Budget Update March 13, 2009

1. Budget UpdateMarch 13, 2009

2. AGENDA • Overview – President Norton • FY2009 Budget update • FY2010 Budget reductions • Proposed draft Guiding Principles for Budget Actions • Next Steps for Departmental and Program Review

3. Unanswered Questions • How much will our budget be reduced? • State appropriation may not be finalized until May, June, July…. • What financial options may be available to the State? • Retirement incentive *Travel Reduction • Layoffs *Furlough Days • Employee concessions *20% DAS Fleet Reduction • Salary freeze *Hiring Freeze *Elimination of non- essential purchases *Freeze Management Salaries

4. Unanswered Questions • Does Southern have the approval to refill critical positions (Faculty, Health & Safety, etc.) for next year? • What will our enrollment be for next year? • What will tuition and fees be set at in FY2010?

5. FY2009 Budget Update Revenue: Current Projection FY2008FY2009 • Student Tuition and Fees $78,400,258 $82,286,473 • Student Housing & Food 19,420,806 20,145,333 • Other Student Fees (app fee, cont. enrollment fee) 4,536,0835,084,052 • Total Collected from Students $102,357,147 (57%) $107,515,858 (59%) • State Appropriation $48,371,011 $47,178,634 • Fringe Benefits (state contribution for employee benefits) 24,357,10723,701,944 • Total State Support $72,728,118 (40%) $70,880,578 (38%) • Other Revenue (rental, interest earnings, commission) $5,645,238 (3%) $4,823,162 (3%) • Total Revenue $180,730,503 (100%) $183,219,598 (100%)

6. FY2009 Budget Update Revenue: Current OriginalProjection FY2009FY2009 • Student Tuition and Fees $83,499,241 $82,286,473 * • Student Housing & Food 19,610,108 20,145,333 • Other Student Fees (app fee, cont. enrollment fee) 5,282,8705,084,052 • Total Collected from Students $108,392,219 (59%) $107,515,858 (59%) • State Appropriation $46,429,633 $47,178,634 • Fringe Benefits (state contribution for employee benefits) 24,586,40223,701,944 • Total State Support $71,016,035 (38%) $70,880,578 (38%) • Other Revenue (rental, interest earnings, commission) $5,351,942 (3%) $4,823,162 (3%) • Total Revenue $184,760,196 (100% ) $183,219,598 (100%) * Decrease is attributed to Part Time enrollment decline

7. FY2009 Budget Update SOUTHERN’S REVENUE IS ENROLLMENT DRIVEN 95.8% of revenue is from enrollment 75% of SCSU’s expenditure is personnel driven

8. FY2009 Budget Update Remaining 25% is operations: Current Projection FY2009 • Utilities $8,843,022 • Institutional Financial Aid 7,884,491 • Food Service Contract (pass through) 5,810,403 • Insurance (pass through) 3,638,301 26,176,217 • Professional Services 4,700,604 • Repairs/maintenance Supplies 2,479,082 • Library Materials/Books 2,204,510 • Equipment 1,225,000 • Other Expenses (travel, advertising, waivers, telecom, office supplies, postage)9,859,504 20,468,700 Total Operating Expenses $46,644,917 (25%) $20,468,700 – Only 10% of budget is discretionary

9. FY2010 Budget Reduction Budget Reduction Possibilities 10% 7,795,449 * 15% 11,064,129 20% 14,332,810 25% 18,064,062 30% 21,795,315 * Overall, the State budget gap is greater than 25% Governor’s current SCSU reduction equals 10% Each 5% reduction is approximately $3.3 million

10. FY2010 Budget Reduction Budget Actions in place this fiscal year to close the FY2010 budget gap • $3,402,710 Currently there are 56 vacant or soon-to-be vacant non-teaching positions. This amount represents budgeted savings for FY2010 and includes fringe benefits. • 273,858 Reduced out-of-state travel by 50% • 251,341 Heating/cooling temperature adjustments • 295,948 Reduced University Assistants • 189,213 Reduced Overtime • 383,268 Reduced associated costs for supplies, professional services, and food/refreshment • 233,341Management/Confidential salaries frozen for FY2010 $5,029,679

11. FY2010 Budget Reduction Additional reductions that can be made to close remaining FY2010 10% budget gap of $2,765,770 • $665,736 Not refilling 12 faculty positions that will be vacated by 2 year temporary appointments (includes fringe benefits) • 906,600 Reduce non-contractual reassigned time by 66% (returns 22.5 FTE faculty to classroom instruction) • 401,558 Additional conservation efforts and price/consumption analysis for electricity, natural gas, and oil • 618,406 Reduce departmental Operating OE budgets by an additional 5% • 110,000 Library materials reduction • 63,470 Reduce Non-teaching PT positions (includesfringe benefits) $2,765,770

12. FY2010 Budget Reduction Recap • $2,765,770 Reductions that would have to be made before July 1, 2009 • 5,029,679 Reductions in place $7,795,449 Estimated 10% reduction for FY2010

13. FY2010 Budget Reduction Unfortunately, we must be prepared for a larger reduction in state appropriation 15% 11,064,129 20% 14,332,810 25% 18,064,062 30% 21,795,315

14. FY2010 Budget Reduction Tuition/Fee Increase 5% Tuition Rate Increase @ 300 enrollment increase (12,000 students) = $4.0 million This only takes us to the 15% reduction

15. FY2010 Budget Reduction Remember: This is a short term plan for July 1, 2009 for FY2010 FY2011 and FY2012 will require additional reductions

16. Guiding Principles – Development (draft) • February 12 President Norton charges the University Budget and Planning Committee and the University Strategic Plan Review Committee with identifying guiding principles which will frame budget actions Budget & Planning CommitteeStrategic Plan Review Committee Mr. James E. Blake – Chair Dr. Marianne Kennedy - Co-chair Mr. Eric Anderson Mr. Andrew Marullo Mr. Peter Boppert Dr. Angela Todaro Ms. Lise Brule Dr. Annette Madlock Mr. William Burton Mr. Brian Johnson Dr. Pamela O. Brucker Mr. Christopher M. Piscitelli Mr. Greg Cochenet Dr. Christine Unson Dr. Nicholas P. Edgington Dr. Glenda Dejarnette Dr. Ross B. Gingrich Mr. Greg R. Crerar Dr. James M. Granfield Dr. Kenneth Florey Dr. Ronald D. Herron Dr. Maria Diamantis Dr. Peter R. Madonia Mr. Mark A. Waters Ms. Barbara Mallick Dr. Nicholas Edgington – Co-chair Dr. Gregory Paveza Dr. Paul Stepanovich Ms. Leilannie Quintana Dr. David E. Pettigrew Ms. Megan A. Rock Mr. Ray Kellogg Mr. Robert G. Sheeley Dr. Stephen Joyner Ms. Judith A. Sizensky-Searles Dr. Troy Paddock Dr. Selase W. Williams Mr. Robert G. Sheeley Dr. Christina D. Baum Ms. Judith A. Sizensky-Searles

17. Guiding Principles – Development (draft) • February 20 Joint meeting of both committees was convened which resulted in a set of draft principles. It was agreed that a sub-committee composed of members from both committees would refine the principles • March 6 Sub-committee met and reached consensus on the final set of draft principles • March 9 Final draft principles were circulated to both committees for final comments • March 10 Final draft principles were reviewed at President Norton’s staff meeting • March 11 Final draft principles were distributed to the University community • March 13 Draft Principles discussed at Town Hall meeting

18. Guiding Principles (draft) Overarching Principles • The vision and mission of the university, as stated in the 2007 – 2012 University Strategic Plan (USP) will serve as the basis for budgetary decisions impacting short term and long term planning • In recognition that any budget reduction scheme induces apprehension, the process will be transparent and effectively communicated to all constituents of the University

19. Guiding Principles (draft) • Support and enhance the student academic experience • Support and enhance the student life experience on campus • Provide for sufficient qualified faculty and staff and an academically sound faculty/student ratio to support the teaching-learning mission of the university • Prevent lay-offs of full-time faculty and staff • Address budgetary gaps caused by vacancies (e.g., early or scheduled retirements) in a manner consonant with advancement of the USP

20. Guiding Principles (draft) • Maintain enrollment to reflect appropriate mix of students (11,800 and 12,300 students –distributed through retention, transfer students, part-time students and a growing graduate student population, with a maximum enrollment of 1,350 for full-time entering freshman) • Maintain a healthy (both physical and psychological) campus environment

21. Guiding Principles (draft) • Maintain appropriate student, faculty, and staff access to the campus, and the University services, such that student success and learning are not impinged • Ensure that University assets are safeguarded • Comply with all governing laws, policies and procedures set forth by governing bodies (Federal, State, NEASC, CSUS BOT) and accrediting bodies for academic programs/schools within the university

22. Guiding Principles (draft) • Make budget decisions that are driven by facts, data, and reasonable projections without ignoring core values as identified in the USP • Do not eliminate a function that we think would have to be reinstated in the near future (2 years) • No use of reserves (balanced budget FY2010) • Reduce costs in areas that focus on one time expenditures and can be reinstated quickly when the economy changes (positively) • Establish alternative revenue streams • Before functions (resources, services, programs) are cut, alternative ways of meeting the needs those functions provide must be determined as expeditiously as possible

23. Guiding Principles (draft) • Support faculty and staff efforts to receive external grants • In dire budget crises where functions that advance the University Strategic Plan are adversely impacted by cost saving or revenue producing measures (e.g. increased student enrollment with decreased human resources to meet academic and support needs of those students), those functions will be given priority consideration for reallocation/allocation of resources when the economy changes positively

24. Guiding Principles (draft) • Continue support for our University’s academic and/or programmatic ‘unique strengths’ • Maintain efforts to prepare students to meet the workforce needs of the nation, and particularly the State of Connecticut

25. NEXT STEPS Send suggestions/revisions to: Mr. James Blake – Blakej2@southernct.edu Dr. Nicholas Edgington – Edgingtonn1@southernct.edu Dr. Marianne Kennedy – Kennedym4@southernct.edu

26. NEXT STEPS Academic Departments • Confirm the fall 2009 course schedule, instructor assignments, effective course rotation and monitor course fill rate • “Formulate an Academic Program Plan that establishes clear goals for the advancement of existing academic programs and sets priorities for new and existing resources.” (USP goal A.1.) • Responsibility: Department Chairs, Deans and Provost

27. NEXT STEPS Administrative Departments • Assuming zero-based budgeting, what would be your level of service? • Assess/survey department’s service objectives • Prioritize service objectives • Minimally, what resources are needed to provide these services? • Who are these services provided to (students, faculty, staff, donors, others)? • What would be the impact if these services were no longer provided? Responsibility: Vice Presidents, Deans, Directors and Department Heads

28. Questions ?