FY16 Budget Forum Presentation

FY16 BUDGET FORUM

FY16 BUDGET FORUM February 20, 2015

Michael Hindery Vice President for Finance and Administration February 2015

FY16 BUDGET FORUM

“It’s Always a Great Day to be a Bronco!”

1,320

Launched Illuminate

entering freshman in fall 2014

www.scu.edu/alumn i/illuminate

Have raised

$17.5M for the new law school building

Completed long-term strategic plan

Rhodes Scholar Aven Satre Meloy

17.3%

return on investments 6 faculty

recognized as 2014 Women of Influence

by Silicon Valley Business Journal

Have raised

$18M

for Edward M. Dowd Art & Art History Building

50 years of women’s athletics 12 newly recruited tenure track faculty & 6 new lecturers in FY15

February 2015 Feb. 20, 2015

$50.5M of new gifts raised in FY 2014

Recycled water = 40% of total campus water consumption

Freshman to sophomore retention rate

96%

One of the highest among SCU peer institutions 22

FY16 BUDGET FORUM

Agenda  Integrated Strategic Plan  Facilities Plan  Budget Process & Considerations  FY16 Salary Pool  Capital Plan  Questions

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FY16 BUDGET FORUM

Overview

• The university's financial

fundamentals are very solid

• 3.5% merit salary pools

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FY16 BUDGET FORUM

Integrated Strategic Plan: Goals 1

www.scu.edu/santaclara2020 Imparting a transformational Jesuit education

2

Fashioning a more humane, just, and sustainable world

3

Fostering innovation and entrepreneurship in service of humanity

4

Advancing contemporary theological studies, education, and ministry

5

Increasing diversity, access, and affordability

6

Fashioning a more humane, just, and sustainable world February 2015 Feb. 20, 2015

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FY16 BUDGET FORUM

Integrated Strategic Plan: Impact  A transformed Santa Clara University – STEM – Increased visibility of arts and humanities – Law School – Athletics – Increased enrollment and satisfaction  Programs to meet the growing and changing

Silicon Valley and its needs

– Engagement with the Silicon Valley

 An endowment of $1.3B in FY23 – $415M in distributions to the operating budget over the next nine years – $422M in additions to principal – $460M in endowment earnings (portfolio return)  Assumption: 5% annual return February 2015 Feb. 20, 2015

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FY16 BUDGET CapitalFORUM Project

Timeline All projects will have: • Steering Committee • Executive Committee

$31M Edward M. Dowd Art and Art History Building $58M

$146M

School of Law

STEM 2

$103M STEM I

$132M

$20M Athletics

STEM 3

STUDENT LIFE AND SERVICES $25M

$24M Benson Center Renovation

Housing 1

$53M

Housing 2

Enrollment Increase (+600 undergraduates)

2014/15

2015/16

2016/17

2017/18

2018/19

2019/20

2020/21

2021/22

2022/23

2023/24

FISCAL YEAR February 2015 Feb. 20, 2015

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FY16 BUDGET FORUM

Capital Projects: Costs and Sources $448M

Total Fundraising/Gifts

ALL PHASES

Total

$145M

University Resources

TOTAL CAPITAL COSTS: $593M

February 2015 Feb. 20, 2015

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FY16 BUDGET FORUM

Edward M. Dowd Art & Art History Building An innovative facility that encourages and inspires collaboration, visual literacy, scholarship, and creativity to develop uniquely creative thinkers and imaginative problem solvers.

$10M $21M

$18M

$21M

Fundraising Target

Raised To Date OPEN FALL 2016 CONSTRUCTION BEGINS MARCH 2015 February 2015 Feb. 20, 2015

$10M

University Resources

$31M TOTAL PROJECT COST 9

FY16 BUDGET FORUM

February 2015 Feb. 20, 2015

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FY16 BUDGET FORUM

University Budget Council (UBC)  Amy Connell

Assistant Provost

 Harry Fong

Associate VP for Finance

 James Hall

Faculty Representative, Management

 Mike Hindery, Chair

VP for Finance & Administration

 Dennis Jacobs

Provost & VP for Academic Affairs

 Lisa Kloppenberg

Dean, School of Law

 James Lyons

VP for University Relations

 Robert Numan

President-Elect, Faculty Senate, Psychology

 Michael Sexton

VP for Enrollment Management

 Robin Reynolds

University Budget Director

 Ed Ryan

Vice Provost

 Claire Shaw

President, Staff Senate February 2015 Feb. 20, 2015

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FY16 BUDGET FORUM

Budget Planning Process JULY

JUNE

All budgets are balanced and loaded into PeopleSoft

MAY

Compensation budgets finalized after salary planning is completed

MICRO:

Budget development at the unit level.

New fiscal year begins

AUG/ SEPT

Macro Budget Planning for next fiscal year

MICRO BUDGET PROCESS

MACRO BUDGET PROCESS

MAR

Micro budget revenue and expense allocations confirmed

MACRO:

Budget development at the aggregate level for operating revenue and expense.

OCT

New funds requests for the coming fiscal year submitted for review

OCT thru DEC

FEB

University Budget Council develops macro budget

University Board of Trustees approves budget recommendations

February 2015 Feb. 20, 2015

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FY16 BUDGET FORUM

FIVE GUIDING PRICIPLES 1.

Maintaining the lowest possible cost of education by controlling tuition and room and board rate increases and funding financial aid

2.

Increasing SCU’s ability to recruit and retain talented faculty and staff

3.

Making investments which support the strategic plan

4. Investing in information technology

to enhance the learning environment and maintain SCU’s position in the Silicon Valley

5. Responsibly steward costs and expenses

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FY16 BUDGET FORUM

Financial Aid

$

The sources of financial aid funding are: • Endowment • spendable gifts • the tuition discount

We are budgeted to spend $84.8M in FY16 on student financial aid

The average award in FY15 from all sources is $25,280

Santa Clara currently meets

74%

of students’ financial need

February 2015 Feb. 20, 2015

4,088

undergraduate students are receiving financial aid in FY15

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FY16 BUDGET FORUM

Endowment Market Value and Performance The endowment funds faculty, financial aid, academic programs and athletics $1,000,000

17.3%

$900,000

12.5% 17.7%

$800,000

14.2%

$598,657

$500,000 $400,000 $300,000 $200,000

$509,149

-21.4%

$697,881

16.5%

-1.4%

13.9%

12.9%

$700,000 $600,000

20.1%

-1.8%

$676,072

$716,821 $688,118 $603,618

$528,892

$449,543

$ notes market value % notes annual investment performance

$875,090 $760,218

We are budgeted to spend $33.2M in endowment payout in FY16

$100,000 $FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

February 2015 Feb. 20, 2015

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FY16 BUDGET FORUM

Revenue Sources Sources of revenue aren’t changing – we are tuition dependent 250.00

FY13 Actual FY14 Actual

200.00

FY15 Projected FY16 Budget

150.00 100.00 50.00 0.00

UG Tuition

FY13 Actual

208.30

Graduate Tuition 74.00

Student Fees

Auxiliaries

Gifts

Other

TOTAL

6.20

Endowment Income 26.30

34.40

19.10

14.10

FY14 Actual

225.60

77.40

5.70

27.70

39.50

13.20

20.50

382.40

FY15 Projected

233.30

81.20

6.20

29.10

33.70

17.40

16.20

409.60 417.10

FY16 Budget

237.20

76.00

5.80

33.20

35.50

20.50

15.90

424.10

February 2015 Feb. 20, 2015

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FY16 BUDGET FORUM

Budget Considerations FACULTY AND STAFF MERIT POOL

UNDERGRADUATE TUITION RATE

A 1% change in the salary merit pool costs ~$1.4M

A 1% change In the

undergraduate tuition rate increases revenue

by ~$2M

GRADUATE TUITION RATE

A 1% change in all

BENEFITS RATE

graduate program tuition rates increases revenue by ~$700K

A 1% change In

the benefits rate costs

~$1.5MK

OPERATIONS & MAINTENANCE Utilities, IT maintenance contracts and insurance have contracted increases ranging from 3% - 8% resulting in expense change of ~$700K

February 2015 Feb. 20, 2015

ROOM & BOARD RATE

A 1% change In the room and board rate increases revenue

by ~$250K

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FY16 BUDGET FORUM Faculty Salary Comparisons Annually, a faculty salary analysis is conducted using faculty salary information from 21 institutions  American University

 Fordham University

 Scripps College

 Babson College

 George Washington

 Southern Methodist

 Loyola Marymount University

 University of Notre Dame

 Loyola University Chicago

 University of Richmond

 Northeastern University

 University of San Diego

 Claremont McKenna College

 Pepperdine University

 University of San Francisco

 Drexel University

 Pomona College

 Villanova University

 Bentley University  Boston University  Claremont Graduate

University

University

University

Sources: AAUP and CUPA-HR

February 2015 Feb. 20, 2015

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FY16 BUDGET FORUM

3.5% - $2.03M

Faculty Compensation

merit pool increase

 Competitive

$800K

compensation is a priority.

 FY16 budget

addresses current market lag.

for promotion increases, market adjustments, and equity

FY16 budget increases include:

$1.8M February 2015 Feb. 20, 2015

$1.7M to increase tenure track faculty in support of enrollment increases.

Total of 20 full-time equivalents added over two years.

increase over FY15 benefits budget for faculty 19

FY16 BUDGET FORUM

Staff Compensation Annually, a staff salary analysis is conducted using salary information from the following: National Survey Sources Mercer Hay Group Aon Towers Watson The Conference Board World at Work

Peer and Regional Sources Dice Technology Survey World at Work CUPA Peer Report - Stanford, USD, SMC, Pepperdine, UOP,USF, LMU, Chapman, Golden Gate - UC Schools - Select CSU Schools

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FY16 BUDGET FORUM

Staff Compensation

3.5% - $2.20M merit increase

 Competitive

$550K

compensation is a priority.

 FY16 budget

addresses current market lag.

for market, equity, and retention adjustments associated with organizational changes

The FY16 budget includes:

$1.9M February 2015 Feb. 20, 2015

$734K for salary adjustments resulting from a review of current positions and the compensation structure

increase over FY15 budget for staff benefits 21

FY16 BUDGET FORUM

Faculty & Staff Additions  Faculty: 20 full-time equivalents over two years – 16 Tenure Track positions – 4 Renewable Term Lecturer positions  Staff: – 17.5 new staff positions  7 fixed term positions funded by restricted funds

– 12 existing fixed term positions converted – the right thing to do

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FY16 BUDGET FORUM

Cost of Education – focus on accessibility and affordability 3.4% tuition rate increase – 2nd lowest in 30 years!

3.9% room and board rate increase

Undergraduate tuition discount rate increased to 28% Combined total cost of education of $58,725 = a blended increase of 3.5%

February 2015 Feb. 20, 2015

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FY16 BUDGET FORUM

FY14 Operating Expenses A&S

Information Technology 5%

University Administration & Services 23%

Business

A&S 13%

Engineering Law

Business 9%

ECP

Engineering 4%

Centers of Distinction

Law 8%

Operations and Maintenance 5%

JST

Athletics Auxiliary Services

Financial Aid 22%

JST 1%

ECP 2%

Centers of Athletics Distinction 2% Auxiliary Services 3% 3%

February 2015 Feb. 20, 2015

Financial Aid Operations and Maintenance Information Technology University Administration & Services

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FY16 BUDGET FORUM

Expenses by Category ($ millions)

90.00

FY13 Actual

80.00

FY14 Actual

70.00

FY15 Projected FY16 Budget

60.00 50.00 40.00 30.00 20.00 10.00 0.00

Student Wages

Library Acquisitions

Financial Aid

Debt Payment

Capital Spending

TOTAL

42.00

Department Operating Expense 75.10

5.30

5.50

73.50

16.90

23.80

371.60

69.80

44.90

75.70

5.90

5.30

80.00

16.70

17.30

383.80

69.40

72.90

47.10

74.20

5.90

5.40

83.00

16.60

19.50

394.00

76.10

80.00

53.40

76.50

5.90

5.90

84.80

16.40

24.50

423.50

Faculty Salaries

Staff Salaries

Benefits

FY13 Actual

64.50

65.00

FY14 Actual

68.20

FY15 Projected FY16 Budget

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FY16 BUDGET FORUM Operating

Budget

TOTAL FY 2015 BUDGET

($ millions)

TOTAL FY 2016 OPERATING BUDGET

Revenue Undergraduate Tuition Graduate Tuition Student Fees Endowment Income Auxiliaries Gifts Other Total Operating Revenue

220.5 74.9 6.0 29.1 33.7 18.8 15.8 398.8

237.2 76.0 5.8 33.2 35.5 20.5 15.9 424.2

Expense Faculty Salaries Staff Salaries Total Salaries & Wages

71.4 74.9 146.3

76.1 80.0 156.1

Benefits Total Salaries & Benefits

49.7 196.0

53.4 209.5

Operating Expenses Student Wages Library Acquisitions Financial Aid Debt Payment Capital Spending Contingency Total Expenditures Total Results

70.8 5.4 5.6 79.4 16.6 19.0 4.3 397.1 1.7

76.5 5.9 5.9 84.8 16.4 24.5 423.5 0.7

0.5 1.2 (0.0)

0.7 (0.0)

Reinvested Funds Operating Fund Balance Capital Fund Balance NET TOTAL Results

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FY16 BUDGET FORUM

Capital Budget

Facilities & Auxiliaries

Information Services

New Construction

• Funding for standard renewal & improvement

• $5.5M 1st yr of network funding • $7.6M renewal & improvement

• Funding for planning phase of several new construction projects

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FY16 BUDGET FORUM

Information Services: 10-Year Capital Budget Plan FY16 Request*

FY17 Projected Request

FY18 Projected Request

FY19 Projected Request

FY20 Projected Request

FY21 Projected Request

FY22 Projected Request

FY23 Projected Request

FY24 Projected Request

FY25 Projected Request

TOTAL

Information Security

0.1

0.2

0.1

0.0

0.2

0.1

0.0

0.2

0.1

0.0

1.0

IT

4.1

1.1

2.5

4.4

2.2

3.2

0.8

2.3

0.4

3.4

24.4

Media Services

4.4

2.1

1.3

1.3

2.3

2.4

3.5

1.4

2.2

2.6

23.3

Networking**

5.5

5.5

0.0

0.1

2.3

2.4

3.5

1.4

2.2

2.6

25.7

$ 5.8

$ 7.4

$ 7.6

$ 7.1

$ 6.0

$ 5.8

$ 7.8

Total IS CapEx Request

$ 14.1

$ 8.9

$ 3.9

$ 74.4

($ millions) * Includes deferred capital **Assumes spreading Networking costs over two fiscal years.

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FY16 BUDGET FORUM

FY16 Capital Budget SOURCE OF FUNDS ($ millions) Capital Renewal General University Facilities Auxiliaries Technology Subtotal Renewal Capital Improvements General University Facilities Auxiliaries Subtotal Improvements Real Estate General University Facilities Subtotal Real Estate

Capital Budget

Operating Budget

Fund Balances

Debt

Funding Total

Gifts

5.7 2.6 13.1 21.4

3.0 2.6 5.2 10.8

2.7 7.9 10.6

-

-

5.7 2.8 13.1 21.4

7.0 6.7 13.7

7.0 6.7 13.7

-

-

-

7.0 6.7 13.7

2.5 2.5

-

2.5 2.5

-

-

2.5 2.5

37.6

24.5

13.1

-

-

37.6

New Construction Master Plan Franklin Street Mall Co Generation Plant Law School STEM I Benson Expansion - Facilities Leavey Upgrades Residence Hall A Dunne Remodel

1.5 1.5 4.5 3.0 4.0 1.0 0.9 2.0 1.5

-

1.5

4.5 2.0 -

1.5 1.8 3.0 4.0 1.0 0.9 -

1.5 1.8 4.5 3.0 4.0 1.0 0.9 2.0 1.5

TOTAL NEW CONSTRUCTION

20.2

-

1.5

6.5

12.2

20.2

Total Capital Budget – FY16

57.8

24.5

14.6

6.5

12.2

57.8

TOTAL RENEWAL AND REPLACEMENT

* New construction indicates long-term funding source

February 2015 Feb. 20, 2015

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FY16 BUDGET FORUM

THANK YOU February 2015 Feb. 20, 2015

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