Academic Leadership Retreat

The Campus Economic and Financial Outlook

Chris CiminoAugust 27, 2014

1. Capital Funding2. Financial Overview3. Formula Funding Update4. Final Thoughts

The Campus Economic and Financial Outlook

1. Capital Funding2. Financial Overview3. Formula Funding Update4. Final Thoughts

The Campus Economic and Financial Outlook

Major Construction Projects…

Projects being planned, programmed, under design or construction.In millions

Construction; 485.45; 49%

Design; 397.365; 40% Planning; 6; 1%

Programming; 98; 10%

Total $987 million

Major Construction Projects…

Projects being planned, programmed, under design or construction.In millions

State; 299; 30%

UT and Gifts; 688; 70%

Total $987 million

Capital Maintenance and Outlay

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

-

-

-

-

30.

40

56.

60

45.

58

65.

00

-

-

-

-

75.

25

24.

00

- 3

.18

1.8

5 6.2

2

2.3

0

12.

34

7.2

0

3.7

5 7.8

0

- 3

.50 8.0

0

4.8

0 11.

00

6.0

0 14.

00

Outlay Maintenance

1. Capital Funding2. Financial Overview3. Formula Funding Update4. Final Thoughts

The Campus Economic and Financial Outlook

Tuition & Fees; 330.7;

30%

Appropria-tions; 188;

17%

Capital; 136; 12%

Grants & Contracts; 244.9; 22%

Sales & Ser-vices; 4.3; 0%

Other; 40.4; 4%

Auxiliaries; 171.9; 15%

FY 2014 TOTAL REVENUE WITH CAPITAL(shown in millions and percent of total)

band and sports camps, testing services, literary publications

F&A revenue, misc. rentals and sales, conference revenue

Total $1.12 billion

Instruction; 255.4; 25%

Acad Support; 80.5; 8%

Student Services; 39.6; 4%

Schol & Fellow; 151.7; 15%

Research; 148.2; 15%

Public Service; 38.5; 4%

Inst. Support; 41.2; 4%

O&M; 68.6; 7%Transfers; -15.5; 2%

Auxiliaries; 171.9; 17%

FY 2014 Operating Budget – all funds(shown in millions and percent of total)

(utilities, custodial, maintenance, and grounds)

(executive management fiscal operations, Development, HR, computing, etc…)

(student activities, admissions, student health, student aid administration, and intramural athletics.)

(libraries, museums, development, academic administration, computing support.)

(WUOT, conferences)

Total $980.1million

Where our revenues come from…

FY 2014 Auxiliary Units(shown in millions)

Total $172 million

Residence Halls; 42.6; 25%

Dining; 4.4; 3%

Bookstores; 18; 10%Parking; 9.5; 6%

Athletics; 95; 55%

Other; 2.9; 2%

Where our funds go…

FY 2014 Operating Budget – all funds(in millions)

Teac

hing

Auxiliar

es

Outreac

h/Enga

gemen

t

Administrati

on0.0

100.0

200.0

300.0

400.0

500.0

600.0 O&M

Inst Support

Public Service

Research

Auxiliaries

Schol & Fellow

Student Services

Acad Support

Instruction

Total $980.1 million

330.7; 34%

188; 19%

244.9; 25%

171.9; 18%

44.6; 5%

Tuition & Fees Appropriations Grants & Contracts Auxiliaries Other

165.3; 26%

174.8; 27%

143.1; 22%

119.2; 19%

35.5; 6%

Total Budget Revenue Summary

FY 2014FY 2005

(shown in millions and percent of total)

FY 2014-15 Appropriations

Knoxville

FY 2014 Appropriations $ 174,335,300

Formula Outcomes $ 3,758,400

Group Health Insurance 916,900

401(k) Match 291,400

Waivers 589,300

Total FY 2015 Appropriation* $ 179,891,300

Chiller system improvements $ 5,000,000

Science and Engineering system upgrades 9,000,000

Total Proposed Capital Maintenance $ 14,000,000

*excludes access & diversity funds of $2.3 million

Does not include centers of excellence, governor chairs, or access and diversity funding, or UTSI.

Mill

ions

Base State Appropriations

20082009

20102011

20122013

2014 (revise

d)

2015 (pro

posed)0

25

50

75

100

125

150

175

200

225

195.4

178.7

152.1142.2 144.2

153.3

174.3 179.945.5

12.6

20.3

29.9

State Appropriations ARRA MOE One-time State Funds

UTK State Appropriations

(1) Includes $6.2M of non-recurring funds for the Bredesen Center for Interdisciplinary Research and Graduate Education(2) Revised State Appropriations

NOTE: CPI Index Values were obtained from the Commonfund Institute's 2012 HEPI Table A in the HEPI Report. The CPI values reported by the Commonfund Institute are based on fiscal year (July 1 -June 30) 12-month averages rather than the annual published CPI values computed over the calendar 12 month period that are usually reported by the Bureau of Labor Statistics.

FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 (1)

FY 12 FY 13 FY14 (2)

$0

$25,000,000

$50,000,000

$75,000,000

$100,000,000

$125,000,000

$150,000,000

$175,000,000

$200,000,000

150,779,000.0156,151,100.0161,307,200.0161,302,900.0159,267,300.0169,086,200.0172,117,000.0

184,467,600.0198,919,700.0

183,109,300.0168,020,900.0173,486,149.0

147,947,704.0156,439,550.0177,486,343.0

148,343,545.0148,402,624.0143,559,581.0135,377,205.0138,650,684.0134,251,260.0140,195,376.0145,211,381.0

128,176,510.0117,614,630.0117,970,581.3

99,124,961.7103,250,103.0

115,366,123.0

150,779,000.0151,466,567.0153,241,840.0150,011,697.0144,933,243.0148,795,856.0146,299,450.0153,108,108.0

159,135,760.0144,656,347.0

131,056,302.0133,584,334.7

109,481,301.0114,200,871.5

127,790,167.0

The University of Tennessee, KnoxvilleActual Appropriations Dollars Compared to HEPI and CPI Adjusted Dollars (in $millions)

Excludes ARRA, MOE, and NR11 Funding

Current Budget (Base + Non-Recur + Access & Diversity) HEPI Adjusted Base AppropriationsCPI Adjusted Base Appropriations

FY 2014-15 Tuition and Fees

Prior 2013 Fall 2013 Fall 2014

In-State

Maintenance $ 8,766 $ 10,074 $ 10,366

Mandatory Fees $ 1,510 $ 1,510 $ 1,510

Total $ 10,276 $ 11,584 $ 11,876

Out-of-State

Maintenance $ 8,766 $ 10,074 $ 10,366

Tuition $ 18,190 $ 18,190 $ 18,190

Mandatory Fees $ 1,770 $ 1,770 $ 1,770

Total $ 28,726 $ 30,034 $ 30,326

Tuition and Fees AY 2013-14A comparison of the Top 25 tuition and fees to that of UT

Source: The Chronicle of Higher Education. (2014)

Pitt

Penn State

Willi

am & M

ary

Illinois

UC Davis

UC Santa Barb

ara

Minneso

ta

Rutgers

Clemson

UC San D

iego

UC Irvin

e

Mich

igan

UC Berkeley

UCLA UVA

Wash

ington

Connecticu

t

Virginia Tech UT

GA Tech

Wisc

onsin

Georgia

Ohio State

Purdue

UT Austin

Maryl

and

Texas A

&MUNC

Florid

a -

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

17,

100

16,

992

15,

463

14,

750

13,

902

13,

746

13,

618

13,

499

13,

382

13,

302

13,

149

13,

142

12,

864

12,

696

12,

458

12,

397

12,

022

11,

455

11,

194

10,

650

10,

403

10,

262

10,

037

9,9

92

9,7

90

9,1

61

8,5

06

8,3

40

6,2

63

Tuiti

on &

Fee

s

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

UC

Dav

is;

$9,7

51

Nor

th C

arol

ina;

$15

,749

UC

Irvi

ne;

$9,2

07

UC

San

Die

go;

$9,9

11

UCL

A; $

10,1

99

UC

SB;

$8,8

04

UC

Berk

eley

; $7

,309

Penn

Sta

te;

$4,7

33

Min

neso

ta;

$7,6

32

Mic

higa

n; $

7,27

7

Wis

cons

in;

$9,8

12

GA

Tech

; $9

,143

Mar

ylan

d; $

10,9

92

Illin

ois;

$5,

413

Rutg

ers;

$6,

558

W&

M;

$4,7

76

Geo

rgia

; $8

,451

Flor

ida;

$11

,658

Virg

inia

; $5

,280

Was

hing

ton;

$4,

901

UTK

; $6

,795

Ohi

o St

ate;

$5,

796

Clem

son;

$4,

415

Purd

ue;

$5,7

25

UT

Austi

n; $

5,80

9

A&M

; $5

,735

Pitt

sbur

gh;

$5,0

23

$13

,877

$7,

694

$14

,226

$13

,234

$12

,692

$13

,671

$14

,985

$16

,444

$13

,524

$13

,437

$10

,384

$10

,980

$8,

908

$14

,428

$13

,073

$13

,570

$9,

842

$6,

170

$12

,006

$12

,383

$9,

092

$10

,037

$11

,242

$9,

900

$9,

792

$8,

505

$6,

590

State Appropriations and Tuition & Fees FY 2012-13A comparison of Top 25 state appropriations per student FTE to in-state tuition and fees per student FTE

Source: US News & World Report and Institutional websites; appropriation data is FY 2012

Tuition & FeesState Appropriations

Undergraduate Mandatory Fees

19831985

19871989

19911993

19951997

19992001

20032005

20072009

20112013

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

UPSF Technology Facilities Transit Study Abroad Library

Percent chance in tuition

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

20013-14

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

8.0%

15.0%

4.6%

6.0%

9.0%

9.0%

6.0%

8.0%8.0%

15.0%

4.5%

8.0%

7.5%

9.0%

7.9%

13.0%

6.0%

12.0%

8.0%

Undergraduate Graduate

1. Capital Funding2. Financial Overview3. Formula Funding Update4. Final Thoughts

The Campus Economic and Financial Outlook

Old Formula

(((.01*instr)+(.125*as)+((ug/total fac units)*instr *.20)+(is*.10)+(GSF*RPSF(5.14))+(port bldgs * pbr (2.57)+(oldsf*oldsfr(1.71)+ar+3.11*sqft = utilities + asb+infl+(.10*quip inv)+ps+salary infl*total faculty units+clerical(.25*basic instr))*(infl))*.60)=basic request + perf score*.0545*basic request+access & diversity+legislative initiatives = FINAL NEED

Background to the new formula

• Prior formula was based on enrollment• Included a performance-based piece• In 2009, Gov. Phil Bredesen became

interested in educational reform• In 2010, Complete College TN Act mandated

new formula• THEC convened Formula Review Committee

TN Outcomes-Based Formula

2010-11 2011-12 2012-13 Est. 2013-1445.0%

50.0%

55.0%

60.0%

65.0%

70.0%

75.0% Austin Peay

East Tennessee

Middle Tennessee

Tennessee State

Tennessee Tech

University of Memphis

UT Chattanooga

UT Knoxville

UT Martin

Chattanooga

Cleveland

Columbia

Dyersburg

Jackson

Motlow

Nashville

Northeast

Pellissippi

Roane

Southwest

Volunteer

Walters

Source: THEC

• Proper outcomes• Appropriate priorities• Subpopulation/Premium level• Fixed Costs• Out of State Tuition Component• Other

Funding Formula Principles

OutcomesStudent Progression: 24 Credit HoursStudent Progression: 48 Credit HoursStudent Progression: 72 Credit HoursBachelors DegreesMasters DegreesDoctoral/Law DegreesResearch/Grant FundingStudent TransfersDegrees per 100 FTEGraduation Rate

2010-11 2011-12 2012-13 2013-14 2014-15-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%Cumulative Change in Appropriations at Universities Due to Formula

APSU ETSU

MTSU TSU

TTU UM

UTC UTK

UTM Total Funding

1. Capital Funding2. Financial Overview3. Formula Funding Update4. Final Thoughts

The Campus Economic and Financial Outlook

1. State support will continue to struggle2. Greater focus on efficiency (e.g. shared services)3. Space utilization / capacity across all areas4. Deferred maintenance5. Continue to build6. Alternative revenues in campus operations,

infrastructure, licensing, and procurement.

Final thoughts….

QUESTIONS?