Budget forum: Enrollment Projections Ahead of What's Needed to Balance Budget
by Geoff Larcom, Published July 13, 2010
Thus far, Eastern Michigan University is "on track" to meet the enrollment goals necessary to balance its operating budget under the tuition freeze approved this spring.
President Susan Martin and EMU Chief Financial Officer John Lumm shared that information during a budget forum June 17 in the Student Center auditorium.
Eastern officials have budgeted a 3.4-percent increase in overall enrollment for the coming academic year to help compensate for the 0-percent increase in tuition. Enrollment numbers have varied each week as more students register, but have remained above the required threshold, Lumm said. Enrollment gains are measured by comparing registered credit hours at the same time last year.
The event was the second of four such budget forums that will take place during the spring and summer. The remaining forums are Wednesday, Aug. 11, 2-3 p.m., Student Center auditorium; and a date to be announced in September.
Lumm said the forums stem from the EMU leadership team's goal of transparent and open communication. It's hoped that a shared understanding of Eastern's financial position can contribute to "an alignment of objectives," Lumm said.
The first two forums covered similar ground in offering an overview of Eastern's budget. A power point of the forum can be found at http://www.emich.edu/budgetforums/.
Among the budget details shared June 17:
- Eastern's FY2011 budget of $366.3 million includes general operating funds of $280.9 million (77 percent), auxiliary funds of $38.8 million (11 percent), expendable restricted funds of $41.2 million (11 percent) and designated funds of $5.4 million (1 percent).
- Operating funds come from tuition and fees and state support, while auxiliary funds come primarily from housing, dining and parking. Expendable restricted funds include financial aid pass through, research grants and contracts and gifts. Designated funds include indirect cost recovery from grants and contracts, athletic game guarantees and revenue from conferences, workshops and camps.
- Cost-cutting actions include energy-related savings of approximately $2 million a year, which include lower prices on natural gas, along with waiting or not filling some staff openings, and a voluntary furlough program.
"All those little things, we'll be looking at," Lumm said.
- In addition to the operating budgets, Eastern has a planned capital investment of $195 million over four years (FY 2009-10 through FY 2012-13), 71 percent of which is going for academic facility enhancements. That unprecedented level of investment includes the Mark Jefferson Science Complex ($90 million) and Pray-Harrold ($42 million). Mark Jefferson is totally funded by EMU, while Pray-Harrold is 75-percent state funded, with Eastern supplying 25 percent.
- Planned capital expenses also include $13.7 million of housing facility enhancements, such as windows in Brown-Munson residence hall and renovations in Pittman and Hoyt Halls. Other facility enhancements are the new Indoor Athletic Practice Facility ($3.9 million), plus work at Eagle Crest, McKenny Hall and campus signage. Other capital expenses are $5.5 million for IT infrastructure, $2.8 million for safety and security and $1.9 million for parking related projects. Eastern Michigan has budgeted $20.5 million for ongoing asset preservation.
- Eastern would pause on some of its one-time capital expenses if the University does not reach its budgeted enrollment goals or the state cuts funding even further than the projected 3.1 percent, Martin said.
- Eastern has reserves of about $30 million to $40 million, essentially a savings account for the University, Lumm said. That is a relatively low number, particularly when compared with EMU's present debt of about $240 million, most of which is going toward new construction.
Yet, despite these daunting numbers, Eastern decided not to raise tuition as a means of bolstering its reserves. Instead, given the challenges students and their families face in Michigan's economy, the University froze tuition.
"There's no better time to do it than now," Lumm said.