East Stroudsburg
University
Environmental Scan,
SWOT Analysis,
and
Five-Year Budget Projection
February 23, 2009
Presented by:
Donna R. Bulzoni CPA MBA
Director of Financial Affairs & Controller
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TABLE OF CONTENTS
Environmental Scan
Introduction ……………………………………..
3
Overview ………………………………………...
4
National Outlook ……………………………….
5-6
Pennsylvania Outlook ………………………..
7-9
Monroe County Outlook & Demographics .
10-11
Government ……………………………………
12-14
Economic Development ……………………..
15-16
Facilities ………………………………………..
17-18
Financial Resources ………………………….
19-25
SWOT Analysis ………………………………………..
26
5-Year Budget Projection …………………………… 27-28
Acknowledgements …………………………………..
29
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East Stroudsburg University
Environmental Scan
Introduction
“It is not the strongest of the species that survive, nor the most intelligent, but the one
most responsive to change.” ……….Charles Darwin
As the University considers its financial position for fiscal year 2009-10 and
beyond, it is appropriate to give careful consideration to the environment in which we
exist. Our environment is constantly changing and poses opportunities and threats
which should be considered as an integral part of our planning process.
The Environmental Scan and SWOT Analysis presented herein is the product of
a campus-wide effort involving more than 20 people. Historically, the Business Office
prepared our Environmental Scan (no formal SWOT Analysis) without input from the
campus constituency. In an effort to improve the scan and more fully engage the
campus community in our planning process, individuals identified as experts in select
fields were asked to provide a detail SWOT in their respective areas of expertise. The
response was tremendous and we believe the resulting product is much improved.
Finally, the addition of a SWOT Analysis to our planning process builds on the
Environmental Scan and the strategic planning discussions currently occurring on the
campus of East Stroudsburg University.
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Overview
After scanning the environment, we have come to the conclusion that the only
thing that is certain is uncertainty. The national recession we currently face has been
compared by our leaders to the Great Depression of the 1930’s. This recession has
had an impact on the Commonwealth of Pennsylvania resulting in the constricting of our
state’s budget. While it seems clear the University has the potential for reasonable
levels of growth, uncertainty looms given the current economic climate in our nation and
the Commonwealth of Pennsylvania.
While Northeastern Pennsylvania has seen steady population growth, East
Stroudsburg University’s growth will be dependent on our ability to garner supporting
resources, both human and capital, and our ability to weather the impact of the
economic crisis.
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National Outlook
According to leading economists, our nation entered a recession in December
2007. The economic slowdown is said to have been sparked by a nationwide crash in
the housing market and the tightening of credit. The combination of rising
unemployment, declining consumer spending, declining asset values, and foreclosures
has led to declining state revenues. The number of people in poverty is growing, adding
costs to state budgets for programs such as Medicaid and social services.
According to “State Budget Troubles Worsen”, (Center on Budget and Policy
Priorities, February 10, 2009), 46 states are currently facing budget shortfalls (See
Figure 1):
Budget deficits are already projected in 43 states for the upcoming fiscal year.
Initial estimates of these shortfalls total almost $94 billion. As the full extent of 2010
deficits becomes known, shortfalls are likely to equal $145 billion.
Figure 2 shows the size and duration of the deficits in the recession that occurred
in the first part of this decade and estimates of the likely deficits in this recession. The
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current recession is expected to be more severe (deeper and longer) than the last
recession, and thus state fiscal problems are likely to be worse.
Source: “State Budget Troubles Worsen”, Center on Budget and Policy Priorities, Feb. 10, 2009
Education is by far the largest component of most states’ budgets. According to
the Center on Budget and Policy Priorities, approximately 46% of all state general fund
expenditures is devoted to some form of education (elementary, secondary, and higher
education). Thus, it is easy to understand that, as a result of this economic crisis, 36
states have cut education or proposed cuts because of their massive, devastating
budget deficits.
In an effort to jumpstart the United States economy, President Obama signed the
$789 billion economic stimulus bill on February 17, 2009. The hope is to strengthen our
economy by creating jobs, delivering tax relief, investing in our infrastructure, improving
our children’s education and making the United States more energy independent.
Highlights of the bill that impact higher education, and potentially East Stroudsburg
University, are as follows:



Increases the maximum Pell Grant by $500, for a maximum of $5,350 in 2009
and $5,550 in 2010
Adds $200 million to the College Work-Study program
Helps more than 4 million additional students attend college with a new, partially
refundable $2,500 tax credit for families
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Pennsylvania Outlook
While Pennsylvania has been affected by the national economic crisis, the
Governor’s office has publicly stated we are withstanding the national recession better
than other states.
The Commonwealth’s unemployment rate has been at or below the national level
for 70 of the past 72 months. Since the national recession began in December 2007,
Pennsylvania has held onto jobs better than many other large, competitor or
neighboring states.
As published in the “Commonwealth of Pennsylvania’s 2009-10 Budget in Brief”,
the Governor’s 2009-10 Budget Overview projects $26.6 Billion in General Fund
Expenditures broken down as follows:
General Fund
Expenditures
$26.6 Billion
What does this mean to higher education, the Pennsylvania State System of
Higher Education, and most importantly, East Stroudsburg University? The Governor’s
2009-10 budget allocates 7.70% of General Fund Expenditures to higher education and
holds PASSHE’s state appropriation constant with the prior year (prior to the return of
4.25%) while Pennsylvania State University, University of Pittsburgh, Temple University
and Lincoln University’s state appropriations will decrease by 6%. State-related
universities such as Drexel and University of Pennsylvania, on average, will experience
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a decline of 26.9% in appropriation. The Department of Education’s appropriation will
be down an average of 48.4%. The only increases in appropriations to higher education
are seen in community colleges that, on average, will receive a 1.8% increase and
PHEAA (Pennsylvania Higher Education Assistance Agency) which will have an
average 8.6% increase of which 11.0% is in grants to students.
To put this in perspective, PASSHE had requested a 6.4% increase in state
appropriation. If we had received it, we would have needed a 4.0% increase in tuition to
balance the PASSHE budget as a whole. Given a 0% increase in state appropriation,
we will need a 7.9% increase in tuition to balance the PASSHE budget. This outcome is
highly unlikely. The Chancellor’s Office is recommending Universities’ early budget
projections be made using an appropriation rate increase somewhere between 2% and
4%.
Looking further down the road, state deficits over the next two and a half years
are predicted to total more than $350 billion. Local governments are also expected to
face shortfalls. Given that a large portion of the Commonwealth’s budget is in
education, cuts should be expected and will probably get deeper as the recession
continues.
Although the Governor was not generous to PASSHE in the area of state
appropriation, no decrease will be experienced. Additionally, other proposals in the
budget could be very positive.
First, the Governor is proposing “Pennsylvania’s Tuition Relief Fund”. This would
be a grant program designed to greatly reduce or eliminate reliance on student loans for
those attending community colleges and the state system universities. In summary,
students pay only what they can afford (as determined by the Estimated Family
Contribution calculation of the federal financial aid form). Any gap between the
calculation and all available existing state and federal grant aid would be filled by the
Tuition Relief Fund. State officials estimate that after four years, the program will have
helped 10,000 students who would not otherwise have gone to college or would have
gone in another state. The program would be funded from the tax revenue generated
from the legalization of video poker machines. A recent State Board of Education
survey of 6,700 current students or recent graduates put the average debt of students
attending PASSHE universities at about $32,000 and community colleges at $11,000.
The introduction of a Tuition Relief Fund might encourage more students to go to
college and result in many more of them finishing their degrees without being burdened
with a significant amount of debt. According to Kenn Marshall, spokesman for
PASSHE, whether all 14 system universities could handle a large influx of students
remains a question and will have to be addressed.
Video poker machines, sometimes referred to as video lottery machines, are
currently legal in nine states (Delaware, Louisiana, Montana, Nevada, New York,
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Oregon, Rhode Island, South Dakota, West Virginia) of which both Oregon & West
Virginia have used the revenue generated to benefit public education. The impact on
East Stroudsburg University, if enacted, is unknown at this time.
Finally, historically, the Governor’s budget allocated $65 million to capital
appropriation for PASSHE. In his budget proposal for Fiscal Year 2009-10, the
Governor is doubling that figure to $130M. East Stroudsburg University has already
submitted a list of “shovel ready” projects for consideration.
Pennsylvania’s future depends on the development of a workforce able to
compete in today’s global economy. Workers from the “baby boomer” generation are
moving into their 60’s and are retiring in large numbers leaving far fewer youth available
to enter the labor market forcing greater competition for key skills.
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Monroe County Outlook & Demographics
According to the latest census data, Pennsylvania’s population is projected to
grow by just two percent over the next ten years while the nation’s population will grow
by nearly nine percent. Northeastern Pennsylvania, Monroe County in particular,
however, has seen steady population growth during the past several years while the
remainder of Pennsylvania has been experiencing population stability or declines. This
trend is likely to extend with ongoing population declines being likely for all but
Northeastern Pennsylvania and perhaps some of those counties located in
southeastern Pennsylvania (Chester, Bucks, Lancaster and York). Based on available
data, it is also likely that the region will become increasingly diverse.
Pennsylvania’s population is also older than the vast majority of the nation’s
population. According to the Center for Workforce Information and Analysis “Economic
Review of Pennsylvania 2007”, the number of Pennsylvanians age 65 and over was 1.9
million in 2007. The state’s percentage of those aged 65 and over is 15.3%, second
only in the nation to Florida which has the highest percentage of those 65 and over.
Pennsylvania’s total working age population (those aged 25 to 64) will be less
than the year before until at least 2029. Therefore, there will be worker shortages in the
coming years and some areas, industries, and occupations will be affected sooner and
harder than others.
Pennsylvania’s Education & Health Services, Professional & Business Services,
and Leisure & Hospitality industry sectors will account for nearly 90 percent of all annual
employment growth through 2014. The education and health care industries are
expected to dominate growth. East Stroudsburg University currently offers programs in
all growth areas.
The latest employment by industry data available for Monroe County, as per the
U.S. Census Bureau, “2002 Economic Census - Summary Statistics by 2002 NAICS Monroe County, PA” follows. Note that the top three industries in Monroe County with
the highest number of paid employees are retail trade, accommodation & food services,
and health care & social assistance, as highlighted in yellow in the table.
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Data based on Geographic Area Series reports. Table includes only establishments of firms with payroll. Nonemployers are shown
separately. Introductory text includes scope, methodology, non-sampling error, and confidentiality protection. For descriptions of
column headings and rows (industries), click on the appropriate underlined element in the table.
D = Withheld to avoid disclosing data of individual companies; data are included in higher level totals; N = Not available; X = Not
applicable
EstabSales, receipts
Annual
Paid
NAICS
Description
lishor shipments
payroll
employees
code
ments
($1,000)
($1,000)
21
Mining (not published for counties)
X
X
X
X
22
Utilities (not published for counties)
X
X
X
X
23
Construction (not published for counties)
X
X
X
X
31-33
Manufacturing
122
1,473,414
233,536
5,111
42
Wholesale trade
112
380,789
31,001
873
44-45
Retail trade
699
1,621,462
158,865
9,207
48-49
Transportation & warehousing (not published for
counties)
X
X
X
X
51
Information
38
N
25,344
835
52
Finance & insurance (not published for counties)
X
X
X
X
53
Real estate & rental & leasing
140
98,053
20,000
960
54
Professional, scientific, & technical services
293
D
D
(1000-2499)
55
Management of companies & enterprises (not published
for counties)
X
X
X
X
56
Administrative & support & waste management &
remediation service
165
71,503
28,368
1,852
61
Educational services
62
Health care & social assistance
71
72
81
15
13,476
5,175
244
309
334,555
148,544
5,272
Arts, entertainment, & recreation
68
102,046
27,227
2,033
Accommodation & food services
364
282,490
83,691
6,554
Other services (except public administration)
267
93,846
25,906
1,259
Source: 2002 Economic Census, Geographic Area Series Questions?
Last revised: October 07, 2005
Pennsylvania’s manufacturing industry continues to shed jobs and its economy
continues to adapt and transform itself from one of goods producing to service
providing.
Monroe County, in particular, has a heavily tourist-based economy and will
continue to use its scenic resources to provide recreational services for the
Northeastern region of Pennsylvania. However, the county continues to encourage
economic development by attracting new industries to the area.
Monroe County is not immune to the impact of the current national economic
crisis. The county’s 2009 budget as approved, although balanced, calls for the first tax
increase in property taxes since 2002 as well as a delay in new hirings until July.
Additionally, $600,000 of capital spending will be put off until the summer.
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Government
Given East Stroudsburg University’s position as a member of the Pennsylvania
State System of Higher Education (PASSHE) and a “state-owned” institution, trends in
governmental activity are relevant to our future financial health. Approximately one-third
of the University’s operating budget is derived from state appropriations, now
approximately $27 million per year. Additionally, significant capital (building) funding
also comes from the Commonwealth.
Where once the University received approximately 2/3s of its operating budget
through state appropriations, we now receive approximately 1/3 of our operating
resources via state funding. For the past 15 years, appropriations have not kept pace
with either student growth or increased costs due to inflation. The burden of addressing
these costs has been shifted to the students by increasing tuition. As a result, college
affordability continues to decline. The National Center for Public Policy and Higher
Education’s Measuring Up 2008 Report gives 49 of 50 states, including Pennsylvania, a
grade of F in higher education affordability. To follow is a graph taken from The
National Center for Public Policy and Higher Education’s Measuring Up 2008 Report
depicting the percentage of income needed to pay for public two- and four-year colleges
(Pennsylvania vs United States vs the median of the top five states).
Affordability
Legend
Pennsylvania
United States
Median of Top Five States
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It is anticipated the state’s downward trend in support for Higher Education, and
in particular the State System of Higher Education, will continue into the foreseeable
future. In recent years, the Governor has focused his higher education funding efforts
on community colleges. In 2005-06, the Governor signed into law the largest increase
in community college funding in 15 years. In 2006-07, he again increased the
investment in community colleges, this time by 5%, including funding for capital
improvements. In comparison, PASSHE received a 3.9% increase for the same time
period with only a 2.7% increase in tuition. As a result, real dollar decreases have been
experienced based on actual growth and inflation. The Governor has recommended a
0% increase in the PASSHE state appropriation for FY 2009-10 while community
colleges will enjoy a 1.8% increase.
An additional issue of some importance to public higher education is the
increased concern on the parts of the executive and legislative branches of government
on accountability. Government expects public universities to run efficiently and to use
the public funds provided to us as carefully as possible. Further, government expects
results from the universities it funds in the form of well-trained students, who move
expeditiously through their academic programs and become capable of contributing to
the state’s economy. According to “A Rising Tide, The Current State of Higher
Education in the Commonwealth of Pennsylvania” (April, 2006), postsecondary
institutions across the Commonwealth are expected to satisfy 3 basic criteria:
1. Full Access – so that anyone with the necessary qualifications can pursue
postsecondary education.
2. Reasonable Choice – such that individual students can pursue programs
of study that are personally rewarding and reasonably priced.
3. Fair Return on the Public Funds Invested in Higher Education – such that
there is both enhanced economic progress and civic participation across
the Commonwealth.
East Stroudsburg University and PASSHE have been successful in meeting
these expectations, producing skilled, successful graduates. According to the most
recent study conducted on behalf of PASSHE, more than 405,000 PASSHE alumni live
and work in the Commonwealth of Pennsylvania. Additionally, PASSHE and its 14
member universities have a combined annual economic impact on the Commonwealth
of nearly $4.5 billion.
The notion of “performance indicators” and “performance funding” grew out of the
concern for accountability. PASSHE was one of the first and continues to be one of
the few public university systems in the nation to voluntarily implement and continue
performance funding. Since the program began in 2000, the Board of Governors has
steadily increased the amount of funding available to the universities for improving their
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performance, for outperforming their peers nationally and for meeting System goals.
Nearly $40 million in performance funding will be awarded to the universities this fiscal
year. It is anticipated that this amount will remain stable or grow slowly during the next
5 to 10 years. However, how an institution benefits from such funding will depend
entirely on its performance vis-a-vis the indicators. During the earlier years when
performance funding was implemented, East Stroudsburg University had experienced a
net loss in terms of the potential for performance funding allocations. This posture is
changing with improvement in our results from the indicators that produce revenue. A
cautious position would be to project level funding from this source so as not to produce
revenue shortfalls from this tenuous source.
The following graph shows a history of East Stroudsburg University’s
performance funding allocation since the start of the program.
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Economic Development
East Stroudsburg University is an economic engine for Monroe County. It is wellpositioned as a major center for innovation, science and technology in northeastern
Pennsylvania. The university is located 75 miles west of New York City and 85 miles
northeast of Philadelphia, placing it in close proximity to the nation’s top global
pharmaceutical and financial services companies.
The University’s new Science and Technology Center is a major attraction in
bringing innovative business and education opportunities to the region. In addition, the
university is centrally located in the nine-county Workforce Innovation in Regional
Economic Development (WIRED) Wall Street West Region and is actively engaged in
the Pocono Mountains Keystone Innovation Zone (PMKIZ). These initiatives, supported
by the creation of the University’s new College of Business and Management, Research
and Economic Development Division, and the new ESU Research and Business Park,
provide a strong foundation for regional alliances and academic opportunities which
prepare students to serve, lead and succeed in a global society.
East Stroudsburg University’s contributions to regional economic development
efforts are noteworthy. East Stroudsburg University is currently the ninth largest
employer in Monroe County, providing 750 jobs directly and creating a total employment
impact of 1,206 jobs. The university generates more than $273.5 million annually in
direct and indirect business stimulus in Pennsylvania, $109.9 million annually in Monroe
County, and $18.3M in East Stroudsburg and Stroudsburg. This encompasses the
impact of spending by the institution, faculty, staff, students and visitors. Additionally,
ESU is located on 256 acres located in East Stroudsburg Borough and Smithfield
Township that are valued at $322M.
ESU has been identified as a “best practice” model in community and economic
development regionally and by the Pennsylvania State System of Higher Education
(PASSHE). The success of the ESU Business Accelerator Program has led to the
creation of nine high tech companies including two companies owned by ESU
graduates and one faculty-owned company. The Pocono Mountains Keystone
Innovation Zone Program has resulted in 170 jobs retained, 36 businesses assisted, 48
student internship placements and $7.8M revenue earned by KIZ companies.
The success of these programs complemented by ESU’s strategic academic
mission has lead to the development of the ESU Research and Business Park on 15
acres of university-owned property. The Park, operated by the ESU Center for
Research and Economic Development, is focusing on attracting start-up/anchor
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companies and educational opportunities in the areas of homeland security, financial
services, biotechnology/life sciences, information technology, healthcare, and advanced
manufacturing. The economic impact projections of Phase 1 of the project which
includes the construction of a 51,000 sq.ft. ($11.25M) Technology and Innovation
Center is 595 jobs and $57M into the Monroe County economy. Additionally, the ESU
Research Park was recently awarded $1M from the Monroe County Gaming Funds
which support community and economic development projects.
Finally, in FY 07-08 and in FY 08-09, PASSHE received legislative appropriations
totaling $3.678M to support economic development initiatives across the
Commonwealth. ESU was awarded $357,000 to support the following economic
development initiatives:
 ESU Web-Based Internship Network (WIN) ($60,000)
 ESU Entrepreneurial Leadership Center ($191,000)
 ESU Research and Business Park Infrastructure ($106,000)
In the area of sponsored projects and research, in FY 07-08, ESU faculty and
staff submitted external grant and contract requests totaling $17.7M and successfully
secured $5.09M. Workforce development initiatives included administrating $622,354 in
employee-training grants involving 42 businesses and training of over 3,600 employees.
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Facilities
Analysis of our current space during a recent study conducted by Sightlines, Inc.
revealed East Stroudsburg University is an older campus in comparison to its peers
within PASSHE. According to their report, greater than 50% of our facilities are more
than 50 years old and 95% of our facilities are greater than 25 years old.
Looking back 5 years, there was $18.3 million of deferred maintenance from
fiscal year 2004 – fiscal year 2008 with anticipated additions in the range of $3-5M per
year each year thereafter.
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Much of our 2002 campus master plan has been achieved. Thus, the University
contracted a master plan consultant to revisit and devise a new plan. Our new plan is
under development and proposes new facilities that will greatly improve the functionality
of Campus facilities However, the capital funding requirements for new and renovated
buildings proposed in this plan are in the hundreds of millions of dollars while ESU’s
current share of the PASSHE capital budget is approximately $3.5 million / year.
The University is space-constrained for future growth without additional new or
modernized facilities and also by the condition of our residence halls and the number of
available beds. Much work has been done to correct this.
Our new Science and Technology Center (120,000 square feet of new academic
space) was completed in 2008 and a renovation of Monroe Hall (40,000 of new
academic space) is funded with construction scheduled to begin the summer of 2009.
Subsequent to that, a new large academic building is anticipated on the sites of the
current Rosenkrans Hall and LaRue Hall which will be demolished. These new facilities
will position the University for the enrollment growth planned in the near and
intermediate terms.
Support facilities for housing, dining and activities are being considered. The
University’s partner, University Properties, Inc, completed 541 beds of student housing
that is already 100% occupied. This increased our ability to house students by more
than 15%. UPI has a development an agreement with Allen & O’Hara to construct new
residence halls and to modernize or replace the existing residence halls. However, the
current economy makes UPI’s ability to acquire bond funding for new construction
questionable. If the bond funding proves to be unavailable, East Stroudsburg University
is at risk for sunk costs while already carrying a heavy debt burden for its share of the
Science & Technology Center and the GESA project
The University is also in dire need of additional parking but has no current
income stream to support the requirements. Finally, utility costs are expected to
escalate with the expiration of the electrical rate cuts imposed by deregulation. It has
been estimated there is a potential for electrical rate increases in 2020 of 30% to 40%
or more.
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Financial Resources
East Stroudsburg University is fiscally sound, receiving an unqualified opinion on
their audited financial statements for Fiscal Year 2007-08. Over the past three fiscal
years, ESU has enjoyed increases in unrestricted net assets as follows:
There are four core higher-level ratios that can provide information on the overall
financial health of an institution: Primary Reserve Ratio, Viability Ratio, Return on Net
Assets Ratio and Net Operating Revenues Ratio. Each of these ratios was calculated
for East Stroudsburg University using data from our Fiscal Year 2007-08 financial
statements. Although the ratios allow for the inclusion of component unit data, the
results presented for ESU below do not.
The resulting ratio values will be useful when assessing future prospects of the
University as well as when developing our strategic plan.
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Four Core Higher-Level Ratios on the Overall Financial Health of the Institution
Name of Ratio
Primary Reserve Ratio
ESU's Ratio Value
What Does it Mean?
.293x
Can the institution retain expendable
resources at the same rate of growth
as its commitments? The implication
for ESU is that we could cover 3 1/2
months (29% of 12 months) expenses
from reserves.
Net Operating Revenues Ratio
4.16%
Return on Net Assets Ratio
5.25%
Viability Ratio
1.12
Explains how any surplus from
operating activities affect the
behavior of the other 3 core ratios.
For ESU, the positive percentage
indicates we had a surplus for this
past fiscal year equal to 4.16% of our
total Operating Revenues. A target of
2-4% is usually good.
Determines if an institution is
financially better off than in previous
years by measuring total economic
return. A return of 3-4% is usually
good.
Used to determine the availability of
expendable net assets to cover debt
should the institution need to settle
its obligations as of the balance sheet
date. A ratio of 1:1 generally means
sufficient expendable net assets are
available to satisfy debt obligations.
Enrollment trends/predictions
Recent history would indicate that East Stroudsburg University can control its
own enrollment destiny as long as it plans carefully to take advantage of all the positive
factors influencing this enrollment.
Over the past five years, undergraduate enrollment has increased at an average
rate of 3.6% per year. This was during a period that the planning perspective on
enrollment indicated the goal of slow and steady enrollment growth at the rate of
approximately 1% per year. Undergraduate headcount enrollment has increased 19.0%
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over this five-year period while undergraduate full-time-equivalent (FTE) enrollment has
increased 21.3%.
Meanwhile, graduate enrollment has increased at an average rate of 1.9% per
year over this same five-year period. Graduate headcount enrollment has increased
9.0% over this five-year period while graduate full-time-equivalent (FTE) enrollment has
increased 11.2%.
The immediate challenge is that neither undergraduate nor graduate enrollment
patterns matched predictions such that both resources and budgets could be planned
accordingly.
Taking the same growth rates and factoring them over time into the future, we
see a university in 2013 with 7,279 undergraduate students and 1,247 graduate
students for a total enrollment of 8,526. Continuing this pattern five more years to 2018
we have 8,687 undergraduate students and 1,370 graduate students for a total of
10,057.
Meanwhile the university’s freshman acceptance rate has dropped indicating we
could be enrolling more freshmen than we currently are if we are willing to accept more
students. Overall the retention rates have improved by several percentage points in the
past five years suggesting better preparation of the students we are enrolling.
An area of concern is the beginning decline in the number of high school
graduates from high school throughout our region. Projections indicate individual
school districts either peaked last year, or will peak this year or next year. This presents
new challenges for the university. The current world-wide economic recession is also
an area of concern because this may prevent some students from affording to attend
any college even though it may also have the effect of bringing us students who cannot
afford more expensive institutions.
Therefore, the university needs to decide what the growth plans will be for the
future and put in process the planning that is necessary to determine where this growth
will be (undergraduate versus graduate, and in what major programs) if we choose to
continue these patterns of growth. Without careful planning, we risk the reoccurrence of
a major student retention problem because of our inability to service the students we
enroll (class availability, parking, housing, student services, etc.). The university must
also determine the role of distance education, off-site course delivery, and other noncampus based instructional models will have in its future.
The University’s enrollment goals have been loosely organized around a sense
of our potential for growth, which is great, tempered by the desire to retain the intimate
instructional atmosphere that has characterized the University for many years. When
the University last completed a master plan, the figure settled on for total enrollment
was 8,500 over a 10-15 year period. While unofficial annual projections have been for
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1% growth in undergraduates and to allow graduate enrollment to float naturally as
capacity for graduates is less constricted, in five of the last seven years, enrollment
increases have exceeded those projections.
Given the System’s approach to allocating funds, an enrollment strategy calling
for metered growth positions the University to benefit from future allocations. This will
become more evident as enrollment growth slows at most other System schools. While
it is important that issues relative to the University’s enrollment goals receive the
broadest possible input, it is appropriate to continue a trend of assuming cautious
enrollment growth while these discussions begin. For financial purposes it is assumed
enrollment growth will be approximately 2% annually.
Appropriation trends/predictions
In terms of finances, the University is largely dependent on revenue from two
streams: 1) Commonwealth appropriations, and 2) Tuition and Fees.
In the case of appropriations, resources have been decreasing steadily as a
proportion of our overall budget. PASSHE’s E&G appropriation per full-time equivalent
(FTE) student from the state has declined 21% in inflation-adjusted dollars since Fiscal
Year 1997-98. Also, since 1997-98, PASSHE’s tuition has increased 16% in inflationadjusted dollars while comparable state-related universities’ tuition rates increased
substantially more. Most recently, Gov. Rendell has requested the return of 4.25% of
our Fiscal Year 2008-09 state appropriation due to the projected shortfall in the
Commonwealth’s budget.
The following graph depicts East Stroudsburg University’s state appropriation for
the past several years:
Page 23 of 29
Growth in E and G resources has largely rested with increased tuition revenue
during the past 5 years or so. Although the System-approved tuition and fee increases
have been moderate, enrollment increases have supplemented the benefits of these
increases and the University has the potential of continued growth, if it chooses to do
so.
For the purposes of discussion, we will assume our appropriations will track the
average increase of the past 10 years. This would lead to an annual increase of
approximately 3%. It is loaded in the first year with a 0% increase as this was the
recommendation made by the Governor for 2009-10 in his February 2009 Budget
Briefing.
The University will have to discuss all alternatives and determine what is likely to
be the most accurate reflection of what may occur.
Tuition trends/predictions
Predicting tuition revenue is a difficult and complex task. There has been
increased attention on tuition by the Governor’s office during the past three years and it
is anticipated that this will continue. The Governor wishes to keep increases to an
absolute minimum. Another issue impacting tuition is the spread between in-state and
out-of-state tuition. State government has expressed the desire to not subsidize out-ofstate students in any way. Out-of-state tuition is 250% of in-state tuition and is so set to
ensure that out-of-state students pay the full cost of educating themselves.
In the past, the University had a limit of 15% on out-of-state students. However,
this has been relaxed somewhat recently and the University’s out-of-state enrollment
has now floated to 25% or more. This has been very helpful in generating revenue in a
time when appropriation increases have been so limited. For the purposes of revenue
projection, it is appropriate to hold out-of-state enrollment at current levels. However, if
the University were to grow its out-of-state enrollment beyond 30%, unwanted attention
would very likely be drawn to us.
To follow are graphs of tuition and fees for the past 10 years:
Page 24 of 29
Page 25 of 29
It can be seen that increases vary considerably within the various categories. It
is unknown at this time how much the System is willing to increase tuition next year. On
the recommendation of the PASSHE Budget Office, 3% will be used for planning
purposes.
The University charges several fees in addition to tuition. The Business Office
will be conducting a review of all fees for consideration by the President’s Council and
the Senate Budget and Planning Committee. It is anticipated that we will find some
flexibility to generate additional revenue by implementing reasonable increases in some
fees.
Other revenues
The University receives some revenue from sources other than appropriations
and tuition and fees. This revenue is primarily interest earned on invested funds, but
also includes rental income and a few other small items. Historically we have budgeted
this category level with no increases. Anticipating interest rates, especially during the
current economic crisis, is difficult at best.
Expenditure trends/predictions
Expenditure projections are based on somewhat limited information about
salaries and benefits. This analysis attempts to project salaries based on the collective
bargaining agreements and benefits using the best known rates at this time as per the
PASSHE Budget Office. In the area of nonpersonnel services (utilities, supplies, etc.) it
is wise to assume moderate increases in utilities following a year of significant increases
due to the rapidly rising cost of oil and gas. Other commodities are projected using a
flat 4% as an inflationary factor.
Page 26 of 29
East Stroudsburg University
SWOT Analysis
Strengths
• Competitive Advantage
• Monopoly position in Monroe, Pike and Wayne Counties as well as
most of Western Jew Jersey
• Close proximity to NYC and Philadelphia
• Attractive, well-maintained campus
• Completion of Science & Technology Building
• Commitment to Diversity
• Competent faculty, dedicated to our students, a large number
holding terminal degrees
• Good curriculum
• Growing student body
• Enrollment Services model
• Commitment to research & economic development
• Fiscally sound (unqualified audit opinion)
Weaknesses
•
•
•
•
Lack of a known enrollment plan
Space constrained for future growth
Age and condition of University buildings, including dormitories
Inadequate parking facilities but no revenue stream to support
additional parking
• Steam plant, steam & sewer distribution system need major
upgrades
• Insufficient support of research and non-existent research facilities
• Significant debt related to Science & Technology Building and GESA
project
• Ineffective/antiquated systems (e-billing, credit cards online,
drop/add system)
• Difficulty changing curriculum
Opportunities
•
•
•
•
Current economic crisis & the $789B Economic Stimulus Bill
Pennsylvania Tuition Relief Fund
Doubling PA Capital Appropriation for PASSHE
Weak economy is expected to expand the available labor pool in
Monroe County
• Growth in industry sectors all of which ESU offers programs
• Population growth in Monroe and surrounding counties
• Continued improvement in the performance indicators
• Completion of Science & Technology Center & renovation of Monroe
Hall
• Master plan proposes new facilities that will greatly improve
functionality of campus facilities
• Plans to construct new residence halls and to modernize or replace
existing ones
• Commitment to research & economic development (new division; new
Technology & Innovation Center)
• New faculty with their own areas of expertise
Threats
•
•
•
•
•
Threat of decreased enrollments due to current economic crisis
Increased competition
Popularity of community colleges
Distance Education
Current economic crisis could resultin the tightening of credit (
reducing the availability of student aid and student loans) and could
impact our collection rate
• Potential for state appropriation cuts
• Campus Master Plan requirements in the hundreds of millions while
ESU’s share of the PASSHE capital budget is approx. $3.5M/Yr
• Ability to acquire bond funding for new residence halls given the
current economy
• Oversight (Legislative, PASSHE, Accrediting bodies)
• Potential for significant electric rate increases with deregulation
• Perception of diversity on campus
SALARIES - APSCUF - INSTRUCTIONAL
SALARIES - SCUPA
SALARIES - STATE UNIVERSITY MANAGERS
SALARIES - AFSCME - 37.5 HRS
SALARIES - PLANT GRDS, NURSES, FT COACHES
WAGES
STUDENT EMPLOYMENT
FACULTY SUMMER SCHOOL PAY
FACULTY OVERLOAD REG SCHED CLASSES
OTHER PAY
OVERTIME
SHIFT DIFFERENTIAL
HIGHER CLASS
SICK LEAVE PAY OUT
ANNUAL LEAVE PAY OUT
PERSONNEL EXPENSES
STATE APPROPRIATION
BASE
AFRP
PERFORMANCE FUNDING
PROGRAM INITITATIVES
LIBRARY (30%)
ACCREDITATION (70%)
RETURN OF 4.25% 2008-09 APPROPRIATION
TUITION
Undergraduate In-State - Academic Year
Undergraduate In-State - Summer
Undergraduate Out-State - Academic Year
Undergraduate Out-State - Summer
Graduate In-State - Academic Year
Graduate In-State - Summer
Graduate Out-State - Academic Year
Graduate Out-State - Summer
INSTRUCTIONAL SUPPORT FEE (40% Trfd to Provost)
OTHER STUDENT FEES
INCOME ON INVESTMENTS
SUMMER CONFERENCE REVENUE
INSTRUCTIONAL TECHNOLOGY FEE
OTHER INCOME
Non-Credit Continuing Ed
Grants:
Federal
State
Local
System
Private
Gifts:
Foundation - Science & Tech Building
Sales & Services
Corporate Partnerships
Parking & Library Fines
Miscellaneous Revenue
TOTAL REVENUE
REVENUE:
23,605,791.35
1,671,827.90
20,370,909.09
850,015.87
3,827,783.61
1,549,845.41
1,211,792.82
460,652.55
3,829,800.04
1,571,387.79
1,451,326.00
1,069,542.77
1,458,243.56
65,069.88
48,764.16
2,558.16
31,426.20
(1,702.38)
1,020.00
1,426,684.20
1,211,237.76
80,542.26
116,452.18
349,434.00
94,099,294.18
22,481,706.05
1,592,217.05
19,400,865.80
809,538.92
3,645,508.20
1,476,043.25
1,154,088.40
438,716.71
3,647,428.61
1,540,576.26
1,451,326.00
1,069,542.77
1,429,650.55
65,069.88
48,764.16
2,558.16
31,426.20
(1,702.38)
1,020.00
1,426,684.20
1,211,237.76
80,542.26
116,452.18
349,434.00
90,124,431.21
25,735,721.94
1,060,431.83
7,738,721.56
6,534,376.85
1,796,040.55
463,450.00
1,149,328.00
2,348,913.00
1,042,902.00
2,316,364.00
382,169.00
35,000.00
144,009.00
300,000.00
190,000.00
220,166.10
513,720.90
220,166.10
513,720.90
(1,183,152.78)
24,714,992.74
1,013,312.79
7,431,788.69
6,204,307.68
1,704,508.45
463,450.00
1,149,328.00
2,348,913.00
1,042,902.00
2,316,364.00
382,169.00
35,000.00
144,009.00
300,000.00
190,000.00
24,572,036.00
331,267.00
2,201,699.00
2009-2010
24,572,036.00
331,267.00
2,201,699.00
2008-2009
26,955,543.97
1,115,772.80
8,105,521.57
6,882,585.63
1,891,900.51
463,450.00
1,149,328.00
2,348,913.00
1,042,902.00
2,316,364.00
382,169.00
35,000.00
144,009.00
300,000.00
190,000.00
1,426,684.20
1,211,237.76
80,542.26
116,452.18
349,434.00
97,863,974.40
48,764.16
2,558.16
31,426.20
(1,702.38)
1,020.00
65,069.88
24,786,080.92
1,755,419.30
21,389,454.54
892,516.66
4,019,172.79
1,627,337.68
1,272,382.46
483,685.17
4,021,290.04
1,602,815.54
1,451,326.00
1,069,542.77
1,487,408.43
226,771.08
529,132.53
25,309,197.08
341,205.01
2,267,749.97
2010-2011
28,233,183.14
1,174,001.86
8,489,707.17
7,249,350.03
1,992,876.79
463,450.00
1,149,328.00
2,348,913.00
1,042,902.00
2,316,364.00
382,169.00
35,000.00
144,009.00
300,000.00
190,000.00
1,426,684.20
1,211,237.76
80,542.26
116,452.18
349,434.00
101,798,367.53
48,764.16
2,558.16
31,426.20
(1,702.38)
1,020.00
65,069.88
26,025,384.97
1,843,190.26
22,458,927.27
937,142.49
4,220,131.43
1,708,704.57
1,336,001.58
507,869.43
4,222,354.54
1,634,871.85
1,451,326.00
1,069,542.77
1,517,156.60
233,574.22
545,006.50
26,068,472.99
351,441.16
2,335,782.47
2011-2012
29,571,379.86
1,235,269.73
8,892,102.41
7,635,658.84
2,099,242.47
463,450.00
1,149,328.00
2,348,913.00
1,042,902.00
2,316,364.00
382,169.00
35,000.00
144,009.00
300,000.00
190,000.00
1,426,684.20
1,211,237.76
80,542.26
116,452.18
349,434.00
105,910,421.75
48,764.16
2,558.16
31,426.20
(1,702.38)
1,020.00
65,069.88
27,326,654.21
1,935,349.78
23,581,873.64
983,999.62
4,431,138.00
1,794,139.80
1,402,801.66
533,262.90
4,433,472.27
1,667,569.29
1,451,326.00
1,069,542.77
1,547,499.73
240,581.44
561,356.70
26,850,527.18
361,984.40
2,405,855.94
2012-2013
Fiscal Years 2008-2009 through 2013-2014
Assumptions
3% tuition increase, 2% enrollment increase annually
3% tuition increase, 2% enrollment increase annually
3% tuition increase, 2% enrollment increase annually
3% tuition increase, 2% enrollment increase annually
3% tuition increase, 2% enrollment increase annually
3% tuition increase, 2% enrollment increase annually
3% tuition increase, 2% enrollment increase annually
3% tuition increase, 2% enrollment increase annually
3% tuition increase, 2% enrollment increase annually
2% enrollment increase; no rate increase
Held constant
Held constant
2% enrollment increase; no rate increase
30,973,004.45
1,299,734.99
9,313,570.37
8,042,553.57
2,211,285.21
463,450.00
1,149,328.00
2,348,913.00
1,042,902.00
2,316,364.00
382,169.00
35,000.00
144,009.00
300,000.00
190,000.00
1,426,684.20
1,211,237.76
80,542.26
116,452.18
349,434.00
110,075,462.73
48,764.16
2,558.16
31,426.20
(1,702.38)
1,020.00
Latest salary increase and benefit assumption data available
Latest salary increase and benefit assumption data available
Latest salary increase and benefit assumption data available
Latest salary increase and benefit assumption data available
Latest salary increase and benefit assumption data available
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
65,069.88 Held constant
28,692,986.93
2,032,117.26
24,760,967.32
1,033,199.60
4,652,694.90
1,883,846.79
1,472,941.75
559,926.05
4,522,141.72
1,700,920.67
1,451,326.00
1,069,542.77
1,578,449.73
247,798.89 0% increase in 2010; 3% increase annually every year thereafter
578,197.40 0% increase in 2010; 3% increase annually every year thereafter
27,656,043.00 0% increase in 2010; 3% increase annually every year thereafter
372,843.93 0% increase in 2010; 3% increase annually every year thereafter
2,478,031.62 0% increase in 2010; 3% increase annually every year thereafter
2013-2014
EAST STROUDSBURG UNIVERSITY
SOURCES AND USES OF FUNDS ESTIMATE
Page 27 of 29
SUMMER CONFERENCES SCHOLARSHIP COMMITMENT
DEBT SERVICE ON MASTER PLAN PROPERTY ACQUISITIONS
DEBT SERVICE ON SCIENCE & TECHNOLOGY BUILDING
DEBT SERVICE ON GESA PROJECT
DEBT SERVICE ON PED SAFETY/STORM WATER MGMT PROJECT
SYTEC PROJECT (SAP)
216 NORMAL STREET BOND PMT per 12/1/2001 Bond Statement
TRANSFERS:
****** General Support Inst Fee Amt (60.0%) ****** Non-Add
PRESIDENTIAL INITIATIVES FUNDING
INSTRUCTIONAL SUPPORT FEE EXPENSE
ONE-CARD PROGRAM
INVESTMENT IN INSTRUCTIONAL TECHNOLOGY
LIBRARY ACQUISITIONS BUDGET
SUMMER CONFERENCE PROCEEDS ALLOCATION
TOTAL CAPITAL COSTS
CAPITAL:
UTILITIES
Electric
Gas
Fuel Oil
Other
TELEPHONE AND PANET
POSTAGE
SHUTTLE SUBSIDY
DESIGNATED REVENUES EXPENSE
SUMMER CONFERENCES DIRECT EXPENSE
COOPERATING TEACHERS (Object 625.25)
CENTRAL CHARGES
IUP COLLABORATIVE DOCTORAL PROGRAM FEE
MARINE SCIENCE CONSORTIUM MEMBERSHIP DUES
PRESIDENTIAL AWARDS
CHANCELLORS .5% SHARE OF TUITION & FEES
PERFORMANCE FUNDING
LIBRARY (30%)
ACCREDITATION (70%)
A. COHN MEMORIAL JAZZ COLLECTION
DEPARTMENT OPER BUDGTS & PAYMENTS ON BEHALF
TRANSPORTATION EXPENSE - COACHES
LEASE - CENTER FOR RESEARCH & ECONOMIC DEVELOPMENT
TUITION WAIVER-OTHER THAN EMPLOYEE
TOTAL OPERATING COSTS
OPERATING EXPENSES:
93,043.02
238,174.07
1,426,684.20
$940,044.88
427,236.09
233,483.00
69,008.76
$50,000.00
$1,458,971.44
75,000.00
1,429,650.55
538,268.73
383,651.40
$3,935,542.13
2,259,166.97
$15,583,125.28
220,166.10
513,720.90
20,000.00
7,431,956.87
156,000.00
855,283.10
1,073,834.76
18,170.74
116,305.79
370,000.00
341,000.00
27,000.00
302,634.00
592,848.35
148,000.00
682,396.03
55,000.00
62,500.00
75,000.00
262,141.67
93,043.02
238,174.07
1,426,684.20
$940,044.88
427,236.09
233,483.00
69,008.76
$50,000.00
$1,531,920.02
75,000.00
1,458,243.56
575,947.54
383,651.40
$4,074,762.52
93,043.02
238,174.07
1,426,684.20
$940,044.88
427,236.09
233,483.00
69,008.76
$50,000.00
$1,608,516.02
75,000.00
1,487,408.43
616,263.87
383,651.40
$4,220,839.72
226,771.08
529,132.53
20,000.00
8,038,404.55
156,000.00
336,000.00
2,396,750.24
$17,039,296.80
302,634.00
592,848.35
148,000.00
738,079.55
55,000.00
62,500.00
75,000.00
288,567.29
302,634.00
592,848.35
148,000.00
709,691.87
55,000.00
62,500.00
75,000.00
275,034.31
220,166.10
513,720.90
20,000.00
7,729,235.14
156,000.00
168,000.00
2,326,941.98
$16,273,818.65
979,213.62
1,229,433.42
20,803.68
133,158.50
370,000.00
341,000.00
915,152.92
1,149,003.19
19,442.69
124,447.20
370,000.00
341,000.00
93,043.02
238,174.07
1,426,684.20
$940,044.88
427,236.09
233,483.00
69,008.76
$50,000.00
$1,688,941.82
75,000.00
1,517,156.60
659,402.34
383,651.40
$4,374,152.16
233,574.22
545,006.50
20,000.00
8,359,940.73
156,000.00
336,000.00
2,468,652.75
$17,664,523.68
302,634.00
592,848.35
148,000.00
767,602.73
55,000.00
62,500.00
75,000.00
302,772.54
1,047,758.57
1,315,493.76
22,259.94
142,479.59
370,000.00
341,000.00
93,043.02
238,174.07
1,426,684.20
$940,044.88
427,236.09
233,483.00
69,008.76
$50,000.00
$1,773,388.91
75,000.00
1,547,499.73
705,560.51
383,651.40
$4,535,100.55
240,581.44
561,356.70
20,000.00
8,694,338.36
156,000.00
336,000.00
2,542,712.33
$18,318,912.91
302,634.00
592,848.35
148,000.00
798,306.84
55,000.00
62,500.00
75,000.00
317,683.60
1,121,101.67
1,407,578.32
23,818.13
152,453.17
370,000.00
341,000.00
Fiscal Years 2008-2009 through 2013-2014
93,043.02
238,174.07
1,426,684.20
$940,044.88
427,236.09
233,483.00
69,008.76
$50,000.00
$1,808,856.69
75,000.00
1,578,449.73
$754,949.74
$383,651.40
$4,650,907.56
247,798.89
578,197.40
20,000.00
9,042,111.90
156,000.00
336,000.00
2,618,993.70
$19,003,956.87
302,634.00
592,848.35
148,000.00
830,239.11
55,000.00
62,500.00
75,000.00
333,335.65
1,199,578.79
1,506,108.80
25,485.40
163,124.89
370,000.00
341,000.00
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
Held constant
2% enrollment increase; no rate increase
Held constant
2% enrollment increase; no rate increase
7% increase annually
Held constant
0% increase in 2010; 3% increase annually every year thereafter
0% increase in 2010; 3% increase annually every year thereafter
Held constant
4% inflationary increase
Held constant
Held constant
Increases at same rate as tuition
Held constant
Held constant
Held constant
4% inflationary increase
Held constant
Held constant
Held constant
Increases at same rate as tuition
7% increase
7% increase
7% increase
7% increase
Held constant
Held constant
EAST STROUDSBURG UNIVERSITY
SOURCES AND USES OF FUNDS ESTIMATE
Page 28 of 29
Page 29 of 29
ACKNOWLEDGMENTS
Diversity & Inclusion
Dr. Victoria Sanders
Danelle McClanahan
Daria Wielebinski
Martin Lacayo
Tonderlera Ragin
Research & Economic Development
Mary Frances Postupack
Patti Campbell
Brad Klein
Miguel Barbosa
Michelle Keiper
Ingrid Sidlosky
Adacemic Effectiveness
Dr. Hank Gardner
Dr. Joe Cavanaugh
Patti Kashner
Juan Rodriguez
Kizzy Morris
Facilities
Syed Zaidi
Bill Pierson
Government & Economic
Environment
Dr. Constantinos Christofides
Financial Resources
Donna Bulzoni
Debbie Grimm
Institutional Research
Curtis Bauman