Budget UpdateBudget UpdateOctober 6, 2011October 6, 2011

FY 2012

FY 2011 FY 2012 *

44,820,178$ 50,449,092$

Fringe Benefits Paid by State 25,948,632 29,022,648

70,768,810$ 79,471,740$

* FY 2012 request reflects the following:

* Impact of 27th Payroll

* FY2012 Bargaining unit (BU) increases

* FY 2011 BU increases not previously covered by the State

* Annualization impact of FY11 new hires

* Fringe Benefits on all of the above

SCSU's STATE APPROPRIATION

State Appropriation

Total

Presented at Town Hall Meeting 10/22/10

FY 2012

STATE APPROPRIATION

Original Requested Change

Governor's March 2011

Recommendation

State Appropriation $ 50,449,092 $ (6,869,586) $ 43,579,506

Fringe Benefits Paid by State 29,022,648 (3,196,467) 25,826,181

Total $ 79,471,740 $ (10,066,053) $ 69,405,687

FY 2012

Steps taken when the FY2012 Spending Plan was developed:

•Reduced full-time positions from 1,023 to 998

•Continued to achieve operational savings from our ongoing cost containment program

•No funding set aside for strategic initiatives

•Tuition and fees were increased by 2.5 percent

FY2012

Despite these actions, the university was still left with a significant budget deficit due to an extra payroll and the growth of non-general fund expenses.  The following actions were taken to close the gap for FY2012: 

•The University received board approval to use almost $4 million of reserves to cover the general fund portion of the 27th payroll for FY 2012

•As part of the FY2012 budget preparation, each vice president provided budget reduction outlines for their respective areas. To close the remaining gap, divisional budgets were reduced by $4.7 million. This included holding positions vacant, including temporary one-year faculty appointments, custodial and clerical staff, and administrators

•A change in board policy that reduced university CHEFA debt obligations by 20 percent. Several refinance opportunities, along with lower interest rates, saved $1.85 million

FY 2012

STATE APPROPRIATION

Governor's March 2011

Recommendation 8/25/11 Change (*)Sub-Total Based on

8/25/11 Change

State Appropriation $ 43,579,506 $ (3,306,602) $ 40,272,904

Fringe Benefits Paid by State 25,826,181 ( 892,233) 24,933,948

Total $ 69,405,687 $ ( 4,198,835) $ 65,206,852

Once the concession agreement was finalized, Southern was notified on August 25, 2011 that the State appropriation would be reduced by an additional $4,198,835. The concession agreement reduced Southern salary and fringe expense by $2,880,227, leaving a budget gap of $1,318,608. To close the gap, management positions will be held vacant until March 1, 2012 or longer. Additional reductions were required in non-divisional OE.

Note: The 8/25/11 reduction to the Gen’l Fund & FB paid-by-State appropriation is offset by the following expense savings (resulting from employee concessions):

Elimination of BU increases $1,831,808 Reduction in Longevity 208,999

Related Fringe Benefit Reduction 839,420$2,880,227

(*)

FY 2012

STATE APPROPRIATION

Sub-Total Based on 8/25/11 Change 9/7/11 Change

Sub-Total Based on 9/7/11 Change

State Appropriation $ 40,272,904 $ ( 815,556) $ 39,457,348

Fringe Benefits Paid by State 24,933,948 ( 441,934)

24,492,014

Total $ 65,206,852 $ ( 1,257,490) $ 63,949,362

On September 7, 2011, The University received a third notification that the State appropriation would be further reduced by $1,257,490. To close this gap, it will require holding 16 administrative positions vacant until January 1, 2012 and 1 position for the entire year. Additional reductions were also required in non-divisional OE.

FY 2012

FY2012 State Appropriation

Total Amount of Reductions $ 15,522,378

Less: Concessions (2,880,227)

Net Reduction $ 12,642,151

•NOTE: Net Reduction is 15.9% of the Original FY 2012 Spending Plan State Appropriation

12,642,151 / 79,471,740 = 15.9%

*

FY2012

Total State Appropriation Reduction:

FY2009 $ (3,266,263)

FY2010 697,040

FY2011 (318,871)

FY2012 (Net) * (12,642,151)

Total State Appropriation Reductions $ (15,530,245)

Total Fund Balance Reduction: (4,398,959)

TOTAL REDUCTION: $ (19,929,204)

* Note: FY2012 reduction is net of savings from concessions $15,522,378 - 2,880,227 = $12,642,151

FY 2012

NOTE: This Trend is Nationwide

FY 2012

The FY2012 Spending Plan was built on an assumption of a 2% enrollment increase.

We wanted to “grow” our way out of the effect of our budget reductions.

FALL 2011

HEADCOUNT

GOAL vs THIRD WEEK ACTUAL

Goal Actual

Third Week

Variance Favorable /

(Unfavorable)

Full Time Undergraduate Continuing 5,375 5,270 (105) New Freshmen 1,350 1,319 (31) New Transfers 950 935 (15)

7,675 7,524 (151)

Full Time Graduate 1,010 938 (72)

Sub Total Full Time 8,685   8,462   (223)

Part Time Undergraduate 1,308 1,172 (136)

Part Time Graduate 2,210 1,899 (311)

Sub Total Part Time 3,518   3,071   (447)

Grand Total 12,203   11,533   (670)

FY 2012

What was the financial impact of not achieving the FY2012 enrollment goals for the Fall?

FT Undergraduate $ (626,848)

FT Graduate (329,184)

PT Undergraduate (357,245)

PT Graduate (727,316)

Total $ (2,040,593)

Net Operating Fund impact (less financial aid 15%, Debt Services, Activity Fees) is:

$1,787,237

FY 2012

HEADCOUNT Fall 2010 vs Fall 2011

Fall 2010 Fall 2011

Variance Favorable /

(Unfavorable) Full Time Undergraduate

Continuing 5,299 5,270 (29) New Freshmen 1,248 1,319 71 New Transfers 947 935 (12)

7,494 7,524 30

Full Time Graduate 1,000   938   (62)

Sub Total Full Time 8,494   8,462   (32)

Part Time Undergraduate 1,282 1,172 (110)

Part Time Graduate 2,188   1,899   (289)

Sub Total Part Time 3,470   3,071   (399)

Grand Total 11,964   11,533   (431)

FY 2012

What was the financial impact of not achieving last Fall’s enrollment?

FT Undergraduate $ 123,720

FT Graduate (283,464)

PT undergraduate (334,530)

PT Graduate (627,284)

Total $ (1,121,558)

Net Operating Fund impact (less financial aid 15%, Debt Services, Activity Fees) is:

$1,084,439

FY 2012

All-University Student Headcount & FTE & by Year (Fall) Includes Full-Time, Part-Time, Undergraduate & Graduate Students

Source: Semi-Annual Statistical Report

HEADCOUNT

Fall 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Full Time 6,791

7,059

7,161

7,291

7,609

7,780

7,996

8,024

8,111

8,346

8,494

8,462

Part Time 5,336

5,195

5,058

4,852

4,568

4,378

4,330

3,906

3,658

3,469

3,470

3,071

Total Headcount 12,127

12,254

12,219

12,143

12,177

12,158

12,326

11,930

11,769

11,815

11,964

11,533

% change 1.00% -0.30% -0.60% 0.30% -0.20% 1.40% -3.20% -1.30% 0.40% 1.30% -3.60%

FTE

Fall 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Full Time 6,402

6,620

6,770

6,908

7,203

7,377

7,779

7,667

7,773

8,020

8,164

8,161

Part Time 1,933

1,914

1,902

1,851

1,734

1,681

1,652

1,512

1,400

1,324

1,363

1,208

Total FTE 8,335

8,534

8,672

8,759

8,937

9,058

9,431

9,179

9,173

9,344

9,527

9,369

%change 2.40% 1.60% 1.00% 2.00% 1.40% 4.10% -2.70% -0.10% 1.90% 2.00% -1.70%

FY2012

Current Forecast

• Possible additional 5% reduction

$63,949,362 x 5% = $ 3,197,468

• Historically Spring enrollment/revenue is less than Fall

There will be significant revenue shortfalls for:

Intersession

Spring

Spring break

Summer A

FY2012

Current Strategies

•Meeting to develop strategies to increase enrollment:USPaRCUniversity Budget & PlanningEnrollment Management Council

•Continue to hold positions vacant/hiring freeze

•Reduce departmental budgets (OE, Student Labor & UA)

In conclusion:

The current path that Southern is following –                

Diminishing state appropriations

Shrinking student enrollments                                                      

                         

will not sustain Southern as the University we know today

FY2012