STATE OF THE INSTITUTE 2010

2006 2007 2008 2009 2010

Topics• Budget• Accomplishments 2006 – 2010• New Initiatives

• Center for Renewable Carbon• Compensation Advisory Board• Workload Funding Forumla

• Improvements• Future

Budget TrendsFY 2005 through FY 2010

Improve operating efficiency while maintaining critical positions that are necessary to drive our teaching, research, and extension missions

Guiding principles dealing with budget reductions• Minimize negative impact on students• Minimize reductions in force• Maintain program availability statewide

PHILOSOPHY

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Tuition and Fees1 $6,999,027 $ 8,018,693 $ 8,913,289 $ 9,421,873 $ 10,933,084 $ 11,949,697

Federal Appropriations2 $11,661,367 $ 14,123,831 $ 12,595,931 $ 19,776,234 $ 13,967,056 $ 15,553,227

State Appropriations $66,100,734 $ 67,729,031 $ 71,858,196 $ 76,714,152 $ 74,446,842 $ 70,000,700

ARRA/MOE Funds3 $ 10,098,400

Gifts and Endowments $5,318,862 $ 6,099,177 $ 6,518,854 $ 5,342,164 $ 6,408,832 $ 6,550,000

Sales and Services $14,313,806 $ 14,748,621 $ 15,681,193 $ 17,734,591 $ 17,173,226 $ 16,530,878

Sponsored Programs $26,604,385 $ 30,027,868 $ 31,874,165 $ 31,191,140 $ 34,289,857 $ 34,850,000

Other $399,648 $ 385,461 $ 412,126 $ 397,579 $ 683,718 $ 434,892

TOTAL $131,397,829 $141,132,682 $147,853,754 $160,577,733 $157,902,615 $165,967,794

REVENUE

1Growth is due to increase of cost of tuition and class size for the College of Veterinary Medicine.2Increase in FY 2008 Federal Appropriations was due to additional Hatch funds awarded to AgResearch and timing difference due to state and federal year end.3Funding for CASNR is not included.

REVENUE

7% 9%

48%4%

10%

21%0%

FY 2010Tuition and Fees

Federal Appropriations

State Appropriations

Gifts and Endowments

Sales and Services

Sponsored Programs

Other

5%9%

50%4%

11%

20% 0%

FY 2005

STATE APPROPRIATIONS

FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 $65,000,000

$67,000,000

$69,000,000

$71,000,000

$73,000,000

$75,000,000

$77,000,000

ARRA and MOE funds are not included in the totals.

Funding for FY 2011 and 2012 are estimates.

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

$66,100,734 $67,729,031 $71,858,196 $76,714,152 $74,446,842 $70,000,700 $69,751,200 $67,340,100

FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 $65,000,000

$67,000,000

$69,000,000

$71,000,000

$73,000,000

$75,000,000

$77,000,000

EXPENDITURESFY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Salaries $ 74,054,223 $ 79,094,076 $ 80,387,470 $ 92,839,986 $ 93,249,309

Benefits $ 22,536,383 $ 24,973,511 $ 27,090,331 $ 31,787,839 $ 31,560,034

Operating* $ 25,713,606 $ 29,917,430 $ 28,251,124 $ 39,519,359 $ 33,645,285

Equipment/Capital Outlay $ 5,305,463 $ 5,119,696 $ 5,597,308 $ 8,090,263 $ 5,814,217

Total $127,609,675 $139,104,713 $141,326,233 $172,237,447 $164,268,845

*Includes Institutional Transfers

58%

18%

20% 4%

FY 2005

57%

19%

20% 4%

FY 2009

Salaries

Benefits

Operating

Equipment/Capital Outlay

Managing with Reduced Budgets

Budget Plan forFY 2010 – FY 2012

Cost SavingsTravel Improvement Program – Statewide travel is submitted by scanned

document instead of mailing hard copy. Annual Savings - $50,000

Four of seven academic units converted all or part of multiple researchsupport staff positions to restricted accounts. Annual Savings - $208,000

Smart Meetings – By use of Polycom, Centra and MicroSoft Communicator,

meetings are conducted via the Internet instead of face-to-face. Travel costs are reduced while communications are improved. Estimated

Savings - $75,000; Staff Time Savings (from travel) - $1M

Electronic Receipts – Replacement of handwritten receipts with electronicsystem. Direct Savings - $5,000; Staff Time Savings - $200,000

Closure of Buford Ellington 4-H Center. Direct Savings - $200,000

Cost Savings152.91 positions eliminated. Estimated annual savings - $6.56M

- Vacant 60.00- Retirement 59.50- Professional/Support Staff 24.41- GRAs 9.00

Operating budget reduction. Annual Savings - $1.92M

Purchase of vans and trucks for off-campus locations. Annual Savings vs.Mileage Reimbursement - $.43/mile. Savings does not include vehicle acquisition cost.

CVM replaced “chiller plants” originally installed in 1976, 1 of 9 originalair-handler units, and old “mercury lighting” system with the Pendergrass Library. This new equipment is 50 percent more efficient than the original.

Strategic ReallocationCentralized grant and contract pre-awards operation within the teaching,

research and Extension units. This was a strategic move to promote more

efficient and effective use of resources by both faculty and staff and will result in growth in grant/contract award dollars.

Re-focused programmatic areas at the 10 Research and Education Centers

while maintaining the necessary diversity in geographic and climatic conditions. REC total reduction - $1.2M

Consolidated leadership at the Middle Tennessee and Dairy Research andEducation Centers. Annual Savings - $135,000

Relocation of the Milan Research and Education Center headquarters nextto the Milan No-Till Museum – improved staffing efficiency. Annual

Savings - $65,000

Strategic ReallocationNew e-commerce store front is being developed for online sales. It is

anticipated that the number of online clientele will increase with a moreuser-friendly website. Estimated additional income = $50,000

E-Mail system was merged with UTK and allowed for the elimination of 1.4FTE. Annual savings = $200,000

International Agriculture program was merged with UTK and allowed for theelimination of 2 FTE. Annual Savings = $200,000

Revenue Enhancements OpportunitiesStudent-Led Organic Vegetable Market

Rental of UT Gardens

Garden membership fee

Increased livestock show fees – will be used to fund livestock coordinator position

Online sale of publications

Master beef programs and pesticide safety certification

Revenue Enhancements OpportunitiesUTIA Capital Campaign has exceeded $85M

Improve marketing of UT animal genetics

50 mile radius “courier service” to capture blood and tissue submissions from private veterinary practices to hospital diagnosis labs will enhance revenue and referral cases.

New services established with Small Animal Hospital Community practice – primary care medicine Dental practice Integrative Medicine

Electronic medical record access, “Referring Veterinary Web Portal,” should

enhance referral cases.

Revenue Enhancements Opportunities MRI service for Equine Hospital.

Intend to market name change from VTH to UT Veterinary Medical Center to enhance recognition of UT medical and surgical expertise.

Fees for lab intensive CASNR courses or those requiring materials.

Increased grant and contract activity to support teaching:7 submitted for a total of $2,810,5532 funded to date for a total of $1,390,665 with the others pending

Institute of Agriculture Spring 2006-Spring 2010

2006 2007 2008 2009 2010

Rank Number, by Rank

Number, by Rank

Number, by Rank

Number, by Rank

Number, by Rank

Professor 114 109 109 114 118

Associate Professor 74 77 67 67 78

Assistant Professor 63 63 75 69 54

Instructor 4 4 5 3 3

Lecturer 0 2 1 1 0

TOTAL FACULTY 255 255 257 253 253

2006 2007 2008 2009 2010

255 255

257

253 253Tota

l Fill

edFa

culty

Pos

ition

s

Accomplishments 2006 - 2010Grew enrollment 13-20% Increased degrees awarded annually

○ 38% BS○ 55% MS○ 117% PhD

New Academic Programs○ PS - Bioenergy Concentration○ CVM – Rehabilitative Medicine and Community Practice○ MS Landscape Architecture ○ BESS - Construction Technology and Off-Road Vehicle

ConcentrationsOver 300,000 off-campus students in 4-H programs

Accomplishments 2006 - 2010 Tennessee Biofuels Initiative and Biomass

Innovation Park, Center for Renewable CarbonCenter for Safer Athletic FieldsNew leadership Reorganized UTIA Information Technology Unit 30% increase in external grant support Exceeded Campaign for Tennessee GoalRealigned UT GardensRevised UTIA Administrative StructureCut UTIA Administrative budget 18%

2006-2010 UTIA Capital Programs $90 Million Total/$47.5 Million State Funds

• John & Ann Tickle Small Animal Hospital & ICU Renovation

• Brehm & McLeod Animal Science Building*

• Milan REC Headquarters• New greenhouses*• Veterinary tissue digester*• Little River Dairy REC* • Greeneville Lodge• CVM Cherokee Unit

Renovation*• Bioenergy Science and

Technology Laboratory• Eastern Region Extension

Office• Racheff Greenhouse

renovation• CVM Large Animal Hospital

Expansion

*State funds allocated

It’s A New Day…

Renewable Carbon• The structural biomass (non-

food) component produced from photosynthesis - lignocellulose

• Traditionally sourced for materials applications

• Expanded emphasis on energy, fuels, and chemicals

• Accelerated convergence of agricultural and forest sectors

• Emerging new toolbox for carbon management

UT Institute of Agriculture, Knoxville, Tennessee

• Coordinate UTIA’s renewable carbon systems R&D

• Innovate in process technology producing fuels, materials, and chemicals from renewable carbon

• Demonstrate novel production and conversion systems

• Educate and train the new workforce

• Transfer information on renewable carbon technologies to a broad client base

UT Institute of Agriculture, Knoxville, Tennessee

A Multi-Faceted Mission…

• The Forest Products Center expands research leadership role as Center for Renewable Carbon

• Continue programmatic emphasis on wood materials

• Bioenergy Science and Technology (BeST) Lab – occupancy scheduled for October 2010

• Putting the “lab” in “collaboration”

Structure and Capacity…

UT Institute of Agriculture, Knoxville, Tennessee

1. New Crop Development

2. Sustainable Production

3. Transport & Logistics

4. Biorefinery Systems

5. Materials & Coproducts

Science Advancement Leads

UT Institute of Agriculture, Knoxville, Tennessee

1. Dr. Neal Stewart, Plant Sciences – Improving yield of desirable components that reduce cost of conversion.2. Dr. Neil Rhoades, Plant Sciences – Reducing production inputs while increasing yield and maximizing ecological benefits3. To Be Named, Biosystems Engineering – Expanding biomass handling and storage options, and value-added preprocessing methods.4. Dr. Joe Bozell, Center for Renewable Carbon – Creating novel biomass fractionation technologies to lower process costs and expand product options.5. Dr. Tim Rials, Center for Renewable Carbon – Developing high-value chemical and material products from renewable carbon feedstocks.

Dr. Kelly Tiller – Business DevelopmentTo Be Named– Academic Program DevelopmentDr. Burt English – Policy Implications Management

20102010200920092009200820082007 2009

20102010

Demonstrate cellulosic biofuels Develop a regional bioenergy crop Advance R&D capacity in biomass

production and processing Establish a commercialization

pathway for the state and region

The UT Biofuels Initiative

UT Institute of Agriculture, Knoxville, Tennessee

Compensation Advisory Board

14-member state-wide advisory board to help guide the University’s compensation

philosophy, structure and programs.

Charged by President – March, 2010

ChargeThe scope of the board is advisory in nature, recommending to the President’s staff changes to compensation philosophy, policies and practices.

Responsibilities include:•Review and identification of best total compensation practices•Review of UT policies and programs•Development of a multi-year compensation strategy (market, equity, incentive and retention)•Identification of long-term strategies and practices for improvement•Identification of quick wins/successes for employees

Engaged national compensation consultant•Review of best practices•Review of current state and recommendations for improvement•Recommended survey of state and regional markets first (including TBR and state employees)

Reviewed UT’s current compensation program•Compensation philosophy•Market relationship for direct pay and benefits•Policies, programs and pay practices•HR strategic plan and initiatives related to pay and benefits

Progress From First Two Meetings

Progress From First Two Meetings Cont’d

Looked for “quick wins”•Review employee suggestions from EEF and •Develop website and newsletter to keep employees informed of our work

Developed “Employer of Choice” model•Continuum stages: misalignment foundation building supportive and promising EMPLOYER OF CHOICE•Use model to measure our progress

Focus of October meeting•Update compensation philosophy and gain support from senior leaders•Review survey of state and regional markets; determine other surveys•Identify “quick wins” for employees

• Purpose – To develop a funding formula model for UTIA based on workload/output measures to secure additional State funding• Committee made up of Programmatic, Financial and Information Representatives from AgResearch, Extension and CVM• UTIA formula model stresses the land-grant philosophy linking research, outreach and service

UTIA Workload Formula Committee

Room for Improvement, Sure Compensation and funding Governor’s Chairs Capital Needs

MaintenanceBuildings

CASNR Funding Endowed Professorships More partnerships with ORNL Top 25 initiative UTK

UTIA Administration Budget

FY 2008 FY 2009 FY 2010 $-

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

$3,500,000.00

FY 2008 FY 2009 FY 2010UTIA Administration $3,463,703 $3,111,168 $2,825,810

UTIA Administration’s budget has been reduced by 18 percent since 2008.It is 2 percent of the total UTIA budget.

Membership: Administrators, Faculty and Staff Representatives

Administrators• Chancellor Joe DiPietro, Chair, Institute of Agriculture• Executive Vice Chancellor Ken Brown, UTHSC• Vice Chancellor Richard Brown, Finance and Operations, UTC• Vice Chancellor Al Hooten, Financial Affairs, UTM• Vice President Mary Jinks, Institute for Public Service• Senior Vice Chancellor and Provost Susan Martin, UTK• Mr. Butch Peccolo, Vice President and CFO• Mr. Scott Rabenold, Acting Vice President for Development

Faculty and Deans• Dr. Toby Boulet, Associate Professor and Past President of Faculty Senate, UTK• Dean Tim Cross, Institute of Agriculture, Extension

Membership: Administrators, Faculty and Staff Representatives Cont’d

Faculty and Deans Continued• Dean Tim Hottel, College of Dentistry, UTHSC• Dr. Dan McDonough, Professor, History and Philosophy, UTM• Dr. Verbie Prevost, Professor/Head and Past President of Faculty Senate, UTC

Staff• Ms. Margie Russell, Director, Engineering Advising & Past Chair, Exempt Staff

Council, UTK

Total Rewards Consultants• Ms. Priscilla Bright, Executive Director, HR Total Rewards• Ms. Linda Hendricks, Chief Human Resources Officer, System and Vice

Chancellor of Human Resources, UTK• Advisors as Needed: Ms. Catherine Mizell and Mr. Brian Lapps, General

Counsel’s Office; Ms. Meredith LeCroy, Employee Communications

Current CRC Programs

UT Institute of Agriculture, Knoxville, Tennessee

•Tennessee funded program to demonstrate the technical and economic feasibility of cellulosic fuels; involves a partnership between UT, Genera Energy, and DuPont-Danisco Cellulosic Ethanol (DDCE)

UT Biofuels Initiative

•Multi-faceted program to accelerate development of alternative energy from renewable carbon sources that is administered by Oregon State Univ., SD State Univ., Oklahoma State Univ., Cornell, and Univ. of Tennessee. Partner agencies include DOT, DOE, and USDA.

The Sun Grant Initiative

•USDA sponsored program to support research and development innovations in wood and related material systems to improve the competitive position of the forest products industry. The program is conducted by 14 land-grant universities across the nation.

Wood Utilization Research Grant

•USDA sponsored program to assess the effect of land-use history on soil carbon sequestration and below-ground ecology of switchgrass production. Also, the impact of biochar from different sources on productivity are under investigation.

Bioenergy Production and Carbon Cycling

Progress From First Two Meetings Cont’dExplore raising the minimum hourly pay rate(s) for employees• UT employees have not had an increase in several years• Health insurance rates are going up, as well as living expenses• We must do something about our employees in the lowest pay grades

Total compensation is important• The value of UT benefits more than doubles the total compensation of our lowest

paid employees• We must develop a communication strategy to ensure employees are taking

advantage of UT’s benefits, as well as to ensure they understand the value

Next steps• Determine number of employees impacted and financial impact of

recommendation• CAB decides if they will make a recommendation to the President’s staff• Discussion of communication’s cascade