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Board of Governors of the Colorado State University System Finance Committee October 1, 2009.

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Presentation on theme: "Board of Governors of the Colorado State University System Finance Committee October 1, 2009."— Presentation transcript:

1 Board of Governors of the Colorado State University System Finance Committee October 1, 2009

2 Agenda Item #1: Global Campus Report Academic –Higher Learning Commission accreditation status Letter of PIF submission receipt received 9/11, 60 days for acceptance evaluation –CEO search process started; job description drafted and ready for posting –Successful initial Curriculum Committee meeting, all fall courses approved Cash –Undergraduate programs remain above plan, graduate programs below plan; net income projection for October start remains unchanged –Complete model rework to current students, revenue and cost structure and improved assumptions in process. New base case compared to old available mid October. Will not ask Board for more funds at October meeting Facilitating faster growth –Approached by Accretive LLC of NY regarding their desire to invest $15-$25 million in Global Campus – meeting at Global done, proposed follow up in NYC 10/21 –Approached 3 different groups about value chain partnerships with them sharing risks on marketing, sales and enrollment costs for faster growth

3 Global Campus Enrollment & Financial Update for Fall C 10/26 Start as of Actual data as of 9/28 10/26 StartGoalActual% of Goal Undergrad Credits % Undergrad Students (729,3.8)* % UG Rev at $249G v $281 a $ 689,730 $ 664,56596% CH/UG student % Grad Credits % Grad Students (486,3.2)** % G Rev at $349G v $351 a $ 542,695 $ 326,43060% CH/G Student % Total Credits % CH Mix (% UG)64%72% Total Students % Student mix (%UG)60%63% Total Revenue $ 1,232,425 $ 990,99580% * March UG b-plan students and CH/s in (), mix changed but total CH remains the same ** March G b-plan students and CH/s in (), mix changed but total CH remains the same

4 Agenda Item #2: Review of Facility Program Plan-Morgan Library See Material in Appendix A

5 Agenda Item #3: Legislative Council September Revenue Forecast Legislative Council General Fund Revenue Forecast Cumulative Shortfall YearJune ReportSeptember Report FY $ $ FY $ $ 1,331.6 FY $ $ 1,641.0 This forecast information was just becoming available on September 21 as you last met. FY2010 The FY 2010 revenue shortfall is projected to be $560.7M compared to $384M in June. The Governor on 8/18 addressed $320M of this shortfall with his recent budget cuts. This leaves $240M which still must be addressed in the coming months. Because of federal law, and the acceptance of stimulus funds, additional reductions in higher education will be difficult and cannot be accomplished without a waiver. Current base is FY (555.3M in total and $113M for CSUS) FY 2011 In FY 2011 (next budget year), the projected shortfall grows to $1.33B. This is $458M more than was projected in June. FY 2012 – the Cliff The cumulative shortfall in FY2011 or FY 2012 does not take into consideration the $320M in current cuts or the need for $345M in new funding for projected caseload increases in the Department(s) of Human Services, Medicaid, Corrections, and K-12.

6 Agenda Item #4: Tuition, Enrollment, and other Revenue/Budget Issues

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11 The Challenge: Funding Higher Education Adequately Colorado ranks 49 th in the nation in terms of state and local support for higher education and 48th in the nation in higher education spending per capita CSU Fort Collins’ resident, undergraduate tuition rate is 81% of the average rate charged by peers –Current tuition rates are more than $1,067 lower than the average rate CSU Pueblo’s resident, undergraduate tuition is 61% of the average rate charged by peers –Current tuition rates are $2,227 lower than the average rate

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13 FY 2009 CSU Peer Tuition Comparison Institution Resident, Undergraduate Tuition UNIVERSITY OF CALIFORNIA-DAVIS$9,496 PURDUE UNIVERSITY-MAIN CAMPUS$7,317 VIRGINIA POLYTECHNIC INSTITUTE AND STATE UNIVERSITY$6,332 WASHINGTON STATE UNIVERSITY$6,720 AUBURN UNIVERISTY MAIN CAMPUS$5,880 IOWA STATE UNIVERSITY$5,524 THE UNIVERSITY OF TENNESSEE$5,448 MISSISSIPPI STATE UNIVERSITY$5,151 KANSAS STATE UNIVERSITY$4,764 TEXAS A&M UNIVERSITY$4,598 COLORADO STATE UNIVERSITY$4,424 NORTH CAROLINA STATE UNIVERSITY AT RALEIGH$3,860 OKLAHOMA STATE UNIVERSITY$3,152 OREGON STATE UNIVERSITY$3,072 Average$5,486 CSU as a Percent of the Average Tuition Rate81% Dollar Difference from the Average Tuition Rate($1,062)

14 FY 2009 CSU-Pueblo Peer Tuition Comparison Institution Resident, Undergraduate Tuition UNIVERSITY OF SOUTH CAROLINA – UPSTATE$8,062 CHRISTOPHER NEWPORT UNIVERSITY$7,550 RAMPO COLLEGE$7,459 COASTAL CAROLINA UNIVERSITY$7,220 LOCK HAVEN UNIVERSITY$5,358 RICHARD STOCKTON COLLEGE$5,146 FAIRMONT STATE UNIVERSITY$5,024 SHEPHERD UNIVERSITY$4,898 CUNY YORK COLLEGE$4,000 MISSOURI WESTERN UNIVERSITY$3,994 MISSOURI SOUTHERN UNIVERSITY$3,432 COLORADO STATE UNIVERSITY-PUEBLO$3,422 Average$5,649 CSU-PUEBLO as a Percent of the Average Tuition Rate61% Dollar Difference from the Average Tuition Rate($2,227)

15 Agenda Item #4: Summary of Revenue Development Issues/Discussion from September 21 Finance Committee Meeting. The “cliff” for higher education still looms in FY 2012 and is larger than ever at this point. At the last Finance Committee meeting on September 21, 2009 solutions were discussed and can be categorized into three broad areas: Generate new or greater amounts of revenue.  Tuition: differentials, higher base tuition increases, change in-state/out-of-state mix, charge more for high cost and high demand programs, close the credit hour window in Ft. Collins  Global Campus  Real estate  Treasury Investments (starting a CSU System investment pool-on hold for now)  Increasing unrestricted donor funds  Begin carbon trading and qualification  Reexamine the use of institutional financial aid Restructure expenses. Reduce expenses at each campus and the System office thereby resetting our expenditure base.  Review current structures and look for greater efficiencies by reexamining such items as personnel, benefits, defined contribution plans, and other insurances to make sure the greatest efficiency is being achieved. Strive for greater flexibility and control for the Board of Governors by being proactive with ideas and concepts with the General Assembly. These include:  Asking for greater operational flexibility and less regulation.  Independent tuition setting authority  Continuing to engage in the debate about an overall solution and strategy for the state’s budget.  Being prepared to support various tax proposals concerning the elimination of tax exemptions or adding new taxes.  Expanding the voice of the CSU System and higher education with the public, elected officials, and others.

16 Changing the Paradigm Higher education must reinvent itself and bold steps need to be taken if we are to survive. Funding: Restructure higher education funding. Create a public admissions “cap” that only allows a number of students equal to state funding divided by the cost to educate a student to receive a discounted tuition rate. Others would have to pay market based rates to enter. Privatization: Begin privatizing a large portion of the CSU system and removing it from state control. The “privatized colleges” within the system will perform better by being able to charge a competitive rate and control their own destiny. Leave some lower cost alternatives open for the state to regulate and oversee in each college. Reorganization: Create a two tiered (instead of three) higher education system consolidating all colleges into either the research or community college systems. Political: Be more aggressive through the coalition started last year with CU, UNC, and Colorado School of Mines to craft “common ground” strategies and solutions and prevent other agencies and/or agendas from cutting higher education. Flexibility: Prepare for the worst and through legislation provide wide ranging flexibility that allows the Board to rapidly respond to a changing funding environment. Run legislation that grants “broad authority” to the Board to take any necessary actions to ensure the System’s survival.

17 Appendix A Colorado State University Morgan Library Program Plan and Other Information


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