UMD FY20 Budget Allocation

Dear Colleagues,
 
Each fiscal year, our campus receives a budget allocation letter from University of Minnesota System administration that provides information about our financial resources. We have received our UMD Budget Allocation Letter for FY20 (July 1, 2019 - June 30, 2020). Here is a brief summary of the key take-aways:

• Overall, we are holding steady with a slight increase in our structural imbalance. We ended FY19 with a $3.9 million structural imbalance. We are expecting to end FY20 with no greater than a $4.1 million imbalance.
• We received an increase of $3,250,849 in Operations & Maintenance (O&M) funding from tuition revenues and state funds.
• Our additional tuition revenue for FY20 is estimated to be $986,785 (undergraduate tuition increased 1.5% and graduate tuition increased 3%).
• UMD’s share of the system wide reallocations was $1,273,000, which require budget cuts that UMD has already built into the FY20 annual budget.
• Budgeted expense increases from the System are for the compensation increases awarded in June, cost pool adjustments, HCAMS operating expenses, campus utilities increases, and compensation adjustments for UMDPD and athletics.  
  • $3,980,232 - compensation
  • $179,080 - cost pools
  • $566,814 - conversion of waivers to scholarships
  • $451,700 - HCAMS operating and campus utilities
  • $147,849 - compensation agreement and competitive market adjustments for UMDPD and athletics

Overall, we received less than we requested, therefore we still have difficult work ahead of us.  For example, we need to determine reductions for Fiscal Year 2020 - 2021 soon, because our academic offerings need to be prepared about a year in advance. These cuts will be painful, but it is best to eliminate our structural imbalance as soon as possible and to move forward without these deficits holding us back. Our annual expenses are going to continue to increase, state funding is unpredictable but not likely to increase significantly, and enrollment is critically important. Increased compensation costs are a large part of our expenses, but they reflect the importance of you, our workforce, and it is essential to retain top talent and offer competitive salaries. 

I am encouraged that this letter recognizes that many of the increased expenses over the past several years are out of our control. Some next steps include continuing to work with the System budget office to reverify our budget numbers, utilize data and metrics to guide future decisions, and continue to seek additional contributions from the System to help resolve our budget issues.

Please contact me or one of the vice chancellors if you have questions or would like additional information about UMD’s budget.

Sincerely,
 
Lendley C. Black
Chancellor