Northern Arizona University: Business Plan

Office of the President

Northern Arizona University: Business Plan

Arizona Board of Regents

June 17 2011June 17, 2011


OVERVIEWThe NAU business plan

– identifies university’s distinctive characteristics

– considers its competitive position among public high research– considers its competitive position among public high research institutions and ABOR approved peers,

– outlines institutional portfolio and metrics, p ,

– provides funding scenarios to meet the Vision 2020 goals under different funding structures, and

– highlights challenges and opportunities that the university faces in delivering on its mission.

2


OPERATIONAL FRAMEWORKArizona is:•One of the states most impacted by

Arizona is:•49th in high school drop‐out rates

th d l ll d

College readiness

One of the states most impacted by recession•32nd in proportion of population with at least a bachelor’s degree•4th in proportion of population with

•45th in young adults ages 18‐24 enrolled in or completed college•44th in college participation of low‐income students

th d k ll f th d

P l ti

(K‐12 Performance)

State Economy Inputs

4 in proportion of population with Hispanic origin

•41th in reading skills of 8th graders•49th in math skills of 8th graders

NAU:$Population

Demographics

y(Public Support)

•Managed $63M in state cuts since 2008 (36% decrease in State General Fund)

Degrees

•State General Fund Appropriation per FTE is lower than it was over 20 years ago ( )

3

g(1989‐90)•No enrollment growth support since FY 2009


MISSION FOCUS

To provide an outstandingTo provide an outstanding

undergraduate residential

education strengthened by

research, graduate and

professional programs, and

sophisticated methods ofsophisticated methods of

distance delivery and

innovative new campuses

and programs throughout

the state.

4


DISTINCTIVE CHARACTERISTICS OF ADISTINCTIVE CHARACTERISTICS OF AREGIONAL UNIVERSITY

• Undergraduate students in• Core of university mission • Undergraduate students in research

• Selective areas of excellence• Regional focus

• Lower research expenditures

• Core of university mission• Highly residential main campus (88% of full‐time freshman students live on campus)

• Smaller class sizes (84% of • Lower research expenditures• Mostly federally and state funded grants and contracts

(81% of all awards in 2011)

Smaller class sizes (84% of freshman level classes are smaller than 50 students)

• Smaller athletics program• First generation students

Undergrad. Education/ Student

Research Focus

Research Focus

• Pell grant recipients Profile

Budget, FinancialStatewide

•More dependent on tuition revenue and state funding

• 1/3 of students off main campus

• Extensive network of community campuses

Financial Aid & Tuition

Statewide Access

revenue and state funding• Predictable pledge tuition

• Lower financial aid award levels

community campuses• 90% of all AUS online degrees• Older students, rural areas• Pilot: NAU‐Yavapai

5


PERFORMANCE GOALS

6


NAU PERFORMANCE METRICS

• Highest percentage headcount and FTE growth in the AUS Enterprise from 2006‐2011

• Highest percentage growth in new transfers from Arizona g p g gcommunity colleges in the Enterprise since 2006; further growth expected from:

2NAU J i t Ad i i2NAU Joint Admissions

Investment adding programs at NAU‐Yuma

• Bachelor’s degree percentage growth expected to be highest in AUS Enterprise for the next three years (average growth ~9%)

7


2005‐2020 TOTAL HEADCOUNT ENROLLMENT 2020 Target = 30,300 Enterprise GoalTarget = 40,000 P j t d

25000

30000

Target 40,000

25,204

Projected

15000

20000 19,069

10000

15000

0

5000

2005 2006 2007 2008 2009 2010 2020

8

2005 2006 2007 2008 2009 2010 2020

Flagstaff Online/statewide Yuma Yavapai


5,000

BACHELOR'S DEGREES AWARDED 2020 Original Silver Target = 4,400;2020 New Target =4,900

4,500

Degree Production is a lagging indicator:

NAU’s huge enrollment growth from

4,000

NAU s huge enrollment growth from 2006‐2011 will mean large gains in bachelor’s degree graduates over the next three years

3,500

2 500

3,000

9

2,500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2020


1994 2020 F T F T O Y

85.0%

1994‐2020 FIRST‐TIME, FULL‐TIME ONE‐YEARRETENTION RATE

Enterprise Goal

80.0%

Enterprise Goal Target = 85%

2020 Silver Target = 78%

71.5%75.0%

ProjectedProjected

70.0%

60 0%

65.0%

10

60.0%

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020


1999 2020 SIX YEAR GRADUATION RATE65.0%

1999‐2020 SIX‐YEAR GRADUATION RATEEnterprise GoalTarget = 65%

60.0% 2020 Silver Target = 60%

50.0%

55.0%

ProjectedProjected

50.0%

45.0%

11

40.0%

19…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…

20…


2020

RESEARCH AND PUBLIC SERVICE EXPENDITURESProjectedProjected

$28.8 $26.9

2009

20102020 Silver Target = $80M

2008

2009 = $80M

Enterprise GoalTarget = $100M

2006

2007Target $100M

2004

2005Research Expenditures

Public Service Expenditures

12$0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0


Mi bi l ti d i

Selective Areas of Strength

• Microbial genetics and genomics

• Renewable energy

• Landscape and resource conservation

H l d ltStrength • Human language and culture

• Undergraduate research

Research Strategy• Enhance academic programs

• Focus on regional problems

• Workforce development

Research

Workforce development

• Innovation/ economic development/ NACET

Research Infrastructure • Compliance

• Financial management/research administration software

13

• Enhanced technology transfer framework


RESEARCH AND PUBLIC SERVICE HIGHLIGHTS• 25 technologies currently available for licensing or development• 25 technologies currently available for licensing or development

• Recent successful spin‐offs: Eccentron, PathoGene, SunWind Solutions…

• Ecological Restoration Institute, Landscape Conservation Analysis, Sustainable Energy Solutions

• Partnerships (NACET, Science Foundation AZ, Colorado Plateau Cooperative Ecosystem Studies Unit)

• Bisgrove Postdoctoral Fellowships supported by Science Foundation Arizona

• Expertise addressing national and regional challenges (forest management, renewable energy ): Paul Keim Wally Covington Tom Ackerrenewable energy…): Paul Keim, Wally Covington, Tom Acker

– Emerging infectious diseases

– Four Forest Restoration Initiative agreement: the largest forest restoration

14

project in the world


MASTER PLAN FOR FLAGSTAFF CAMPUS

15


CAPITAL PROJECTSCompletion 2012Completion Fall 2011

• San Francisco Parking Garage

• Residence Halls

• Ardrey Auditorium

• Health and Learning Center

• Skydome

• Liberal Arts • Ardrey Auditorium

• Classroom Upgrades

• Liberal Arts

• North Plant

• Native American Cultural Center

h Q d• North Quad

• Transportation Spine

• Science Lab Facility

Potential Future Projects

• Multi purpose Facility

16

• Multi‐purpose Facility

• Science/ Health Facility


NORTHERN ARIZONA UNIVERSITYPROJECTED DEBT SERVICE AS A PERCENTAGE OF TOTAL EXPENSES (1)

(Amounts in Millions)

Outstanding Annual Debt Service as a %Debt of Total

Fiscal Student Estimated Debt Prin End of Yr. AnnualDebt Service

of Total Expenditures

Year Enrollment New Debt Retirement Balance 1Debt Service

With SPEED

Without SPEED

With SPEED

2009/10 24,925 179.3 8.9 443.4 23.4 23.4 6.33% 6.33%/ ,

2010/11 25,380 18.5 9.3 452.6 24.8 27.7 6.22% 6.95%

2011/12 26,263 84.6 10.2 527.0 25.9 32.4 6.12% 7.66%

2018/19 30,309* 0.0 17.2 421.6 26.4 38.7 4.32% 6.34%1) After FY11 retirement of $18.7 million of debt. Includes all COPS and BONDS and SPEED bondsAdditional debt capacity based on the maximum debt ratio percentages is as follows (based on assumed 30 year financing at 6%):Source: FY10 NAU Debt Capacity

FY 8% Debt Capacity (Without SPEED)p y ( )2011 $ 95,000,000

2012 $ 110,000,000

17

2020 $ 305,000,000

*2020 goal


STATEWIDE MISSIONSTATEWIDE MISSION

18


S S M• Serving students off‐campus for more than three decades

34 community campuses (up from 22 in 2003)

SCOPE OF STATEWIDE MISSION

– 34 community campuses (up from 22 in 2003)– 76 traditional classroom‐based programs

• Online degree programs (90% of AUS undergraduate online degree awards)Online degree programs (90% of AUS undergraduate online degree awards)

– 78 online programs

El 90/30 ( ll t l t i l d b t f ll 2008 d• Eleven 90/30 programs (enrollment nearly tripled between fall 2008 and spring 2011)

• Joint admissions

• Three‐year bachelor’s degrees at NAU Yavapai

• $31.9 million budget in FY2011 supporting 7,675 students (30% of NAU h d )headcount)

• $1.7 million annually in leased facilities statewide 19


JOINT ADMISSIONS

• CCC2NAU pilot started in Fall 2008• CCC2NAU pilot started in Fall 2008

• Now partnerships with 7 community colleges:p p y g

– Arizona Western College

– Central Arizona Colleges

– Coconino Community College

– Maricopa Community Colleges

h C i C ll– Mohave Community College

– Pima Community College

– Yavapai College– Yavapai College

20Number of students served since 2008: 1,500


STUDENT COST OF BACHELOR’S DEGREE:

$ Transportation/Personal

STUDENT COST OF BACHELOR S DEGREE: LOWER COST OPTIONS

4 years at Flagstaff Campus

$

$80,000

$90,000

$100,000 Transportation/PersonalRoom and BoardBooks and SuppliesFeesTuition

4 years at NAU Statewide

4 years at Flagstaff Campus

$

$50,000

$60,000

$70,0002 years at community college + 2 years at NAU Statewide (Community Campus)

(Community Campus)

3 years at NAU Yavapai

$ 0 000

$20,000

$30,000

$40,000

$0

$10,000

Flagstaff (Pledge) Statewide 2NAU Yavapai

21Note: Students starting in Fall 2011; statewide and Yavapai tuition annual increases assumed as 4.5% level


BUSINESS STRUCTURE 2012‐2020

22


FY11 BUDGET SITUATIONEstimated all funding sources total = $444 million

FY12 BUDGET SCENARIOEstimated total = $430 million

State

$444 million

State Gen'l Fund$103

Other Revenue

$16 Gen'l Fund$134 30%

Net Tuition & Fees$145 33%

24%Net

Tuition & Fees$154

4%

33%

TRIFAuxiliary

Other Revenue

$16 4%

$ 5436%

Private

TRIF$12 3%

Auxiliary Revenue

$46 11%

Grants & Contracts

$47 11%

Fed Fin Aid$33 7%

Private Gifts$

$11 2%

yRevenue

$45 10%

Grants & Contracts

$48 11%

Fed Fin Aid$36 8%

Private Gifts$15 3%

3%

23Sage shaded pieces are the basic university expenditure supports

Yellow shaded pieces provide some university support

Red shaded pieces are not generally available for direct support

7%$13 3%


UNIVERSITY BUSINESS PLAN CHALLENGES

Scenario Models Assume:

R f d l f t t l f d t th h FY 2020• Range of models of state general fund support through FY 2020

• Target = FY 2011 state and tuition support per student, inflation dj dadjusted

• 2020 performance dependent on tuition revenue IF state does not reinvest through performance fundingnot reinvest through performance funding

Challenge is to consider impacts on tuition levels, campuses,

t d t i d i it i istudent mix, and university mission24


SCENARIO PLANNING TO MEET 2020 GOALS –SCENARIO PLANNING TO MEET 2020 GOALSSTATE GENERAL FUND AND TUITION AND FEES

FY08 FY09 FY10 FY11 est. FY12 FY15 FY20 Projection Projected Projection

State Percentage Change over FY12Funding Sources Final FY 08

was $158 273 6

Final FY09 was

$140 272 6‐30% 0% 93%

If State$158,273.6 $140,272.6Assumes No Reduction or Growth in State funds

Rollover B

If State does not increase

f di (M t i

If State Performance

Funding Investments FY15‐FY20 Return Us to FY11 S tBecomes a

Cutfunding (Metric Assumption)

FY11 Support Percentages

General Fund 160,867.0 161,600.0 133,118.0 133,118.0 103,022.0 103,022.0 72,528.6 103,022.0 199,000.0 Gross Tuition and Fees 128,921.0 146,365.0 173,313.0 202,539.0 216,751.0 277,979.0 428,637.4 398,144.0 302,166.0and Fees 128,921.0 146,365.0 173,313.0 202,539.0 216,751.0 277,979.0 428,637.4 398,144.0 302,166.0

Total 256,273.6 307,965.0 306,431.0 335,657.0 319,773.0 381,001.0 501,166.0 501,166.0 501,166.0

State Funds % 63% 52% 43% 40% 32% 27% 14% 21% 40%Gross Tuition % 38% 48% 57% 60% 68% 73% 86% 79% 60%

25Headcount 22,307 23,320 24,925 25,380 26,263 27,750 30,309 30,309 30,309


FY 2012 BUDGET PLAN REDUCTION OF $198MFY 2012 BUDGET PLAN REDUCTION OF $198MNAU SHARE IS $30.1M

Strategy Approx. Amt Discussion

Tuition and Fee Collections

$6‐8M ($6 million with

stable enrollment)

• Rebate new resident 2011‐2012 Pledge students $350 (estimated $1.2M)

• Additional financial aid (RSA and scholarships) to be provided estimated to be $3 5M) provided estimated to be $3.5M

• Graduate Assistant Waivers from 75% to 100% of Tuition

Reductions, savings, revenue growth from

$15M • FY 2011 Voluntary Retirement Program for Tenured Faculty should bring in $1,2‐$1.6M with EREg

Divisions, Debt Service, Salaries and Benefits (Employee Related Expenses – ERE)

g $ , $

• Debt service reduction of $1.9M• Changes/increases in benefits prices for employees

• Divisional/central budget reductionsp ) g

Operating Efficienciesin all Divisions

$0‐$2M • Innovations that reduce costs per FTE

Reduce state budget $4‐7M • Diverting one‐time funds for FY12 and FY13 knowing our flexibility and one time expenditures, reserves,auxiliary accounts

base or structural deficit must be corrected by FY14


STATE AND LOCALRESOURCES (MILLIONS)

Target

EMSA (Enrl Mgmt &

Cabinet Level Reduction (Millions)

Provost $3.8 EMSA (Enrl Mgmt &

Provost$94 9

gStudent Aff)

$28.114%

Extended Campuses

EMSA (Enrl Mgmt & Student Aff) 1.1Extended Campuses 1.0Capital Assets 0.3I f ti T h l$94.9

48%

p$24.312%

Capital Assets$15 2

Information Technology Services$14.8

President$6.73%

Information Technology Services 0.6Advancement 0.4Finance & Administration 0.3$15.2

8%

$8%

Finance & Administration

$8.74%

Institutional

President 0.3Research 0.1Institutional Effectiveness 0.1T t l 8 0

27

Advancement$2.81%

Research$2.71%

Effectiveness$1.61%

Total 8.0


NAU TOTAL TUITION FEES AND STATENAU TOTAL TUITION, FEES, AND STATEAPPROPRIATION/ FTE

28


2007 2009 DELTA EDUCATIONAL AND RELATED

University of North Carolina at63 000

68,000

2007‐2009 DELTA EDUCATIONAL AND RELATEDCOSTS PER DEGREE Depending how you look

at it: North Carolina at

Greensboro

The University of Montana

58,000

63,000

Northern Arizona University is either the

Northern Arizona

University48 000

53,000 • Most productive

‐‐‐or‐‐‐University

Utah State

43,000

48,000

• Has the lowest support per FTE

Utah State University

38,000 E&R/DEGREE E&R/DEGREE E&R/DEGREE among its Board approved

peersInstruction+ Student Services

29

Delta E& = Instruction + Student Services + Instruction+ Student Services

Instruction + Student Services + Research + Public Service

x (Academic Sppt + Institutional Sppt+ O&M)


NOTES ON COST COMPARISONSNorthern Arizona University is:y

• More productive than its peer average per degree

• Lowest cost university in the Arizona University System for

educational and related costs per FTE and per degree

– On the Flagstaff Campus

– Through Online Courses and Degrees

– At Extended Campus Sites and NAU‐Yuma

– New Pilot: NAU‐Yavapai

Joint Admissions (Arizona CC2NAU Programs)– Joint Admissions (Arizona CC2NAU Programs)

30


BUDGET CHALLENGES

31


ENROLLMENT GROWTH30,000

Y

4 0332,593

2,956

662 675

631

686

20 000

25,000

Online

Yuma

17,5295,048 4,359

4,517

4,033

462 1,318

2,593675

15,000

20,000Community Campuses

13,027 12,71714,766

5 000

10,000Flagstaff

0

5,000

2003 2004 2005 2006 2007 2008 2009 2010

32

003 004 005 006 007 008 009 0 0


2010‐2011 AAUP: RANKED FACULTY PEER COMPARISON2010‐2011 AAUP: RANKED FACULTY PEER COMPARISONRank Peer Average forOrder Institution All Ranked Faculty ($)1 George Mason University 95,800 2 University of Nevada‐Las Vegas 94,600 3 The University of Alabama 92,500 4 Georgia State University 92,000 5 University of North Carolina at Greensboro 85,800 y ,6 Kent State University Kent Campus 85,300

Weighted Average (Peer Mean) 85,200 50th Percentile (Peer Median) 84,400

7 Old Dominion University 83,400

Still Last

7 Old Dominion University 83,400 8 Southern Illinois University Carbondale 81,400 9 Ohio University‐Main Campus 81,100 10 Western Michigan University 80,300 11 University of Akron Main Campus 79 000 Still Last11 University of Akron Main Campus 79,000 12 University of Maine 78,700 13 Northern Illinois University 76,800 14 Bowling Green State University 75,900 15 Wichita State University 75 000

33

15 Wichita State University 75,000 16 Northern Arizona University 74,300

Percentage to Market 14.6Percentage from Market ‐12.8


FULL‐TIME INSTRUCTIONAL FACULTY COMPOSITION

Lecturers/

Fall 2002Fall 2010 N=836;

FTE Students per Full‐Time Faculty = 27:1

TenuredT

Lecturers/ Instructors

13619%

Lecturers/ Instructors

311

27:1

Tenured44363%

Tenure Track12918%

Tenured40749%

Tenure

37%

N=708;FTE Students per Full‐Time Faculty = 24:1

Tenure Track11814%

34

24:1


SALARY MARKET COMPARISONSSALARY MARKET COMPARISONS

0

5

7

‐3

‐8

‐5

0

m M

arket

‐14 ‐14

‐7‐10

‐16

‐13

‐15

‐10

% from

2003 2004 2005 2006 2007 2008 2009 2010

Classified Staff ‐14 ‐10 ‐10 ‐7 ‐6 ‐10 ‐13 ‐14

Service Professionals 7 8 7 3 1 6 7 10

‐16‐20

Service Professionals ‐7 ‐8 ‐7 ‐3 ‐1 ‐6 ‐7 ‐10

Academic Professionals ‐16 ‐13 ‐8 ‐8 ‐6 ‐5 ‐5 ‐8

Administrators ‐3 ‐6 ‐3 1 ‐5 ‐7 ‐10 ‐8

Ranked Faculty (Prof, Assoc, Assist) ‐16 ‐19 ‐16 ‐15 ‐16 ‐14 ‐14 ‐13

35


AGING INFRASTRUCTURE• $230 million in deferred• $230 million in deferred maintenance

– Facility condition index: 0 12Facility condition index: 0.12 (Greater than 0.10 – a sign of poor condition)

• Last state appropriated building renewal (partial) in FY 2007

36


BUDGET OPPORTUNITIESBUDGET OPPORTUNITIES

37


N I t ti l I iti ti• Integrated degrees: Undergraduate + master’s degree in 5 years (instead of 6)

New Instructional Initiatives

‐ piloted by 5 departments

• Summer and winter sessions to aid in degree completion

• Program mix

• Student success initiative

– Focus on freshman skill buildingFocus on freshman skill building– Coordinated sections improve consistency of the student experience– Piloting proven modules/courses procured from commercial vendors– Multiple course delivery mechanismsp y

38


P i i• Program mix expansion– Physician Assistant program, Doctor of Physical Therapy (Phoenix)

– Joint RN/BSN program with community colleges/ p g y g

• STEM field expansion– NAU’s enrollments in STEM fields have increased not only in

absolute terms, but in proportion of all NAU enrollments:

6,000 Growth in STEM Field Enrollments Growth in Proportion of STEM Field

4,000

5,000 Fall 03 – Fall 10

60%

80%

100%

Growth in Proportion of STEM Field Enrollments, Fall 03 – Fall 10

1 000

2,000

3,000

0%

20%

40%

60%

39‐

1,000

2003 2004 2005 2006 2007 2008 2009 2010

0%

2003 2004 2005 2006 2007 2008 2009 2010

STEM Non‐STEM


TO ACCOMPLISH STRATEGIC BUSINESS PLANTO ACCOMPLISH STRATEGIC BUSINESS PLANFocus: Maintain Quality and Achieve 2020 Goals

• Pledge tuition program + lower cost options for students

– Pledge program cannot be maintained without annual increases

E ll h i i i l i i i• Enrollment growth in an increasingly competitive environment

• Increased attention to cost drivers and cost containment

• Efficient business practices – use of technology to minimize hiring

• Growth in self‐support for appropriate units/activities

• Innovative public‐private partnerships for capital construction and operations

• Increased retention, improved curricular and scheduling practices, use of technology

• State re‐investment in higher education

– Performance funding 40


THANK YOU

41

Documents

Northern Arizona University: Business Plan