1. Budget Sub Meet and Confer Budget Primer
September 12, 2017
Rick Straka

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

3. Tuition vs. Fees Tuition
Major source of General Fund revenues along with State Appropriations
General Fund
Core Instructional and Operational budgets
Tuition does NOT fund:
Parking related expenses
Student Union operations or debt service
Residence Life operations or debt service
Student Activity operations

4. Tuition vs. Fees
Fees
Defined and authorized by MnSCU Board Policy 5.1.1
Fee revenues are restricted for specific uses based upon above MnSCU Policy and Procedure
Note: There is a current Minesota State System Tuition and Fee Review Task Force addressing Tuition and Fee Policy

5. Types of Fees Mandatory Fees Optional Fees
Senior citizen fee in lieu of tuition, Parking fee, Late fee, Payment plan fee, Statewide student association fee.
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
Personal property charges and service charges
Revenue Fund fees

6. Major Fund Types General fund Student Activity Fund Revenue Funds
Tuition and Appropriation, Primary university operations
Student Activity Fund
Student Fee Funded activities
Revenue Funds
Student Union, Residential Life (Room and Board), Outdoor Rec Fee
Auxiliary Funds
Parking, Bookstore

7. MSU Budget Process
Operating Budget is Primarily Incremental in Nature (Gen Fund, Student Fees, Room and Bd)
Last Year’s Base +/- Incremental Change
Incremental Change Aligned with Strategic Goals
Mandated/Required Changes Also Considered
Legislative and Bargaining Changes Challenging
Biennial Budget Finalized 6 weeks prior to Biennium Start
Bargaining Agreements Often Settled Late in Biennium

8. Gen Fund Budget Subcategories
Basic Operations
Base +/- Incremental
Equipment
40% Base, 60% Zero Based
Strategic Priority
Zero Based
Repair and Betterment

9. Other Fund Types Federal Grants State Grants Private Grants
Financial Aid Funds
Agency Funds

10. Role of Foundation Primary Role of Foundation Secondary Role
Scholarship Support via Annual Gifts and Endowment Earnings
Secondary Role
Restricted Purpose Gifts
Foundation revenues are not a material source of unrestricted General Fund Budget

11. State Appropriation Trends
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.

12. FY17 Review Budget was balanced Enrollments Decreased to 13,650
Reserves Look Sound – 7% range plus
Slightly Positive Gen Fund Cash Flow for FY17
Largest Increase in Online Differential NAI
No Financial Recovery Plan Required

13. FY18 Update
Enrollment for FY18 Projected decrease FYE. Plan for fairly stable enrollment in FY19
Decline in NEF and Transfers
Uptick in Retention
HS Demographics - Leveling Off in Total
FY18 Tuition Shortfall Can be Covered by Biennial Cash Flow in FY18
FY18 Budget Planning Showed One-Time Cash Flow Increase
FY19 Will Require Balancing Structural Deficit

14. Capital Budget/Building Funds
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
Future Projects After CSB Phase 2 will pay 1/3 of debt service

15. Capital Budget/Building Funds
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)

16. Capital Budget/Building Updates
$25.8M in GO funded Clinical Sciences Building. Completed December 2016.
Asking for $6.5M in CSB Phase II funding and $3.5M in HEAPR in 2018 GO Bonding cycle.
Carkoski Dining Replacement (Rev Bonds) completed December 2016.
Space Utilization Study in Fall 2017 will help develop long term capital plan to address Armstrong Hall

17. Open Q & A
Questions??

18. Budget Sub Meet and Confer Budget Primer
September 12, 2017
Rick Straka