General Fund Budget Fiscal Year 2005

May 5, 2004

Attachment C

General Fund Budget Development

• FY 2004 was a challenging year

• Focus on maintaining quality in our core academic mission

• Concern about maintaining quality and reputation amid continuing budget reductions

• We are working together as a campus to meet the challenges

Quality Indicators

• The Princeton Review – Named Oakland as one of “The Best Midwestern Colleges, 150 Great Schools to Consider.”

• The Carnegie Foundation – Categorizes Oakland as a “Doctoral/Research University-Intensive.”

• The Unofficial, Unbiased Guide to the 328 Most Interesting Colleges – Ranks Oakland as one of the nation’s most underrated schools

• U.S. News and World Report – Consistently recognizes Oakland in its annual report about “America’s Best Colleges.”

• U.S. News and World Report – Best Graduate Schools - Recognized Oakland’s Beaumont Graduate Program of Nurse Anesthesia as 6th in the United States

Oakland UniversityQuality Measures

• Oakland University students say they find their education academically challenging

– 87% of freshmen and 79% of seniors said OU emphasizes academics and studying

– OU students reported finding their exams challenging, did more revisions of papers and assignments, and more regularly came prepared for class

Highlights of 2003National Survey of Student Engagement

• OU seniors reported higher than average gains in

– General education

– Writing and speaking clearly and effectively

– Citizenship, and

– Understanding others of diverse racial and ethnic backgrounds

• 83% of seniors rated the OU experiences as excellent/good and 78% said that, if starting over, they would attend OU again. Both percentages exceed the norm for Doctoral Intensive institutions.

Highlights of 2003National Survey of Student Engagement

Continued

FY 2003 Unrestricted Education and General Expenditures

(Instruction %)

Compared to other Michigan institutions, Oakland University spends more of its Education and General Funds on Instruction. Michigan data does not include three major research universities (MSU, UM & WSU).

Source: Financial Statements OU and Michigan Institutions

0%

10%

20%

30%

40%

50%

OU GVSU CMU FSU LSSU WMU MTU SVSU EMU NMU

Resource Constraint Challenges

Division One-Time Base Total

Academic Affairs $ 2,060,836 $ 3,824,923 $ 5,885,759

Finance and Administration 434,313 1,299,908 1,734,221

Student Affairs 126,575 394,826 521,401

University Relations 42,688 129,160 171,848

President 114,088 403,629 517,717

General 1,847,500 360,000 2,207,500

Revenue 1,000,000 1,000,000

Total $ 5,626,000 $ 6,412,446 $ 12,038,446

Oakland UniversityBudget Reductions by Division

FY 2003 through FY 2005

3,974

4,290

4,712

4,223

3,681

$3,000

$3,500

$4,000

$4,500

$5,000

Fiscal Year

Oakland University’s FY 2005 appropriation per FYES is projected to be $293 per FYES less than the 1995 level.

1995 1998 2001 2003 2005Projected

Oakland UniversityAppropriation per FYES

FY 1995 – FY 2005 Projected

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

WSU UMAA MTU MSU NMU FSU LSSU WMU UMF UMD EMU CMU SVSU OU GVSU

Source: FY 2003 - 2004 Higher Education Appropriations Report

Appropriation per FYES FY 2004 (Ranked)

Michigan Universities General Fund Expenditures Per FYES

FY 2003UMAA $28,794

MTU 18,140 Dollars

WSU 17,162 Median $11,143

MSU 15,977 Average 15 12,963

FSU 12,835 Average 11 10,398

UMD 11,799

NMU 11,242

UMF 11,143

WMU 10,366

LSSU 9,949

CMU 9,675

EMU 9,641

OU 9,538 (13th)

GVSU 9,436

SVSU 8,755Source: Heidi Data Base

If OU spent the average per FYES in FY 2003, excluding the major research universities and MTU, our expenditures would have been $11M higher.

Oakland UniversityExpenditures per FYES

FY 2000 through FY 2004

$7,700

$8,000

$8,300

$8,600

$8,900

$9,200

FY 2000 FY 2001 FY 2002 FY 2003 FY 2004

Actual CPI Adjusted

Adjusting for inflation, Oakland spends less per FYES now than it spent in FY 2000

Projected

Fiscal Year Equated Students (FYES)Per Full-Time Equivalent Faculty (FTEF)

FY 2003UNIVERSITY FYES/FTEFNMU 22.25GVSU 20.34SVSU 20.11OU 19.89EMU 19.69CMU 18.27UMD 16.95UMF 16.72LSSU 15.91FSU 15.05WMU 14.65MSU 12.76MTU 12.59UMAA 12.07

AVERAGE 11 17.50

OU’s student/faculty ratio decreased slightly from the previous year’s number of 19.99. This ratio represents the fine line between a quality indicator (a low ratio) and an efficiency indicator (a high ratio).

Source: Heidi Data Base

0

20

40

60

80

100

120

140

UMAA MTU UMF WSU MSU LSSU FSU UMD GVSU EMU OU CMU NMU SVSU WMU

Source: HEIDI Data Base, professional and service categories

Staff Per Each 1,000 FYES FY 2003 (Ranked)

Gross Sq Feet Per FYES in MichiganFY 2003

Univ. Ft2/Student

UMAA 341.4MTU 341.3MSU 326.2WSU 295.5LSSU 276.6UMF 275.2NMU 273.7WMU 196.4SVSU 182.2FSU 174.3UMD 152.3EMU 135.4CMU 129.0OU 117.6GVSU 110.1

• Classroom space, in modules was 1,515 in Fall 2003.

• Module utilization in Fall 2003 was 88% with prime day times (10:00 am – 2:00 pm) at 90%.

• Available class modules were primarily during the mid to late afternoon.

• Night class modules were close to 100% utilization.

Source: Heidi Data Base

OU would need to add 79 sq feet per FYES to be at the median square footage per FYES. This would mean adding over 1 million square feet to the campus.

Oakland UniversityHistory of Cost Containment Efforts

•Outsourcing/Partnerships $1,426,000

•Utilities 950,000

•Going Paperless 125,000

•Reorganization/Process Re-Engineering

390,350

•Health Benefits Changes 863,000

•Technology/Telecomm Savings 112,000

Estimated Savings/Benefits $3,866,350

FY 2005Budget Overview

Fiscal Year 2005Budget Reductions

•Academic Affairs

•Finance and Administration

•Student Affairs

•University Relations

•President

•General

•Contingency/Strategic Plan/Technology Funds

•Total Divisional Budget Reductions

($948,200)

(415,300)

(131,800)

(43,200)

(134,600)

(60,000)

(300,000)

($2,033,100)

Impact of FY 2005 Budget Reductions Academic Affairs

($948,200)• Reduction in the level of support available for research and

instruction including part-time faculty, replacement of equipment in laboratories, administrative support for academic processes, and supplemental support for faculty professional development

• Slow down or postponement in the implementation of the Distinctive Undergraduate Experience initiative and reduction in funds available to support assessment activities

• Increase in the overall risk to our network due to inadequate staffing in technology areas, including the academic units

• Elimination or reduction in funds to support new programs and initiatives, including expansion of research through matching funds

• Reduction in the hours of operation for key academic offices/units including the Library

Impact of FY 2005 Budget Reductions Finance and Administration

($415,300)

• Elimination of positions and reassignment of work to existing employees will result in fewer projects taken on, slower response times, and less attention to details

• Inability to respond to unforeseen needs in such areas as police services and facilities projects

• Reduced ability to maintain up-to-date skill levels for employees

Impact of FY 2005 Budget ReductionsStudent Affairs

($131,800)

• Reorganize and downsize the division, resulting in reduced services and programs

• Eliminate ability to upgrade 32 outdated/non-supported computers

• Reduction in student programs and student organization support reducing our ability to attract students who are looking for a robust undergraduate student life experience

• Reduction of financial support to club sports

• Oakland Center building hours reduced

• Reduced hours of operation in ID Card office

• Eliminate all student walk-in appointments in Career Services

• Elimination of health education/promotion position in Graham Health Center

Impact of FY 2005 Budget ReductionsStudent Affairs

Continued

Impact of FY 2005 Budget Reductions University Relations

($43,200)

• Increased philanthropic support is needed in order to expand programmatic offerings of the university and provide resources for students. Budget decreases have been taken from both the general fund and OUF budgets. Staff is drawn away from activities that directly result in revenue generation in order to address daily business operations and will result in lower campaign goals and expectations.

Impact of FY 2005 Budget ReductionsOffice of the President

($134,600)

• Challenge all staff members to produce and achieve goals with reduced resources

• Discontinue subscriptions and memberships that are beneficial to the role and function of the office of Government Relations

• Reductions in travel will result in decreased networking opportunities and access to elected and appointed officials

• Elimination of annual employee appreciation event

• Discontinue publication of Inside Oakland; Student Handbook; Info Guide and trim size and quantities of admissions publications

• Athletic team operations, compliance and academic support services, sports information, marketing and development will be negatively impacted

•Continuation of Hiring Freeze

•Employee Suggestion Program (Lean Principles)

•Program Review

•Energy Conservation Measures

•Health Benefits Council

Oakland UniversityInitiatives to Contain Costs

Non-Discretionary Cost Increases

•Compensation pool

•Charter schools

•Purchased utilities

•Bank card fees

•Academic affairs course fee allocation

•Debt service

•Contract faculty travel and research

$2,970,000

348,100

223,200

170,900

78,400

70,900

18,000

Academic Support Requiredfor Enrollment Growth

•Off-campus programs

•Spring/Summer course offerings/demand

•Macomb University Center program expansion

•Board approved new academic programs: Wellness, Health, Injury Prevention Financial Information Systems

•Economics faculty addition

$1,134,600

409,200

434,000

164,60013,500

87,500

Supporting and ServingStudents

• Student Financial Aid Increases

• Support Enrollment Management conversion to ADMIN 701 electronic web-based application processing/management system

• Office of New Student Programs funding to provide enhanced orientation services

$377,700

340,100

50,600

State Appropriation Reduction (2%)

Non-Discretionary Cost Increases

Budget Priorities

Total Shortfall

Less University Budget Reductions

Remaining Budget Shortfall

($982)

(3,880)

(2,941)

(7,803)

2,033

($5,770)

FY 2005 Budget Summary($ in thousands)

FY 2005Revenue Enhancements

• State Appropriation Decrease of 2.0% - $982,000

• Budgeted enrollment target increase of 3% to 13,709 FYES generating $2.5 million in tuition and fees

• Additional $2.1 million in tuition and fee revenue as a result of a 2.4% average undergraduate and 3.4% average graduate tuition and fee rate increase

• Increase general service fee by $2 and decrease recreation center fee by $2 to capture debt re-financing savings of Series 1995 bonds resulting in an additional $90,000 in revenue to the General Fund

Revenue Changes

• Course fee increase of $2 generating $78,000 in additional revenue

• Application fee increase of $5 for undergraduate and $20 for graduate generating $315,000 in revenue to cover ADMIN 701 system costs

• Orientation fee increase of $20 for FTIAC and $10 for transfer students resulting in $50,600 in revenue to cover New Student Program costs

• Indirect cost recovery revenue increase of $150,000 to reflect growth in external research funding

• Charter school revenue increase of $456,000 to reflect changes in the university’s charter schools, including the addition of the Detroit Academy of Arts and Sciences PSA

Revenue Changes Continued

FY 2005General Fund Budget

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