OPERATING BUDGET AND PLAN FY 2018 – 2019...BUDGET SUMMARY This section provides an overview of the University's 2018-2019 operating budget. Detailed budget information is provided

OPERATING BUDGET AND PLAN

FY 2018 – 2019

Table of Contents Budget Summary. .......................................................................................... 1 2018-2019 Actions of the General Assembly .............................................. 3 2018-2019 Educational and General Program Priorities .......................... 5 2018-2019 Auxiliary Services Program Priorities ..................................... 6 Graph Comparing FY 2018 to 2019 Total University Revenue ............... 7 Graph Comparing FY 2018 to 2019 Total Revenue .................................. 8 Graph Comparing FY 2018 to 2019 E&G Revenue .................................. 9 Graph Comparing FY 2018 to 2019 E&G Expenditures ........................ 10 Graph Comparing FY 2018 to 2019 Auxiliary Revenue… ..................... 11 Graph Comparing FY 2018 to 2019 Auxiliary Expenditures ................. 12 Table 1: Revenue Summary ..................................................................... 13 Table 2: Expenditure Summary .............................................................. 14 Table 3: Summary of Auxiliary Services, Income and Expenditures .. 15 Table 4: Longwood University Foundation Support Summary ............. 18 Budget Allocation Ratio ............................................................................. 19 Instructional Budget per Student FTE ..................................................... 20 Debt Burden Ratio ..................................................................................... 21 Glossary ........................................................................................................ 22

1

BUDGET SUMMARY

This section provides an overview of the University's 2018-2019 operating budget. Detailed budget information is provided in the supporting tables. Highlights of the proposed plan are presented below.

The budget is based on assumptions related to enrollment projections, actions taken by the General Assembly and Governor, revenue calculations and expenditure estimates. Tuition revenue calculations are based on prior credit hour production.

$2,830,061 of current year anticipated surplus funds for FY 2019 are utilized to balance

the FY 2019 budget.

Tuition and fees, as approved for full time Virginia undergraduates, will increase by an average of $620, a 4.87 percent increase. This includes a discount of $250 on the 30th credit hour. Tuition for Virginia undergraduates was increased by $320, based on a thirty-credit-hour schedule. Tuition rates for in-state graduate, out-of-state undergraduate, and out-of-state graduate students were increased to $480, $785 and $995 per credit hour, respectively. In compliance with guidance set forth by the Governor and the General Assembly, auxiliary student fees and room and board charges may be increased to cover changes in inflationary costs, debt service expenses, and costs associated with base salary and benefit increases.

The projected revenue budget for FY 2019 is $129,558,946 which excludes $5,045,497 in state appropriation for student financial assistance. The proposed expenditure budget for the total University is $128,592,314.

The budget consists of two major components: the Educational and General Programs

budget and the Auxiliary Services budget.

The Educational and General Programs budget, which includes both general and nongeneral funding sources, is composed primarily of expenditures and revenues in the Instructional programs, as well as Sponsored Programs (grants and contracts). The total planned expenditures for FY 2019 are $71,677,986.

Longwood will contribute $61,000 in FY 2019 to fund faculty promotions. Additional funding of $29,021 is included in the faculty salary pool to continue the July 10, 2017, two percent faculty salary increase.

Longwood will fund the Core Curriculum CIVITAE implementation cost for FY19 with $888,908.

2

The second major component of the University's total budget is Auxiliary Services,

which includes activities such as student housing, dining services, parking and athletics. The proposed Auxiliary Services budget for 2018-2019 is $56,914,328. A total of $937,462 will be held in debt reserve for future use.

3

2018-2019 ACTIONS OF THE GENERAL ASSEMBLY

The General Assembly session began January 10, 2018, and ended on March 10, 2018. The General Assembly did not finalize a budget before the end of the regular session, and negotiations continue. As of this writing, the Senate Finance Committee is scheduled to consider a proposed budget proposal put forward by the House Appropriations chairman and a co-chairman of the Senate Finance Committee on May 29, 2018. If that budget proposal is adopted, Longwood’s total Educational and General (E&G) operating appropriation will increase from $69,099,081 to $69,796,261 -- $28,182,452 GF and $41,613,809 NGF. The budget would provide an additional $697,180 in FY19. Longwood’s FY 2019 general fund operating base increased by a net $1,291,604 (4.8%) from 2018. This is primarily due to additional funding for benefit cost increases. Longwood’s FY 2019 nongeneral fund operating base decreased $594,424. These changes will be reflected in our appropriation received from the state on July 1, 2018. Financial Aid General fund support for student financial assistance in FY19 would increase $376,476 for a total of $5,045,497. Southside Virginia Regional Technology Consortium (SVRTC) Funding remained at $108,905 for the SVRTC in FY 2019. Salary Increases Funding for salary increases is not included in FY19 of the budget proposal. Higher Education Equipment Trust Fund Funding for the FY 2019 Equipment Trust Fund (ETF) program of $743,433 general fund would be appropriated to Longwood under the budget proposal. This is unchanged from the previous year. Out-of-State Capital Fee Out-of-state students are required to pay 100 percent of the average cost of their education. Additionally, non-resident students will pay $20 per credit hour as a mandatory capital fee. The amount of capital fees that will be paid by the University to support state capital project debt

4

service on bonds issued under the 21st Century Program decreased $8,238 from $106,149 to $97,911. Capital Projects The budget proposal provides $2,488,000 for equipment for the New Academic Building. The budget also authorizes Longwood to begin planning the renovation and expansion of the Facilities Annex Building project. Longwood’s Maintenance Reserve funding for FY19 would be $1,878,865, an increase of $535,574 from FY18.

5

2018-2019 EDUCATIONAL AND GENERAL PROGRAM PRIORITIES

The University’s 2018-2019 Educational and General budget is based on priorities that support the strategic plan. After carefully examining the revenue projection for FY 2019, funds were allocated for strategic initiatives and fixed costs increases. The recommended expenditures include funds for the following:

Merit based and compression related salary adjustmentsfunding for Faculty, A/P, Classified and Wage positions. $449,900

Estimated Nongeneral Fund Portion of Health Insurance $416,819 and other Benefits Increases

Core Curriculum CIVITAE $888,908 Data Analytics $232,954 Increase in Faculty Promotions $ 61,000

6

2018-2019 AUXILIARY SERVICES PROGRAM PRIORITIES

The University’s 2018-2019 Auxiliary Services budget is based on the program priorities listed below. Auxiliary activities are required to be self-supporting and must maintain sufficient fund balances for operations, renewal and equipment replacement and capital reserves. The Board approved housing and dining rate increases on December 1, 2017. Comprehensive fees were approved May 18, 2018.

Auxiliary Indirect Cost Rate

The Auxiliary Services operations are charged an indirect cost recovery rate for services provided by educational and general operations (such as payroll processing, purchasing, billing services and facilities administration). The auxiliary cost study is submitted to SCHEV prior to the beginning of each biennium. The indirect cost rate for the 2018-2020 biennium is 14.19 percent. This is a .55 percent decrease from the prior biennium.

Housing

Housing revenue will continue to provide funds for maintenance reserve projects in the residence halls. Housing revenues are projected to exceed expenses by $2,000,000. These net revenues, will be utilized to support comprehensive fee budgets in FY 2019.

Dining

Dining revenues are projected to exceed expenses by $830,061. These net revenues will be utilized to support comprehensive fee budgets in FY 2019.

Comprehensive Fee Budgets

The comprehensive fee is used to support many auxiliary programs and services including: intercollegiate athletics, recreation and intramural programs, the student union, student health and wellness services, the Farmville Area Bus services, debt service, and repair and maintenance on nongeneral fund supported facilities. FY2019 planned contributions to reserves total $937,462. These reserves are for operating cost associated with the new university center and debt service to replace the Steam Distribution System on Wheeler Mall.

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TABLE 1 13REVENUE SUMMARY

Budget Proposed2017-2018 2018-2019

EDUCATIONAL AND GENERAL

Tuition and Fees 41,884,487 42,007,212

Commonwealth Appropriations * 27,728,101 28,473,616

Federal Grants and Contracts 663,649 828,827

State/Local/Private Grants and Contracts 213,537 160,831

Other Sources 252,500 207,500

Total Educational and General 70,742,274 71,677,986

AUXILIARY REVENUE

Total Auxiliary Revenue 56,466,701 57,880,960

INSTITUTIONAL TOTAL 127,208,975 129,558,946

*Appropriation excludes Higher Education Student Financial Assistance of$4,669,021 in FY 2018 and $5,045,497 in FY 2019.

14

Budget 2017-2018

Proposed 2018-2019

EDUCATION AND GENERAL

Instruction 35,497,000 37,249,231

Sponsored Programs 877,186 989,658

Public Service 508,390 549,783

Academic Support 8,263,449 7,534,056

Student Services 4,625,699 4,882,142

Institutional Support 11,042,193 11,502,656

Plant Operation & Maintenance 7,600,477 7,023,258

Scholarships & Fellowships 1,2 2,327,880 1,947,202

Total E&G Expenditures 70,742,274 71,677,986

AUXILIARY ENTERPRISES

Expenditures 48,546,598 50,069,370

Transfers Debt Service (Mandatory) 6,875,014 6,844,958 Non-Mandatory

Total Auxiliary Enterprises 55,421,612 56,914,328

INSTITUTIONAL TOTAL 126,163,886 128,592,314

2 Scholarships of $580,678 will be paid by the Longwood Foundation

EXPENDITURE SUMMARYTABLE 2

1 FY 2018 and FY 2019 exclude $4,669,021 and $5,045,497 respectively in Higher

Education Financial Assistance from State Appropriations

TABLE 3

INCOME AND EXPENDITURES 15


RESIDENCE HALLS

Direct Income 117,800 2,117,800

Income (Room Fees ) 23,563,253 22,362,252

Expense 20,574,981 20,704,410

Debt Service (Mandatory) 1,779,128 1,775,642

Non-Mandatory Transfers (1,326,944) (2,000,000)

Net (Contribution to Fund Balance) 0 0

FOOD SERVICES

Direct Sales 113,000 136,000

Income ( Meal Plans) 8,952,553 9,286,362

Expense 7,907,616 8,363,854

Debt Service (Mandatory) 231,642 228,447

Non-Mandatory Transfers (926,295) (830,061)


BOOKSTORE

Income (Sales and Contracts) 375,000 375,000

Expense 273,195 345,830

Debt Service (Mandatory) 0 0

Non-Mandatory Transfers 0 0

Net (Contribution to Fund Balance) 101,805 29,170

ATHLETICS

Income (Direct Sales and Services) 309,580 309,580

Student Fees 8,748,724 8,170,912

Expense 8,019,229 7,453,667




PARKING AND TRANSPORTATION


Student Fees 339,399 299,119

Expense 659,596 653,414




Continued on next page

SUMMARY OF AUXILIARY SERVICES

TABLE 316

INCOME AND EXPENDITURES


TELECOM SYSTEMS


Student Fees 949,473 978,168

Expense 950,473 979,168




STUDENT HEALTH


Student Fees 926,115 1,210,929

Expense 976,115 1,586,129




STUDENT UNION


Student Fees 3,179,415 3,128,597

Expense 1,781,359 1,733,891




RECREATION AND INTRAMURALS


Student Fees 2,121,300 2,113,847

Expense 1,026,740 1,021,964




Continued on next page


TABLE 3

INCOME AND EXPENDITURES 17


CONFERENCES


Student Fees 0 0

Expense 374,555 358,225




OTHER AUXILIARY


Student Fees 5,123,033 4,935,183

Expense 6,002,739 6,868,818


Non-Mandatory Transfers In 2,253,239 2,830,061

Net (Contribution to Fund Balance 943,283 937,462

TOTAL AUXILIARY ENTERPRISES

Income (Direct Sales and Services) 2,563,435 5,395,591

Student Fees 53,903,265 52,485,369

Expense 48,546,598 50,069,370


Prior Year General Auxiliary SurplusNet (Contribution to Fund Balance) 1,045,088 966,632


TABLE 4 18

LONGWOOD UNIVERSITY FOUNDATIONINSTITUTIONAL SUPPORT SUMMARY

2018-2019

Academic Departments 750,000

Administrative & Student Services 250,000

Advancement 325,000

Marketing & Operations 125,000

Athletics 325,000

Facilities & Grounds 125,000

Sub Total 1,900,000

Scholarships

Educational & General 580,678

Auxiliary 571,413

Sub Total 1,152,091

Grand Total 3,052,091

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llm

ent

Pro

ject

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s –

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l an

d S

pri

ng

S

emes

ters

(O

n a

nd

Off

Cam

pus

)

For

mu

la:

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stru

ctio

n a

nd

Aca

dem

ic S

up

por

t B

ud

gets

F

all a

nd

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rin

g E

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llm

ent

Pro

ject

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s

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ruct

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ud

get

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den

t F

TE

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nif

ican

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f In

dic

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ects

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nt o

f fu

nds

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nded

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stru

ctio

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cade

mic

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port

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ll-t

ime

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vale

nt s

tude

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ram

atic

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e ra

tio

sign

als

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ift i

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ndin

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iori

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hang

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so c

an

acco

mpa

ny a

n en

roll

men

t inc

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line

.

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gwoo

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niv

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rren

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Y 2

017

the

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ease

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aril

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nal

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olar

ship

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d pr

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ay

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and

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ary

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ng f

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CIV

ITAE

and

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ased

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l ann

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udge

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nsor

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rogr

ams

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ighe

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duca

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anci

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Aid

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20

21

Lon

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Deb

t Ser

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to T

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d E

xpen

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6 pe

rcen

t for

FY

201

9. T

his

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ulat

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ased

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led

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pay

men

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or F

Y 2

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l bud

gete

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erve

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t B

urd

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atio

Sig

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ican

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nden

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f fi

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sion

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e le

vel o

f de

bt s

ervi

ce w

ith

the

inst

itut

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s bu

dget

ed e

xpen

ditu

res.

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mu

la:

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t S

ervi

ceT

otal

Exp

end

itu

re B

ud

get

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vel t

rend

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a de

crea

sing

rat

io o

ver

tim

e in

dica

tes

that

deb

t ser

vice

ha

s su

ffic

ient

cov

erag

e w

itho

ut im

ping

ing

furt

her

on o

ther

fun

ctio

nal

area

s. T

he s

tand

ard

for

high

er e

duca

tion

is a

max

imum

of

7 pe

rcen

t, m

eani

ng th

at c

urre

nt p

rinc

ipal

and

inte

rest

exp

ense

sho

uld

not b

e gr

eate

r th

an 7

per

cent

of

the

tota

l bud

get.

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houg

h th

e 7

perc

ent l

evel

is a

n ac

cept

able

thre

shol

d, th

is p

erce

ntag

e ca

n ra

nge

betw

een

5 pe

rcen

t and

10

perc

ent.

The

act

ual p

erce

ntag

e w

ill

vary

bas

ed u

pon

the

fina

ncia

l str

engt

h of

the

inst

itut

ion.

Ins

titut

ions

w

ith

grea

ter

flex

ibil

ity

in a

lloc

atin

g fu

nds

wil

l be

able

to ta

ke o

n ad

diti

onal

deb

t. L

ongw

ood

part

icip

ates

in th

e st

ate

bond

pro

gram

w

hich

is b

ased

on

fixe

d ra

tes.

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t is

not i

ncre

ased

wit

hout

bud

geti

ng

an in

crea

se in

fun

ds a

vail

able

to p

ay th

e fi

nanc

ial o

blig

atio

ns.

In M

arch

200

7, th

e B

oard

of

Vis

itor

s ap

prov

ed a

n in

stit

utio

nal d

ebt

rati

o of

up

to 9

per

cent

to f

acil

itate

the

com

plet

ion

of n

onge

nera

l fun

d pr

ojec

ts a

ppro

ved

by th

e G

ener

al A

ssem

bly.

22

Glossary

Academic Support: Includes activities conducted to provide support services to the institution's three primary programs: instruction, research and public service. Examples include the library, deans, academic technology, academic service center and disability resources.

Appropriation: An expenditure authorization with specific limitations as to amount, purpose, and time; formal advance approval of an expenditure from designated resources available or estimated to be available.

Auxiliary Services: Activities within the University that exist to furnish goods or services directly or indirectly to students, faculty and staff. These activities charge fees directly related to, but not necessarily equal to, the cost of the service. Auxiliary services must be self-supporting.

Banner: Longwood’s administrative information system that integrates Finance, Student and Human Resources modules within a single enterprise system.

Direct Sales (Auxiliary): Sales of auxiliary services, to include facility rental, bookstore income, parking decals/fines and recreation center memberships.

Educational & General (E&G): Term used to describe all operations related to the institution’s educational objectives.

Full-Time Equivalent (FTE): A means for expressing part-time students or faculty as a full-time unit. The formula is generally based on credit hours. Example: An institution may define full-time as being twelve credit hours, so a student (or faculty member) taking (or teaching) three credit hours would then equal .25 FTE.

General Funds: Revenue received from the State from the collection of taxes, fees and other charges.

Grants and Contracts (Sponsored Programs): Sponsored program funds are generated through a grant or contractual agreement. Funds may be provided by state, federal, local or private entities. Sponsored program funds must be expended for the purposes outlined in the respective grant/agreement.

Indirect Costs: Fee charged to grants or contracts to pay for the use of University facilities, i.e., overhead.

Institutional Support: Activities whose primary purpose is to provide operational support for the day-to-day functioning of the institution, excluding physical plant operations. Examples include the President, Vice-Presidents, institutional research and assessment, administrative technology, public relations, financial operations, internal audit, human resources, and safety and security.

Instruction: Includes all activities that are part of the institution's instructional program, primarily all academic departmental operations.

23

Mandatory Transfers: Transfers arising out of (1) binding legal agreements related to the financing of the educational plant, such as amount for debt retirement, interest and required provisions for renewals and replacements of plant, not financed from other sources, and (2) grant agreements with agencies of the federal government, donors, and other organizations to match gifts and grants to loan funds and other funds.

Miscellaneous E&G Revenues: Includes nongeneral fund revenues derived from the sale of goods or services that are incidental to the conduct of instruction, research or public service. Examples include revenues from facility rentals, payment plan fees, administrative fees and indirect costs.

Nongeneral Funds: Tuition, fees, and all other funds not received from the State. This includes grants and contracts income.

Nonmandatory Transfers: These transfers serve a variety of objectives such as moving monies generated in auxiliary enterprise fund groups to an E&G fund group or to a capital outlay fund group for use in providing project funding.

Operation and Maintenance of Plant: This category includes the operation and maintenance of the physical plant. It includes all operations established to provide services and maintenance related to campus grounds and facilities. It also includes utilities, insurance, facilities management, custodial services, sustainability and power plant operations.

Public Service: Includes all funds expended for those noninstructional services established and maintained to provide services to the general community or special sectors within the community. Community service is concerned with making available to the public various resources and unique capabilities that exist within the institution. The Longwood Small Business Development Center is included in this category.

Restructuring: Legislation that allows institutions of higher education varying levels of decentralization in the areas of procurement, personnel and capital outlay while establishing commitments and performance measures for the institutions.

Student Fees (Auxiliary): Student dining, housing and comprehensive fees.

Student Services: Those activities whose primary purpose is to contribute to students' emotional and physical well-being and to their intellectual, cultural and social development outside the context of the formal instruction program. Examples include academic and career advising, admissions, registration, financial aid and student success.

Tuition and Fees: Nongeneral funds that include all tuition and fees assessed against students for current operating purposes. Fees include application fees, registration fees, course fees and on-line fees.

Documents

OPERATING BUDGET AND PLAN FY 2018 – 2019...BUDGET SUMMARY This section provides an overview of the University's 2018-2019 operating budget. Detailed budget information is provided