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Presentation to UPRAC. UTC Budget. 2008-09. Dr. Richard L Brown Vice Chancellor Finance and Operations January 31, 2008. U PRAC. UPRAC 2008. UPRAC A FINANCIAL AND RESOURCE ALLOCATION MODEL FOR UTC STRATEGIC PLAN IMPLEMENTATION.

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    1. Presentation to UPRAC UTC Budget 2008-09 Dr. Richard L Brown Vice Chancellor Finance and Operations January 31, 2008

    2. UPRAC

    3. UPRAC 2008

    4. UPRAC A FINANCIAL AND RESOURCE ALLOCATION MODEL FOR UTC STRATEGIC PLAN IMPLEMENTATION • UPRAC role will be short-term and long-term as an integral advisory mechanism for UTC Chancellor. • Review of current UTC budget and financial resources • Review of short-term and long-term strategic goals • Review of current assets-both financial and capital • UPRAC Special presentations and reviews • Campus Master Plan • Technology Plan • Capital Outlay Plan • Academic Plan • Library Resources • Facilities Planning Space Allocations

    5. Campus Parking Plan • Landscape Committee • Environmental Task Force • Campus Emergency Preparedness Task Force • Campus Wellness Initiative • Scholarships Allocation Plan • Tuition Discounting North Georgia • Shared Governance Groups • Institutional Program Review • Review of all academic programs • Review of all operational programs • Review of auxiliary programs • Develop a matrix/rubric for evaluation and assessment of effective program • Recommend internal reallocation of resources from program review.

    6. Sub-committees (28) • Work will be ongoing throughout the year • Strategic reports to full UPRAC • Recommendations and reports will be presented throughout the year—may transcend coming budget year • Short-term and long-term initiatives • Chancellor’s Innovation Fund • $500,000 initial seed fund • UPRAC work with coordinator to develop criteria and project selection • Make recommendations on project sustainable fund

    7. UPRAC 2008-09 Financial Planning And Strategic Planning And Allocations of Resources Budgeting “A Plan to Allocate Resources”

    8. UPRAC – Challenges • Fiscal/economic conditions of the State of Tennessee • Changing political climate • Higher Education vs. “Discretionary” spending by State Legislature • Are we accountable? • Are we value driven? • Do we add value to economy of the State? • Are we preparing graduates for job market of Tennessee? • Does our research bring jobs, industry, quality of life to the state and region? • Can we have a real conservation about current base budget expenditures? • Program Review – all programs • Eye towards internal reallocation • Curriculum review • 21st Century teaching strategies • “GET ON-LINE – OR OUT OF THE COMPETITIVE LINE”

    9. Development of a long-range fiscal plan • Planning • Persistence • Preservation • Collaboration • Measuring our successes and failures • Celebrating our victories • Having the commitment of will to allocate to priorities • TRANSPARENCY – ACCOUNTABILITY – COMMUNICATION – TAC • Always keep in focus: At the core of what we do – WE TEACH!

    10. Key Financial Concepts • State Appropriations • Direct appropriations by State of Tennessee • Salaries • Operating dollars • THEC funding formula • Tuition and Fees • Revenues generated by direct charges to student for the cost of education • Historical – 50/50 – State Vs. Student • Must be Peer Benchmarked for competitiveness • UT has historically taken a “cookie cutter” approach – “One size” does not fit all • Specialized Fees • Lab fees • Student Activity Fees • Athletic Fees • Bonded Project Fees • All increase the overall cost of education for the students

    11. The State has now claimed tuition and fees as state support • Peer Group Assessment and Benchmarking is important • Mission Differentiation - Important

    12. Restricted Funds • University Development Campaign • UC Foundation Support • Gifts Pledges • Friend Raising and Fund Raising • Challenges • Donors really want the State of Tennessee to do their “fair share” of basic costs of providing services • Many Times: These funds should become your “margin of Excellence” and pathways to innovation, change, entrepreneurship

    13. Auxiliary Support Funds • Food Service • University Housing • UTC Bookstore • McKenzie Arena • Parking Services • Service Centers • Document Services • Telecommunication Services • Revenue Producing Units • Fine Arts Center • Challenger Center • Cadek Conservatory • Children’s Center • University Athletics

    14. Most have some E & G support • Must determine “cost benefit analysis” what is appropriate level • Most are helpful to define metropolitan mission • Most involve public/private partnerships • Most have at least one or two donors who will “hug” these programs if you try to reduce funding or services • Accountability and transparency – for public scrutiny: The Smell Test

    15. 2007-08 PLANNING

    16. UTC Chancellor and UPRAC convenes budget hearings Feb. 2008 UPRAC recommends priority budget items To Chancellor March, 2008 Chancellor makes budget recommendation to UTC Trustee Advisory Committee April, 2008 UTC Trustee Advisory Committee recommends budget approval to UT President June, 2008 UT President makes final recommendation for approval of UTC budget to the UT Board of Trustees

    17. UNIVERSITY PLANNING RESOURCES AND ADVISORY COUNCIL TENTATIVE BUDGET HEARINGS 2008-09 UPRAC (ALL MEETINGS IN 305 FLETCHER HALL) Monday, February 25, 2008 Tuesday, February 26, 2008

    18. Thursday, February 28, 2008 Friday, February 29, 2008 UPRAC discussions to follow presentations

    19. The UTC Budget Preparation-Process-Guidelines for 2008-09 • There will be a major focus on “grass-roots” budget/planning at the departmental level to ensure every faculty and staff members has an opportunity for input a fully understands the budget development and process. It will be a dynamic multi-year planning approach linking fiscal planning to priority resources allocations. • There will NOT be “open” campus wide budget hearings as in past years. Budget development will start at the departmental level, then on to the Vice Chancellor/Athletic Director…who will then make their presentations on behalf of their divisions to the UPRAC [University Planning Resources and Advisory Council]. • The UPRAC is comprised of a broad representation of institutional members and will serve to advise the Chancellor and the executive team on fiscal priorities. This was a major recommendation within our Strategic Plan.

    20. The UTC Budget Preparation-Process-Guidelines for 2008-09 (Cont.) • Provided a “standard budget reporting format” for transparency and ease of understanding of the allocated numbers. • Created for the Chancellor a new “Chancellor’s Innovation, Entrepreneurship, and Big Ideas” Discretionary Fund. New programs, innovative ideas and partnership initiatives can be funded on a “pilot” basis as we look to their leveraged sustainability for recurring funding in the out year $500,000) • The Office of University Budget is available to meet with, or sit in on, any departmental budget hearing to assist with accurate financial and budget planning data. • Our new financial model will be assessment driven and data rich as we present openly our decisions to the larger campus. The model will continue to utilize our new Budget web-site to disseminate all presentations, actions, and current financial information (transparency).

    21. The UTC Budget Preparation-Process-Guidelines for 2008-09 (Cont.) • The model seeks alignment with THEC, UT System, and State Legislature budget and planning goals and timelines • Model calls for the Chancellor to present a “State of The University” address to the campus where we as a team outline our priorities and resource support.

    22. Strategic Planning and Fiscal Issues 2007-08 and Beyond • Permanent funding of grant “soft money" academic position. • Final Phase – Computational Engineering Ph.D. funding. • One of Two Phases – Education Doctoral Program Funding. • General Education faculty positions – to handle enrollment increase for 2007-07 and 2007-08. • Permanent funding – Positions within Student Development and University Advancement. • Faculty salary compression funding – four year phased program to add $1 million. • Full Professor • Associate Professor • Would ask for a plan/study to effectively apply new support funding based upon approved benchmarks.

    23. Strategic Planning and Fiscal Issues 2007-08 and Beyond (Cont.) • Energy/utility funding – to deal with increased costs of natural gas, electrical, water. • Continue cost avoidance – Energy Plant improvements. • Systems controls balancing – saves $200,000 this fiscal year. • Energy conservation program. • Exempt/nonexempt staff compensation and equity plan. • ERC/HR – approved plan. • ESC/HR – approved plan. • Four year phased program. • Restoration of operating budgets across major divisions. • Travel • Equipment • Technology equipment

    24. Strategic Planning and Fiscal Issues 2007-08 and Beyond (Cont.) • Continue efforts with University Strategic Plan • Divisional plans • Campus Plan completed Fall, 2007 • Major initiatives focus – Spring, 2008. • Program review across all divisions. • Acquisition and implementation of Student Information System

    25. FISCAL PLANNING CHALLENGES AND OPPORTUNITIES 2007-08 • Implementation of Institutional Strategic Plan and fiscal planning to fund “top initiatives.” • Compensation planning for faculty and staff: peer benchmarking—compression—merit. • Enrollment management and retention initiatives. • Instructional technology and institutional technology strategic planning.

    26. FISCAL PLANNING CHALLENGES AND OPPORTUNITIES 2007-08 (cont.) • Partnerships, engagement, and service learning. • North Georgia and North Alabama contiguous counties tuition discounting. • Globalization of the curriculum and campus demographics. • On-line educational course delivery. • K-12 partnerships.

    27. FISCAL PLANNING CHALLENGES AND OPPORTUNITIES 2007-08 (cont.) • Post Geier campus diversity initiatives. • Access and student success. • Sustainability of selected doctoral programs. • SACS Reaffirmation.

    28. FISCAL PLANNING CHALLENGES AND OPPORTUNITIES 2007-08 (cont.) • UTC Strategic Planning Scorecard Benchmarks – provide a campus-wide and continued momentum to achieve the recently modified goals set forth by the UTC Scorecard. • Facilities Support – infusion of preventative maintenance, custodial, and utilities support. • Doctoral Programs – finalize expansion of curriculum and Library resources.

    29. Summary of 2008-09 Budget Governor Phil Bredesen • Theme: Learn to live with the economy and manage through it: bring the ship • safely to harbor. • You can’t control the wind--but you can adjust your sails • Focus: Education-Jobs-Healthy Lifestyles • No major current year impoundments or budget reductions • Current year shortfall will be covered by TennCare Reserves-Tobacco Fund • Revenues and increased reversion targets for State Government • Will not call upon State Rainy Day Fund Education • Fully Funds new BEP • 25M Pre-K classrooms • Lottery Scholarships • Change continuation GAP from 3.0 to 2.75 • *80% of all students lose scholarships within the first year • $200 million reserves for endowment to TSAC-15,000 more students to • get Financial Aid

    30. Summary of 2008-09 Budget Governor Phil Bredesen, cont’d • 4.Recommends a 2% raise (across the board) for all state employees to • retain quality employees • $3.4 bil for higher education – 12% of budget • $5.6 mil of year 2 funding Biofuels Initiatives • $1 mil for UT Mouse Genome Project • $3 mil regional biocontainment lab • $5.3 mil for Hope Scholars • $27 mil need-based financial aid • Leaves in place capital funds for new library and Grote Hall Improvements • Project flat-base budget going forward • New revenues will likely come from Tuition and Fees-Enrollment • Growth-Internal Reallocations

    31. Highlights of 2007-08 Budget and Planning Process • Restoration of operating support for Academic Affairs and instruction of $2.2 million • Finalization of instructional faculty for the Ph.D. • Finalization of the recruitment and selection – Executive Team • New funding for equipment and technology enhancements • Resolved the occupancy issues – North and South campus (95%) • Strongest fund balance reserve in UTC history at $2.9 million • $48 million from State in Capital Outlay – New Library addition • 5% raise pool – Largest compensation improvement in NINE years • Continued momentum to select Student Information System (reserve fund of $3.9 Million to fund) • New UTC staff attorney and support staff on campus • Operational support for UTC ROTC Program

    32. Highlights of 2007-08 Budget and Planning Process • Funded Women’s Center to embrace campus diversity • Permanent funding for University Admissions Office • Student fee increases – Student Development • Health Fee $393,202 • Green Fee $175,000 • Strengthened instructional component of the University to fund new positions and general education faculty • Ensured all regular, full-time faculty lines were funded with state support • Phased restoration of faculty travel and operating budgets • Enhanced support for Lupton Library with recurring and nonrecurring funds • Continued phased support to enhance UTC Athletics • Stabilized utility costs by capital outlay investments – over $21 million of indirect cost avoidance

    33. Highlights of 2007-08 Budget and Planning Process • Implements new Instructional Lab Fee ($25 per course) to generate over $175,000 annually • Implemented new Student Health Fee to generate over $393,202 for student health, mental health and overall wellness and education • Implemented new Student Green Fee ($10 per semester) to generate over $175,000 to support recycling, environmental conservation, energy management and purchase of “green power”

    34. 2007-2008 Base Budget by Vice Chancellor & Other Expenditures

    35. BUDGET REQUEST SUMMARY 2007-08

    36. Eligibility Requirements Junior/Senior Students in Good Academic Standing with a minimum of 60 hours. Must reside in these Counties Counties in Georgia Catoosa, Dade, Fannin, Murray, Walker, Whitfield Counties in Alabama Jackson 75% Reduction of Cost of Out of State Tuition Estimated loss of revenue is approximately $352,350 Will require 60 additional students to cover loss of revenue Will seek funding from UC Foundation for potential loss of revenue is necessary for pilot project Metropolitan Plan Out of State Tuition Discount Plan for Contiguous Counties

    37. Master Planning Efforts

    38. Phase II – 2005-2008 $98.0 million • Capital Outlay $68.3 million • Capital Maintenance $26.5 million • Partnerships $ 3.2 million Phase III – 2009-2010 $33.9 million • Capital Outlay $26.5 million • Capital Maintenance $ 7.4 million Ten-Year Capital Impact = $280 million Campus Master Plan Phase I – 2000-2004 $148.4 million • Capital Outlay $43.8 million • Capital Maintenance $13.4 million • Partnerships $91.2 million Implementation Summary

    39. Capital Projects Master Plan 15 Years Lupton Library Replacement 48 mil Fine Arts Center 22 mil New Lab Sciences Building 32 mil New Classroom Building 20 mil (Larger Class Sizes) True One-Stop Student Center 10 mil New Alumni Center 10 mil Intramural Sites 5 mil NCAA Track & Field Facility 6 mil Phase 4-5 Student Housing 40 mil (800 Beds) Major Structured (3) Parking 20 mil New Performing Arts Center 50 mil (City/County Partnership) Total263 Mil

    40. ENROLLMENT

    41. The University of Tennessee at ChattanoogaOut-Of-State Undergraduate Enrollment 536 487 466 461 471 1 - 5 465 467 471 455 538 NOTE: Out-of-state designation is based on tuition status. Percent out-of-state undergraduate enrollment is equal to number of out-of-state undergraduates divided by total undergraduate headcount.

    42. Geographic Distribution of Students by State of ResidenceThe University of TennesseeFall 2007 Less Than 100 17 30 5 4 5 29 100 - 300 12 7 38 25 8 2 90 116 48 20 301 - 500 11 152 91 282 7 204 1 - 8 13 41 86 Greater Than 500 22 87 83 43 236 161 575 DC - 8 DE - 14 MD - 143 RI - 9 364 39763 23 189 18 6 174 209 179 977 164 93 266 11 1,489 Students from Foreign Countries 8 Military & US Territory Students TOTAL STUDENTS = 46,662 (Unduplicated Headcount) 5

    43. < 50 students 50 to 199 students 200 to 600 students > 600 students Geographic Distribution of Students by Tennessee CountyThe University of TennesseeFall 2007 UT Martin Robertson 234 Macon Clay 5 Montgomery 522 Hancock 13 Stewart 57 Sumner 773 20 Pickett 3 Claiborne Sullivan 723 Johnson 17 Trousdale 23 Scott 81 Hawkins 71 Campbell 108 Lake Obion 608 Henry 247 Jackson 7 Overton 23 Fentress 25 92 Weakley 815 Cheatham 144 Union 68 Hamblen 412 45 62 80 Houston 17 Smith 35 Grainger 62 Washington Carter 63 Dickson 259 2,317 Davidson Morgan 89 Wilson 343 Putnam 190 Anderson 917 260 Greene 173 Unicoi Dyer 388 Gibson 611 Benton 157 Jefferson 333 1 - 9 Carroll 389 Humphreys 81 White 23 Cumberland 137 Knox 6,937 38 DeKalb 18 2,029 Williamson Roane 201 Cocke 75 Rutherford 609 Crockett 127 Hickman 62 Cannon 13 Van Buren Sevier 616 Loudon 288 Lauderdale 249 Henderson 182 Perry 73 Warren 94 Rhea 142 Blount 1,091 Madison 760 140 Decatur Maury 269 116 6 Bledsoe 48 30 Haywood 75 Lewis 39 89 Bedford 85 Coffee 296 Tipton 308 McMinn 243 Monroe 154 Marshall Chester Grundy 22 Meigs 73 Sequatchie Moore 67 The University of Tennessee (UT Knoxville, Veterinary Medicine & Central Administration) Shelby 4,665 Fayette 115 Hardeman 185 McNairy 343 Wayne 59 Giles 85 7 Bradley 642 Hardin 128 Lawrence 133 Lincoln 110 Franklin 135 Hamilton 5329 Polk 66 Marion 188 UT Health Science Center-Memphis UT Space Institute UT Chattanooga 39,763 Tennessee Residents 5,410 Residents of Other US States 1,489 Residents of Foreign Countries (Unduplicated Headcount)