Academic Leadership Retreat The Campus Economic and Financial Outlook Chris Cimino August 27, 2014

1.Capital Funding 2.Financial Overview 3.Formula Funding Update 4.Final Thoughts The Campus Economic and Financial Outlook

1.Capital Funding 2.Financial Overview 3.Formula Funding Update 4.Final Thoughts The Campus Economic and Financial Outlook

Major Construction Projects… Projects being planned, programmed, under design or construction. In millions Total $987 million

Major Construction Projects… Projects being planned, programmed, under design or construction. In millions Total $987 million

Capital Maintenance and Outlay

1.Capital Funding 2.Financial Overview 3.Formula Funding Update 4.Final Thoughts The Campus Economic and Financial Outlook

FY 2014 TOTAL REVENUE WITH CAPITAL (shown in millions and percent of total) band and sports camps, testing services, literary publications F&A revenue, misc. rentals and sales, conference revenue Total $1.12 billion

FY 2014 Operating Budget – all funds (shown in millions and percent of total) (utilities, custodial, maintenance, and grounds) (executive management fiscal operations, Development, HR, computing, etc…) (student activities, admissions, student health, student aid administration, and intramural athletics.) (libraries, museums, development, academic administration, computing support.) (WUOT, conferences) Total $980.1million

Where our revenues come from… FY 2014 Auxiliary Units (shown in millions) Total $172 million

Where our funds go… FY 2014 Operating Budget – all funds (in millions) Total $980.1 million

Total Budget Revenue Summary FY 2014FY 2005 (shown in millions and percent of total)

FY Appropriations Knoxville FY 2014 Appropriations$ 174,335,300 Formula Outcomes$ 3,758,400 Group Health Insurance916, (k) Match291,400 Waivers589,300 Total FY 2015 Appropriation*$ 179,891,300 Chiller system improvements$ 5,000,000 Science and Engineering system upgrades9,000,000 Total Proposed Capital Maintenance$ 14,000,000 *excludes access & diversity funds of $2.3 million

Does not include centers of excellence, governor chairs, or access and diversity funding, or UTSI. Millions Base State Appropriations

UTK State Appropriations (1) Includes $6.2M of non-recurring funds for the Bredesen Center for Interdisciplinary Research and Graduate Education (2) Revised State Appropriations NOTE: CPI Index Values were obtained from the Commonfund Institute's 2012 HEPI Table A in the HEPI Report. The CPI values reported by the Commonfund Institute are based on fiscal year (July 1 -June 30) 12-month averages rather than the annual published CPI values computed over the calendar 12 month period that are usually reported by the Bureau of Labor Statistics.

FY Tuition and Fees Prior 2013Fall 2013Fall 2014 In-State Maintenance$ 8,766$ 10,074$ 10,366 Mandatory Fees$ 1,510 Total$ 10,276$ 11,584$ 11,876 Out-of-State Maintenance$ 8,766$ 10,074$ 10,366 Tuition$ 18,190 Mandatory Fees$ 1,770 Total$ 28,726$ 30,034$ 30,326

Tuition and Fees AY A comparison of the Top 25 tuition and fees to that of UT Source: The Chronicle of Higher Education. (2014)

State Appropriations and Tuition & Fees FY A comparison of Top 25 state appropriations per student FTE to in-state tuition and fees per student FTE Source: US News & World Report and Institutional websites; appropriation data is FY 2012 Tuition & FeesState Appropriations

Undergraduate Mandatory Fees

Percent chance in tuition

1.Capital Funding 2.Financial Overview 3.Formula Funding Update 4.Final Thoughts The Campus Economic and Financial Outlook

Old Formula (((.01*instr)+(.125*as)+((ug/total fac units)*instr *.20)+(is*.10)+(GSF*RPSF(5.14))+(port bldgs * pbr (2.57)+(oldsf*oldsfr(1.71)+ar+3.11*sqft = utilities + asb+infl+(.10*quip inv)+ps+salary infl*total faculty units+clerical(.25*basic instr))*(infl))*.60)=basic request + perf score*.0545*basic request+access & diversity+legislative initiatives = FINAL NEED

Background to the new formula Prior formula was based on enrollment Included a performance-based piece In 2009, Gov. Phil Bredesen became interested in educational reform In 2010, Complete College TN Act mandated new formula THEC convened Formula Review Committee

TN Outcomes-Based Formula Source: THEC

Proper outcomes Appropriate priorities Subpopulation/Premium level Fixed Costs Out of State Tuition Component Other Funding Formula Principles

Outcomes Student Progression: 24 Credit Hours Student Progression: 48 Credit Hours Student Progression: 72 Credit Hours Bachelors Degrees Masters Degrees Doctoral/Law Degrees Research/Grant Funding Student Transfers Degrees per 100 FTE Graduation Rate

1.Capital Funding 2.Financial Overview 3.Formula Funding Update 4.Final Thoughts The Campus Economic and Financial Outlook

1.State support will continue to struggle 2.Greater focus on efficiency (e.g. shared services) 3.Space utilization / capacity across all areas 4.Deferred maintenance 5.Continue to build 6.Alternative revenues in campus operations, infrastructure, licensing, and procurement. Final thoughts….

QUESTIONS?