ALASKA’S FIRST UNIVERSITY AMERICA’S ARCTIC RESEARCH UNIVERSITY

University of Alaska FairbanksExecutive Leadership Workshop

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

Agenda

I FY10 Status - Projected Results Projected Carryforward

II FY11 Conditions and Distributions The Issues How do we Address Them?

III FY12 budget and 3 - 5 year planning horizon

Operating Budget Priorities

IV Summary

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I – FY10 Status – Projected Results

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FY10 Budget$8.2M Non-General Funds Required to Maintain Existing

Programs! ($7.4M projected additional in FY10)

ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

Compensation Increase$4.2M General Fund$3.3M Non-General Fund

Maintenance & Repair$434K 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

Carryforward Analysis

Unrestricted (F1) carryforward projected at $6.5M or 2.8%

Estimate $5M to $7M at end of FY10

Initial contingency reserve low but a pullback replenished

Higher than anticipated tuition and ICR revenue partly offset fixed costs increases

Grants and Contracts accounts receivable reduced

Units with deficits at end of FY10 will submit a remedial plan

ALASKA’S FIRST UNIVERSITY AMERICA’S ARCTIC UNIVERSITY

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

II - FY11 Conditions and Distributions

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Overall UAF status going into FY11 GF salary and benefit funding distributions Planning assumptions 3% SW Pool Central needs Structuring of required redistributions – PBB and

other

Initial Budget IssuesHow do we Solve them?

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FY 11 Budget$10.8M Non-General Funds Required to Maintain Existing Programs!

ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

Compensation Increase$3.91M General Fund (net of system level reduction)$3.68M Non-General Fund BOR Request ($4.7M GF, $3.8M NGF)

Maintenance & Repair$795K General Fund$790K Non-General Fund

BOR Request ($795K GF, $790K NGF)

Other Fixed Costs$1.58M General Fund$3.66M Non-General Fund

BOR Request ($1.8M GF, $3.8M NGF)

Programs$1.5M General Fund*$2.67M Non-General Fund

BOR Request ($4.9M GF, $7.2M NGF)

As passed by the Legislature

*Includes CES, ACEP, MAP and 150K of one-time STEM funding.

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

Handouts:1. FY11 Conference Committee Action2. FY11 Fiscal Status - Delta Document3. FY11 Reference Document

Discussion

Fiscal Impact Planning Assumptions

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

Legislature’s 3% redistribution pool is substantially returned to UAF

2% enrollment growth Anticipate utility trigger mechanism Flat research revenue

3% SW Pool

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

$11.6M total for all of UAF $4.6M GF $7.0M NGF

Anticipate 95% will be returned

FY11 Central Obligations

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

Must cover ongoing cost increases Fuel Tuition rate increases (institutional scholarships) SW chargebacks

Must cover existing structural deficits Bookstore/Tech Center Institutional scholarship budget shortfall

Must cover strategic facility upgrades One-stop shop Life Sciences planning advance

Must build adequate emergency reserve $2.6M required to meet

FY11 Campus-wide Unfunded Obligations

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

KUAC Athletic Travel Upark Department Moves Wells Fargo Lease/Moves Sustainability (SIREN) Fee Match SOM/Northern Leadership OIT HR Office Grant Technician

$2.0M required to meet

Required Adjustments

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

$2.6M required for central needs $2.0M in unfunded obligations campus-wide $1.3M PBB

$5.9M in required FY11 redistributions

Redistribution Options

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

• Across the board• School/college/Unit level• VC/Provost/Chancellor level

• Amount allocated• By financial driver

• % GF, % NGF

• Administrative vs. Academic vs. Research• By Space• Vacancies centrally held• Other

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Discussion

III - FY12 Budget and 3–5 Year Planning Horizon

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FY 12 Operating Budget Priorities

Address fixed costs increases – 5% to 7% per year

Meet obligations to established programs: Biomedical, Climate, WFD including teacher preparation, others

Maintain momentum: Engineering, Energy

Increase graduation rates (including State financial aid)

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

Operating Budget 3 to 5 Year Conditions

Annual 3% salary increase Annual 15% benefit increase Annual 10% tuition increase Enrollment increase 10% if significant

State financial aid package ICR rate increase but Research flat overall

if no significant facilities investment 2% to 3% total increase in GF per year Debt Obligations

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Unrestricted Revenue GapBased Upon FY05 to FY09 Annualized Data

ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

FY09 FY10 FY11 FY12 FY13$220,000.0

$240,000.0

$260,000.0

$280,000.0

$300,000.0

$320,000.0

$340,000.0

$360,000.0

Projected ExpenseProjected Unrestricted Revenue

Annualized Expense Increasing at 8.42%Annualized Revenue Increasing at 6.86%

$8.3M Gap

$13.8M Gap

$4.2MSurplus

Breakeven

$3.5M Gap

Does not include financial aid-dependent enrollment increase

Closing the Funding Gap

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

Across the Board reductions will not be adequate for 3-year budget horizon

Vertical reductions will require elimination and/or restructuring of some programs / functions

Reallocation of savings from vertical reductions will meet “gap” in funding experienced by other units

Closing the Funding Gap

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

Program review will need to occur in administrative, support, academic, and research operations

Criteria needed for each functional area

Priorities necessary within and across functional areas

Closing the Funding Gap

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY

Benchmarking to peers

Performance metrics

Areas of distinction or focus

Accreditation and mission alignment

?

Next Step

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Summer 2010 – begin Administrative review

Fall / Winter 2010 – begin Academic, Research, Student Support review

Implementation in FY12 based on reviews

VI - Summary

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ALASKA’ S FIRST UNIVERSITY AMERICA’ S ARCTIC RESEARCH UNIVERSITY