President’s Recommended Budget for The University of Toledo Board of Trustees Finance & Audit Committee May 12, 2014 NOTE: ELEMENTS OF THIS PRESENTATION ARE SUBJECT TO BOARD APPROVAL, AND ARE NOT YET FINAL.

The Heart of our Structural Issue Growth Rate = 4.87% Growth Rate = % Growth Rate = - 5.8% The combination of enrollment declines, strain on State money, tuition inflation, and the need to reinvestment in our infrastructure is a structural issue that we must deal with over the next 3 years. Failure to deal with this would be poor stewardship on our part.

Remaining Budget Calendar Items University Council – April 18 Business Managers – April 23 U. Council Finance & Strategy Subcom. – April 25 Deans and VPs – April 23 President Jacobs – April 30 Board Finance Committee - May 12 Board approval – June 16

FY15 Financial Improvement Target Our target at the start of the FY15 budget process was $18M. We have hit this target, via the following: Refined assumptions = $4.5M Administrative cuts = $6.0M Main Campus improvements = $2.7M Health Science Campus improvements = $1.6M UTMC improvements = $3.3M

Major Assumptions SSI increase of 1.8% 2.39% increase in undergraduate tuition 0% increase in general fee 1% increase in graduate / prof tuition (except Law) 0% change in enrollment, before new initiatives. Overall increase is 1%. 2% increase in salaries and wages

Areas of Investment Salary increases for faculty and staff Positions in Engineering, NSM, and Nursing colleges $ to stimulate growth in externally funded research and development of on-line courses Additional resources for recruitment of high-ability students One World Schoolhouse and Schoolcraft College project Investments in patient satisfaction, quality and safety

Risks Contained in the FY15 Budget Enrollment State Share of Instruction (SSI) Outcome of union negotiations Funding only half of deferred maintenance Healthcare benefits costs Healthcare marketplace and ACA

Longer-term Risks Demographic trends State funding Changes in pension liability accounting Growth in regulations and compliance Pressure on tuition and student debt levels

Incentive Plan Externally funded research: –For incremental externally funded research over current year levels, we will increase the percentage of indirect cost recovery (IDC) returned to the colleges from 30% to 70%. On-line class development –Additional funding will be available for faculty involved in developing on-line courses and programs. This will be administered by the Provosts’ Office, under the auspices of their current program.

Carry-Forwards We will implement a revised program of carry-forwards. Reinstate balances from FY10 forward. Designated funds in colleges only. Plan by college still required, to facilitate cash flow planning. Plan approved by Dean, Provost, EVP CFO. Encouraged for use on capital items

Routine Capital State biennial capital bill = $23.7M for UT. Routine capital on top of State bill = $18M –Provost = $4M –Facilities = $5M –Info Tech = $3M –UTMC = $6M

Hiring Process RCG will no longer be part of hiring process. RCG will continue, with a new charge and group makeup. Budgeted positions can be filled with Dean / VP approval. Positions vacated in year will have 30 day wait period for re-engineering before they can be posted. HRTD will be measured on “time to fill” once a job is posted New positions will require Dean / VP approval, as well as SLT approval.