1. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN WWW.UTPB.EDU Presenter Mark McGurk, VPBA Funding & Finance Informational May 17, 2016

2. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN WWW.UTPB.EDU  Legislative Process Texas State Legislature In session every two years Odd numbered years from Mid-January to Late May Must pass the State Budget (General Appropriations Act) (GAA) for the next biennium Legislative Cycle (GAA) LAR’s (Legislative Appropriations Request) submitted by all State Agencies and Institutions of Higher Education Base Bill(s) prepared by the LBB (Legislative Budget Board) is filed House and Senate create and pass separate GAA Conference Committee creates the final GAA Conference Committee version of GAA is passed by the House and Senate at the end of May

3. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN Legislative Cycle (GAA) FY 2018 - 2019 April 2016Base reconciliation instructions issued May 2016Budget (LAR) instructions issued by LBB and GOBPP (Governor’s Office of Budget Planning and Policy) June 2016Base reconciliation is due June – July 2016LBB provides GR (General Revenue) target to institutions August 2016Agency budget request (LAR) submitted to LBB and GOBPP Aug – Sep 2016Public hearings conducted by LBB and GOBPP October 2016LAR updates submitted (tuition & fees-local)

4. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN Legislative Cycle (GAA) FY 2018 - 2019 January 2017House and Senate each file a Base Bill January 2017House and Senate committees and subcommittees named Jan – Feb 2017House and Senate LAR Hearings Feb – Apr 2017House and Senate create and approve separate versions of the GAA Apr – May 2017Conference Committee creates final version of the GAA May 2017House and Senate approval Conference Committee version of GAA

5. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN Formula Funding Formula funding is based on the following factors: 1. Headcount – Increase in headcount over prior biennium 2. Semester Credit Hour (SCH) – increase in SCH production over prior biennium 3. Level of Instruction – UG Lower division, UG upper division, graduate level, doctoral level (provides weighting) 4. Never fully funded – funding is based on the size of the available pool of funds as set by the State Comptroller estimates

6. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN Formula Funding Continued Texas Higher Education Coordinating Board - Formula Funding - Conf. Comm. 2016-2017 Cost Study Relative Weights Matrix Cost Study - FY 2012, FY 2013, and FY 2014 Relative Weights Discipline Undergraduate Lower-Level Undergraduate Upper- LevelMaster'sDoctoral Professional Practice 01 Liberal Arts1.001.764.0010.770.00 02 Science1.783.027.5320.610.00 03 Fine Arts1.472.526.037.950.00 04 Teacher Ed1.632.082.567.420.00 05 Agriculture2.072.757.8011.770.00 06 Engineering2.383.527.1017.980.00 07 Home Economics1.101.753.018.670.00 08 Law0.00 5.13 09 Social Services1.682.052.9318.180.00 10 Library Science1.491.573.6012.060.00 11 Veterinary Medicine0.00 22.03 12 Vocational Training1.452.640.00 13 Physical Training1.511.260.00 14 Health Services1.071.652.799.862.64 15 Pharmacy1.865.0228.2935.144.32 16 Business Admin1.191.883.3923.920.00 17 Optometry0.00 37.5255.927.58 18 Teacher Ed Practice2.282.130.00 19 Technology2.262.413.895.200.00 20 Nursing1.722.113.348.990.00 21 Developmental Ed1.000.00 Base Rate $ 55.39Funding Rate 10%Teaching Experience Supplement for Tenure and Tenure Track

7. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN Why is this important to UTPB?

8. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN State Appropriations provide almost half of UTPB Budgeted Revenue

9. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN What do we spend it on? Budgeted Expenses

10. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN Fund 0001 and Fund 0250 = State Appropriated Budget Designated and other local funds = Budgeted as well General Revenue (GR) – Fund 0001 – State funding provided by sales tax revenues, business taxes, energy taxes Local Tuition Revenue – Fund 0250 – State Statutory Tuition that is sent into the State Treasury ($50/SCH) Designated Tuition – Locally retained tuition revenue that is budgeted and serves as our reserves (savings account) Auxiliary Revenues – Housing, Athletics, Student Service Fees Restricted Revenues - Grants and Gifts

11. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN State Appropriation Statutory Tuition Collected Remitted to State Treasurer General Revenue UTPB State Appropriation

12. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN UTPB Budget Process Base Budget State Appropriated funds are used primarily to fund salaries Designated Funds are used to fund departmental budgets for supplies, maintenance and operations, copiers, etc. Designated Funds are also used to fund utilities, physical plant expenses (repairs and maintenance) and institutional scholarships Restricted Gift Funds are primarily used to fund scholarships and endowed Chairs Restricted Sponsored Projects fund external contracts and grant activities

13. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN UTPB Budget Process New Revenues Biennial Process for new State Appropriations – Increases (decreases) in formula funding, new special items or sunset of special items, new Tuition Revenue Bond (TRB) funding Tuition and Mandatory Fee Increases – can be yearly or every other year based on Board of Regents request Incidental Fee requests – Yearly, approved by UTS Academic Affairs Vice Chancellor

14. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN UTPB Budget Process Budget and Planning Committee Meets to discuss funding environment - new revenues, reductions in funding, requests for funding. Evaluates new revenues or reductions and makes recommendation to the President and Executive Staff Executive staff reviews Budget and Planning recommendations, then makes recommendations to the President. President decides allocations and funding

15. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN Our Current Situation So, if we have this process, then why are we under Financial watch? Simply, we are spending more than we generate in revenue Our reserve (Designated) has been reduced significantly

16. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN How did this occur? Rapid growth in enrollment Spending outside the budget PeopleSoft Implementation Mid-year, rapid turnover in the Accounting Office, Turnover in the VPBA. Lack of knowledge hampered implementation. Lack of institutional input into fit-gap and short implementation schedule. Little to no input into user group. Lack of knowledge by the technical implementation team (UTShare)

17. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN What is being done? In the current year, we have implemented a strategic hiring freeze. This means that all position requests must be reviewed justified and approved at the executive level. Allocated Goals for reductions to executive leadership – each area was allocated an amount to “save” in the current year and next year - $800,000 total goal 8% Maintenance and Operations reduction (Designated only) only if cost centers have sufficient funds, not to impact students.

18. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN What is being done? Budget and Planning Committee are currently reviewing and discussing possible recommendations for next year. Planning for next year’s budget is currently being done to put things into the budget Adjunct Faculty Summer Budget Institutional Scholarships

19. THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN Questions?