Budget Update September 19, 2008

FY 2008 Spending Plan FY 2008 Spending Plan

TODAY’S BUDGET DISCUSSION WILL FOCUS ON FY2008 AND FY2009 OPERATING BUDGETS – This does not include funding for: 1.Capital Projects (new building) 2.Federal, State, and private grants (student aid) 3.Endowment – Scholarships

WHERE DOES THE UNIVERSITY RECEIVE ITS RESOURCES? FY2008 l Student Tuition and Fees$78,400,258 l Student Housing & Food 19,420,806 l Other Student Fees (app fee, cont. enrollment fee) 4,536,083 –Total Collected from Students $102,357,147 (57%) l State Appropriation $48,371,011 l Fringe Benefits (state contribution for employee benefits) 24,357,107 –Total State Support $72,728,118 (40%) –Other Revenue (rental, interest earnings, commission) $5,645,238 (3%) –Total Revenue FY2008 $180,730, %

95.3% OF SOUTHERN’S REVENUE IS ENROLLMENT DRIVEN l Total Collected from Students $102,357,147 l Appropriation based on enrollment 69,849,793 $172,206,940 $172,206,940 / $180,730,503=95.3%

HOW ARE THE RESOURCES SPENT? PERSONNEL l Full Time Personnel$65,510,293 l Part Time Personnel 16,911,256 l Additional Compensation (overtime, longevity) 4,159,384 l Fringe Benefits 32,092,294 * l Total Personnel Costs$118,673,227(66%) * State support is $24,357,107

OPERATING EXPENSES l Utilities$8,704,094 l Institutional Financial Aid 7,259,423 l Professional Services 5,556,605 l Food Service Contract 5,255,285 l Insurance 3,204,938 l Repairs/maintenance Supplies 2,880,674 l Library Materials/Books 2,204,510 l Equipment 2,034,669 l Other Expenses (travel, advertising, office supplies, postage) 12,667,266 Total Operating Expenses $49,767,464(27%)

DEBT SERVICES (per BOT Policies) l System Debt Service $7,062,542 l Parking/Residence Hall Debt Service 4,906,068 Total Debt Service $11,968,610 (7%) Total Expenses $180,409, % Total Favorable$321,202 * * 1/5 th of 1.0% of total budget

HOW ARE SCSU’S DISCRETIONARY DOLLARS USED TO SUPPORT FUNCTION/PROGRAM? l Instruction $63,851, % l Research 2,449, % l Academic Support 8,727, % l Library 6,449, % l Scholarships, Loans 7,668, % l Student Support Services 19,664, % l Institutional Support (Admin) 20,588, % l Physical Plant (Facilities) 16,952, % l Public Service 435, %

FY 2008 NEW BUDGET INITIATIVES (1.4 million)

FY2008 SUMMARY l 95.3% funding – student driven l 61% of current budget – spent in support of academic programs l 70% of new dollars = new faculty

FY 2009 Spending Plan FY 2009 Spending Plan

BUDGET DEVELOPMENT FOR FY2009 December 2007 – January 2008 l FY2008 mid-year review l Established AY financial aid budget l Established guidelines for divisional budgets

February 2008 – April 2008 –Received preliminary FY2009 Spending Plan guidelines from CSU System Office l Estimated State Appropriation l Final enrollment numbers for state supported funding l Office of Policy & Management (OPM) Inflation factors

THE ORIGINAL BASE BUDGET FOR FY 2009 IDENTIFIED A SHORTFALL OF $4.8 MILLION ($ WE NEED VS $ WE RECEIVE) WHY? Original enrollment targets for FY 2008 were not achieved + Other CSUS Universities exceeded their enrollment goals = Reduced share of State Appropriation from fundable enrollment

OTHER FACTORS THAT CONTRIBUTED TO SHORTFALL:  Revised CSUS distribution ($500,000 lost revenue)  The original budget assumed no vacant positions Therefore…

l Reexamined FY 2009 enrollment targets with the Enrollment Management Council –FT undergraduate > +1.0% –FT graduate > flat Resulted in $500,000 increased revenue l Staggered hiring; kept some staff positions vacant resulting in $1.7 million l Reduced operating expenditures by $1.4 million l Utilize $1.2 million from Unrestricted Reserve Balance NOTE: Reserves continue to be in compliance with BOT policy.

ESTIMATED CURRENT UNRESTRICTED RESERVES Debt Service $8,600,544 Required per BOT Policy 9,303,668 Designated Reserves 4,373,251 TOTAL$22,277,463

May 2008 – July 2008 l Balanced FY09 Spending Plan was presented to the Board of Trustees oJune 13, 2008 Reviewed by BOT oJuly 17, 2008 BOT approves FY2009 Spending Plan

JULY 2008–GOVERNOR INITIATES A 3% RESCISSION IMPACT BY EXPENSE CATEGORY Full Time (turnover) ($200,000) University Assistants (295,948) Part Time Staff (193,534) Overtime (189,213) All Other P.S. (shift differential) (107,034) Fringe Benefits (667,719) Other Expenses (consulting & prof. services) ( 383,268) Total ($2,036,716)

STRATEGIES THAT ARE BEING APPLIED TO MANAGE THE BUDGET: Focus of budget management is adherence to Strategic Plan Enrollment teams: oEnrollment Management Council oEnrollment Operations Committee oSummer Enrollment Committee oGraduate Council oDeans Council

Energy Conservation: oLocked rate for electricity oPlanned reverse auction for natural gas oConservation initiatives (switches, controls, temp. regulation & light bulbs) oNew electrical & mechanical systems for Earl Hall, Jennings & Lyman Facility Usage: oEnsure that we are recovering our costs for outside facility rental oPursue opportunities to increase other revenue streams Vigilance on the expense side of the budget

HIRING FREEZE - EFFECTIVE MAY 29, 2008 All administration and faculty positions are covered by the freeze University may request an exemption for public health and safety reasons Every effort must be made to minimize overtime expense There will be no relief from the part-time cap in the current AAUP collective bargaining agreement Use of outside consultants will be closely scrutinized Any management positions that become vacant in the Fall 2008 will remain vacant at least until January 2009

OUT-OF-STATE TRAVEL – RESTRICTION May 29, 2008 – Chancellor Carter requested the university presidents to authorize out-of-state travel requests that are “deemed essential to university business.” l Exceptions are: Contractually–mandated travel Student clubs/organizations funded from student activity funds Grant funded travel l Quarterly reports to demonstrate savings l If savings are not apparent, then an overall moratorium will be placed on out-of-state travel

WHERE ARE WE NOW? 1. Expecting another 2% rescission 2. Developing strategies to increase enrollment where we have interest and capacity (Graduate School) 3. Focusing on recruitment of transfer students (Compac Agreements) 4. Working to retain undergraduate students through to graduation