May 4, 2011
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Transcript of May 4, 2011
Office of the President
May 4, 2011
PARADIGM SHIFT: The New Face of a “Public” University.
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Office of the President
ACCOMPLISHMENTS FY 2011• Record enrollments: 25% growth (in FTE) since fall 2008• Four Forest Restoration Initiative agreement – the largest forest
restoration project in the U.S., possible in the world • Centralized student transfer system• Princeton Review: NAU in the guide to ‘green colleges’• e-Planning• e-PAR• Top grant awards FY 2011:
– The Partnership for Native American Cancer Prevention: $1.7 million– Microbial Forensics (Dr. Keim): $1.6 million– ERI: $1.5 million– American Indian Air Quality Training Program: $1.5 million– Northern Arizona University Noyce Fellows Program: $1.5 million
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ECONOMIC RECOVERY• AZ sales revenue up by 8.4 % in Feb 2011 (compared to Feb 2010)
• JLBC projects FY 2012 surplus of $5.2M
BUT
• 1% temporary sales tax sunsets on 5/31/2013
• AZ’s structural deficit has not been addressed (FY 2014 deficit
projected to be $600M)
• Nationally, “economic growth slowed to a crawl”
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NAU’S PLANNING ENVIRONMENT• Enrollment in FTE grew by 25% since
the budget cuts started in FY 2008
– Amounts to $33 million today.
• State General Fund decreased by
36% since FY 2008
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• No enrollment growth support since
FY 2009
• State General Fund Appropriation per
FTE is lower than it was over 20 years
ago (1989-90)
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STATE GENERAL FUND + GROSS TUITION AND FEE SUPPORT PER FTE
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*Estimate
2008 2009 2010 2011 2012*$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
0
5,000
10,000
15,000
20,000
25,000
30,000
$7,052$8,904 $9,354
$8,477 $5,595 $4,196
21,352
25,20426,263*
Gene
ral F
und
and
Tuiti
on/F
ee S
uppo
rt p
er
FTE
Fall
Enro
llmen
t Hea
dcou
nt
Student
State
Enrollment
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HIGHER EDUCATION MARKETPLACE
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$0 $100 $200 $300 $400 $500 $600 $7000
2,000
4,000
6,000
8,000
10,000
12,000VT
NJND PAIL
MISC MNDEMAOH ME CTRI VA MDINMO KYWI
IAOR TX NE NDARSDKS
WACO TNAZ
ALMT HICANY OK AKMSWVIDNM
NCGAUT
LANVFL
WY
Per Capita State Support for Higher Education
Aver
age
Tuiti
on a
t Pub
lic 4
-yea
r Ins
tituti
ons
Low tuitionHigh public support
High tuitionLow public support
Low tuitionLow public support
Low to Moderate tuitionModerate public support
Sources: • Average FY 2009 Tuition – IPEDS• Population 2009 – U.S Census Bureau• FY 2011 State Support for Higher Education – Grapevine Project
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CURRENT FY11 BUDGET SITUATION
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Green shaded pieces are the basic university expenditure supports Yellow shaded pieces provide some university supportRed shaded pieces are not generally available for direct support
State Gen'l Fund134.330%
Tuition & Fees144.533%Grants & Contracts
4711%
Fed Fin Aid $33 7%
Private Gifts13.43%
TRIF
112%
Auxil-iary Revenue
4510%
Other Revenue
16.1
4%
Estimated all funding sources: Total = $444 million
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FY12 BUDGET SCENARIO
State Gen'l Fund103.124%
Tuition & Fees15436%
Grants & Contracts48
11%
Fed Fin Aid $36 8%
Private Gifts
153%
TRIF123%
Auxil-iary Rev-enue
4611%
Other Rev-enue
164%
Estimated total = $430 million
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FY11 ESTIMATED $444M
FY12 ESTIMATED $430M
State Gen'l Fund103.124%
Tuition & Fees15436%
Grants & Contracts
4811%
Fed Fin Aid $36 8%
Pri-vate Gifts
153%
TRIF123%
Aux-iliary Rev-enue
4611%
Other
Rev-enue
164%
State Gen'l Fund134.330%
Tuition & Fees144.533%
Grants & Contracts4711%
Fed Fin Aid $33 7%Private Gifts
13.43%
TRIF112%
Auxiliary Revenue4510%
Other Revenue16.14%
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CHANGES IN REVENUE SOURCES
14Tuition and Fees State Appropriation All Other (most restricted)0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2006
2006
2006
2011
Est
2011
Est
2011
Est
2012
Pro
j
2012
Pro
j
2012
Pro
j
46%
14%
40%38% 38%
33%30%
37%
2020??
2020
??
2020
??
24%
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PERFORMANCE FUNDING (ABOR)
Base +
Adjustment to the Base+
Performance Funding=
University Funding
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Components of Performance Funding1. Increases in SCH completed2. Increase in number of degrees
produced3. Increases in research funding4. Success in meeting the state’s
economic development goals5. Maintaining or enhancing quality
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ADDRESSING STATE BUDGET CUTS & PREPARING FOR A DIFFERENT BUDGET
STRUCTURE
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FY 2008: $2,595,300 • Hiring and travel freeze• Layoffs, contract reductions• Retirements
FY 2012: $30,100,000• Salaries and benefits• Operating efficiencies• Diversion of one-time funds
+ tuition and fee collections
Managed a total of $63M of state support cuts since 2008
Stimulus- Replacing state funded salaries
- Moderating tuition increases
Enrollment Growth
University Budget Cuts
Moderate Tuition
Increases
FY 2009: $24,500,700• Reduced operating budgets• Layoffs, contract reductions• Retirements• Closed Center for High Altitude
Training, Social Research Laboratory
• Closed several community campuses; reduced services
• Increased faculty and staff workloads and limited hiring despite enrollment growth
FY 2010: $6,096,200• All employee furloughs; VSRP• Offered fewer courses and
increased class sizes• Decreased tenure density
FY 2011: $30M Rollover continues• Implemented business
processes, financial strategies, and academic policies to maximize efficiencies
• VSRP II.
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IMPLICATIONS OF BUDGET CUTS• $230 million in unfunded building renewal
• Change in faculty composition
• Faculty, staff, and administrative salaries
• Total expenditures in personal services and benefits have not kept up with
enrollment growth
• Class sizes
• Faculty workload
• Changes in academic programs
• Technology efficiencies17
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FULL-TIME INSTRUCTIONAL FACULTY COMPOSITION
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Tenured
44363%
Tenure Track12918%
Lec-turers/
In-struc-tors13619%
Fall 2002
N=708; FTE Students per Faculty = 24:1
Tenured40749%
Tenure Track11814%
Lectur-ers/ In-struc-
tors31137%
Fall 2010 N=836; FTE Students per Faculty = 27:1
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2010-2011 AAUPRANKED FACULTY PEER COMPARISON
• Good progress(went from avg $69K to $74K)
• Still Last
Rank Peer Average for
Order Institution All Ranked Faculty
1 George Mason University 95,800 2 University of Nevada-Las Vegas 94,600 3 The University of Alabama 92,500 4 Georgia State University 92,000
5 University of North Carolina at Greensboro 85,800 6 Kent State University Kent Campus 85,300 Weighted Average (Peer Mean) 85,200 50th Percentile (Peer Median) 84,400 7 Old Dominion University 83,400 8 Southern Illinois University Carbondale 81,400 9 Ohio University-Main Campus 81,100
10 Western Michigan University 80,300 11 University of Akron Main Campus 79,000 12 University of Maine 78,700 13 Northern Illinois University 76,800 14 Bowling Green State University 75,900 15 Wichita State University 75,000 16 Northern Arizona University 74,300 Percentage to Market 14.6 Percentage from Market -12.8
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SALARY MARKET COMPARISONS
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2003 2004 2005 2006 2007 2008 2009 2010
-20
-15
-10
-5
0
5
-14 -14
-7-10
-16
-3
-8
-16
-13
% fr
om M
arke
t
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ENROLLMENT GROWTH
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2003 2004 2005 2006 2007 2008 2009 20100
5,000
10,000
15,000
20,000
25,000
30,000
13,027 12,71714,766
17,5295,048 4,359
4,517
4,033462 1,318
2,593
2,956662 675
631
686
Flagstaff
Community Campuses
Online
Yuma
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GRADUATE AND UNDERGRADUATE ENROLLMENTS
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2005 2006 2007 2008 2009 20100
5,000
10,000
15,000
20,000
25,000
30,000
13,472 14,526 15,569 16,787 18,301 20,194
5,5976,036 5,783 5,720
5,2995,010
Graduate Undergraduate
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All Diverse Students
Latino Students
Native American Students
2003 2004 2005 2006 2007 2008 2009 20100
200
400
600
800
1,000
1,200
1,400
1,1881,292
1,2121,318
1,265 1,277 1,2811,214
2003 2004 2005 2006 2007 2008 2009 20100
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2,0762,233 2,301
2,559 2,6472,908
3,271
3,843
2003 2004 2005 2006 2007 2008 2009 2010 2020 Goal
20%
22%
24%
26%
28%
30%
32%
34%
31%
33%
2003 2004 2005 2006 2007 2008 2009 2010300
400
500
600
700
800
900 866
International Students
DIVERSITY
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FY 2012 BUDGET PLAN REDUCTION OF $198MNAU SHARE IS $30.1M
Strategy Approx. Amt DiscussionTuition and Fee Collections
$6-8M ($6 million with
stable enrollment)
• Rebate new resident 2011-2012 Pledge students $350 (estimated $1.2M)• Additional financial aid (RSA and scholarships) to be provided estimated to be $3.5M• Graduate Assistant Waivers from 75% to 100% of Tuition
Reductions, savings, revenue growth from Divisions, Debt Service, Salaries and Benefits (Employee Related Expenses – ERE)
$15M • FY 2011 Voluntary Retirement Program for Tenured Faculty should bring in $1,2-$1.6M with ERE• Debt service reduction of $1.9M• Changes/increases in benefits prices for employees • Divisional/central budget reductions
Operating Efficiencies in all Divisions
$0-$2M • Innovations that reduce costs per FTE
Reduce state budget flexibility and one time expenditures, reserves, auxiliary accounts
$4-7M • Diverting one-time funds for FY12 and FY13 knowing our base or structural deficit must be corrected by FY14
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Provost94.947%
EMSA (Enrl Mgmt & Student
Aff)28.114%
Extended Campuses
24.312%
Capital Assets15.28%
Information Technology
Services14.87%
Finance & Administration8.74%
President6.73%
Advancement2.81%
Research2.71%
Institutional Effectiveness1.61%
State and Local Resources (Millions)
Cabinet Level Target Reduction (Millions)
Provost $3.8 EMSA (Enrl Mgmt & Student Aff) 1.1Extended Campuses 0.97Capital Assets 0.6Information Technology Services 0.6Finance & Administration 0.3President 0.3Advancement 0.1Research 0.1Institutional Effectiveness 0.1
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POSSIBLE BUDGET STRATEGIES UNDER STUDY
• Reductions in benefits
• Hiring freeze
• Furloughs
• Increases in summer school and winter term
• Cost/benefit analysis of Community Campuses
• Review of centers, institutes and public service offices 26
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LEVERS FOR ADJUSTING THE ACADEMIC AREA BUDGET
• Reallocation of faculty work efforts
• Additional use of technology in delivering course materials –
requires less faculty time
• Academic coaches/advocates to provide support/motivation
to students
• Increase minimum class sizes where practical
• Offset additional expenses to class and program fees
• Renewed emphasis on summer school/winter session 27
Office of the President
Investing in Strategic Initiatives is Critical for NAU’s Long-term Health
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HOW DID THE FY11 BASE BUDGET CHANGE?
Major Additions (new funds) for Budget
• Over $3 Million from Voluntary Retirement Incentive Program (VSRIP)• Over $8 Million from enrollment growth and tuition and fees• Approximately $2 Million of debt payment reduction
Major Budget Investments
• Nearly $6 Million for Market Adjustments, Workforce Planning, and Minimum Wage• $5M for Class Coverage and Undergraduate Support
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FY11 SIGNIFICANT ONE-TIME INVESTMENTS
• Debt Repayment
• South Beaver School Lease/Liberal
Arts Staircases and FF&E
• Police Radio
• Academic Building Repairs
• Skydome/Athletics Temporary
Moving/Locations, etc.
• Quad
• Roofs, Other Building Maintenance,
Fire Life Safety Issues
• Retention Initiatives
• Operations for Colleges and Units
• Software Systems
• Research
• Transportation Spine
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STRATEGIC INVESTMENTS
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LEADERSHIP DAY RECOMMENDATIONS
• Investments in Capital Assets
• 100% graduate assistant tuition waivers
• Oracle/PeopleSoft Financial System
• Efficiencies (grants, paperless campus)
• Compliance (bio-safety auditor)
• Retention Initiatives
• Cline Library
• ….
APPROVED
• 100% Graduate Student Waivers
• Oracle/PeopleSoft Financials
• Retention Initiatives
(Coaches/Advocates)
UNDETERMINED
• Capital Assets
• Part-time Faculty Salaries
• Admissions
• Cline Library
• Branch Campuses
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CAMPUS INFRASTRUCTURE PROJECTSCompletion Fall 2011• Health and Learning Center• Skydome• Liberal Arts• North Plant• Native American Cultural Center• North Quad• Transportation Spine• Science Lab Facility
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Completion 2012• San Francisco Parking Garage• Residence Halls• Ardrey Auditorium Seating• Classroom Upgrades
Potential Future Projects• Multi-purpose Facility• Science/ Health Facility
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SUMMER CONSTRUCTION
PROJECTS
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WHAT IS THE NEW FACE OF A “PUBLIC” UNIVERSITY?
• Mission and Accountability
• Technology
• Funding
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Office of the President
Thank you.Questions?
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