1. ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY University of Alaska Fairbanks Spring 2010 Operating Review 1 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

2. Agenda I Introduction  Expected outcomes Chancellor Rogers II FY12 budget and 3 - 5 year planning horizon  Operating Budget PrioritiesChancellor Rogers  Campus master plan and 6 year capital planDirector Zanazzo  R&R, M&R Director Zanazzo III FY11 conditions and distributions  Conditions and operating assumptions Vice Chancellor Pitney  FY11 distributions Vice Chancellor Pitney IV FY10 projected final performanceProvost Henrichs V Management report recap  M&R and R&R ExpendituresDirector Zanazzo  Major cost savings Vice Chancellor Pitney  Capital Accounts Director Zanazzo  Management report Vice Chancellor Pitney VI SummaryChancellor Rogers 2 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

3. I - Introduction ALASKA’S FIRST UNIVERSITY  AMERICA’S ARCTIC UNIVERSITY 3 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

4. Great Land…Great University ALASKA’S FIRST UNIVERSITY  AMERICA’S ARCTIC UNIVERSITY ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY 4

5. 5 A Student and Community Focused Research University UAF’s strategic priorities are to:  Increase degree and credential completion rates.  Lead in research concerning the circumpolar north and its peoples.  Engage communities to foster economic development and sustainability.

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7. 7 A Student and Community Focused Research University UAF’s strategic priorities are to:  Increase degree and credential completion rates.  Lead in research concerning the circumpolar north and its peoples.  Engage communities to foster economic development and sustainability.

8. 8 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY SPECIAL TOPICS Climate ChangeClimate Change - November 2009 Top 20 Overall: The database contained 10,801 institutions. Ranked by three separate measures Citations, Papers, and Citations Per Paper. Source dates: 1999-June 30, 2009 http://sciencewatch.com/ana/st/climate/institution/

9. 9 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY RankInstitutionCitationsPapersCitations Per Paper 1NCAR1134136231.33 2NASA1073133232.32 3NOAA1060942025.26 4Columbia U1060041225.73 5Max Planck Society992535627.88 6UK Met Office966731330.88 7U Colorado907841421.93 8U Oxford862233625.66 9U E Anglia838631526.62 10U Washington815335123.23 11University Of Alaska809834723.34 Rank by Number of Citations Lower ranked institutions: US Geological Survey, UC Berkeley, Penn State, UC San Diego, Stanford, CSIRO, UC Santa Barbara, U Wisconsin, Colorado State

10. ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY 10 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY A Student and Community Focused Research University UAF’s strategic priorities are to:  Increase degree and credential completion rates.  Lead in research concerning the circumpolar north and its peoples.  Engage communities to foster economic development and sustainability.

11. 11 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY Campus Direct Spending (FY08) Estimated Direct and Indirect Economic Impact (FY08) Bristol Bay$2,625,000$4,000,000 Chukchi$1,600,000$2,400,000 Interior-Aleutians (rural) $800,000n/a Interior-Aleutians (Fairbanks) $3,500,000$4,700,000 Kuskokwim$6,000,000$10,000,000 Northwest$3,000,000$5,000,000 Tanana Valley$11,000,000$17,000,000 Data are from a report by the McDowell Group on economic and social impacts of community campuses. Economic Impact of Community Campuses

12. 12 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY From a report by the McDowell Group on economic and social impacts of community campuses. Impact of Community Campuses  Provide place-based educational opportunities  Respond to community and local employer needs  Foster economic advancement of rural and Fairbanks residents  Engage youth

13. ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY 13 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY UAF aims to align research, teaching, outreach and engagement activities within areas of emphasis:  Life Sciences  Climate  Engineering and Energy  Natural Hazards  Northern Peoples A Student and Community Focused Research University

14. ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY 14 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY Aligning Research, Education, and Community Engagement Just a few examples...  Atmospheric scientists (with students) assist borough with air-quality issues  AVO monitors Redoubt and ash plumes  GI/ARSC researchers preparing tsunami run-up maps for 70 coastal communities  ACEP geothermal resource assessment

15. II - FY12 Budget and 3–5 Year Planning Horizon 15 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

16. 16 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY FY 12 Operating Budget Priorities  Address fixed costs increases  Meet obligations to established programs: Biomedical, Climate, WFD including teacher preparation, others  Maintain momentum: Engineering, Energy  Increase graduation rates (including State financial aid)

17. ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY 17 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY Operating Budget 3 to 5 Year Conditions  Annual 3% salary increase  Annual 15% benefit increase  Annual 10% tuition increase  Enrollment increase 10% if significant State financial aid package  ICR flat overall if no significant facilities investment

18. 18 Unrestricted Revenue Gap Based Upon FY05 to FY09 Annualized Data ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY $8.3M Gap $13.8M Gap $4.2M Surplus Breakeven $3.5M Gap Does not include financial aid- dependent enrollment increase

19. Impact of GF/non-Federal Revenue Ratio 19 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY  If applied at the MAU level, favors MAUs with mainly tuition rather than Federal revenue  Encourages increased tuition and fees  Discourages investment in rural campuses, Ph.D. programs  Increases instability of funding (positive feedback to revenue change)

20. Closing the Funding Gap 20 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY  Increase revenue: Recruit students, secure both research and education grants  Reduce cost  Reallocate  Adapt: Efficiency, new approaches  Eliminate programs or activities  Incentives for units to do all of the above  Strategic investments: Pursue new GF, but reallocate if necessary

21. Campus Master Plan Update 21 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY  Faculty, staff, and student committee assisted by Perkins + Will  Wide campus and community participation  Chancellor Rogers briefed Board of Regents’ Facilities and Land Management Committee in April  Will seek approval at the June 2010 Board of Regents’ meeting  Bristol Bay, Chukchi, Interior Aleutians, Kuskokwim and Northwest Campuses’ MP completed in 2006  Master plans updated on a five to seven year cycle

22. New Construction  Life Sciences Facility  Energy Technology Facility  Engineering Academic Programs Facility  Replace Heat and Power Plant  Student Residential Facilities Renewal and Renovation  Critical Electrical Distribution  Main Waste Line Repairs  IT Infrastructure  Community Campuses’ R&R Six-Year Capital Improvement Plan Top Priorities 22 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

23. M&R and R&R 23 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

24. 24 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY Summary of R&R Appropriations, 97-10 Sufficient R&R and replacement of the heat and power plant are essential. State$133.5 M Non-State$47.4 M Non-State Category: Federal Receipts$13.4 M Non-State Category: University Receipts$34.0 M TOTAL$180.9 M Average FY97-FY10$12.9 M Annual NeedAt least $30 M

25. 25 Plumbing shower waste line from the use of showers for over 40 years. Skarland Hall Shower Repairs Corrosion at galvanized shower base pans. This results in water leaking to floor below. ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY 25

26. Wood Stave Sewer Pipe 26 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY 50 year old wood stave pipe - shows only the "bands“. The sewer flow was holding the wood staves up, and once the sewer flow was stopped, they fell to the bottom of the line.

27. III - FY11 Conditions and Distributions 27 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

28.  Continue Reshaping of Budget and Management Processes Budget Principles Carryforward Principles  Impacts and Management of Cost Shifts from Statewide Functional Specific Charge Backs Broad Based ICR and SCH Assessments  New Mechanisms for Gathering Reallocation Pool FY11 – Initial Budget Analysis 28 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

29. FY11 Conditions 29 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY  Entering FY 11 with ~$4M shortfall  GF compensation increase $1.6M below actual  No GF for non-compensation fixed costs (except fuel)  Continuing GF appropriation for ACEP, CES likely  MAP, STEM may receive GF. MAP needs 1:1 match.

30. FY11 Assumptions 30 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY  Legislature’s 3% redistribution pool returned  Insufficient M&R and R&R funding (but more than usual)  Potential lack of utility trigger mechanism  Flat or slightly increasing research revenue  Flat enrollment (maintain FY10 increase)

31. 31 FY 11 Budget $8M Non-General Funds Required to Maintain Existing Programs! ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY Compensation Increase $3.45M General Fund $3.77M Non-General Fund Maintenance & Repair $795K General Fund $790K Non-General Fund Other Fixed Costs $1.3M General Fund $3.5M Non-General Fund Programs $1.4M General Fund* $2.67M Non-General Fund As passed by the Legislature *Includes CES, ACEP, MAP and 150K of one-time STEM funding.

32. FY11 Distributions to Units 32 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY  Salary & benefits increases @ 60% of total  60% of resident tuition  Tuition scholarship budget (‘waivers’) formerly centralized (may delay to FY12)  Replenish reserve, address unbudgeted scholarships and critical needs: ~3 to 4% ATB reduction  PBB: 1% ATB reduction and targeted redistribution

33. IV – FY 10 Projected Performance 33 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

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36. Student Credit Hours 36 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY  Spring 2010 continued Fall 2009 Enrollment Increases:  UAF had a 6.6% increase in SCH Spring 09 to Spring 10.  Bristol Bay and Northwest led CRCD.  Fairbanks was up 8.2%; TVC was up 4.3%.  Nearly all Fairbanks schools and colleges were up, led by College of Engineering and Mines and School of Education

37. Student Credit Hours 37 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY Strategies:  Continue efforts with Alaska high school seniors  School and College recruiting coordinators  Contacts and visits with Alaska high school counselors  UAF UA Scholars award of $2500  Promote financial aid opportunities  Recruiting in Washington and California State Community College systems and California high schools  Targeted recruiting in China  Community and business partnerships  E-Learning

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40. Freshman Retention 40 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY FY07-FY09 3 Yr Avg.FY10 FY11 Projection Tanana Valley Associate- Level, FTFT 43.7%47.1%48% Baccalaureate, all campuses, FTFT 76.4%81.5%80% Total FTFT Retention 65.3%66.7%68%

41. Retention and Graduation Strategies  Increased Baccalaureate admission standard  Mandatory placement  Improved advising  Supplemental instruction  Freshman seminars  Improvements to the Honors Program  Northern Leadership Center  Leadership, Involvement, Volunteer Experience (LIVE) 41 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

42. Retention and Graduation Strategies  Early registration, Fairbanks, TVC and Rural  Improved Financial Aid Advising, Rural and TVC  More Outdoor Adventures  Expanded UAF Traditions programming  Student sustainability efforts  And established efforts like Rural Student Services, TRiO, EDGE (Education Development Growth Experience)... 42 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

43. 43 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

44. Research Expenditures 44 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY ARRA Impacts: Facilities improvements should lead to future research opportunities  R/V Sikuliaq  Upgrades to Toolik Lake research facilities.  Fill atrium of Arctic Health Research Building and construct facility at Kuskokwim Campus.  NSF MRI grant to support bioinformatics research Research funding impacts are not yet clear  May have largely substituted for other research funding sources.

45. 45 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY  Failure of some campus facilities, more anticipated  Facilities are a major concern  Need Life Sciences Facility, both teaching and research laboratories  Further develop strategy on Energy Tech Center Research Expenditures

46. 46 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY  Biomedical programs update  PACMAN funded  Looking forward to EPSCoR IV funding  Alaska Climate Science Center is under negotiation  DHS Center of Excellence (National Center for Island, Maritime, Extreme Environment Security with UH and UPRM)

47. ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY 47 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

48. 48 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY UAF Development  Loss of Foundation funding  Decentralized: SFOS, SOM and CLA/Library have unit development officers  Five staff remain in central development office  On track to meet FY10 goal of $5.6M  Alumni giving is up 6% so far

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50. V - Management Report Recap ALASKA’S FIRST UNIVERSITY  AMERICA’S ARCTIC UNIVERSITY 50 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

51. M/R & R/R Expenditures Fairbanks Campus CRCD & TVCC Total FY09 Expenditures Capital$ 9,367,700$ 7,573,200$ 16,940,900 Operating$ 16,343,472$ 700,103$ 17,043,575 FY09 Calculated Operating$ 14,141,853$ 560,726$ 14,702,579 FY10 Budgeted Capital$ 16,181,700$ 5,036,800$ 21,218,500 Operating$ 14,682,070$ 941,467$ 15,623,537 FY10 Calculated Operating$ 15,391,100$ 799,200$ 16,190,300 FY11 Calculated Operating$ 16,828,800$ 946,400$ 17,775,200 51 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

52. Major M&R and R&R Projects Funded in FY 09 52 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY ProjectsDescriptionAmount One-Stop Shop Completed Jan. 2010 Provides a more convenient service for UAF students. $162,539 Parking Lot Storm Water Run- off Control storm water run-off from West Ridge lots, modify WRRB roof drain. $328,196 TVCC Exterior Envelope Completed October 2009 Replaced entire exterior building envelope.$3,387,200 Northwest Campus Critical Deferred Renewal Projected for October 2010 Replace steel pilings under the Nagozruk and Emily Brown Library buildings. $112,800 Campus Main Sanitary Waste Projected for September 2010 Multi-year campus wide sanitary and storm water waste line project $556,700

53. 53 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY TVCC Thermography Photos TVCC Revitalization Phase 3 Exterior Envelope Before After

54. ALASKA’S FIRST UNIVERSITY  AMERICA’S ARCTIC UNIVERSITY 54 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY Critical Electrical Distribution Phase 1A New utilidor (8' x 8') located on the North side of Alumni Drive near the Atkinson Power Plant. Interior of Vault 2 - boxes and switches will be located on the left hand wall.

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56. FY10 Major Continuing Cost Savings  Academic Affairs  $174K – Library eliminated two staff positions, cut journals and database  $329K – Museum eliminated or left unfilled three staff and two faculty positions  $200K – School of Management eliminated one faculty position and refilled another at lower cost  $ 63K – College of Liberal Arts reduced adjunct faculty hires  Administrative and Facilities Services  $379K – Eliminated or holding vacant seven administrative and staff positions 56 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

57. FY10 Major Continuing Cost Savings  College of Rural and Community Development  $ 60K – Reduced staff position to part-time  $ 43K – Reduced TVC heating costs due to new envelope  IT  $118K – Eliminated or reduced two staff positions  $ 42K – Software licenses dropped due to Google Apps  Student and Enrollment Services  $265K – Eliminated or holding vacant three staff and one executive position 57 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

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59. 59 FY 10 Budget $8.2M Non-General Funds Required to Maintain Existing Programs! ($7.4M projected additional in FY10) ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY Compensation Increase $4.2M General Fund $3.3M Non-General Fund Maintenance & Repair $434K General Fund $657K Non-General Fund Other Fixed Costs $150K General Fund $4.2M Non-General Fund Programs $1.1M General Fund $2.7M Non-General Fund

60. Management of Contingencies 60 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY  Initial FY10 budget included only $1.3M contingency reserve  1% pullback in August 09 (pre-distribution) yielded $2M additional  $522K in utilities not covered by “trigger”  Higher than anticipated tuition revenue (~$700K) and ICR ($~1.4M)  No significant additional contingency funding anticipated

61. Carryforward Analysis  Unrestricted (F1) carryforward projected at $4.9 M or 2.3%  Estimate $5 M to $7 M at end of FY10  Initial contingency reserve low but a pullback replenished  Higher than anticipated tuition and ICR revenue partly offset fixed costs increases  Grants and Contracts accounts receivable reduced  Units with deficits at end of FY10 will submit a remedial plan ALASKA’S FIRST UNIVERSITY  AMERICA’S ARCTIC UNIVERSITY 61 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

62. VI - Summary 62 ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY