Administrative and
Fiscal Officers Meeting
Thursday, April 9, 2009
Massachusetts Institute of Technology
Agenda
Welcome and Opening Remarks
Terry Stone, Executive Vice President and Treasurer
Budget Planning Process – Fiscal Year 2010 and Beyond
Rafael Reif, Provost
Progress of the Institute-wide Planning Task Force
Israel Ruiz, Vice President for Finance
Member of Task Force Coordinating Team
Innovative Solutions Underway
Modernizing MIT Travel
Robin Elices, Senior Director, Office of the Vice President for Finance
Energy Investments
Richard Amster, Jr., Director, Campus Planning, Engineering and Construction
Lights Out
William VanSchalkwyk, Managing Director, Environment, Health, and Safety
Programs
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Rafael Reif, Provost
Budget Planning – Fiscal Year
2010 and Beyond
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Outline
Short term:

Fiscal 2010 Pro Forma General Budget
Longer term:

2011-2012 Budget/Task Force Update
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Budget Planning Process Objective
Reduce General Institute Budget (GIB) expenses
by $100-$150m by FY12 (i.e., in three years)
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Identifying a Long-term Budget Planning Target
Projected
$40
Projected End of Year GIB Results
Due to
Endowment
End-of-Year
GIB
DeficitsSensitivities
as a Function
Basic Model Assumptions
Annual non-investment revenue
growth:
•Tuition = 4.25%
•Gifts to GIB = 0%
•Indirect Research = 0%
•Endowment unit growth (via gifts) = 1%
$20
$0
($20)
($60)
($80)
Annual expense growth:
•Average annual growth = 4%
($69)
($100)
($120)
($114)
($140)
($160)
($158)
($180)
FY2013
FY2012
FY2011
FY2010
A: (-12.5%; -12.5%; -12.5%; 9.5%; 9.5%)
B: (-33%; 0%; 0%; 9.5%; 9.5%)
C: (-30%; 0%; 9.5%; 9.5%; 9.5%)
D: (-40%; -15%; 0%; 9.5%; 9.5%)
Massachusetts Institute of Technology
FY2014
($191)
($200)
FY2009
(Deficit) / Surplus
$M
$ Millions
($20)
($40)
of Endowment Performance
April 9, 2009
Administrative and Fiscal Officers Meeting
Budget Planning Work Underway
Near term (FY09 and FY10) objectives
Achieve a
budget reduction of $50m in FY10
Long term (FY11 and beyond) objectives

Reach long-term budget targets ($100m-$150m) assisted
by an Institute-wide Task Force effort
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Fiscal 2010 Budget Overview
Goal: Develop a Fiscal 2010 budget that achieves a $50m
expense reduction
General Revenue Parameters:



Tuition increase: 3.8%
Flat endowment payout (FY09 to FY10)
Maintain undergraduate financial aid policies and tuition subsidy for
graduate student research assistants
General Expense Parameters:



No new recurring funds
Modest merit pool increases
Significant reductions in startup and retention funds
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Budget Planning Work Update
Objective for FY11 and beyond:

Reach long-term budget targets ($100m-$150m) assisted by an Institutewide Task Force effort
Guiding principles for the Task Force:

Maintain commitment to:
 MIT's mission: Advance knowledge and educate students
 MIT's unified structure: One faculty, one staff and one student
population, operating under common sets of policies and procedures
 Cutting edge research and to closely integrate teaching with research
 Need-blind admissions and need-based financial aid
 Diversity
 Working and communicating with the entire MIT community
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Israel Ruiz, Vice President for Finance
Member of Task Force Coordinating Team
Progress of the Institute-wide
Planning Task Force
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Task Force Charge
Review and analyze current practices and expenditures
that support the Institute’s mission and operations.
Identify




Activities or operations closely aligned with MIT’s core mission
Opportunities for efficiency and cost reduction as well as
costs/benefits of proposed operational changes
Opportunities to promote environmental impact and sustainability
Paths to implementation that preserve MIT's mission, values, and
culture
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Task Force Structure
Task Force Coordination
Data Team
Academic
Administrative
Student Life
Working Group:
Working Group:
Working Group:
Education
Admin Processes
Student Life
Working Group:
Working Group:
Research
HR/Benefits
Working Group:
Space
Revenue
Enhancement
Working Group:
Revenue
Enhancement
Working Group:
Procurement @
MIT
Working Group:
IT @ MIT
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Process: Phase 1
February - May 2009

Each Working Group collects community input

Each Working Group develops prioritized list of opportunities

Deliverable of each Working Group:
List of opportunities with estimated impacts
June 2009

Synthesize inputs from all Working Groups

Task Force presents report to Leadership Team

Receive feedback
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Process: Phase 2
July - September 2009


Each Working Group receives feedback on opportunities list
Working Groups further refine list based on feedback



Highlight critical implementation issues
Refine estimates of impact
Deliverable of each Working Group: Report of opportunities with
estimated impacts
October 2009



Synthesize inputs from all Working Groups
Task Force presents report to Leadership Team
Receive feedback
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Emerging Themes
Revenue
Enhancement
4% Education

9%
IT
13%
Site Engagement
Research
1%



Human
Resources or
Benefits
20%
Space
18%
Idea Bank Postings

Student Life
13%
Administrative
Processes
13%
Over 2,000 unique visitors
Approx. 70,000 page views
Average visitor views 14 pages
Average visit: 7 min., 18 sec.

1063 entries as of April 6, 2009
53% comments, 47% ideas
Procurement
9%
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Emerging Theme: Paperless Solutions
Three categories of opportunities:
1. Automation of paper-based systems

Opportunities in every process area

Student systems, HR and payroll processes, accounts payable, travel,
events management, facilities, research administration, faculty affairs
2. Stop printing!

Opt-in/ opt-out

Push capabilities, individuals select from a menu of subscriptions
3. Electronic document management systems

Couple with strategies to reduce paper retention
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Overarching Themes
Optimize
Share
Fewer
Simplify
Leverage
Automate
Massachusetts Institute of Technology
Stop
Reduce
April 9, 2009
Administrative and Fiscal Officers Meeting
Building a Better MIT
Collaborative
Mind-set
Costeffective
Focus
Influence
Behavior
Evolving
Culture
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Innovative Solutions Underway
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Robin Elices, Senior Director
Office of the Vice President for Finance
Modernizing MIT Travel
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Optimize the Travel Experience
We want to offer a system that is so good, you
will choose to use it!
Trip
planning
Payment
Expense
reporting
Reimbursement
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Portfolio of Options
Travel credit cards


Corporate pay eliminate out-of-pocket expense
Option to use personal credit cards maintained
Concur electronic expense reporting system


Credit card expenses feed to Concur (electronic receipts)
Automated expense reports (electronic workflow for approvals)
Reimbursements for out-of-pocket expenses via direct deposit
Cliqbook on-line booking tool available through Concur


Under consideration for pilot
Existing methods for booking - agencies or direct with airlines remain
Sampling process of high-risk transactions replaces 100% audit
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Project Timeline
Project team
Technical
experts and business owners (VPF, IS&T)
DLC user
advisory group
Plan
Apr
‘09
Pilot
Aug
‘09
Massachusetts Institute of Technology
Implement
Nov
‘09
Jul
‘10
April 9, 2009
Administrative and Fiscal Officers Meeting
Richard Amster, Jr., Director,
Campus Planning, Engineering and Construction
Energy Investments
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Project Locations
Ray and Maria Stata Center – Building 32
The Dreyfus Building – Building 18
Stratton Student Center – Building W20
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Ray and Maria Stata Center
Lighting upgrades

Lamps, ballasts, and fixtures

To increase energy efficiency
Cost: $520,000
Payback: 3.3 years
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
The Dreyfus Building
Fume Hood Face
Velocity Reduction:
Recalibration of fume
hoods
to reduce energy consumption.
Cost: $430,000
Payback: 2.65 years
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
Stratton Student Center
Lighting upgrades
Lamps,
ballasts, and
fixtures to increase energy
efficiency.
Cost: $69,000
Payback: 2.8 years
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
NSTAR Rebates
Project costs incorporate NSTAR estimate for
utility rebate

Stata Center: $100,000

Stratton Student Center: $16,000

Dreyfus Building

Project is a custom measure and thus will need a unique analysis by NSTAR to
determine potential rebate.
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
At a Glance
Project Location
Estimated Cost
Payback
Ray and Maria Stata Center
$520,000*
3.3 years
The Dreyfus Building
$430,000
2.65 years
Stratton Student Center
$69,000*
2.8 years
* Incorporates NSTAR estimate for rebates.
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
William VanSchalkwyk, Managing Director
Environment, Health, and Safety Programs
Lights Out
Massachusetts Institute of Technology
April 9, 2009
Administrative and Fiscal Officers Meeting
AO-FO Meeting
April 7, 2009
“Greening MIT”
Engaging the Entire MIT Community
in Our Campus Energy Activities
Step One: “Lights Out”
Bill VanSchalkwyk
Managing Director
EHS Headquarters Office
Green Ambassadors
Who we are:
 Green Ambassadors are people like you and me who make a
difference in our local energy and environmental outcome.
What we do:
 We act locally to encourage green behavior and get the word
out!
How to learn more:
 Information, tools, institutional support:
http://mit.edu/mitei/campus
green-ambassadors@mit.edu
“FLIP THE SWITCH”
32% of our electricity used for lighting
Some spaces unoccupied 30-55% of
the time while lights on
Seek a Balance in lighting usage
Custodian Practices Updated
Laboratories and Similar Areas
Walking the Talk on Energy: More!
 Flip The Switch
 Power I.T. Down
 Up to $800,000 can be saved annually if we used power
management features on our 20,000 MIT personal computers
 Shut the Sash
 Lab fume hoods use more energy than 2 single family homes!
MIT has over 1,000
 Awareness program demonstrated sash height reductions of
over 25%. $1,000,000/yr opportunity if adopted widely
across campus
 Resolve to Revolve
 On average 8x as much air is exchanged when a swing door is
opened vs. a revolving door: if all used revolving doors at
E25: $7,500 saved