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Strategies and Scenarios��

TAC Training - PART 3

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Part 3 Agenda

  • HB 4141 requirement�
  • Cost Management Strategies

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  • Tuition Modification Scenarios�
  • Pro Forma Assumptions�
  • Live Pro Forma & Scenario building�

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HB 4141, § 2(4)(a)(b)

  • The University must provide the council with:
    • A plan for managing costs (we are doing this now!)�
    • A plan for how tuition and fees could be decreased if the university receives extra appropriations

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Cost Management Strategies

  • This is our focus now. See: https://sou.edu/president/next-steps/

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  • Important items of note re. bending the cost curve:
    • Roughly 85% of budgeted expenses in E&G are personnel
    • OPE (Benefit structure for Retirement and Health Care)
    • Constrained by Labor contracts for Faculty and Classified
    • S&S can only ‘absorb’ smaller and smaller amounts�
  • Overall cost management strategy is to reduce the recurring cost base�
  • Outside pressures on cost (i.e. unfunded mandates), are largely out of our control and difficult to manage

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Cost Containment Strategies – Labor

  • Reduce the recurring cost base (while maintaining service level and being true to our mission & values)�
  • Difficult or impossible to control OPE escalations
    • Difficult = Health
    • Impossible = Retirement

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Cost Containment Strategies – S&S

  • S&S cost management

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Tuition Reduction Approach

  • Considered if additional state allocations above CSL projections for biennium�
    • Likelihood similar to taking a selfie with Bigfoot to put on TikTok or becoming your own meme�
  • Board of Trustee approval and plan�

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Functionally, a tuition reduction would be easiest to process as a ‘refund’ similar to how fees refunds worked during COVID

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Current Pro Forma Assumptions

  • Revenues
    • State allocations set at latest from SSCM
    • Tuition is variable; SCH estimate set to ~ -2% from AY22
    • Enrollment Fees function of headcount/SCH estimates
      • *Reminder: Incidental Fees not part of TAC
    • Misc. Revenue estimated, based on historical averages
    • Sports Lottery funding indirectly influences transfers out of E&G

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  • Expenses
    • Labor
      • Classified and Faculty CBA rates applied
      • Unclassified Admin have placeholder estimates.
      • OPE rate adjustments come in at various times
      • PEBB stable ($16,680/yr per Employee)
      • Student Labor increased to track minimum wage growth in OR�
    • S&S – Still in flux; monitoring inflationary pressures

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NEXT MEETING:�PRO FORMA

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