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Saturday, Feb 16, 2019

A Few Clouds, 27 °F

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Deborah Shaffer

Deborah Shaffer

Photo courtesy of: University Communications and Marketing

Dr. Chaden Djalali

Dr. Chaden Djalali

Photo courtesy of: University Communications and Marketing

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University shares financial update FY19 forecast, FY20 budget planning


Deborah J. Shaffer, vice president for finance and administration, and Dr. Chaden Djalali, executive vice president and provost, shared this message with the Ohio University community on Jan. 15, 2019.


Dear Colleagues,

On Thursday, we will update our Board of Trustees on the FY20 Planning Process and Assumptions. In advance of our presentation, we first want to share with you where we are and where we are moving as a University.

In addition to preparing for the next budget cycle, it is important to note that President Nellis has charged us with developing a multi-year strategic plan. The 2025 Strategic Plan will have clearly articulated fiscal strategies and metrics to measure our success in achieving our performance goals.

The plan, which would be reviewed year-to-year, serves as a pathway for systematically identifying where we want to be in 2025 and how our revenue generation, fundraising, and expense realignments meet our academic, research, scholarship and creative activity mission and commitment. And most importantly, it will build stronger accountability and transparency.

We will be providing more information as this plan is developed as we have many groups – including Senates, Budget Planning Council, Deans, and President's Cabinet – who will be included as a part of the 2025 Strategic Plan process.

Strategic Realignment and Cost Reduction Update

In keeping with the budget reduction plan we implemented three years ago, administrative planning unit budgets are in the final year of 7% reductions (accomplished over the three years of FY18-FY20).  The Offices of Information Technology (OIT) and Diversity and Inclusion (D&I) were excluded from these reduction targets in order to support planned institutional investments in these areas.

The Provost’s Office worked with Colleges and academic planning units to set differential planning unit goals. Academic unit strategies included a combination of cost reduction and net revenue growth to achieve these targets over a 3-year period and were permitted to use limited and defined reserves to bridge operations during this period. The Provost’s Office is in the process of working with the Academic planning units to analyze progress toward these goals, identify additional strategies within the units for cost management and revenue growth, and to understand the impacts.

Although the auxiliaries – Housing, Transportation and Parking, Printing Services and Culinary Services – are making proportional budget adjustments to current levels of enrollment, these units also will continue their final year of a three-year commitment to provide scholarship support. These units’ scholarship support over the past 3 years stands at a cumulative increase of $4 million.

Board of Trustees Presentation and Discussion

Over the next several months, we will receive Ohio University's State Share of Instruction (SSI) allocation, which is determined by metrics set at the state level. We also will gain a better understanding of Governor DeWine’s funding priorities in the upcoming Biennial Budget (FY20/FY21). Until we have additional information regarding potential future year support, we are planning based on current funding levels. To ensure that we remain competitive and fiscally strong, we are requesting the Board of Trustees to consider the following fee increase resolutions:

  • Tuition Increase for Fall 2019 First-Year Student Cohort: We recommend the Board of Trustees approve a 3.5% increase in Ohio University’s undergraduate tuition on incoming FY20 first year cohort. Four years of 0% tuition increases, slight decreases in enrollment, incremental investments in financial aid, and cost pressures from compensation, health care, and deferred maintenance necessitate this planned increase.
  • Housing and Dining Increase for Fall 2019 First-Year Student Cohort: We are requesting the Board approve fee increases for the incoming FY20 Guarantee cohort for both Housing (3.5%) and Dining (2%). These increases are required to fund deferred maintenance, debt service, and rising costs for delivery of these services.

Additionally, we will provide updates to the Board of Trustees that summarize:

  • Current and projected institutional budget planning assumptions (e.g. costs and expenses, projected revenue from tuition and fees, investment and fundraising incomes; SSI) and the multi-year financial impacts.
  • Current undergraduate and graduate enrollment targets, including in-state, out-of-state, international, undergraduate financial aid and discount rates, and graduate programs.
  • Current status of Capital Improvement Plan.
  • New strategies for revenue enhancement /cost reduction being developed during the FY20 budget planning process.
  • Budget planning activities and timeline over the next six months as we work to finalize an FY20 for presentation to the BOT in June 2019.

Budget planning for FY20 includes salary increases for all continuing, benefits-eligible employees hired prior to April 1, 2019. We will provide additional details about the anticipated raise pool for FY20 in the coming weeks.

Budget Planning Actions: January – June, 2019

The Provost is meeting with the leadership of each College and Academic planning unit this month. The goal is to review each Unit’s current budget, identify new strategies for program and revenue growth, discuss cost management and reduction, and understand the collective impact of these efforts on unit and University multi-year planning.

The Provost will continue the discussion with deans about staffing plans to ensure the university is meeting its academic mission and upholding its commitment to move toward a One OHIO University model.

Concurrently, the Vice Presidents continue to work with their planning units on cost reduction and avoidance strategies, opportunities to directly and indirectly support revenue growth and analyze and refine institutional planning assumptions.

Budget planning for FY20 includes consideration for a raise pool for all continuing, benefits-eligible employees hired prior to April 1, 2019. We will provide additional detail to staff in the coming weeks related to planned salary increase distributions.

We look forward to engaging you on this planning discussion and providing you with continued updates on our progress toward ensuring a financially sustainable model for our university.

Kind regards,

 

Deborah J. Shaffer
Vice President for Finance & Administration
CFO and Treasurer

 
 

Chaden Djalali
Executive Vice President & Provost