President’s Recommended Budgetfor

The University of Toledo

Board of Trustees Finance & Audit Committee

May 12, 2014

NOTE: ELEMENTS OF THIS PRESENTATION ARE SUBJECT TO BOARD APPROVAL, AND ARE NOT YET FINAL.

The Heart of our Structural Issue

Growth Rate = 4.87%

Growth Rate = - 2.27%

Growth Rate = - 5.8%

The combination of enrollment declines, strain on State money, tuition inflation, and the need to reinvestment in our infrastructure is a structural issue that we must deal with over the next 3 years. Failure to deal with this would be poor stewardship on our part.

Remaining Budget Calendar Items

• University Council – April 18• Business Managers – April 23• U. Council Finance & Strategy Subcom. – April 25• Deans and VPs – April 23• President Jacobs – April 30• Board Finance Committee - May 12• Board approval – June 16

FY15 Financial Improvement Target

Our target at the start of the FY15 budget process was $18M. We have hit this target, via the following:

•Refined assumptions = $4.5M •Administrative cuts = $6.0M •Main Campus improvements = $2.7M•Health Science Campus improvements = $1.6M•UTMC improvements = $3.3M

Major Assumptions

• SSI increase of 1.8%

• 2.39% increase in undergraduate tuition

• 0% increase in general fee

• 1% increase in graduate / prof tuition (except Law)

• 0% change in enrollment, before new initiatives. Overall increase is 1%.

• 2% increase in salaries and wages

Areas of Investment• Salary increases for faculty and staff

• Positions in Engineering, NSM, and Nursing colleges

• $ to stimulate growth in externally funded research and development of on-line courses

• Additional resources for recruitment of high-ability students

• One World Schoolhouse and Schoolcraft College project

• Investments in patient satisfaction, quality and safety

Risks Contained in the FY15 Budget

• Enrollment

• State Share of Instruction (SSI)

• Outcome of union negotiations

• Funding only half of deferred maintenance

• Healthcare benefits costs

• Healthcare marketplace and ACA

Longer-term Risks

• Demographic trends

• State funding

• Changes in pension liability accounting

• Growth in regulations and compliance

• Pressure on tuition and student debt levels

Incentive Plan

• Externally funded research:– For incremental externally funded research over current

year levels, we will increase the percentage of indirect cost recovery (IDC) returned to the colleges from 30% to 70%.

• On-line class development– Additional funding will be available for faculty involved

in developing on-line courses and programs. This will be administered by the Provosts’ Office, under the auspices of their current program.

Carry-Forwards

• We will implement a revised program of carry-forwards.

• Reinstate balances from FY10 forward.

• Designated funds in colleges only.

• Plan by college still required, to facilitate cash flow planning. Plan approved by Dean, Provost, EVP CFO.

• Encouraged for use on capital items

Routine Capital

• State biennial capital bill = $23.7M for UT.

• Routine capital on top of State bill = $18M– Provost = $4M– Facilities = $5M– Info Tech = $3M– UTMC = $6M

Hiring Process

• RCG will no longer be part of hiring process. RCG will continue, with a new charge and group makeup.

• Budgeted positions can be filled with Dean / VP approval.

• Positions vacated in year will have 30 day wait period for re-engineering before they can be posted.

• HRTD will be measured on “time to fill” once a job is posted

• New positions will require Dean / VP approval, as well as SLT approval.