FY10 Budget Update

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FY10 Budget Update

• Finance and Administration Advisory Group
• July 9, 2009

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Agenda

• Review of FY10 budget process
• Current status of FY10 budget
• Strategy schedule for completion of FY10 budget

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Review of FY10 Budget ProcessGoals

• UMass Boston used the four goals of the strategic
  plan to guide decision-making for the FY10
  budget.
• Increase student access, engagement and success
• Attract, develop, and sustain highly effective
  faculty
• Create a physical environment that supports
  teaching, learning, and research
• Enhance campus community engagement through
  improved organizational structure.
• We knew that budget cuts will be painful, and
  that even the smallest reductions have impacts.
  Consequently, before we made any decisions to
  reduce expenses, we wanted to understand clearly
  what the impacts would be.
• We also knew that we must plan for continued
  enrollment growth and provide high-quality,
  reasonably priced higher-education services to
  current and future students.
• We pledged to have a transparent, participatory
  process to ensure that the campus community works
  together during these uncertain economic times.

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Review of FY10 Budget ProcessFocus on the Base,
Not Merely New Requests

• Because of the fiscal challenges anticipated for
  FY10, the campus budget process included a
  rigorous review of base budgets for consistency
  with the strategic plan, not merely just a focus
  on requests for new resources.
• We asked the Vice Chancellors to develop
  six-percent and nine-percent expense reduction
  scenarios to their base budgets so that we could
  understand the implications of major spending
  cuts on our academic enterprise and our campus
  operations.

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Review of FY10 Budget ProcessOther Important
Changes

• We continued the transition to all-funds
  budgeting
• Moving from a traditional focus on each funding
  source in silo fashion to looking at the total
  campus budget.
• All revenue sources belong to UMass Boston no
  unit owns a trust fund.
• For FY10, we are developing the first campus-wide
  personnel budget, by expanding position budgeting
  to cover positions supported by trust funds, not
  merely those funded by the state appropriation.
• We are moving to more automation of the budget
  submission process
• Asked units to submit FY10 non-personnel budgets
  via FAIR.
• Will be implementing an electronic budget module
  for FY11 that will further automate the
  submission process, including enabling units to
  budget for both personnel (by position) and
  non-personnel expenses within the same system.
  

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Review of FY10 Budget ProcessFY10 Budget
Decision-Making Framework

• To ensure that we had an open and participatory
  process, we reached out to various constituent
  groups on campus.

• UMass Board of Trustees
• Establishes broad policy for the 5 campuses
• Approves fees and annual budgets for all campuses
• Presidents Office
• Directs and coordinates fee-setting and budgeting
  planning for all campuses

• Growth Planning Committee
• Will help UMass Boston to understand and plan
  for the resources necessary to accommodate future
  growth

• Revenue Advisory Committee
• Will help to develop campus FY10 multi-year
  revenue strategy

• Union Leadership Committee
• Will receive information about FY10 budget
  challenge and options under consideration to
  resolve it

• Chancellor Exec Staff
• Establishes strategic priorities for UMass Boston
• Approves operating budget for campus consistent
  with UMass Bostons strategic priorities
• Deans
• Work with faculty to develop and implement
  academic vision for their colleges
• Work with their departments to develop budget
  requests consistent with UMass Bostons strategic
  priorities and goals for their college

• BLRPC
• Represents Faculty Council in operating budget
  process
• Provides input on budget process, on budget issues

• AF/Office of Budget Financial Planning
• Manages UMass Bostons annual budget process and
  supports the effective allocation and use of the
  campus financial resources

Reporting relationship
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Current Status of FY10 BudgetState Support

• For FY10, the state has significantly reduced its
  support for our campus compared to the original
  FY09 budget
• FY10 state appropriation for the UMass system
  will include several formerly separate line items
  without providing increased funding to the
  appropriation.
• In the case of UMass Boston, the Collins Center,
  MODR and the youth program in Nantucket are
  included in the language of the FY10
  appropriation.
• Very real possibility exists of 9C cuts in FY10.

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Current Status of FY10 BudgetFederal Stimulus
Money

• The FY10 budget includes federal stimulus money.
  Our estimate of UMass Bostons share is 13.6M.
• Unlike the state appropriation, it does not come
  with support of fringe benefits.
• We hear rumors that the state will request a
  waiver from the federal government of the
  requirement that it fund higher education at the
  FY06 level or higher, which, if granted, would
  result in a reduction in FY10 state support.
• One-time, one-year funding. It goes away in FY11,
  leaving us with 13.6M less in revenue in FY11.

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Current Status of FY10 Budget2-Year Approach to
Campus Operating Budget

• As a result of the fee increase, federal stimulus
  money, and planned expense reductions, we
  anticipate a balanced budget for FY10.
• However, we must plan for the possibility of a 9C
  cut in FY10.
• Additionally, because the stimulus money is
  available for only one year, we face a large
  challenge in FY11, even with significant expense
  reductions.
• For FY11, we propose to use a strategy similar to
  the one that we implemented in FY09 use trust
  fund balances that we want to build up during
  FY10 to help produce a softer landing in FY11 and
  to reduce the extremely large amount of
  expenditures cuts that we would otherwise have to
  make in FY11.

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Strategy for Balancing FY10 Budget

• We have a three-part strategy for balancing the
  FY10 budget and preparing for FY11
• New revenue
• Fee increase
• Federal stimulus money
• Old revenue
• We are working to identify ways to use existing
  resources, such as trust funds, more efficiently
• Expense reductions

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Strategy for Balancing FY10 BudgetExpense
Reductions

• A leadership team from the Provosts Office,
  Chancellors Office, and Administration and
  Finance reviewed all departmental FY10 budget
  submissions and worked with the deans and vice
  chancellors to prioritize reductions.
• Using the 6 reduction scenarios, this leadership
  group, in consultation with the deans and vice
  chancellors, classified all budget-reduction
  suggestions into three groups
• Savings that, while painful, will have a
  minimally negative impact and should be pursued
  immediately
• Reductions that would have a more significantly
  negative impact and require greater deliberation
• Cuts that slice deeply into our core educational
  values and strategic initiatives and are thus
  measures of last resort.

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Strategy for Balancing FY10 BudgetExpense
Reductions (continued)

• We are moving forward with the first category of
  budget reductions.
• These savings include operational
  belt-tightening, eliminating vacant positions,
  and other cost-cutting measures.
• We will implement these cuts at the start of the
  fiscal year by reducing unit FY10 budgets.
• We will schedule a meeting with each VC to work
  through the details.
• Although we requested 6 and 9 scenarios from
  departments, we are not implementing
  across-the-board reductions.
• End result of the review by the leadership group
  is that the dollar amount of reductions and
  reductions as a percent of base budget will vary
  by unit.
• We will continue to review the cost reductions in
  the second group as our revenue picture becomes
  more certain.

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Strategy for Balancing FY10 BudgetBudget
Completion Timetable
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