SLIDE 1 Budget Sub Meet and Confer Budget Primer
September 13, 2019 Rick Straka
SLIDE 2 Presentation Topics
- 1. Tuition vs. Fees – What is the difference?
- 2. Types of Fees – What are they and why?
- 3. Fund types – What are they?
- 4. What role does foundation play in budget?
- 5. Trends in State Appropriation
- 6. General Budget Update
- 7. Capital Budget/Building Updates
- 8. Q&A
SLIDE 3 Tuition vs. Fees
w Tuition
- Major source of General Fund revenues along with
State Appropriations
§ Core Instructional and Operational budgets
§ Parking related expenses § Student Union operations or debt service § Residence Life operations or debt service § Student Activity operations
SLIDE 4 Tuition vs. Fees
w Fees
- Defined and authorized by MinnState Board Policy
5.1.1
- http://www.mnscu.edu/board/policy/511.html
- http://www.mnscu.edu/board/procedure/511p1.html
- Fee revenues are restricted for specific uses based
upon above MinnState Policy and Procedure
SLIDE 5 Tuition Procedure 5.11.1
w Subpart C. Differential course and program tuition Colleges and universities may charge tuition by course or program when special circumstances
- exist. These circumstances may include but are not
limited to an extraordinary cost of offering the course
- r academic program (e.g., need for specialized
equipment and supplies; accreditation standards; delivery methods, e.g., off site locations, online, clinical experience) or a desire to incent enrollment in a specific course or program.
SLIDE 6 Tuition Procedure 5.11.1
w Subpart D. Market driven tuition Colleges and universities may set and charge market driven tuition for customized training, continuing education, graduate programs, fully
- nline undergraduate programs, non-
resident/non-reciprocity, international, non-credit instruction, and contract post-secondary enrollment
SLIDE 7
Totally Online New Programs
SLIDE 8 Types of Fees
w Mandatory Fees
- Senior citizen fee in lieu of tuition, Parking fee, Late
fee, Payment plan fee, Statewide student association fee.
w Optional Fees
- Application fee, Credit for prior learning assessment
fee, Student life/activity fee, Athletics fee, Health services fee, Special events fee, Residential learning community fee, Technology fee
w Personal property charges and service charges w Revenue Fund fees
SLIDE 9 Major Fund Types
w General fund
- Tuition and Appropriation, Primary university
- perations
w Student Activity Fund
- Student Fee Funded activities
w Revenue Funds
- Student Union, Residential Life (Room and Board),
Outdoor Rec Fee
♦ Auxiliary Funds
SLIDE 10
MSU Budget Process
w Operating Budget is Primarily Incremental in Nature (Gen Fund, Student Fees, Room and Bd)
< Last Year’s Base +/- Incremental Change
w Incremental Change Aligned with Strategic Goals
< Mandated/Required Changes Also Considered
w Legislative and Bargaining Changes Challenging
< Biennial Budget Finalized 6 weeks prior to Biennium Start < Bargaining Agreements Often Settled Late in Biennium
SLIDE 11
Gen Fund Budget Subcategories
w Basic Operations
< Base +/- Incremental
w Equipment
< 40% Base, 60% Zero Based
w Strategic Priority
< Zero Based
w Repair and Betterment
< Zero Based
SLIDE 12
Other Fund Types
w Federal Grants w State Grants w Private Grants w Financial Aid Funds w Agency Funds
SLIDE 13 University Gen Fund Reserves
w MinnState Required Undesignated Reserves of 5% - 7% of prior year Gen Fund Revenues w Goal of Minimum Year End Cash Balance of 20%
SLIDE 14
Gen Fund Reserve Uses
w Unanticipated Revenue Shortfalls or Expenses w Bridge Funding for a Short Term Transition to Balance Base Budgets w One-Time Investments (Operating or Capital) w NOT for Funding Ongoing Deficit Spending
SLIDE 15 Role of Foundation
w Primary Role of Foundation
- Scholarship Support via Annual Gifts and Endowment
Earnings
w Secondary Role
♦ Foundation revenues are not a material source of unrestricted General Fund Budget
SLIDE 16 State Appropriation Trends
w Historic state funding goal
- 2/3 Appropriation, 1/3 Tuition
- Current Funding
- Approximately 1/3 Appropriation, 2/3 Tuition
- Fifteen year trend has been steadily declining
state support. There has been an increase in last three biennium which partially supported tuition freezes in 4 of last 6 years (FY14-FY19). Unlikely to return to historic funding goal.
SLIDE 17
FY19 Review
w Budget was approximately $4M in deficit prior to Investments and Reallocation/Reductions into FY20 ØEnrollments Decreased to 13,250 ØReserves Look Sound – 7% range plus ØSlightly Negative Gen Fund Cash Flow for FY19 ØLargest Increase in Online Differential NAI ØNo Financial Recovery Plan Required
SLIDE 18 FY20 Update
w Enrollment for FY20 Projected decrease 120-150
- FYE. Plan for fairly stable enrollment in FY21
< Decline in NEF and Transfers < Uptick in Retention < HS Demographics - Leveling Off in Total
w FY20 Tuition Shortfall Leaves Slight Deficit Budget at 3% Inflation w Assumes $5M in reduction of base budgets from FY19-FY20 w FY21 Will Require Balancing Structural Deficit
SLIDE 19
Capital Budget/Building Funds
w General Obligation (GO) Bond Funds
< Funds Major Academic (Non-Revenue Fund) projects § Ex. Ford Hall, Clinical Sciences, Trafton Renovation < MSU Pays 1/6 of debt service from General Fund < Armstrong Replacement Project $100M over 2022, 2024, 2026 Bonding Sessions
SLIDE 20
Capital Budget/Building Funds
w Revenue Bond Funds
< Funds Major Improvements to Residence Halls, Student Union and Other Revenue Streams § Ex. Sears and Preska Halls, Dining, CSU Addition/Renovation, Outdoor Recreation Project < Revenue Funds Pay 100% of Debt Service via Student Fees (Room and Board, CSU Facility Fee) < Seasonal Dome was $2M of Taxable Revenue Bond Proceeds plus $3.5M Gen Fund Reserve
SLIDE 21 MinnState Three Pillars
- 1. Student Success
- 2. Diversity, Equity and
Inclusion
- 3. Financial Sustainability
SLIDE 22
MSU Strategic Initiatives 2016-2021
1. Enhancing Student Success and Completion 2. Elevating Faculty Distinction and Academic Achievement 3. Expanding Regional and Global Impact 4. Leading Equity and Inclusive Excellence 5. Advancing a Culture of Evidence and Innovative Organizational Designs 6. Leveraging the Power of Partnerships and Collaboration
SLIDE 23 President’s Retreat and Convocation
- 1. Student Success
- 2. Student Success
- 3. Student Success
* Retention, Completion, Opportunity Gap
SLIDE 24
National Trends in Higher Education
Insights from the Society for College and University Planning 2019 Annual Conference
SLIDE 25
Open Q & A
w Questions??
SLIDE 26 Budget Sub Meet and Confer Budget Primer
September 13, 2019 Rick Straka
