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Campus Conversation 1: April 18 & 21, 2016
View the video recording of the WVU vice president for administration and finance and vice provost discussing the university budget.
Campus Budget Conversation Slideshow
Strategy & Budget Campus Conversation, September 20, 2016
Leverage Internal Expertise with External Resources
Partnerships with Federal Government Agencies, NGOs and Businesses
Leverage Entrepreneurial Activities
State and Community Partnerships
Business Engagement
Research-Based Solutions for State Challenges
Priorities within PROSPERITY
Priorities within PROSPERITY
1. CREATE ONE WVU
Culture of Prosperity
Align Partnerships
Transformation Teams
2. R1 STATUS
Research Priorities
Faculty Research Productivity
Research Support
Institutes & Centers
Doctoral Productivity
Snapshot: STRATEGIC PRIORITIES
Snapshot: STRATEGIC PRIORITIES
EDUCATION
Recruitment
Retention
K-12 Education
HEALTHCARE
Translational & Clinical Care
Address State’s Health Needs
Health & Wellness
PROSPERITY
Create One WVU
R1 Status
Transform WV Economy
BUDGET OVERVIEW
Sources & Ownership of FY16
Sources of Funding
Tuition and Fees
$396 m / 35%
Grants / Contracts
$327 m / 29%
State Appropriations
$188 m / 29%
Auxiliaries
$152 m / 13%
Other Revenues
$64 m / 6%
Other Appropriations
$9.5 m / 1%
Ownership of Funding
Centrally Allocated Funds
$493 m / 43%
Grants / Contracts
$327.31 m / 29%
Non-Centrally Allocated Funds
$318 m / 23%
Total Budget = $1 billion
BUDGET OVERVIEW
2016 Budgeted Use of Funds
Debt Service
$34 m 3%
Supplies, Services and Other Expenses
$224 m 21%
Depreciation and Amortization
$82 m 8%
Scholarships and Fellowships
$37.7 m 5%
Utilities
$31.7 m 3%
Benefits
$149 m 14%
Salaries and Wages
$478 m 46%
THE SITUATION
By the end of Fiscal Year 2017, we have to reduce our spending by $27 million. At the end of Fiscal Year 2020, we have to reduce our spending by an additional $18 million, for a total reduction of spending of $45 million, annually.
HOW DID WE GET HERE?
1. DECLINING STATE SUPPORT
Lost $30 million in base funding from the state
2. ENROLLMENT & PRICING PRESSURES
Competition, Pricing & Enrollment Challenges
Tuition Affordability
Increased Tuition Discounting/ Scholarship
3. INCREASING OPERATING COSTS
State Obligations (i.e., PEIA, wvOASIS system)
Talent, Fringes, Supplies & Infrastructure
Where do we go from here?
Where do we go from here?
INVESTING IN PRIORITIES
Research
Programs
Talent
Enrollment
Infrastructure
MAINTAIN STRATEGIC FINANCIAL GOALS
Positive Adjusted Operating Margin & Preserve Cash Position
Maintain Bond Rating
Continue Strategic Investments for Future Growth
TRANSFORMATION TEAMS
12 teams looking at how the University can reduce expenses and generate revenue
Impact of FY 2016 Budget Activities on Future Years
Impact of FY 2016 Budget Activities on Future Years (as of June 30, 2016) Dollars in millions
Original Plan
Estimated
FY16 = - $26 m
Forward looking budget deficits
FY17 = - $29 m
FY18 = - $28 m
FY19 = - $25 m
FY20 = - $15 m
HOW WE FIX THIS (THE 5-YEAR PLAN)
HOW WE FIX THIS (THE 5-YEAR PLAN)
(as of July 1, 2017)
TUITION INCREASES
5% for Resident & NonResident through FY21
STATE APPROPRIATIONS
2% Reduction in FY18 - flat thereafter
SALARY INCREASE PROGRAM
$1.5 million retention pools in FYs 17, 19 and 21
3% Raise Pools in FYs 18 and 20
HOW WE FIX THIS (THE 5-YEAR PLAN)
HOW WE FIX THIS (THE 5-YEAR PLAN)
(as of July 1, 2017)
STUDENT AID
$7 million in FY17 and $5 million annual increase thereafter
STUDENT RETENTION
1% improvement in FY17 with an additional 1% improvement in FY18
FY17 is a planning year to reduce spending while making permanent reductions in FY18
KEY DRIVERS FOR BALANCING THE BUDGET
KEY DRIVERS FOR BALANCING THE BUDGET
Organizational/Structural Transformations
Revenue/State Appropriations/Tuition
Other Reductions
BUDGET TRANSFORMATION PROGRAM: FY17
BUDGET TRANSFORMATION PROGRAM: FY17
Reduction of Centrally Allocated Budgets
Other units = $8.5 m
Colleges= $10 m
Curtail spending and return savings to meet target reduction.
Limits on Non-centrally Allocated Expense Budgets
Colleges = $3.6 m
Other units $7.5 m
Curtail spending and retain savings.
Equals $29.6 million
Revenue Targets for Non-Centrally Allocated Budgets
Colleges = $85.5 m
Other units = $188.7 m
Collect revenues equal to budget.
BUDGET TRANSFORMATION PROGRAM: FY18
BUDGET TRANSFORMATION PROGRAM: FY18
Continued Reduction of Budgets
Other units = $8.5 m
Colleges = $10 m
Base budget reduction.
Limits on Non-centrally Allocated Expense Budgets
Colleges = 3.6 m
Other units = $7.5 m
Revenue Targets for Non-Centrally Allocated Budgets
Colleges = 85.5 m
Other units = $188.7 m
Expense budget limits and revenue targets reset annually based on activity revenues and cash continues to flow to fund owners.
Impact of Revised 5-year Planning Assumptions (as of July 1, 2016) Dollars in millions
Impact of Revised 5-year Planning Assumptions (as of July 1, 2016) Dollars in millions
◆ Approved Budget
◆ Uncorrected Plan
Savings:
Target annual base budget savings:
FY16 = $14
FY17 = $15
FY18 = $10
FY19 = $6
FY20 = $0
FY21 = $45
Realized savings:
FY16 = $0
FY17 = $29 (target)
Snapshot: BUDGET
Snapshot:BUDGET
If we can correct FY17, the University will be better positioned to move forward and make investments in priorities and prepare for growth.
And as state appropriations and enrollment turns around, we will be better positioned to prepare for future opportunities, while removing costs that do not directly contribute to our land-grant mission.
