10 Kutztown University has maintained a balanced E&G budget without the use of cash reserves for the past six years and has made a firm commitment to continue that practice moving forward as detailed in our strategic plan. The work hasn’t been easy, and it required significant reductions to our employee workforce which has resulted in increasing our studentto-faculty ratio from 16.7 to 18.6. After several years of significant budget reductions that were needed to right size our annual expenses with declining revenues, we are pleased to see our revenues increasing as the state makes a larger investment in the form of appropriations. These additional dollars will allow us to cover the increased costs associated with the newly agreed upon collective bargaining agreements. Our student financial aid expense has leveled off after four years of increases in the range of $3 million per year and has become even more manageable with our additional financial resources. Our annual debt payments are also on the decline, which has freed up funding to help cover inflationary cost increases to services and supplies as well as other strategic investments. Our E&G budget continues to generate a slight surplus that is transferred to plant accounts to help us fund deferred maintenance needs across campus. We anticipate a large increase to net assets and cash balances in fiscal year 2023-24 due to additional revenue, salary savings, and the $10 million in CSFRF funds received in the prior year and fully recognized this year. Net assets and cash balances are projected to remain consistent over the three future years as any large projects will be covered with restricted funds – Key 93 and state capital money. Auxiliary Revenues and Expenses Describe the Auxiliary financial projections: 1. For high-risk universities and/or universities with housing occupancy below 70% for any year within the projection period and associated outstanding debt, provide a plan, within the Auxiliary section, which addresses occupancy, any associated housing debt, and long-term sustainability. Insert chart with housing data from the Charts for Narrative tab of the CPP template. 2. If the university has a balanced budget or a surplus, briefly describe (1) new expenditures and/or (2) transfers for strategic investment, deferred maintenance, other. The auxiliary operations at Kutztown University continues to be in a solid financial position. Through modest fee increases and higher occupancy rates our revenues have increased by nearly 10% in fiscal year 2023-24. This additional revenue has allowed us to cover rising personnel costs and address deferred maintenance needs within our many buildings all while maintaining a healthy level of net assets and cash. In housing specifically, we achieved an occupancy rate of over 96% in the fall 2023 semester. In an effort to keep up with student demand and evolving needs for our DSO students we plan to do a minor refresh of an older traditional hall this summer and a full renovation of a 300-bed residence hall in years 2025 through 2027. This investment is significant but based on a real need that has grown more pressing in recent years. The renovation of the 50-year-old building will provide us with more airconditioned beds on campus and still leave two aging buildings that could be closed if occupancy levels drop in the upcoming years. The dining operation has also benefitted from the increased occupancy levels in the form of increased revenue which has allowed us to keep up with inflation and the rising costs from our food vendor, Aramark. We will be completing a brand refresh of our Starbucks location this summer. Overall, we are pleased with our ability to cover the costs of ongoing operations, invest in our facilities, and carry a healthy amount of cash to address unforeseen challenges. Auxiliary Chart Actual Reforecast FY 2022-23 FY 2023-24 FY 2024-25 % Change FY 2025-26 % Change FY 2026-27 % Change Total Auxiliary Budget Total Revenues $42.7 $46.8 $50.0 7.0% $51.0 1.9% $52.0 1.9% Total Expenditures and Transfers to Plant Funds 42.6 46.8 50.0 7.0% 51.0 1.9% 52.0 1.9% Revenues Less Expenditures/Transfers to Plant Funds $0.1 $0.0 $0.0 0.0% $0.0 0.0% $0.0 0.0% Surplus/(Deficit)--Excludes Transfers to Plant Funds $6.4 $5.4 $5.9 $6.1 $7.5 Use of Supplemental Resources for One-Time Needs/ Strategic Initiatives 0.0 0.0 0.0 0.0 0.0 Revenues and Use of Supplemental Resources/Adjustments Less Expenditures & Transfers $0.1 $0.0 $0.0 $0.0 $0.0 Total Actual/Estimated Unrestricted Auxiliary & Plant Net Assets $37.3 $38.0 $42.1 10.7% $37.5 -10.9% $34.4 -8.4% Total Actual/Estimated Auxiliary End of Year Cash Balance $38.0 $38.7 $42.8 10.5% $38.3 -10.7% $35.1 -8.3% Projected ($ in Millions) I I I I
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