march 22, 2013 revenue generation task force meeting

REVENUE GENERATION TASK FORCE MEETINGMarch 22, 2013 | 3 to 5 p.m.

LSU AgCenter, 214 Efferson Hall

Lee Griffin, Finance and Revenue Sub-Committee Co-Chair

WELCOME AND INTRODUCTIONS

3

Meeting Information

This meeting is streaming live at:

www.lsu.edu/tat

For more information about this task force and the Transition Advisory Team visit:

www.lsu.edu/lsu2015

4

Today’s Objectives

Hear from LSU Vice-Provost for Academic Affairs Gil Reeve about online learning

Discuss other universities’ revenue enhancement initiatives Review the Department of Residential Life’s Vision 2020

Strategic Plan Discuss Vice Chancellor for Student Life & Enrollment Services Dr.

Kurt Keppler’s comments about the current and future state of LSU-BR’s on-campus housing

Examine LSU property management Public private partnership trends in higher education Identify key priorities and recommendations to date

Gil Reeve, LSU Vice-Provost for Academic Affairs

ONLINE LEARNING

Dr. Christel Slaughter, SSA Consultants

REVENUE ENHANCEMENT INITIATIVES AT OTHER UNIVERSITIES

“Responding to Budget Cuts with Alternative Sources of Revenue” | Research Questions

7

What initiatives are institutions planning on to generate revenue given changing budget dynamics?

What efforts have institutions already implemented? How successful have these programs been at generating

revenue? What was the process involved in implementing these

initiatives; who was involved, what was the timeline, what were the costs?

How have institutions identified and assessed potential new revenue streams?

Source: Education Advisory Board

Ideas for Enhancing Alternative Revenues for Higher Education

9

New Educational RevenuesCapturing High-Growth Student Populations and Instructional Services

International student recruitment Applied and professional master’s Distance learning and course licensing Summer and intersession blended learning Customized corporate training Testing and certification Distance learning articulation agreements Senior enrichment programs Faculty consulting

Source: Education Advisory Board

10

Academic Entrepreneurship InfrastructureCritical Capabilities for Identifying, Launching and Scaling Viable Programs

Business planning support Fast-cycle program launch Cost-effective marketing Curriculum development Enrollment management Outsourcing and joint venture models

Source: Education Advisory Board

11

Branding, Licensing and AffinityExpanding Product Categories and Sellable Space

Increasing branded merchandise demand Alumni, parent and community affinity programs “STEALTH” advertising and sponsorship Diversifying athletics revenues

Source: Education Advisory Board

12

Auxiliary ServicesIncreasing Demand While Reducing Fixed Costs

Premium-priced healthy and convenient foods Future bookstore Shared-cost luxury amenities Favorable vendor rebates

Source: Education Advisory Board

13

Student FeesCharging for Convenience and Choice

Convenience fees Sharing costs of inefficient scheduling Differential instructional cost

Source: Education Advisory Board

14

Campus OperationsTurning Cost Centers into Revenue Producers

Campus health center Selling administrative services Surplus goods disposal Sustainable energy purchase power agreements

Source: Education Advisory Board

15

Facilities and Real EstateGenerating Cash Flow from Underutilized Space

Event rentals Development of joint ventures Long-term leasing Asset acquisition and disposal

Source: Education Advisory Board

Dr. Christel Slaughter

LSU TODAY

Department of Residential Life

Department of Residential Life

6,000 students live on campus

85 percent of freshmen live on campus

Residence halls have reached full capacity 700 students on waiting

list Revenue neutral

Would require upperclassmen and graduate students to move off campus

LSU-BR Campus Housing Snapshot Current Issues with Requiring Freshmen to Live on Campus

19

Department of Residential Life Vision 2020 Strategic Plan

Housing master plan Identified residence halls to renovate – as one

renovation completes, another hall is taken “offline” to begin its renovation. Fall 2012: Laville Honors College Fall 2013: Annie Boyd Hall (adding 160 beds)

New Residence Hall Project 660 new beds

August 2015: 330 beds 2016: 330 beds

LSU Property Management

An Analysis of Public Private Partnerships in Higher Education

22

Public Private Partnership Overview

Contractual agreement between a public agency and private partner to achieve all, one or a combination of the following: Monetize an existing infrastructure asset Design, construct, finance, and/or operate and

maintain an infrastructure project Transfer risks

A public private partnership is not an outright sale of a public asset.

Source: William Blair & Company

23

Advantages and Benefits

Private sector financing Equity, longer-term debt and wide array of financing tools

Design-build Reduced construction costs and faster project delivery

Operations and Maintenance Savings Long-term Risk Allocation and Transfers that allow the public

agency to better concentrate on its core functions Access to the best operational expertise and innovative

technology Long-term contract provides tax benefits to private partner

that can flow through savings to public agency

Source: William Blair & Company

Public Private Partnership Lessons Learned

Valuation Execution Use of Proceeds

Internal due diligence Thorough internal and external due diligence

Long-term: debt reduction, capital projects, pension funding, revenue replacement

Upfront analysis/modeling Gradual increases in user fees Hybrids possible

Understand value-drivers Customer service impact Avoid spending upfront proceeds for short-term purposes

Robust and transparent bidding process

Don’t rush operational and technology transitions

Create stakeholder value

Manage bidder and stakeholder expectations

Value for Money (VFM)

Understand value of risk transfer

Source: William Blair & Company 24

Public Private Partnership Lessons Learned (continued)

Source: William Blair & Company 25

Knowledge is power Transparency, terms and timetable Stakeholder communications strategy Managing the message and expectations Monetary value + favorable market conditions +

political will = SUCCESS

Group Discussion

KEY FINDINGS AND RECOMMENDATIONS TO DATE

Save the Date

Next Meeting:

April 15, 2013LSU AgCenter, 212 Efferson Hall

LSU-Baton Rouge

Lee Griffin, Finance and Revenue Sub-Committee Co-Chair

ADJOURNMENT