Transfers 310,383 325,640 336,806 348,229

Net from Operations and Transfers ‐ ‐5,646 ‐19,066 ‐27,048

Central Reserve Balances (1) 15,410 14,764 ‐4,302 ‐31,350

(1) Does not include unit reserves Net Tuition Revenue Increase (2)

(2) No Tuition Increase FY17 FY18 FY19

0.00% 0.00% 0.00%

Resident Undergraduate Peer Tuition Comparison


Peer Tuition ComparisonResident Graduate Peer Tuition Comparison


Peer Tuition ComparisonNon-Resident Undergraduate Peer Tuition Comparison


Peer Tuition ComparisonNon-Resident Graduate Peer Tuition Comparison


Proposed Tuition and Mandatory Fee Increases

Tuition and Mandatory Fee Category

Dollar per Credit

Increase

Percent Increase

Resident Undergraduate $6 4.0%Resident Graduate $12 3.4%Non-resident Undergraduate $18 3.6%Non-resident Graduate $20 3.6%

Student Building Fee $0 0%Incidental Fee $3 1.4%Health Service Fee $5 3.9%Recreation Center Fee (ASRC) $3 7.3%

Overall Resident Undergrad at 15 credits per term $101 3.77%


Proposed Tuition RatesProposed Base Tuition Rates


Proposed Tuition & Mandatory Fees


Fall Per Quarter Tuition and Mandatory Fees

Description 2012‐13 2013‐14 2014‐15 2015‐162016‐17

Proposed

Increase from FY13

to FY17

Average Increase

since FY13Quarterly Increase

Annual Increase

Undergraduate ( 15 SCH):

Resident $2,551 $2,628 $2,598 $2,678 $2,779 $228 $57.00 $101 $303

% chg ‐1.43% 3.02% ‐1.14% 3.08% 3.77% 8.94% 2.23%

Non‐Resident $7,621 $7,698 $7,773 $8,003 $8,284 $663 $165.75 $281 $843

% chg ‐0.52% 1.01% 0.97% 2.96% 3.51% 8.70% 2.17%

Graduate (12 SCH):

Resident $4,465 $4,515 $4,563 $4,700 $4,855 $390 $97.50 $155 $465

% chg ‐1.74% 1.12% 1.06% 3.00% 3.30% 8.73% 2.18%

Non‐Resident $6,745 $6,819 $6,891 $7,100 $7,351 $606 $151.50 $251 $753

% chg ‐0.81% 1.10% 1.06% 3.03% 3.54% 8.98% 2.25%

QuestionsandComments

Finance & Administration Committee · 4th Week Winter Enrollment. 4th Week Winter Enrollment Budget...

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