College of Human Ecology Assembly

1
College of Human Ecology Assembly

• Wednesday, April 30, 2003

2
The College of Human Ecology goals and approach
to budget realities mirror those of the
University of Minnesota
3
FY2004 2005Budget Framework
GOALS
Balancing the Budget
Investing in the Future
PRINCIPLES
STRATEGIES
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FY2004 2005Budget Framework
Investing in the Future
Balancing the budget
PRINCIPLES
Establish, Maintain and Implement Academic
Priorities Maintain Support to Improve
Productivity of Faculty and Staff Help Students
Realize Their Educational Goals Build and
Maintain An Infrastructure That Will Enhance
Academic Excellence and Accountability
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Fiscal Year 2004-05GOALS
Balancing the budget
Investing in the future
STRATEGIES
Reduction of Administrative and Operating Costs
Academic Investment Differential,
Targeted Allocations
Targeted Eliminations, Reductions And
Consolidations
Academic Investment Pool
Enhanced Institutional Revenues
Investment in Students
Student Tuition Fee Revenue
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Estimated U of MN Financial Obligations
Needed InvestmentsFY0405 BienniumBudget
Challenge Exacerbated by Increasing Costs
Note Estimated Cost of 2.5 compensation
increase in FY05 would add 21.1 million to
budget challenge. Total challenge would be
110.4 million
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Preliminary Estimated FY04-05Shared Solution
to the Budget Challenge
Estimated Range of Solution
Reduction in Administrative And Operating Costs
30 70M - 85M
Targeted Eliminations, Reductions and
Consolidations
15 30M - 45M
Enhanced Institutional Revenues
5 10M - 15M
Student Tuition Fees Revenue
50 120M - 140M
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Shared Solution to the Potential Budget Challenge

• Fringe Benefit/Health Care Cost Containment
• Mandated Operating Expenses Reductions and Cost
  Controls
• Greater Operating Efficiencies
• Elimination of Duplicate/Redundant Activities
• Improved Purchasing Practices

Reduction of Administrative and Operating Costs

• Targeted ReductionsPhasing down a units
  dependence on state funds
• Targeted EliminationsPhasing out all state funds
  supporting unit
• Targeted ConsolidationsOrganizational merger of
  two or more unit/activities saving state funds

Targeted Eliminations, Reductions and
Consolidations
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CHE FY02 Funding Sources 28,705,497
State Appropriations (includes UMES and UAES 27
Sponsored Grants Contracts 41
Tuition 20
Other 2
Federal Appropriations (includes UMES and UAES 5
Endowments Gifts 5
10
CHE FY02 Expenditures 28,681,828
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FY02 revenue by department/unit by funding
source

APPROPRIATIONS
APPROPRIATIONS
(includes UMES
(includes UMES
ENDOWMENTS
GRANTS AND
SPONSORED
CONTRACTS
AND GIFTS
and UAES)
and UAES)
FEDERAL
TUITION
STATE
OTHER
Admin
0.22
0.21
0.13
0.02
0.01
0.41
DHA
0.31
0.39
0.02
0.10
0.08
0.10
FSoS
0.46
0.26
0.03
0.02
0.00
0.23
FScN
0.52
0.00
0.05
0.08
0.04
0.31
SSW
0.20
0.13
0.01
0.02
0.01
0.63
SS
0.11
0.47
0.00
0.31
0.11
0.00
Total
0.27
0.20
0.05
0.05
0.02
0.41
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Indirect Cost Recovery (ICR)
13
CHE tuition is tied to enrollments
CHE FY02 tuition was 5,325,337 CHE Estimated
FY03 Tuition is 6,233,010
Fall 97
Fall 98
Fall 99
Fall 00
Fall 01
Fall 02
Undergraduate
831
935
953
949
1033
1088
Graduate
307
261
332
354
334
397
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Projected FY03 common good contributions
Institutional Revenue Sharing
1,038,990 University assessment to recognize
institutional level costs that benefit entire
institution. Tax is on revenue earned on
selected income in non-sponsored funds at the
rate of 6.35. Projected at 7.6 next year
1,169,138 Enterprise
127,067 University assessment to cover costs to
replace primary institutional administrative
systems. Tax is on selected non-sponsored
salaries at the rate of 1.25.

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Timeline University General Assessments
Fiscal Year
Enterprise Assessment
Business Serv. Tax
Sales Serv. IRS
Academic IRS
1997-98 .7 various - 0.0 1998-99 0.0 various
- 0.0 1999-00 .7 revised 2.0 1.0 2000-01 1.2
5 - 3.25 2.25 2001-02 1.25 - 3.25 3.75 200
2-03 1.25 - 3.75 6.35
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FY1999-
FY2000-
FY2001-
FY2002-
00
01
02
03
1,357,832


Academic Excellence
586,180
102,000
298,018
371,634
256,000


Development
-
-
-
256,000
393,598


Technology
150,000
45,000
60,000
138,598
152,300


External Relations
-
-
100,000
52,300
344,613


CHE Facilities
100,000
-
-
244,613
Totals
836,180
147,000
458,018
1,063,145
2,504,343


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What I have heard

• We will first address efficiencies and cost
  savings
• Colleges that have growth potential are not at
  risk
• Growth potential is measured in enrollment AND in
  income generation
• Program alignments for quality measure and cost
  savingssignature programs
• High overhead at risk

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Implications for the College

• OM base major reduction
• Reduction on college base in future on tuition
  income established on a base year 2003
• Tuition income generated because of high
  productivity increased enrollment and credit
  hours retained in college
• At a minimum, demands sustainability
• Growth preferred in selected quality areas as
  well as reductions/elimination in targeted areas

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State Subsidy Tuition Relationship10 Revenue
Swap Model
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State Subsidy Tuition Relationship10 Revenue
Swap Model
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Institutional Revenue Sharing (IRS) Enterprise
Tax Model
FY
IRS Assessment
IRS
Ent. Assessment
Ent
Total Tax Assessment
2003
727,487.05
6.35
134,409.45
1.25
861,896.50

2004
832,693.16
7.60
130,659.45
1.25
963,352.61

2005
925,399.28
8.85
126,909
1.25
1,052,308.73

2006
1,056,105.39
10.10
126,909
1.25
1,183,014.84

2007
1,186,811.50
11.35
126,909.45
1.25
1,313,720.95

2008
1,317,517.61
12.60
126,909.45
1.25
1,444,427.06
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Strategies

• Cost Containment and efficiencies
• Work Force study
• Target Programs
• Identify signature programs
• Identify good and marginal programs
• Increase Revenue

• 200,000
• 600,000
• 200,000

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Program Targets

• Establish criteria for signature programs
• Excellent invest
• Good keep
• Good not keep

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Basic Criteria of Excellence College of Human
Ecology

• Scholarship
•  
• High-Quality Education to Outstanding
  Undergraduates
• Building Cornerstone Programs of Excellence in
  Graduate
• Education and Research
• Increasing the University's Contributions to
  Society

• Management
•  
• Encouraging Entrepreneurship
• Resource Allocation
• Positioning

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Revenue Generation

• Options to explore

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Goals Long Term

• Maintain enrollment and excellence of
  undergraduates sustain excellence in competitive
  programs and improve programs determined to be
  goodmove to excellence
• Maintain competitiveness of the graduate program
• Maintain grant procurement levels of the college
  and increase ICR
• Increase alternative revenue streams e learning,
  certificates, continuing education and
  professional development

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Goals Long Term

• Continue investment in development to realize
  increased endowments for future income
• Continue to align outreach programs of the
  college for efficiencies and relevance
• Analyze role functions and efficiencies of staff
• Insure excellence in customer service within
  college
• Invest in faculty and staff development

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Goals Short Term

• Reduce costs by implementing efficiencies
• Reallocate investments to high priorities to
  improve quality and competitiveness
• Invest to increase productivity and increase
  income
• Target elimination when marginal to mission
  and/or excellence

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Principles

• All investments and reallocation/reductions are
  done in context of a long-term plan for
  excellence competitiveness and quality
• Planning accommodate flexibility for opportunity
• Work with an ethic of stewardship of resources
• Central to mission

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What are the indicators of quality while doing
cost containment? What are the appropriate
financial goals for departments?