University Vision, Mission, Values



-714375-838200East Stroudsburg UniversityEnvironmental ScanAnd5-Year Budget ProjectionsDonna R. Bulzoni, CPA, MBA, SPHRFebruary 13, 2013Table of Contents TOC \o "1-3" \h \z \u University Vision, Mission, Values PAGEREF _Toc348298036 \h 3Overview PAGEREF _Toc348298038 \h 4Governance PAGEREF _Toc348298039 \h 5Economic Outlook PAGEREF _Toc348298040 \h 6Economic Development PAGEREF _Toc348298041 \h 8Facilities PAGEREF _Toc348298042 \h 10Human Resources PAGEREF _Toc348298043 \h 13Financial Resources PAGEREF _Toc348298044 \h 14Enrollment PAGEREF _Toc348298045 \h 16Fund Raising PAGEREF _Toc348298046 \h 18Budget Highlights PAGEREF _Toc348298047 \h 20Summary Calendar PAGEREF _Toc348298048 \h 22University Vision, Mission, ValuesValues…..We are committed to the principles of intellectual integrity, freedom of expression, the fair and equal treatment of all, good citizenship, environmental stewardship, and accountability for our actions and the resources entrusted to us.Vision…..East Stroudsburg University of Pennsylvania will be the first choice for students seeking a comprehensive university with a small college climate distinguished by innovation and tradition where they will learn to serve, lead and succeed. Mission…..East Stroudsburg University of Pennsylvania will provide:Challenging and contemporary undergraduate and graduate curricula that engage and equip students to critically appraise and apply knowledge in their lives and chosen fields of study;A learning community that promotes diversity and views teaching as the university’s primary focus;Varied opportunities for student and faculty research, creative endeavors and involvement in public service; andLeadership and service in the educational, cultural and economic development of the regionOverviewEast Stroudsburg University (ESU) welcomed its 13th President, Dr. Marcia G. Welsh, during one of its most challenging times. Faced with financial stress and declining enrollment, ESU is at a pivotal point in its history. Given a structural budget problem and the fact that strategic planning, enrollment management, human resource planning, and budget processes are not fully integrated, much work must be done to continue to ensure the University’s viability. GovernanceOn July 1, 2012, East Stroudsburg University welcomed Dr. Marcia G. Welsh as its 13th President, succeeding Dr. Robert Dillman who served as the University’s President since 1996. Dr. Welsh’s inauguration is planned for April 6, 2013 with a most appropriate theme: “Great Expectations”. The transition from President Dillman to President Welsh has been smooth to date and the University is excited at the prospects of a realistic approach to shared and collegial governance.Other changes in governance include Dr. Victoria Sanders’, former Vice President for Enrollment Management, departure to the Pennsylvania State System of Higher Education and Richard Staneski’s, Vice President for Administration and Finance, retirement in March 2013. A search is currently underway for a new Vice President for Administration and Finance. President Welsh has been meeting with constituent groups and has already established two key task forces: the Summer School Task Force which is charged with developing a robust, student-focused summer school program while also contributing to the University’s financial strength and the Enrollment Services Task Force which is charged with re-vamping the Division of Enrollment Management so as to provide the best services to our students.Economic OutlookThe enacted Commonwealth of Pennsylvania Fiscal Year 2012-2013 General Fund Budget totaled $27.66 Billion. The allocation of those dollars was as follows:Source: 2012-13 Mid-Year Budget Briefing, Pennsylvania Office of the Budget, December 4, 2012Higher Education Funding was held level with FY 2011-12 and comprised 14% of the total General Fund Budget. Since the time that budget was enacted, the Governor signed unemployment compensation reform legislation. This reform allowed the Commonwealth to issue bonds to repay the state’s outstanding unemployment compensation debt to the federal government. As a result, the Commonwealth is expected to save more than $380M annually. Additionally, the Governor implemented reforms of the Commonwealth’s fleet and travel programs. ESU was party to those reforms whereby all state vehicles were returned to the Commonwealth and Enterprise rental car was implemented. We estimate we will save approximately $32k annually as a result of this change.In his budget announcement on February 5, 2013, the Governor presented a balanced General Fund budget for Fiscal Year 2013-2014 totaling $28.4B, an increase of 2.4% over the FY 2012-13 budget. Funding for higher education was held level with Fiscal Year 2012-2013 while Key 93 dollars, which are used to fund deferred maintenance, was increased by $401k for PASSHE. The Commonwealth’s General Fund Budget proposed for Fiscal Year 2013-2014 is as follows:Source: 2013-14 Budget in Brief, Pennsylvania Office of the Budget, February 5, 2013The most recent projected outlook for the nation for FY 2012-13 and FY 2013-14 is as follows:FY 2012-13FY 2013-14Real GDP2.0%2.1%Consumer Expenditures3.1%3.4%U.S. Wages & Salaries3.0%4.2%U.S. Unemployment Rate7.8%7.4%Source: 2012-13 Mid-Year Budget Briefing, Pennsylvania Office of the Budget, December 4, 2012 When examining unemployment rates, Pennsylvania’s unemployment rate typically lags behind that of the United States as a whole. The PA rates were lower than the U.S. rates in July 2012, sharply increasing and meeting those of the U.S. in August 2012, peaking in September 2012 and then declining and meeting those of the U.S. in November 2012. (see graph that follows).Source: 2012-13 Mid-Year Budget Briefing, Pennsylvania Office of the Budget, December 4, 2012According to the Governor’s “Commonwealth of Pennsylvania 2013-14 Executive Budget” presented on February 5, 2013, Total 2012-13 General Fund Revenues were 1.1% above budget. Corporation Taxes, Other Taxes and Non-Tax Revenue are all above budget while Consumption Taxes, which includes sales and use taxes, are below budget (see table that follows).??“The U.S. economy continues to modestly recover from the Great Recession, however fairly subdued economic growth is forecast through at least the second quarter of 2014. While the underlying fundamentals of the economy are sound, political concerns out of Washington are likely dampening economic growth. Increased federal income taxes, expired payroll tax reductions, lingering concerns regarding federal spending (sequestration) and the approaching federal debt limit are all likely impacting the economy.”Source: 2012-13 Mid-Year Budget Briefing, Pennsylvania Office of the Budget, December 4, 2012??BudgetActual$ Difference% DifferenceTax RevenueCorporation Taxes$ 1,316.3$ 1,583.5$267.220.3%Consumption Taxes 6,271.0 6,067.4 -203.6-3.2%Other Taxes 6,686.4 6,745.1 58.7 0.9%Non-Tax Revenue 138.0 168.4 30.422.0%Total$14,411.7$14,564.4$ 152.71.1%Source: 2013-2014 Executive Budget Presentation, Pennsylvania Office of the Budget, February 5, 2013Another important highlight from the Governor’s 2013-14 Executive Budget is an overhaul of the state pension systems. Regarding pension reform, the Pennsylvania State System of Higher Education and East Stroudsburg University have experienced significant increases in contribution rates over the past few years for SERS and PSERS and expect those increases to continue if there isn’t reform.The following graphically shows those increases in SERS and PSERS rates between FY 2011 and FY 2017.Additionally, it is important to note GASB Statement No. 68, Accounting and Financial Reporting for Pensions is effective for ESU for Fiscal Year end June 30, 2015. This statement requires governments to recognize their long-term obligation for pension benefits as a liability. Under the current GASB, we are “paying as we go”, so to speak, similar to making a monthly mortgage payment. With the implementation of GASB 68, we will be required to recognize the entire liability, similar to your mortgage liability, on our balance sheet. PSERS and SERS will provide the University with our share of the liability. It is anticipated to be SIGNIFICANT and to impact our Total Net Assets.Economic DevelopmentMonroe County, with a population of 169,842, is one of the fastest growing counties in Pennsylvania. Faced with an unemployment rate of 9.4% (higher than the 7.9% state average as of December 2012), the County is focusing on ways to attract, retain, and support businesses in new, knowledge-based industry clusters. Additionally, Monroe County’s lack of high paying jobs has resulted in over 25,000 people commuting daily for employment opportunities and higher wages in New York and New Jersey. The county’s tactical location has resulted in Monroe County being defined as a separate “Micropolitan” and as an “Exurbia” area which refers to the fast-growing communities on the outer fringe, beyond the suburbs of major metropolitan communities, with a growing number of urban commuters ( ). These regional economic challenges and geographic opportunities have positioned East Stroudsburg University as a strategic hub for education, innovation, and technology in northeastern Pennsylvania. East Stroudsburg University’s contributions to regional economic development efforts are noteworthy. According to the most recent data available from PASSHE, East Stroudsburg University is one of the largest employers in Monroe County, providing 825 jobs directly and creating a total employment impact of 1,206 jobs. The university generates more than $273.5M annually in direct and indirect business stimulus in Pennsylvania, $109.9M annually in Monroe County, and $18.3M in East Stroudsburg and Stroudsburg. This encompasses the impact spending by the institution, faculty, staff, students and visitors. Additionally, ESU is located on 256 acres located in East Stroudsburg Borough and Smithfield Township that are valued at $322M.Additionally, the university’s role as a partner in community economic development was enhanced in 2007, when ESU established the division of Research and Economic Development (RED) to address the critical role higher education plays in economic development and to engage the university in economic development initiatives within the scope of its academic mission. The University’s economic development efforts are supported by its infrastructure. On May 4, 2012, the university celebrated the grand opening of the ESU Innovation Center. The 51,000 sq. ft. facility includes the university’s Business Accelerator Program and offices and wet labs to support start-up companies. Over the past five years, the ESU Business Accelerator Program created 118 jobs, retained 143 jobs, and relocated/lost 44 jobs. The university’s Business Accelerator Program and Entrepreneurial Leadership Center are attracting start-up companies and providing research and entrepreneurial experiences for students and faculty in competitive industry sectors including: homeland security, financial services, biotechnology/life sciences, information technology, healthcare, and advanced manufacturing. Recent initiatives in the areas of bioscience and additive manufacturing are also providing opportunities for regional alliances and academic collaboration. Since the launch of the Entrepreneurial Leadership Center (ELC) in 2008, over 1,000 students have been introduced to entrepreneurship through the efforts of the 31 faculty and staff who participated in Entrepreneurship Across the Colleges. Additionally, through the support of a $100,000 Keystone Innovation Grant (KIG), secured by ESU on behalf of the Pennsylvania State System of Higher Education (PASSHE), a total of 236 students, representing the 14 PASSHE universities, submitted business ideas in the First Annual PASSHE Student Business Plan Competition. Jonathan Weber, a sophomore majoring in computer science/computer security at ESU, won first place in the competition for his company eDentified, a powerful people search engine. The grant also supports the Second Annual Student Business Plan Competition and faculty commercialization and marketing efforts for the PASSHE Technology Transfer and Commercialization Resource Network. The Network provides an integrated approach to protecting intellectual property and advancing faculty and student commercialization across the fourteen PASSHE universities. The KIG grant also supports PASSHE’s partnerships with the Penn State Research Foundation (PSRF). PSRF currently serves as PASSHE’s Technology Transfer and Communication Office. Fiscal year 2011-2012 marked the first commercialization of faculty/student research in the 119 year history of East Stroudsburg University. In April 2012, ESU signed a non-exclusive License Agreement with Garrett Hewitt International, LLC to commercialize Lyme-Aid, a tick testing kit for people and pets, created through the ESU Student Business Plan Competition.In the area of Sponsored Projects and Research in FY 2011-2012, ESU faculty and staff submitted proposals for 62 external grants and contracts totaling $4M and successfully secured $2.8M. Over the past five years, the Office of Sponsored Projects and Research secured over $19.7M in support of faculty research, student services, construction and economic development efforts.The following chart shows funds requested and funds awarded for Fiscal Years 2007-08 through 2011-2012, to date.The next chart shows how the funds received were invested back into the University, economic development and faculty/student initiatives and projects.The university also supports workforce training programs through the office of Workforce Development.? The Department of Community and Economic Development allocated for $246,533 for 2012-13 FY, 10% increase from the previous year.? These funds allow qualified companies the opportunity to train new and existing employees through the Guaranteed Free Training Program offered through WEDnetPA.? Outcomes and metrics will be determined at the end of the FY 2012-13, June 30, 2013. ?During FY 2011-2012, the office managed $222,544 allocation dispensed to 23 businesses, training over 1938 employees.Legislative appropriations supporting economic development initiatives during FY 10-11 included a $459,500 grant from the Monroe County Local Share Account – Gaming Funds to expand the University’s Business Accelerator Program. The expansion was complete in spring 2012 and includes additional business accelerator space and multi-purpose rooms in addition to 114 paintings by legendary artist Sterling Boyd Strauser which were donated to East Stroudsburg University by the Grey and Linda Carter family. Funding secured for the construction and facilities in the ESU Innovation Center totaled $5.8M while ESU economic development initiatives secured $2.4MFacilitiesThe University has a number of financing options available to it for funding capital needs: the commonwealth capital budget; bond financing; operations and monwealth Capital BudgetThe Capital Budget of the Commonwealth of Pennsylvania provides for the acquisition, design, construction, and/or renovation of new or existing Commonwealth buildings, facilities, physical betterments or improvements.The level of funding received from the Commonwealth for all of PASSHE is currently $65 million per year; In the Governor’s budget address on February 5, 2013, he announced continued funding at this level for Fiscal year 2013-2014. However, it is not certain if the Commonwealth will continue this funding level or make changes. With construction of Phase 1 of the Keystone Center scheduled to commence in Spring of 2014, reduction in the level of support from the Commonwealth may have a serious negative impact. The five year capital appropriations plan for PASSHE includes funding for both phases of the project; however, the budget office has only released funding for the construction of Phase 1 while funding for Phase 2 (the library part of the building) is contingent upon appropriations from the Commonwealth continuing at the current level. Over the past five fiscal years, ESU was approved funding from the Commonwealth’s Capital Budget as indicated in the following table.ProjectAmount ApprovedScience & Technology Building$20,600,000Renovation of Monroe Hall$ 7,800,000Keystone Commons$75,000,000Library Renovation$25,000,000Bond FinancingThe university uses long-term bond financing for a variety of projects and property acquisitions. As of December 17, 2012, ESU had $55.3 million total debt outstanding. Of this amount, 83.93% was for Education & General, 10.08% for the Recreation Center, 5.61% for the Residence Halls, and .38% for the University Center. The following graph shows debt outstanding by fund:The following table reflects all debt outstanding, by fund and purpose, carried on the University’s books as of December 17, 2012:Purpose of the Debt by FundPaid OffBond Payable at December 17, 2012Bond Payable in 5 YearsRate of Debt Retirement at 5 YearsBond Payable in 10 YearsRate of Debt Retirement at 10 YearsEducation & General Purchase of the Innovation Center2031$ 7,324,995$ 5,662,276$ 3,873,986 Guaranteed Energy Savings Project2022 7,051,788 3,237,996 0 Marine Science Consortium2035 7,102,500 5,992,500 4,537,500 Pedestrian Safety & Stormwater Management2029 5,807,097 4,095,428 2,266,560 Property Acquisitions2031 2,399,032 1,466,260 474,914 Science & Technology Building2029 15,923,475 10,787,063 5,199,664 Student Information System2018 805,000 0 0Total Education & General 46,413,88631,241,523 32.7%16,352,62464.8%Residence Halls2025 3, 104,385 1,615,558 48.0% 270,15091.3%University Center2013 210,129 0100.0% 0100.0%Recreation Center2022 5,576,830 2,263,523 59.4% 0100.0%Total$55,305,230$35,120,604$16,622,774The debt outstanding by fund above reflects all debt carried on the University’s books as of December 17, 2012. It is important to note, however, the Board of the East Stroudsburg University Foundation unanimously passed a motion on June 19, 2003 to support the bonding for the Science & Technology Center at East Stroudsburg University by funding debt service up to $1 million per fiscal year for twenty years (through Fiscal Year 2026). It must also be noted there were originally two partners in the Marine Science Consortium project (ESU and Kutztown University). Since the project began, another university within the PASSHE joined the project. Credit analysts examine the length of time it takes for debt to be retired. For ESU’s education and general fund debt, the rate of principal retirement at 5 and 10 years is 32.7% and 64.8%, respectively. For residence halls, university center, and recreation center, the rates of principal retirement at 5 years are 48.0%, 100.0% and 59.4%, respectively and at 10 years are 91.3%, 100.0%, and 100.0% respectively.There are no known limitations in our indenture or loan agreement with the authority through which the Pennsylvania State System of Higher Education issues bonds which would affect or limit our capacity to borrow. However, the University has set its own target or cap such that annual debt service should fall between 3% and 5% of unrestricted revenue. This provides realistic benchmarks against which to weigh the fiscal impact of new bond authorizations. The following table shows debt service as a percentage of unrestricted revenues, based on current debt levels for fiscal years 2014 to 2018 which includes debt to be issued in July 2013 for our parking project. If no new debt is added to the existing or planned issuances, debt service as a percentage of unrestricted revenues will range from 4.52 percent in FY 2017 to a high of 4.97 percent in fiscal year 2014 (using Projected Unrestricted Revenue as per the Environmental Scan).20132014201520162017Projected Unrestricted Revenue97,175,20899,643,368102,712,477106,220,416109,672,567Total Debt Service including new Debt* 4,527,160 4,954,679 4,952,832 4,953,119 4,956,218Debt Service as a % of Unrestricted Revenue4.66%4.97%4.82%4.66%4.52%Additional Debt Service Capacity Target (3%) – Addl Debt Srvc00000 Additional Possible Issuances00000 Cap (5%) – Addl Debt Srvc 331,600 27,489 182,792357,902527,410 Additional Possible Issuances $4,737,000 $392,700 $2,611,000 $5,113,000 $7,534,000* Includes debt service on $6,762,000 new bonds to be issued July 2013 to fund parking project Using a 5 percent maximum, an additional debt service capacity would be available on $393 thousand to $7.53 million of additional debt (not considering the current fiscal year 2013), in FY 2014 and FY 2017, respectively, if approved by PASSHE and the Board of Governors, for the years 2014 through 2017.Operations and ReservesBecause East Stroudsburg University has received limited funding from the Commonwealth Capital Budget for projects, and in order to keep our Debt Service to Unrestricted Revenue ratio within the range of 3% to 5%, the University has used operating funds and reserves to fund small projects.Over the past ten years, the University has funded $11.3 million of capital projects using Education & General operating funds and reserves. To follow is a summary of those projects.ProjectOperating & Reserve Funds Used to FinanceRenovation of Zimbar$2,279,000Monroe Hall Renovation 645,847Keystone Commons (Design) 344,000Alumni Center 359,400Koehler Fieldhouse Roof Replacement 1,100,000Science & Tech Museum Fitout 961,700Reibman Addition-Admissions 2,317,000Eiler-Martin Track Replacement 351,000Guaranteed Energy Savings Project 259,000Eiler-Martin Field Lighting 621,000Eiler-Martin Artificial Turf 1,098,000Kemp Library-Computer Lab Renov 978,000Total$11,313,947Future ProjectsThere are a number of capital projects in planning stages which could impact the Fiscal Year 2013-2014 budget including the fit-out of the Innovation Center in preparation for relocating the Hotel, Restaurant and Tourism Management and Business Management departments. Other capital needs that remain unfunded include the completion of the back-fill plan to optimize space in Stroud Hall, Gessner Hall and Koehler Fieldhouse. Yet another capital project that may need to be funded by the university is the replacement of one of the boilers in the central boiler plant. The University is planning to move forward with building a parking structure for approximately 220 cars over the existing lot behind Dansbury Commons and, in addition, develop another 130 surface parking spaces behind Zimbar and on two additional sites where currently there are small houses located. This $ 7.2 million project will be funded through Commonwealth bonds and parking reserves, with debt service being absorbed by the parking permit fee which has already been implemented.Finally, University Properties, Inc. (UPI), an affiliated non-profit organization, under a contract with Allen & O’Hara Development Corporation of Memphis, Tennessee, built 969 beds of new suite style housing in two buildings on the campus northwest of the intersection of Normal and Smith Streets. The newly built residence halls include offices for Residence Life, Campus Police and a new Fitness Center. Planning is currently underway to build an additional building which will house +/- 500 beds. The new building will house the Health and Counseling Center. However, the project is currently on hold awaiting court decision on the issue of real estate tax on the project. Any bonds for such projects are issued by UPI and the debt liability is maintained on their books and they are responsible for all debt service.Deferred Maintenance and Key 93Historically, PASSHE and its 14 universities have received a share of the Commonwealth’s transfer tax revenue to be used to fund deferred maintenance on PASSHE campuses. ESU’s annual share has been approximately $700k. This allocation has been uncertain in recent years and is forcing PASSHE universities, including ESU, to explore other funding sources for deferred maintenance. A recent study conducted by Sightlines, Inc indicates we are evolving into a younger campus as a result of completed projects such as Hemlock and Hawthorn Suites, the renovation of Monroe Hall and purchase of the Innovation Center. However, with this comes an increased need to maintain these facilities. Thus, although the Governor’s budget proposal for FY 2013-14 includes a $401k increase in these funds, the university needs to remain prepared to inject operating funds to compensate for what may be lost if Key ’93 funds are taken away, as they were in 2010, and/or to supplement any allocation of Key 93 dollars from the Commonwealth. Utility ProjectionsThe latest projections related to energy, prepared by Penn State Facilities Engineering Institute, show that natural gas reserves are higher than average and the outlook for electric is stable. Thus, it is safe to assume that rates for energy will not increase significantly. This, added to demand side load management and seeking advantage from voluntary load curtailment, makes it safe to assume a nominal increase of 4.4% in the utility budget for Fiscal Year 2013-2014 may be all that is needed.Human ResourcesESU’s greatest strength continues to lie in its human resources.In Fall 2012, there were 672 full-time employees and 157 part-time employees at East Stroudsburg University. Of these, 287 were full-time faculty and 43 were part-time faculty. 85% of full-time faculty was tenured or are on tenure track and 15% held the doctorate or other terminal degree.In comparison, in Fall 2011, there were 686 full-time employees and 157 part-time employees at East Stroudsburg University. Of these, 298 were full-time faculty and 69 were part-time faculty. 89% of the full-time faculty was tenured or on tenure-track and 82% held the doctorate or other terminal degree. In Fall 2010, there were 731 full-time employees and 76 part-time employees. Of these 332 were full-time faculty and 61 were part-time faculty. 84% of the full-time faculty was tenured or on tenure-track and 75.7% held the doctorate or other terminal degree.To follow is a comparison showing the change in human resources over the past three years.As the University develops its Enrollment Management plan, likewise a comprehensive Workforce Plan should be developed. Such a plan would provide the most appropriate level and placement of human resources on campus so as to enable successful implementation of the Enrollment Management and Strategic Plans.Financial Resources●●●“Based on my reading of East Stroudsburg University of Pennsylvania’s periodic review report, the independent auditors’ statements, financial ratio analysis and other information, the University appears to be under considerable financial stress. The uncertainty of future state funding, loss of ARRA funds and the fact that strategic, enrollment, and budget planning processes are not fully integrated will make the next five years particularly challenging for the institution.”Middle States Periodic Review Report…..Kenneth H. Levison, Middle States Financial Reviewer●●●20122011201020092008Operating RevenueTuition & Fees59,13553,25351,65849,56146,253Grants & Contracts15,78414,21813,88711,49710,362Sales & Services of Educational Departments1,642 1,7751,2781,4521,195Auxiliary Enterprises20,33220,27719,63419,08616,927Other Revenues1,108 64 748 703 619Total Operating Revenue98,00189,58787,20582,29975,356Non-Operating & Other Revenue22,64327,44329,55527,51130,533Total Revenue120,644117,030116,760109,810105,889East Stroudsburg University, although fiscally sound, is financially stressed due to declining state appropriation and enrollment. It received an unqualified opinion on its audited financial statements for Fiscal Year 2011-12. For the past five fiscal years, ESU has enjoyed increases in net assets as follows:The sources of the University’s operating revenue have been consistent and predictable. To follow is a Total Operating Revenues (summary in thousands).As is the case with revenues, University operating expenditures have been consistent and predictable. To follow is a Total Operating Expenses summary (in thousands).20122011201020092008Instruction42,77346,39544,96942,56040,637Research5585351.0651,2371,276Public Service1,8812,2741,9131,5921,264Academic Support11,18110,66111,64110,0637,077Student Service8,3358,6188,6148,1708,155Institutional Support17,62715,78916,14516,65316,272Operations & Maintenance of Plant7,3147,6417,6028,2347,160Depreciation7,6676,9846,1055,6233,827Student Aid5,5473,8173,4342,8442,790Auxiliary Enterprises14,80313,55412,51612,17112,300Total117,686116,268114,004109,147100,758Board of Governor’s Policy 2011-01 establishes expectations for long-term financial health of System entities through the measure of unrestricted net assets and operating margin.ESU met these requirements for Fiscal Year 2012, reporting a Ratio of Unrestricted Net Assets to Education & General Revenue of 15.65% and an Operating Margin of 5.93%. To follow is the calculation of these measures taken directly from the University’s 2012 FINRPT.Unrestricted Net Assets at June 30, 2012Purpose of ReserveAmountProvost’s Strategic Reserve 2,637,722Technology Fee 2,591,755Funds used to Balance 2013 Budget 1,827,154Facilities Projects 1,790,232Parking Reserve 1,070,803Self-supporting Accounts 706,407Performance Funding 657,849Scholarship Funds 577,361Funds Held in Trust 560,787Camps & Conferences 549,621ISF – Grant Matching 373,923Banner Project 362,325Program Accounts 359,620Science & Tech Bldg 258,562Orientation 217,543Ancillary Systems 188,483One Card Equipment Reserve 158,773Multilith Equipment Reserve 93,184PC Replacement Program 54,047ADA Transitions (23,999) TOTAL15,012,152It is important to note that while the Ratio of Unrestricted Net Assets to E&G Revenue exceeds the requirement of BOG Policy 2011-01, a great portion of the balance of Unrestricted Net Assets is earmarked for specific purposes and, to use those funds would require the University abandon the original purpose they were set aside. To follow is a summary of those Unrestricted Net Assets:EnrollmentDetermining enrollment growth for the University is one of the most difficult assumptions to determine when preparing the University’s 5-Year Budget Projections as we do not have a long-term enrollment management plan. The Division of Enrollment Management prepares a Freshman & Transfer Enrollment Plan for each Fall semester. This plan includes enrollment target recommendations for the upcoming Fall semester, retention strategies, financial considerations, and an enrollment goals time table. The lack of a strategically-linked enrollment management plan to the University’s strategic plan was noted by the Middle States decennial and periodic review evaluation teams. East Stroudsburg University’s administration recognizes the need for both short-term and long-term enrollment management plans that encompass summer, winter, academic year, graduate students and alumni. President Welsh will be engaging an outside consultant to assist the University with preparing our long-term plan.Until such plan is available, ESU’s budget projections continue to be prepared in collaboration with the Division of Academic Affairs and, specifically, the Office of Academic and Institutional Effectiveness. Historically, the University’s goals have been loosely organized around a sense of potential growth, which had been considered great, tempered by the desire to retain the intimate instructional atmosphere that has characterized the University for many years. When the University last completed a master plan, the figure settled on for total enrollment was 8,500 over a 10-15 year period. Unofficial annual projections have been for 1% growth in undergraduates and to allow graduate enrollment to float naturally as capacity for graduates is less constricted. This figure no longer seems practical. East Stroudsburg University had shown growth in enrollment between Fall 2008 and Fall 2009. Since that time, however, it has been experiencing declines, especially in graduate enrollment. Coupled with these declines we have seen growing student accounts receivable and declining new high school graduation rates which suggest development of an Enrollment Management Plan is critical at this juncture. The graphs that follow depict undergraduate, graduate and total headcount between Fall 2008 and Fall 2012. The University is taking measures to address its growing student accounts receivable by hiring an Accounts Receivable Collections Manager and also by working with a consultant to assist the University with the development of a strategy for addressing this growing problem. The graphs that follow show the growth of Student Accounts Receivable between June 30, 2008 and June 30, 2012.One other factor that must be carefully considered as we prepare our enrollment management plan is projected high school graduation rates. The map that follows shows the projected percent change in the number of new high school graduates for the years 2007 through 2020. Note the change in Monroe county from previous projections is a DECREASE of 29%. Also important to note, however, is projections for counties adjacent to Monroe County have INCREASED, some very significantly. The University needs to closely examine these projections as it develops its enrollment management plan.County% Cg in # of New High School GraduatesPike+278%Carbon+161%Luzerne+12%Northampton-2%Lackawanna-7%Monroe-29% Fund RaisingNow more than ever, private support through the East Stroudsburg University Foundation (ESUF) Annual Fund is crucial for East Stroudsburg University to make up the losses realized in declining support from the state. Supporting the University’s number one fundraising priority, increasing support for the operating budget, has been the Foundation’s first focus in building fundraising programs.The ESUF Annual Fund provides support for:Financial assistance to students through scholarshipsGrants to faculty for research Funding for all alumni events, reunions and activities Special alumni affinity mailings, invitations and newslettersRaising student awareness to embrace a culture of philanthropyThe ESUF Annual Fund continues to gain momentum in a challenging economic environment.YearTotalAmount Restricted to ESU Programs2010$521,927$355,5662011$698,777$461,5052012$907,664$543,4882013 (through 12-31-12)$431,800$276,878As of December 31, 2012, the ESUF Annual Fund raised $431, 800 towards its FY 12-13 $900,000 goal. Of the $431,800, $276,878 is restricted to programs at the University and its enhancement to University departmental budgets. In comparison, for FY 11-12, $907,664 was raised, of which $543,488 was restricted to programs at the University thus enhancing departmental budgets. Further comparison shows that the ESUF Annual Fund grew 30% from FY 10-11 to FY 11-12 and has grown 74% in the last two years (FY 09-10 compared to FY ll-12). The ESUF is cautiously optimistic that they will reach the $900,000 goal this year since 48% percent has been raised so far this fiscal year with six months remaining. The case to increase support for the ESUF Annual Fund through annual scholarships continues to resonate with alumni and friends. The ESUF is pleased to report that in FY 12-13 (through December 31, 2012), 35 new annual scholarships to benefit students have been funded for a total of $46,921 compared to 23 new annual scholarships totaling $49,080 in FY 11-12. In two years, over $96,000 in additional annual scholarship funds has been raised. The impact for students is immediate and visible as a credit line on tuition invoices. In FY 12-13 (through November 30, 2012), the ESUF awarded 213 endowed scholarships from 183 funds totaling $119,810 compared to 255 endowed scholarship from 181 funds totaling $259,775 in FY 11-12. FY 12-13, through November 30, 2012, the Foundation awarded 187 annual scholarships from 100 funds totaling $119,970 compared to 208 awards from 73 funds totaling $218,023. Revenue through ESUF annual scholarships has had the effect of doubling the revenue impact of our total endowment for scholarship support. The number of awards and amount awarded for the current fiscal year 2012-2013 reflect disbursements through November 30, 2012. Spring scholarships have yet to be advertised, selected or disbursed. Additionally, number of awards and amounts awarded are both on track to realize increases over last fiscal year. Athletic fundraising also continues to gain momentum. In FY 12-13 through December 31, 2012, $171,616 has been raised for athletic purposes or 52% of FY 11-12 results. Athletic FundraisingFY 2013 (through December 31, 2012FY 2012FY 2011Non-scholarship$121,984$178,575$187,937Annual Scholarship$40,787$88,503$25,560Endowed Scholarship$8,845$59,554$17,350 Total$171,616$326,632$230,847Current fiscal year to date fundraising for new gifts and new pledges is also encouraging. The Foundation has raised $3.01 million in new gifts and new pledges through December 31, 2012, compared to $2.18 million for the entire fiscal year 2012. The Faculty and Staff Campaign will kick off in mid-February. Budget HighlightsState AppropriationThe Governor recommended level funding for higher education in his February 5, 2013 budget announcement. This budget assumes such level funding.TuitionThis budget assumes a 3% tuition rate increase and a -1% enrollment increase.Off-Campus Revenue OpportunitiesEast Stroudsburg University continues to pursue off-campus opportunities in Philadelphia and Lehigh Valley. These additional revenues and related costs are reflected in the budget. Important to note, deficits are being projected for both over the 5-years of these budget projections.Other New Revenue OpportunitiesEast Stroudsburg University will be introducing its new Early Start Program for Summer 2013 and China Cohort Program for Fall 2013. These additional revenues and related costs are reflected in the 5-year budget projections. On the non-operating side of the house, these budget projections include estimated royalty income from the commercialization of Lyme-Aide.Performance FundingA new methodology for performance measurement has been implemented with the current fiscal year. As it is difficult to predict the impact of the new methodology, we are holding this revenue source level.FeesThis budget assumes fees increase at the same rate as tuition.Salaries & BenefitsSalaries & Benefits are as per PASSHE Budget Assumptions plus LV and Philadelphia (the full effect of the APSCUF contract is not reflected in the projections that follow).Operating BudgetThis budget assumes level funding.Debt ServiceThis budget includes an increase in mandatory transfers for debt service on $6.7M of new debt to be issued July 2013 for the parking project.Banner ImplementationThe Banner Implementation is ongoing and dedicated, additional human resources to ensure the project’s success (consultants, temporary employees, and student workers) are anticipated to continue through Fiscal Year 2016-2017 and are included in the budget.Purchase of Innovation CenterThe University closed on the Innovation Center in December 2012. The purchase of this building saves us $842,160 of lease payments per year. Deferred MaintenanceHistorically ESU received approximately $700K of Key 93 dollars earmarked for deferred maintenance. In his February 5, 2013 budget announcement, the Governor proposed an increase of approximately $401k in Key 93 dollars for PASSHE which equates to approximately $30k for ESU.The 2013-2014 Education and General BudgetEarly projections show a deficit of $3.0 million before the full impact of the APSCUF contract is incorporated into the budget.A number of mandatory costs were considered in the development of this budget. A total of $1 million in pension and healthcare cost increases (including annuitant’s hospitalization) are built into the budget. Other costs include $5.0M of debt service due to capital projects committed to and/or completed in prior years with an additional $436k of new debt service for bonds to be issued in July 2013 for the parking project.Summary CalendarEast Stroudsburg UniversitySchedule for Completion of the 2013-2014 BudgetActivityDateBudget Planning Session (Environmental Scan)February 13, 2013Senate Budget & Planning Committee Seek University advice & council regarding budgetLate February 2013President's Guidance MemorandumLate February 2013Annual Budget HearingsApril 2013Budget Summarized for Senate Committee andApril 2013 President's CouncilSenate Budget & Planning Committee meets to discussMid May 2013 2013-2014 budgetPresident's Council reviews recommendationsMay 2013 from Senate CommitteeAssessment ActivitiesMay/June/July 2013BOG decides tuitionJune ,July 2013Appropriations receivedAugust 2013Budget FinalizedMid August 2013Feedback on budget to University CommunityAugust 2013Budget presented to Council of TrusteesSeptember 2013NotesAcknowledgementsThis document was prepared through a collaborative effort of constituents from all divisions on the University’s campus and the East Stroudsburg University Foundation, Inc. ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download