Financial Analysis of the University of Buffalo in the Middle of the Coronavirus

Pandemic

Howard BunsisProfessor of Accounting, Eastern Michigan University

Past Chair, AAUP Collective Bargaining Congress September 2020

1

Roadmap• Data transparency issues at UB• UB revenue distribution from different sources; state appropriation and tuition

revenue• Brief analysis of the financial situation of the SUNY System – with an update on the

New York State financial situation• Analysis of the financial situation of the University of Buffalo• Detailed Expense and Priority Analysis of the UB administration• Number of Faculty, Graduate teaching faculty, and faculty and administrative salaries• Analysis of the investment performance of the UB Foundation • Other Issues: Degrees Conferred, Graduation and Pell Rates• Athletics – amount of support for athletics from the core academic mission• Recommendations: Use of reserves versus furloughs/layoffs; this is the EXACT situation

to use reserves

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3

Data transparency issues at UB

General Transparency Issues

4

The transparency problem starts at the System level:The SUNY System financial statements do not contain ANY financial information for the individual campuses.

SUNY does have 64 campuses, so they rely on individual campuses providing financial information. Stony Brook has full financial statements; UB has a financial overview, which is not as extensive. The following systems do include campus-specific financial information:

Systen # of InstitutionsUniversity System of Georgia 28California State University 13University of Wisconsin System 10University of Maine System 5University of California 4Connecticut State University 4University System of New Hampshire 4

Two systems are similar to SUNY with a lack of individual campus data, though they do have campus budget data that SUNY/UB does not:• University of Illinois System (3 institutions)• University of Massachusetts (4 institutions)

More on Transparency – IPEDS

5

What is IPEDS? Integrated Postsecondary Education Data System of the U.S Dept. of Education

What information does IPEDS have? Campus-specific revenues, expenses, assets, debt, and reserves from a finance perspective, and there are standard definitions used so we can compare over time and to peer institutionsNote the finance data is a 19-page pdf file

What are the timing issues?The IPEDS site currently only has 2018 data; the 2019 data was submitted by the UB administration to the federal government (the UB admin claims it went to SUNY, but they still have it) in April of 2020

What happened when we asked the administration for the 2019 data?They rejected our first requestWe then used the FOIA process, which will take timeNote that EVERY other institution I have worked with this spring/summer has given this information when requested. The UB admin stands alone in their refusal to share this basic information; This is simply unconscionable!

Institutions that Have Provided 2019 IPEDS Data this spring/Summer• Rutgers• Wayne State• University of Arizona• Johns Hopkins• University of Michigan• Bowling Green• Oregon Tech• Western Oregon• Adelphi• Emerson• Cleveland State• SUNY Cortland provides the 2019 IPEDS data on its website (some other SUNY institutions do the same)https://www2.cortland.edu/offices/institutional-research-and-assessment/institutional-reporting/external-reports/ipeds.dot• CUNY provides the 2019 IPEDS data for all of its institutions on its website, at

https://www.cuny.edu/about/administration/offices/oira/institutional/reports/integrated/2018-2019/

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The fact that the UB administration:• Requested our request for the data• Rejected our FOIA for the data

This just should not happen and is unacceptable!

The UB administration has spent more time rejecting and disparaging the request than it would take to send these small pdf files

Still More on the Lack of Transparency – What Budget?

7

UB produces an annual Budget report.However, this is not a budget – it is a general discussion of finances, but no actual dollars allocated to different divisions and colleges; it is a budget without a budgetTry going to: http://www.buffalo.edu/administrative-services/managing-money/key-budget-financial-information.htmlYou will not find any real budget data – lots of processes and termsThe 2019-2020 budget report has graphs that mostly stop in 2017

UB has 13 schools and colleges; a budget would report the resources allocated to these colleges over time. Remarkably, this data is not publicly available. The UB admin claims they share this data with the appropriate committees. The UB admin needs to be reminded that UB is a public institution.

If you want to see what a budget looks like – and not just a budget website with committees and forms and processes – but actual numbers, go to:• https://budget.rutgers.edu/fiscal-year-budget• https://budget.arizona.edu/content/budget-reports• https://www.stonybrook.edu/commcms/budgetoffice/about/operating

What about the UB Financial Overview?

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The financial overview would be the best tool to analyze the financial condition of UB – if it were complete and if it were more timely

What is missing?The Statement of Cash FlowsThis statement is a very important financial statement to assess the financial condition of an institution. In fact, of the Moody’s 10-factor ratio framework for higher education, two of the ratios are based on cash flows. Without this statement, we cannot develop a ratio framework for UB. Note that the Stony Brook financial statements do contain a Statement of Cash Flows;Does the UB administration have such a statement? Of course they do, but they choose not to share it with the public.

IN addition, the over UB Overview is 11 pages long (the 2018 overview was 33 pages); the Stony Brook report is 36 pages long; there is much more financial information from Stony Brook, and it is more timely and simply more robust.

What about timing?The 2018-19 UB financial overview came out in September of 2020. The 2019-20 overview should be coming out at this timeNote that the 2019 Stony Brook financial statements, with a Statement of Cash Flows, was released on May 13, 2020

Different Results for Total Revenues from Different Sources

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SourceFinancial Statement Name or Heading Financial Construct 2017 2018 2019 2020

UB Financial Overview Core Operating Activities Graph Total Operating Revenues 743,000,000 752,000,000 Not Reported

UB Financial Overview Statement of Revenues and Expenses Core Operating Activities Total Operating Revenues 743,054,000 Not Reported Not Reported

UB Financial Overview Statement of Revenues, Expenses and Changes in Net Assets Total Operating Revenues 726,341,274 Not Reported Not Reported

UB Financial Overview Revenue and Expenses by Entity Total Revenues 1,337,114,991 Not Reported Not Reported

UB Financial Overview Statement of Activities

Operating And Non-Operating Revenues separately - # is total, including Research Foundation Not Reported 1,035,334,520 1,113,297,844

IPEDS Revenues by SourceTotal All Revenues and Other Additions 1,107,678,587 1,133,630,328

Not supplied by UB admin

March 2019 Budget Presentation Core Operating Activities Graph Total Operating Revenues N/A 753,000,000March 2019 Budget Presentation Graph in Presentations Total Operating Budget N/A 754,000,000

2019-20 Budget Report Highlights All Funds Budget 775,000,000

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Revenue Distribution: Where is the Money Coming From?Analysis of The State Appropriation

and Tuition Revenue

2018 Revenue Distribution per IPEDS

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2018 Amount % of TotalState Appropriation 455,340,234 40.2%Tuition and Fees 292,050,739 25.8%Grants and Contracts 190,023,842 16.8%Auxiliary 62,158,344 5.48%Other Revenues 37,503,649 3.3%Federal Pell Grants 37,451,908 3.3%State financial aid grants 29,401,701 2.6%Gifts 20,111,317 1.8%Investment income 4,919,753 0.4%Hospital 4,668,841 0.4%Total Revenues 1,133,630,328 100.0%

• The state appropriation is the main operating appropriation

• Tuition and fees are net of financial aid discounts

• Grants and contracts include federal, state, local, and private operating grants

• Auxiliary includes housing, dining, student union, bookstore, parking, athletics

• Other revenues are not broken down in any manner

• Gifts do not include any gifts made separately to the UB Foundation; these gifts were made directly to UB

2018 Revenue Distribution Per IPEDS Graphically

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40%

26%

17%

5%

3% 9%State AppropriationTuition and FeesGrants and ContractsAuxiliaryOther RevenuesRemaining Items

State Appropriation to UB Over Time

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In thousands 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019UB per Overview 466,711 430,498 414,354 423,041 600,453 493,813 408,501 454,856 585,020 605,920 455,340 503,671UB per IPEDS 476,427 431,676 400,019 421,046 415,705 395,518 422,043 413,095 429,608 438,402 455,340

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

UB per Overview UB per IPEDS

The Overviews are not consistent in how this is reported

There was an increase for 2019

Annual Percentage Change in State Appropriation to UB vs. The State Appropriation to all of SUNY (per SUNY audit)

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-12%-9%-6%-3%0%3%6%9%12%

2008to

2009

2009to

2010

2010to

2011

2011to

2012

2012to

2013

2013to

2014

2014to

2015

2015to

2016

2016to

2017

2017to

2018

2018to

2019

UB Rest of SUNY

Long-Term Percentage Changes:Appropriation to UB vs. Rest of SUNY

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-17%

27%

6%

-2%

31% 28%

-20%

-10%

0%

10%

20%

30%

40%

2008 to 2013 2013 to 2019 2008 to 2019

UB Rest of SUNY

Enrollment AnalysisWe will examine:• Enrollment• Tuition price• Discount rate• Tuition revenue per IPEDS

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Basic Enrollment DataSource: http://www.buffalo.edu/provost/oia/facts-publications/factbook/student/enrollment.html

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Total Enrollment 28,054 28,192 28,881 29,048 28,860 28,952 29,850 29,944 29,806 30,183 30,648 31,503 31,923

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Undergrad 18,779 19,022 19,368 19,396 19,334 19,516 19,831 19,829 19,951 20,411 21,020 21,607 21,921Grad 9,275 9,170 9,513 9,652 9,526 9,436 10,019 10,115 9,855 9,772 9,628 9,896 10,002Total Enrollment 28,054 28,192 28,881 29,048 28,860 28,952 29,850 29,944 29,806 30,183 30,648 31,503 31,923

5,000

10,000

15,000

20,000

25,000

30,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Undergrad Grad

Annual Percentage Change in Enrollment

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0.5%

2.4%

0.6%

-0.6%

0.3%

3.1%

0.3%

-0.5%

1.3% 1.5%

2.8%

1.3%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2008to

2009

2009to

2010

2010to

2011

2011to

2012

2012to

2013

2013to

2014

2014to

2015

2015to

2016

2016to

2017

2017to

2018

2018to

2019

2019to

2020

Annual Percentage Change in Total Enrollment

Long-term Percentage Changes in Enrollment

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6%

11%

17%

8%

0%

8%6% 7%

14%

-2%0%2%4%6%8%10%12%14%16%18%

2008 to 2014 2014 to 2020 2008 to 2020

Undergrad Grad Total

Peer Institutions Chosen BY the UB Administration to IPEDS• Rutgers University-New Brunswick (New Brunswick, NJ)• Stony Brook University (Stony Brook, NY)• University of Arizona (Tucson, AZ)• University of California-Irvine (Irvine, CA) • University of California-Los Angeles (Los Angeles, CA) • University of California-San Diego (La Jolla, CA)• University of Iowa (Iowa City, IA)• University of Michigan-Ann Arbor (Ann Arbor, MI)• University of North Carolina at Chapel Hill (Chapel Hill, NC) • University of Pittsburgh-Pittsburgh Campus (Pittsburgh, PA) • University of Washington-Seattle Campus (Seattle, WA)• University of Wisconsin-Madison (Madison, WI)

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Enrollment Changes vs. Peer Institutions per IPEDS

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2016 2019 % Change

UC Irvine 30,836 36,032 16.9%

UCSD 32,906 37,887 15.1%

UM 43,651 46,716 7.0%

UCLA 41,908 44,537 6.3%

Buffalo 29,806 31,503 5.7%

UW 45,408 47,400 4.4%

Stony Brook 25,272 26,256 3.9%

Arizona 42,595 44,097 3.5%

UNC 29,084 30,011 3.2%

Iowa 30,844 31,656 2.6%

Wisconsin 42,716 43,463 1.7%

Rutgers 49,428 50,254 1.7%

Pitt 28,649 28,673 0.1%

Peer Mean 36,941 38,915 5.5%

Peer Median 37,407 40,675 3.7%

UB Rank (of 13) 10 10 5

UB is the 10th largest of this peer group in terms of total headcount enrollment

UB enrollment is growing faster than the average/median of this peer group

Undergraduate Tuition PriceSource: http://www.buffalo.edu/provost/oia/facts-publications/factbook/institutional-data/tuition-and-fees.html

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Undergrad Tuition 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020In-State $4,350 $4,660 $4,970 $4,970 $5,270 $5,570 $5,870 $6,170 $6,470 $6,470 $6,670 $6,870 $6,870Out-of-State $10,610 $11,740 $12,870 $13,380 $14,720 $15,190 $17,810 $19,590 $21,550 $23,710 $24,180 $24,540 $24,564Ratio 2.44 2.52 2.59 2.69 2.79 2.73 3.03 3.18 3.33 3.66 3.63 3.57 3.58

Undergrad Fees Only 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020In-State $1,867 $1,950 $2,043 $2,166 $2,249 $2,419 $2,628 $2,700 $2,911 $3,104 $3,158 $3,229 $3,310Out-of-State $1,867 $1,950 $2,043 $2,166 $2,249 $3,419 $2,628 $2,700 $2,911 $3,104 $3,158 $3,229 $3,310Ratio 1.00 1.00 1.00 1.00 1.00 1.41 1.00 1.00 1.00 1.00 1.00 1.00 1.00

UG Tuition and Fees 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020In-State $6,217 $6,610 $7,013 $7,136 $7,519 $7,989 $8,498 $8,870 $9,381 $9,574 $9,828 $10,099 $10,180Out-of-State $12,477 $13,690 $14,913 $15,546 $16,969 $18,609 $20,438 $22,290 $24,461 $26,814 $27,338 $27,769 $27,874Ratio 2.01 2.07 2.13 2.18 2.26 2.33 2.41 2.51 2.61 2.80 2.78 2.75 2.74

Per IPEDS:o The % of first-time undergraduates from New York State is 87%o The % of first-time undergraduates from a state other than New York is 2%

Graduate Tuition PriceSource: http://www.buffalo.edu/provost/oia/facts-publications/factbook/institutional-data/tuition-and-fees.html

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Graduate Tuition 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020In-State $8,766 $8,945 $9,910 $9,822 $10,171 $10,568 $10,960 $11,181 $10,870 $11,269 $11,269 $11,090 $11,310Out-of-State $13,873 $14,629 $15,688 $16,171 $17,384 $18,813 $20,377 $21,770 $22,210 $23,025 $23,025 $22,650 $23,100Ratio 1.58 1.64 1.58 1.65 1.71 1.78 1.86 1.95 2.04 2.04 2.04 2.04 2.04

Graduate Fees Only 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020In-State $1,389 $1,441 $1,513 $1,608 $1,666 $1,862 $1,832 $2,022 $2,295 $2,477 $2,514 $2,615 $2,822Out-of-State $1,389 $1,441 $1,513 $1,608 $1,666 $1,862 $1,832 $2,022 $2,295 $2,477 $2,514 $2,615 $2,822Ratio 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

Grad Tuition and Fees 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020In-State $10,155 $10,386 $11,423 $11,430 $11,837 $12,430 $12,792 $13,203 $13,165 $13,746 $13,783 $13,705 $14,132Out-of-State $15,262 $16,070 $17,201 $17,779 $19,050 $20,675 $22,209 $23,792 $24,505 $25,502 $25,539 $25,265 $25,922Ratio 1.50 1.55 1.51 1.56 1.61 1.66 1.74 1.80 1.86 1.86 1.85 1.84 1.83

• The ratio of out-of-state to in-state is higher for undergrad than grad• The number of undergraduate and graduates who are New York residents is not

reported in the enrollment website of UB• The only data by residency in the UB enrollment site from the Provost is:

o % of International students (grad and undergrad) 2008 16%o % of International students (grad and undergrad) 2020 18%

Tuition and Fees Price GraphicallySource: http://www.buffalo.edu/provost/oia/facts-publications/factbook/institutional-data/tuition-and-fees.html

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$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

UG In State Grad In State Grad Out of State UG Out of State

Average Annual Percentage Change in UG Tuition and FeesSource: http://www.buffalo.edu/provost/oia/facts-publications/factbook/institutional-data/tuition-and-fees.html

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Undergrad Tuition2008 to

20092009 to

20102010 to

20112011 to

20122012 to

20132013 to

20142014 to

20152015 to

20162016 to

20172017 to

20182018 to

20192019 to

2020In-State 7.1% 6.7% 0.0% 6.0% 5.7% 5.4% 5.1% 4.9% 0.0% 3.1% 3.0% 0.0%Out-of-State 10.7% 9.6% 4.0% 10.0% 3.2% 17.2% 10.0% 10.0% 10.0% 2.0% 1.5% 0.1%Fees Only 4.4% 4.8% 6.0% 3.8% 7.6% 8.6% 2.7% 7.8% 6.6% 1.7% 2.2% 2.5%

Tuition and Fees2008 to

20092009 to

20102010 to

20112011 to

20122012 to

20132013 to

20142014 to

20152015 to

20162016 to

20172017 to

20182018 to

20192019 to

2020In-State 6.3% 6.1% 1.8% 5.4% 6.3% 6.4% 4.4% 5.8% 2.1% 2.7% 2.8% 0.8%Out-of-State 9.7% 8.9% 4.2% 9.2% 9.7% 9.8% 9.1% 9.7% 9.6% 2.0% 1.6% 0.4%

Total UG Sticker price 2019-20 In-State OutTuition $6,870 $24,564Fees $3,310 $3,310Tuition and Fees $10,180 $27,874Room and Board $14,134 $14,134Grand Total $24,314 $42,008

The increases have been much lower in recent

years, as we will see in the graphs

Long-term Percentage Changes in UG Tuition and FeesSource: http://www.buffalo.edu/provost/oia/facts-publications/factbook/institutional-data/tuition-and-fees.html

Inflation per Bureau of Labor Statistics, CPI-U Northeast

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37%

20%

64%64%

36%

123%

11% 6%18%

0%

20%

40%

60%

80%

100%

120%

140%

2008 to 2014 2014 to 2020 2008 to 2020

In-State Out-of-State Inflation

Long-term Percentage Changes in Grad Tuition and FeesSource: http://www.buffalo.edu/provost/oia/facts-publications/factbook/institutional-data/tuition-and-fees.html

Inflation per Bureau of Labor Statistics, CPI-U Northeast

27

26%

10%

39%46%

17%

70%

11%6%

18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2008 to 2014 2014 to 2020 2008 to 2020

In-State Out-of-State Inflation

Discount RateSource: IPEDS

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YearTuition and Fees,

Gross (Sticker)Discounts and

AllowancesTuition and Fees,

Net Discount Rate2008 181,832,311 38,452,410 143,379,901 21.1%2009 195,766,071 39,247,087 156,518,984 20.0%2010 218,126,352 43,716,795 174,409,557 20.0%2011 227,379,545 42,668,407 184,711,138 18.8%2012 238,925,323 43,404,114 195,521,209 18.2%2013 265,530,346 49,716,497 215,813,849 18.7%2014 297,273,273 49,392,255 247,881,018 16.6%2015 312,982,156 61,058,710 251,923,446 19.5%2016 341,472,874 60,394,587 281,078,287 17.7%2017 356,123,371 62,416,286 293,707,085 17.5%2018 362,050,329 69,999,590 292,050,739 19.3%

• The discount rate is defined as:• Discounts and allowances in the

numerator• Tuition and Fees, Gross in the

denominator• Tuition and fees net = Tuition and

Fees, Gross – Discounts and Allowances

• The discount rate has declined over time, though there was a slight increase for 2018

• The administration will likely claim the rate is higher, as they focus on the rate for new students; this is the discount rate for all students

Discount Rate for All of SUNY and Peer InstitutionsSource: SUNY Audited Financial Statements

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Peer Institutions

2018 Discount Rate

2019 UG In-State Tuition and Fees

Arizona 24.7% $12,467Pitt 24.4% $19,080UM 24.2% $15,262Stony Brook 22.6% $9,625UCLA 22.6% $13,226UNC 21.3% $8,987UCSD 21.2% $14,167Rutgers 21.0% $14,974Iowa 20.8% $9,267UC Irvine 19.8% $13,700Buffalo 19.3% $10,099Wisconsin 15.3% $10,555UW 13.5% $11,207

Peer Mean 20.9% $12,710Peer Median 21.3% $12,847UB Rank (of 13) 11 10

Correlation 0.433

All of SUNYTuition and Fees,

Gross (Sticker)Discounts and

AllowancesTuition and Fees,

NetDiscount

Rate2018 2,352,266 688,728 1,663,538 29.3%2019 2,435,560 723,238 1,712,322 29.7%

• UB has a lower discount rate than the rest of SUNY

• The discount rate for UB is among the lowest of the peer group but tuition is also on the lower side

• The correlation of 0.433 is positive; higher the tuition, higher the discount rate

UB Tuition Revenue per IPEDS (through 2018); UB Overview for 2019

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YearTuition and Fee Revenue, Net

Annual Percentage

Changes2008 143,379,9012009 156,518,984 9.2%2010 174,409,557 11.4%2011 184,711,138 5.9%2012 195,521,209 5.9%2013 215,813,849 10.4%2014 247,881,018 14.9%2015 251,923,446 1.6%2016 281,078,287 11.6%2017 293,707,085 4.5%2018 292,050,739 -0.6%2019 * 291,994,973 -0.02%

The 2008 to 2018 numbers are per IPEDS

The 2019 amount is per the UB Financial Overview

Annual Percentage Changes in Enrollment, Tuition Price and Tuition Revenue

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-2.0%0.0%2.0%4.0%6.0%8.0%10.0%12.0%14.0%16.0%

2008to

2009

2009to

2010

2010to

2011

2011to

2012

2012to

2013

2013to

2014

2014to

2015

2015to

2016

2016to

2017

2017to

2018

2018to

2019

2019to

2020

Enrollment In-State UG Tuition & Fees Tuition Revenue

UB State Appropriation vs. Tuition Revenue Per IPEDS Sources: Financial Overview for 2019; Inflation per Bureau of Labor Statistics, CPI-U Northeast)

32

50,000,000100,000,000150,000,000200,000,000250,000,000300,000,000350,000,000400,000,000450,000,000500,000,000550,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Tuition Revenue State Appropriation State Adj for Inflation

State Appropriation vs. Tuition Revenue

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0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

700,000,000

800,000,000

900,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Tuition Revenue State Appropriation

State Appropriation Per Capita for All of Higher Education Source: Grapevine, 2019-2020

34

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New York rank 17New York per capita 314.97US Average 296.28

Ratio of State Appropriation to Tuition SUNY and UB Vs. Other Institutions

Based on 2019 Financial Statements (Financial Overview for UB)

35

2.68 2.54

2.17 1.87

1.72

1.28

0.90 0.86 0.68 0.57 0.54 0.48 0.38 0.36 0.27 0.27 0.16

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Ratio of State Appropriaiton to Tuition Revenue

36

Brief analysis of the financial situation of

the SUNY System

SUNY Balance SheetSource: SUNY Audited Financial Statements

37

02,000,0004,000,0006,000,0008,000,000

10,000,00012,000,00014,000,00016,000,00018,000,00020,000,00022,000,00024,000,000

2013 2014 2015 2016 2017 2018 2019

Total Assets Total Liabilities Total Net Assets

Assets = Liabilities + Net Assets

This data does not include anything from the Research Foundation or the UB Foundation

The liabilities have been adjusted for pensions and retiree healthcare

The growth in assets and reserves is because for the last few years, SUNY has generated positive cash flows

Components of Net Assets• Invested in capital assets: this is the value of the buildings, and this component of net assets

does not tell us anything about the financial freedom or flexibility of UB. This component is not part of reserves

• Restricted non-expendable net assets: These are net assets that have restrictions that do not allow for the principle of donated funds to be spent; this is mostly related to funds that have been donated to the university. This component is not part of reserves

• Restricted expendable: These are net assets that are set aside for a specific purpose, and the reserves can only be spent for that purpose. This component IS included in the calculation of reserves (this is done by Moody’s and others). the bond rating agencies include restricted net assets in the computation of reserves, and for good reason. o Let’s say you have a mortgage on your house, and you have a fund with the following rule:

the money in the fund can only be used to pay the principle and interest on your mortgage. Even if your child is sick, or if there are unexpected expenses, you cannot use the money in the fund for any other purpose.

o Question: Are you better off having this fund, despite its restrictions? Absolutely! That is because you have a definitive funding source for an important need. The same logic applies to universities. Note that for SUNY, this item is very small at $435 million in 2019

• Unrestricted Net Assets: This component does count towards reserves, and unrestricted means unrestricted. The administration may claim that unrestricted net assets are already spoken for. However, the external auditors put it in the unrestricted category.

38

Breakdown of SUNY Net Assets Over TimeSource: Audited financial statements

39

Net Assets Adjusted 2013 2014 2015 2016 2017 2018 2019Invested in Capital Assets 940,031 1,090,418 1,088,762 1,144,763 1,126,096 1,013,312 1,162,357Restricted Nonexpendable 331,906 357,733 407,723 439,759 466,739 498,348 524,574Restricted Expendable 276,950 347,716 358,723 366,478 388,883 433,512 435,421Unrestricted 1,199,349 1,187,306 806,145 1,074,569 1,415,266 1,774,248 1,890,364Total Net Assets 2,748,236 2,983,173 2,661,353 3,025,569 3,396,984 3,719,420 4,012,716

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2013 2014 2015 2016 2017 2018 2019

Unrestricted Restricted Expendable

What the Administration May Claim About Reserves vs. RealityThe Coronavirus is EXACTLY What Reserves Should be Used For

40

What the Administration Will Claim What is RealityThe reserves are not nearly that high, as so much of the reserves are restricted by the endowment and donor restrictions

The unrestricted reserves do not include any funds restricted by donors

Most of the reserves are already designated by Board policy for important student initiatives; even if we wanted to move some of the funds, we are not allowed to do so

If there is a firm, no-way-you-can-get-out-of-it commitment, then the external auditors would put those funds in the restricted-expendable category of net assets; the Board may have voted for certain initiatives, but those priorities can be changed at the discretion of the Board.

Reserves cannot be spent on recurring expenses such as faculty salaries, and we would be violating our fiduciary responsibility if we used reserves in a haphazard manner

Reserves should not be spent on recurring expenses, but reserves ARE there for this exact purpose: to deal with temporary and unexpected declines in revenues or increase in expenses. That is EXACTLY the situation we are in now with the coronavirus pandemic

Moody’s Ratio Framework• Moody’s created a new comprehensive framework to determine bond ratings in

2015, then updated this in both December 2017 and May of 2019. The goal is to analyze ratios that define the overall financial health of the institution. • There are a total of 10 factors utilized, and they cover revenue, expense,

reserves, cash flows, liquidity, and debt. • This framework is much more comprehensive than the factors reported by the

administration in the audited financial statements, though the two ratios that overlap are the primary reserve and viability ratios

41

Moody’s Scorecard For 2019, SUNY Rating is Aa3Shaded Cells are Where SUNY Stands in 2019 – and SUNY Still has an Aa3 rating in August 2020

42

Aaa Aa A Baa Ba B Caa Ca

Factor 1: Market Profile (30%) Sub-Weight Exceptional Excellent Very Good Good Fair Poor Very Poor Very Poor

Operating Revenues ($000) 15% Greater than 2.7 Billion 400M to 2.7 Billion75 Million to 400

Million40 Million to 75

Million30 Millino to 40

Million20 Million to 30

Million8 Million to 20

MillionLess than 8

Million

Annual Change in Operating

Revenue (%) 5% > 8% 6% to 8% 4% to 6% 2% to 4% 0% to 2% -6% to 0% -6% to -11% < -11%Strategic Positioning 10%

Factor 2; Operating

Performance (25%)

Operating Cash Flow Margin

(%) 10% > 20% 11% to 20% 4.5% to 11% 1% to 4.5% -2% to 1% -3.5% to -2% -5% to -3.5% <-5%Revenue diversity (max single contribution %) 15% < 35% 35% to 50% 50% to 69% 69% to 79% 79% to 87% 87% to 93% 93% to 97% > 97%

Factor 3: Wealth and Liquidity

(25%)

Total Cash and Investments

($000) 10% > 2.5 billion100 million to 2.5

billion25 million to 100

million10 million to 25

million2.3 million to 10

million900k to 2.3

million 350k to 900k < 350k

Reserves to Operating

Expenses (%) 10% > 100% 50% to 100% 15% to 50% 5% to 15% 4.4% to 5% 3.8% to 4.4% 3.2% to 3.8% < 3.2%

Monthly Days Cash on Hand 5% > 260 140 to 260 50 to 140 25 to 50 14 to 25 8 to 14 6 to 8 < 6

Factor 4: Leverage (20%)

Reserves to Debt (%) (high is

better) 10% > 300% 75% to 300% 20% to 75% 12% to 20% 6% to 12% 3.5% to 6% 2.1% to 3.5% <2.1%

Debt-to-Cash Flow (x) (low is

better) 10% < 4 4 to 10 10 to 16 16 to 22 22 to 34 34 to 46 46 to 58 > 52> 58

Process: Ratios Mapping into Ratio Scores and Bond Ratings

43

SUNY gets a score for each of the 10 variables, based on the level of the ratio; the scores are then compiled;

Aaa 1Aa 3A 6Baa 9Ba 12B 15Caa 18Ca 20

Scorecard Outcome Score (Low is better)Aaa Less than 1.5Aa1 1.5 to 2.5Aa2 2.5 to 3.5Aa3 3.5 to 4.5A1 4.5 to 5.5A2 5.5 to 6.5A3 6.5 to 7.5

Baa1 7.5 to 8.5Baa2 8.5 to 9.5Baa3 9.5 to 10.5Ba1 10.5 to 11.5Ba2 11.5 to 12.5Ba3 12.5 to 13.5B1 13.5 to 14.5B2 14.5 to 15.5B3 15.5 to 16.5

Caa1 16.5 to 17.5Caa2 17.5 to 18.5Caa3 18.5 to 19.5

Ca More than 19.5

SUNY Moody’s 10-Ratio Factor DetailsAmounts in thousands

44

Factor 1: Score Rating Factor 3: Score RatingOperating Revenues 12,146,632 Aaa Cash and Investments 4,118,564 AaaChange in Operating Revenue 2.0% AStrategic Reporting Very good Aa Reserves 2,325,785

Operating Expenses 11,614,887Factor 2: Score Rating Primary Reserve Ratio 20.0% AOperating Cash Flows 891,370Total Revenues 12,146,632 Cash * 365 956,438,335Cash Flow Margin 7.3% A Total Expenses 11,614,887

Monthly Days Cash on Hand 82 AState Appropriation 3,708,124Total Revenue 12,146,632 Factor 4:Revenue Diversity 31% Aaa Reserves 2,325,785

Debt 11,076,645Viability Ratio 21% A

Debt 11,076,645Cash Flows 891,370Debt-to-Cash Flow 12.4 A

Final Score for SUNY3.70 corresponds to the Aa3 rating

45

Score Weight ResultOperating Revenues 1 15% 0.15Change in Revenues 6 5% 0.30Strategic Positioning 3 10% 0.30Cash Flow Margin 6 10% 0.60Revenue Diversity 1 15% 0.15Cash and Investments 1 10% 0.10Primary Reserve 6 10% 0.60Cash on Hand 6 5% 0.30Viability 6 10% 0.60Debt-to-Cash Flow 6 10% 0.60TOTAL 3.70

Moody’s Rating for SUNY:Aa3 with STABLE Outlook, July 2, 2020

UB admin cited the negative outlook for the entire sector, but it is stable for SUNYPast Ratings: Aa3 from 2012 to present

Source: https://www.moodys.com/research/Moodys-assigns-Aa3-to-State-University-of-New-York-Series--PR_906558257 46

Strengths:• Large and diversified scale of operations of $12 billion in

operating revenue• Combined with nearly $7 billion of cash and investments at

June 30, 2019, provide stability to its operating model. • The system has excellent strategic positioning as the

dominant provider of higher education in New York with strong state support and favorable tuition pricing.

• The varied market roles of the owned hospitals, along with COVID stimulus funding, provide stability in the near term as it manages through the pandemic.

Challenges:• Ongoing expense from state negotiated benefits and

considerable capital needs for the large system. • Financial leverage is substantial with debt of $12 billion,

although the state pays approximately 75% of debt service aiding debt affordability.

• Exposure to patient care revenue, through four academic medical centers with a challenging payer mix.

• The most immediate risk is the impact of COVID, which has reduced revenue from many services.

Outlook:• The university will manage through near-term operational and financial uncertainty driven by the coronavirus outbreak; taxable bonds will

provide budgetary relief• Core revenue will contract but operating performance in fiscal 2020 will remain largely in line with fiscal 2019 due to expense reduction

measures.• For fiscal 2021, performance is likely to weaken, depending upon fall 2020 enrollment, state support and patient care net revenue

performance. • Favorably, actions to adjust expenses along with funding from CARES act will limit the immediate negative impact to operating performance.

New York State Moody’s RatingAa1 with negative outlook on July 13, 2020

Source: https://www.moodys.com/research/Moodys-assigns-Aa1-to-the-State-of-New-Yorks-PIT--PR_906575260 47

Strengths:• Strength of New York's personal income

tax revenue base• Very strong coverage of debt service• Strong bond payment mechanism. The

strength of the security structure supports a very high rating,

• State's demonstrated willingness to both cut spending and raise revenues when necessary.

Challenges:• The coronavirus crisis is not a key driver for

this rating action, although it was a factor in the state's outlook change to negative at the beginning of April.

• The crisis led the state to project a decline in income tax collections for the 2021 fiscal year to about $49 billion from more than $53 billion in fiscal 2020 (7.5% decline)

Current Moody’s Bond Ratings or Peer Institutions

48

UM AaaU-Washington AaaUNC - Chapel Hill AaaIowa Aa1Pitt Aa1UC Systen Aa2Arizona Aa2Buffalo (SUNY) Aa3Wisconsin Aa3Rutgers Aa3

49

Analysis of the financial situation of the

University of Buffalo

2019 Revenue Distribution of UB vs. the Rest of SUNYWith Hospital

50

41.6%

24.1%

16.5%

2.1%

7.3% 6.0%

1.5% 0.6% 0.3%

30.4%

14.1%10.9%

6.0%2.6%

5.6%

1.1% 1.1%

28.1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

StateAppropriation

Tuition andFees

Grants andContracts

Auxiliary OtherRevenues

Pell Gifts Investmentincome

Hospital

UB SUNY System

2019 Revenue Distribution of UB vs. the Rest of SUNYWithout Hospital

51

41.7%

24.2%

16.5%

2.1%

7.4% 6.0%

1.6% 0.6%

42.3%

19.6%

15.2%

8.3%

3.6%

7.9%

1.5% 1.6%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

StateAppropriation

Tuition andFees

Grants andContracts

Auxiliary OtherRevenues

Pell Gifts Investmentincome

UB SUNY System

Could We Do a Ratio Analysis for UB?

52

Moody's VariableDo We have the

info for UB? Notes Moody's VariableDo We have the

info for UB? NotesFactor 1: Factor 3:

Operating Revenues Yes Per IPEDS Cash and Investments No Neither UB overview or IPEDS has this

Change in Operating Revenue Yes Per IPEDS Primary Reserve Ratio No

Neither UB Overviews or IPEDS has info to make the pension adjustments to get to reserves; Stony Brook statements do have this information

Factor 2: Monthly Days Cash on Hand NoNeither UB Overviews or IPEDS has the detail on cash that a true financial statement has

Cash Flow Margin No

No true cash flow statement in UB overviews; IPEDS does not report cash flows

Factor 4:

Revenue Diversity (% contribution of largest revenue source) Yes Per IPEDS Viability Ratio No

Neither UB Overviews or IPEDS has info to make the pension adjustments to get to reserves; Stony Brook statements do have this information

Debt-to-Cash Flow NoNeither UB Overviews or IPEDS has the cash flow information needed

UB Revenues Over Time (Declining But Large Role of the State)2008 to 2017 per IPEDS; 2018 to 2019 per UB Overview

53

Year Total RevenuesChange in Total

RevenuesState

Appropriation Total Revenues

State Appropriation as % of total

revenues2008 915,302,533 476,426,851 915,302,533 52.1%2009 891,569,616 -2.6% 431,675,977 891,569,616 48.4%2010 882,748,590 -1.0% 400,018,589 882,748,590 45.3%2011 928,413,436 5.2% 421,046,072 928,413,436 45.4%2012 942,772,568 1.5% 415,705,211 942,772,568 44.1%2013 932,167,775 -1.1% 395,517,807 932,167,775 42.4%2014 999,742,973 7.2% 422,042,546 999,742,973 42.2%2015 1,004,776,566 0.5% 413,094,614 1,004,776,566 41.1%2016 1,062,086,160 5.7% 429,607,940 1,062,086,160 40.4%2017 1,107,678,587 4.3% 438,401,537 1,107,678,587 39.6%2018 1,104,228,627 -0.3% 455,340,234 1,104,228,627 41.2%2019 1,211,285,132 9.7% 503,671,329 1,211,285,132 41.6%

Total UB Revenues Over Time Graphically2008 to 2017 per IPEDS; 2018 to 2019 per UB Overview

54

500,000,000600,000,000700,000,000800,000,000900,000,000

1,000,000,0001,100,000,0001,200,000,0001,300,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Total Revenues

Annual Percentage Change in Total UB Revenues2008 to 2017 per IPEDS; 2018 to 2019 per UB Overview

55

-4%-2%0%2%4%6%8%10%12%

2008to

2009

2009to

2010

2010to

2011

2011to

2012

2012to

2013

2013to

2014

2014to

2015

2015to

2016

2016to

2017

2017to

2018

2018to

2019

Annual % Change in Total Revenues

UB Revenue Distribution of Main Revenues2008 to 2017 per IPEDS; 2018 to 2019 per UB Overview

56

0%

10%

20%

30%

40%

50%

60%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Appropriation Tuition All Other Revenues

57

Estimated Losses from the Coronavirus Pandemic

Fiscal 2020 Tuition Revenue Estimates – No Estimated LossesSources: http://www.buffalo.edu/provost/oia/facts-publications/factbook/student/enrollment.html

58

• Tuition revenue for 2020 will likely be slightly above the 2019 level• There is no data on summer enrollment, as the enrollment website stopped reporting summer data in 2010

Enrollment Total HeadcountFall 2018 Enrollment 31,503Fall 2019 Enrollment 31,923% Change 1.3%

Spring 2019 Enrollment 30,104Spring 2020 Enrollment 28,999% Change -3.7%

Tuition and Fees:UG In State 2019 $10,099UG In State 2020 $10,180% Change 0.8%

Grad in state 2019 $13,705Grad in state 2020 $14,132% Change 3.1%

Grad out of state 2019 $25,265Grad out of state 2020 $25,922% Change 2.6%

Estimates for 2021 Tuition Revenue vs. 2020

59

Simpsonscarborough, an admin-side consultant, reported in April 2020 that universities should expect a 20% decline in enrollment for Fall 2020; there was very little basis for this prediction

Moody’s, June 2020: Given there is a recession, they predict a 2% to 4% increase in enrollment, but net tuition revenue and other student revenue for the 2021 fiscal year will likely decline between 5 and 13 percent.

Note that Moody’s is including auxiliary revenue in this estimate;

Note per the next slide that UB has much lower auxiliary revenue as a % of total revenue compared to most institutions.

Auxiliary Revenues and Expenses

60

Auxiliaries 2018 2019Per IPEDSRevenues 62,158,344 Data not availableExpenses 93,042,350 Data not available

Per UB Financial OverviewRevenues 21,202,518 24,870,751Expenses 72,740,667 78,834,225

• Trying to estimate losses from housing, dining, parking, student union, athletics and other auxiliary activities is very difficult, given the inconsistency in reporting by UB.

• Remember, UB reports data to IPEDS – I am reporting what UB sends in• % of Undergrad students international = 13% (per 2019-20 common data set)• % of Undergrad students who live on campus = 34% (per 2019-20 common data set)

Estimated 2021 Tuition and Auxiliary Revenue LossesCARES Act Funding per https://www.insidehighered.com/news/2020/04/10/listing-funds-each-college-can-expect-receive-under-federal-stimulus

61

% Loss $$ Loss CARES Funding Net Loss

Worst Case Loss 12.0% (38,023,887) 11,976,450 (26,047,437)

Most Likely Loss 8.0% (25,349,258) 11,976,450 (13,372,808)

Best Case Loss 4.0% (12,674,629) 11,976,450 (698,179)

Total CARES Act funding 23,952,900

1/2 discretionary 11,976,450

Estimated 2021 Losses from the State Appropriation

62

Tax revenues are expected to be 7.5% lower in 2021 than in 2020, given the estimates by Moody’s

Note that the 2020 appropriation will not be hit, and it is likely that given the estimates of a recovery in 2021 and 2022, the estimated percentage losses in the appropriation above are likely conservative (higher than they actually will be)

2019 Appropriation 503,671,329 503,671,329 503,671,329

Worst Case Loss Most Likely Loss Best Case LossEstiated % Decline in the Appropriation -13.0% -7.5% -5.0%Estiated % 2021 Dollar Loss in the Appropriation (65,477,273) (37,775,350) (25,183,566)

Estimated Reduction in Investment IncomeSource: https://finance.yahoo.com

63

Given the increase in the S&P 500, there should be more investment income than expected.

Any claim that the coronavirus will lead UB to have investment losses in either 2020 or 2021 is not supported by any evidence

S&P 500 6/30/2019 2,941.76S&P 500 6/30/2020 3,100.29Percentage return for 2020 5.4%

S&P 500 6/30/2020 3,100.29S&P 500 9/16/2020 3,385.49Percentage return so far in 2021 9.2%

3 Scenarios for Total 2021 Potential Losses

64

Worst Case Most Likely Best CaseTuition + Auxiliaries (26,047,437) (13,372,808) (698,179)State Appropriation (65,477,273) (37,775,350) (25,183,566)Total Estimated Losses (91,524,710) (51,148,158) (25,881,745)

Potential Losses in Context:Estimated 2021 Losses vs. Unrestricted Reserves

(Reserves per 2019 UB Overview; does not include the RF)

65

Even in a worse-case scenario, the amount of unrestricted reserves is larger than any potential losses;

This makes clear than there is no need for any furloughs or layoffs

The reserves are not adjusted for pensions, so they are likely larger

25,881,745 51,148,158

91,524,710

219,271,794

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

Best Case Most Likely Worst Case UnrestrictedReserves

Estimated Losses Compared to Reserves

66

Examination of the Expenses and Priorities of the UB Administration:• Instruction and Research• Upper-Level Administrative Costs• Number of faculty, academic staff

and administrators

Why We Use IPEDS to Analyze Expenses• There is significant inconsistency in the way the financial overviews report

expenses over time; the 2018 and 2019 Overviews have different constructs than earlier Overviews• The expense numbers from the Overviews do not come close to matching

IPEDS, and it is not possible to reconcile the two• IPEDS has clear guidelines and definitions, and we can use it to compare over

time and to other peer institutions• It would really have helped if the UB administration had given us the 2019

IPEDS finance and Human Resources data, which they clearly have but decided not to provide. As stated, this refusal is unconscionable.• We will use IPEDS through 2018 to analyze expenses and priorities

67

How Expenses are Reported by/to IPEDS

68

• Because of the change in reporting structure , as well as the inconsistencies, we will focus on the salary-only component of expenses

• Note that the UB benefit rate reported by the UB administration to the AAUP compensation survey in 2019 is 32.3%; this further illustrates how a 65% benefit rate is unrealistically high

• The administration admitted that this rate is problematic. This is another reason to focus on the salary-only component of expenses

Instruction 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Salaries 191,157,533 192,209,933 195,355,167 201,801,979 194,060,047 206,072,472 213,773,263 225,802,099 232,542,003 231,400,426 241,321,913

All Other Not reported Not reported Not reported Not reported Not reported Not reported Not reported Not reported 275,731,459 290,147,695 239,165,073Fringes 112,022,284 105,271,770 103,346,277 125,454,822 114,851,611 119,500,460 133,665,061 147,733,564 Not reported Not reported Not reported

Plant Not reported Not reported 35,783,607 35,739,687 34,568,178 39,526,219 43,071,418 43,267,478 Not reported Not reported Not reported

Depreciation Not reported Not reported 18,277,805 19,559,725 17,910,478 20,404,339 23,990,039 27,146,344 Not reported Not reported Not reported

Interest Not reported Not reported 17,012,753 18,648,707 14,772,126 17,345,196 18,570,019 19,110,413 Not reported Not reported Not reported

Other 26,289,863 20,918,723 20,843,134 15,013,797 13,979,829 20,017,574 21,059,135 21,798,482 Not reported Not reported Not reported

Total 329,469,680 318,400,426 390,618,743 416,218,717 390,142,269 422,866,260 454,128,935 484,858,380 508,273,462 521,548,121 480,486,986

Benefit Rate 58.6% 54.8% 52.9% 62.2% 59.2% 58.0% 62.5% 65.4% Not reported Not reported Not reported

Salary-Only Component of Expenses per IPEDS, 2018

69

Dollars Percent of Total Dollars Percent of Total

Instruction 241,321,913 51.9% 241,321,913 52.2%Research 52,430,499 11.3% 52,430,499 11.3%Public Svc 4,873,388 1.0% 4,873,388 1.1%Acad Support 56,382,716 12.1% 56,382,716 12.2%Student Svc 17,608,054 3.8% 17,608,054 3.8%Institutional Support 60,783,400 13.1% 60,783,400 13.2%Auxiliary 28,737,175 6.2% 28,737,175 6.2%Hospital 2,583,484 0.6% 0 0.0%Total Salaries 464,720,629 100.0% 462,137,145 100.0%

Without Hospital

• The reason why this is reported with and without the hospital is that when we compare this to peer institutions, some of the peers have HUGE hospitals that distorts the results; therefore, we will take the hospital out of the peer results

• Institutional support is upper-level administration, no matter what the UB admin claims. The average salary of the management employees who make up institutional support is over $114,000

UB Salary-Only Component of Expenses per IPEDS, 2008 to 2018

70

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Instruction 191,157,533 192,209,933 195,355,167 201,801,979 194,060,047 206,072,472 213,773,263 225,802,099 232,542,003 231,400,426 241,321,913Research 45,303,582 53,159,888 51,663,390 50,003,808 56,907,065 48,206,059 50,051,511 44,938,323 46,039,591 49,318,645 52,430,499Public Svc 4,500,375 4,326,018 3,947,816 5,405,568 5,042,708 4,713,593 4,295,613 4,435,846 4,714,377 4,243,492 4,873,388Acad Support 39,019,177 46,867,426 47,764,815 48,966,294 49,180,729 50,991,508 52,331,259 51,070,668 53,255,441 54,311,602 56,382,716Student Svc 11,657,171 12,138,791 9,901,205 11,064,137 11,125,110 11,759,659 14,317,096 16,521,702 16,779,381 17,272,966 17,608,054Institutional Support 50,746,099 52,911,309 57,967,262 54,822,160 56,426,461 53,009,590 53,843,669 55,551,803 59,556,533 60,058,731 60,783,400Auxiliary 21,343,752 22,916,387 23,198,603 23,941,159 23,862,993 24,643,891 25,680,449 25,874,749 27,719,111 27,544,440 28,737,175Hospital 3,125,569 3,194,726 2,930,222 2,277,918 2,586,990 2,179,142 2,710,271 2,800,714 2,679,294 2,403,074 2,583,484Total Salaries 366,853,258 387,724,478 392,728,480 398,283,023 399,192,103 401,575,914 417,003,131 426,995,904 443,285,731 446,553,376 464,720,629

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Instruction 52.1% 49.6% 49.7% 50.7% 48.6% 51.3% 51.3% 52.9% 52.5% 51.8% 51.9%Research 12.3% 13.7% 13.2% 12.6% 14.3% 12.0% 12.0% 10.5% 10.4% 11.0% 11.3%Public Svc 1.2% 1.1% 1.0% 1.4% 1.3% 1.2% 1.0% 1.0% 1.1% 1.0% 1.0%Acad Support 10.6% 12.1% 12.2% 12.3% 12.3% 12.7% 12.5% 12.0% 12.0% 12.2% 12.1%Student Svc 3.2% 3.1% 2.5% 2.8% 2.8% 2.9% 3.4% 3.9% 3.8% 3.9% 3.8%Institutional Support 13.8% 13.6% 14.8% 13.8% 14.1% 13.2% 12.9% 13.0% 13.4% 13.4% 13.1%Auxiliary 5.8% 5.9% 5.9% 6.0% 6.0% 6.1% 6.2% 6.1% 6.3% 6.2% 6.2%Hospital 0.9% 0.8% 0.7% 0.6% 0.6% 0.5% 0.6% 0.7% 0.6% 0.5% 0.6%Total Salaries 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Percent of total salaries going to instruction, institutional support, and all other categories: UB only per IPEDS

71

52% 50% 50% 51% 49% 51% 51% 53% 52% 52% 52%

12% 14% 13% 13% 14% 12% 12% 11% 10% 11% 11%

14% 14% 15% 14% 14% 13% 13% 13% 13% 13% 13%

22% 23% 22% 23% 23% 23% 24% 24% 24% 24% 24%

0%

20%

40%

60%

80%

100%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Instruction Research Institutional Support All Other

Percentage of total salaries going to instruction, research, and institutional support to peer institutions for 2018, per IPEDS

Salaries take out hospital salaries (UM, Iowa, Wisc)

72

Institution

Instruction Salaries /

Total Salaries

Research Salaries / Total

Salaries

Instruction + Reseearch Salaries /

Total Salaries

Institutional Support

Salaries / Total Salaries

Buffalo 52.2% 11.3% 63.6% 13.2%Stony Brook 51.0% 12.9% 64.0% 12.9%UCSD 44.5% 23.4% 67.9% 10.1%UC Irvine 50.0% 14.6% 64.6% 8.3%Arizona 32.7% 24.2% 56.9% 8.2%Pitt 35.8% 32.8% 68.6% 7.9%Rutgers 39.1% 19.6% 58.7% 7.9%UW 45.2% 20.4% 65.6% 7.6%UM 36.2% 23.2% 59.4% 7.1%UCLA 51.2% 15.1% 66.4% 6.9%UNC 36.5% 20.4% 56.9% 6.8%Iowa 35.5% 26.5% 61.9% 6.5%Wisconsin 31.4% 38.3% 69.7% 6.5%

Peer Mean 40.8% 22.6% 63.4% 8.1%Peer Median 37.8% 21.8% 64.3% 7.7%Buffalo rank (of 13) 1 13 8 1

• Though UB spends the highest percentage of total salaries on instruction, it spends the least on research; when combined, UB is 8th

• The big result here is the administrative spending; UB spends a higher percentage of total salaries on administrative spending than any peer institution.

• If UB had spent the average amount on the salaries of upper-level administrators as peer institutions, there would have been $23,541,858 less spent on these administrative salaries.

• Therefore, UB could save over $23 billion if their administrative spending was just at the mean level of peer institutions.

The Michigan Legislature Bases Part of the State Appropriation on the Level of Administrative Costs – and IPEDS Institutional Support is Used to Determine This

Source: https://www.house.mi.gov/hfa/PDF/Summaries/19s140s1_HigherEd_Summary_passed_Senate.pdf73

Summary: FY 2019-20 University Performance Funding Increases

• According to the Michigan Legislature:Institutional support expenses are a “Measure of administrative costs”

• The UB administration has repeatedly sought to say that institutional support per IPEDS is not really admin costs, but this definitive usage makes clear what every analyst knows:

Institutional support is a measure/proxy for administrative costs!!

Instruction and Research Salaries as a Percent of Total SalariesUB vs. Peers, 2018 per IPEDS

74

69.7% 68.6% 67.9% 66.4% 65.6% 64.6% 64.0%63.6%61.9% 59.4% 58.7% 56.9% 56.9%

0%10%20%30%40%50%60%70%80%

Wisconsin Pitt

UCSDUCLA UW

UC Irvine

Stony Brook

Buffalo

IowaUM

RutgersUNC

Arizona

Instruction + Reseearch Salaries / Total Salaries

Institutional Support salaries as a percent of total salaries 2018 per IPEDS

75

13.2%12.9%

10.1%

8.3% 8.2% 7.9% 7.9% 7.6% 7.1% 6.9% 6.8% 6.5% 6.5%

0%

2%4%

6%

8%10%

12%14%

Buffalo

Stony Bro

okUCSD

UC Irvine

Arizona

Pitt

Rutgers UW UMUCLA

UNCIowa

Wisc

onsin

Institutional Support Salaries as a Percent of Total Salaries

76

Number of Faculty, Graduate teaching faculty, and faculty and

administrative salaries

Number of faculty from 2008 to 2020 (fall 2019)Source: http://www.buffalo.edu/provost/oia/facts-publications/factbook/faculty-and-staff/faculty-and-staff.html

77

TT 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020# Change 2009

to 2020% Change 2009

to 2020Full 521 501 504 509 494 500 504 494 484 491 490 491 (30) -6%Assoc 371 377 369 379 382 393 388 392 390 372 377 391 20 5%Asst 317 272 267 241 232 257 283 295 272 277 266 248 (69) -22%Instructor 7 5 3 6 3 4 3 3 3 3 4 5 (2) -29%Librarian 62 64 59 56 53 55 53 50 50 50 49 53 (9) -15%Total TT 1,278 1,219 1,202 1,191 1,164 1,209 1,231 1,234 1,199 1,193 1,186 1,188 (90) -7%

NTT 623 571 579 570 598 622 636 653 661 687 704 704 81 13%Visiting 41 47 44 39 37 38 37 35 39 37 29 26 (15) -37%Total NTT 664 618 623 609 635 660 673 688 700 724 733 730 66 10%

Adjunct 513 519 490 502 560 556 544 571 539 509 510 529 16 3%

Grand Total Faculty 2,455 2,356 2,315 2,302 2,359 2,425 2,448 2,493 2,438 2,426 2,429 2,447 (8) -0.3%

• The number of tenure-track (TT, which includes tenured and tenure-track) faculty is declining, versus an increase in the number of NTT (non-tenure track)

• There is a significant decline in the number of assistant professors; if UB wants to maintain its role as a major research university, it must continue to hire new assistant professors. This is an issue of priorities

Long-term Percentage Changes in Number of Faculty and Enrollment

78

-4%

1%

6% 6%

-3%

8%

-3%

7%

-7%

10%

3%

14%

-10%

-5%

0%

5%

10%

15%

Total TT Total NTT Total Adjunct Enrollment

2009 to 2015 2015 to 2020 2009 to 2020

As enrollment has increased, the UB administration has responded by hiring fewer tenure and tenure-track faculty, and more non-tenure/track and adjuncts over these time periods

Employee Break-down per IPEDS

79

2013 2014 2015 2016 2017 2018 2019 # Change % ChangeManagement 363 359 350 355 356 358 355 (8) -2%Business/Financial Ops 243 282 330 373 411 451 461 218 90%Computer Eng, Svc 271 271 266 265 265 268 249 (22) -8%Legal Arts Sport, Media 191 192 178 171 184 196 193 2 1%Healthcare Practioners and Technical 231 237 235 239 250 263 260 29 13%Service 447 454 466 441 442 473 477 30 7%Office/Admin Support 533 511 490 459 421 421 395 (138) -26%Maintenance 186 178 187 190 190 189 187 1 1%Transportation 47 46 45 49 53 43 41 (6) -13%Total 2,512 2,530 2,547 2,542 2,572 2,662 2,618 106 4%

2013 to 2019

• The number of management employees has been flat/down from 2013 to 2019• The big increases in the number of business and financial operations employees is

very striking• There is a large decline in the number of office and administrative support

Number of Graduate Teaching and Research Assistants at UB, as reported to IPEDS

80

2013 2014 2015 2016 2017 2018 2019 # Change % ChangeGrad Teaching 1,155 1,181 1,184 1,207 1,232 1,220 1,236 81 7%Grad Research 101 101 123 117 124 116 133 32 32%Grad Assistants, Total 1,256 1,282 1,307 1,324 1,356 1,336 1,369 113 9%

2013 to 2019

• The increase in the number of graduate teaching assistants is in contrast with the decline of tenure and tenure-track faculty

• This trend supports the trend reported for non-tenure track faculty as well – the administration has met the increase in enrollment with more hiring of Non-tenure track and graduate assistants over tenure and tenure-track faculty

UB Faculty Salaries per AAUP Compensation Survey

81

AAUP 2013 2014 2015 2016 2017 2018 2019 2020Professor $133,727 $133,448 $133,295 $137,716 $136,340 $136,200 $143,900 $145,224Associate $91,797 $91,753 $93,262 $94,634 $94,182 $92,900 $98,120 $99,676Assistant $78,502 $77,918 $80,565 $82,250 $82,331 $81,300 $83,676 $82,040Instructor $55,199 $57,498 $59,032 $61,770 $57,350 $59,400 $58,166 $53,858Lecturer $64,355 $63,421 $62,756 $64,206 $66,039 $67,600 $70,882 $73,514

ALL RANKS $101,433 $100,315 $100,900 $102,508 $101,882 $100,700 $105,678 $106,661

2013 to 2014 2014 to 2015 2015 to 2016 2016 to 2017 2017 to 2018 2018 to 2019 2019 to 2020Professor -0.2% -0.1% 3.3% -1.0% -0.1% 5.7% 0.9%Associate 0.0% 1.6% 1.5% -0.5% -1.4% 5.6% 1.6%Assistant -0.7% 3.4% 2.1% 0.1% -1.3% 2.9% -2.0%Instructor 4.2% 2.7% 4.6% -7.2% 3.6% -2.1% -7.4%Lecturer -1.5% -1.0% 2.3% 2.9% 2.4% 4.9% 3.7%ALL RANKS -1.1% 0.6% 1.6% -0.6% -1.2% 4.9% 0.9%

All Ranks Long-Term Percentage Changes in Faculty SalariesSource: AAUP Compensation Surveys

Inflation per https://www.bls.gov/regions/mid-atlantic/data/consumerpriceindexhistorical_northeast_table.htm

82

1.1%

4.1%5.2%

2.3%

7.1%

9.5%

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%

10.0%

2013 to 2016 2016 to 2020 2013 to 2020

UB All Ranks Inflation

UB Salaries of Non-Faculty Employees per IPEDS

83

2013 2019 $$ Change % ChangeAverage Annual

% ChangeManagement $99,688 $114,478 $14,790 14.8% 3.0%Business/Financial Ops $63,229 $66,657 $3,428 5.4% 1.1%Computer Eng, Svc $79,116 $86,360 $7,244 9.2% 1.8%Legal Arts Sport, Media $63,280 $70,732 $7,452 11.8% 2.4%Healthcare and Tech $62,299 $65,207 $2,909 4.7% 0.9%Service $37,874 $40,567 $2,693 7.1% 1.4%Office/Admin Support $40,730 $45,414 $4,683 11.5% 2.3%Maintenance $43,916 $47,496 $3,580 8.2% 1.6%Transportation $34,645 $39,065 $4,421 12.8% 2.6%

2013 to 2019

Dollar Changes in Average Salaries, 2013 to 2019, Management vs. Faculty per IPEDS

84

$2,967

$4,245

$5,174

$6,324

$6,527

$10,173

$14,790

$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000

Instructor

All Ranks

Assistant

Associate

Lecturer

Professor

Management

$$ Change 2013 to 2019

2019-2020 Faculty Salaries vs. Peer Institutions per AAUP Compensation Survey: UB Well Behind Peers

85

2019-2020 Full Associate Assistant Instructor Lecturer All RanksUCLA $225,045 $148,856 $111,131 $89,838 $173,395UCSD $191,494 $130,823 $112,676 $92,438 $148,753UC Irvine $189,205 $125,625 $106,160 $98,079 $146,686UM $178,523 $118,615 $100,833 $62,085 $74,850 $129,910Rutgers $175,420 $114,796 $90,295 $66,110 $73,333 $125,051UW $156,379 $119,274 $107,507 $54,908 $87,110 $124,335Stony Brook $164,368 $110,765 $93,394 $79,474 $68,515 $119,813UNC $162,701 $104,783 $104,126 $58,267 $118,338Wisconsin $148,890 $112,479 $97,059 $69,911 $71,899 $115,430Buffalo $145,224 $99,676 $82,040 $53,858 $73,514 $106,661Arizona $143,590 $99,771 $83,349 $47,486 $65,306 $105,284Pitt $162,471 $105,054 $89,448 $54,890 $56,707 $104,002Iowa $145,520 $96,326 $85,913 $58,006 $103,761

Peer Average $170,300 $115,597 $98,491 $62,123 $74,529 $126,230UB vs. Average in $$ ($25,077) ($15,921) ($16,450) ($8,265) ($1,015) ($19,568)UB vs. Average in % -14.7% -13.8% -16.7% -13.3% -1.4% -15.5%UB Rank (of 13) 12 12 13 7 of 8 6 10

UB Change in Faculty Salaries vs. Peers, All Ranks, 2016 to 2020; UB has lost significant ground vs. peer

Source: AAUP Compensation Survey

86

2016 2020 $ Change % ChangeUC Irvine $124,266 $146,686 $22,420 18.0%UCLA $151,404 $173,395 $21,991 14.5%UCSD $129,593 $148,753 $19,160 14.8%U-Wash $109,325 $124,335 $15,010 13.7%Arizona $94,825 $105,284 $10,459 11.0%Rutgers $114,761 $125,051 $10,290 9.0%Stony Brook $109,703 $119,813 $10,110 9.2%UNC $109,037 $118,338 $9,301 8.5%UM $122,162 $129,910 $7,748 6.3%Wisc-Madison $109,526 $115,430 $5,904 5.4%Iowa $98,273 $103,761 $5,488 5.6%Pitt $98,616 $104,002 $5,386 5.5%Buffalo $102,508 $106,661 $4,153 4.1%

Peer Average $114,291 $126,230 $11,939 10.1%UB vs. Average in $$ ($11,783) ($19,568) ($7,785) -6.1%UB vs. Average in % -10.3% -15.5%UB Rank (of 13) 10 10 13 13

87

Analysis of the investment performance

of the UB Foundation

Value of InvestmentsSource: https://ub-foundation.org/financial-information/investment-performance/

88

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

2013 2014 2015 2016 2017 2018 2019

Endowment Other Investments

Investment PortfolioSource: UBF audited financial statements

89

Total Investments: 2013 2014 2015 2016 2017 2018 2019Cash 29,080,210 22,522,127 13,045,665 12,922,783 8,396,200 16,768,004 12,126,103

Fixed Income 118,421,423 131,447,256 104,791,343 106,771,542 107,508,180 133,607,136 130,421,709

Equity securities 321,646,255 373,478,167 394,713,527 348,392,062 427,874,872 435,132,653 441,453,706

Alternatives: Real Assets 66,492,002 83,116,288 82,139,974 88,009,703 95,943,191 99,338,407 108,901,382

Private equity 79,821,641 91,296,583 105,970,730 102,223,502 124,810,481 155,039,221 181,435,901

Hedge funds 141,662,316 159,200,719 166,384,685 166,684,438 173,890,249 185,728,031 191,239,120

Total Alternatives 287,975,959 333,613,590 354,495,389 356,917,643 394,643,921 440,105,659 481,576,403

Other 4,358,673 3,299,980 690,881 17,539,192 1,944,904 464,426 607,698

Total Investments: 761,482,520 864,361,120 867,736,805 842,543,222 940,368,077 1,026,077,878 1,066,185,619

Percent Distribution 2013 2014 2015 2016 2017 2018 2019

Cash 4% 3% 2% 2% 1% 2% 1%Fixed Income 16% 15% 12% 13% 11% 13% 12%Equity Securities 42% 43% 45% 41% 46% 42% 41%Total Alternatives 38% 39% 41% 42% 42% 43% 45%Other 1% 0% 0% 2% 0% 0% 0%Total 100% 100% 100% 100% 100% 100% 100%

• This is a very risky portfolio, yet the UB administration claimed that this is riskier than a plain vanilla S&P 500 fund. That claim is simply inaccurate.

• These alternative investments are pure risk, and we will see the results are poor

Description of Investments per the UB Foundationaudited financial statements• Real assets are those invested in commingled funds, limited partnerships and limited liability

companies• Private equity partnerships are generally made through limited partnerships. Under the terms

of such agreements, the Foundation may be required to provide additional funding when capital or liquidity calls are made by fund managers. These partnerships have a limited existence, and they may provide for annual extensions for the purpose of disposing portfolio positions and returning capital to investors.

• Investments in hedge funds have numerous provisions which may restrict the redemptive nature of the investment. o Certain of the hedge funds are subject to initial “lock-up” provisions, ranging up to three

years. Subject to the expiration of the “lock-up” period, the investor has the ability toliquidate its investments periodically from monthly to tri-annually, accompanied by notice periods ranging from thirty to one hundred eighty days at June 30, 2019 and 2018.

o A portion or all of the hedge funds investment may be held as “side-pocket” investments, as determined by such investment fund’s investment manager. The investor’s ability to redeem its interest in the side-pocket investments is restricted until the occurrence of a realization event with respect to the underlying investment positions in such side-pockets per the terms of the respective investment fund’s agreement.

90

Analysis of the EndowmentSource: UBF Audited financial statements

91

2013 2014 2015 2016 2017 2018 2019

Endowment, Start 511,019,818 554,392,383 624,790,675 619,295,674 600,960,825 659,156,156 724,999,677

Investment return 59,576,329 84,962,452 14,979,075 (962,044) 77,369,084 62,925,345 40,190,707

Contributions 5,932,278 10,339,308 5,416,683 10,335,720 9,819,513 21,133,297 9,325,852

Appropriation for Expenditure (23,929,981) (25,700,051) (26,927,592) (27,990,936) (29,563,430) (30,300,555) (31,746,883)

Other 1,793,939 796,583 1,036,833 282,411 570,164 12,085,434 55,125,336

Endowment, End 554,392,383 624,790,675 619,295,674 600,960,825 659,156,156 724,999,677 797,894,689

Total UB Expenses per IPEDS 986,465,898 996,805,637 1,040,215,629 1,107,485,634 1,142,949,441 1,141,013,332 ??

% of beginning endowment spent to support operations 4.7% 4.6% 4.3% 4.5% 4.9% 4.6% 4.4%% of main UB Expenses covered by endowment 2.4% 2.6% 2.6% 2.5% 2.6% 2.7% ??

Fundraising expenses 7,603,768 7,600,643 7,681,245 8,007,685 8,218,611 8,661,484 9,510,073

• The investment return includes dividend income, interest income, realized gains on selling securities, and unrealized gains and losses• The appropriation for expenditure is the support the endowment provides for UB core’s operations

• Over the last 7 years, between 4.3% and 4.9% of the endowment’s principle is used• In 2018, the $30.3 million that the endowment provided represented 2.7% of the total expenses of UB

• Fundraising expenses were $7.6 million in 2013, and rose to $9.5 million in 2019, an increase of 10. Note that the $9.5 million in 2019 fundraising expenses were greater than the $9.3 million in contributions raised by the endowment; fundraising expense were higher than endowment contributions in 2013 and 2015 as well

Investment ReturnsSource: UBF Audited financial statements

92

10%13.7%

2%

-0.3%

12%9%

5%

22%

14.5%

9%

3%

14% 14%

6%

-2%

3%

8%

13%

18%

23%

2013 2014 2015 2016 2017 2018 2019

Total UBF Investment Return S&P 500 Return • In each year for 2013 to 2019, the S&P 500 return was higher than the return for the investment portfolio of the UB Foundation

• All the investing in risky securities seems to be inferior to simply investing in a plain vanilla fund

93

Other Issues: Degrees Conferred, Graduation and Pell Rates

Degrees ConferredSource: http://www.buffalo.edu/provost/oia/facts-publications/factbook/student/graduation-rate.html

94

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Bachelors 4,276 4,343 4,436 4,747 4,840 4,854 5,029 5,017 5,379 5,231 5,068 5,273Masters 1,966 2,078 2,032 2,148 2,342 2,127 2,238 2,600 2,471 2,275 2,382 2,315Professional 623 668 662 647 626 668 604 686 641 607 620 647Doctorate 329 309 273 302 297 330 350 342 343 344 337 391Certificates 167 159 205 138 169 169 193 140 203 207 240 232Grand Total 7,361 7,557 7,608 7,982 8,274 8,148 8,414 8,785 9,037 8,664 8,647 8,858

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Bachelors Masters Professional Doctorate Certificates

Graduation RatesSource: http://www.buffalo.edu/provost/oia/facts-publications/factbook/student/graduation-rate.html

95

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

4-Year Rate 5-Year Rate 6-Year Rate

One-Year Retention RatesSource: http://www.buffalo.edu/provost/oia/facts-publications/factbook/student/retention.html

96

88.5%88.2%

87.6%87.1%87.5%88.1%88.1%

86.1%87.1%86.8%

86.3%

70% 72% 74% 76% 78% 80% 82% 84% 86% 88% 90%

Fall 08 back Fall 09Fall 09 back Fall 10Fall 10 back Fall 11Fall 11 back Fall 12Fall 12 back Fall 13Fall 13 back Fall 14Fall 14 back Fall 15Fall 15 back Fall 16Fall 16 back Fall 17Fall 17 back Fall 18Fall 18 back Fall 19

One-Year Retention Rate

2018 Graduation and Pell Rates of Buffalo and Peers, per IPEDS

97

0%5%10%15%20%25%30%35%40%45%

50%55%60%65%70%75%80%85%90%95%

UCLA UMUNC

UC Irvin

eUCSD

Wisc

onsin UW Pitt

Rutgers

Buffalo

Stony B

rook

Iow

a

Arizona

Grad Rate Pell RateThe higher the Pell rate, the lower the graduation rate

UB has the 10th

highest graduate rate at 76%, versus a peer mean of 82%

UB has the 5th

highest Pell rate, at 32%, versus a peer mean of 26%

98

UB Athletics: Amount of support for athletics from the core academic mission

Go Bulls

Athletic Overview per EADA (Equity in Athletics Data Analytics) Submitted to the US Dept. of Education

99

YearTotal Athletic

ExpensesTotal UB Expenses

Athletics as % of Total

2008 21,854,374 942,991,496 2.3%2009 25,942,006 1,227,702,512 2.1%2010 16,973,584 920,627,982 1.8%2011 26,221,691 944,830,379 2.8%2012 27,478,169 944,395,043 2.9%2013 28,960,127 986,465,898 2.9%2014 31,134,149 996,805,637 3.1%2015 31,909,540 1,040,215,629 3.1%2016 34,219,719 1,107,485,634 3.1%2017 35,883,884 1,142,949,441 3.1%2018 40,763,071 1,138,624,633 3.6%2019 36,970,124 1,160,440,565 3.2%

ParticipantsMen 214Women 161Total Student-Athletes 375Total Undergrad students 21,607Percent of total UG Students 1.7%

Percentage Change in Athletic vs. Other ExpensesSource: EADA (Equity in Athletics Data Analytics) of US Dept. of Education

100

22%28%

55%

10% 12%

23%

0%

10%

20%

30%

40%

50%

60%

2011 to 2015 2015 to 2019 2011 to 2019

Athletics Total Expenses

Breakdown of Athletic ExpensesSource: USA Today Athletic Database, https://sports.usatoday.com/ncaa/finances

101

YEARCOACHING /

STAFF SCHOLARSHIPSFACILITIES / OVERHEAD OTHER TOTAL EXPENSES

2011 $8,408,939 $6,371,627 $51,840 $11,389,285 $26,221,6912012 $8,345,368 $6,354,309 $55,322 $12,723,170 $27,478,1692013 $8,569,134 $7,277,504 $54,404 $13,059,085 $28,960,1272014 $9,142,338 $7,635,181 $1,321,888 $13,034,742 $31,134,1492015 $9,299,146 $8,364,393 $1,575,002 $12,670,999 $31,909,5402016 $9,810,809 $9,239,541 $2,950,686 $12,218,683 $34,219,7192017 $9,539,328 $9,418,613 $2,892,722 $14,033,221 $35,883,8842018 $15,033,182 $8,727,511 $2,820,831 $14,181,547 $40,763,0712019 $16,994,845 $8,306,107 $2,090,833 $18,541,268 $45,933,053

• Scholarships are not necessarily cash costs, but they are important costs; if athletes were not receiving this aid, other students could certainly be receiving the aid

• There were large increases in coach’s salaries in 2018 and 2019

What Comprises “Other” per USA TodaySource: https://sports.usatoday.com/ncaa/finances

• Other is a very large amount in every year. This is what is reported as comprising other in the USA Today Finances report:• Severance payments to past coaches and staff• recruiting• team travel• equipment and uniforms• game day and camp expenses• fundraising and marketing costs• spirit group support• medical expense/insurance• conference dues• the value of university-provided support such as administrative services• facilities and grounds maintenance• security, risk management, utilities, depreciation and debt service that is not charged to the athletics

department

102

Breakdown of Athletic Revenues: There are very few direct athletic revenues to cover athletic expenses:

Source: https://sports.usatoday.com/ncaa/finances

103

YearTICKET SALES CONTRIBUTIONS

RIGHTS / LICENSING OTHER

Total Direct Athletic

Revenues

2011 $994,216 $384,436 $2,581,968 $1,443,932 5,404,552

2012 $1,059,966 $1,320,953 $2,749,027 $2,230,719 7,360,665

2013 $944,768 $392,815 $3,366,315 $2,169,707 6,873,605

2014 $1,285,778 $600,252 $3,397,218 $2,015,671 7,298,919

2015 $1,101,014 $1,058,460 $3,894,030 $1,774,870 7,828,374

2016 $1,107,153 $1,913,487 $4,300,804 $2,134,903 9,456,347

2017 $1,065,783 $1,953,470 $5,163,103 $2,081,443 10,263,799

2018 $1,036,460 $1,924,828 $4,628,492 $2,431,716 10,021,496

2019 $1,456,665 $5,201,383 $3,933,198 $9,835,072 20,426,318

YearSTUDENT

FEESSCHOOL FUNDS

Total Subsidies

2011 $7,874,073 $12,949,405 20,823,4782012 $7,819,038 $12,300,508 20,119,5462013 $7,952,787 $14,137,658 22,090,4452014 $8,168,727 $15,810,334 23,979,0612015 $8,433,752 $15,919,426 24,353,1782016 $8,744,820 $16,066,399 24,811,2192017 $8,981,926 $16,646,496 25,628,4222018 $9,233,325 $21,579,827 30,813,1522019 $22,293,734 $3,257,900 25,551,634

• Students pay student fees to attend classes; a definitive percentage of the student fee goes to support athletics• The lack of MAC football will not hurt ticket sales revenues, as those are tiny; UB will miss out on money games at

Kansas State and Ohio State

Subsidies from the Core Mission TO AthleticsSource: https://sports.usatoday.com/ncaa/finances

104

YearTotal Athletic

ExpensesTotal

Subsidies

Percent of Expenses

Subsidized2011 26,221,691 20,823,478 79%2012 27,478,169 20,119,546 73%2013 28,960,127 22,090,445 76%2014 31,134,149 23,979,061 77%2015 31,909,540 24,353,178 76%2016 34,219,719 24,811,219 73%2017 35,883,884 25,628,422 71%2018 40,763,071 30,813,152 76%2019 45,933,053 25,551,634 56%

• Total subsidies = Student Fees + School Funds

• 2019 was the best year, asthere was an increase incontributions and “other” revenues

• Even in the best year, more than ½ of athletic expenses have to be covered by the core academic and research mission of UB

2019 Athletic Revenues and ExpensesSource: https://sports.usatoday.com/ncaa/finances

105

$1,456,665 $5,201,383 $3,933,198

$9,835,072

$45,933,053

$0$5,000,000

$10,000,000$15,000,000$20,000,000$25,000,000$30,000,000$35,000,000$40,000,000$45,000,000$50,000,000

TICKET SALES CONTRIBUTIONS RIGHTS /LICENSING

OTHER Athletic expenses

2019 Athletic Revenues and Expenses

Direct revenues only cover $20.4 million of the $45.9 Million of athletic expenses

The rest comes from students and the academic side of the university

2019 Athletic Subsidies vs. Peer InstitutionsSource: https://sports.usatoday.com/ncaa/finances

106

2019 Athletic Expenses

Dollar Subsidy

Percent Subsidy

Rutgers $103,167,344 $29,859,395 29%Stony Brook $36,515,041 $29,216,351 80%Buffalo $45,933,053 $25,551,634 56%Arizona $100,565,835 $21,886,167 22%UC Irvine $22,310,597 $17,669,315 79%UNC $110,809,706 $9,163,374 8%U-Wash $131,317,636 $4,151,964 3%Wisc-Madison $154,621,828 $3,029,000 2%UCLA $127,339,042 $2,577,213 2%Iowa $146,282,275 $650,000 0.4%UM $190,952,175 $261,773 0.1%

Peer Mean $112,388,148 $11,415,679 25%UB vs. Peer mean ($66,455,095) $14,135,955 30%UB rank (of 11) 9 3 3

2019 Subsidies vs. Peer Institutions GraphicallySource: https://sports.usatoday.com/ncaa/finances

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

Rutgers StonyBrook

Buffalo Arizona UCIrvine

UNC U-Wash Wisc UCLA Iowa UM

Dollar Subsidy Percent Subsidy

2019 Athletic Expenses vs. MAC PeersSource: https://sports.usatoday.com/ncaa/finances

108

• The administration claims the MAC is not a viable peer group, but UB plays in the MAC

• Notice how the expenses are much similar for this group than for the IPEDS peers

• UB spends the most of any MACschool on athletics

• The percentage subsidy is the lowest in the conference, but the dollar subsidy is the 3rd largest

• Is now the time to get out ofDivision-1 football for the MAC?

2019 Athletic Expenses Dollar Subsidy

Percent Subsidy

Buffalo $45,933,053 $25,551,634 56%Central Michigan $33,642,870 $25,228,204 75%Miami (Ohio) $38,650,630 $27,154,286 70%Western Michigan $38,997,076 $24,652,287 63%Akron $37,275,978 $26,011,378 70%Eastern Michigan $30,878,069 $20,858,180 68%Toledo $35,560,555 $21,886,157 62%Ball State $27,911,602 $20,551,096 74%Kent State $29,573,232 $18,874,287 64%Ohio $34,677,243 $19,992,428 58%Northern Illinois $26,483,239 $14,846,542 56%Bowling Green $25,780,900 $15,625,182 61%

Peer Mean 32,675,581 21,425,457 65%UB vs. Peer mean 13,257,472 4,126,177 -10%UB rank (of 12) 1 3 12