financial report to the faculty committee on administrative & financial policy (fap) professor...
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Financial Report to the Faculty
Committee on Administrative & Financial Policy (FAP)Professor Allen Hoffman, Chair
Provost ad interim John OrrVice President & CFO Jeffrey Solomon
March 22, 2007March 22, 2007
2
AgendaAgenda
1. Overview of FAP Activities 2006-07Professor Hoffman
2. Benchmarking of Faculty SalariesProvost ad interim Orr
3. Financial Update for FY07 & FY08
Vice President Solomon
4. Questions
3
FAP Membership 2006-2007FAP Membership 2006-2007
Allen Hoffman, Chair
James Hanlan, Chair FBC
Suzanne Weekes, Secretary
Jeffrey Solomon, VP Finance & CFO
Judith Trainor, Budget, Planning & IR
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FAP’s ChargeFAP’s Charge
To inform the Faculty on administrative and financial policies affecting the Faculty and the academic affairs of WPI
To ascertain the interests and views of the Faculty concerning such policies and represent these interests and views to the Administration
5
Major FAP Activities 2006-07Major FAP Activities 2006-07
Staff Opinion Survey Faculty Phased Retirement Program Faculty Salary Benchmarking Fringe Benefit Issues Budget Status & Development
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Report on FacultyReport on Faculty
Investment in New Faculty for FY08
Benchmarking of Faculty Salaries– Determination of Peer Group– Data Comparison by Rank– Development of Compensation Philosophy
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Investment in FacultyInvestment in Faculty
19 searches authorized for FY2008
– To replace faculty who retired in FY2005– To build areas of strategic importance– To support enrollment growth– To establish new robotics program
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The WPI Faculty-Fall 2006The WPI Faculty-Fall 2006
Instructional Faculty 205
Tenured 159 (78%)
Assistant Professors 44 (22%)
Associate Professors 74 (36%)
Full Professors 87 (42%)
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The WPI Faculty-ChangesThe WPI Faculty-Changes
Fall 2002 Fall 2006
Instructional Faculty 215 205
Percent Tenured 73% 78%
Assistant Professors 54 44
Associate Professors 72 74
Full Professors 89 87
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New Approach for Salary AnalysisNew Approach for Salary Analysis
Identification of broader peer group
Benchmarking based on AAUP data
Development of salary philosophy & plan
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Sources of Faculty Salary DataSources of Faculty Salary Data
Association of Independent Technological UniversitiesFall 2006 AITU data now availableLimited group of 20 schoolsIncludes RPI, CMU, MIT, RITReported by faculty rank and by discipline
American Association of University ProfessorsFall 2006 AAUP data not yet availableCovers most institutions Not segregated by discipline
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Reminder of 2006 Report:Engineering and CS Salaries, Fall 2005 - ProfessorsReminder of 2006 Report:Engineering and CS Salaries, Fall 2005 - Professors
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
$130,000
Milw aukee School of Engineering Kettering University Embry-Riddle Aeronautical UniversityThe Cooper Union Franklin W. Olin College of Engineering Clarkson UniversityRose-Hulman Institute of Technology Polytechnic University Worcester Polytechnic InstituteIllinois Institute of Technology Rochester Institute of Technology Case Western Reserve UniversityRensselaer Polytechnic Institute Harvey Mudd College Carnegie Mellon UniversityMassachusetts Institute of Technology
WPI
Median
$106,354
CWRCLK R-H PLY IIT CMURIT RPI HM MIT
1155824 1026 20321 673723 42
Number of Professors
OCETCU
ERA
KU
MSE
23 33 14 8 2
FALL 2000 - FALL 2005
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
$130,000
$140,000
Fall 2000 Fall 2001 Fall 2002 Fall 2003 Fall 2004 Fall 2005
Median
High
WPI
Low
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Engineering and CS Salaries - Professors Engineering and CS Salaries - Professors
FALL 2000 - FALL 2005
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$110,000
$120,000
$130,000
$140,000
Fall 2000 Fall 2001 Fall 2002 Fall 2003 Fall 2004 Fall 2005
Median
Max
WPI
Min
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Peer Group CharacteristicsPeer Group Characteristics
Number of Institutions 34
Doctoral I 27 (80%)
AITU Schools 15 (44%)
Public Institutions 11 (33%)
New England 9 (27%)
Average Enrollment 14,500
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Peer GroupPeer Group
Boston CollegeBoston UniversityBrandeis UniversityBrown UniversityCalifornia Institute of TechnologyCarnegie Mellon UniversityCase Western Reserve UniversityClarkson UniversityCornell University-PublicCornell University-EndowedDrexel UniversityEmbry-Riddle Aeronautical UniversityGeorgia TechHarvey Mudd CollegeKettering UniversityLehigh UniversityMichigan Tech
Milwaukee School of EngineeringMassachusetts Institute of TechnologyNew Jersey Institute of TechnologyNortheastern UniversityPenn State University Park Polytechnic UniversityPurdue University-West LafayetteRensselaer Polytechnic InstituteRochester Institute of TechnologyRose-Hulman Institute of TechnologyStevens Institute of TechnologyTufts UniversityUniversity of ConnecticutUniversity of Illinois at Urbana-ChampaignUniversity of Maryland at College ParkUniversity of Massachusetts-AmherstVirginia Tech
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Average Salaries-Assistant ProfessorsAverage Salaries-Assistant Professors
$60
$65
$70
$75
$80
2001-02 2002-03 2003-04 2004-05 2005-06
In T
hous
ands
WPI Peer Group
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Average Salaries-Associate ProfessorsAverage Salaries-Associate Professors
$65
$70
$75
$80
$85
2001-02 2002-03 2003-04 2004-05 2005-06
In T
ho
usa
nd
s
WPI Peer Group
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Average Salaries-Full ProfessorsAverage Salaries-Full Professors
$90
$95
$100
$105
$110
$115
2001-02 2002-03 2003-04 2004-05 2005-06
In T
ho
usa
nd
s
WPI Peer Group
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CFO ReportCFO Report
FY07 Financial Status FY08 Approved Budget Parameters The Structural Deficit New Debt Structure Endowment Update New Building at Gateway Park Other Major Capital Projects Green Campus
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The Budget: Status of FY07The Budget: Status of FY07 Projected surplus of $1M at 6-30-07
Projected total revenue to equal budget– Undergraduate net tuition at budget– Shortfall in graduate tuition– Increase in Corporate Education– Increase in short-term investment income
Projected total expense to be below budget– Vacancy savings– Utilities savings– New building at Gateway Park to open in April
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The FY08 Budget: Themes & ObjectivesThe FY08 Budget: Themes & Objectives
Prudently continue growth of net revenues
Provide faculty support by authorizing searches for 19 tenure/tenure-track faculty
Provide adequate salary increases and affordable health insurance for faculty and staff
Fully integrate Gateway Park life sciences building into operating budget
Constrain the rate of tuition increases
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The FY08 Budget: Approved ParametersThe FY08 Budget: Approved Parameters
FY07 Budget FY08 Budget
Tuition increase 5.9% 4% - 5%
Freshman class size 760 (777 actual) 780 - 800
Undergraduate FTE 2,759 2,873-2,893
Tuition discount-freshmen 40.1% (42.5% projected) 41.0%
Tuition discount-all students 38.6% (38.5% projected) 39.1%
Merit pool 3.5% 4.0%
Equity/promotion pool 1.0% 1.0%
TT faculty searches 13 (10 filled) 19
Utilities $5.6 M $5.6M
New Gateway building $1.4M net expense $2.9M net expense
Health insurance contribution $3.3M (4% increase) $4.2M (25% increase)
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The FY08 Budget: Sources of RevenueThe FY08 Budget: Sources of Revenue
Net undergraduate tuition & fees $67.3M 59%Net graduate tuition 8.7M 8%Summer session tuition 2.8M 2% Subtotal net tuition & fees $78.8M 69%
Auxiliary operations 13.1 M 12%Endowment/investment income 10.2 M 9% Corporate/professional education 4.6 M 4%Indirect cost recovery 3.4 M 3% Unrestricted gifts 2.5 M 2%Other revenue 1.6 M 1% Total revenue $114.2 M 100%
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The FY08 Budget: Uses of FundsThe FY08 Budget: Uses of Funds
Salaries $52.6M 46%
Health insurance 4.2M 4%
Other benefits 10.2M 9%
Subtotal compensation $67.0M 59%
Other operating expenses 25.8M 22%
Debt service/depreciation 11.9M 10%
Utilities 5.6M 5%
New building at Gateway Park 2.9M 3%
Contingency 1.0M 1%
Total $114.2M 100%
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The Structural DeficitThe Structural Deficit
In a “balanced” budget, the structural deficit refers to items that are not being fully provided for or the use of resources to a greater extent than what might be ultimately sustainable.
Examples:– Inadequate deferred maintenance funding– Too high endowment spending rule– Not funding faculty salaries to adequate levels– Insufficient financial aid to meet tuition increases for
upper class students
Develop plan to address structural deficit over time
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Debt StructureDebt Structure Restructuring of existing debt
– More strategic debt structure– Extend average life– Create level debt service– Create additional debt capacity
New debt for residence hall ($40M)– To be issued June 2007– Rates locked in at 4.7% for 40 years
Total debt at approximately $145M– Overall annual debt service cost not increased significantly
Public Credit Ratings– Standard and Poor’s A+ (Outlook upgraded to stable)
– Moody’s Investors Service A1
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Endowment-Market Value HistoryEndowment-Market Value History
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000$381M as of Feb 28, 2007
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Endowment-Market Value ComparisonEndowment-Market Value Comparison
51 Tufts $1,215,413,000
71 BU $916,017,000
90 RPI $682,894,000
99 Northeastern $595,859,000
109 RIT $568,945,000
157 WPI $353,720,000
Values as of June 30, 2006 per NACUBO
For private institutions to which the greatest number of WPI students apply for admittance
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Endowment-Performance HistoryEndowment-Performance History
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06
WPI Average for all colleges
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Endowment-Asset AllocationEndowment-Asset Allocation
Actual Allocation 2/28/07Approved Allocation Policy
Public Equity 40%
Public Equity 50.3%
Hedge Funds 25%
Real Assets 18%
Fixed Income
12%
Private Equity
5%
Hedge Funds 27.4%
Fixed Income 10.6%
Real Assets 4.6%
Private Equity 7.1%
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Life Sciences Building at GatewayLife Sciences Building at Gateway
Scheduled to open April 2007 31 faculty to have labs in new facility Operations committee determined
initial level of required support 11 new staff to be hired in FY2008 Transportation to be provided Corporate & professional education Café
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Major Capital Projects-FY07 & FY08Major Capital Projects-FY07 & FY08
New residence hall & garage
Alumni Field renovation
Salisbury & Goddard Hall renovations
Founders Hallrestaurant/pub & convenience store
Alden Hall air conditioning
Recreation center planning to continue
33
The Green CampusThe Green Campus
Why Go Green? Trends in Higher Education Cost/Benefit Analysis of Going Green Green Buildings at WPI
– Bartlett Center– New Residence Hall
Policy Adopted by WPI Board
34
Questions
This presentation is available on theOffice of Faculty Governance web page
http://www.wpi.edu/Campus/Faculty/