Board of Trustees Meeting Agenda | July 2021

Executive Summary – FY 2021 Recap and FY 2022 Overview

In July 2020 the Trustees voted on a FY2021 budget that assumed a total operating deficit of $9.0 million. The budget included an assumption of a 15% cut in state funding as directed by the Office of Financial Management, 50% maximum on-campus occupancy as directed by the Trustees to minimize disease transmission, and a 5% drop in total enrollment. Once again, the university demonstrated exceptional flexibility and responded to the difficult financial reality while keeping intact our commitment to mission and values. By Spring term the financial picture looked vastly more positive – two rounds of federal stimulus shored up the areas most affected by low on-campus occupancy, and the state’s economic outlook improved enough that funding for FY21 and the 2021-2023 biennium came in essentially flat, which we welcomed for now. State/Tuition and Local General Funds. Our assumption of a 5% decline in overall enrollment was realized. A larger decline in undergraduates was mostly offset by an increase in resident graduate students who pay higher tuition, but as the year progressed we saw slightly higher attrition between terms which decreased net tuition revenue by nearly $1 million compared to budget. Overall, cost reduction plans were achieved and the budgeted $2.2 million deficit turned into a $6.6 million surplus as the state support was not reduced by 15% as expected. In the year ahead, it appears the pandemic is still affecting first year enrollment. We anticipate 445 fewer total students than fall ’20, with 80 percent average annual occupancy in the residence halls. Instructional modality will shift back to mostly face to face, similar to traditional pre-pandemic modality patterns. We anticipate a reasonably typical summer session in 2021 and operating conditions that look much closer to they were pre-pandemic. The Enterprise Fund Group – All areas of the Enterprise fund group (housing, dining, bookstore, parking) were significantly impacted by lower on-campus residency as well as lower overall enrollment. The Board directed the university to restrict occupancy to one person per room, which created a maximum potential occupancy rate of 50%. This effectively waived the live-on requirement, so some students chose other options, either off campus in Ellensburg or presumably back to their hometowns. As a result, operating results were fairly bleak despite significant cost reduction efforts, as the fixed costs of campus housing are significant and largely unavoidable (utilities, maintenance, debt service, insurance, fire protection, etc). Ultimately, additional federal support arrived in early 2021, which mostly eliminated the operating losses, and the university met all of its debt covenants. Looking forward to FY22, as mentioned earlier, the pandemic continues to have an impact on total enrollment generally but first year enrollment specifically which is the source of the majority of economic activity in the Enterprise fund group. The budget presented here anticipates 80-percent of normal occupancy in the residence halls, and a corresponding decline

4 | P a g e

Made with FlippingBook Ebook Creator