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Budget Update October 6, 2011. FY 2012 Presented at Town Hall Meeting 10/22/10.

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Presentation on theme: "Budget Update October 6, 2011. FY 2012 Presented at Town Hall Meeting 10/22/10."— Presentation transcript:

1 Budget Update October 6, 2011

2 FY 2012 Presented at Town Hall Meeting 10/22/10

3 FY 2012 STATE APPROPRIATION Original RequestedChange Governor's March 2011 Recommendation State Appropriation $ 50,449,092 $ (6,869,586) $ 43,579,506 Fringe Benefits Paid by State 29,022,648 (3,196,467) 25,826,181 Total $ 79,471,740 $ (10,066,053) $ 69,405,687

4 FY 2012 Steps taken when the FY2012 Spending Plan was developed: Reduced full-time positions from 1,023 to 998 Continued to achieve operational savings from our ongoing cost containment program No funding set aside for strategic initiatives Tuition and fees were increased by 2.5 percent

5 FY2012 Despite these actions, the university was still left with a significant budget deficit due to an extra payroll and the growth of non-general fund expenses. The following actions were taken to close the gap for FY2012: The University received board approval to use almost $4 million of reserves to cover the general fund portion of the 27 th payroll for FY 2012 As part of the FY2012 budget preparation, each vice president provided budget reduction outlines for their respective areas. To close the remaining gap, divisional budgets were reduced by $4.7 million. This included holding positions vacant, including temporary one-year faculty appointments, custodial and clerical staff, and administrators A change in board policy that reduced university CHEFA debt obligations by 20 percent. Several refinance opportunities, along with lower interest rates, saved $1.85 million

6 FY 2012 STATE APPROPRIATION Governor's March 2011 Recommendation8/25/11 Change (*) Sub-Total Based on 8/25/11 Change State Appropriation $ 43,579,506 $ (3,306,602) $ 40,272,904 Fringe Benefits Paid by State 25,826,181 ( 892,233) 24,933,948 Total $ 69,405,687 $ ( 4,198,835) $ 65,206,852 Once the concession agreement was finalized, Southern was notified on August 25, 2011 that the State appropriation would be reduced by an additional $4,198,835. The concession agreement reduced Southern salary and fringe expense by $2,880,227, leaving a budget gap of $1,318,608. To close the gap, management positions will be held vacant until March 1, 2012 or longer. Additional reductions were required in non-divisional OE. Note: The 8/25/11 reduction to the Gen’l Fund & FB paid-by-State appropriation is offset by the following expense savings (resulting from employee concessions): Elimination of BU increases$1,831,808 Reduction in Longevity 208,999 Related Fringe Benefit Reduction 839,420 $2,880,227 (*)

7 FY 2012 STATE APPROPRIATION Sub-Total Based on 8/25/11 Change9/7/11 Change Sub-Total Based on 9/7/11 Change State Appropriation $ 40,272,904 $ ( 815,556) $ 39,457,348 Fringe Benefits Paid by State 24,933,948 ( 441,934) 24,492,014 Total $ 65,206,852 $ ( 1,257,490) $ 63,949,362 On September 7, 2011, The University received a third notification that the State appropriation would be further reduced by $1,257,490. To close this gap, it will require holding 16 administrative positions vacant until January 1, 2012 and 1 position for the entire year. Additional reductions were also required in non-divisional OE.

8 FY 2012 FY2012 State Appropriation Total Amount of Reductions $ 15,522,378 Less: Concessions (2,880,227) Net Reduction $ 12,642,151 NOTE: Net Reduction is 15.9% of the Original FY 2012 Spending Plan State Appropriation 12,642,151 / 79,471,740 = 15.9% *

9 FY2012 Total State Appropriation Reduction: FY2009 $ (3,266,263) FY ,040 FY2011 (318,871) FY2012 (Net) * (12,642,151) Total State Appropriation Reductions $ (15,530,245) Total Fund Balance Reduction: (4,398,959) TOTAL REDUCTION: $ (19,929,204) * Note: FY2012 reduction is net of savings from concessions $15,522, ,880,227 = $12,642,151

10 FY 2012 NOTE: This Trend is Nationwide

11 FY 2012 The FY2012 Spending Plan was built on an assumption of a 2% enrollment increase. We wanted to “grow” our way out of the effect of our budget reductions.

12 FALL 2011 HEADCOUNT GOAL vs THIRD WEEK ACTUAL Goal Actual Third Week Variance Favorable / (Unfavorable) Full Time Undergraduate Continuing 5,375 5,270 (105) New Freshmen 1,350 1,319 (31) New Transfers (15) 7,675 7,524 (151) Full Time Graduate 1, (72) Sub Total Full Time 8,685 8,462 (223) Part Time Undergraduate 1,308 1,172 (136) Part Time Graduate 2,210 1,899 (311) Sub Total Part Time 3,518 3,071 (447) Grand Total 12,203 11,533 (670) FY 2012

13 What was the financial impact of not achieving the FY2012 enrollment goals for the Fall? FT Undergraduate $ (626,848) FT Graduate (329,184) PT Undergraduate (357,245) PT Graduate (727,316) Total $ (2,040,593) Net Operating Fund impact (less financial aid 15%, Debt Services, Activity Fees) is: $1,787,237 FY 2012

14 HEADCOUNT Fall 2010 vs Fall 2011 Fall 2010 Fall 2011 Variance Favorable / (Unfavorable) Full Time Undergraduate Continuing 5,299 5,270 (29) New Freshmen 1,248 1, New Transfers (12) 7,494 7, Full Time Graduate 1, (62) Sub Total Full Time 8,494 8,462 (32) Part Time Undergraduate 1,282 1,172 (110) Part Time Graduate 2,188 1,899 (289) Sub Total Part Time 3,470 3,071 (399) Grand Total 11,964 11,533 (431) FY 2012

15 What was the financial impact of not achieving last Fall’s enrollment? FT Undergraduate $ 123,720 FT Graduate (283,464) PT undergraduate (334,530) PT Graduate (627,284) Total $ (1,121,558) Net Operating Fund impact (less financial aid 15%, Debt Services, Activity Fees) is: $1,084,439 FY 2012

16 All-University Student Headcount & FTE & by Year (Fall) Includes Full-Time, Part-Time, Undergraduate & Graduate Students Source: Semi-Annual Statistical Report HEADCOUNT Fall Full Time 6,791 7,059 7,161 7,291 7,609 7,780 7,996 8,024 8,111 8,346 8,494 8,462 Part Time 5,336 5,195 5,058 4,852 4,568 4,378 4,330 3,906 3,658 3,469 3,470 3,071 Total Headcount 12,127 12,254 12,219 12,143 12,177 12,158 12,326 11,930 11,769 11,815 11,964 11,533 % change 1.00%-0.30%-0.60%0.30%-0.20%1.40%-3.20%-1.30%0.40%1.30%-3.60% FTE Fall Full Time 6,402 6,620 6,770 6,908 7,203 7,377 7,779 7,667 7,773 8,020 8,164 8,161 Part Time 1,933 1,914 1,902 1,851 1,734 1,681 1,652 1,512 1,400 1,324 1,363 1,208 Total FTE 8,335 8,534 8,672 8,759 8,937 9,058 9,431 9,179 9,173 9,344 9,527 9,369 %change 2.40%1.60%1.00%2.00%1.40%4.10%-2.70%-0.10%1.90%2.00%-1.70%

17 FY2012 Current Forecast Possible additional 5% reduction $63,949,362 x 5% = $ 3,197,468 Historically Spring enrollment/revenue is less than Fall There will be significant revenue shortfalls for:  Intersession  Spring  Spring break  Summer A

18 FY2012 Current Strategies Meeting to develop strategies to increase enrollment:  USPaRC  University Budget & Planning  Enrollment Management Council Continue to hold positions vacant/hiring freeze Reduce departmental budgets (OE, Student Labor & UA)

19 In conclusion: The current path that Southern is following –  Diminishing state appropriations  Shrinking student enrollments will not sustain Southern as the University we know today FY2012


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