The Statewide Budget Context and
Western Illinois University’s
Mission-Driven Planning and Results
Presented to the !
Western Illinois University Board of Trustees!
March 11, 2016!
Background:
Budget Context and Legislative Audit
Commission Guidelines
Background:
Budget Context
1.  The Illinois public universities did not
create the current fiscal crisis
•
•
•
•
•
•
•
Illinois Board of Higher Education
Higher Learning Commission
Chicago Sun Times
Bloomberg Business
Washington Post
Moody’s
National Center on Budget and Policy Priorities
Background:
Budget Context
2.  The Illinois public universities could not
have foreseen the current financial crisis
•
This is the first 9 month budget impasse in the 159
year history of Illinois public higher education
Background:
Budget Context
3.  Western Illinois University does not
have plans cease operations temporarily
or permanently
Background:
Legislative Audit Commission Guidelines
Included Within University Budgets
Stipulations
GRF
Unrestricted
Tuition
Unrestricted
Auxiliary Facilities System
Restricted
Other Non-Appropriated
Restricted
Excluded From University Budgets
Stipulations
State Capital Construction
Separate Bill
Foundation Income
Separate Legal Entity
FY02-15 Budget Trends
FY 02-15 Funding Trends
1.  The State is investing less GRF in
Illinois public higher education
GRF Funding: FY02-15
(dollars in thousands)
$1,600,000
$66,000
$64,000
$1,500,000
$62,000
$1,400,000
$60,000
$1,300,000
$58,000
$56,000
$1,200,000
$54,000
$1,100,000
$52,000
$1,000,000
$50,000
02 03 04 05 06 07 08 09 10 11 12 13 14 15
Illinois Public Universities
Western Illinois University
Annual Percent Change in GRF Funding
FY 03-15
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
-10.0%
03
04
05
06
07
08
Illinois Publc Universities
09
10
11
12
13
14
Western Illnois University
15
FY 02-15 Funding Trends
1.  The State is investing less GRF in Illinois
public higher education
A.  FY 02-10
A.  Funding Trends
B.  Institutional Plans
C.  Results
B.  FY 11-15
A.  Funding Trends
B.  Institutional Plans
C.  Results
Annual Percent Change in GRF
FY 02-10
GRF Instability: Variable reductions, small
increases, and rescissions
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
-10.0%
03
04
05
06
07
08
09
10
Institutional Plans
FY02-10
During GRF Instability, WIU:
1.  Restricted spending to immediate needs
2.  Monitored travel requests and expenditures
3.  Limited replacement hiring
Institutional Results
FY02-10
As a result, WIU:
1.  Established and Maintained a 1-2% contingency
reserve fund
2.  Did not engage in employee layoffs or furloughs
Annual Percent Change in GRF
Funding FY 11-15
Reductions and Delayed Appropriations
(state cash flow)
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
-8.0%
-10.0%
11
12
13
14
15
Institutional Plans
FY11-15
Reduced and Delayed Appropriations
1.
2.
3.
4.
Continued to restrict spending, monitor travel, and
limit replacement hiring
Negotiated delayed salary increases with collective
bargaining units
Cancelled salary increases for non-negotiated
personnel
Increased university reserves and carefully monitored
cash balances
Institutional Plans
FY11-15
Reduced and Delayed Appropriations
5.  Introduced retirement incentives
6.  Implemented zero-based budgeting within
Academic Affairs
7.  Consolidated 18 academic departments/units into
10, and four technology units into one
Institutional Plans
FY11-15
Reduced and Delayed Appropriations
8.  Centralized admissions, advisement, and the School of
Graduate Studies between campuses
9.  Held at least 25% of annual GRF departmental
operating budgets
10.  Implemented phase out plans for:
o
o
o
o
o
four pre-professional programs
20 academic minors
one undergraduate major
two post-baccalaureate certificates
one graduate degree
Institutional Results
FY11-15
1.  WIU reduced state appropriated budgets by $14.2
million in personnel and $2.7 million in operating
•  Representing a $16.9 million cost savings and
avoidance to the University
Institutional Results
FY11-15
2.  The size of the University workforce also
decreased by 163 employees (52 faculty and 111
staff)
Institutional Results
FY11-15
3.  There were only 3 layoffs and no furloughs
during this time
•  13 years of budget instability and reductions with very
limited layoffs and no furloughs
Institutional Results
FY11-15
4.
Western Illinois University received 10 year
reaffirmation of accreditation by the Higher
Learning Commission
•  Receiving the highest level, with no follow ups or
reports
FY 02-15 Funding Trends
1.  The State is investing less GRF in Illinois public
higher education
A.  FY 02-10: GRF instability
B.  FY 11-15: GRF reductions and delays
2.  With decreasing GRF revenue, Illinois public
universities are becoming increasingly reliant on
UIF revenue
Increasing reliance on University
Income Fund Over the Last 14 Years
Illinois Public Universities
100%
80%
72.3%
60%
61.0%
40%
39.0%
20%
27.7%
0%
FY02
FY15
GRF
UIF
Increasing reliance on University
Income Fund Over the Last 14 Years
Western Illinois University
100%
80%
60%
40%
67.8%
59.0%
41.0%
32.2%
20%
0%
FY02
FY15
GRF
UIF
Increasing UIF Reliance and
Decreasing Enrollment
Illinois Public Universities
206,000
204,000
202,000
200,000
198,000
196,000
194,000
192,000
190,000
188,000
186,000
205,023
192,985
Fall 2010
Fall 2015
Increasing UIF Reliance and
Decreasing Enrollment
Western Illinois University
13,000
12,500
12,000
11,500
12,585
11,000
11,094
10,500
10,000
Fall 2010
Fall 2015
Plans to Become Less Reliant
on GRF and UIF
1.  Completed a fundraising campaign in
January 2014 that:
A.  Generated $62.1 million
B.  Increased the endowment from $16 million to
$40 million
C.  Raised the University's total asset base to $55
million
WIU Strategies to Become Less
Reliant on GRF and UIF
2.  Increased the amounts of external grants
and contracts
A.  FY15 a record for WIU
B.  $11.1 million, up $1.2 million or 12.1% in just
one year
WIU Strategies to Become Less
Reliant on GRF and UIF
3.  Maintained instructional costs below the
statewide average of the Illinois public
universities
Instructional Costs Per Credit Hour:
WIU Compared to Statewide Average
Fiscal
Year
WIU
% Below
State Avg.
2009
$267.16
(11.1%)
2010
$275.31
(6.3%)
2011
$272.68
(10.1%)
2012
$284.01
(10.6%)
2013
$294.30
(12.3%)
2014
$307.32
(19.6%)
Source: Illinois Board of Higher Education Cost Study
Instructional Costs Per Credit Hour:
Statewide Low, High, and WIU
$450.00 $417.04 $400.00 $350.00 $348.71 $419.86 $359.77 $327.87 $300.00 $275.31 $250.00 $232.22 $200.00 FY10 $272.68 $240.55 FY11 $284.01 $249.57 FY12 $294.30 $257.94 FY13 Source: Illinois Board of Higher Education Cost Study
$307.32 $269.52 FY14 WIU Strategies to Become Less
Reliant on GRF and UIF
4.  Maintained administrative costs below
the statewide average of the Illinois
public universities
Administrative Costs Per Credit Hour
Fiscal
Year
WIU
% Below
State Average
FY 2009
$68.90
(16.8%)
FY 2010
$68.70
(13.7%)
FY 2011
$67.76
(18.5%)
FY 2012
$70.94
(19.3%)
FY 2013
$63.48
(26.9%)
FY 2014
$68.85
(24.0%)
Source: Illinois Board of Higher Education Cost Study
Administrative Costs Per Credit Hour:
Statewide Low, High, and WIU
$160.00 $142.88 $140.00 $120.00 $119.49 $125.05 $124.54 $120.78 $100.00 $80.00 $68.70 $60.00 $40.00 $58.36 FY10 $67.76 $61.59 FY11 $70.94 $64.51 FY12 $63.48 $58.22 FY13 Source: Illinois Board of Higher Education Cost Study
$68.25
$63.26 FY14 WIU Strategies to Become Less
Reliant on GRF and UIF
5.  Renew Moline and the City of Moline opened the
Mills at no construction, operating, or personnel
costs to the University
Financial Status of WIU
Planning Results
•  KPMG Financial Ratios are used by the
federal government in evaluating
institutional fiscal health
Planning Results:
FY08-14 Composite Financial Indicator
Overall Fiscal Health
4.00
3.60
3.50
3.00
2.90
3.00
2.50
2.50
2.00
1.80
1.70
1.30
1.50
1.00
0.50
0.00
08
09
10
11
12
13
14
Planning Results:
FY08-14 Primary Reserve Ratio
Fiscal Stability
1.00
0.80
0.60
0.40
0.20
0.17
0.21
0.25
0.27
0.26
0.25
10
11
12
13
14
0.06
0.00
-0.20
-0.40
-0.60
-0.80
-1.00
08
09
Planning Results:
FY08-14 Net Operating Reserve Ratio
Institutional Surplus
0.10
0.08
0.06
0.06
0.04
0.04
0.04
0.02
0.01
0.01
08
09
0.00
0.01
0.00
-0.02
-0.04
-0.06
-0.08
-0.10
10
11
12
13
14
Planning Results:
FY08-14 Return on Net Assets Ratio
Ability to Satisfy Debt Obligations
0.18
0.20
0.13
0.15
0.10
0.05
0.05
0.13
0.12
0.04
0.03
0.00
-0.05
-0.10
-0.15
-0.20
08
09
10
11
12
13
14
Fiscal Year 2016
Fiscal Year 2016
•  A history of strong conservative fiscal
management has improved efficiency and
enabled the University to withstand the
unprecedented state budget impasse
•  But it is a whole new ballgame for
Illinois Public Universities
Cumulative GR Budget Declines
FY03-FY15
Illinois Public Universities
0.00%
-5.00%
-10.00%
-15.00%
-20.00%
-25.00%
03
04
05
06
07
08
09
10
11
12
13
14
15
Cumulative GR Budget Declines
FY03-FY16 (current)
Illinois Public Universities
0%
-10%
-20%
-30%
-40%
-50%
-60%
-70%
-80%
-90%
-100%
03
04
05
06
07
08
09
10
11
12
13
14
15
16
Challenges Faced in FY16 and Beyond
Fiscal Planning
1.  The State’s lack of GRF funding
represents 21.2% of the total university’s
$248 million all-funds budget
Challenges Faced in FY16 and Beyond
Fiscal Planning
24.6%
22.0%
21.2%
32.2%
State Appropriation
University Income
Auxiliary Facilities System
Other Non-Appropriated
Challenges Faced in FY16 and Beyond
Fiscal Planning
46.6%
53.4%
Unrestricted
Restricted
Challenges Faced in FY16 and Beyond
Fiscal Planning
2.  A $51.4 million FY16 GRF Reduction is
compounded by an $11.0 million cost
shift (unfunded mandate) of the State’s
need based financial aid program (MAP)
The Potential Enrollment Effects of
Not Funding MAP on Enrollment
13,000
12,500
12,000
11,500
11,000
10,500
10,000
9,500
9,000
8,500
8,000
2011
2012
2013
2014
Fall Enrollment W/ 2015 MAP Funding
Potential Fall 2015 Enrollment W/O MAP funding
2015
Challenges Faced in FY16 and Beyond
Fiscal Planning
3.  WIU has faced 14 years of budget
reductions and our institutional
expenditures are primarily personnel
costs
Western Illinois University Budget
20.0%
80.0%
Personnel
Operating
Challenges Faced in FY16 and Beyond
Fiscal Planning
•  14 Years of budget reductions have
primarily been achieved been achieved by
reducing operating budgets and limiting
attrition hiring
o Some areas of the University no longer have
vacant positions
o There were no layoffs and furloughs for 13 years
o This trend will not continue
FY 16 Plans:
Increase Future Revenue
1.  Continued with previous strategies
2.  Initiated corporate recruitment
3.  Expanded dual enrollment agreements
and outreach
4.  Implemented high demand programs and
Formats
o Hybrid Master’s MBA program
o Hybrid Master’s in College Student Personnel
FY 16 Plans:
Increase Future Revenue
5.  Completed Price Sensitivity and
Elasticity Study
•  3% tuition reduction for new undergraduate students
•  Instate tuition for all undergraduate and graduate
domestic students
•  No fee increases
Reduce Expenditures
1.  Limited replacement hiring. Fall 2015
workforce size is down:
A.  26 faculty positions
B.  8 administrative/professional positions
C.  25 civil service positions
Reduced Workforce and
Average Class Sizes
•  While the University reduced 72 (3.1%)
of the undergraduate courses offered in
fall 2015
•  The average undergraduate course size
was 20.7 in fall 2014 and 20.2 in fall
2015
Reduced Workforce and
Average Class Sizes
•  While the University reduced 22 (7.6%)
of the graduate courses offered in fall
2015
•  The average graduate course size was
11.0 in fall 2014 and 12.6 in fall 2015
Reduce Expenditures
2.  Implemented Retirement Incentive
Program. A total of 59 employees took
advantage of this program
A.  8 faculty members
B.  12 administrative/professionals
C.  39 civil service
Reduce Expenditures
3.  Reduced 12 month contract lengths for
five employees
Reduce Expenditures
4.  Announced Layoffs
A.  26 non-tenured faculty positions
B.  11 staff positions
Layoffs will be effective in either FY17 or FY18
depending on the employees years of service
Reduce Expenditures
5.  Began January 2016 voluntary pay
reductions or equivalent donations for
o President
o Vice Presidents
o Senior Academic Administrators
Reduce Expenditures
6.  Enacted June 2016 furloughs and a
voluntary pay reduction program for all
non-negotiated personnel earning more
than $40,000 annually
Reduce Expenditures
Annual
Income
Number
of Days
$40,000 - $49,999
$50,000 - $74,999
$75,000 - $99,999
$100,000 - $124,999
125,000 - $149,999
$150,000 and above
6
10
12
13
14
15
FY16 Furlough and Voluntary Pay
Reduction Plan
•  Includes
o 479/1,101 non-negotiated employees
•  Excludes
o 264 employees due to annual income levels
o 358 employees not paid from appropriated funds
Reduce Expenditures
7.  Enacted Academic Program Elimination
Review (APER) Committee
o Makes recommendations based on trends in
enrollment, majors, course offerings, and program
costs
o If program(s) are closed, they are Phased Out
o Program savings realized in FY18 and beyond
Reduce Expenditures
8.  Implemented a hiring freeze
Fiscal Years 2017 and 2018
“The best way to predict [our] future is to
create it.” -- President Abraham Lincoln
Planning Parameters
1.  We will be guided by our strategic
planning
2.  Will continue to make very difficult but
necessary decisions
3.  Our decisions will respect our students
Planning Parameters
4.  Our decision making will reflect the core
value of social responsibility and respect
for:
o Administrative processes
o Shared governance
o Good faith bargaining
Planning Parameters
5.  We will continue to:
A.  Do what is best for Western Illinois University
B.  Ensure a strong and viable university that exists
to serve students and its host communities for
decades to come
Increase Revenue
1.  Support aggressive recruitment
2.  Continue establishment of high demand
programs and formats
3.  Finish implementation of
recommendations from the Persistence
and Completion Academy
4.  Intensify pursuit of external and private
funding
Increase Revenue
5.  Identify new revenue streams
Expanding corporate recruitment activities across Illinois
and within Saint Louis, Missouri
6.  Position the University for the next
comprehensive fundraising campaign
7.  Advocate with business, industry, education,
and civic leaders for fair and predictable
higher education funding
8.  Implement additional strategies
Reduce Expenditures
1.  Reduce the size of our workforce by100
2.  Engage in attrition savings
3.  Continue the hiring freeze
4.  Implement layoffs to help align staffing
with enrollment
Reduce Expenditures
5.  Continue with the Academic Program
Elimination Committee
6.  Close and/or combine offices and units
7.  Adjust 12 month administrative contract
lengths to 11 or 10 months where
feasible
8.  Cancel salary increases for nonnegotiated personnel
Reduce Expenditures
9.  Negotiate for no salary increases with
collective bargaining units
10. Evaluate need for FY17 furlough and
voluntary salary reduction programs
11. Reduce and conserve operating funds
Reduce Expenditures
12.  Consolidate and eliminate programs
and services
13. Reduce hours of various offices/units
14. Continue with previous budget
strategies
15. Implement additional strategies
The Statewide Budget Context and
Western Illinois University’s
Mission-Driven Planning and Results
Presented to the Western Illinois University
Board of Trustees
March 11, 2016