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 6 th in the United States Oakland University Quality 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 2003 National 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 2003 National 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

Resource Constraint Challenges

Division One-Time Base Total Academic Affairs$ 2,060,836$ 3,824,923$ 5,885,759 Finance and Administration434,3131,299,9081,734,221 Student Affairs126,575394,826521,401 University Relations42,688129,160171,848 President114,088403,629517,717 General1,847,500360,0002,207,500 Revenue1,000,000 Total$ 5,626,000$ 6,412,446$ 12,038,446 Oakland University Budget Reductions by Division FY 2003 through FY 2005

Fiscal Year Oakland University’s FY 2005 appropriation per FYES is projected to be $293 per FYES less than the 1995 level Projected Oakland University Appropriation per FYES FY 1995 – FY 2005 Projected

Source: FY Higher Education Appropriations Report Appropriation per FYES FY 2004 (Ranked)

Michigan Universities General Fund Expenditures Per FYES FY 2003 UMAA$28,794 MTU 18,140 Dollars WSU 17,162Median$11,143 MSU 15,977Average 15 12,963 FSU 12,835Average 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 (13 th ) GVSU 9,436 SVSU 8,755 Source: 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 University Expenditures per FYES FY 2000 through FY 2004 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 2003 UNIVERSITYFYES/FTEF NMU22.25 GVSU20.34 SVSU20.11 OU19.89 EMU19.69 CMU18.27 UMD16.95 UMF16.72 LSSU15.91 FSU15.05 WMU14.65 MSU12.76 MTU12.59 UMAA12.07 AVERAGE OU’s student/faculty ratio decreased slightly from the previous year’s number of This ratio represents the fine line between a quality indicator (a low ratio) and an efficiency indicator (a high ratio). Source: Heidi Data Base

Source: HEIDI Data Base, professional and service categories Staff Per Each 1,000 FYES FY 2003 (Ranked)

Gross Sq Feet Per FYES in Michigan FY 2003 Univ.Ft 2 /Student UMAA341.4 MTU341.3 MSU326.2 WSU295.5 LSSU276.6 UMF275.2 NMU273.7 WMU196.4 SVSU182.2 FSU174.3 UMD152.3 EMU135.4 CMU129.0 OU117.6 GVSU110.1 Classroom space, in modules was 1,515 in Fall 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 University History of Cost Containment Efforts Outsourcing/Partnerships$1,426,000 Utilities950,000 Going Paperless125,000 Reorganization/Process Re-Engineering390,350 Health Benefits Changes863,000 Technology/Telecomm Savings112,000 Estimated Savings/Benefits$3,866,350

FY 2005 Budget Overview

Fiscal Year 2005 Budget 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 Reductions Student 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 Reductions Student 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 Reductions Office 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 University Initiatives 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, , , ,900 78,400 70,900 18,000

Academic Support Required for 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 13,500 87,500

Supporting and Serving Students 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, ,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 2005 Revenue 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 2005 General Fund Budget - END-