Budget & Planning
780 Regent Street Suite 241
PO Box 8010
Madison, WI 53708-8010
608/262-1544 608/265-2090 Fax
e-mail: budget@uwsa.edu
website: http://www.uwsa.edu
September 25, 2012
To:
Auxiliary Budget Officers
Budget Officers
From:
Luke Nelson
Budget & Policy Analyst, Office of Budget and Planning
Subject:
Preliminary 2013-14 Auxiliary Cost and Budget Building Factors
The 2011-13 Biennial Budget required the Board of Regents to fund UW institutions
through block grants. Prior to that change, auxiliary operations were required by state
statute to be accounted for in Fund 128 (State Chapter 20.285 alpha appropriation 1(h)).
These operations now fall into the state’s Chapter 20.285 1(gb) appropriation defined as
General Program Operations – Block Fund 121. Other funds that have been rolled into
this appropriation include tuition revenue and General Operations Receipts.
As part of implementing the block grant it was decided by the Chief Business Officers
(CBOs) that Funds 123, 128, 136, and 228 continue to be maintained separately, while
Funds 120, 129, 528, and 530 will roll into either 128 or 136, at the institution’s
discretion. It was further decided that Funds 128 and 136 should be managed under
NACUBO Financial and Accounting Report Manual Policies 703.111 and 703.113 (Fund
128) and 703.114 through 703.117 (Fund 136). These policies can be found on the
System Budget Office website at http://www.uwsa.edu/budplan/annualOpBudget.htm
and are also included as attachment #1.
Additionally, please recall statutory provisions 36.27 (6), which states segregated fees
may be used only for the purposes for which they were generated, and 36.46 (1), which
requires the Board of Regents to request approval to accumulate auxiliary reserve funds
from student fees that exceed 15% of the previous fiscal year’s total revenues.
Lastly, at the Auxiliary Teleconference last February, there was a brief discussion
regarding the potential student review of Financial Policy F50, which governs how
segregated fees are allocated at UW System institutions. The Associated Students of
Madison (ASM) and three UW-Madison students have filed a Notice of Claim with the
Wisconsin Department of Justice related to ASM’s dispute with UW-Madison over the
portion of non-allocable fees in the 2012-13 budget. Because ASM is now represented
by an attorney, any future discussions with the students or others regarding the subject
matter of the Notice of Claim will need to take place with general counsel present.
General Guidelines:
Auxiliary budgets should not automatically increase by applying cost factors to every
budget category. Institutions should review budget to actual expenditure experience over
the past several years and apply percentages that reflect those experiences wherever
possible.
Institutions should continue to place an emphasis on aligning budgets with actual
expenditures. Student affordability is a priority of the Board of Regents and total cost of
attendance (tuition, segregated fees, housing, and board costs) should be considered as
rates are developed. To accomplish this, budget only those positions and expenditures
anticipated for use in 2013-14, and consider using reserve balances for one time funding
and phasing in rate increases. This is of particular importance given that nine of the 14
reserve reporting institutions exceeded the 15% reporting threshold for student fee funded
auxiliary reserves in the latest report to the Joint Committee on Finance.
Please contact me with any questions at (608) 263-7482 or lnelson@uwsa.edu.
cc:
Chief Business Officers
Chief Student Affairs Officers
Renee Stephenson
Freda Harris
2013-14 University of Wisconsin System
Auxiliary Budget Building Cost Factors
1) Reporting Threshold
The Board of Regents has approved a detailed reporting requirement minimum of the
greater of 3.0%, or the rolling average of the prior three years of Wisconsin
Disposable Income Per Capita. The current three-year rolling average is 3.0%, so
please use 3.0% as the reporting threshold for the 2013-14 submissions.
2) Pay Plan Increases
The Department of Administration (DOA) has advised agencies in their biennial
budget instructions that, in building their program revenue requests, they may include
a 2.0% pay plan increase for both 2013-14 and 2014-15, while reminding them that
actual compensation increases will not be known until later in the budget process.
Information regarding proposed increase recommendations by the Board of Regents
will be provided once it is approved for submission to the Office of State Employee
Relations (OSER).
Effective July 1, 2013, under Wis. Stat. 230.12(3)(e) and Chapter 111, the Board of
Regents and the UW-Madison Chancellor must submit separate recommendations to
OSER for adjusting compensation for all UW System employees.
Due to the uncertainty regarding actual salary increases, institutions may want to
work with students to develop 2013-14 budget scenarios that encompass a 1.0% to
3.0% pay plan range. This will prevent the need to re-visit discussions at a later date
should the actual pay plan fall above or below the DOA proposed 2.0%.
3) Fringe Benefits
For 2013-14, it is estimated that UW System overall fringe benefit rates will be
39.61% for permanent staff, 32.90% for graduate assistants, 28.00% for LTE, and
2.35% for student help. This includes the calendar year 2013 change to the
Wisconsin Retirement System (WRS) recently announced by the Department of
Employee Trust Funds (ETF). Institutions should use their own experience in
establishing fringe benefits for employees.
4) Health Insurance Cost Increases
ETF estimates health insurance costs will increase 5.0% (weighted average) in
calendar year 2013. We currently estimate an increase of 8.0% in calendar year 2014.
5) Enrollments
Institutions are asked to use actual enrollments from the prior year to budget for the
upcoming fiscal year. For 2013-14, please use the actual 2012-13 enrollment
numbers for your institution.
6) Inflation
Indices provided by The Department of Revenue (DOR) project a 1.82% increase in
inflation for 2013-14. This is given as a guideline. Please limit inflation applications
to supplies and services. Also, historical expenditure data is preferred to using
inflation estimates whenever possible.
7) Interest Income
The State Investment Fund earning rates averaged .14% as of June 30, 2012. Please
use this rate when estimating interest earnings.
8) Chargebacks
There are a number of miscellaneous chargebacks to UW System institutions that can
be distributed by funding source to assess a fair share of the cost to auxiliaries. These
include common systems, Office of State Employee Relations (OSER), Fund 128,
and Wisconsin State Management Accounting and Reporting Tool (WisMART).
The most recent assessments are listed below and on the following pages.
2012-13 Common Systems Allocations
Madison
$10,983,991
Milwaukee
$4,159,245
Eau Claire
$1,369,044
Green Bay
$695,227
La Crosse
$1,151,078
Oshkosh
$1,438,398
Parkside
$607,815
Platteville
$972,020
River Falls
$823,046
Stevens Point
$1,221,345
Stout
$1,147,357
Superior
$415,597
Whitewater
$1,281,805
Colleges
$971,987
Extension
$1,075,171
SA/ SYS
$131,697
Total
$28,444,823
2011-12 OSER Assessments
Madison
$900,476
Milwaukee
$172,278
Eau Claire
$66,511
Green Bay
$34,113
La Crosse
$51,769
Oshkosh
$65,140
Parkside
$31,542
Platteville
$45,769
River Falls
$37,884
Stevens Point
$62,912
Stout
$66,169
Superior
$25,542
Whitewater
$61,712
Colleges
$36,856
Extension
$36,341
SA/ SYS
$19,199
Total
$1,714,213
2011-12 Fund 128 Assessments
Madison
$82,125
Milwaukee
$38,310
Eau Claire
$12,867
Green Bay
$9,210
La Crosse
$13,891
Oshkosh
$17,170
Parkside
$4,389
Platteville
$12,676
River Falls
$9,181
Stevens Point
$15,868
Stout
$13,397
Superior
$5,412
Whitewater
$15,509
Colleges
$3,870
Extension
$1,555
Total
$255,430
2011-12 WisMART Assessments
Madison
$138,632
Milwaukee
$54,863
Eau Claire
$29,860
Green Bay
$26,329
La Crosse
$33,351
Oshkosh
$30,436
Parkside
$20,671
Platteville
$27,500
River Falls
$24,379
Stevens Point
$37,363
Stout
$36,559
Superior
$21,286
Whitewater
$29,326
Colleges
$25,506
Extension
$26,910
System Admin
$14,695
Total
$577,665
9) Payments for Municipal Services
Prior experience for municipal services is the best indicator of future assessments. The
February 2012 billing amounts provided by the Department of Administration are listed
below.
2011-12 Payments for Municipal Services
Assessments
Madison
$4,714,868
Milwaukee
$597,946
Eau Claire
$146,522
Green Bay
$79,607
La Crosse
$175,127
Oshkosh
$179,443
Parkside
$60,556
Platteville
$129,478
River Falls
$97,533
Stevens Point
$152,733
Stout
$156,476
Superior
$44,323
Whitewater
$156,680
Colleges
$134,792
Extension
$282,873
SA/SYS
$22,284
Total
$7,131,241
10) Property, Liability, and Worker’s Compensation Program Cost Adjustments
The Department of Administration estimates a 2.0% overall increase in 2012-13. 201314 premium estimates will be available in November. Premium changes realized by the
UW System in 2011-12 were 25.4% for Property, 29.5% for Liability, and -16.8% for
Worker’s Compensation. Individual institutions will see larger or smaller changes based
on actual experiences. Please contact your institution’s risk manager for the actual loss
experience.
11) Central Utility Systems
The UW System has discontinued annual billings to fund the Program Revenue portion
of the Central Utilities Pool. Since 2010-11, institutions have funded the Program
Revenue portion of campus utility projects through bonding, internal borrowing, or cash
payments.
12) WIAC
There are no estimates available for the WIAC assessment at this time. The assessments
have been $28,000 per institution for the past three years. The committee will meet with
the chancellors in the spring of 2013 to develop the 2013-14 assessments.
13) Reserve Levels
In February of 2010, an Auxiliary Working Group recommended the formation of
operating and capital reserve policies which can be found at
http://www.uwsa.edu/fadmin/fppp/fp43at3.htm.
The operating reserve maximum is the sum of 15% of prior year revenue, two years of
planned routine capital expenditures, and one year of debt service.
The capital reserve should consist of funds set aside for specific renovations, acquisitions,
or building projects. The capital reserve should be held in Fund 228 with specific project
codes or departments set up for each planned renovation, acquisition or building project.
Specific projects codes or departments should not accumulate funds earlier than four
years prior to the commencement of the project in the absence of documented
extenuating circumstances.