ALASKA ’ S FIRST UNIVERSITY  AMERICA ’ S ARCTIC RESEARCH UNIVERSITY

1. University of Alaska Fairbanks Executive Leadership Workshop ALASKA’S FIRST UNIVERSITY  AMERICA’S ARCTIC RESEARCH UNIVERSITY ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY

2. Agenda • I FY10 Status - Projected Results • Projected Carryforward • II FY11 Conditions and Distributions • The Issues • How do we Address Them? • III FY12 budget and 3 - 5 year planning horizon • Operating Budget Priorities • IV Summary ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 2

3. I – FY10 Status – Projected Results ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 3

4. FY10 Budget $8.2M Non-General Funds Required to Maintain Existing Programs! ($7.4M projected additional in FY10) ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 4

5. Carryforward Analysis • Unrestricted (F1) carryforward projected at $6.5M or 2.8% • Estimate $5M to $7M at end of FY10 • Initial contingency reserve low but a pullback replenished • Higher than anticipated tuition and ICR revenue partly offset fixed costs increases • Grants and Contracts accounts receivable reduced • Units with deficits at end of FY10 will submit a remedial plan ALASKA’S FIRST UNIVERSITY  AMERICA’S ARCTIC UNIVERSITY ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 5

6. II - FY11 Conditions and Distributions ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY

7. Initial Budget Issues How do we Solve them? • Overall UAF status going into FY11 • GF salary and benefit funding distributions • Planning assumptions • 3% SW Pool • Central needs • Structuring of required redistributions – PBB and other ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 7

8. FY 11 Budget $10.8M Non-General Funds Required to Maintain Existing Programs! As passed by the Legislature *Includes CES, ACEP, MAP and 150K of one-time STEM funding. ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 8

9. Handouts: • FY11 Conference Committee Action • FY11 Fiscal Status - Delta Document • FY11 Reference Document Discussion ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 9

10. Legislature’s 3% redistribution pool is substantially returned to UAF 2% enrollment growth Anticipate utility trigger mechanism Flat research revenue Fiscal Impact Planning Assumptions ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY

11. 3% SW Pool • $11.6M total for all of UAF • $4.6M GF • $7.0M NGF • Anticipate 95% will be returned ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 11

12. FY11 Central Obligations • Must cover ongoing cost increases • Fuel • Tuition rate increases (institutional scholarships) • SW chargebacks • Must cover existing structural deficits • Bookstore/Tech Center • Institutional scholarship budget shortfall • Must cover strategic facility upgrades • One-stop shop • Life Sciences planning advance • Must build adequate emergency reserve • $2.6M required to meet ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 12

13. FY11 Campus-wide Unfunded Obligations • KUAC • Athletic Travel • Upark Department Moves • Wells Fargo Lease/Moves • Sustainability (SIREN) Fee Match • SOM/Northern Leadership • OIT • HR Office • Grant Technician • $2.0M required to meet ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 13

14. Required Adjustments • $2.6M required for central needs • $2.0M in unfunded obligations campus-wide • $1.3M PBB $5.9M in required FY11 redistributions ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 14

15. Across the board School/college/Unit level VC/Provost/Chancellor level Amount allocated By financial driver % GF, % NGF Administrative vs. Academic vs. Research By Space Vacancies centrally held Other Redistribution Options ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY

16. Discussion ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 16

17. III - FY12 Budget and 3–5 Year Planning Horizon ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 17

18. FY 12 Operating Budget Priorities Address fixed costs increases – 5% to 7% per year Meet obligations to established programs: Biomedical, Climate, WFD including teacher preparation, others Maintain momentum: Engineering, Energy Increase graduation rates (including State financial aid) ALASKA’S FIRST UNIVERSITY  AMERICA’S ARCTIC RESEARCH UNIVERSITY ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 18

19. Operating Budget 3 to 5 Year Conditions Annual 3% salary increase Annual 15% benefit increase Annual 10% tuition increase Enrollment increase 10% ifsignificant State financial aid package ICR rate increase but Research flat overall if no significant facilities investment 2% to 3% total increase in GF per year Debt Obligations ALASKA’S FIRST UNIVERSITY  AMERICA’S ARCTIC RESEARCH UNIVERSITY ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 19

20. Unrestricted Revenue GapBased Upon FY05 to FY09 Annualized Data $13.8M Gap $8.3M Gap $3.5M Gap Breakeven $4.2M Surplus Does not include financial aid-dependent enrollment increase ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 20

21. Closing the Funding Gap • Across the Board reductions will not be adequate for 3-year budget horizon • Vertical reductions will require elimination and/or restructuring of some programs / functions • Reallocation of savings from vertical reductions will meet “gap” in funding experienced by other units ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 21

22. Closing the Funding Gap • Program review will need to occur in administrative, support, academic, and research operations • Criteria needed for each functional area • Priorities necessary within and across functional areas ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 22

23. Closing the Funding Gap • Benchmarking to peers • Performance metrics • Areas of distinction or focus • Accreditation and mission alignment • ? ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 23

24. Next Step • Summer 2010 – begin Administrative review • Fall / Winter 2010 – begin Academic, Research, Student Support review • Implementation in FY12 based on reviews ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY 24

25. VI - Summary ALASKA’ S FIRST UNIVERSITY  AMERICA’ S ARCTIC RESEARCH UNIVERSITY