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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
4th Week Winter Enrollment
BudgetUpdates
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
FY15 Actual FY16 BudgetFY16 Q2 Forecast
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
FY15 Actual FY16 BudgetFY16 Q2 Forecast
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
FY15 Actual FY16 BudgetFY16 Q2 Forecast
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
Service & Supplies (net of transfers) 69,435 72,692 63,750 ‐8,942 ‐14.00% 35,454 35,752
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
Service & Supplies (net of transfers) 88,085 99,724 88,333 ‐11,391 ‐12.90% 49,603 51,899
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)
2017CapitalProjectRequest
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)
2017CapitalProjectRequest
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
2017CapitalProjectRequest
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.
2017CapitalProjectRequest
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
2017CapitalProjectRequest
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
2017‐19BiennialRequest
Funding Scenarios
2017‐19BiennialRequest
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
TuitionRecommendation
Multi-year E&G Budget Forecast Scenario 1
TuitionRecommendation
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
TuitionRecommendation
Peer Tuition ComparisonResident Graduate Peer Tuition Comparison
TuitionRecommendation
Peer Tuition ComparisonNon-Resident Undergraduate Peer Tuition Comparison
TuitionRecommendation
Peer Tuition ComparisonNon-Resident Graduate Peer Tuition Comparison
TuitionRecommendation
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%
TuitionRecommendation
Proposed Tuition RatesProposed Base Tuition Rates
TuitionRecommendation
Proposed Tuition & Mandatory Fees
TuitionRecommendation
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