CALS Faculty Senate Financial Review – April 2017 …CALS Priorities: Food and Energy Systems, Social Sciences, Life Sciences, & Environmental Sciences…

Agenda Priorities Challenges – 2008 – 2018 How we got here Revenue sources and spending plans Fiscal Year 16 final results Controllable vs Non-controllable Costs CALS strategies for controlling costs in light of reduced revenues, capped enrollments, reduced subsidies and increased costs Looking ahead

Fund capital needs and make progress on deferred maintenance Priorities Hire faculty Fund capital needs and make progress on deferred maintenance Retain faculty and staff Enhance student experience Enable research and outreach

Challenges – 2008 – 2018 How did we get here?

Significant Changes to Revenues and Expenses Elimination of deficit spending at the University level CALS subsidy reduced from $33M in FY14 to $20.5M in FY18, representing a cut of nearly 38% After University Support Pool (USP) tax is paid (10% of net tuition revenue on undergraduate and graduate professional tuition), the net subsidy as of FY17 to CALS is $12.6 million Over 30% State reduction since 2008 Flat State Appropriation 2010-2016. Still had to pay SIP on state positions resulting in a further decrease in purchasing power Change in Financial Aid policy, increase costs Increase in administrative charge (CAM) reflecting full allocation of expenses to responsible units

Significant Changes to Revenues and Expenses Elimination of deficit spending at the University level CALS subsidy reduced from $33M in FY14 to $20.5M in FY18, representing a cut of nearly 38% After University Support Pool (USP) tax is paid (10% of net tuition revenue on undergraduate and graduate professional tuition), the net subsidy to CALS is $12.6 million% State reduction since 2008 Over 30% State reduction since 2008 Flat State Appropriation 2010-2016. Still had to pay Salary Improvement Program (SIP) costs, resulting in a further decrease in purchasing power Change in Financial Aid policy, increase costs Increase in administrative charge (CAM) reflecting full allocation of expenses to responsible units

Red line represents reduction in buying power of State funding due to SIP expenses

Significant Changes to Revenues and Expenses Elimination of deficit spending at the University level CALS subsidy reduced from $33M in FY14 to $20.5M in FY18, representing a cut of nearly 38% After University Support Pool (USP) tax is paid (10% of net tuition revenue on undergraduate and graduate professional tuition), the net subsidy to CALS is $12.6 million Over 30% State reduction since 2008 Flat State Appropriation 2010-2016. Still had to pay SIP on state positions resulting in a further decrease in purchasing power Change in Financial Aid policy, increased costs Increase in administrative charge (CAM) reflecting full allocation of expenses to responsible units

Cornell Grant Aid Expenditures (gray boxes = recessions; dotted lines = Cornell financial aid policy changes)

Gross and Net Undergraduate Tuition Growth (FY08-FY16) CALS financial aid bill consumed 19% of Undergraduate tuition in FY08; it consumed 31% in FY16

Significant Changes to Revenues and Expenses Elimination of deficit spending at the University level CALS subsidy reduced from $33M in FY14 to $20.5M in FY18, representing a cut of nearly 38% After University Support Pool (USP) tax is paid (10% of net tuition revenue on undergraduate and graduate professional tuition), the net subsidy to CALS is $12.6 million Over 30% State reduction since 2008 Flat State Appropriation 2010-2016. Still had to pay SIP on state positions resulting in a further decrease in purchasing power Change in Financial Aid policy, increase costs The budget model has fully allocated expenses to all units based on various formulas. This has greatly increased our administrative expenses.

FY14 increase due to change in University Budget Model and full allocation of costs

Revenue sources and spending plan Fiscal Year 16 Actual Results Controllable vs Non-controllable costs

CALS Revenue and Expense – All Sources

Total Revenue – FY16 (all fund groups) Educational Activities and Other Sources includes things such as rental income, sales of products/services, conference & workshop revenue, etc. Large portion of Educational Activities and Other Sources is related to Lab of Ornithology fees Interdepartmental Revenue examples: Internal billing (i.e. depts. Bill each other for services) Re-charge centers (i.e. CNAL)

Total Expenses – FY16 (all fund groups) -General Expenses include supplies, travel, conferences/seminars, leases, etc. -Purchased Services include payment for consulting services to vendors, technical services, CIT virtual servers and internal services, etc. -Indirect cost expense includes the indirect cost paid on grant and restricted gift accounts. These dollars are assessed based on the expense activity in a grant or restricted gift account and go back to the college.

Controllable, Semi-controllable and Non-controllable Expenses Red – Non-controllable Yellow – Semi-controllable Blue – Controllable Non-controllable – 44.5% Semi-controllable – 18.9% Controllable – 36.6% -General Expenses include supplies, travel, conferences/seminars, leases, etc. -Purchased Services include payment for consulting services to vendors, technical services, CIT virtual servers and internal services, etc. -Indirect cost expense includes the indirect cost paid on grant and restricted gift accounts. These dollars are assessed based on the expense activity in a grant or restricted gift account and go back to the college. Note: Percentages differ from those on Slide 11 due to exclusion of Contracts & Grants

CALS strategies for controlling costs in light of reduced revenues, capped enrollments, reduced subsidies and increased costs

College Response to Impacts on Revenue and Expenses CALS has implemented various steps: Closed Education department in 2010 2 Faculty Retirement Incentive Programs Closed redundant facilities and outsourced operations Slowed faculty hiring 2009/2010 Staff Retirement Incentive – approx. 10% reduction

Department-level steps 18% assessment on unrestricted revenue sources Minimum F&A on grants and contracts – 18% Product testing – 18% Continuing Education & Summer Session School of Continuing Education takes 40% Remaining 60% split 1/3 college, 2/3 department University assessments on reserves (partially passed to depts.) Funds Functioning as Endowment (FFE) assessment – FY10 Gannett assessment – FY15 Operating budget cuts no SIP funded for Admin units in FY17 ~2.3% reduction 5% budget cut to all CALS units in FY10.

Fund capital needs and make progress on deferred maintenance What we still must do Hire faculty Fund capital needs and make progress on deferred maintenance Retain faculty and staff Enhance student experience Enable research and outreach

Renewed focus on Revenue Enhancement Methods Professional programs Summer School targeted at high school students Increased transfers Target junior transfers – recent University option Increased enrollment Positioning for strategic state appropriations: Plant Innovation and Data Analytics Institute (NYS Life Science initiative; CALS proposal $54 million) Plant Innovation and Data Analytics Institute (Southern Tier Regional Economic Development Council URI funds, CALS proposal $26 million)

Professional Programs Currently, CALS shares gross tuition revenue on professional degree programs if department develops a cohort model with a target of at least 10 students enrolled. The revenue sharing varies by the tuition tier rate as follows: Tier 2 tuition: $33,200/year (FY17) $2,500 per student, with no maximum cap on enrollment Tier 1 tuition: $50,712/year (FY17) Proportion of Gross Tuition Revenue Provided to Program Number of Students 10-19 20-29 30-59 60-99 100+ 30% X   35% 40% 45% 50%

Department Yield per Student – based on Tier 1 Rate of $50,712/year Amount to Department per Student based on Enrollment % Provided to Dept 10-19 20-29 30-59 60-99 100+ 30% 15,214   35% 17,749 40% 20,285 45% 22,820 50% 25,356 Example: Tier 1 program with 50 students would yield $1,014,250 ($20,285 x 50) for the department

Engineering MEng program Engineering shares 30% of revenue with departments College of Engineering no longer gets any University subsidy; now, all departments pay 10% of faculty salaries and 10% of all building costs including utilities 30% share was capped at FY 15 tuition rates (university took all revenue increases in FY 16 and decreased subsidy to all in FY 17). Engineering will revisit cap in FY19 Engineering has almost 500 paying masters students – yielding approximately $7M gross funds to departments and $17M to the college funds have allowed building renovations for Kimball, Upson and BME

Two submitted questions from CALS faculty

Annus horribilis I have 2 words for you: Observation: Only 23% of tenure track faculty are confident in central administration leadership (recent work-life faculty survey). I have 2 words for you: Annus horribilis

But, CALS is moving on with great confidence, in alignment with University priorities vetted with and supported by President Pollack

University’s Strategic Priorities

Next question: A&S and Vet had a net loss of tenure track faculty during the recession, but have bounced back. CALS numbers are down. Will we bounce back?

Hiring in Key Focal Areas

Questions/Comments/Concerns