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Spring Management Report Meeting
March 24
2010
UAF Spring 2010 Management Report 1
The Financial Year at UAF in Context
FY10 Year-End Expectation UAF has operated throughout FY10 with very limited central resources. In conformance with our adopted budget principles (attachment A), we have operated under the premise that resources are best managed at the core business unit level. Implementing this principle has resulted in maximum distribution of all available resources to schools, colleges and institutes. This coupled with the unintended consequences of implementation the tuition distribution model has resulted in fewer resources available centrally than is prudent (significantly below the established 2% threshold). Although we will close out FY10 with solvency, we are instituting plans to pullback sufficient base and one time funding as we enter FY11 to meet prior-year commitments, central needs, and pending strategic initiatives. To accomplish this and minimize impact on individual units, we have temporarily suspended our maximum carry forward guideline. Units are encouraged to reserve as much as prudent into FY11 in order to minimize the impact of the pending pullback. In fact, after an alarming November management report, we have seen an appropriate increase in projected reserves since announcing this initiative. We believe the units are strategically using existing funds in anticipation of future need. Additionally, we continue to push for improved management report accuracy, thus staying in regular contact with the Deans, Directors, and fiscal officers who are aware of and actively managing their fiscal position. Recharge Center Review and Auxiliary Operations The recharge center review continues. Our focus on the facilities recharge has resulted in a careful review of shop rates and cost structures. That work continues and we expect to see positive change in the coming fiscal year. In conjunction with this year’s rate setting process, we have challenged all centers to carefully consider their operations in light of SW accounting requirements and UAF guidelines. We will be working with those we consider marginal in the coming months. We are also responding to a request from Chancellor Rogers to review those auxiliary and recharge centers managed under Administrative Services and Student Services. Specifically, we have been charged to review business operations in the two units to ensure we are fully leveraging resources to create the optimum student experience at UAF. A key topic is to consider grouping like operations together to maximize management resources and to fully leverage available financial resources.
Institutional Tuition Scholarships (waivers) We continue to implement the UAF budget management principles. We are currently working on the distribution of budget associated with institutional tuition scholarships (tuition waivers and instructional assistantships) to appropriate units. Currently the budget supporting this activity is held centrally but the authority to make awards is distributed. We believe this change properly aligns the authority to grant scholarships with the responsibility to fund those commitments. Planning Forward amid Known Fiscal Gap Another area of focus this spring is to begin addressing a significant looming fiscal gap at UAF. If no structural changes are made, we estimate that by FY13 unrestricted revenue will fall short of requirements by close to $14 million. In addition, there are key strategic investments that must be
UAF Spring 2010 Management Report 2
made to position UAF for the future. Of course this gap will not materialize because each year we will make necessary adjustments, however the impact of filling it is in fact real, and it must be managed with a two or three-year time horizon, to support decisions that are more holistic and strategic. The gap is largely composed of insufficient general fund revenue increases and the inability to meet necessary non-general fund revenue expectations. Managing the fiscal gap was a key focus area at UAF’s recent Executive Leadership retreat. Attachment E is a presentation on the subject, which was delivered at that event. Although there is much we can do, significant operational and programmatic change will be required to accommodate the gap and still fund the strategic development of the institution. This is and will continue to be a critical focus for UAF in the coming months and years.
UAF Spring 2010 Management Report 3
1. FY10 Carryforward Analysis UAF’s January management report projects a carryforward of $4.9M in F1. This represents 2.3% of projected F1 revenue. Based on initial carryforward projections, UAF has suspended the maximum carryforward guidelines as stated in the carryforward principles. This will allow departments to strategically use existing funds in anticipation of FY11 needs. It is anticipated that this action will move the anticipated year end F1 carryforward into the $5M to $7M range. Total carry forward projection including recharge and leasing (F7, FE, FL) is $13.2M. In FY09, the newly adopted carryforward policy coupled with the development of “shovel ready” projects enabled UAF to manage down the carryforward balance going into FY10. UAF will continue to active manage our carryforward to ensure that UAF ends FY10 within projected levels. As in prior years the bulk of FY10 carryforward will be returned back to the contributing units. The units with deficits from FY10 will be required to submit a repayment plan that includes identifying contributing factors and the steps they will take to remediate those factors in future years. In accordance with our budget principles, Central management will hold sufficient resources to ensure achievement of institutional goals and to support performance based budgeting requirements.
Distributions from central carryforward will be approved via the Chancellor’s Cabinet. The funding priorities are identified during the budget development process and in response to new strategic investment opportunities such as; facilities and space needs (including energy efficiencies), climate, energy engineering and biomedical priorities.
2. FY10 Budget Building Process and Status No FY09 carryforward was used to balance the FY10 budget. However, funding of known commitments would have drawn central resources $2.6M below what was initially available. As noted in our response to question 3 below, a pullback of funding from our units and additional tuition and ICR revenue enabled us to meet these commitments as required throughout the year.
3. Management of Contingencies The initial budget contained a $1.3M in central contingency reserve, which is less than the 2% required. An additional $2M was pulled back centrally in August (see attachment B) to ensure that adequate funding was available to cover centrally allocated costs and strategic investments. A separate $1.4M pool for PBB reallocations was funded at continuation time. Increases in Tuition and ICR revenue over the prior fiscal year helped offset central investments in institutional tuition waivers, assistantships and other strategic needs including $522K for the utilities not covered by the trigger funding. Decisions on use of additional contingency funds which may become available are driven by ongoing commitments, prioritization and one-time funding requests. With the exception of managing to the targeted carry forward range of $5M to
UAF Spring 2010 Management Report 4
$7M, we do not anticipate significant additional contingency funding will be available for the balance of the fiscal year.
4. FY10 Initiative and Initiative Pool, TVEP Status We are projecting to fully expend all initiative pool and TVEP funds. We will continue to monitor.
5. Debt Strategies and Plans The only new debt related issue we anticipate for FY11 is $106K associated with the High Bay Test Module (Energy Technology Facility phase 1A). Debt for the Life Science Classroom and Lab Facility will not kick in until FY12. Please see attachment C for details.
6. Grants and Contracts Accounts Receivable Analysis Historically, total revenue from restricted grants and contracts has been greater during the first and second quarters, than during the third and fourth quarters. The size of the first two quarters is attributed primarily to increased expenditures during the summer research field season and an increase in funding tied to the start of the federal fiscal year on October 1. The average Accounts Receivable balance during the 2nd quarter of fiscal year 2010 has seen a significant decrease. The balance of the receivables is 11% less than the 2nd quarter of FY08 and 17% less than FY09. The reduction is largely due to the Office of Grants and Contracts Administration (OGCA) ongoing collection and monitoring policy which was instituted the last two quarter of fiscal year 2009. The average restricted revenue in relation to restricted receivables is projected to decrease by 4% from fiscal year 2008 and 14% from fiscal year 2009. The majority of outstanding Accounts Receivable in the past was due to large amounts of uncollected revenue from private entities. The entities included other universities, native corporations, non-profits and corporations. Because of the UAF ongoing collection policy OGCA believes the outstanding balance will have a steady decrease. OGCA is anticipating an increase of restricted revenues this year due to the additional American Recovery and Reinvestment Act (ARRA) funding. The increase is anticipated to climb steadily over the next two years as the grants are expensed. Because the accounts receivable generated from the ARRA funding is paid by electronic means the ratio of outstanding receivables to revenue is also anticipated to decrease for the next two years. See attachment D for details.
UAF Spring 2010 Management Report 5
ATTACHMENT A
UAF Spring 2010 Management Report 6
Attachment A – Budget Principles
Coordination
1. Direction A clear set of short and long term objectives will be developed.
2. Community The assignment of responsibilities and authority and the allocation of resources will explicitly reflect the relationship of the parts to the whole. The model will incorporate mechanisms which recognize and incent partnerships and cooperative activities between units.
3. Mission Focus Central management will hold sufficient resources to ensure achievement of institutional goals and to support performance based budgeting requirements.
Motivation
4. Value and Reward Growth and Quality Improvement The system will incent and reward efficiency, effectiveness and growth with particular emphasis in areas which specifically meet institutional mission and goals. It will incorporate straightforward and easily understood mechanisms designed to automatically recognize and reward effective performance.
5. Stability To maximize motivation of desired behavior and ensure operational stability and predictability, the assignment of responsibility, authority and the rules for budget distribution will be known, remain constant and be enforced.
Decision Making
6. Decentralization To optimize decision making and efficiency of operations the system will allow for the distribution of authority and responsibility to the maximum extent possible and reasonable. The closer the point of an operating decision is to the point of implementation, the better that decision is likely to be. Decentralization will be done with a clear sense of purpose and with the intent to avoid duplication of function.
UAF Spring 2010 Management Report 7
7. Knowledge Information is needed to allow decision makers to arrive at decisions which promote UAF objectives. The system will have processes in place which generate and communicate data in an effective and timely manner.
Stewardship
8. Fiscal Accountability The model will encourage units to generate carry forward amounts within established limits and will contain clear sanctions for units which deficit spend or whose projections deviate from actual in amounts greater than established variances.
9. Space Accountability Space is a limiting factor for the delivery of programs and services at UAF. The model will encourage efficient and prioritized use of available space.
UAF Spring 2010 Management Report 8
ATTACHMENT B
UAF Spring 2010 Management Report 9
UAF Spring 2010 Management Report 10
UAF Spring 2010 Management Report 11
Pat Pitney, Vice Chancellor (907) 474-7907
(907) 474-5850 fax [email protected]
www.uaf.edu/adminsvc/
Administrative Services University of Alaska Fairbanks, P.O. Box 757900, Fairbanks, Alaska 99775-7900
MEMORANDUM
TO: Brian Rogers, Chancellor FROM: Pat Pitney, Vice Chancellor Administrative Services DATE: August 17, 2009 SUBJECT: FY10 budget status
UAF is entering FY10 in a very tight fiscal position centrally. This is due to conscious decisions to empower schools and colleges to manage the majority of revenue at the unit level and because of significant budget hits to central reserves. Decisions were made to maximize the level of control schools, colleges, and institutes have to deliver service to their units. The tuition model (coupled with the existing ICR distribution model), the new carry forward principles, and full distribution of available FY10 general fund allocations to operating units, are evidence of those decisions. At the same time we chose to fund major unbudgeted items centrally rather than passing cost on to departmental budget, thus drawing reserves down to near zero. A few significant ones are listed below.
• Legislature’s denial of the utility and athletics travel supplementals - $1.3M and $0.3M respectively
• UAF’s portion of investment losses - $2.1M • Use of general fund to units to cover 100% of FY09 salary increases when ICR and tuition were
required to cover 40% • Additional SW charge backs due to the investment loss - $0.6M
I believe providing maximum management control at schools, colleges, and institutes is appropriate and we will work to maintain and enhance that approach, however, under the conservative revenue assumptions in the attached FY10 budget summary, UAF is approximately $2M below continuation requirements. Central reserves are at less than 1% when 2% is required. To address this shortfall, and to position us to meet existing commitments, I am recommending the creation of a non-base funding pool by collecting the equivalent of 1% of actual FY09 unrestricted receipts from all UAF units. These funds will be managed within the multiple appropriation budget constraints.
UAF Spring 2010 Management Report 12
Page 2 Memo to Chancellor Rogers re: FY10 Budget Status Recently instituted cost saving measures for unrestricted funded positions will provide unit managers the tools required to minimize the impact of this action.
• Extended Christmas soft closure - $700K potential savings • Managing for extended vacancies - $980K potential savings (60 additional vacant days per
position recruitment)
These cost saving programs coupled with tuition and ICR revenue generating capacity will minimize the operational impact on major academic and research units. Units without revenue generating capacity will be dependent on utilizing the cost saving measures only. Additionally all cabinet members have been requested to;
• Promote energy efficiency • Examine use of university vehicles • Scrutinize travel • Critically examine space utilization.
Alternatives, including a base reduction and a pull back of actual revenue in excess of projected, were considered. These approaches were dismissed due to the temporary nature of the shortfall and because they were considered a violation of base principles calling for preserving as much flexibility at the unit level as possible. I believe this action maintains UAF’s strategic momentum, by minimizing the impact to core instructional and research units and serves as an effective short-term bridging strategy to meet existing priority commitments. It positions UAF sufficiently at this time; however, we will need to revisit our overall fiscal status in the November/December time frame. Current budget distribution status and impact of the 1% by unit are attached for reference. At that time we will have more information on the status of FY10 legislative utilities funding, know tuition and ICR revenue levels, and therefore be in a position to make decisions concerning additional cost saving measures should it be necessary. With your approval a 1% pull will be applied to each unit’s budget by August 24, 2009.
UAF Spring 2010 Management Report 13
Unrestricted Pull Back
in 1,000's
Division
Total FY09 Unrestricted
Revenue 1% Pull BackChancellor Chancellor Office Operation $1,043.6 $10.4 Equal Opportunity and Diversity $342.8 $3.4 Governance $191.4 $1.9 Human Resources $1,635.9 $16.4 Information Technology $3,920.5 $39.2 Total Chancellor $7,134.1 $71.3Provost College of Engineering & Mines $11,910.2 $119.1 College of Liberal Arts $14,764.8 $147.6 College of Nat Sciences&Mathematics $11,672.1 $116.7 Cooperative Extension $4,149.1 $41.5 Library $8,010.9 $80.1 Museum $3,482.9 $34.8 Provost Office Operations $5,069.2 $50.7 School of Education $3,612.8 $36.1 School of Fisheries & Ocean Science $11,201.0 $112.0 School of Management $4,891.8 $48.9 School of Nat Res & Ag Science $5,986.7 $59.9 Summer Sessions $2,195.0 $21.9 Total Provost $86,946.3 $869.5VCAS Auxiliary & Business Services $180.9 $1.8 Environ Health&Safety and Risk Mgmt $1,342.4 $13.4 Financial Services $5,745.1 $57.5 Safety Services $2,943.4 $29.4 Facilities Services $20,938.6 $209.4 Physical Plant $477.4 $4.8 Utilities $155.1 $1.6 VCAS Office $868.6 $8.7 Total VCAS $32,651.5 $326.5CRCD Bristol Bay $1,963.4 $19.6 Chukchi Campus $1,176.5 $11.8 Interior-Aleutians Campus $2,759.9 $27.6 Kuskokwim $3,927.6 $39.3 Northwest $2,118.9 $21.2 Rural College $9,524.1 $95.2 Tanana Valley $11,017.5 $110.2 Total CRCD $32,487.8 $324.9VCUA Student Rec Center $647.9 $6.5 Athletics and Recreation $6,034.4 $60.3
Development Office $547.7 $5.5
KUAC $907.9 $9.1
UAF Alumni Association $202.5 $2.0
University Marketing $1,783.8 $17.8
University Relations $408.5 $4.1
VC Advancement&Community Engagement $704.3 $7.0 Total VCUA $11,237.0 $112.4VCR Arctic Region Supercomputing Center $2,263.4 $22.6 Geophysical Institute $9,709.0 $97.1 Institute of Arctic Biology $6,373.9 $63.7 Intl Arctic Research Center $3,784.2 $37.8 Vice Chancellor for Research $7,154.5 $71.5 Total VCR $29,285.1 $292.9VCSES Admissions $2,063.2 $20.6 Enrollment Mgmt Administration $145.2 $1.5 Financial Aid $750.2 $7.5 Freshman & Transfer Services $239.8 $2.4 Registrar $1,289.5 $12.9 Residence Life Programs $1,397.0 $14.0 Student Affairs $3,146.2 $31.5 Wood Center Programs $865.3 $8.7 Total VCSES $9,896.3 $99.0
Grand Total $209,638.0 $2,096.4
UAF Spring 2010 Management Report 14
Vaca
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Fact
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7.0%
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.92%
UAF Spring 2010 Management Report 15
Estimated Soft Closure Savings
Employee CategoryTotal FY09
Exp (103010) Staff Benefits TotalClosure Savings
Executive $5,271,147.9 $1,718,394.2 $6,989,542.1 $78,829.4APT $16,116,728.6 $7,848,846.8 $23,965,575.5 $270,288.4Classified $18,108,744.3 $11,372,291.4 $29,481,035.7 $332,492.9APT Temp $119,166.4 $9,414.1 $128,580.6 $1,450.2Classified Temp $1,444,825.3 $114,141.2 $1,558,966.5 $17,582.3Classified Temp Extended $34,107.8 $14,120.6 $48,228.5 $543.9Total Salary and Benefits $41,094,720.4 $21,077,208.4 $62,171,928.8 $701,187.2
Estimated Utility Savings $7,500.0
Total Closure Savings $568,449.7
Benefit RatesExecutive 32.6%APT 48.7%Classified 62.8%APT Temp 7.9%Classified Temp 7.9%Classified Temp Extended 41.4%
Participation Factor 80.0%Total Work Days in Year 266Total Days in Closure 3Percent of Days in Closure 1.13%Utility Savings Per Day $2,500.0
UAF Spring 2010 Management Report 16
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$14.
6$1
4.3
$17.
2$2
4.1
$17.
0$0
.0$4
4.5
$434
.0($
1,05
5.5)
$0.0
$0.0
($19
.6)
($8.
7)($
12.5
)($
99.3
)($
9.7)
$0.0
$0.0
($1,
205.
3)$3
,017
.7$1
,225
.3$5
93.2
$32.
2$1
6.8
$57.
8($
4.4)
$40.
4$2
91.5
$355
.3$5
,625
.7
($1,
318.
3)($
141.
7)($
9.8)
($52
.4)
($41
.0)
($29
.1)
($16
4.6)
($40
.5)
($28
.9)
($17
3.9)
($2,
000.
2)
$417
.8$0
.0$0
.0$0
.4$0
.3$4
.9$1
1.9
$5.4
$68.
3$9
1.0
$600
.0$3
00.0
$300
.0$0
.0$0
.0$0
.0$0
.0$0
.0$0
.0$0
.0$0
.0$6
00.0
$390
.4$7
8.7
$16.
1$5
.1$3
.7$6
.8$1
1.9
$6.6
$18.
4$2
3.3
$560
.9$5
12.4
$103
.3$2
1.1
$6.7
$4.8
$8.9
$15.
6$8
.6$2
4.1
$30.
5$7
36.2
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$1,0
55.5
$0.0
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$19.
6$8
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2.5
$99.
3$9
.7$0
.0$0
.0$1
,205
.3
$2,6
76.2
$482
.0$3
7.2
$31.
9$1
7.5
$33.
0$1
38.8
$30.
3$1
10.9
$144
.8$3
,702
.5
$1,7
71.5
Viro
logy
M&
R (f
unde
d on
e tim
e) C
ES
(Fun
ded
one
time)
CE
S/A
CE
P/E
ngin
eerin
g O
utre
ach
(fund
ed)
AC
EP
(fun
ded
one
time)
Hea
lth P
rogr
ams
(fund
ed)
Tota
l Bas
e O
blig
atio
ns
Viro
logy
M&
R (f
unde
d on
tim
e)
FY
10 C
ompe
nsat
ion
Incr
ease
(les
s ex
ecut
ive
sala
ry re
duct
ion)
Bal
ance
Rev
enue
Adj
ustm
ents
FY
10 T
uitio
n R
even
ue -
Cha
nge
in R
ate
(+5%
)
M&
R (f
unde
d)
CE
S/A
CE
P/E
ngin
eerin
g O
utre
ach
Tota
l Pot
entia
l Sol
utio
ns
CE
S (f
unde
d on
e tim
e)
AC
EP
(fun
ded
one
time)
Hea
lth P
rogr
ams
(fund
ed)
M&
R (f
unde
d)
SW
Cha
rge-
Bac
ks
Sta
ff B
enef
it R
eser
ve
Tota
l Rev
enue
Adj
ustm
ents
Inc
reas
ed IC
R ($
3.2M
Add
ition
al R
estri
cted
Act
ivity
)
FY
09 E
nrol
lmen
t Inc
reas
e an
d/or
Enr
ollm
ent P
atte
rn S
hift
Sta
ff 4.
5% G
rid A
djus
tmen
t (60
%)
AC
CFT
and
Uni
ted
Aca
dem
ics
Mar
ket A
djus
tmen
t (60
% F
1) A
djun
ct F
acul
ty C
ompe
nsat
ion
(AA
UP
- FT
) A
HE
TCE
Com
pens
atio
n (L
6070
- C
R,C
T) (6
0% F
1)
Bas
e A
djus
tmen
ts
New
Bas
e B
udge
t Obl
igat
ions
(Req
uire
d):
AC
CFT
and
Uni
ted
Aca
dem
ics
Com
pens
atio
n (U
AFT
/UN
AC
- A
9/F9
) (60
% F
1)
Tota
l New
Bas
e B
udge
t Obl
igat
ions
(Req
uire
d)
Oth
er B
ase
Adj
ustm
ents
:
Tota
l Oth
er B
ase
Adj
ustm
ents
FY
09 M
arke
t Adj
ustm
ent (
A9
and
F9 M
arke
t plu
s E
xecu
tive
Rai
se)
FY
10 M
AU
PB
B P
ool P
ull B
ack
(1%
of G
F) F
Y10
MA
U P
BB
Poo
l rea
lloca
tion
1% U
nres
tric
ted
Pullb
ack
Pote
ntia
l Sol
utio
ns
Util
ity E
xpos
ure
(Ass
umes
$2.
687
Trig
ger F
undi
ng)
Fue
l Sup
plem
enta
l
Sof
t Hol
iday
Clo
sure
(3 d
ays)
Tw
o W
eek
Forc
ed V
acan
cy U
tility
Sav
ings
(2%
ene
rgy
cons
erva
tion
effo
rt)
Enr
ollm
ent I
ncre
ase
(2%
)
3/23
/201
0D
RA
FTU
AF
Bib
le 0
8_07
_09.
xlsx
UAF Spring 2010 Management Report 17
ATTACHMENT C
UAF Spring 2010 Management Report 18
UA
F D
ebt P
aym
ents
FY
09 to
FY
19(A
ll am
ount
s in
thou
sand
s)
Cat
egor
y / D
escr
iptio
nD
ebt
Am
ount
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
Cur
rent
Deb
tSE
RIES H - CCD Project Diesel E
ngine Generator
848
$
647
$
-$
-$
-$
-$
-$
-$
-$
-$
-$
SERIES J - Refinance A & B (S
RC)
516
432
-
-
-
-
-
-
-
-
-
SERIES K - WRRB, R
efinance C & I
1,040
1,044
1,042
1,042
1,041
656
653
654
654
657
655
SERIES L - W
RRB, A
thletics, CRA, Electric Line
565
538
540
542
538
534
406
405
404
403
671
SERIES M - Hutchison Upgrade, IAB (R
eallocated)
63
63
63
63
63
63
63
63
63
63
323
SERIES N - Intertie, Chiller, BiRD, Patty Ice, Aurora, Elvey
1,615
1,618
1,613
1,617
1,609
1,614
1,613
1,722
1,671
1,668
1,341
SERIES O - Lena Point, M
useum, A
rctic Health, V
irology
951
949
947
935
942
948
948
952
945
951
278
SERIES P - R
efinancing Series H
& J
-
117
1,248
1,242
1,251
1,249
1,248
1,246
1,244
1,245
779
S
ub-T
otal
: Deb
t Ser
vice
on
Cur
rent
Deb
t Iss
ues
5,59
8$
5,40
8$
5,45
3$
5,44
1$
5,44
4$
5,06
4$
4,
931
$
5,
042
$
4,
982
$
4,98
8$
4,
046
$
Percent of U
nrestricted Revenue
2.2%
2.1%
2.0%
1.9%
1.8%
1.6%
1.5%
1.4%
1.4%
1.3%
1.0%
Proj
ects
with
Ant
icip
ated
Deb
t Fun
ding
(1) (2)
Life Science Classroom
and Lab Facility (P
roject Cost $108.6M
)20,625
$ -
$
-$
-$
815
$
1,630
$
1,630
$
1,630
$
1,630
$
1,630
$
1,630
$
1,630
$
Energy Technology Facility 1A
(Site W
ork and Test M
odules) (3)
3,000
$
-
-
106
150
-
-
-
-
-
-
-
Energy Technology Facility 1B
(Project Cost $29.6M)
14,300
$ -
-
-
-
572
1,144
1,144
1,144
1,144
1,144
1,144
S
ub-T
otal
: Deb
t Ser
vice
on
Ant
icip
ated
Deb
t Iss
ues
-$
-$
106
$
965
$
2,20
2$
2,77
4$
2,
774
$
2,
774
$
2,
774
$
2,77
4$
2,
774
$
Percent of U
nrestricted Revenue
0.0%
0.0%
0.0%
0.3%
0.7%
0.9%
0.8%
0.8%
0.8%
0.7%
0.7%
Deb
t Ser
vice
on
Cur
rent
and
Ant
icip
ated
Deb
t Iss
ues
T
otal
: Deb
t Ser
vice
on
All
Deb
t Iss
ues
5,59
8$
5,40
8$
5,55
9$
6,40
6$
7,64
6$
7,83
8$
7,
705
$
7,
816
$
7,
756
$
7,76
2$
6,
820
$
Percent of U
nrestricted Revenue
2.2%
2.1%
2.0%
2.2%
2.5%
2.5%
2.3%
2.2%
2.1%
2.0%
1.7%
Tot
al U
nres
tric
ted
Rev
enue
(F
orec
ast)
248,
861
$ 26
1,30
4$
274,
370
$ 28
8,08
8$
30
2,49
3$
317,
617
$
333,
498
$
350,
173
$ 36
7,68
2$
38
6,06
6$
405,
369
$ In
tern
al D
ebt A
rran
gem
ents
U
A M
useum Settlement
2,650
$
265
$
265
$
265
$
265
$
265
$
265
$
265
$
265
$
265
$
265
$
-$
B
ookstore/Tech Center D
eficit Repayment
2,165
$
-
365
450
450
450
450
-
-
-
-
-
Life Sciences P
lanning (Pay-off w/ L
ife Sciences D
ebt Issue) (4)
1,000
$
-
-
-
-
-
-
-
-
-
-
-
Signers' H
all O
ne-Stop Renovation
700
$
-
200
200
200
100
-
-
-
-
-
-
D
igital T
V Equipment
400
$
-
100
100
100
100
-
-
-
-
-
-
S
ub-T
otal
: Int
erna
l Deb
t Arr
ange
men
ts265
$
930
$
1,015
$
1,015
$
915
$
715
$
265
$
265
$
265
$
265
$
-$
Percent of U
nrestricted Revenue
0.1%
0.4%
0.4%
0.4%
0.3%
0.2%
0.1%
0.1%
0.1%
0.1%
0.0%
Add
ition
al It
ems U
nder
Con
side
ratio
n C
ommunity Cam
pus A
cquisition
400
$
-$
-$
50$
50$
50$
50$
50$
50$
50$
50$
-$
Note 1: BiRD and Virology build-out projects h
ave been removed from
this schedule until new hires associated with a Life Sciences facility would make these advanced laboratory sp
aces a higher priority.
Note 2: Utilities projects, including Critical Electrical Distribution, Pow
er Plant Revitalization, W
est R
idge Energy Conservation, and M
ain Waste Line Repairs have been removed from
this schedule in
anticipation of State R&R funding. Should such funding fail to materialize in timely fashion, debt financing is a fallback proposal.
Note 3: ETF
debt associated with Phase 1A paid off w
ith bond proceeds in ETF
Phase 1B; otherwise scheduled at $280K
annually beginning in FY12.
Note 4: W
orking capital loans on Life Sciences w
ould be paid off with bond issue. In the event that L
ife Sciences d
oes n
ot move forward in a timely manner, paym
ents would be made beginning in FY11
scheduled at $400K
, $150K
, $150, $150K
, and $150K
through FY
15.
Additional Notes:
Assum
es 5% annualized growth in unrestricted revenues
Assum
es debt service at $80,000 per $1,000,000 project costs
FY10 SMR - DEB
T 032310[1]
UAF Spring 2010 Management Report 19
ATTACHMENT D
UAF Spring 2010 Management Report 20
Att
achm
ent
D
UAF Spring 2010 Management Report 21
ATTACHMENT E
UAF Spring 2010 Management Report 22
3/23/2010
1
FY10 Budget Status
1
FY09 Budget
$8.5M Non‐General Funds Required to Maintain Existing Programs!(Only $1.6M Additional NGF Earned in FY09)
Compensation Increase$4.6M General Fund$3 7M Non‐General Fund
Maintenance & Repair$506K General Fund$670K Non‐General Fund$3.7M Non General Fund $670K Non General Fund
Other Fixed Costs$1.0M General Fund$4.1M Non‐General Fund
Programs$2.6M General Fund$2.8M Non‐General Fund
2
FY10 Budget
$8.2M Non‐General Funds Required to Maintain Existing Programs!($7.4M projected additional in FY10)
Compensation Increase$4.2M General Fund$3 3M Non‐General Fund
Maintenance & Repair$434K General Fund$657K Non‐General Fund$3.3M Non General Fund $657K Non General Fund
Other Fixed Costs$150K General Fund$4.2M Non‐General Fund
Programs$1.1M General Fund$2.7M Non‐General Fund
3
UAF Spring 2010 Management Report 23
3/23/2010
2
Reasonable Carry Forward
• Based upon Carry Forward Guidelines:
– Minimum of 1% or $3,574,249
– Maximum of 2% to 4% or $10,296,954
• Projected Carry Forward Based Upon YTD Revenue and Expense Activity
– Between $5M and $9M
4
F1 Carry Forward Projectionsas of November 2009
UnitProjected Carry
Forward
Chancellor $17,539
VC For Rural, Community & Native Education $326,571
Provost $758,500
5
$ ,
Vice Chancellor for Students $83,792
VC Advancement & Community Engagement <$460,130>
Vice Chancellor for Administrative Services $155,764
Central Obligations (Scholarships, debt service, utilities etc.) <$1,577,045>
Vice Chancellor for Research $1,639,551
Total $944,542
Suspend Maximum Carry Forward Guideline
• For FY10 there will be no sweep of carry forward in excess of levels specified in the guidelines
• The accuracy guideline will remain in effect
6
UAF Spring 2010 Management Report 24
3/23/2010
3
Institutional Needs
• Institutional Shortfall ‐ $2.6M– Un‐Budgeted Scholarships– Critical Needs
• Fuel – Non General Fund Portion• Departmental Needs
– International Programs– Development OfficeDevelopment Office– Arctic Policy– School of Management
• Infrastructure– One Stop– Initial Capital Project Development
• Structural Deficit Funding– KUAC– Bookstore/Tech Center– Athletics– OIT
7
Lay of the Land
How We Evolved Financially From yFY05 to FY09
8
FY09 Unrestricted Expenditures by NCHEMS
FY09 Actual ‐ % of Total – FY05‐FY09 Direction of ChangeAcademic Support ‐ $21.2M/5.2% ‐ ↑
Debt Service ‐ 3.7M/.9% ‐ ↗
Institutional Support ‐ $34.9M/8.6% ‐ ↑
Instruction ‐ $69.5M/17.2% ‐ ↗
I ll i A hl i $5 3M/1 3% ↑
Research
AcademicSupport
InstitutionalS t
9
Intercollegiate Athletics ‐ $5.3M/1.3% ‐ ↑
Library Services ‐ $8.6M/2.1% ‐ →
Physical Plant ‐ 51.4M/12.7% ‐ ↗
Public Service ‐ $9.3M/2.3% ‐ ↑
Research ‐ $43.4M/10.7% ‐ ↗
Scholarships ‐ $3.0M/.7% ‐ →
Student Services ‐ $13.1M/3.2% ‐ →
Support
PhysicalPlant
Instruction
UAF Spring 2010 Management Report 25
3/23/2010
4
Relative SizeFY09 General Fund and Non‐General Fund Revenue
General Non‐General Percent
Unit Fund Fund Total Of Total
Chancellor $4,688.1 $587.3 $5,275.4 1.5%
Provost $61,574.7 $61,635.3 $123,210.0 34.0%
CRCD $19,849.9 $23,604.0 $43,453.9 12.0%
VCR $13,063.7 $71,734.7 $84,798.4 23.4%
VCACE $7,231.1 $5,945.3 $13,176.4 3.6%
VCSES $7,435.4 $21,200.2 $28,635.6 7.9%
VCAS Operating $9,760.7 $10,416.3 $20,177.0 7.0%
Physical Plant & Utilities $21,961.2 $9,577.4 $31,538.6 4.4%
VCAS Institutional $4,160.5 $7,837.5 $11,998.0 3.3%
Total $149,725.3 $212,538.0 $362,263.3 100.0%
10
General Fund Over Time
$40,000.0
$50,000.0
$60,000.0
$70,000.0
FY05
$0.0
$10,000.0
$20,000.0
$30,000.0FY06
FY07
FY08
FY09
11
Annual Growth Rate in General Fund Revenue
FY05 – FY09 Annualized
8.00%
10.00%
12.00%
14.00%
16.00%
‐4.00%
‐2.00%
0.00%
2.00%
4.00%
6.00%
12
UAF Spring 2010 Management Report 26
3/23/2010
5
Annual Growth Rate in Non‐General Fund Revenue
FY05 – FY09 Annualized
15.00%
20.00%
25.00%
30.00%
‐5.00%
0.00%
5.00%
10.00%
13
Where Are We Going
FY11 and Beyond
14
Assumptions
• Annual 3% Salary Increase
• Annual 15% Benefit Increase
• Annual 5% Tuition Rate Increase / 7% in FY12
• Change in Enrollment – Unit Specific
• Indirect Cost Recovery – Unit Specific
15
UAF Spring 2010 Management Report 27
3/23/2010
6
Meeting Priorities While Costs Continue To Increase
• Salaries• Staff Benefits (Health Care)• Utilities/Fuel• SW Assessments
– Network– Data Tapes
Skillsoft– Skillsoft– Roxen
• Board of Regents Maintenance and Repair Requirement• Risk Management• Debt Service (Life Sciences, Energy)• Custodial Services Contract• Scholarships• Other Inflationary Items• Structural Deficits
16
Main Revenue Drivers
• Enrollment
• Tuition Rates
• Restricted Activity and Corresponding ICR
• General Fund
• Fund Raising
• Auxiliaries
• Bake Sales
17
Potential Increased Revenue
• Tuition Rate Increase Only – $1.6M• ICR on Sponsored Activity
– 1% – $280K– 5% – $1.4M
E ll t I ( t FY11 T iti R t )• Enrollment Increase (at FY11 Tuition Rates)– 1% ‐ $330K– 5% ‐ $1.6M
• Federal Revenue– 1% ‐ $880K– 5% ‐ $4.5M
18
UAF Spring 2010 Management Report 28
3/23/2010
7
FY11FY11
19
FY11 BudgetGovernor’s Proposal
$8M Non‐General Fund Required to Maintain Existing Programs!
Compensation Increase$3,674 General Fund$3,550 Non‐General Fund
Maintenance & Repair$795 General Fund$790 Non‐General Fund
Other Fixed Costs$1,282 General Fund$ 3,655 Non‐General Fund
Programs$950 General Fund$2,668 Non‐General Fund
20
FY12FY12
21
UAF Spring 2010 Management Report 29
3/23/2010
8
How Do We Meet The Challenge?
22
Unrestricted Revenue GapBased Upon FY05 to FY09 Annualized Data
$320,000.0
$340,000.0
$360,000.0
$3.5M Gap
$8.3M Gap
$13.8M Gap
23
$220,000.0
$240,000.0
$260,000.0
$280,000.0
$300,000.0
FY09 FY10 FY11 FY12 FY13
Projected Expense
Projected Unrestricted Revenue
Annualized Expense Increasing at 8.42%Annualized Revenue Increasing at 6.86%
$4.2MSurplus
Breakeven
How Are We Going To Address Priorities
• Raise Revenue
• Reduce Cost
• Reallocate
• Transform• Transform
• Stop Doing
• Incentives to Encourage What Practices/Behaviors
• Key Strategic Investments
24
UAF Spring 2010 Management Report 30