Operating Budget
For Fiscal Year 2015-2016
Operating Budget for Fiscal Year 2015–2016
Executive Summary
Operating Budget
Uses of Funds
The proposed budget for Fiscal Year (FY) 2015/16
totals $151.8 million, compared to the FY 2014/15
budget of $145.7 million, an increase of 4%.
The total payroll and benefits budget is 4% above the
prior year, an increase of $4.1 million. The faculty
and administrative and support staff payroll budgets
are proposed to increase by 5% and 4%, respectively,
adding a combined $2.8 million of expense. Casual
labor and student labor are budgeted to increase 1%
and 3%, respectively. Health benefits are expected to
increase by 8%.
Sources of Funds
For the fifth consecutive year, the comprehensive
fee is assumed to increase by 3%. This increase,
based on an annualized on-campus enrollment of
1,785, will result in a gross tuition and fees budget
approximately 2% higher than the prior year.
The financial aid budget is proposed to increase by 6%,
adding $1.9 million and totaling $34.4 million. The
budget continues to fund the College’s commitment
to need-blind admissions. The percentage of students
on aid is anticipated to increase from 44.5% to 45%.
Tuition and fees, less financial aid, are budgeted
at $73.8 million, up 1% from FY 2014/15, and
represent 49% of total sources of funds, down from
51% in FY 2014/15.
The recommended use of endowment distribution
is $48.7 million, an increase of 11%, producing an
additional $4.8 million of revenue over FY 2014/15.
This is a result of the growth in the endowment and
assumes a proposed spending distribution of 5% of
the twelve-quarter moving average market value of
the endowment as of June 30, 2014, as well as a
97% utilization of the annual distribution.
The designated funds budget, which includes grants,
discretionary funds, trust income, restricted gifts,
and other funds, is $10.3 million, increasing 4% from
FY 2014/15.
Unrestricted annual giving and auxiliary enterprises
are budgeted to increase 3% and 5%, respectively.
The budgeted use of the 2014–2019 reserve is set
at $3.9 million, although history suggests it is likely
that less of the reserve will be utilized.
The faculty payroll budget includes an additional 1.0
full-time equivalent (FTE). The administrative and
support staff payroll budget includes an additional
15.55 FTE and reductions of 4.58 FTE, for a net
increase of 10.97 FTE.
Operational uses of funds are proposed to increase
by 4%, $2 million over the prior year, bringing total
non-payroll uses to $55.9 million. The FY 2015/16
budget includes expenses, as well as revenue,
associated with the Coastal Studies Center and the
Digital and Computational Studies Program. The
following areas are proposed to receive slightly above
average funding in FY 2015/16: supplies, software,
printing, postage; travel, recruiting, conferences;
and technology replacement and renewal. The
increases are driven by software maintenance
fees, transportation and trip costs associated with
the Bowdoin Marine Science Semester, training
expenses, and multiple software applications.
Other areas with modest increases include library
materials, utilities, major maintenance and capital
renewal, and debt service. While the utilities budget
typically increases 5%, the proposed 3% increase
is due to a favorable electricity pricing lock through
December 2016.
Page 1
Operating Budget for Fiscal Year 2015–2016
Budget Methodology
Budget Process
The Treasurer’s Office prepared the operating
budget together with the President, senior officers,
and budget managers. Throughout the process,
the Financial Planning Committee of the Board of
Trustees met and provided assistance and insight.
Reconciliation of Operating Budget for
FY 2015/16 to GAAP Basis Financial
Statements
Sources and Uses Net Increase
or (Decrease)
Less: Depreciation on plant
and equipment
$
-
(11,375,000)
The annual budget process typically begins with
budget managers in October, continues into February
with the Board of Trustees receiving a preliminary
draft, and is approved by the Board in May. Following
implementation in July, and with the benefit of yearend financial information, the budget is revised in
October, if necessary.
Add: Equipment expenses capitalized
1,500,000
Add: Capital renewal program
expenses capitalized
3,475,000
Basis of Operating Budget
Presentation
Add: Designated revenues
1,000,000
The operating budget is prepared on a sources and
uses basis of accounting. This basis is a modified
approach to generally accepted accounting principles
(GAAP). The College applies GAAP for external
financial reporting.
Less: Other non-cash items
(1,100,000)
GAAP financial reporting of revenues and expenses
is included in a statement of activities. The College’s
statement of activities includes operating and nonoperating activities for the three net asset categories:
unrestricted, temporarily restricted, and permanently
restricted.
The sources and uses budget focuses solely on the
operational portion of unrestricted and temporarily
restricted net assets. In addition, the sources and
uses budget modifies the treatment of a number
of transactions, in an attempt to budget on a cash
basis. The modifications applied with sources and
uses generally are the exclusion of certain noncash transactions and inclusion of certain cash
transactions. Non-cash transactions excluded are
made up of depreciation expense, amortization, and
others. Cash transactions included are debt principal
payments, capital lease principal payments, and
equipment and capital renewal purchases. Please
see Appendix A for a Comparison of Sources and
Uses to GAAP.
Major capital expenditures, such as new construction
and renovation projects, are not included in the
operating budget. Please see Appendix B for the
Capital Expenditure Plan.
Page 2
Add: Capital lease principal payments
580,000
Add: Realized loss on swap contract
685,000
Estimated GAAP Operating Loss
$ (5,235,000)
Definition of Terms
Please see Appendix C for a Definition of Terms.
Operating Budget for Fiscal Year 2015–2016
Bowdoin College Operating Budget for Fiscal Year 2015/16
Recommended
Actual
Budget
Budget
% of
%
Line
Description FY 2013/14 FY 2014/15 FY 2015/16
total change
Sources
1 Tuition$80,985,769 $83,437,000 $85,223,000 56%
2%
2
Room
9,584,213 10,091,000 10,086,000 7%
(0%)
3
Board 11,340,388 11,500,000 11,995,000 8%
4%
4Fees
795,379 818,000 835,000
1%
2%
5
Gross Tuition & Fees 102,705,749 105,846,000 108,139,000 72%
2%
6
less: Financial Aid (31,461,887) (32,499,000) (34,353,000) (23%)
6%
7
Net Tuition & Fees 71,243,862 73,347,000 73,786,000
49%
1%
8Auxiliary Enterprises4,714,8614,117,0004,305,000 3% 5%
9
Unrestricted Annual Giving
8,277,798
8,388,000
8,640,000
6%
3%
10
Other Income2,149,3312,138,0002,160,000 1% 1%
11 Use of Endowment Distribution 40,646,960 43,835,000 48,676,000
32%
11%
12 Use of Designated Funds
6,917,257
9,977,000 10,348,000
7%
4%
13 Use of 2014–2019 Reserve 2,649,634 3,881,000 3,870,000
2%
(0%)
14
Total Sources 136,599,703 145,683,000 151,785,000 100%
4%
Uses
15Payroll
16Faculty22,207,85823,728,00024,828,000 16% 5%
17 Administration & Support (a) 38,306,322 41,005,000 42,670,000
28%
4%
18
Casual Labor1,262,6931,146,0001,160,000 1% 1%
19 Student Labor
2,009,501
2,004,000
2,059,000
1%
3%
20 Health Benefits (a)
9,370,276 10,683,000 11,551,000
8%
8%
21 Other Employee Benefits (a) 12,113,984 13,275,000 13,635,000
9%
3%
22
Total Payroll 85,270,634 91,841,000 95,903,000 63%
4%
23Operations
24
Contracted Services5,946,4296,450,0006,392,000 4%(1%)
25 Supplies, Software, Printing, Postage
6,887,793
7,363,000
8,194,000
5%
11%
26 Purchases for Resale
4,027,049
3,754,000
3,957,000
3%
5%
27 Travel, Recruiting, Conferences
4,055,445
3,889,000
4,287,000
3%
10%
28
Telecommunications515,291521,000546,0000%5%
29
General Expenses4,201,3974,688,0004,749,000 3% 1%
30
Library Materials2,335,2142,710,0002,780,000 2% 3%
31
Utilities5,177,6315,487,0005,662,000 4% 3%
32
Insurance1,026,1261,048,0001,087,000 1% 4%
33
Leases1,317,8241,358,0001,211,000 1%
(11%)
34 Equipment
931,616 1,315,000 1,451,000
1% 10%
35 Technology Replacement & Renewal
1,338,868
1,529,000
1,657,000
1%
8%
36 Major Maint. & Capital Renewal 4,825,999
4,960,000
5,109,000
3%
3%
37 Debt Service (Principal & Interest) 8,742,387 8,770,000 8,800,000
6%
0%
38
Total Operations 51,329,069 53,842,000 55,882,000
37%
4%
39
Total Uses 136,599,703 145,683,000 151,785,000 100%
4%
40
Net Increase or (Decrease) $- $- $-
(a) Excludes salaries and benefits funded outside of the operating budget.
Page 3
Operating Budget for Fiscal Year 2015–2016
Revenues (Sources)
Net Tuition and Fees
Tuition and fees, less financial aid, represent
approximately 49% of the total sources of funds
reflected in the operating budget. The key inputs to
these amounts are the comprehensive fee, on- and
off-campus enrollment assumptions, the percentage
of students expected to receive aid, and the average
financial aid package.
The College continues to moderate increases in
the comprehensive fee. The proposed increase for
FY 2015/16 is 3%, producing a comprehensive fee
of $61,354. The comprehensive fee increase has
been 3% for five consecutive fiscal years. The total
annualized enrollment, including students studying
away, is projected to be 1,927 FTE, with 1,785 FTE
students on campus and 142 FTE students studying
away. The anticipated size of the first-year class
is 495. These key enrollment assumptions have
changed slightly from FY 2014/15, in which the
budgeted total annualized enrollment is 1,920 FTE,
with 1,800 FTE students on campus and 120 FTE
students studying away.
In addition to these key assumptions are the
percentage of students paying room and board
charges. Previously the budget assumed that 94%
of all students on campus would pay for room and
board. However, the actual number of students
paying room and board charges has shifted recently.
Board participation has been trending closer to 96%,
and room at 92%. The proposed budget incorporates
these changed assumptions. The financial impact of
these adjustments is a slight increase in revenue.
With all of the above mentioned assumptions, gross
tuition and fee revenues are budgeted at $108.1
million, an increase of 2%.
Recommended Tuition and Fees
FY 2015/16
FY 2014/15
Tuition $ 47,744
$
46,354
Room 6,142 5,964
Board Student Activities Fee
7,000
6,796
468
454
Comprehensive Fee $61,354
$59,568
Historical Comprehensive Fees and % Increases
$70,000
6.0%
$60,000
5.0%
$50,000
4.0%
$40,000
3.0%
$30,000
2.0%
$20,000
$10,000
1.0%
$-
0.0%
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
Operating Budget
Fiscal Year End
Comprehensive Fee
% Increase in Comprehensive Fee
Source: Bowdoin College Institutional Research, Analytics, and Consulting
Comprehensive Fee Comparison FY 2014/15
$62,000
$58,000
$56,000
$54,000
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Comprehensive Fee
$60,000
Source: Bowdoin College Institutional Research, Analytics, and Consulting
Page 4
Operating Budget for Fiscal Year 2015–2016
The financial aid budget is proposed at $34.4 million
and continues to fund the College’s commitment to
need-blind admissions. The student aid office uses
its own institutional methodology for determining
each student’s need. The projected total number of
aided students is 867 FTE, up from the FY 2014/15
assumption of 854. This is 45% of the total annualized
enrollment, which includes students studying away.
The average financial aid grant is budgeted to be
$39,620, up from $38,060 in the prior year.
Comparison of Endowment Annualized Returns
Top
BowdoinMeanQuartile
FY 2013/14
19.2%
17.0%
17.2%
3-year annualized
12.3%
10.1%
9.8%
5-year annualized
13.8%
12.5%
12.7%
10-year annualized
10.4%
8.3%
7.7%
Mean data is for Bowdoin’s 18-College comparison
group and Top Quartile data is for all institutions (832),
as reported by the 2014 NACUBO-Commonfund Study
of Endowments.
Historical Tuition Discount %
(financial aid/tuition and required fee revenue)
40.0%
36.0%
32.0%
28.0%
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
24.0%
Fiscal Year End
Source: Audited Financial Statements
Endowment Distribution
With exceptional investment management and
oversight functions, Bowdoin’s endowment has
achieved top quartile performance over the past ten
years.
This marks the third consecutive year in which the
distribution has increased substantially over the prior
year, a by-product of the significant market value growth
realized since the endowment surpassed its pre-crisis
peak in June 2011. Over the three-year period included
in the spending formula (7/1/2011–6/30/2014), the
annualized endowment return was 12.3%.
The College has a spending policy in place that
permits, subject to Board approval, an annual
distribution from the endowment within 4% to 5.5% of
the twelve-quarter moving average market value of the
endowment as of June 30 of the preceding year. The
use of the twelve-quarter moving average attempts to
smooth the volatility of endowment cash flows over
time to support the College’s operating budget, while
simultaneously preserving the purchasing power of
the endowment. For FY 2015/16, the administration
recommends distributing 5% of the twelve-quarter
moving average market value of the endowment as of
June 30, 2014. This percentage is unchanged from
the FY 2014/15 budget and produces a spending
distribution of $50.0 million.
Generally, the entire spending distribution is not
readily available due to restricted endowment terms.
The endowment distribution estimated to be available
for the operating budget for FY 2015/16 is 97% of
the spending distribution, the same as FY 2014/15.
At 97% of the spending distribution, $48.7 million is
included in the FY 2015/16 budget, approximately
32% of total sources. This is an 11% increase over
the FY 2014/15 budgeted amount of $43.8 million.
The endowment’s market value was $1.2 billion as of
June 30, 2014, compared to $1.04 billion as of June
30, 2013. The College’s endowment per FTE student,
a key financial indicator, increased from $565,000 to
$679,000. Compared to its 18-College comparison
group, Bowdoin’s endowment per FTE ranked fifth.
The endowment supports many programs, the
largest of which is the financial aid budget. In 2001,
35% of the endowment was restricted for financial
aid compared to 45% currently. The endowment
distribution will fund approximately 66% of the
financial aid budget in FY 2015/16.
Page 5
Operating Budget for Fiscal Year 2015–2016
Endowment Market Value
Endowment by Designation
Millions
$1,400
Scholarships
Professorships/Instruction
General Operations/Unrestricted
$1,200
Other
Library and Book
$1,000
Technology
Arctic Museum
$800
Art Museum
Lectureship
$600
4%
20
0
20 5
06
20
0
20 7
08
20
0
20 9
1
20 0
11
20
1
20 2
13
20
14
$400
3% 3% 2% 2% 1%
45%
19%
21%
Fiscal Year End
Source: Audited Financial Statements
Endowment per FTE Student FY 2013/14
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
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Source: 2014 NACUBO-Commonfund Study of Endowments
Operating Reserves
The College maintains a number of operating reserves
to fund operations, contingencies, and emergencies.
Reserve balances have been accumulated from
operational savings in previous years. These reserves
totaled $11.7 million as of March 31, 2015.
2014–2019 Reserve
Beginning in 2009, the College started building a
multi-year reserve, now referred to as the “2014 –
2019 Reserve.” Year-end savings beginning in FY
2008/09 have accumulated in this reserve to fund
projected deficits, if needed. The budgeted use of the
reserve in FY 2014/15 is $3.9 million, although it is
likely that less than $3 million will be utilized. In the
proposed budget, the use of the reserve is also $3.9
Page 6
million. Current projections indicate the reserve will
be available for at least ten years.
Operating Reserves as of March 31, 2015
2014–2019 Reserve
Network Replacement
Reserve
Health Claims Rate
Stabilization Reserve
$ 7,261,000*
1,864,000
1,000,000
Utilities Contingency
500,000
Organizational Contingency
and Other Reserves
Total Operating Reserves
1,073,000
$ 11,698,000
* Reflects use of $2.9 million through 3/31/2015.
Operating Budget for Fiscal Year 2015–2016
Designated Funds
Designated funds include grants, discretionary
funds, trust income, restricted gifts, and other funds.
Designated funds are restricted in use and, under the
sources and uses basis of budgeting, they are only
included as revenue if related expenses are incurred.
The proposed use of designated funds has been
budgeted to increase by 4%, or $371,000, totaling
$10.3 million. Key components of the increase are a
number of restricted gifts that are anticipated to fund
the Coastal Studies Center.
Unrestricted Annual Giving
Unrestricted annual giving is proposed to increase
3%, for a budget of $8.6 million. The College’s annual
giving program includes the Alumni and Parents
Funds. The Alumni Fund represents approximately
80% of total unrestricted annual giving and is
budgeted at just over $7 million.
Auxiliary Enterprises
Auxiliary enterprises generate revenues derived
from providing services to the College and include
the Bowdoin Stores, events and summer programs,
dining service, the Children’s Center, the Museum of
Art Shop, the Arctic Museum Shop, and others. The
revenues received attempt to cover the associated
costs of goods or services provided. Auxiliary
enterprises have been budgeted to increase by 5%, or
$188,000. Increasing in FY 2015/16 are anticipated
revenues in the Bowdoin Stores, up $70,000 from
FY 2014/15 due to increased merchandise sales.
The total auxiliary enterprises budget is $4.3 million,
comprising 3% of total sources of funds.
Other Income
Other income sources have been budgeted at $2.2
million, a 1% increase from FY 2014/15. Other
income consists primarily of investment return
on cash accounts, Federal Work Study funding,
application fees, and overhead cost recovery from
federal grants.
Expenses (Uses)
Total Payroll and Benefits
Total payroll and benefits represent approximately
63% of the total uses of funds. The proposed total
payroll and benefits budget is 4% above the prior
year, an increase of $4.1 million. The faculty and
administrative and support staff payroll budgets are
proposed to increase by 4.6% and 4.1%, respectively,
adding a combined $2.8 million. The faculty
salary pool increase assumption is 4%, and the
administrative and support staff salary pool increase
assumption is 3%. Casual and student payroll have
been budgeted to increase 1% and 3%, respectively.
Health benefits and other employee benefits are
expected to increase by 8% and 3%, respectively, a
combined increase of $1.2 million.
FY 2015/16 Budgeted Payroll and
Benefits Distribution
Administration and Support (non-academic)
Administration and Support (academic)
Faculty
Other Employee Benefits
Health Benefits
Student Labor
Casual Labor
12%
2% 1%
36%
14%
26%
9%
Faculty Payroll
The faculty payroll budget, which includes
approximately 200 FTE faculty positions, maintains
the College’s student-to-faculty ratio of 9:1. Faculty
payroll includes funding for faculty promotions, faculty
retirement, sabbatical leaves, and department chair
compensation. During FY 2015/16, the College plans
to add a new senior faculty position in Arctic studies
and climate change. This position will be funded by
the endowment.
The College utilizes a “4,5,6” faculty compensation
policy to achieve increases in continuing faculty
payroll by a percentage equal to a three-year
lagging average of increases, by academic rank, at
Page 7
Operating Budget for Fiscal Year 2015–2016
comparison colleges ranked 4th, 5th, and 6th in
average salary. Based on this policy the salary pools
for instructional ranks in FY 2015/16 will increase by
3.52% for full professors, 3.20% for associates, and
4.70% for assistants. These percentages represent
the total pool for salary increases by rank, including
funds for merit recognition as well as equity and
promotion adjustments.
Administrative and Support Staff Payroll
Administrative and support staff payroll represents
28% of total uses and is budgeted to increase 4.1%.
The salary pool increase assumption is 3%, with
an additional 1.1% increase due to adjustments
to several existing positions and the addition of
new positions. The net increase is 10.97 FTE, and
new positions include: staffing associated with the
Bowdoin Marine Science Semester (boat program
manager and assistant director/program manager);
a Digital and Computational Studies technical
support/data specialist; a developer and analyst
in Institutional Research, Analytics, and Consulting;
an associate dean of admissions; an assistant
director of financial aid; an environmental health
and safety manager; an audio-visual technician; a
systems engineer; an information technology training
specialist; and a director of the Student Center for
Multicultural Life. The FY 2015/16 administrative
and support staff budget includes a total of 732 FTE
employees — 364 administrative positions and 368
support staff positions.
Staffing by Division
Admin. Support
Operations Staff StaffTotal
Facilities Management and
Security 16 143159
Auxiliary Enterprises
22
111
133
Academic Affairs 55
35
90
Development and
Alumni Relations
40 1555
Student Affairs
43
10
53
Library and Museums
29
22
51
Information Technology
45
6
51
Athletics49
2 51
President, Finance and
26 1440
Administration
Admissions
18
8
26
Communications and
Public Affairs
11
2
13
Total Operations354 368 722
Investment Office (funded
by investment returns)
Page 8
10
-
10
Grand Total 364 368 732
Casual Labor
Casual labor is budgeted to increase only $14,000,
or 1%, for a total budget of $1.2 million. Casual
employees are made up of seasonal events and
summer programs staff, admissions readers,
athletic facility monitors, lifeguards, and others.
These positions are non-benefits-eligible and are
not included in official staffing statistics. The
College currently employs approximately 260 casual
employees.
Student Labor
The student labor budget totals $2.1 million, up
$55,000 from FY 2014/15. Bowdoin students are
employed part-time during the academic year. The
majority of student employees work for academic
affairs, student affairs, information technology, dining
service, or the library. Federal Work Study funds
approximately 25% of the student labor budget, and
approximately 66% of student wages are paid to
students receiving financial aid. Approximately 1,300
students are employed during the academic year and
summer, with average annual earnings of $1,463.
Students earn an average of $8.84 per hour, with a
median hourly wage of $8.75, and a minimum hourly
wage of $7.75.
Health Benefits
The College’s health benefits budget totals $11.6
million, an increase of $868,000, or 8%. The health
benefit plan (medical and dental) is self-funded
under the Employee Retirement Income Security Act
(ERISA). The annual costs of the plan are primarily
a function of health and dental claims, as opposed
to annual premiums. The College maintains a $1
million Health Claims Rate Stabilization Reserve in
the event of higher-than-budgeted health claims. At
$1 million, this reserve is approximately 8.7% of the
annual health benefits budget for FY 2015/16. In
addition, the College purchases stop-loss insurance
for protection against large claims.
The College has traditionally offered only a preferred
provider organization (PPO) health plan. Effective
January 1, 2015, in addition to the PPO plan, the
College implemented two high-deductible health
plans along with individual Health Savings Accounts,
to which the College made contributions. These new
plans have not impacted the College’s overall health
claims budget. Over time, the new health plans are
expected to mitigate increases in the College’s health
care costs.
Operating Budget for Fiscal Year 2015–2016
Other Employee Benefits
Core Expenses
Other employee benefits mainly consist of payroll
taxes and retirement contributions. The College
contributes to a retirement plan at a rate of 10.12%
of gross pay for employees under age 50 and at a
rate of 12.13% for employees over age 50, after
participation requirements are met. In addition,
the College contributes an amount equal to 4.3%
of the participant’s total salary in excess of 60%
of the Social Security Wage Base. Other benefits
include disability insurance, life insurance, a tuition
assistance program, and others.
Core expenses represent 61% of all operational
(non-payroll) expenses and include contracted
services; supplies, software, printing, postage;
purchases for resale; travel, recruiting, conferences;
telecommunications; general expenses; and library
materials. Together, non-payroll core expenses total
$34.1 million and are budgeted to increase 4.9%, or
$1.6 million.
The budget for other employee benefits is $13.6
million, compared to $13.3 million in FY 2014/15,
a 3% increase. This percentage increase is slightly
below the combined faculty and administrative and
support staff payroll percentage increase, due to a
reduction in the budget assumption for other employee
benefits. Previously, the budget assumption was
20.5% of the combined faculty and administrative and
support staff payroll budget. However, actual amounts
have been trending lower in recent years, with a fiveyear average of 20.2%. In FY 2015/16, the budget
assumption has been decreased to 20.2%.
FY 2015/16 Budgeted Core Expense
Distribution
Supplies, Software, Printing, Postage
Contracted Services
General Expenses
Travel, Recruiting, Conferences
Purchases for Resale
Library Materials
Telecommunications
9%
2%
13%
26%
Operational Uses
Operational (non-payroll) uses of funds are proposed
to increase by 4%, or $2 million, and total $55.9
million.
FY 2015/16 Budgeted Operational
Expense Distribution
Core Expenses
Debt Service (Principal and Interest)
Utilities
Major Maintenance and Capital Renewal
Technology Replacement and Renewal
Equipment
Leases
Insurance
9%
10%
3%
3% 2% 2%
55%
14%
15%
21%
Driving the majority of the increase in core expenses
are software maintenance agreements, which are
increasing by $831,000. New software maintenance
fees include: annual costs associated with a new
human resources information and payroll system,
a new application for admissions, and scholarship
management software for the financial aid office. In
addition, the travel, recruiting, and conferences budget
goes up by $398,000, and purchases for resale
increases by $203,000. Changes to travel, recruiting,
and conferences are driven by one-time training
programs in information technology and transportation
costs associated with the Bowdoin Marine Science
Semester. Purchases for resale amounts are primarily
related to food cost increases in dining, and are offset
with associated auxiliary revenues.
Other Operational Uses
16%
In addition to core expenses, the College incurs costs
related to utilities, insurance, leases, equipment,
technology replacement and renewal, major
maintenance and capital renewal, and debt service.
Page 9
Operating Budget for Fiscal Year 2015–2016
Utilities
Insurance and Leases
The FY 2015/16 utilities budget is $5,662,000,
compared to $5,487,000 in FY 2014/15, a 3%
increase. As of March 31, 2015, more than 70% of the
College’s utility pricing for FY 2015/16 is fixed, with
electricity rates locked through December 2016. The
utility category is dominated by the cost of electricity,
as shown below. Included in the electricity budget
are the College’s payments under a power purchase
agreement for approximately 1.6 million kWhs of solar
photovoltaic power, or 8% of the College’s total annual
electricity usage.
The College budgets and manages insurance
and lease costs centrally. The insurance budget
increases 4%, or $39,000. Insurance costs include
the traditional categories of workers’ compensation,
property, casualty, auto, and general liability, as well
as coverage specific to higher education such as
educator’s legal liability, intercollegiate and club
sports, medical malpractice, and fine arts coverage.
The lease budget is proposed to decrease by 11%,
down $147,000. This reduction is primarily the result
of lease terminations at Brunswick Station. Key
existing leases include equipment leases and leased
space at Waterfront Maine, 104 Harpswell Road, and
the information technology co-location property at
Oxford Networks.
The College has identified numerous energy
savings initiatives that, when implemented, produce
immediate utility savings and further the College’s
commitment to achieve carbon neutrality by 2020.
Examples of utility initiatives already completed and
funded by the utility budget include conversions of
oil-fired boilers in perimeter buildings to natural gas,
lighting upgrades, and insulation and weatherization
projects. In FY 2015/16, the utility budget includes
$500,000 to complete the remaining fuel conversions
and continue lighting upgrades. For more information
on the College’s carbon neutrality plan, go to bowdoin.
edu/sustainability.
FY 2015/16 Budgeted Utilities Distribution
Electricity
Natural Gas
Utility Initiatives
Sewer
Water
Gasoline
Diesel Fuel
Fuel Oil No. 2
Propane Gas
2%
9%
7%
6%
0%
39%
35%
To mitigate cost fluctuations in the energy market, the
College maintains a $500,000 utilities contingency.
The College also retains a Maine-based consulting firm
to assist in utility budget modeling and procurement.
Page 10
Equipment has been budgeted at $1.5 million,
increasing 10% from FY 2014/15. Dining services,
facilities management, and athletics have the most
significant equipment needs.
Technology Replacement and Renewal
Technology replacement and renewal increases by
8%, totaling $1.7 million. Approximately $1 million
of expenses are related to cyclical replacements of
computer lab and classroom equipment, employee
computers, and audio-visual equipment. Other
significant items included in the technology replacement
and renewal budget are software upgrades, an intrusion
detection/prevention system, system information and
event monitoring tool, a grants management application,
and security cameras in the Museum of Art.
Major Maintenance and Capital Renewal
1%
1%
Operating Equipment
The major maintenance and capital renewal budget
is $5.1 million, a 3% increase. The budget includes
funding for routine projects such as campus repairs,
replacements, and scheduled maintenance. In addition,
significant funding has been approved for ongoing
renovations and improvements to Coles Tower, the first
phase of campus electrical infrastructure upgrades, a
new media hub space in Hawthorne-Longfellow Library,
and air conditioning in Kresge Auditorium.
Operating Budget for Fiscal Year 2015–2016
Debt Service
Other Key Indicators
The debt service budget, which is unchanged from FY
2014/15, is $8.8 million and represents 6% of the
total uses of funds. The College currently has $267.7
million outstanding in long-term bonds. The weighted
average cost of capital of the debt is 4.83%, and the
average life of the bonds is 79.8 years. The College’s
current credit rating, affirmed by Moody’s Investors
Services Inc. in October 2013, is Aa2.
Instruction and Research
Bonds Outstanding (in millions)
Par Value
Series 2008, tax-exempt, synthetically
fixed, 3.84%, due 2032–2037
$ 20,700
Series 2009A, tax exempt, 5.00%–
5.125%, due 2035–2039
98,750
Series 2009B, taxable, 6.667%,
due 2035–2039
19,750
Series 2012, taxable, 4.693%,
due 2112
Total Bonds Outstanding
128,500
$ 267,700
Instruction and Research Expenses to
Total Operating Expenses
100%
$160
$140
$120
$100
$80
$60
$40
$20
$-
80%
60%
Millions
The College used $98.75 million of the Series 2012
proceeds to fund an escrow account for the purpose
of defeasing the Series 2009A bonds on their first call
date in 2019. The interest payments on the escrowed
bond proceeds, $4.6 million annually, are paid for out
of escrow investment earnings and are therefore not
included in the operating budget.
As a percentage of total operating expenses,
instruction and research expenses generally fall
between 35% and 37% of total operating expenses,
as reported on a GAAP basis. These percentages,
which are derived from the annual audited financial
statements, are not expected to change significantly
in FY 2015/16.
40%
20%
05 06 07 08 09 10 11 12 13 14
20 20 20 20 20 20 20 20 20 20
Fiscal Year End
0%
Other Operating Expenses
Instruction and Research
Instruction and Research % of Total
Source: Audited Financial Statements
Cost of Attendance
The budgeted cost of attendance per student is
$85,034, up from $80,935 in FY 2014/15. With
a proposed comprehensive fee of $61,354, the
College is subsidizing the actual cost of attendance
by $23,680 per student. This is based on a budgeted
total uses of funds of $151.8 million divided by an
on-campus enrollment of 1,785 FTE.
Budgeted Cost of Attendance
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$-
$21,367
$23,680
$59,568
$61,354
2015
2016
Subsidy
Fiscal Year End
Comprehensive Fee
Page 11
Operating Budget for Fiscal Year 2015–2016
Distribution of Resources
Academic affairs, library, and museums represent
38% of the total budget of $151.8 million.
FY 2015/16 Budgeted Distribution of Resources
Uses of Funds
Payroll
Operations
Total
% of
Total
Divisional Operating Expenses
Academic Affairs
$ 42,445,000 $ 5,332,000 $ 47,777,000
32%
Auxiliary Enterprises
8,146,000
5,820,000
13,966,000
9%
Facilities Management and Security
9,107,000
2,865,000
11,972,000
8%
Information Technology (includes Digital and Social Media) 5,973,000
5,064,000
11,037,000
7%
President, Finance and Administration
4,930,000
5,729,000
10,659,000
7%
Library and Museums
4,583,000
4,351,000
8,934,000
6%
Student Affairs
5,846,000
2,373,000
8,219,000
5%
Development and Alumni Relations
6,142,000
1,520,000
7,662,000
5%
Athletics
4,692,000 1,569,000 6,261,0004%
Admissions
2,712,000 1,207,000 3,919,0003%
Communications and Public Affairs
1,327,000
481,000
1,808,000
1%
$ 95,903,000 $ 36,311,000
132,214,000
87%
Major Maintenance and Capital Renewal
5,109,000
3%
Utilities 5,662,000
4%
Debt Service
8,800,000
6%
Total Other Operating Expenses 19,571,000
13%
Total Divisional Operating Expenses
Other Operating Expenses
Page 12
Total Uses of Funds
$ 151,785,000 100%
Comparison of Sources and Uses to GAAP
Comparison of Sources and Uses to GAAP
Description
GAAP Statement of Activities
Sources and Uses
Depreciation Expense
Included
Excluded
Equipment and Technology
Equipment Purchases
Purchases in excess of $5,000,
per the College’s capitalization
policy, are excluded (initially
capitalized, then depreciated
over time).
Included at the full purchase
price
Major Maintenance and Capital
Renewal
Projects that extend the useful
life of a facility, per the College’s
capitalization policy, are
excluded (initially capitalized,
then depreciated over time).
Included at the full project cost
Debt Service (Principal and
Interest)
Principal payments are excluded;
interest expense is included.
Principal and interest payments
are included.
Capital Lease Obligations
Principal payments are excluded;
interest expense is included.
Principal and interest payments
are included.
Donor-Restricted Funds
Revenue is only included to the
extent that related expenses
have been incurred.
Revenue is only included to the
extent that related expenses
have been incurred.
Board-Designated Funds
Revenue is included
immediately when received.
Revenue is only included once
related expenses have been
incurred.
Appendix A, Page i
Capital Expenditure Plan
Capital Expenditure Plan
The College maintains a capital expenditure plan
separately from the operating budget. The focus of
the capital expenditure plan is on new construction
and significant renovation projects. Projects included
in the capital expenditure plan are generally funded
from a combination of bond proceeds, gifts, and
grants. The repayment of debt service related to
projects included in the capital expenditure plan is
included in the operating budget.
Bowdoin College Capital Expenditure Plan
Sources of Funding
In Hand
Major
Start End
Project
Gifts and Debt
Maintenance
Other
Line Project
Project Project
Budget
Pledges
Financing
Budget
Sources
In Progress
1
Coastal Studies
Center
Mar 14 Aug 15
2
Coles Tower
Renovations
Jun 14 Aug 17
3
Polaris—Phase 2
and 3*
Sept 14 Dec 16
4
Solar Project*
5
6
$ 801,000 $ 701,000
6,520,000
$
-
$
Needed
Other/
Financing
- $
100,000 $
-
-3,166,000 3,354,000
-
-
300,000
-
300,000
-
-
-
May 14 May 15
225,000
-
-
225,000
-
-
Ashby House
Renovation*
Oct 14 July 15
970,000
-
850,000
120,000
-
-
Stowe House
Renovation*
Nov 14 Aug 15
1,090,000
-
1,090,000
-
-
-
TBD
-
1,199,000
62,000
4,000,000
-
-
-
-
---
-
-
Not Started
7
BNAS Warehouse,
Fields, and Trails
8
Boiler #3
July 15 Aug 16
Replacement/Repair
9
Arctic Museum
TBD TBD
TBD
10
Druckenmiller and
Hatch Science Labs
TBD
TBD TBD
TBD
TBD
4,836,000
-
28,000
-4,000,000
140,000
11
12
Other Bond-Funded
13
Century Bond Proceeds $ 28,212,000
Total
$ 5,537,0006,605,000
$ 3,761,000 $ 268,000 $ 4,000,000
21,607,000
* Trustee-approved projects (Italicized numbers are estimates)
Note: The Gifts & Pledges In Hand column includes gifts and paid pledges as well as unpaid written and verbal pledges.
Note: As of March 31, 2015, the College has $4,853,000 of cumulative property purchases paid for out of working capital
(cash and/or the line of credit). Permanent funding source to be determined.
Appendix B, Page i
-
Definition of Terms for Fiscal Year 2015–2016
Definition of Terms for
Fiscal Year 2015–2016
Lines 1 to 4 — Tuition, Room, Board, and Fees
The comprehensive fee charged to students. In
addition to the major components (tuition, room, and
board) this section also includes a student activities
fee (providing funding for student organizations).
Line 6 — Financial Aid
Financial aid expense includes Bowdoin’s
need-based grant aid program plus the federal
government’s Supplemental Educational Opportunity
Grant (SEOG) and some state aid programs.
Offsetting federal matching funds appear as revenue
in Line 12, Use of Designated Funds.
Line 8 — Auxiliary Enterprises
Auxiliary enterprises, which provide services to the
campus community, attempt to recover their costs
through charges for goods or services. The major
revenue centers are the Bowdoin Stores, events and
summer programs, dining service, the Children’s
Center, and the student health program. Student
health insurance fee revenue is presented net of
premium expense.
Line 9 — Unrestricted Annual Giving
All unrestricted gifts received through the College’s
annual giving program. Gifts for capital or other
restricted purposes are not included.
Line 10 — Other Income
Revenue including investment return on operating
cash and the College’s designated funds,
indirect cost recovery earned by the College for
administering federal grants, funds received for
the Federal Work Study program, income received
from certain trusts, and miscellaneous revenue.
Endowment investment returns are not included on
this line (they appear on Line 11, Use of Endowment
Distribution, to the extent they fund the annual
endowment distribution).
Line 11 — Use of Endowment Distribution
Annual distribution from the endowment to fund
operating activities. Only included in operating
revenue after any donor-imposed restrictions have
been met.
Line 12 — Use of Designated Funds
Gifts and grants designated for specific current
purposes or one-time initiatives. Included in
operating revenue after any donor-imposed
restrictions have been met and any related
expenses have been incurred. The major
components of this line include an unrestricted
reserve to support financial aid and academic
initiatives, as well as the receipt and use of
government and private grants, restricted
annual and capital gifts, trust income, and funds
designated for faculty uses.
Line 13 — Use of 2014 – 2019 Reserve
Beginning in 2009, the College started building a
multi-year reserve, now referred to as the “2014 –
2019 Reserve.” Year-end savings from FY 2008/09
through FY 2012/13 have been accumulated in this
reserve to fund projected deficits, if needed.
Line 16 — Faculty Payroll
Salaries associated with the faculty, including
regular pay, summer salaries, and grant-funded
salaries.
Line 17 — Administration and Support Payroll
Salaries and wages of the administrative and
support staff.
Line 18 — Casual Labor
Wages for non-benefits-eligible, short-term
employees.
Line 19 — Student Labor
Wages paid to students.
Line 20 — Health Benefits
Costs of the College’s self-funded medical and
dental plans.
Line 21 — Other Employee Benefits
Other employee benefit expenses, primarily FICA tax
and retirement contributions.
Line 24 — Contracted Services
Professional and other services (audit, legal,
facilities, etc.).
Line 25 — Supplies, Software, Printing, Postage
Wide range of expenditures, from software and
publication costs to supplies for housekeeping and
facilities operations.
Line 26 — Purchases for Resale
Cost of sales for dining service and the Bowdoin
Stores (food, textbooks, etc.).
Appendix C, page i
Definition of Terms for Fiscal Year 2015–2016
Line 27 — Travel, Recruiting, Conferences
Travel and related costs (primarily academic affairs,
admissions, athletics, and development).
Line 28 — Telecommunications
Phone service provider, long distance, wireless
service, cable television, portable device service,
and Internet service.
Line 29 — General Expenses
Numerous miscellaneous expenses such as student
fellowships, graduate scholarships, property taxes,
and bank charges.
Line 30 — Library Materials
Library books, periodicals, and electronic resources.
Line 31 — Utilities
Cost of electricity, natural gas, heating oil, water,
sewer, propane, gasoline, and diesel.
Line 32 — Insurance
Workers’ compensation, property, casualty,
auto, general liability, educator’s legal liability,
intercollegiate and club sports, medical malpractice,
and fine arts policies.
Line 33 — Leases
Leases for computer hardware, copiers, printers,
and studio and other rented space.
Line 34 — Equipment
Research equipment for faculty and divisional
operating equipment.
Line 35 — Technology Replacement and Renewal
Cyclical replacement of computers, audio-visual
equipment, and other information technology
equipment.
Line 36 — Major Maintenance and Capital Renewal
Costs of the annual program of maintenance and
upgrades to the physical plant of the College. Major
construction projects fall outside the scope of the
annual budget and are not included.
Line 37 — Debt Service (Principal and Interest)
Debt service expense for the purposes of the
operating budget includes all outflows of cash for
principal, interest payments, authority fees, facility
fees, and swap settlement payments.
Appendix C, page ii
Prepared by the Treasurer’s Office
S. Catherine Longley
Senior Vice President for Finance
and Administration & Treasurer
Delwin C. Wilson III
Director of Finance and Campus Services
James D. Tatham
Budget and Planning Analyst