TO:
Board of Trustees

FROM:
Kirsten M. Volpi


Executive Vice President and Chief Operating Officer

DATE:
May 23, 2016

SUBJECT: FY 2017 Budget

Background:
As we approach fiscal year 2017 and the development of the budget, there are key strategic factors
as well as operational needs that translate to our financial position, both short and long term. Fiscal
year 2017 brings a moderating of our revenue sources. We wil see a slight increase in financial
support from the state, and are experiencing a softening of our revenue base primarily due to our
moderating of tuition rate increases along with the leveling off of undergraduate enrollment. We are
also experiencing a drop in gift revenues which is a reflection of what is occurring in the energy and
commodities industry. These pressures have made it more difficult to manage the delicate balance of
making strategic and critical investments while minimizing the impact on students and tuition. This
budget was developed by prioritizing our resource needs in relation to our revenue position and the
impacts not only to the upcoming year, but future years.

State Funding
Despite market conditions impacting the energy industry, the economic outlook for Colorado remains
relatively stable and growth is expected to continue through 2017 (although at a slower rate than
prior year). Much of the revenue growth is expected to be used for required reserves, TABOR
refunds, and transfers to transportation and capital construction resulting in a flat appropriation for
higher education of $672 mil ion (excluding financial aid) for 2017.
Fiscal year 2017 is the second year for allocating funds under HB14-1319, which provided new
parameters for higher education funding, superseding the pay for services model in prior years, and
moved us to a pay for “performance” model. Although overall state funding for higher education
remained flat, Mine’s allocation increased slightly by $91,722 (0.45%) due to our enrollment and
performance metrics over the last year.


Board of Trustees Meeting
May 23, 2016

1

The chart below reflects state funding for Mines since fiscal year 2008 along with our financial aid
commitment pursuant to SB10-003:


In the March 2016 State revenue forecast, the Governor’s budget office noted that continued
economic growth in Colorado is likely to lead to TABOR refunds next fiscal year. Once the
Referendum C limit was met (2015), the state is required to distribute the excess (refund) to
Colorado tax payers. The source to fund the refunds is any discretionary budget within the state’s
general fund. As higher education is one of a few discretionary line items within the state budget, it is
affected by the TABOR refunds. Despite state revenue growth, the higher education budget remains
flat in fiscal year 2017 as the additional funds wil be partially used for TABOR refunds.


Board of Trustees Meeting
May 23, 2016

2

Discussion:
The university continues to make strides in funding strategic and critical investments. The proposed
budget reflects investing in areas that are critical to the operations of the university as wel as efforts
to align resources with strategic initiatives.
This budget represents al funds received and used by the university and is categorized as current
unrestricted funds (“operating”), funds that are designated for particular purposes (faculty start up
and indirect cost recoveries), restricted funds (research and gifts) and the university’s endowment
funds. The changes for each fund are summarized below and detailed in Attachment 1.
Current
Unrestricted
Designated
Current
Endowment and
Operating Fund
Fund
Restricted Fund
Loan Fund
Total
Revenue
$ 1 88,835,152 $ 2
6,222,294 $ 7 9,100,000 $ 2 05,000 $2 94,362,446
Expense
$ 1 88,477,128 $ 2
2,714,644 $ 7 7,411,115 $ 1 53,501 $2 88,756,388
Net Activity
$ 3
58,024
$ 3
,507,650
$ 1
,688,885
$ 5
1,499
$ 5
,606,058


Operating Revenue is expected to increase by $8.32 mil ion as outlined below:

FY 2016 Base
FY 2017 Adjustments
FY 2017 Budget
Tuition
123,595,673
6,424,178
130,019,851
State Funding
20,547,328
91,722
20,639,050
Housing and Dining Revenue
17,704,595
741,504
18,446,099
Indirect Cost Return from Research Activity
11,979,866
119,829
12,099,695
Continuing Education
2,177,139
2,177,139
Other Revenue
3,106,167
3,106,167
Gift Revenue from the Mines Fund
1,400,000
1,400,000
Rollforward to FY17 One-time
947,150
947,150
Total
180,510,768
8,324,383
188,835,151
The increases are based on the following assumptions:
 Tuition increases of 3.0% for resident students and 4.0% for non-resident students;

 Housing room rates to increase by 6.00% and meal plans to increase by 2.20%;

 Slight increase in Indirect Cost Recoveries due to an increase in the indirect cost rate on new
research awards; and

 Of the FY16 net positive variance, $0.95 mil ion wil be used to fund 2017 one-time budget
requests.



Board of Trustees Meeting
May 23, 2016

3

Enrollment
Over the past ten years, both undergraduate and graduate enrollment has grown; largely due to the
market interest in our focus areas of earth, energy, and the environment, but also due to our
continued improvement in retention rates. Below represents enrollment of the past seven years:

In spring of fiscal year 2016, we began to see a softening in our nonresident enrollment much of
which occurred in our energy and Mining programs. This is not inconsistent with what the economy is
experiencing in the energy and commodities industry, this softening appears to be continuing through
our new student enrollment for fall 2016. Mid-way through the enrollment cycle for new freshman, we
were seeing fewer non-resident students commit to Mines, however due to steps taken to attract new
nonresident freshman, our fall numbers for non-resident students are stronger. The steps we took in
the spring to build the fall 2016 class included the “Discover Mines” and “Making the Connection”
programs. The wait list was opened six weeks earlier than prior years and additional financial aid
packages were provided to nonresident students interested in low enrollment programs. Of the
students that attended the additional Discover Mines program, 43% committed with a large
percentage of those non-resident.
The results of these actions have been positive and the decreases have been materialy mitigated.
Overall we received over 12,000 total freshmen applications, and we are targeting a fall 2016
incoming class of 1,000 freshmen and 150 transfer students from area community colleges. From
this class, we expect 51.7% to be Colorado residents and 48.3% to be non-residents shown in the
following table:
Board of Trustees Meeting
May 23, 2016

4


Freshmen and Transfer Enrollment
Academic Year 2014-2016
Applications Received
Committed - May
Fall Enrollment
Resident Nonresident
Total
Resident Nonresident
Total
Resident
Nonresident
Total
2016 3
,547 9
,194 1
2,741
621

580

1
,201
595*
555*
1150*
2015 3
,498 8
,852 1
2,350
620

619

1
,239
599

533

1
,132
2014 3
,808 9
,322 1
3,130
717

539

1
,256
688

471

1
,159
*Target
Graduate “intends to enroll” statistics are also strengthening and are trending higher than prior year
at this same time. However, we remain cautious as graduate enrollment is volatile and it is too early
to determine the behavior of the students currently enrolled. We are projecting a total decrease of
1.0% for all graduate enrollment primarily due to the decrease we experienced this spring and wil
update the revenue projections after fall census.


Operating Expenses are expected to increases by $7.31 mil ion. The increases in expenses are
for strategic initiatives and operational needs as follows:


FY 2017
FY 2016 Base
Adjustments
FY 2017 Budget

Labor - Salaries and Benefits
$95,287,940
$2,883,185
$98,171,125


Labor - Graduate Support
10,693,773
384,378
11,078,151
Labor - Adjunct
1,593,056
246,000
1,839,056
Undergraduate Financial Aid
19,176,856
297,687
19,474,543
Other Operating
8,312,053
1,478,082
9,790,135
Debt
9,454,289
164,688
9,618,977
Operations and Maintenance
7,303,794
174,271
7,478,065
Housing and Dining Operating
6,048,074
90,131
6,138,205
New Faculty Start Up
5,119,768
780,232
5,900,000
Reserves
4,858,863
40,548
4,899,411
Information Technology Operating
2,701,653
1,756,130
4,457,783
To be funded with Innovation & Technology Reserves
(1,113,411)
(1,113,411)
Capital Renovation and Controlled Maintenance
3,244,070
3,244,070
Indirect Cost Return Distribution
2,861,527
2,861,527
CSMF Development Fee
1,900,000
1,900,000
Library
1,739,962
133,000
1,872,962
Continuing Education
866,532
866,532
Total
$181,162,210
$7,314,921
$188,477,131
Board of Trustees Meeting
May 23, 2016

5

Strategic Initiatives $0.96 million (5.35 FTE)
This budget proposal includes new funds for creating distinctive programs, improving the students’
first year experience, improving our marketing and communications, and developing an employee
reward and recognition program. These initiatives are outlined below:
 Creating Distinctive Programs (3.75 FTE) increasing investments for the learning experience,
specifically by increasing funding for:

o Innovative teaching and learning by enhancing pedagogy and classroom learning. To
support this focus an Instructional designer and administrative support wil be hired.
o an Innovation director to develop and improve learning outside of the traditional
classroom. The request also includes both capital and operating funding for online
development.
o The creation of an Engineering and Society Program to connect innovation and design
in engineering and applied science to societal needs. This includes one new FTE at no
additional cost due to realigning existing funds.

 First Year Experience (1.60 FTE) – includes continued investments in the Center for Academic
Services and Advising with the hiring of a new Associate Director. We are also providing 0.6 FTE
for the first year honors program as well as creating a themed learning community in Residence
Life.

 Marketing and Communication – in fiscal year 2016, the Board approved funding for the Director
of Marketing to establish a marketing and communication strategy for Mines. The new director is
joining Mines on June 1, 2016; this request is to fund the operations of the new program.

 Employee Rewards and Recognition – we wil be developing a program to focus on
acknowledging strong performance of our employees with the intent to drive engagement and
high performance.


Operational needs $6.34 million (12.5FTE)
Operational budget increases are provided to address investments in general operations and critical
needs within the departments that, without support, could impact operations.

Salaries and Benefits – The legislature sets the salary and benefit increases for classified staff. For
fiscal year 2017, they did not approve a salary increase for classified staff, but have funded the
increase for health benefits. For the academic and administrative faculty, we propose to provide a
2.0% merit pool which is slightly higher than CPI of 1.18% in the Denver/Boulder area.
Benefit increases not only include health care, but also the statutory increase for the state retirement
plan (PERA) of 0.90%.

Financial Aid – The budget includes our commitment under SB10-003 to convert all state funds
received pursuant to fee for service to financial aid and graduate support within ten years. Fiscal year
2017 wil be the sixth year of the commitment with a total budget of $8.47 mil ion in additional
institutional financial aid and graduate support dedicated to resident students.

Faculty Start-Up – Currently we have 21 active searches for new faculty positions and an additional
12 searches for upcoming retirees. This budget request is to fund start up packages for research for
those new faculty, as well as increased commitments for new faculty hired in the current year.

Board of Trustees Meeting
May 23, 2016

6

Business Processes (1FTE) – as a continuation from prior year, we wil assess/redesign processes
and invest in technology where appropriate to employ best practices, improve administrative
infrastructure and streamline processes. This request is for the procurement of a document retention
and workflow system. It also includes a new position for a functional project manager to assist with
implementation of streamlined business process systems.

Technology (1.5 FTE) – we continue to expand and improve our information technology
infrastructure and this request includes funds for the implementation of a new Customer Relationship
Management program, a new Business Intelligence position and increases for various system
upgrades and maintenance fees.

Other Operating Investments and Critical Needs $1.67 mil ion (10.0 FTE):

Expense:
Increase
FTE

Faculty and Staff Development
1
17,500

Utilities and Facilities Support
2
15,271

Student Support
1
0,000

Research Support
4
21,980
1

Title IX
1
9,000

General, Debt and Other
1
,591,740
9

Salary Savings
( 700,000)

Total
1
,675,491
The expenses above reflect the hiring request of four administrative assistants and a client relations
coordinator for the academic departments funded with existing salary savings and with no budget
impact. Other position requests are for various functions throughout the institution and include an
attorney, a budget/enrollment data analyst, research support and a strength and conditioning coach.
In the third quarter of 2016, the Mines Magazine staff that were employed by the CSM Alumni
Association (CSMAA) were transitioned to become Mines employees and several CSMAA positions
were transitioned to the CSM Foundation. In order to strategize alumni programming and initiatives
broadly, this budget request includes a new position for the Executive Director for CSMAA.



Board of Trustees Meeting
May 23, 2016

7

Designated and Restricted Activities are expected to decrease by $5.26 mil ion and expenses are
expected to decrease by $3.24 mil ion as detailed below:
FY 2017
Revenue:
FY 2016 Base
Adjustments
FY 2017 Budget
Sponsored Research Grants/Contracts
$57,773,691
($1,573,691)
$56,200,000
Gifts
21,256,629
(2,686,629)
18,570,000
Fees
17,835,903
($983,774)
16,852,129
Auxiliary
5,664,756
(1,064,756)
4,600,000
Financial Aid
5,361,304
$38,696
5,400,000
CO Geological Survey - State Support
1,753,734
0
1,753,737
Other
1,146,366
$1,005,062
2,151,428
Total Revenue
$110,792,383
($5,265,092)
$105,527,294
Expense:
Sponsored Research - salaries, benefits & operating
$56,449,946
($1,132,562)
$55,317,384
Other Labor – salaries and benefits
16,349,265
3,117,462
19,466,727
Designated Auxiliary Operating
10,643,641
($680,714)
9,962,927
Undergraduate Financial Aid
9,701,736
498,264
10,200,000
Debt
4,134,073
($85,172)
4,048,901
Other Operating
3,780,021
(3,021,701)
758,320
Capital Renovation/Controlled Maint.
2,457,034
($1,932,034)
525,000
Total
$103,515,716
($3,236,457)
$100,279,259
Net Activity
$7,276,667
$5,248,035

Designated Funds includes revenues derived for a specific purpose and cannot typically be used to
fund general operations. Examples include the Academic Facility Fee designated for debt services
payments, Student Activity Fees used for student organizations, lab fees, and funds set aside for
faculty research and professional development. Designated Revenue is expected to increase
primarily due to student fee revenue increases. Expense are expected to increase due to salary
increases, re-aligning a position to the student center, increases to debt service and an increased
spending in faculty start-up accounts.
Restricted Funds are restricted from outside entities and include all of our federal, state and private
research, activities supported by our donors and the CSM Foundation, as wel as federal and state
financial aid. We are anticipating research revenues and expenditures (not awards) to remain
relatively flat to current year forecast, but lower than original y budgeted.
Endowment Funds are resources invested in perpetuity and represent those endowment funds that
are owned by the university (as opposed to the CSM Foundation) and include both restricted and
unrestricted sources. The income in this section includes investment earnings or new gifts and
expenses represent spending from the university’s endowment and the foundation fee for
administering university endowments. We expect the activity to remain relatively flat to the current
year forecast, but lower than original y budgeted due to the decline in investment income and gift
revenues.

CSM Foundation Budget is included for informational purposes in Attachment 2.

Board of Trustees Meeting
May 23, 2016

8

Recommendation:

The Finance and Audit Committee reviewed the Fiscal Year 2017 Budget and recommends it to the
Board of Trustees for their consideration and approval:




Resolution:

BE IT RESOLVED that the Board of Trustees approves the Fiscal Year 2017 Budget:


Board of Trustees Meeting
May 23, 2016

9

Colorado School of Mines
All Funds Operating Budget
Fiscal Year 2017
(in millions)
Attachment 1
Designated &
FY17
Designated &
Restricted FY17
Total FY17
FY16
Proposed
Restricted FY16
Proposed
Total FY16
Proposed
in millions
Forecast
Budget
Forecast
Budget
Forecast
Budget
Revenues
Tuition and Fees (including Continuing Education)
$132.19
$138.39
$16.33
$16.85
$148.51
$155.24
Research
11.98 1
2.10
5
5.00 5
6.20
66.98 68.30
Auxiliary
17.69 1
8.45
4
.57
4
.60
22.26 23.05
Fee for Service/State Support
14.26 1
4.44
1
.75
1
.76
16.01 16.21
Gifts
1.80
1
.40
1
8.43 1
8.57
20.23 19.97
Other
3.88
4
.05
8
.38
7
.55
12.26 11.60
Total Revenues
181.80 188.84 104.46 105.53 286.26 294.37
Expenditures
Instruction
63.86 6
9.47
9
.08
9
.11
72.94
78.57
Research
4.17
4
.11
5
6.49 5
6.59
60.66
60.70
Public Service
-
-

0
.28
0
.28
0.28
0.28
Academic Support
19.49 2
1.22
0
.76
0
.83
20.25
22.05
Student Services
5.81
6
.24
1
.98
1
.98
7.79
8.22
Institutional Support
18.36 2
0.80
0
.83
0
.78
19.19
21.58
Operations and Maintenance of Plant
18.49 1
9.38
2
.07
2
.32
20.56
21.71
Scholarships & Fellowships
18.98 1
9.47
1
0.16 1
0.27
29.14
29.75
Auxiliaries
19.57 1
9.64
1
7.88 1
8.27
37.45
37.90
Capital Renovations and Controlled Maint
3.54
3
.33
0
.53
0
.53
4.07
3.86
Total Expenditures
172.27 183.67
100.06 1
00.95
272.33 284.62
Net Operating Activity Before Reserves
9.52
5.17
4.40
4.58
13.93 9.75
Capital/Reserve Additions
8.71 4.81
0.29 (0.67)
9.00
4.14
Net Operating Activity
$0.81
$0.36
$4.11
$5.25
$4.93
$5.61

COLORADO SCHOOL OF MINES FOUNDATION, INC.
Attachment 2
FY'17 UNRESTRICTED OPERATIONS BUDGET REQUEST



Change from PY
FY'17
FY'16
Amount
Percent
REVENUE:


Endowment Administrative Fee - 1.8% (FY16 was 2%)
$ 3,196,778

$ 3,420,000

$ (22

3,222)
-7%
CSM Endowment Held - Investment Fees - 1.8%
474,739

505,000

(30

,261)
-6%
CSM Advancement Services Fee *
1,625,771

1,626,882

(1,111)

0%
Administration Fee on Non-Endowed Restr Gifts
260,000

260,000

-
0%
Unrestricted Cash Gifts-Bequests, trusts,etc
250,000

150,000

100,000

67%
Unrestricted Investment Income
110,000

210,000

(10

0,000)
-48%
Other Sources
48,000

68,500

(20

,500)
-30%
Reserve Endowment Support
149,733

241,841

(92

,108)
-38%
CSMF Reserve Endowment-Welcome Center lease**
199,783

199,600

183

0%
Subtotal Revenue excluding Alumni Relations
$ 6,
314,804
$ 6,
681,823
$ (367,

019)
-5%
CSMF Support - Reserve Fund
175,000

-
175,000

---
CSM Support
110,000

-
110,000

---
CSMAA Board Support
100,000

-
100,000

---
Program Revenue
50,609

-
50,609

---
Subtotal CSMF Alumni Relations Revenue
$ 435,

609
$ -

$ 435,

609
---
Total CSMF Revenue including Alumni Relations
$ 6
,750,413
$ 6
,681,823
$ 6
8,590
1%
EXPENDITURES:

CSM Foundation:
Personnel Compensation
$ 4,903,106

$ 5,080,993

$ (17

7,887)
-4%
Operations
1,411,698

1,600,830

(18

9,132)
-12%
Total
6,314,804
6,681,823
(367,019)
-5%

CSMF Alumni Relations:
Personnel Compensation
229,500

-
229,500

---
Operations
206,109

-
206,109

---
Total
$ 435,

609
$ -

$ 435,

609
---
Total Expenditures
$ 6
,750,413
$ 6
,681,823
$ 6
8,590
1%
*CSM Advancement Services Fee
$ 1,900,000

Less CSM Support - Legislative Relations (paid by CSMF)
(274,229)
Total Advancement Services Fee for CSMF Operations
$ 1,625,771

Summary of Legislative Relations:
Federal Legislative Services
$ 162,000

$ 162,000

$ -
0%
Colorado Legislative Services
112,229
111,118
1,111
1%
Total
$ 274,

229
$ 273,

118
$ 1,
111
0%
**Payment to CSM is waived for FY15 thru FY18 (4 years)