Dr. Les WongDr. Les WongPresidentPresident

Mr. Gavin Leach, Mr. Gavin Leach, Vice President for Finance and AdministrationVice President for Finance and Administration

July 9, 2010July 9, 2010

Budget and TuitionBudget and Tuition

Small group meetings around campus

January 10, 2010 – Sent 10 planning points for campus to focus their thinking

Focus of senior staff and President’s Council agenda

Focus of Academic Cabinet

KEY: Sustain quality instruction

Preserve the student experience

Delivering a plan for 2010-2011Delivering a plan for 2010-2011

PlanPlan ActionActionMaking significant changes to the way we use our facilities, which will impact class schedules and work weeks. This includes space and schedule consolidation to maximize use of classroom space to generate energy savings

Began priority scheduling by zones; adjusted building system activation and shutdown tighter to building schedule

Examine employee scope of work and seek to maximize coverage and assignments

Began restructuring job duties across divisions to maximize coverage of administrative functions;

Service levels will be examined and changed; workforce and succession planning will be considered

MPSERS retirement will create staffing changes across university operations; facility system and service levels through performance contracting

10 Planning Points10 Planning Points

10 Planning Points10 Planning Points

PlanPlan ActionActionSeek some permanent building closures

Demolition of Overtime completed; reviewing plans for Carey Hall

Review academic portfolio. Determine what measures will be used to evaluate continued department support.

EPC has begun process with Provost to review academic portfolio

Review sports team portfolio. What array of varsity, club, and intramural activities justifies continued investment and/or opportunities for enrollment growth and revenues?

Athletic Director has begun review process of all programs to determine best mix and opportunity for enrollment growth and revenues

Assess, evaluate, and decrease technology costs

Reorganized technology departments; reduced costs on technology staffing, purchases, and insurance

Identify and invest in new revenue positive initiatives

Expanding graduate programs and online programs; changed dining services operations

10 Planning Points10 Planning Points

PlanPlan ActionActionExamine unit and divisional reorganizations including support services and auxiliary functions

Cash handling operations between dining, auxiliary, and financial services; reorganizing other accounting operations; technology

Identify and implement new policies and procedures that bring about savings in benefits/services, including health care savings and retirements savings

Restructured health plan in FY2010 through cooperative arrangement with 12 universities (MUCH) projected to reduce costs by $200,000 annually; MUCH will be sending out an RFP soliciting information from health care TPAs; discussions with benefits liaison group on health and other benefits; completed RFP on life and LTD resulting in projected savings of $90,000 over three years; exploring prescription drug carve-out

NMU’s expenditures increased at an average annual rate of 2.21% per

year over the past 10 years which is below the rate of inflation. Reductions in operating costs have been accomplished by:

◦ Reorganizations◦ Streamlining processes that have reduced administrative staffing◦ Reducing overall staffing 3% while increasing enrollment 27.8%◦ Changing the mix of faculty to be more in line with other state universities◦ Increasing class size and extensive use of technology to deliver services◦ Cutting administrative costs◦ Cutting health care benefit costs (through restructuring health plan and

employee share of costs

However, some costs cannot be controlled:◦ Energy prices◦ Health care costs◦ State mandates for pension costs

Controlling CostsControlling Costs

FY2010-11FY2010-11Tuition and Budget Planning

State of Michigan Assumptions

◦ Continuation budget in an election year

◦ No new money to NMU – projected 3.1% reduction

◦ Executive Orders likely in 2011

◦ Michigan’s challenge: Revenue, Reform, Reductions

State of MichiganState of Michigan

Other ConcernsOther Concerns

Fiscal year 2011 NMU GoalsFiscal year 2011 NMU Goals

Maintain affordable tuition and fees

Maintain enrollment

Protect curriculum

Control costs

Maximize efficiencies

Protect ability to invest in and grow programs

Increase financial aid to protect and assist need-based students and ensure access to Northern

Alternative BControl costs – limit net expenditure adjustments to 0.9% (budget reductions of $1.1 million)

Increase tuition and fees by $205 per semester for full-time resident undergraduate students (maintain second lowest tuition and fees in the state)

Issue a tuition credit of $192 for full-time resident undergraduates – fall semester increase will be reduced to $13 for students versus the prior year with the credit

Increase financial aid by 9.5% ($1.1 million)

Increase nonresident undergraduate tuition and fee $226 per semester (since they are not eligible to receive stimulus credit on tuition and fees)

Increase graduate rate by $28 per credit hour – to enhance support expanding graduate programs (NMU has lowest grad rate in state)

Tuition AlternativesTuition AlternativesSummary HighlightsSummary Highlights

Need-based StudentsNeed-based Students(Alternative B -- Impact of $205 per semester tuition increase)(Alternative B -- Impact of $205 per semester tuition increase)

Annual

EFC FY10 # of w/$205 Incr 2009-2010 Incr (Decr) in(Need Categ) Students NMU Tuition Pell Grant * NMU BOT ARRA Credit Net Tuition Net Tuition Net Tuition

0 1,791 $7,864 $5,550 $2,000 $192 $122 $174 ($52)

1-500 259 $7,864 $5,300 $1,550 $192 $822 $854 ($32)

501-1000 168 $7,864 $4,800 $1,270 $192 $1,602 $1,624 ($22)

1001-1500 161 $7,864 $4,300 $980 $192 $2,392 $2,404 ($12)

1501-2500 297 $7,864 $3,550 $860 $192 $3,262 $3,274 ($12)

2501-4617 568 $7,864 $2,048 $700 $192 $4,924 $4,926 ($2)

* EFC = Expected Family Contribution (0 EFC = Highest need level)

* Average award per EFC group.

2010-2011 Award TableNet Tuition For Students Receiving Pell Awards

Automatic Need Based Awards

NMU today isNMU today is

Stable

Well-positioned

We have a road map

We have a campus master plan

We will direct our own change

QuestionsQuestions