2 Executive Summary Please insert the Executive Summary chart from the CPP Excel file. Provide a brief (one page) narrative describing the university’s financial projections and how the university will achieve at a minimum a balanced operating result and at least demonstrate progress toward meeting the minimum student/faculty ratio. Items in red must have an explanation detailing the university’s strategies to address the negative trends. University budget projections should be balanced annually, without the use of reserves, and demonstrate fulfillment of progress towards meeting the associated minimum fall student/faculty ratio during the projection period. Universities should also outline how they are stabilizing reserve levels against the 40% goal associated with university financial sustainability ratios. Universities that received university-specific communications from the chancellor for the fall 2023 summarized Comprehensive Planning Process (CPP) submission must address those items in this Executive Summary. Kutztown University continues to follow a path to financial sustainability that was originally planned out in the fall of 2019. We have remained focused on three primary goals centered around increasing new enrollment, improving our retention rate, and right sizing our annual operating budget. Our commitment has paid off in the form of tangible results which are validated by improving financial indicators. First, our freshmen enrollment of 1,392 in the fall of 2019 has grown to 1,594 in fall 2023 with a 4-year average of 1,550 which represents a much more sustainable level and closely approaching our annual goal of 1,600. Second, our freshmen cohort retention rate of 74.2% in fall 2019 increased as high as 79.3% in fall 2022 with a 4-year average of 77.3% which is just under our long-term target of 78%. We did see a decline in fall 2023 to 74.8%, but we have many initiatives in place to ensure that is a one year setback rather than the beginning of a trend. Finally, and most impressively, we have paired back our expenses over recent years to more align with our recurring revenues. This hard work helped us move from sustainability plan 2 (orange) to sustainability plan 1 (yellow) in fall 2021. We have continued to improve our financial indicators since that time and were able to attain green results for all three financial indicators in the most recent fiscal year ended June 30, 2023. Our annual operating margin improved from being consistently negative to a positive 2.3%. Our annual primary reserve ratio improved to 41.6% which represents our highest single year result in over 5 years. Our minimum reserves, as measured in days of cash needed to cover expenses, has increased by 60 and now stands at a very healthy 229 days. We have also made great progress by increasing our student-to-faculty ratio from 16.7 in fall 2019 to 18.6 in fall 2023. The next step is to ensure we can maintain these impressive single year results moving into the future. We anticipate similar financial results for fiscal year 2023-24 as we have benefitted from additional state appropriations, the one-time CSFRF funds, stable enrollment, and modest fee increases. These positive changes should account for approximately $8.9 million in additional revenue. With more revenue, we are able to cover increases in salaries, benefits, and student financial aid while significantly increasing our unrestricted net assets and cash balances. These funds will be set aside for future years as we address deferred maintenance needs across campus and strategically plan for larger building renovations. Even with the additional revenue and projected positive financial results, we continue to better align our workforce with our student enrollment. We reduced our fall FTE faculty by 9.5 this past fall which helped us improve our student-to-faculty ratio from 17.8 to 18.6 in one year’s time. These types of actions will help set us up for success in future years when additional enrollment, higher tuition, and greater appropriations are not guaranteed. Executive Summary Actual Reforecast Goal FY 2022-23 FY 2023-24 FY 2024-25 % Change FY 2025-26 % Change FY 2026-27 % Change Revenues and Use of Supplemental Resources/Adjustments Less Expenditures & Transfers $1.6 $0.0 $0.0 0.0% $0.00 0.0% $0.0 0.0% Total Estimated Unrestricted Net Assets $75.5 $85.0 $87.8 3.3% $83.5 -4.9% $79.6 -4.6% Total Estimated End of Year Cash Balance $93.0 $102.5 $105.3 2.8% $101.0 -4.1% $97.2 -3.8% Annualized FTE Enrollment 6,648.05 6,875.20 6,875.20 0.0% 6,875.20 0.0% 6,875.20 0.0% Fall FTE Student/Fall FTE Faculty Ratio 19.4 17.8 18.6 18.7 19.0 19.3 Net Tuition Revenue per FTE Student* $6,092 $6,276 $6,255 -0.3% $6,318 1.0% $6,375 0.9% *Undergraduate academic year tuition revenue less institutional aid/annualized undergraduate FTE enrollment. Note: this estimate may include aid awarded to graduate students. ($ in Millions) Projected I I I I
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