Fiscal 2015 Education Operating Budget

Presentation to the Saint Louis University

Faculty Senate

February 25, 2014

The External Environment

• National focus on college affordability, access, and accountability for higher education and health care

• Decline in federal funds for research

• Philanthropic giving has not returned to pre-recession levels

• Increasing governmental regulations and compliance costs

• Less tuition price elasticity and growing financial aid needs

• Decreasing numbers of traditional undergraduate students

• Stagnant domestic graduate student enrollments

• National decline in Law School enrollments

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FY14 Forecast University Operations

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FY14 Forecast VS. FY13

(in thousands)

FY14

Forecast

FY13

FY14 Vs. FY13

Fav/(Unfav)

Tuition and Fees (net) $260,169 $262,935 $(2,766)

Government Grants & Contracts 9,200 8,928 272

Contributions & Private Grants 6,300 5,463 837

Endowment & Other Inv Income 30,363 27,801 2,562

Auxiliary Enterprises 44,101 45,048 (947)

Other 6,577 6,034 543

Total Revenue 356,710 356,209 501

Personnel 1/ 248,022 230,834 (17,188)

General Expense 1/ 70,396 64,912 (5,484)

Depreciation 16,000 16,127 127

Interest Expense 9,353 9,656 303

Total Expense 343,771 321,529 (22,242)

Operating revenue over expenses $12,939 $34,680 $(21,741)

1/ Includes $15.7M and $3.2M of estimated savings, for Personnel and General Expense, respectively.

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Net Tuition and Total Compensation

$240,361

$251,815$261,466 $262,935 $260,511 $261,427

$201,293

$213,699

$227,099$230,834

$248,022

$257,266

$180,000

$200,000

$220,000

$240,000

$260,000

$280,000FY10 FY11 FY12 FY13 FY14 FY15

Net Tuition Revenue Total Compensation

5 YR CompoundGrowth Rate FY10 FY11 FY12 FY13 FY14E FY15B

Net Tuition Revenue 1.69 $240,361 $251,815 $261,466 $262,935 $260,511 $261,427Total Compensation 5.03 $201,293 $213,699 $227,099 $230,834 $248,022 $257,266Faculty 5.97 $103,775 $112,235 $119,530 $123,715 $133,158 $138,656Staff 3.95 $94,294 $98,015 $103,879 $103,196 $110,784 $114,448

FY15 Budget University Operations

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Key Components of the Budget • Net Tuition Revenue

Tuition Rates

Enrollment

Financial Aid

• Endowment Spending

• Compensation

• Savings Assumptions

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Focus on Net Tuition Revenue

• Actual enrollment and discount rate may vary as long as the

University net tuition revenue target is achieved.

Freshmen Total

Enrollment 1,600 11,832

Discount Rate 47.6% 34.5%

Discount Amount $28.8M $137.7M

Net Tuition Revenue $31.7M $261.4M

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Undergraduate Tuition Rates

Budget

FY15

FY14

FY13

FY12

FY11

% Increase

Annual Rates

3.5%

$37,350

3.9%

$36,090

3.8%

$34,740

4.0%

$33,470

4.0%

$32,180

A 1% increase in undergraduate tuition rates increases revenue by $2.6 million.

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Fall Enrollment FTEs Budget FY15

FY14

FY13

FY12

Arts & Sciences 3,100 3,206 3,390 3,471

Cook School of Business 1,612 1,622 1,643 1,616

College of Ed & Public Service 410 401 464 473

Doisy 1,637 1,559 1,542 1,435

School of Law 458 601 773 858

School of Medicine 958 958 981 977

School of Nursing 839 809 835 931

Parks College 749 742 719 680

School for Professional Studies 510 491 472 455

College for Public Health & Social Justice 939 910 801 745

Spain 620 620 602 584

Total 11,832 11,919 12,222 12,225

% increase/(decrease) (.7) (2.5) - 2.1

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Compensation

• Compensation and benefits account for approximately 72% of total expenses

• Increased compensation funding of 2% is recommended in FY15

• SLU merit increases have averaged 2% over the last five years

• Point of reference - a 1% compensation increase represents $2.6 million = to a 1% increase in Net Tuition Revenue

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FY15 New Spending

• Operating expense increases versus the FY14 forecast are partially due to $2.0.M in new spending. Key components:

$.9M Related to previously approved programs in the School for Professional Studies, School of Nursing, Arts & Sciences, and SLUCOR.

$.5M Related to ITS FISMA compliance

$.4M For contractual increases and a placeholder for unknown increases

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FY14 and FY15 Savings Assumed

(in thousands)

FY15

Budget

FY 14

Forecast Vacancy/Lag in filling positions 1/ $13,225 $15,681 General Expense 1/ 1,000 3,160 Savings goal 8,000 -

Total $22,225 $18,841

1/ Based on historical spend patterns.

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FY15 Budget Vs. FY14 Forecast

(in $000’s)

FY15

Budget

FY 14

Forecast

FY14

Budget

FY15 Vs. FY14

Forecast Fav/(Unfav)

Tuition and Fees (net) $261,427 $260,169 $273,548 $1,258

Government Grants & Contracts 9,200 9,200 9,030 -

Contributions & Private Grants 6,300 6,300 6,300 -

Endowment & Other Inv Income 33,445 30,363 26,764 3,082

Auxiliary Enterprises 44,361 44,101 45,467 260

Other 6,394 6,577 6,994 (183)

Total Revenue 361,127 356,710 368,103 4,417

Personnel 270,491 263,703 263,225 (6,788)

General Expense 74,937 73,556 73,256 (1,381)

Savings Assumed (22,225) (18,841) (6,652) 3,384

Depreciation 16,112 16,000 16,338 (112)

Interest Expense 9,038 9,353 9,193 315

Total Expense 348,353 343,771 355,360 (4,582)

Operating Revenue Over Expenses $12,774 $12,939 $12,743 $(165)

FY15 Projection Consolidated Operations

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Consolidated Projection Vs. FY15 Operating Budget

The University’s Consolidated projection includes the following items that are not included in the Operating Budget:

• UMG Physicians’ practice

• Sponsored Programs and Grants

• Depreciation expense related to designated capital spending

The result = a decrease of $(10)M versus the University Operating Budget, driven by depreciation

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FY15 Vs. FY14 Consolidated Forecast

(in $000’s)

FY15

Forecast

FY 14

Forecast

FY15 Vs. FY14 Forecast

Fav/(Unfav)

Tuition and Fees (net) $268,794 $267,618 $1,176

Government Grants & Contracts 38,552 38,552 -

Contributions & Private Grants 44,443 44,443 -

Endowment & Other Inv Income 49,194 44,102 5,092

Auxiliary Enterprises 48,861 50,511 (1,650)

Other 16,195 16,377 (182)

Patient Care 273,866 265,687 8,179

Total Revenue 739,905 727,290 12,615

Personnel 546,110 534,037 (12,073)

General Expense (excluding contingency) 169,718 164,481 (5,237)

Savings Assumed (22,225) (18,841) 3,384

Depreciation 34,307 34,195 (112)

Interest Expense 9,598 9,924 326

Total Expense 737,508 723,796 (13,712)

Operating Revenue Over Expenses $2,397 $3,494 $(1,097)

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