The Statewide Budget Context and

Western Illinois University’s

Mission-Driven Planning and Results

Presented to the Western Illinois University Board of Trustees

October 7, 2016

Order of Presentation

1. FY 2002-2017 Funding Trends

2. Budget Parameters

3. FY 2016 Actions

4. FY17-18 Plans and Preliminary Results

5. WIU’s Financial Health

FY02-17 Funding Trends

Fiscal Year 2002-2017 Funding Trends

• The State continues to invest less GRF

in Illinois public higher education

GRF Funding: FY02-16

(dollars in thousands)

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$300,000$400,000$500,000$600,000$700,000$800,000$900,000

$1,000,000$1,100,000$1,200,000$1,300,000$1,400,000$1,500,000$1,600,000

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

16-1

7

Illinois Public Universities Western Illinois University

Annual Percent Change in GRF Funding

FY 03-15

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

03 04 05 06 07 08 09 10 11 12 13 14 15

Illinois Publc Universities Western Illnois University

Annual Changes in GRF Funding: FYs 16-17

(dollars in thousands)

$14,900

$77,100

$31,400

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

Stop GapFunding

FY15 Benchmark

• Currently Not

Available

oOnly after December

31, 2016, when

spending

authorization expires

• However, benchmark

appropriations to

FY15 are available

Changes in GRF Funding: FY 16 and 16-17

Received60%

Not Received

40%

• $46.3 M

received$77.1 M

benchmark

• Represents 60% of

expected funding

Cumulative GR Budget Declines

FY03-FY16 (current)

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

03 04 05 06 07 08 09 10 11 12 13 14 15 16-17

Illinois Public Universities

Budget Parameters

Legislative Audit Commission Guidelines

Included Within University Budgets Stipulations

GRF Unrestricted

Tuition Unrestricted

Auxiliary Facilities System Restricted

Other Non-Appropriated Restricted

Excluded From University Budgets Stipulations

State Capital Construction Separate Bill

Foundation Income Separate Legal Entity

Western Illinois University

FY17 All Funds Budget

21.7%

31.4%22.0%

24.9%

State Appropriation University Income

Auxiliary Facilities System Other Non-Appropriated

Western Illinois University

FY17 All Funds Budget

53.1%

46.9%

Unrestricted Restricted

Western Illinois University

FY17 All Funds Budget

79.2%

20.8%

Western Illinois University Budget

Personnel Operating

Fiscal Year 2016

Actions

FY 16 Actions to Increase Revenue

1. Initiated the Presidents Executive

Corporate Cluster

oQuad Cities

o Saint Louis

FY 16 Actions to Increase Revenue

2. Expanded dual enrollment agreements

and outreach

o Signed Agreements with Elgin and Moberly Area

Community Colleges

o Initiated discussions with Heartland, Lewis and

Clark, Saint Louis, and Southwestern Illinois

Community Colleges

FY 16 Actions to Increase Revenue

92.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Fill Rate

3. Implemented high

demand programs

and Formats• Established Hybrid

Master’s MBA and CSP

programs

• Offered 7 sections

• 126 course enrollments

137 available seats

FY 16 Actions to Increase Revenue

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%3. Implemented

high demand

programs and

Formats• Goal: Offer at least

10% of courses in

irregularly scheduled

format (weekend,

distance)

FY 16 Actions to Increase Revenue

4. Completed Price Sensitivity and

Elasticity Study• 3% tuition reduction for new undergraduate students

• Instate tuition for all undergraduate and graduate

domestic students

• No fee increases

FY 16 Actions to Decrease Expenses

1. Limited replacement hiring. Fall 2015

workforce size is down:

A. 26 faculty positions

B. 8 administrative/professional positions

C. 25 civil service positions

FY 16 Actions to Decrease Expenses

2. Implemented Retirement Incentive

Program. A total of 59 employees took

advantage of this programA. 8 faculty members

B. 12 administrative/professionals

C. 39 civil service

Total Cost Savings: $85,100

FY 16 Actions to Decrease Expenses

3. Reduced 12 month contract lengths for

five employees

FY 16 Actions to Decrease Expenses

4. Engaged in Layoffs

A. 110 layoffs

B. 87 call backs

Total Cost Savings: $486,000

FY 16 Actions to Decrease Expenses

5. Began January 2016 voluntary pay

reductions or equivalent donations for

o President

oVice Presidents

o Senior Academic Administrators

Total Cost Savings: $206,700

FY 16 Actions to Decrease Expenses

6. Enacted June 2016 furloughs and a

voluntary pay reduction program for all

non-negotiated personnel earning more

than $40,000 annually

FY16 Furlough Schedule:

Non-Negotiated Staff

Annual

Income

Number

of Days

$40,000 - $49,999 6

$50,000 - $74,999 10

$75,000 - $99,999 12

$100,000 - $124,999 13

125,000 - $149,999 14

$150,000 and above 15

FY16 Furlough and Voluntary Pay

Reduction Plan

• Includes

o 479/1,101 non-negotiated employees

• Excludes

o 264 employees due to annual income levels

o 358 employees not paid from appropriated funds

Total Cost Savings: $1.2 million

FY 16 Actions to Decrease Expenses

7. Enacted Academic Program Elimination

Review (APER) Committee

oDisestablished African American Studies,

Philosophy, Religious Studies, and Women’s

Studies majors

FY 16 Actions to Decrease Expenses

8. Implemented a hiring freeze

Total Cost Savings: $1.2 million

Fiscal Years 2017 and 2018

Plans and Preliminary Results

Planning Parameters

1. We will be guided by strategic planningA. Higher Values in Higher Education 2012-2022, 2106

Supplement, and future Supplements

2. Will continue to make very difficult but necessary decisions

A. $3.1 million in personnel cost savings

3. Our decisions will respect our students

Planning Parameters

4. Decision making will reflect the core

value of social responsibility and respect

for:

oAdministrative processes

o Shared governance

oGood faith bargaining

Planning Parameters

5. We will continue to:

A. Do what is best for Western Illinois University

B. Ensure a strong and viable university that exists

to serve students and its host communities for

decades to come

Plans and Preliminary Results:

Increase Revenue

1,400

1,500

1,600

1,700

1,800

1,900

2,000

New Freshmen Enrollment

1. Support

aggressive

recruitment• Stabilized new

freshmen enrollment

after 6 years of

decline

Plans and Preliminary Results:

Increase Revenue

4

24

46

68

138153153

167

0

20

40

60

80

100

120

140

160

180

Engineering Enrollment2. Continue establishment of high demand programs and formats

A. Master’s in Business Analytics (5 students)

B. Master’s in Community and Economic Development (7 students)

C. IBHE approval for Mechanical Engineering

Plans and Preliminary Results:

Increase Revenue

62.0%

64.0%

66.0%

68.0%

70.0%

72.0%

74.0%

First Year Retention Rates

3. Supporting Persistence

A. Building Connections

B. Persistence and Completion Academy

Plans and Preliminary Results:

Increase Revenue

$9.9

$11.1

$11.6

$9.0

$9.5

$10.0

$10.5

$11.0

$11.5

$12.0

FY 14 FY 15 FY 16

Contracts and Grants(Dollars in Millions)

4. Intensify pursuit

of external

funding

Plans and Preliminary Results:

Increase Revenue

5. Identify new revenue streams

A. There are 67 new partnerships with 38 regional

employers as a result of the President’s

Executive Corporate Cluster

Plans and Preliminary Results:

Increase Revenue

6. Position the University for the next

comprehensive fundraising campaign

A. Development Officers began reporting to the

Vice President for Advancement and Public

Services on July 1.

B. For FY 2017, all development officers identified:

1. Prospects, potential funding, and interest areas

2. Fundraising plans

Plans and Preliminary Results:

Increase Revenue

7. Advocate with business, industry,

education, and civic leaders for fair and

predictable higher education funding

Plans and Preliminary Results:

Increase Revenue

• Hosted Illinois Coalition Meetings

• Spoke at the Illinois Coalition Meeting in Springfield

• Held 6 Meetings with Legislative Leaders and Legislators

• Provided Illinois General Assembly Budget Testimony

• Had 4 Meetings with the Governor

• Hosted the Chairperson and the Executive Director of the Illinois Board of Higher Education on Campus

• Appointed to the Illinois Board of Higher Education and Action Teamso Increasing Affordability

o Reducing Attainment Gaps

Plans and Preliminary Results:

Increase Revenue

8. Implement additional strategies

Plans and Preliminary Results:

Reduce Expenditures

1. Continue to carefully evaluate

replacement hiring

2. Continue attrition savings

Plans and Preliminary Results:

Reduce Expenditures

3. Close and/or combine offices and units

A. Closed the Quad Cities Executive Studies Center

at the end of FY16

Plans and Preliminary Results:

Reduce Expenditures

4. Adjust 12 month administrative

contract lengths to 11 or 10 months

where feasible

A. Department Chairs/School Directors placed on

11.5 month contracts, effective July 1, 2016

B. Department Chairs/School Directors will receive

11.0 month contracts, effective July 1, 2017

Plans and Preliminary Results:

Reduce Expenditures

5. Cancelled salary increases for non-

negotiated personnel

Plans and Preliminary Results:

Reduce Expenditures

6. Negotiate for no salary increases with

collective bargaining units

A. UPI Units A and B

1. Gave back 1% FY16 raise

2. Will engage in temporary 3% salary reductions for FYs

17 and 18

3. The 3% temporary salary reductions will be paid back if

certain enrollment and appropriations triggers are met

Plans and Preliminary Results:

Reduce Expenditures

7. Continue FY17 furlough program

FY17 Furlough Schedule:

Non-Negotiated Administrative/Professionals

Annual

Income

Number

of Days

$40,000 - $49,999 6

$50,000 and above 8

Plans and Preliminary Results:

Reduce Expenditures

8. Reduce and conserve operating funds

Plans and Preliminary Results:

Reduce Expenditures

9. Consolidate and eliminate programs

and services

A. Instructional Design and Technology merged

with Engineering Technology, effective 7/1/16

B. Discontinued the:1. B.A. in Music (Macomb)

2. Bachelors in Early Childhood Education (Quad Cities)

3. Master’s in Liberal Arts and Sciences (Quad Cities)

Plans and Preliminary Results:

Reduce Expenditures

10. Continue with previous budget

strategies

Plans and Preliminary Results:

Reduce Expenditures

11. Maintain instructional costs per credit

hour below the statewide average

Instructional Costs Per Credit Hour

Fiscal

Year

WIU % Below

State Avg.

2009 $267.16 (11.1%)

2010 $275.31 (6.3%)

2011 $272.68 (10.1%)

2012 $284.01 (10.6%)

2013 $294.30 (12.3%)

2014 $307.32 (19.6%)

2015 $316.86 (11.7%)

Source: Illinois Board of Higher Education Cost Study

Instructional Costs Per Credit Hour:

Statewide Low, High, and WIU

$232.22$240.55

$249.57$257.94

$269.52$261.01

$275.31 $272.68$284.01

$294.30$307.32

$316.86$327.87

$348.71$359.77

$417.04 $419.86$429.72

$200.00

$250.00

$300.00

$350.00

$400.00

$450.00

FY10 FY11 FY12 FY13 FY14 FY15

Source: Illinois Board of Higher Education Cost Study

Plans and Preliminary Results:

Reduce Expenditures

12. Maintain administrative costs per credit

hour below the statewide average

Administrative Costs Per Credit Hour

Fiscal

Year WIU

% Below

State Average

FY 2009 $68.90 (16.8%)

FY 2010 $68.70 (13.7%)

FY 2011 $67.76 (18.5%)

FY 2012 $70.94 (19.3%)

FY 2013 $63.48 (26.9%)

FY 2014 $68.85 (24.0%)

FY 2015 $72.06 (20.5%)

Source: Illinois Board of Higher Education Cost Study

Administrative Costs Per Credit Hour:

Statewide Low, High, and WIU

$58.36 $61.59 $64.51$58.22

$63.26 $60.99$68.70 $67.76 $70.94

$63.48

$119.49$125.05

$142.88

$124.54$120.78

$112.65

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

FY10 FY11 FY12 FY13 FY14 FY15

$68.65 $72.06

Source: Illinois Board of Higher Education Cost Study

Plans and Preliminary Results:

Reduce Expenditures

13. Implement additional strategies

Financial Status of WIU

Planning Results

• KPMG Financial Ratios are used by the

federal government in evaluating

institutional fiscal health

Planning Results:

FY08-15 Composite Financial Indicator

1.80

1.30

3.00

3.60

2.90

1.70

2.75

1.47

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

08 09 10 11 12 13 14 15

Overall Fiscal Health

Planning Results:

FY08-15 Primary Reserve Ratio

0.170.06

0.21 0.25 0.27 0.26 0.25 0.26

-1.00

-0.80

-0.60

-0.40

-0.20

0.00

0.20

0.40

0.60

0.80

1.00

08 09 10 11 12 13 14 15

Fiscal Stability

Planning Results:

FY08-15 Net Operating Reserve Ratio

0.01 0.01

0.04

0.06

0.04

0.000.01

-0.01

-0.10

-0.08

-0.06

-0.04

-0.02

0.00

0.02

0.04

0.06

0.08

0.10

08 09 10 11 12 13 14 15

Institutional Surplus

Planning Results:

FY08-15 Return on Net Assets Ratio

0.050.03

0.13

0.18

0.12

0.04

0.13

0.02

-0.20

-0.15

-0.10

-0.05

0.00

0.05

0.10

0.15

0.20

08 09 10 11 12 13 14 15

Ability to Satisfy Debt Obligations

Summary

Summary

• This presentation was broken into 5 parts

Summary

1. FY02-17 Funding Trendso The State continues to invest less GRF in Illinois

public higher education

1. Budget Parameterso The University has limited discretionary ability

o The vast majority of institutional expenses are related to personnel

o Previous years of budget reductions focused on operating reductions

Summary

3. Fiscal Year 2016 Actionso Focused on difficult but necessary decisions to

emerge from the historic and unprecedented state budget impasse

4. Fiscal Year 2017 and 2018 Plans and Preliminary Results

o Will continue to focus on decisions that will position Western Illinois University for a strong and sustainable future for decades to come.

Summary

5. WIU Fiscal Health

o Is strong and we are known for quality in these

challenging fiscal times.

Summary

• While we successfully addressed externally imposed fiscal challenges, our peers from across the Midwest and national external sources recognized the excellence of Western Illinois University

Summary

• While we successfully addressed externally imposed fiscal challenges, our peers from across the Midwest and national external sources recognized the excellence of Western Illinois University

Summary

• While we successfully addressed externally imposed fiscal challenges, our peers from across the Midwest and national external sources recognized the excellence of Western Illinois University

The Statewide Budget Context and

Western Illinois University’s

Mission-Driven Planning and Results

Presented to the Western Illinois University Board of Trustees

October 7, 2016