July2019
CWU QUARTERLY BOARD MEETING AGENDA July 25, 2019 Wellington Event Center/Barto Hall
THURSDAY, JULY 25, Ellensburg WORK SESSION 1:30 Call to Order • Adoption of the Agenda • Adoption of the Minutes of the previous board meeting
1:45-2:30 Budget Outlook for 2019-2020 2:30-3:15 NWCCU Mission & Core Themes 3:15-4:15 Dugmore Briefing and Hall Tour
Central Washington University Board of Trustees July 26, 2019
ACTION – Approval of the minutes of the Regular Meetings of May 16 and 17, 2019.
We recommend the following motion: The Board of Trustees of Central Washington University hereby approves the minutes of the regular meetings of May 16 and 17, 2019.
Submitted:
Linda Schactler Chief of Staff
Approved for submittal to the Board:
James L. Gaudino President
Board of Trustees Minutes May 16-17, 2019
DRAFT
MAY 16, 2019 WORK SESSION Sid W. Morrison Board Room (Barge 412) The work session was called to order at 1:32 p.m. Present: Ron Erickson, Chair Ray Conner Gary Epp Gladys Gillis Keith Thompson Absent: Robert Nellams, Vice Chair Erin Black Staff to the Board James L. Gaudino, President Linda Schactler, Secretary to the Board, Chief of Staff, Joel Klucking, Treasurer to the Board, Vice President for Business and Financial Affairs Alan Smith, Assistant Attorney General Kim Dawson, Executive Assistant to the President and Board of Trustees Executive Faculty and Staff Andreas Bohman, Vice President for Operations Delores (Kandee) Cleary, Vice President for Diversity and Inclusivity Katherine Frank, Provost/Vice President for Academic and Student Life Kremiere Jackson, Vice President for Public Affairs Sharon O’Hare, Vice President for Enrollment Management Scott Wade, Vice President for University Relations Action – Approval of the Agenda
Motion 19-15: Mr. Thompson moved the Board of Trustees of Central Washington University approve the agenda of the meetings of May 16 and 17, 2019. Ms. Gillis seconded the motion, which the board unanimously approved. Approval of Minutes Motion 19-16: Mr. Thompson moved that the Board of Trustees of Central Washington University approve minutes of the regular meetings of February 21 and 22, 2019. Mr. Epp seconded the motion. The motion was approved.
FY 20 BUDGET PREVIEW Vice President Klucking presented the Board with a preview of the FY20 operating budget, and a comparison to the FY19 forecast. Budgetary drivers such as projected enrollment and retention were discussed. Mr. Klucking advised the board and others that the university planned a tuition increase of 2.4 percent for the 2019-2020 school year, as allowed in RCW RCW 28B.15.067(6)(c) Based on these drivers and current assumptions, it is anticipated that CWU’s FY20 operating revenues will increase 6.4 percent over the current year due to increased enrollment and increased funding from the State of Washington. This also includes the favorable impact of opening Dugmore Hall, a 402-bed residence hall, and the adjacent dining facility. However, it also is anticipated that operating costs will increase 7.4 percent, due primarily to employee wage and benefit increases, a 12.5 percent increase in the minimum wage, and the $2.5-million bond payment and operating costs related to Dugmore Hall and the adjacent dining facility. From 2016 to 2018, a Baccalaureate Task Force (BTF) work group assessed the current state of academic advising at Central Washington University and recommended improvements. Work group annual reports are available at https://www.cwu.edu/mission/baccalaureate. These reports made clear that academic advising needs to be revised to better support students’ retention, progression, and degree completion. In winter 2019, the Provost and Faculty Senate jointly formed the Academic Advising Council (AAC) and charged the council to develop a new model of advising based on the recommendations from the BTF work group. In February 2019, the AAC held town halls with students, faculty, and staff to begin the broad conversation about how best to support students through academic advising. The faculty and staff town halls provided feedback about five potential advising models to determine the features that best address students’ needs. These conversations reiterated the need to revise the existing advising model. Specifically, students, faculty, and staff indicated students need advisors who are competent, caring, and accessible. Students also need to understand the role of advisors in order to know to whom to turn for specific questions. Based on the cumulative feedback received and the BTF recommendations, in March and April 2019, the AAC developed a proposal for a new model of advising. It is important to emphasize that, at this point, the proposed model is a draft, and the AAC will use May 2019 to solicit feedback from the university community regarding this model. The proposed model is designed to better meet students’ needs in advising and promote their success. Next Steps: Based on the feedback received from students, faculty, and staff about this proposed model, the AAC will further revise and refine the model. The goal is to reach consensus on a final model of advising by the end of June 2019, construct a budget, and make recommendations to the Provost. Once a model and budget are approved, implementation of the new model will begin. In July, the final FY20 budget and a tuition increase will come forward to the board for approval. RETENTION DISCUSSION Advising
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Mental Health & Wellness In May 2018, the Board of Trustees approved a $12/quarter increase to the Medical and Counseling fee to offset a state-mandated increase in the hourly pay rate for nurses employed by Medical Services; to fund a new permanent treatment provider for Counseling Services; and to provide tele-psychiatry services. The addition of a new staff member was intended to meet Ellensburg campus students’ growing demand for mental health counseling and crisis services. Meeting Demand for Services: Counseling Services made several changes to its service delivery model due to the inability to secure a suitable hire during FY19. The goal was to increase, rather than just maintain, mental health service access for Ellensburg-campus students. To this end, Counseling Services: • Developed a Scope of Practice policy to better delineate parameters of service to increase the equity of service provision to students; • Used data-informed decision-making for allocating service availability quarter by quarter, prioritizing rapid access for routine initial appointments and crisis counseling appointments, while also providing short-term therapeutic services; • Emphasized collaborative treatment planning between service-seeking students and professional staff; • Increased access points for mental health education and support. Service Demand Outcomes: Compared to FY18, from July 1, 2018 through April 19, 2019: • More students attended at least one appointment with Counseling Services (948 vs 914). • There was a 30-percent increase in initial appointments (735 vs 565) with only a 1-day increase in wait-time for an appointment (5.83 vs 4.99). • Average wait-time for an unscheduled crisis appointment decreased from 1.07 days to .13 days. • Even with Scope of Practice, only 4.7 percent of clients were referred out after the initial appointment, and 6.2 percent of clients were referred out after intake. • There was a 67.8-percent increase (146 vs 87) in outreach and consultations provided to the university community. • Two drop-in consultation sites, one with Music and one with Athletics, were established. Each provides two hours of weekly drop-in support for students (“Let’s Talk” program). • A part-time, temporary, licensed mental health counselor who is fluent in Japanese was hired to help, as needed, with counseling Asia University America Program (AUAP) students. • An online presence to provide information and basic education to students was established. • During fall 2017 and winter 2018, a total of 187 students were placed on a waitlist for ongoing individual therapy. During fall 2018 and winter 2019, a total of 87 students were placed on a waitlist for ongoing individual therapy. That is a 53.5 percent reduction in the number of students who had to wait for individual therapy after completing the initial service intake requirements. Continued Challenges: • Volume of need: Medical Services providers continue to see an increasing number of students presenting with mental health concerns, including significant diagnoses such as bipolar disorder and psychotic disorders. • Maintaining full staffing: Although Counseling Services has successfully filled the position funded through last year’s fee increase, another staff member is now retiring, and the Assistant Director for Training position is vacant.
3 Board of Trustees Minutes May 16-17, 2019
• FTE to student ratio:
o Current filled FTE (4.39) to student ratio is 1:2,277 o Current filled and vacant FTE (6.39) to student ratio is 1:1,569. • Space: Counseling Services will soon run out of office space and does not have the capacity for more than one additional new hire. Additional Fee Request: Although last year’s proposal included the possibility of a fee increase request for FY20, Counseling Services is not seeking one at this time because there has not been an opportunity to evaluate the impact of an additional staff person on the supply/demand problem and we have been awaiting the outcome of the state legislative session, which concluded April 28. Fortunately, the state appropriated $368,000 annually “solely for increasing mental health counseling.” The university will develop a plan for this funding that prioritizes the following: • Personnel: o Hire Clinical Case Manager for Counseling Services o Increase 4 Rights and Responsibilities Case Managers to 12-month contracts o Hire an additional 1-2 counselors with specialty areas • Technology: o Purchase Tele-psychiatry trial for a year o Onboard WellTrack or similar product (self-directed as well as therapist-assisted coping skills training for mental health and wellness concerns). Re-Recruitment Vice President O’Hare updated the board on the re-recruitment pilot. During spring quarter, the focus has been to build awareness of re-recruitment as a retention tool. Colleges and departments have re- cast some of their end-of-year celebrations. The recent Wildcat Student Success Day focused on celebrating the end of the first year (freshmen) and halfway to graduation (sophomore). Next steps include assessing the spring 2019 pilot, adding a summer peer-outreach component, developing an action plan for AY19-20 and implementing fall quarter. Student Services Center The Student Services Center project was initiated with the intent to scope, define, and guide forward progress in the continued development of a one-stop-shop for students needing assistance with their education experience, administrative tasks, or other service transactions. Major goals of the SSC project are to: • Define the desired student experience and services to be provided at the SSC • Analyze and revise the Student Services experience and update technology to provide best-of-class services • Reengineer/reduce the complexity of student- facing processes • Modify Bouillon Hall to maximize utility and comfort • Create a comprehensive and easy to navigate online one-stop shop for all students, regardless of location • Make organizational changes that will best support Student Services
Going forward, the Project Management Office (PMO) will need approximately $425,000 to continue to fulfill the vision and enact recommendations and identified improvements for a modern, comprehensive, consolidated Student Services Center.
4 Board of Trustees Minutes May 16-17, 2019
Workforce Diversity Vice President Cleary presented the board with some background information on workforce diversity. Cultural competence is a key aspect of the mission of Central Washington University because it is integral to the academic success of students and their success after graduation. As well, diversity among university employees enriches all university endeavors, including marketing, problem solving, and organizational flexibility. The diversity of the workforce is especially critical at an institution like CWU where the student body is very diverse. A third of students are people of color. Half transferred to CWU from another institution, and more than half are first in their family to go to a university. In order to meet the needs of such a diverse student body, the university requires employees with the cultural competence to understand what student needs really are. A critical factor of the university’s success therefore is a workforce that is diverse: faculty and staff from many walks of life; diverse in gender, race and ethnicity; and with a wide range of cultural experience. The student body at Central Washington University has become more diverse, however, employees have remained relatively static. A plan is being developed to address CWU’s workforce diversity and will be shared soon. Meeting adjourned at 5:10 PM. Trustees, the president, and the assistant attorney general attended a social dinner at the University House from 6:00-8:00 p.m. No business was conducted.
MAY 17, 2019 Barge Hall, Room 304 Executive Session Present: Ron Erickson, Chair Erin Black
Ray Conner Gladys Gillis Keith Thompson James Gaudino, President Linda Schactler, Board Sec’y, Chief of Staff Joel Klucking, Board Treasurer, VP Business & Financial Affairs Katherine Frank, Provost Alan Smith, Assistant Attorney General
The board convened in executive session at 8:00 a.m. for one hour for the purpose of discussing issues related to personnel and litigation, per RCW 42.30.110. At 9:00 a.m., the executive session was extended another 15 minutes. Executive session ended at 9:09 a.m. Regular Business Meeting The regularly scheduled business meeting was called to order at 9:16 a.m.
5 Board of Trustees Minutes May 16-17, 2019
Present: Ron Erickson, Chair Erin Black Ray Conner
Gary Epp Gladys Gillis Keith Thompson
Staff to the Board James L. Gaudino, President Joel Klucking, Treasurer to the Board, Vice President for Business and Financial Affairs Alan Smith, Assistant Attorney General Kim Dawson, Executive Assistant to the President and Board of Trustees Executive Faculty and Staff Andreas Bohman, Vice President for Operations Delores (Kandee) Cleary, Vice President for Diversity and Inclusivity Katherine Frank, Provost/Vice President for Academic and Student Life Kremiere Jackson, Vice President for Public Affairs Sharon O’Hare, Vice President for Enrollment Management Scott Wade, Vice President for University Relations Public Comment Chair Erickson reported that three people signed up for public comment:
• Alexa Shindruk , President of Central Environmental Club, addressed sustainability at CWU. • Anne Slippy, Aviation student, requested “the reconsideration of Professor Jason Underhill, and for his appointment for tenure.” • Dr. Cody Stoddard , Professor of Law and Justice and Past Faculty Senate Chair, who spoke about the hard work of our faculty and staff. CWU Police Department Personnel and Budget Capacity Vice President Andreas Bohman gave the board an overview of the CWU Police Department. CWU police are commissioned officers and attend the Washington State Criminal Justice Training Commission’s basic law enforcement academy. The annual UPPS budget is funded from two sources: state funding and parking revenue. In the FY20 budget, UPPS is currently allocated $89,046 for goods and services, of which $29,600 is available for basic equipment replacement, uniforms, training, memberships, certifications and academy fees for officers. Eliminating purchases of uniforms and basic equipment leaves approximately $9,900 for officers’ training, memberships, certifications and travel. The department does not have a vehicle replacement fund. In addition to operational challenges, the limited budget presents a challenge when recruiting officers for open positions. Despite shortfalls in funding and tragic events, the CWU police department is performing and managing very well. With strong support from students, staff, faculty, and the Employee Assistance Program (EAP), our law enforcement officers have shown extraordinary resiliency and an unwavering commitment to our campus community. The department intends to prioritize diversity hiring in order to better serve CWU’s very diverse student population. However, relying on parking revenue to fund safety services has not proven adequate or reliable. As well, it diverts funds away from badly needed parking improvements. The university should develop a steady and sustainable funding solution for this critical department.
Board Business President’s Annual Evaluation: CWUP 1-10-050 [Powers and Duties] requires the Board of Trustees to “evaluate, either verbally or in writing, the president, based on written or verbal criteria established by the board, information gleaned from the board meetings, communications received, strategic plan accomplishments, and/or any other criteria as determined by the board of trustees.” The Board reviews the performance of the president for the period July 1 through June 30 of each year. In October 2018 the Board provided a letter to President Gaudino, specifying priority areas of focus for the 2018-2019 academic year. The Board’s review of the president’s performance will be based on this direction, as well as a self-evaluation the president will submit to the board in July. Annual Trustee Self-Evaluation: The Board of Trustees annually assesses its own performance. This assessment is intended to support continuous improvement and increased effectiveness. The Board has adapted a self-evaluation tool from a template developed by the Association of Governing Boards. The board will conduct this evaluation in July. 2019-2020 Draft Board Meeting Schedule: Central Washington University Policy 1-10-030 states that the Board shall hold a regular meeting at least once each calendar quarter and may establish a schedule of regular meetings. The following schedule plans for a retreat in October and one regular meeting in each of the following quarters. The draft schedule will be before the board for adoption in July. • October 16, 17 & 18, 2019 [annual planning retreat] • February 20 & 21, 2020 • May 14 & 15, 2020 • July 23 & 24, 2020 Board Communications The Board acknowledges receipt of the following communications: 1. Resolution dated Monday, May 6, 2019, from the ASCWU Student Government, regarding Sustainability. Chair Erickson added that Gladys has been appointed to the Operations and Enrollment Management committees and has completed her Open Public Meetings Act (OPMA) training. ACTION AGENDA Approval of Resolution 19-07 Trustee Epp read Resolution 19-07: WHEREAS , members of the 2018-2019 Associated Students of Central Washington University (ASCWU) Student Government (SG) served with distinction and conducted themselves in a professional manner befitting their leadership positions; and WHEREAS , the SG respected and supported the shared governance process, engaging fully in campus committees, and establishing constructive communication and positive relationships among the ASCWU and students, faculty, staff, administrators, and the community; and WHEREAS , the SG expanded social media efforts to Twitter and Instagram, and increased student participation in events and in student clubs and organizations; and
7 Board of Trustees Minutes May 16-17, 2019
WHEREAS , the SG worked with the Faculty Senate and Academic and Student Life to update the commencement policy; and WHEREAS , the SG encouraged students to become involved in discussions about issues that impacted them, to ask questions, and to look for ways to reduce costs; and WHEREAS , the SG came together during significant and impactful times in an effort to support the student voice; NOW, THEREFORE, BE IT RESOLVED that this Board of Trustees wishes to publicly express its appreciation to the members of the 2018-2019 ASCWU SG for their dedicated service to Central Washington University and its students, and to wish them well in their future endeavors. ADOPTED and signed this 17 th day of May, 2019. Motion 19-17: Mr. Epp moved that the Board of Trustees of Central Washington University hereby approve Resolution 19-07 honoring the Associated Students of Central Washington University, which was seconded by Ms. Black. The motion was approved. Approval of Consent Agenda The consent action items are submitted by the divisions of Academic and Student Life, Business and Financial Affairs, Enrollment Management, Operations, and the President. Motion 19-18: Mr. Conner moved that the Board of Trustees of Central Washington University approves the consent action items submitted May 17, 2019, which was seconded by Ms. Gillis. The motion was approved. Approval of Bachelor of Arts Liberal Studies Motion 19-19: Ms. Gillis moved that the Board of Trustees of Central Washington University endorses the recommendation of the Faculty Senate (Motion No. 18-78) and hereby approves the Bachelor of Arts Liberal Studies degree program this day May 17, 2019, which was seconded by Ms. Black. The motion was approved. Approval of Resolution 19-06 Trustee Thompson read Resolution 19-06: WHEREAS , the Faculty Senate is the primary means by which faculty collectively share in the governance of Central Washington University by shaping the university’s academic environment; and WHEREAS , the Faculty Senate Executive Committee serves a leadership role for the Senate by receiving, evaluating, and directing the disposition of items under Senate consideration; and WHEREAS , the Faculty Senate Executive Committee represents the Senate in discussions with various committees, administrators, and other university groups on issues related to the academic mission of the university; and
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WHEREAS , the Faculty Senate Executive Committee completed a number of important initiatives during the 2018-2019 academic year that strengthened shared governance by developing mechanisms for faculty input on the operating budget, launching implementation of general education, and reviewing and updating the Senate Bylaws and Faculty Code; and WHEREAS , the Faculty Senate Executive Committee has provided frank and engaging insight to the Board about the classroom, research, and campus life of faculty; NOW, THEREFORE, BE IT RESOLVED that the Board of Trustees of Central Washington University extends its appreciation to the Faculty Senate Executive Committee for their hard work and dedication in articulating the academic mission of the university as it moves forward to meet its challenges. ADOPTED and signed this 17th day of May, 2019. Motion 19-20: Mr. Thompson moved that the Board of Trustees of Central Washington University hereby approve Resolution 19-06 honoring the Faculty Senate Executive Committee, which was seconded by Ms. Gillis. The motion was approved. Approval of Resolution 19-05 Trustee Gillis read Resolution 19-05: WHEREAS , Gary Epp has served the State of Washington as the student trustee on the CWU Board of Trustees during the 2018-19 academic year; and WHEREAS , Gary has contributed to board discussions about meeting student needs, addressing issues of mental health need, retention, and many other subjects; and WHEREAS , Gary has executed his board responsibilities while fulfilling his duties as a member of the membership services and floor staff at the Student Union and Recreation Center; and WHEREAS , Gary’s academic interests are exemplified by his participation on the ASCWU Services and Activities Fee Committee, serving as a resident assistant, a Camp C-Woo counselor, and a math tutor; and WHEREAS , Gary’s passion for Central Washington University and his commitment to creating an inclusive and diverse environment for students is evident through his work promoting academic excellence, addressing student needs, and providing leadership opportunities for students; NOW THEREFORE BE IT RESOLVED , that this Board of Trustees and the university community extend their deepest appreciation to Gary Epp for his collaborative, insightful and dedicated service as Student Trustee on the Board of Trustees of Central Washington University. ADOPTED and signed this 17 th day of May, 2019. Motion 19-21: Ms. Gillis moved that the Board of Trustees of Central Washington University hereby approve Resolution 19-05 honoring Gary Epp, which was seconded by Mr. Conner. The motion was approved.
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Approval of Naming of Hertz Concert Hall in McIntyre Hall Motion 19-22: Ms. Black moved that the Board of Trustees of Central Washington University hereby approves the naming of the 600-seat concert venue in McIntyre Hall to be the Wayne S. Hertz Concert Hall, which was seconded by Mr. Conner. The motion was approved. Approval of Promotion, Tenure, Post-Tenure Review Motion 19-23: Mr. Conner moved that the Board of Trustees of Central Washington University hereby approves faculty tenure, promotion and post tenure review as recommended by the Provost this day May 17, 2019. Ms. Gillis seconded the motion. The motion was approved. Approval of Student Recreation Fee Increase Motion 19-24: Mr. Epp moved that the Board of Trustees of Central Washington University approves the Recreation Center Fee increase, from $102 to $117, for fiscal year2020. Mr. Conner seconded the motion. The motion was approved. Approval of Tutoring Fee Increase Motion 19-25: Mr. Thompson moved that the Board of Trustees of Central Washington University hereby approves the rate increase for Tutoring, from $5 to $7.50, for fiscal year 2020. Ms. Black seconded the motion. The motion was approved.
The next meeting of the Board of Trustees is July 25 and 26, 2019 at Ellensburg, WA
Meeting adjourned at 10: 28 AM.
Linda Schactler, Secretary to the
Ron Erickson, Chair CWU Board of Trustees
CWU Board of Trustees
10 Board of Trustees Minutes May 16-17, 2019
Central Washington University Fiscal 2020 Budget Report
Joel Klucking, Chief Financial Officer / Vice President Division of Business & Financial Affairs July 2019
Table of Contents Introduction ................................................................................................................................................3 Executive Summary – FY 2019 Recap and FY2020 Overview ..................................................................4 1. Reflections on RCM/ABB ...................................................................................................................5 2. Budget Drivers – Revenue ................................................................................................................11 State-Funded Enrollment ......................................................................................................................12 Total Revenues – Operating Funds ......................................................................................................12 Tuition ...................................................................................................................................................13 I. Budget Drivers – Operating Expenses ..............................................................................................15 II. The FY 2020 Operating Budget ........................................................................................................16 State and Tuition Fund ..........................................................................................................................18 State Allotment ......................................................................................................................................18 Net Tuition Revenue .............................................................................................................................19 Expenditures – State and Tuition Fund ................................................................................................20 Local General Funds ..............................................................................................................................21 Enterprise Funds ...................................................................................................................................23 Student Activities Funds .......................................................................................................................24 III. The FY 2019 Non-Operating Budget ............................................................................................25 IV. Six-Year Rolling Forecasts ............................................................................................................26
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Introduction
This purpose of this document is to report on the results of operations for FY19 and to mark the end of the development of the FY20 university budget. It represents countless hours of work by many CWU employees and is a tribute to the sophistication of our systems, processes, and, most important, to our people. This is the second annual budget report, and by design builds on much of the information provided in last year’s report. That report went into great detail on how we have organized ourselves (our choice) and university funds (as required by the state). That information is included as an addendum to this report for reference, and all annual reports are posted at http://www.cwu.edu/budget/. We continue to leverage the great work done over the past several years to improve our ability to budget, forecast, and report on financial data. It deserves repeating, that with respect to budgeting, forecasting and reporting, CWU is as capable as the most sophisticated for-profit and not-for-profit entities. In 2018, CWU moved academic units away from incremental budgeting to Activity Based Budgeting (ABB) within the Responsibility Center Management (RCM) philosophy. Self-supporting (not state- subsidized) areas of the university represent about 45 percent of our annual operating budget and embraced a commercial-style budgeting methodology many years ago. As we head into our third year under the new budget model, it seems worthwhile to reflect on how it has gone so far, and to review the financial realities of the past three years. So a portion of this report is dedicated to that purpose, as well as to the proposed budget for FY20 and an update of our six-year rolling forecasts.
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Executive Summary – FY 2019 Recap and FY2020 Overview
From a financial point of view, 2019 was another great year at CWU. Despite a slight shortfall in budgeted, fall-student headcount, actual revenues exceeded expectations in all operating funds. With faculty and staff vacancies at typical percentages, expenses generally were lower than budgeted. Higher revenues and lower expenses is a good place to be, and it allows the university to set some funds aside for things that do not always fit in annual budgets, such as equipment replacement and funds for strategic investments. State/Tuition and Local General Funds. Although we did not achieve budgeted fall enrollment (+61 actual vs. +100 budgeted), the increase in non-resident undergraduate students (who pay higher tuition) and a slight increase in average credit load more than offset the minor shortfall in total student headcount. As a result, gross tuition revenue came in $1.5 million higher than target. The 2018 summer session was much better than expected, delivering about $1.0 million in additional income to the four academic colleges. First-year retention will not be known until the fall census (day ten), however mid-year persistence indicates that we may have a slight improvement over the prior year. This good news was offset by higher-than-expected tuition waivers, of about $1.5 million. In FY 2019 CWU waived $17 million in tuition (in the State/Tuition fund group). Generally, the optimization of tuition waivers continues to be an area of opportunity for the university. Looking ahead to FY20, we anticipate another increase in fall headcount of about 150 students, a strong summer session, and similar operating conditions to FY19 overall. This budget accommodated across-the-board increases in wages and benefits, another increase in the state’s minimum wage, and a long list of state-mandated wage classification upgrades. However the compounding effect of these increases will put pressure on future years. The Enterprise Fund Group , specifically Housing and Dining, experienced solid financial performance, benefitting from a near-capacity residential population and efficient operations. Looking forward to FY20, there will be significant budgetary pressure on these areas as we open the 402-bed Dugmore Hall, the new 6,000-square-foot dining facility, and experience the full impact of investments made to improve the comprehensive residential experience. The Student Activities Fund also experienced higher than budgeted revenues in FY19, which more than offset higher than planned expenses. With significant student employment, this area has felt the impact of the multi-year increase in minimum wage acutely, and will in FY20 as well. Capital Development continued in FY19 with the completion of Samuelson Hall, and the start of construction of the Health Sciences facility. In the fall of 2018, Central completed new recreation facilities and an upgrade to Tomlinson Stadium, funded by the CWU Foundation. FY20 will include the aforementioned opening of Dugmore Hall and dining facility, as well as significant upgrades to the Brooklane Village apartment complex and Stephens-Whitney residence hall.
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1. Reflections on RCM/ABB
As we enter year three of the “new” budget model, it seems like a good time to reflect on how it has impacted the university. Of course this would be extremely complex, as there are many data points, both subjective and objective, and without broad campus input it would likely be subject to the bias of the author. But luckily, at least related to the Activity Based Budgeting (ABB) portion of the model, there are facts that can be commonly known about how resources were deployed and consumed, particularly in comparison to the pre-ABB era. This report will focus on sharing these facts, not the impact of them on any particular part of the university’s operations. It is important to note again that the ABB model applies only to the four colleges in the State and Tuition Fund, which represents only about one fourth of our total operating budget. The remaining three fourths of operating expenses continue operating under either the incremental budget model or a common commercial budget model. Revenue Allocations A significant distinction between ABB and incremental budgeting is that in ABB budgeting, revenues are allocated based on an activity, in our case that activity is student credit hours (SCH). Revenues are allocated to each responsibility center (College) that generates SCH, in the proportion that those SCH are generated; expense budgets are created based on available revenues. Under the incremental budget model, revenues are held centrally, and expense budgets are rolled forward from the prior year with incremental additions for wage and salary increases. Under both models, if revenues exceed expenses then funding of new initiatives is possible. If revenues are less than expenses, either cuts occur or the university spends its reserves. It is also possible to fund new initiatives by reallocating funds away from other areas. CWU has experienced all of these scenarios since 2013. One common critique of the ABB model is that the colleges received less funding than they would have under the incremental model. This is true in the aggregate, at least in FY18 and FY19. There are two other factors to consider: in FY18 it is also true that the non-college support functions took a permanent $1.2-million cut to mitigate the impact of the college shortfall. Initially $1.5 million was removed from the college budgets and set aside for equipment replacement. The following chart tells this story in the aggregate. Note that references to Fund 149 mean the State & Tuition fund and Fund 148 represents summer and other non-mandatory or course fees.
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What if we had stayed with Incremental budgeting?
2018
2019
2020
All Colleges If Incremental
Budget
Budget
Budget
$ $ $ $ $
58,506,713 57,854,807
$ $ $ $ $
60,123,787 59,883,774
$ $ $
62,972,615 63,817,150
Activity Based Budget
Difference All Colleges
(651,906)
(240,013)
844,535
Actual
Actual
Actual
Unspent Funds (Fund 149) Unspent Funds (Fund 148)
1,669,312
252,997 (202,169)
TBD TBD
(93,732)
The existence of unspent funds might indicate that the colleges were able to manage their budgets well enough, even though in the aggregate there was 1.1-percent less budget than there would have been under incremental. This is particularly the case in FY18, just as the non-college divisions were able to manage a 2.0 percent cut that year. To complicate the matter, three of the colleges were asked to set aside up to 2.5 percent for what was effectively a forced (or at least strongly encouraged) savings plan, to be used only if needed. In the end there were no requests to tap into the savings plans and this represents almost $1 million of the underspend of about $1.7 million in fund 149 in FY18. It is also noteworthy that in FY18 we missed our revenue budget by about $1.0M. Had we stayed on incremental budgeting that year, there likely would have been a mid-year, across-the-board budget cut, and the colleges’ proportionate share of the cut would have been roughly $500,000. As it turned out, the $1 million mid-year cut was absorbed by the non-college units and the equipment funds. If we dive deeper into this data, we can see that not all the colleges have received less funding under ABB compared to incremental. The chart below shows the annual difference by college, and what the difference was between incremental allocation and the actual ABB allocation.
Incremental vs. ABB allocations By College
2018
2019
2020
College
More/(Less)
More/(Less)
More/(Less)
Arts & Humanities
$ $ $ $ $
(541,340) (295,243) (117,042) 301,719 (651,906)
$ $ $ $ $
(651,559)
$ $ $ $ $
622,649 285,310 (479,578) 416,154 844,535
Education & Professional Studies
33,467
Business Sciences
(202,392) 580,471 (240,013)
Difference
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As time passes, one can see the impact of SCH (the “activity” part of ABB) on the allocations of revenue. In FY19, the College of Arts & Humanities (CAH) made an investment in faculty to open up more sections of English and Philosophy. This decision helped to alleviate a backlog of course requirements for many students and, of course, generated significantly more SCH—driving more revenues to CAH in FY20, per the model. The College of Business (CB) has seen declines in SCH over the past three years and you can see the impact on their revenue allocations. However investments in generating new SCH already have been made in Business, which should bring additional revenue allocations in the future. Governance Over New Funding One of the objectives of moving to RCM/ABB was to more intentionally direct resources toward mission fulfillment, particularly teaching and learning, most of which (but certainly not all) happens in the Division of Academic & Student Life (ASL). Just as important is creating transparency in how those resources are allocated, and how decisions are made to increase or decrease resources during the budget development process each year. To achieve these objectives, a new budget committee was created to serve as the campus forum for budget-related topics: the President’s Budget Advisory Committee (PBAC). PBAC created a Budget Allocations sub-committee (BASC) to help manage the process of reviewing new funding requests for the support (non-college) units. Any new funding added to support units would, by model design, be allocated to the colleges (as a cost) and would reduce their available funding. Starting with the development of the FY19 budget, an extensive process took place to enhance transparency and invite university-wide conversation about the merits of new funding proposals. Ultimately, the president still makes the decisions, but now makes them within the framework of the new shared governance structure. The president also has the benefit of the vetting and information provided by this process. This has had a dramatic effect in reducing the level of funding additions to support units, particularly when compared to the years preceding the new budget model. The next chart goes back to FY13 and isolates new discretionary funding decisions among the institutional support areas (Divisions of the President, Operations, Enrollment Management, and Business & Financial Affairs); the academic support areas (Provost & Associate Provost, OISP, Graduate Studies, Library and Student Success); and the four colleges. Again, this is only new discretionary funding, and does not include across-the- board wage and benefit increases, state-mandated funding, or budget cuts. As you can see, there were a couple of years where we increased funding for institutional priorities and also cut budgets, but only the new discretionary funding is shown.
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The point of showing this chart is to highlight the difference the new governance process and transparency has had over the past two years compared to the preceding years. Those small blue columns on the right side of the chart represent comparatively tiny increases in support costs in FY19 ($150k) and FY20 ($160k). Another way of looking at increases in funding between Academic and Student Life (colleges and academic support) and institutional support is by changes year over year. One would expect from the above chart that institutional support would be growing very slowly compared to ASL over the past two years. However when you add in all elements of the budget—such as state mandates, wage and benefit increases and cuts as well as new funding—there may be a different conclusion. The chart below shows year-over-year increases in total actual spending for FY17-19 and the budget for FY20 for all both fund 149 and 148 (as already defined), which encompasses all four quarters of instruction. In fact, year-over-year spending in non-ASL areas has been declining fairly consistently. The increase in the FY20 budget is due to the fact that we assume all positions will be filled for the entire year, but in reality we will see some salary and benefit savings due to vacancies. With all the state mandates in FY20, it will likely grow from FY19 but not to the extent shown in the budget.
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If you were to look at it yet another way, again year-over-year changes, but instead of looking at all spending, we could look at just wage changes. These changes are the result of across-the-board wage increases, merit and promotion, additional staff, and the impact of filling or experiencing vacancies. The following chart shows the year-over-year impact of actual wage expenses for FY17-19 and the budget for FY20. The steep increase in FY20 is, again, due to not budgeting for vacancies.
It is important to note that simple year-over-year changes only tell one part of the story—it matters how big the base is to begin with. ASL is about 65 percent of the total spending so one would expect that the annual increase would be 65 percent of the total. In both of the last two charts that is not the case prior to the implementation of the new governance structure. Only in FY19 and potentially
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in FY20 is that the case, indicating that the new governance structure is having an impact on the allocation of funds. A final note on these two charts: in the green and blue wage-expense chart, one would expect that the Support wages would be increasing proportionate to ASL increases, as all pay increases were relatively similar. However when you consider the FY20 increases in both charts, the wage increase for support is almost identical to total expense increase for Support ($2,809 vs. $2,831) which implies that ALL of the increases in the budget were due to wages. This makes sense, as there were minimal approved increases and only $30,000 was related to non-wages. Applying this logic to ASL, that would imply that there are budgeted increases of $2,645 ($6,148 minus $3,503) to something other than wages (likely goods & services). This may indicate some flexibility in the ASL budgets. FY20 New Funding Decisions – State/Tuition Fund To conclude this topic, below is a highly summarized list of the new funding requests, with recommendations by the Budget Allocations Sub-Committee (BASC), the President’s Budget Advisory Committee (PBAC), and finally the decisions made by the president and/or provost. Green font indicates institutional support new funding. For full details on each request, click here.
Description
Requested Amount $183,600
BASC
PBAC
President (Provost for ASL items)
Financial Aid Counselors (3) Library annual contracts
Fund
Fund only two (conditionally)
Fund two with existing resources – no new funding Provost approved, supported by Cabinet – new ASL funding Fund with existing resources – no new funding Needs additional justification – no new funding Provost approved, supported by Cabinet – new ASL funding
$71,000
Fund
Fund
Expand Admissions search pools
$58,336
Fund
Do not Fund
Admissions Processors
$93,480
Fund if Possible Fund if Possible Fund if Possible Fund if Possible
Item merits consideration Item merits consideration Item merits consideration Item merits consideration Do not fund
OISP Recruiting & Outreach Increase Athletics per diem Employee council funding Assistant Athletic Coaches Faculty Senate Operating Budget Faculty Senate GE Operating Budget GE Implementation backfill
$102,544
Fund - $100,000
$166,576
$10,000
Fund from President’s office with existing funds – no new funding
$157,661
Not Recommended Not Recommended Not Recommended Not Recommended
Not funded
Fund - $30,000
$30,024
Do not Fund
$29,349
Do not Fund
This should be an ASL expense – Provost will use existing funds Already funded by Provost FY19 – no new funding
$40,000
Do not fund
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Internal Communications Specialist
$100,000
Not Recommended Not Recommended Not Recommended Not Recommended Not Recommended
Do not fund
Fund, but no additional funding. Each division VP to contribute proportionately from existing funds Provost may decide to do this, but no new funds will be used. No new funding, PMO will continue to be funded by users (projects) No new funding, however the President will fund $50k pilot program for faculty diversity initiative
Library Assoc Dean $85,000
Do not fund
Project Mgmt. Office
$259,250
Do not fund
Diversity Outreach Specialist
$110,000
Do not fund
Fund - $30,000
Enhance new student open houses
$30,000
Do not fund
2. Budget Drivers – Revenue
The most significant revenue driver for the university budget is clearly enrollment, both individual students (“headcount”) and full-time equivalent (FTE) students, which for this purpose is total credits divided by 15 (for a quarter). Headcount is most relevant for services that are not dependent upon credits taken, such as housing, dining, parking, and bookstore revenues. Other revenue elements, such as tuition and most mandatory fees are charged per credit taken and therefore FTE is the main driver. Budget development at CWU begins with fall headcount estimates, as it is quite easy to derive quarterly headcount, as well as FTE using established historical patterns from the fall headcount baseline. On the chart below, note the repeating pattern of higher enrollment in the fall, with a consistent drop each quarter. This drop is typically 4 or 5 percent each quarter and comes from a combination of student persistence issues, graduation, and/or transfer to another institution.
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State Funded Enrollment Headcount by academic term
11,263
11,071 10,602 10,193
11,120 10,684 10,231
507
520
457
514
486
466
441
Fall 17 Winter 18 Spring 18 Fall 18 Winter 19 Spring 19 Fall 19 Undergraduate Graduate
Once estimates of quarterly student headcount and FTE are established, these data are used as revenue drivers for of most of our operating fund groups.
Total Revenues – Operating Funds
Total operating revenues have increased over time as enrollment has grown and rates have increased to keep up with inflationary pressures. Operating revenue growth is budgeted to continue to grow in the 5- to 6-percent range, due to anticipated higher headcount, rate increases, and an increase in funding provided by the state.
Total Revenues – Operating Funds (‘000s) Fiscal Year
Total Revenues
Change From Prior Year $10,881 (+5.3 percent) $11,712 (+5.4 percent) $14,111 (+6.2 percent)
Fiscal 2018
$215,366 $227,078 $241,189
Fiscal 2019 (forecast) Fiscal 2020 (budget)
In the chart below, operating revenues are segregated by type of revenues for the past three years, as well as the budget for FY 2020. Note the increase to the state allotment in FY20, due to investments made in mental health, teacher education, and wages. Enterprise Funds are also expected to increase more than in the past, which demonstrates the impact of opening Dugmore Hall and the new dining
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