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The Challenges Ahead

The Challenges Ahead. April 6, 2010 President John Haeger. Celebrating Accomplishment Academics. Joint art exhibit in the Beasley Gallery involving students from Sendai, Japan and NAU Professional Science Masters degree in Climate Change Solutions 

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The Challenges Ahead

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  1. The Challenges Ahead April 6, 2010 President John Haeger

  2. Celebrating AccomplishmentAcademics • Joint art exhibit in the Beasley Gallery involving students from Sendai, Japan and NAU • Professional Science Masters degree in Climate Change Solutions  • Adoption of the Recommendations of the Global Learning Task Force, with global competence embedded in outcomes for every student’s education  • Implementation of new first year seminar • Parks and Recreation Management cited through program review for providing excellent professional experiences for its students • Biological Sciences cited through its program review for significant involvement of undergraduates in research

  3. Celebrating AccomplishmentResearch • Support from Science Foundation Arizona (SFAz) for16 graduate research fellows and two Bisgrove post-doc toral scholars. • National Science Foundation (NSF) funding to add mathematics and psychology to existing astronomy, environmental science and environmental biology summer Research Experiences for Undergraduate (REU) programs • Jim Sample, Lori Rubino-Hare, Mark Manone (School of Earth Science and Environmental Sustainability/Center for Science Teaching & Learning) – grants from NSF and SFAzfor using geospatial tools to improve K-12 science teaching • Paul Keim group (Apichai Tuonyok and others) - high-resolution forensic analysis of bacteria • Jason Beduhn, National Endowment for the Humanities for international collaboration studying ancient manuscripts • Huenneke and group of Chemistry/Biology/Health & Human Services faculty, National Cancer Institute, 5 year partnership with the U of Arizona Cancer Center and Partnership for Native American Cancer Prevention – research, training, and outreach • Leslie Schulz, ARRA award from NIH, $577K, gene-environment interactions and diabetes in Native Americans in the border region of Mexico

  4. Celebrating AccomplishmentAthletics • Athletes’ graduation rate is higher than NAU general student population • Athletes’ cumulative GPA is higher than NAU average cumulative GPA • Each student athlete is expected to perform a minimum of 10 hours a year. Student athletes typically perform over 4,000 hours of community service activity annually. • NAU spends approximately 3% of its budget on Athletics; less than Big Sky, peer and division average. • NAU Athletics is generally successful in the Big Sky; it is consistently among the top three contenders for the President’s Cup. Overall: NAU is receiving good value for its investment in Athletics. Source: March 8, 2010 report from Mellonbrook Group

  5. Active and Upcoming Capital Projects

  6. Renovation of the Inn at NAU Lab Kitchen Lobby

  7. The Health and Learning Center Current Status Indoor Track New Stadium Gymnasium

  8. Native American Cultural Center

  9. The National Debate on Higher Education • Cost • Performance • Accountability/accessibility • Role of the Research University

  10. Arizona’s National Position Source: Chronicle of Higher Education March 20, 2010

  11. Change in U.S. States Support of Higher Education FY08-FY10 Source: The Chronicle Letter, January, 2010

  12. Arizona Budget Issues Context • Arizona is next-to-last among the states for job growth but are still one of the fastest-growing states • Since December, 2007 • The unemployment rate has more than doubled to 9.5% • Over 275,000 jobs have been lost from the Arizona economy • Retail sales are down about 20% • Home prices have fallen by 42% • State revenues for FY10 were expected to be 34% less than 2007, but are falling short of that! • FY10 Shortfall of $.7B and anticipated FY11 shortfall of $2.6B theoretically addressed in March 19 legislative session

  13. AZ State Fiscal Support of Higher Education Source: The Grapevine, PostSecondary Education Opportunity

  14. The University Budget

  15. Fluid Partially Fluid NotFluid

  16. Fluid Partially Fluid NotFluid

  17. FY10 Budget Initial State Budget Planning April 2009 Forum FY10 State Budget Actual April 2010 Forum • General fund actually reduced to $133.1 • Tuition changes and surcharges brought in $12M additional • Net: funds available were $3M less than anticipated • Therefore not all plans could be implemented

  18. Stimulus Funding • Last April, we did not know when and how much one-time stimulus money we would receive • We received more than expected -- $23M used for personnel expenditures

  19. Proposed Budget Planning Assumptions for FY11-12 • Current General Fund appropriation of $133.1 M remains the same for FY11 if Proposition 100 passes • The universities are subject to a $200M rollover – our share is $30M • If Proposition 100 does not pass, our General Fund appropriation is reduced by $16M to $117M • New $11M of one-time stimulus funds expected • Estimate $8-$10M for FY11 in new tuition funding with enrollment growth. Can we earn an additional $10M for FY12? • Administrative overhead fee rate remains stable • Further divisional budget reductions limited • Contract 6/6 for service professionals/administrators continued • Ability to use furloughs maintained in contracts, but no current plans for FY11 • Continue to look for ways to increase revenue and decrease costs • Must fund classes to meet enrollment growth and losses from VSRIP • FY 11 and 12 General Fund appropriations are a big ? The State may have continuing holes in its budget • NAU will handle required 2.75% salary line reduction internally

  20. Tuition Policy • Extended Campuses and NAU-Yuma • Pay $1,500 less in tuition and fees than resident undergraduates on the research campus • NAU-Yavapai • NAU-Yavapai will charge about $3,100 less in tuition and fees

  21. Using New Guidelines

  22. Faculty Retirement Incentive Program (VSRIP) COLLEGE/AREA # Participating COLL OF ENGINEER, FORESTRY & NATURAL SCI 10 COLLEGE OF ARTS & LETTERS 10 COLLEGE OF BUSINESS ADMINISTRATION 7 COLLEGE OF EDUCATION 3 COLLEGE OF HEALTH & HUMAN SERVICES 1 COLLEGE OF SOCIAL & BEHAVIORAL SCIENCES 9 PRESIDENT 1 PROVOST 2 Grand Total43 Over $4 million in salary and ERE

  23. Best Case Scenario Example: FY11-FY12 • State appropriation maintained in FY12 • Tuition Increases to average of peers over two years; enrollment increases of 1,000 each year provides approximately $10 million a year

  24. Medium Case Scenario Example: FY11-FY12 • 10% reduction in State General Fund in FY12 (MOE no longer in effect) • Tuition Increases to average of peers over two years; enrollment increases of 1,000 each year provides approximately $10 million a year

  25. Bad Case Scenario Example: FY11-FY12 • Proposition 100 Fails • Additional 10 percent General Fund Reduction in 2012 • Limited Tuition/Enrollment Increases ($5M per year)

  26. What is the effect of these possible scenarios?

  27. University Strategies – Short-term Strategies • Use reserves for immediate, one-time reductions; spend the next year identifying any permanent reductions needed • Review every vacancy for most critical use • Local funds for university use • Review academic programs, services, practices, policies etc. for effective and efficient practices • Review non-academic programs, services, practices, policies, for effective and efficient practices • Use technology to improve services and lessen need for people • Consider reductions in financial aid • What economies can the university community suggest? • Conservative on spending • Build central reserves for FY12 cliff • Continue to anticipate changing scenarios • Move the university forward to fulfill university mission, goals and priorities

  28. Must Invest in Institutional Priorities • Strategic Investment in Personnel • Class Coverage • Student Success • Using Technology to change business practices • Building renovation • System Architecture • Degree programs for the future

  29. Innovation Fund Decisions

  30. Degree Granting Public Institutions Carnegie Classification 2008

  31. NAU-Yavapai

  32. Long-Term Strategies for Academic Excellence and Economic Well-Being • Assumptions: • Permanent shift in state funding • State funding will be tied to new performance measures • Business and technological changes have helped the institution but there is a “cost of doing business” • Academic Issues and Challenges: • Tenure density • Full use of technology available • Freshman/sophomore year • Organizational structure • Low enrolled courses, majors and programs • Standardization of course content • Self-paced and competency-based modules

  33. Questions and Comments

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