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

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

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

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

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

6. Capital Maintenance and Outlay

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

8. 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

9. 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

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

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

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

13. FY 2014-15 Appropriations Knoxville FY 2014 Appropriations$ 174,335,300 Formula Outcomes$ 3,758,400 Group Health Insurance916,900 401(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

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

15. 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.

16. FY 2014-15 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

17. Tuition and Fees AY 2013-14 A comparison of the Top 25 tuition and fees to that of UT Source: The Chronicle of Higher Education. (2014)

18. State Appropriations and Tuition & Fees FY 2012-13 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

19. Undergraduate Mandatory Fees

20. Percent chance in tuition

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

22. 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

23. 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

24. TN Outcomes-Based Formula Source: THEC

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

26. 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

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

29. 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….

30. QUESTIONS?