Draft 4.3.06
University of Missouri-Kansas City
Preliminary Report of Resource Reallocations
Effective July1, 2005 and July 1, 2006
Allocation of Marginal Revenues
During the period July 1, 2006 through July 1 2007, UMKC projected an increase in
operating revenues of approximately $12.9 million. Of this amount, $10.7 million, or 83%, of the
marginal revenues budgeted were allocated to the core missions of instruction (teaching),
research, and service. In FY06 new revenues allocated to the core missions totaled $6.4 million,
while in FY07 the amount was $4.4 million. The vast majority of the total increase ($9.4 million)
in funding for the core missions was directed to cover mandatory increases in salary and benefits
approved by the Board of Curators. Approximately $1.3 million was allocated to enhance
academic programs in dentistry, law, and the conservatory. The balance of total new revenues,
approximately $2.2 million was allocated to cover mandatory cost increases related to physical
facilities (i.e., utilities and redevelopment expenses). All other cost increases to enhance the
academic mission, cover salary and benefit adjustments for staff employees, pay for the
escalation in facility costs, and fund other mandatory cost increases were covered through
internal reallocations from administrative functions. Table 1 provides a macro view of the
distribution of new revenues and reallocated resources to specific planned purposes noted above.
Resource Reallocations Required to Fund Operations
UMKC will have reallocated approximately $9.2 million during the period of July 1,
2006 through July 1, 2007. During the current fiscal year (FY06), reallocations totaled
approximately $4.6 million. Of that amount approximately $2.0 was allocated to the core
missions of instruction (teaching), research, and service, and to academic support units directly
serving the core missions (i.e., library and research office). The balance of the reallocation ($2.6
million) was allocated to cover the salary and benefit cost increase ($1.2 million) for staff
employees, to pay for the marginal increase ($0.7 million) in information technology related to
PeopleSoft, and to fund a $0.7 million increase in utilities and insurance. For the current fiscal
year 16 FTE administrative/support positions have been eliminated.
As planned for fiscal year 2007, reallocations total another $4.6 million. Of this amount,
approximately $1.1 million is being reallocated to pay for the mandatory increase in salary and
benefits for staff employees. Other reallocations include: $1.4 million for facilities M&R, debt
service, and insurance; $0.7 million for institutional financial aid; $0.5 million for student fee
write-off of uncollectible assessments; $0.5 million for information technology related to
PeopleSoft implementation of the student module; and $0.4 million for contingency reserve to
buffer potential shortfall in project revenues or to cover unanticipated costs or unusual increases
in planned expenses. Currently planned for FY07 is the elimination of 6 FTE
administrative/support positions. Beyond the reallocations previously noted, an additional
$760,000 is anticipated to be reallocated from administrative activities in the academic
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Draft 4.3.6
schools/college to the core missions of teaching, research, and service. The specific details of
these reallocations will be finalized by April 15.
A detailed breakdown of the reallocations effective July 1, 2006 and July 1, 2007 are
shown in Table 2. The schedule displays the organizational units affected by the reallocations
and the units, programs, or purposes for which the reallocated dollars were used. Reallocations
shown for FY06 have been fully executed and those planned for FY07 will be executed effective
July 1, 2006, pending Board approval of the University of Missouri System’s consolidated
operating budget for fiscal year 2007.
Table 3 and Table 4 present a high-level summary of the incremental increases in
revenues and expenditures for FY06 and FY07. Increases in operating expenditures in both
periods out stripped marginal revenues leaving a recurring fund gap of about $4.6 million each
year. To achieve budget equilibrium and close the funding gap required significant reallocations
principally from central campus administration.
Draft 4.3.06
Table 1: Summary of Allocation of Funds for the Period
July 1, 2005 through July 1, 2006
To Sources of Funds ($millions)
New Revenues
$12.9
Reallocations
$9.2
Total
$22.1
Total Uses of Funds
Faculty Salaries & Benefits
Academic Programs
Physical Facilities
Staff Salaries & Benefits
PeopleSoft
Financial Aid
Bad Debt Write-off
Contingency Reserve
Insurance
Total
9.4
1.3
2.2
_____
$12.9
2
2.0
1.7
2.3
1.2
.7
.6
.4
.3
$9.2
9.4
3.3
3.9
2.3
1.2
.7
.6
.4
.3
$22.1
Draft 4.3.06
Table 2: Reallocation of Resources Effective
July 1, 2005 through July 1, 2006
Effective July 1, 2005
Reallocation From
Amount
Provost’s Office
$2,272,000
Chancellor’s Office
511,941
VC Student Affairs
52,573
VC University Advancement
21,222
VC Admin. & Finance
115,033
Administrative Recurring
Reserves
1,582,931
Total
_________
$4,555,700
Reallocation To
Amount
School of Law
Conservatory
Arts & Sciences
Library
Graduate School
Research Office
Provost – Salary & Benefit
Required Increase
IT-PeopleSoft
Admin. Support Salary &
Benefit Required Increase
Insurance
Utilities
Total
$1,000,000
70,000
530,000
228,868
90,000
50,000
88,371
699,148
1,134,790
178,479
486,044
$4,555,700
Effective July 1, 2006
Reallocation From
Amount
Reallocation To
Chancellor’s Office
$ 237,596
Provost’s Office
1,109,556
VC Student Affairs
637,210
Communications
47,450
VC University Advancement
106,192
VC Admin. & Finance
1,202,706
Administrative Reserves
550,000
School-based Financial Aid
660,400
Total
Amount
Admin. Support Salary &
Benefit Required Increase
$1,083,286
IT-PeopleSoft Student System 488,000
Debt Service
378,200
Facilities M&R
795,200
Insurance
153,400
Student Fee Bad Debt
550,000
Institutional Financial Aid
660,400
Contingency Reserve
442,624
Total
$4,551,110
$4,551,110
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Draft 4.3.06
Table 3: FY06 Summary Budget Plan of Marginal Revenues and Expenditures
Marginal Revenues
Tuition
State Appropriations
F&A Recovery
Total Marginal Revenues
$4,847,319
1,747,835
143,282
$6,738,436
Marginal Expenditures
Expenditures Funded by Marginal Revenues:
Core Missions (Teaching, Research, Service)
Student Affairs
Contingency Reserve
Total Funded by Marginal Revenues
$6,310,601
350,000
77,835
$6,738,436
Expenditures Funded by Reallocations:
School of Law
Conservatory
Arts & Sciences
Library
Graduate School
Research Office
Administrative Support Salary & Benefit Increase
IT –PeopleSoft
Insurance
Utilities
Total Funded by Reallocations
Sources of Reallocations:
Provost’s Office
Chancellor’s Office
VC Student Affairs
VC University Advancement
VC Admin. & Finance
Administrative Recurring Reserves
Total Reallocations
$1,000,000
70,000
530,000
228,868
90,000
50,000
1,223,161
699,148
178,479
486,004
$4,555,700
$2,272,000
511,941
52,573
21,222
115,033
1,582,931
$4,555,700
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Draft 4.3.06
Table 4: FY07 Summary Budget Plan of Marginal Revenues and Expenditures
Marginal Revenues
Tuition
State Appropriations
Total Marginal Revenues
$4,585,668
1,491,132
$6,076,800
Marginal Expenditures
Expenditures Funded by Marginal Revenues:
Core Missions (Teaching, Research, Service)
Campus Facilities (Utilities)
Contingency Reserve
Total Funded by Marginal Revenues
$4,411,574
1,600,000
65,226
$6,076,800
Expenditures Funded by Reallocations:
Administrative Support Salary & Benefit Increase
IT-PeopleSoft Student System
Debt Service
Facilities M&R
Insurance
Student Fee Bad Debt Write-Off
Institutional Financial Aid
Contingency Reserve
Total Funded by Reallocations
Sources of Reallocations:
Chancellor’s Office
Provost’s Office
VC Student Affairs
Communications
VC University Advancement
VC Admin. & Finance
Administrative Reserves (One-time)
School-based Financial Aid
Total Reallocations
$1,083,286
488,000
378,200
795,200
153,400
550,000
660,400
442,624
$4,551,110
$ 237,596
1,109,556
637,210
47,450
106,192
1,202,706
550,000
660,400
$4,551,110
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