Annual Budget and Finance Report

October, 2004

by William R. Crangle, Vice President for Financial Affairs

8-132Plymouth State University is financially healthy. We have had small surpluses every year except two in the last eight years. We have a small operating reserve, and enrollments are at an all-time high. The changes we have made over the past years have improved retention and average class size, reduced operating costs, and in most areas improved net revenue. However good that news is, we continue to face challenges that create a tight budget and require continued planning to assure that we are funding the critical aspects of the institution to secure our future. The following is a review of the FY (Fiscal Year) 05 budget and our general fiscal health.

Highlights of the FY 2004-2005 Budget

Tuition

At their June 2004 meeting, the Board of Trustees approved tuition rates for FY05, reflecting an increase of 6.5 percent over the prior year; room and board rates increased by 6.1 percent and 0.7 percent respectively over the prior year; and other mandatory fees to $1,548 (increases varying depending on the fee, with a total fee increase of 4.6 percent).

State Appropriation

State appropriation increased system-wide by 3 percent and for PSU specifically by 2.1 percent. This increase is following no increase for FY04. PSU’s increase was lower as the trustees allowed CLL not to increase tuition for FY04 and 05 and increased the system allocation to fund the change; pay increases for the UNH Extension Service are also taken off the top of the appropriation; and KSC received some additional support for its science center, as we did last year. The FY05 state appropriation represents 22.8 percent of general operating funds and 14.5 percent of all funds.

Salaries and Benefits

Salaries for all benefited staff are budgeted to increase by 4.5 percent and by 3 percent for all non-benefited staff. Benefit costs increased by 5.8 percent and now represent 40 percent of compensation for benefited employees.

Enrollment

Undergraduate enrollment has grown for four years in a row. We expect growth to continue for FY05 and level off in FY06. Actual admission numbers for fall 2004 are exceeding our projections. Retention for the upper grades appears very strong. Preregistration numbers from last April were the highest we have had in some time, and we expect to exceed our total student headcount enrollments.

Graduate student enrollment has grown significantly in recent years. The M.Ed. continues to enjoy much growth in new programs. Increasing demand for teachers and administrators in secondary schools generated a 25 percent increase last year. The MBA program had a very large graduating class last spring; therefore, numbers should drop slightly in FY05. MBA’s revenue rose 34 percent in FY04 and we expect further growth in the near future. The division served over 1,255 individual students last year, and collaborates with school districts and businesses across the state.

For more information on enrollment trends, please visit the fact book produced by Institutional Research.

Financial Aid

Institutional financial aid costs are expected to increase 16.9 percent over FY04 and are currently budgeted at more than $4 million. In FY96, PSU began a program to increase the amount of financial aid dedicated to scholarship or non-need-based aid. Since then, we have invested over $850,000 in funding for new programs that support this strategic initiative. Retention of students receiving scholarship support is among our highest. We are also required by Board policy to fill the “gap” between the cost of education and available aid for needy students. As a result of stagnant federal financial aid, a very small state grant program, and the increase in loans our students are required to incur, the cost of need-based aid has increased significantly.

Gifts and Grants

Plymouth State University received $786,022 in private gifts in FY04 (not including pledges or planned gifts). Of these, 53 percent or $418,929 was given for the Annual Fund, either for scholarships, ongoing projects or unrestricted funds. This Annual Fund total is almost $30,000 more than last year. Expanding Our Reach campaign giving totals include $129,800 for Boyd Science Center, $15,142 for the Silver Cultural Arts Center, $149,071 for endowment, $3,234 for the PSU Gateway, and $69,849 for class and department projects. The annual total raised is about $100,000 less than FY03, which was our all-time high. The number of donors increased by 13 percent, with 14 percent of this year’s donors giving more than they gave last year, 28 percent of donors renewing their giving to PSU, and a 52 percent increase in gifts from faculty and staff.

PSU received grant and contract awards of more than $2 million during FY 2004. New initiatives include a grant from the U.S. State Department for $250,000 to support the Pakistani Teacher Project (see the story on page 8). The Davis Foundation, for $81,000, has funded Project Launch, a program designed to develop a number of new campus initiatives to improve undergraduate education and retention. A new grant from the National Oceanic and Atmospheric Administration for $500,000 will support the New England Weather Technology initiative. New support of $85,000 from the Department of Education funded the Center for Professional Educational Partnerships.

Campus

Utilities are budgeted to increase by 9 percent over the FY04 budget. We are concerned that this increase may not be enough to cover the ever-increasing cost of oil. We will keep a close eye on this area during the summer and fall and make necessary adjustments during the fall term.

Deferred maintenance continues to be a major challenge for PSU, USNH and, in fact, for most higher education institutions. Our outstanding deferred maintenance is currently estimated at approximately $15 million and growing. We invest approximately $1.8 million per year to address these issues. Our challenge has been catching up—solving the problem for the long term will take more than our current investment. The Campus Budget Committee and the University Planning Committee are looking at this issue and trying to address it within the annual budget cycle.

Strategic Planning

The University Planning Committee, the Campus Budget Committee, the president and the Cabinet continue to work on our strategic planning and budget efforts. As strategic planning becomes increasingly integrated into our annual university budget cycle, I am confident that the planning process will have a greater influence on the allocation of the budget and we will be working in a value-based budget environment. If you are interested in what the CPC and the CBC are doing, please see their Web pages:

  • University Planning Committee
  • Campus Budget Committee
  • An extensive review of the issues in the report as well as trends affecting higher education budgets is available online. Also available is a summary of PSU’s standing with our comparator institutions.

    Revenues and Expenditures FY04

    Revenue:

    Tuition and fees
    $35,040,000

    State appropriation
    $11,167,000

    Auxiliary income
    $15,435,000

    Other income
    $2,787,000

    Total revenues
    $64,429,000

    Expenditures:

    Salaries and benefits
    $37,113,000

    Supplies and services
    $12,445,000

    Financial aid
    $4,068,000

    Utilities
    $3,057,000

    Transfers
    $6,764,000

    Total expenses
    $63,447,000

    Total Budget Variance

    Surplus (Deficit)
    $982,000


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