Open Forum on the BudgetFY2017 – FY2019

May 4, 2016

Agenda

Higher Education Environment

Impact to Ramapo College

Budget process

Financial outlook

Higher Education Environment

Higher Education EnvironmentRevenue from key sources continuing to

decline

Student demographics

Demands for return on investment from higher education

New business and delivery models and globalization of education

Revenue from key sourcescontinuing to decline

State appropriations for public institutions have been steadily declining

Pressure from enrollment levels

Fluctuating Endowment values and donor support

Student DemographicsProjected High School Graduates 2015 – 2020

(Northeast)

Northeast projecting a 7.75% decline in high school graduates in next five years

Student DemographicsProjected High School Graduates 2015 – 2020

(New Jersey)

Over the next five years, high school graduates in New Jersey are projected to decline by 3.5%

Demands for return on investment from education

Value and cost of education

Employment rates after graduation

Student debt levels

Graduation rates and retention

Alternatives to traditional degreesAccelerated programsIndustry accreditations or certifications

Delivery of EducationOnline programsHybrid models

Globalization and international enrollmentEnrollments of international students are

increasing Global foot print of an institution

New business and delivery models and globalization of education

Impact to Ramapo College

State Support as a Percent of Revenues

7.0%

9.0%

11.0%

13.0%

15.0%

17.0%

19.0%

21.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016(proj)

2017(proj)

*State Support and Revenues do not include Employee Benefits

State Support vs. Tuition & Fees as a Percent of Operating Revenues

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

55.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016(proj)

State Support Tuition & Fees

*State Support and Revenues do not include Employee Benefits

New Jersey State Support

FY16 Adj. State

Appropriation

FY17 Bud EstFTE Undergrad (tot weighted)

State Funding Per Undergrad

FTE

Rowan University $85,383,000 11,708 7,395

New Jersey City University $24,154,000 4,735 5,101

The College of New Jersey $27,177,000 6,610 4,111

William Paterson University $30,357,000 7,589 4,000

Kean University $30,469,000 9,327 3,267

Ramapo College $14,953,000 4,978 3,004

Stockton University $18,391,000 7,437 2,473

Montclair State University $35,859,000 14,687 2,442

Sector Average $33,492,875 8,384 3,974

Source: FY17 State of NJ Detailed Budget book [Does not include support for Employee Benefits]

$15,466

$13,698

$12,864 $12,820 $12,365

$11,772 $11,581 $11,179

$11,000

$13,000

$15,000

$17,000

The Collegeof NewJersey

RamapoCollege ofNew Jersey

RowanUniversity

RichardStocktonUniversity

WilliamPatersonUniversity

MontclairState

University

KeanUniversity

New JerseyCity

University

FY16 Tuition & Fee Comparison to New Jersey Public Schools

Annualized Enrollment FY11 – FY19 (Proj)

5,300

5,400

5,500

5,600

5,700

5,800

FY11 FY12 FY13 FY14 FY15 FY16 FY17Proj

FY18Proj

FY19Proj

Total FTE Undergrad FTE

Annualized enrollment as calculated includes all sessions: Summer, Fall, Winter and Spring

Ramapo Student Indebtedness

Average Ramapo Freshmen – 64% take out loans averaging $8,542

Ramapo student loan indebtedness for 4 years averages $28,758

In 2014 State of New Jersey average is $28,318 (source TICAS website)

National Average in 2014 is $28,950

Source: Collegefactual.com, Money Magazine

BUDGET PROCESS

Using resources focused on the Mission of the College

The planned use of resources will not exceed estimated resources available

The College is committed to maintaining resources in order to sustain overall financial health

Principles of Budget Development

Current Budget Cycle

Step 1 New fiscal year begins (Jul) Submit OMB budget request

to State (Nov)

Step 2 Units submit funding

requests (Jan- Mar)

Step 3 Cabinet reviews budget

requests Draft proforma and

assumptions tested (May)Step 5 Board of Trustees approves

budget and tuition & fee increase (Jun)

Step 4 Budget Presentation-Open Forum Final budget developed for Trustee

review (Jun)

Step 6 Units receive

budgets (Jul)

Step 7 President’s State of

the College Address

Step 8 Assessment and

adjustment of current budget

Proposed Budget Cycle

Step 2 Budget training for unit

directors Budget for units

established by account for review

Change requests submitted through Adaptive (Jan- Mar)

Step 3 Cabinet reviews budget Draft proforma and

assumptions tested (May)

Step 5 Board of Trustees

approves budget and tuition and fee increase (Jun)

Step 4 Budget Presentation-Open Forum Final budget developed for

Trustee review (Jun)

Step 6 Units receive

budget (Jul)

Step 7 President’s State of

the College Address

Step 8 Budget training for unit

directors Units assessment and

adjustment of current budget (FY17)

Step 1 New fiscal year begins (Jul) Submit OMB budget request

to State (Nov)

Focus on what is needed in each unit

No more “inflationary” requests, as next year change requests will be submitted (assumes increases and decreases)

All new items will be requested with a funding source in mind

Budgeting is a College-wide process, the Budget Office is here for support and guidance, but each unit owns their budget

Next Year’s Budget Cycle

State support

Appropriations /Employee benefits –“authorized positions”

Student tuition & fees (net)

Auxiliary services

Fundraising revenues

Where Do Operating Funds Come From?

Sources of Revenues 2017 Est.

State Support,

27.7%

Net Tuition, 31.6%

Fees, 18.5%

Other, 1.0%

Auxiliary, 21.2%

Expenditures by Category 2017 Est.

Salaries & Benefits, 62.6%

Fuel & Utilities, 3.5%

Maintenance & Cap Improv,

2.1%

Contracted & Professional,

9.4%

Debt Service, 11.3%

Other, 11.1%

Financial Outlook

Current Baseline Budget

Current Key Assumptions:

Base State appropriation flat

Full-time fringe rate at 49.43%

Flat undergraduate enrollments

25% growth in graduate programs

Housing occupancies at 95.5% in fall and 89.7% in spring

Ramapo College - Baseline Scenario

in thousands FY2017 FY2018 FY2019

E & G Revenues $ 117,689 $ 118,506 $ 120,692 Auxiliary Services 40,513 40,261 40,174 Total Revenue 158,202 158,766 160,866

E & G Expenditures 124,971 129,002 131,728 Auxiliary Expenditures 35,794 34,534 36,268 Total Expenditures 160,764 163,536 167,996

Deficit (2,562) (4,770) (7,130)

Balancing Measures to Consider

Reserves could be released to decrease deficit in FY17

Review of SPIF program and budget requests

Increases to tuition, fees and housing – will review rates in connection with the current rate of inflation and the Higher Education Price Index

Assessment of vacant/open positions

Downside Scenarios

Further reduction in State appropriations

Further decline in State benefit support

Decline in student enrollments

Union contract settlement

Financial Outlook

Future Considerations AffordabilityContinue to balance budgetWork to maintain affordability for students

EnrollmentMaintain strong enrollment management effortsContinue efforts to maintain strong retention

CapitalContinue to address deferred maintenanceExpansion in accordance with the Facilities Master Plan

College Goal: Financial Sustainability