ALL FUNDS OPERATING BUDGET FY2020 - University of Arizona Budget Document FY20...The University of Arizona’s Y2020 budget is a reflection of its strategic plan to improve rankings

Institutional Budget Document Page 1

ALL FUNDS OPERATING BUDGET

FY2020


Table of Contents Introduction ............................................................................................................................................................ 3

Budget Highlights .................................................................................................................................................... 3

General Fund Changes ............................................................................................................................................ 3

Base Tuition Rate Increase % .................................................................................................................................. 3

Mandatory Fees Increase ........................................................................................................................................ 4

Enrollments ............................................................................................................................................................. 4

Utilities .................................................................................................................................................................... 4

Leases ...................................................................................................................................................................... 4

ASC Rate .................................................................................................................................................................. 5

Facilities and Administrative Cost Recovery ........................................................................................................... 6

Responsibility Centered Management (RCM) ........................................................................................................ 6

Organizational Changes .................................................................................................................................. 7

Financial Aid ............................................................................................................................................................ 7

All Funds Operating Budget .................................................................................................................................... 8

Permanent Allocated Funding Base Report ............................................................................................................ 8

Spending Authority ................................................................................................................................................. 8

Gross Tuition & Fees Detail ..................................................................................................................................... 8

Auxiliary Report ...................................................................................................................................................... 8

Capital Development Plan ...................................................................................................................................... 8

Financial Status ....................................................................................................................................................... 8

Appendix 1-1: All Funds Operating Budget FY2020 ................................................................................................ 9

Appendix 1-2: All Funds Operating Budget FY2019 vs. FY2020 ............................................................................ 10

Appendix 2: Permanent Allocated Funding Report (1 of 2) ................................................................................. 11

Appendix 3: Spending Authority ........................................................................................................................... 13

Appendix 4: Gross Tuition and Fees Detail ........................................................................................................... 14

Appendix 5: Auxiliary Report (1 of 3) .................................................................................................................... 15



Appendix 6: Capital Development Plan (1 of 3) .................................................................................................... 18



Appendix 7: Financial Status ................................................................................................................................. 21


Introduction The University of Arizona’s FY2020 budget is a reflection of its strategic plan to improve rankings and enrollments through external engagement, brand management, student experience, research, and a renewed focus on Health Sciences. After last year’s $8.6 million increase in State General Fund appropriation, the University of Arizona will receive a $15.1 million increase in FY2020 to help fulfill its operational and educational needs. The FY2020 budget of $2.7 billion represents a $60.7 million or 2% increase over the FY2019 budget.

Budget Highlights General Fund Changes The table below explains general fund changes from FY19 to FY20:

FY19 General Fund $ 277,734,100

Health Insurance Trust Fund Adjustment 1,049,400

Remove Freedom Center One-Time Funding (1,000,000)

Research Infrastructure Adjustment (800)

Capital Infrastructure Adjustment 211,000

Remove FY19 One-Time Funding (2,164,800)

FY20 One-Time Funding 9,450,000

Phoenix Medical Campus Expansion 8,000,000

Statewide Adjustments (572,300)

FY20 General Fund $ 292,706,600

Base Tuition Rate Increase % FY20 represents a 5% non-guaranteed tuition increase for Undergraduate students, 1-2% increase for new students enrolling in the Guaranteed Tuition program, 2% increase for resident Graduate students, and a 3% increase for College of Medicine-Resident students. Tuition did not increase for non-resident Graduate students.

FY19 FY20 Increase %

Undergraduate-Resident $10,467 $10,991 $524 5%

Undergraduate-Resident (CAST-Sierra Vista) $8,548 $8,719 $171 2%

Undergraduate-Resident Guaranteed Tuition $11,077 $11,299 $222 2%

Undergraduate-Non-Resident $31,688 $33,273 $1,585 5%

Undergraduate-Non-Resident Guaranteed Tuition $34,976 $35,326 $350 1%

Graduate-Resident $11,716 $11,938 $222 2%

Graduate-Non-Resident $32,065 $32,065 $0 0%

College of Medicine-Resident* $31,652 $32,602 $950 3%

College of Medicine-Non-Resident $54,180 $54,180 $0 0%


Mandatory Fees Increase FY20 did not see increases to Mandatory student fees, except for a slight change to Arizona Financial Aid Trust (AFAT) which is indexed to the current Undergraduate Resident Tuition Rate a 1%.

Enrollments Below is a history of enrollment for the past six years, FY20 Enrollment change projected for FY20 Budget Submission, and FY20 Total Projected Enrollment:

FTE FY14 FY15 FY16 FY17 FY18 FY19

FY20 Proj

Change

FY20 Proj Total

Grad Non-Resident 3,627 3,821 3,795 3,855 3,920 4,095 26 4,121

Grad Resident 3,883 3,908 4,069 4,053 4,039 4,077 27 4,104

Undergrad Non-Resident 10,445 11,551 12,321 12,566 12,498 12,458 (303) 12,155

Undergrad Resident 22,117 22,351 22,379 22,275 22,931 22,927 (299) 22,628

College of Med-MD 719 757 759 821 817 819 0 819

Total 40,791 42,388 43,323 43,570 44,205 44,376 (549) 43,827

Utilities Utilities budget funded from Educational & General sources increased 1.9% from $35.6M to $36.4M in FY20.

Leases No change in FY20 base budget from FY19.


ASC Rate The purpose of the Administrative Service Charge (ASC) is to recover overhead costs incurred by the institution on behalf of units which are not directly funded by either state appropriations or sponsored grants and contracts. There are currently two components of the Administrative Service Charge (ASC). The first component is the ASC assessed at 11.0%; this rate is charged on external revenues on accounts that fall within the Auxiliary and Designated fund groups. Only revenues from external sources are used to calculate the ASC. The following revenues (identified as internal by object code) are excluded:

1. Revenues from interdepartmental billings and gifts. 2. Institutional fees (such as tuition, art fees, indirect cost, and utility pass-through charges).

The second component of the ASC is an assessment of 2.0% on operational expenditures (excluding student aid, cost of goods sold – including animal and feed, the ASC revenue component – Object Code 7955, and transfers) on all auxiliary and designated funds unless protected, for example, institutionally mandated accounts, service centers, mission support agreements, and allocated designated funds. Splitting the ASC rate into a revenue and expenditure component broadens the base of funds, provides greater flexibility in recovering funds across a fiscal period instead of all at once, balances out recovery mechanisms between auxiliary units that have greater rate variability, and encourages strategic investments and savings.

The revenues generated from the Administrative Service Charge (ASC) are used specifically to support overhead costs (activities on campus which benefit the entire institution, but which are not easily assignable to any one unit, for example, utilities, payroll and procurement processing). ASC revenue is projected at $27.8M for FY20. History of ASC rates:

ASC Rate - Revenue

ASC Rate - Expenditure

FY08/09 8.00% FY09/10 9.00% FY10/11 9.00% FY11/12 9.00% FY12/13 9.00% FY13/14 9.00% FY14/15 9.00% FY15/16 9.50% 1.00%

FY16/17 9.50% 1.00%

FY17/18 9.50% 1.00%

FY18/19 9.50% 1.00%

FY19/20* 11.00% 2.00% *FY19/20 ASC Rate was increased mid-fiscal year.


Facilities and Administrative Cost Recovery The university receives reimbursement for facilities and administrative costs, or indirect costs, associated with external research. A portion of this reimbursement is returned to the colleges to support research activities that cannot be directly charged to Grants. Rates Charged to Grants & Contracts: The F&A Cost Recovery rate varies depending upon type and location of the research activity. The current FY20 on-campus Organized Research rate is 53.5% and off-campus rate is 26%. These rates, which are approved in the Colleges and Universities Rate Agreement, are generally for use on grants, contracts, and other agreements with the Federal Government. Indirect Cost Revenue Distribution to the University and the Colleges: F&A Cost Recovery allocation was historically 75% to the university and 25% to the colleges through FY15. Beginning in FY16 with the implementation of RCM, 100% of incremental changes in total Indirect Cost revenues are attributed and allocated to colleges net of assessments using the RCM distribution model. The Facilities & Administrative Perm Base Recovery projections increased to $104M in FY20 from $98.7M in FY19.

Responsibility Centered Management (RCM) In FY16, the University adopted an RCM framework for allocating incremental budget. Allocations for the FY20 budget were based upon the level of activity change incurred by responsibility center units for the prior fiscal year (i.e., the change in activity from FY18 to FY19). Revenues allocated through the RCM framework are base undergraduate & graduate tuition, program fees, differential tuition, and facility & administrative cost recovery from grants. These incremental revenues are allocated net of Regents Set Aside and other institutional financial aid and assessments for institutional & support center costs, Provost investments, and facilities space use. An increase of $2.25M was allocated in the FY20 budget. Of this total amount, colleges received an allocation of $857.8k while institutional & support center allocations increased by $1.4M. The FY20 allocations were based upon the following model elements:

• Undergraduate Tuition Allocation – 75% based upon weighted student credit hours (SCH), 25% based upon student major/college of enrollment

• Graduate Tuition Allocation – 75% based upon student major/college of enrollment, 25% based upon student credit hours

• Program Fees & Differential Tuition – 100% allocated to the college that owns the fee or differential tuition

• Facilities & Administration (F&A) Cost Recovery from Grants – 100% to the college associated with the grant award

• Institutional & Support Center Expense Recovery – 30.96% of undergraduate tuition and 12.38% of graduate tuition revenue, program fees, differential tuition and F&A cost recovery revenues

• Strategic Investment Rate– 2.66%

• Facilities Rate – $25.48 per net assignable square foot (NASF)


Organizational Changes New Organizations were created for Office of University Initiatives, UAHS Brain Science, Neurosurgery, Urology,

Tumamoc Hill, Office of Societal Impacts, Arizona Space Institute, Comp Pain and Addiction Ctr, A Center, Cloud

Operations, IT Service Management, Ctr for Violence Prevention, Office of the Ombuds, Office of Prevention Education

and Training, Office of Advocacy and Support, National Institute for Civil Discourse, DC Center Outreach and

Collaboration, Academic Administration, General Education Administration, Distance Education, and Office of University

Initiatives. Name changes included those for Arizona Center for Integrative Medicine to Andrew Weil Center for

Integrative Medicine, Research Development and Innovation (RDI) to Research Innovation & Impact (RII), and UA South

to College of Applied Science and Technology. Movement of Division of Equity, Inclusion and Title IX and University

Information and Technology Services (UITS) to Secretary of the University, VP Tech Launch Arizona to SVP Research and

Innovation, Freedom Center to RII Centers & Institutes, Office of the Registrar to Academic Affairs Division, and Student

Engagement and Career Development to Enrollment Services. New SVP Levels created for Secretary of the University,

General Counsel, Intercollegiate Athletics (ICA), Development, Marketing and Communications, and Research and

Innovation.

Financial Aid ABOR Policy 4-321 states that the Regents set aside for financial aid for each university shall be 14% of the result of multiplying the resident tuition rate for the academic year by the estimated sum of resident full pay equivalents and non-resident full pay equivalents. The Board may consider additional Regents set aside amounts at its discretion. In years FY09 and prior, the university set aside 15%. From FY10 to FY13 the regents required the universities to set aside 17%. Beginning in FY14, per ABOR, the set aside amount is to be calculated on 14% of the margin. Beginning in FY16, Regent’s set aside is no longer being collected on Mandatory Fees.


All Funds Operating Budget Appendix 1-1: All Funds Operating Budget FY2020 includes 2020 Operating Budget for All Funds, presented in total sources, total uses by program, and total uses by natural expense category. Appendix 1-2: All Funds Operating Budget FY2019 vs. FY2020 includes All Funds Operating Budget for FY2019, FY2020, and change from FY2019 to FY2020. (Note: These tables include interdepartmental transfers and other budget considerations which are eliminated in financial statements.)

Permanent Allocated Funding Base Report FY20 Permanent Allocated Funding Base report including State and Locally Allocated information is listed in Appendix 2: Permanent Allocated Funding Base.

Spending Authority FY20 Spending Authority includes State Expenditure Authority for FY2020 Original Budget, FY2019 Revised Budget, and the changes between the two. See Appendix 3: Spending Authority for details.

Gross Tuition & Fees Detail The table in Appendix 4: Gross Tuition and Fees Detail lists five-year history (FY2016-FY2019) and one-year estimate (FY2020) of Gross Tuition and Fee Revenues.

Auxiliary Report The tables in Appendix 5: Auxiliary Report (1 of 3), Appendix 5: Auxiliary Report (2 of 3), Appendix 5: Auxiliary Report (3 of 3) list five-year history (FY2015-FY2019) and one-year estimate (FY2020) of Total Sources, Total Expenditures, and Ending Balance for Auxiliary Enterprise.

Capital Development Plan The table in Appendix 6: Capital Development Plan (1 of 3) includes board approval status and other detailed information about new and revised capital projects. The table in Appendix 6: Capital Development Plan (2 of 3) includes annual debt service funding sources for new and revised capital projects. The table in Appendix 6: Capital Development Plan (3 of 3) includes operational and maintenance funding sources for new and revised capital projects.

Financial Status The table in Appendix 7: Financial Status includes FY2019-FY2020 actual financial status with FY21 & FY22 projections.


Appendix 1-1: All Funds Operating Budget FY2020


Appendix 1-2: All Funds Operating Budget FY2019 vs. FY2020


Appendix 2: Permanent Allocated Funding Report (1 of 2)



Appendix 3: Spending Authority


Appendix 4: Gross Tuition and Fees Detail

University of Arizona Gross Tuition and Fees Revenue Detail (in thousands)

FY 2016 Actual

FY 2017 Actual

FY 2018 Actual

FY 2019 Actual

FY 2020 Projected

Fall/Spring Base Tuition $642,060 $668,613 $664,746 $675,140 $683,216

NR UG $324,575 $345,205 $336,825 $344,182 $348,811

RES UG $205,516 $209,887 $215,301 $216,985 $217,923

NR Grad $55,748 $58,366 $57,239 $57,894 $60,914

RES Grad $56,221 $55,156 $55,382 $56,080 $55,568

Online $10,616 $29,851 $40,476 $49,671 $59,903

NR UG $1,062 $2,687 $5,616 $8,593 $12,282

RES UG $1,043 $2,388 $4,992 $7,639 $10,917

NR Grad $3,668 $12,538 $15,114 $16,921 $18,573

RES Grad $4,843 $12,239 $14,754 $16,517 $18,131

Prog Fees/Diff $38,241 $32,904 $34,006 $33,607 $34,232

UG $15,798 $17,069 $17,452 $17,191 $17,448

Grad $22,443 $15,835 $16,554 $16,416 $16,784

Course Fees $5,976 $5,863 $6,156 $6,174 $6,174

UG $4,781 $5,394 $5,664 $5,680 $5,680

Grad $1,195 $469 $493 $494 $494

Ext Ed Fees $13,268 $14,018 $16,761 $16,996 $18,691

Non-Degree $4,408 $4,393 $4,499 $4,217 $4,244

Summer Session $35,095 $40,944 $36,875 $37,005 $37,249

Mandatory Fees $40,129 $39,899 $43,916 $46,880 $47,629

UG $32,906 $33,116 $36,450 $38,442 $39,056

Grad $7,223 $6,783 $7,466 $8,438 $8,573

Other Misc. $18,652 $19,325 $21,136 $21,928 $23,841

Total Tuition & Fees $808,446 $855,810 $868,571 $891,616 $915,179

1. Program Fee and Differential Tuition Revenue reflects State only - Other Program Fee and Differential

Tuition revenue reflected in Summer Session and Extended Education.

2. Totals do not include Scholarship Allowance or Uncollectible Bad Debt.


Appendix 5: Auxiliary Report (1 of 3)

University of Arizona- AUXILIARY ENTERPRISE

TOTAL SOURCES

FY15 FY16 FY17 FY18 FY19 FY20 EST

AUXILIARY ENTERPRISES Bookstore 33,983,700 31,589,000 29,817,600 28,360,800 27,961,400 28,880,900 Campus Recreation 2,107,000 2,161,900 2,200,200 2,246,900 2,418,600 2,838,200 Facilities Management 23,971,600 25,444,500 52,175,000 53,594,000 57,112,300 57,764,700 Intercollegiate Athletics 76,347,200 71,541,600 76,873,700 79,108,400 82,989,200 82,877,700 Parking 21,621,500 18,150,500 19,271,500 19,430,000 20,141,000 20,149,400 Residence Life 49,712,800 50,905,800 52,132,300 51,489,800 54,651,600 61,736,600 Student Health 6,541,600 6,586,500 7,048,600 7,682,500 7,919,200 8,261,400 Student Union 34,124,000 35,816,300 35,949,900 34,910,400 36,088,300 38,983,500 Other Auxiliary 21,006,800 23,817,000 23,005,000 23,222,500 21,207,300 22,030,800

TOTAL AUXILIARY 269,416,200 266,013,100 297,955,800 300,045,300 310,488,900 323,523,200

*Includes transfers which are eliminated at fiscal year-end.



University of Arizona - AUXILIARY ENTERPRISE

TOTAL EXPENDITURES


AUXILIARY ENTERPRISES

Bookstore 33,179,300 31,716,000 28,979,600 28,935,900 28,287,800 31,062,700

Campus Recreation 1,764,200 1,789,300 3,286,500 1,953,200 2,251,600 2,670,900

Facilities Management 27,511,000 21,679,700 52,829,700 52,770,400 55,914,500 58,289,900

Intercollegiate Athletics 72,593,200 74,066,200 77,653,900 89,344,800 78,139,500 82,800,600

Parking 21,477,100 18,347,100 17,767,100 19,631,800 20,136,300 20,436,100

Residence Life 49,452,300 50,915,000 52,395,800 42,504,600 53,948,300 62,028,200

Student Health 6,002,400 6,546,400 7,293,100 7,345,800 7,919,200 9,199,700

Student Union 34,076,100 35,199,300 35,267,500 34,856,600 35,764,200 38,876,300

Other Auxiliary 22,025,900 23,200,400 21,517,800 22,715,700 20,399,300 21,895,900

TOTAL AUXILIARY 268,081,500 263,459,400 296,473,000 300,058,800 302,760,700 327,260,300




University of Arizona – AUXILIARY ENTERPRISE

ENDING BALANCE


AUXILIARY ENTERPRISES

Bookstore 11,618,600 11,491,600 12,329,600 11,754,500 11,428,100 9,246,300

Campus Recreation 924,100 1,296,700 210,400 504,100 671,100 838,400

Facilities Management 3,660,300 7,425,100 6,770,400 7,594,000 8,791,800 8,266,600

Intercollegiate Athletics 8,951,100 6,426,500 5,646,300 (4,590,100) 259,600 336,700

Parking 480,300 283,700 1,788,100 1,586,300 1,591,000 1,304,300

Residence Life 768,900 759,700 496,200 9,481,400 10,184,700 9,893,100

Student Health 1,561,000 1,601,100 1,356,600 1,693,300 1,693,300 755,000

Student Union 537,800 1,154,800 1,837,200 1,891,000 2,215,100 2,322,300

Other Auxiliary 1,595,900 2,212,500 3,699,700 4,206,500 5,014,500 5,149,400

TOTAL AUXILIARY 30,098,000 32,651,700 34,134,500 34,121,000 41,849,200 38,112,100



Appendix 6: Capital Development Plan (1 of 3)

THE UNIVERSITY OF ARIZONA FY 2020 CAPITAL DEVELOPMENT PLAN


Appendix 6: Capital Development Plan (2 of 3)

THE UNIVERSITY OF ARIZONA FY 2020 CAPITAL DEVELOPMENT PLAN


Appendix 6: Capital Development Plan (3 of 3) THE UNIVERSITY OF ARIZONA

FY 2020 CAPITAL DEVELOPMENT PLAN


Appendix 7: Financial Status

*Source: ABOR Operational Financial Review

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ALL FUNDS OPERATING BUDGET FY2020 - University of Arizona Budget Document FY20...The University of Arizona’s Y2020 budget is a reflection of its strategic plan to improve rankings