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REPORT TO THE
BOARD OF
TRUSTEES
2006-07 YEAR END PROJECTION
2007-08 PROPOSED BUDGET
2007-08 to 2011-12 FIVE-YEAR CAPITAL BUDGET
June 7-9, 2007
TABLE OF CONTENTS
Finance Committee Agenda 1
Introduction 2
Antioch University Summary Report 5
Antioch College 6
Glen Helen 14
Antioch University New England 20
Antioch University Seattle 32
Antioch University LA & SB Operating Budgets .40
Antioch University Los Angeles – Capital Budgets .46
Antioch University Santa Barbara – Capital Budgets .48
Antioch University McGregor 50
PhD in Leadership and Change 62
University Central Administration 68
Antioch Review 72
WYSO Public Radio 76
Endowment Summary Report 82
Finance Committee Agenda
Friday, June 8, 9:00 – 11 :00 AM
Seattle Campus
1. FY 07 Year End Operations Review • Campus Presidents
2. FY 08 Budget Campus Presidents
3. FY08-12 Capital Budgets Campus Presidents
4. Investment Policy and Endowment Spending Bruce Bedford
5. Debt Covenant Update Tom Faecke
6. Expense and Revenue Monitoring at Campuses Tom Faecke
7. Handling of Restricted Funds Tom Faecke
8. Audit Recommendation Updates Tom Faecke
9. College Tenure Recommendations Bruce Bedford
10. Other
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REPORT TO THE BOARD OF TRUSTEES
June 7-9, 2007
This report includes the 2006-07 end of year projections prepared and submitted
by each of the Campuses. Two months remained in the fiscal year when these
projections were prepared. The October report will include the actual end of year
budget figures but management feels that the projections as presented are an
accurate reflection of year end. Also included in this report is the 2007-08
Proposed Budgets which contain the spending plans developed by each of the
Campuses and operating units for consideration and action by the Board of
Trustees. The Proposed Budget for each Campus reflects a careful analysis of its
future revenues and expenditures. The fiscal year 2008-12 capital budget request
is also presented for review, comment and approval. The endowment summary is
included in this report. Earnings on the endowment have been strong this fiscal
year and the final results will be reported aUhe October board meeting.
The financial information in this report is presented in summary form. You will
notice that the budget for 2006-07 is compared against the projection for the same
period. On the same worksheet you will find the projected end of year
performance for 2006-07 compared against the 2007-08 proposed budgets. A
separate section detailing the capital budget requests follows the current year
projection and proposed budget section of this report for each campus and
operating unit.
2006-07 Year-End Projections
With approximately two months remaining in the fiscal year these financial
projections reflect that the University will end the year in a positive position of
$253,176 with regard to excess revenue over expenditures. When factoring in the
cash items resulting from the capital budget freeze implemented at the November
board meeting the University projects that it will end the year with a positive
balance of $1,077,451. Obviously, this was a double edged sword approach.
While we were able to save the cash from the equipment and capital improvement
freeze, Campuses and operating units were unable to purchase valuable
equipment and move forward with badly needed physical improvements to their
facilities. This cannot go on forever, but for this fiscal year it was a necessity to
improve the University cash position. These positive balances also do not
necessarily totally amount to cash as it includes receivables and pledges that
have not been collected. After the 2006-07 audit has been completed we will be
able to give you an accurate account of our cash position at year end.
On a cash basis two operating units of the University are projected to be ending
the year with a negative balance. WYSO will be ending the year with excess
revenue over expenses of $24,089, but when calculating the cash items from
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capital expenditures it is projected to net a negative amount of $90,241. The
Antioch Review did not have any capital expenditures so the end of year deficit is
projected to be $53,266
Antioch University Southern California has been officially segregated into
individual institutions beginning in 2007-08, but as a combined unit in this fiscal
year they ended the year with a negative $191,032 of expenses over revenues.
Because their capital expenditures were limited to only $43,000 against
depreciation expense of $309,026 they ended the year with a net positive cash
basis of $70,994. As you can recall, Antioch University Southern California
ended fiscal year 2006-07 with a negative $879,000 so this year’s performance
marks a vast improvement in revenue and expense control over the past.
Antioch College is projected to end the fiscal year with a negative $395,543 of
expenses over revenues. As in Southern California, they limited the amount they
spent on equipment and capital improvements and thus ended the year with a net
positive cash basis of $404,671. Again, we must reiterate that although limited
capital expenditures helped the University cash position, it only led to further
deferring of badly needed improvements to the College physical facilities and the
replacement of its aging equipment.
Management is working with WYSO and the Antioch Review on their budgets and
will be introducing changes that will eliminate the operating deficits within the next
fiscal year, or other options must be considered. Management is also confident
that Antioch University Los Angeles and Santa Barbara have taken the necessary
.action that will allow them to operate on a self-sustaining, yet, growing pair of
institutions in fiscal year 2007-08. Antioch College continues to struggle with
enrollment and retention issues and a physical plant that is in desperate need for
deferred maintenance and improvements. Management is taking this challenge
very seriously and is looking forward to constructive discussions with the board
surrounding these issues.
2007 -08 Budget Review
Total revenues in 2007-08 are expected to exceed $85.7 million, an increase of $5
million over what is projected for the 2006-07 fiscal year. Expenditures for next
fiscal year are expected to be approximately $85.2 million or an increase of $4.9
million over the current fiscal year. All campuses have submitted a balanced .
budget for review and approval. The information provided in this report is in
summary form for the 2007-08 budgets. Detailed budget information is available
for your review and the campus presidents are prepared to answer any questions
regarding their budget submittals.
The Antioch Review and WYSO have submitted budgets that reflect a deficit of
$34,194 and $100,140 respectively. As was stated in the 2006-07 narrative,
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management is working with these units on a plan that will present a balanced
budget by the 2008-09 fiscal year.
Antioch College has submitted a balanced budget for approval. It is
management’s recommendation that the approval of the College budget be
deferred until the Finance Committee and Board of Trustees has had the
opportunity to review and discuss the long-term fiscal projections of the College.
2008·12 Capital Budget
Campuses and operating units were asked to submit a five year capital budqet,
We have included these requests as presented. Management will continue to
monitor the cash position of the University and only allow expenditures in the
2007-08 fiscal year that can be paid without borrowing from campus contingencies
or the line of credit. Management feels thatpast practice of approving capital
expenditures without identifying the funding source contributed to the drain on
cash that was deposited for restricted purposes.
Respectfully Submitted,
Thomas A. Faecke
Vice Chancellor &CFO
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Antioch University
2006-07 Projection & 2007-08 Proposed Budget
Revenues
Tuition & Fees
Less Tuition Discounts
Net Tuition and Fees
Gifts
Grants
Endowment Income
Contracts
Other Income
Total E&G Rev~nue
Auxiliary Enterprises
Released From Restrictions
Net Overhead for Central Operations
Total Revenues
Operating Expenses
Salaries & Wages
Benefits
Training & Development
Student Aid Services
Special Events
Supplies
Business Operations
Plant Maintenance
Resale Costs
Interest Expense
Miscel1aneous
Contingency/Reserves
Campus Contingency, Mandatory
Campus Contingency, Discretionary
Overhead
To the University
Other (Intercampus Agree & Univ Canf)
Depreciation
Total Operating Expenses
Excess Revenue over Expenses
757,710
748,869
152,907
193,635
-134,439
151,591
·112,124
561,706
·198,893
·152,476
425,149
1,346,950
·155,721
·110,209
4,857,517
183281
Annual Budget Conversion to Cash Basis
Capital Expenditures
Principal Payments
Bond Proceeds
Add back Depreciation
Total Cash Items
Net Cash Basis Budget
2,033,892
58,170
-110,209
·1,299,786
.1,116,505
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ANTIOCH
COLLEGE
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ANTIOCH COLLEGE
2006-07 YEAR END PROJECTION
2007-08 PROPOSED BUDGET
Fiscal Year 2007-08 will be the third year of implementation of the Renewal
Plan for Antioch College.
Gross tuition income declined in the current year and is projected to decline
further in the coming year. Despite admission of a strong first-year class in fall
2006, the College continues to struggle with the bUdgetary implications of a
historically small class of entering students in fall 2005 (63 new students),
which is currently in its second year of studies. Gifts remain below projection,
requiring more rapid expenditure of the Drey gift of $10 million. College
leadership have responded to the worsening revenue situation by undertaking
significant reductions in core expenditures, including $2 million in staff and
operating cost expenditures, which become fully effective in the new fiscal
year. Further reductions in expenditures are being contemplated. 7
The College is projecting an end-of-year deficit for 2006-07 of about $395,000.
This is due to lower than projected revenue in the amount of $1,402,613, the
result of shortfalls in tuition, auxiliary services, gift income and other income.
The budget included $325,000 in other income from the gain on the sale of
properties which did not materialize. The impact of lower than projected
revenues was mitigated by expenditures $1,007,070 less than projected.
Savings were mainly due to reduced personnel costs. Some senior positions
became vacant and remained unfilled and a hiring freeze on selected positions
was put into effect after the November board meeting. There were also
savings in energy costs.
I. Current Year Accomplishments and Challenges
• Fall 2006 new student admissions were more than double those of fall
2005 (130 versus 63). The College continues be more selective in
offering admission, with an emphasis on higher academic preparation of
new students.
• Key elements of the Renewal Plan were fully operational. Five learning
communities were offered in the fall of 2006, as compared to three in
the fall of 2005. Incoming students expressed general satisfaction with
the Learning Community experience. Faculty have agreed to
adjustments in the second semester of the first year core curriculum to
allow for greater student choice in course selection.
• New co-op communities were successfully implemented in New Mexico,
Washington, D.C. and southwest Ohio in fall 2006.
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• The College initiated a variety of efforts for improving retention of
students, and particularly first-year students. Levels of student
satisfaction were surveyed in the late fall of 2006 and faculty and staff
have established mechanisms for early detection and response to
student academic or social difficulties that might lead to withdrawal. The
new presidential task force on retention meets monthly to coordinate
retention efforts across campus.
• The president and the faculty have agreed to focus curricular resources
on three areas: the environment, global citizenship and the arts. This
curricular frame will clarify to prospective students Antioch’s areas of
academic distinction and will be used as a tool to recruit and retain
academically motivated students.
• Dr. Dana Patterson, the first director of the Coretta Scott King Center for
Cultural and Intellectual Freedom, was appointed in December 2006.
The Center is now fully operational and is offering a rich array of
academic and community service programming.
• The Vice President for Institutional Advancement resigned in February
2007, after having built an effective professional development team and
identifying a large and credible list of major gift prospects. The IA office
has been reorganized to ensure continued effective staff performance.
Annual fund gifts and pledges as of the end of April were $919,285 and
major gifts and pledges are approaching $200,000 for the 2006
Campaign.
• In an effort to keep the College’s chronic deficit at manageable levels
over the longer term, the College reduced core staff and operating cost
expenditures by approximately $2 million, or approximately 10
percent of total expenditures. These included the elimination in March
of 20 staff positions representing approximately $1.1 million in savinqs.
Additional staff reductions will be announced before June 1, becoming
effective July 1, 2007. The full benefit of staff and operating cost
reductions will be in effect from the beginning of the fiscal year. Staff
reductions required the reorganization of the Office of the President and
the consolidation of the Office of Student Affairs and the Department of
Auxiliary Services. The positions of Executive Vice President and Dean
of Faculty have been consolidated into a single position. (Rick Jurasek,
Executive VP, has been appointed President of Medaille College,
effective June 1.) Milt Thompson, former Director of Auxiliary Services,
has been appointed Vice President for Student Affairs and Services,
effective March 1.
• A new fund-raising document entitled “Thinking Critically, Acting
Responsibly, Giving Generously” was developed with the assistance of
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Krukowski and Associates and with input from faculty, staff and board
members. The document provides a summary of plans and progress
toward revitalizing the College’s performance as an educational
institution.
• Good progress has been made toward cultivating a campus climate
characterized by intellectual freedom, open inquiry and mutual respect,
due to the leadership of faculty, students and staff alike.
• The College and the University have begun discussions with prospective
investors interested in developing housing and other facilities on College
land adjacent to Livermore Street.
II. Enrollment, Revenue and Expense chanqes for 2007-08
Five-Year Planning Framework
The College continues to analyze and plan its budget within the framework of a
five-year rolling financial planning model first developed in fiscal year 2006-07.
On the revenue side, the model enables senior staff to vary assumptions about
enrollments and student revenues (I.e. tuition revenue), gift income and
endowment and other sources of income based on performance. In the course
of the year, the president has adjusted downward revenue assumptions
attendant to enrollment growth, retention and gifts to still positive but more
realistic levels.
Revenue and Enrollment
• The College five-year plan provides that a significant portion of the
2007-08 operating budget will be funded by gifts, It is the assumption of
the College that 2007 fund-raising will be as successful as 2004-06.
• Overall student body enrollment for 2007-08 is forecasted to decline
(see note below)
• Endowment income net endowment income will decline due to the draw
down of the Drey gift.
• Tuition will increase by five percent (5%).
• Total Degree and non-Degree Fall enrollment:
New Transfers Returning AEA Total
(non-
matricl
FY07 116 17 209 79 421
FY08 110 15 182 82 389
.
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Expense Changes
• The 2007-08 budget provides for a $1.7 million net reduction in personnel and
operating expenditures.
• Salaries increases are planned at approximately one percent.
• Energy costs are expected to decrease by $50,000.
Risks
The President is determined to bring expenditures into alignment with realistic
projections of revenue. This is essential for the College’s sustainability, as it
increases revenues from enrollment and gifts at a slow rate of growth andover the
long term. As such, the College has aggressIvely managed expenses in the face of
weak revenues, and will continue to do so.
Steven Lawry
President
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Antioch College
2006-07 Projection & 2007-08 Proposed BUdget
Revenues
Tuition & Fees
Less Tuition Discounts
Net Tuition and Fees
Gifts
Grants
Endowment Income
Contracts
Other Income
Total E&G Revenue
Auxiliary Enterprises
Released From Restrictions
Subsidy
Total Revenues
8,405,159 ,:,: .:”
-4.71 %
!;:r::~
-1,088,695
2,961,364 -4.31% -90,909
747,228 -4.42% :: -15,584
925,000 -19.15% :” 149,644
202,202 12.05% :” -76,566
758,902 6.13% :”; -61,409
2,319,480 4.59% :.: -350,987
1,456,542 -13.96% i
132,043 0.00% “.’
285,921
240,944
-100.00% :
-183,900
1,585,000
19,835,885 ‘.::;
-395,543,
56.71%
87.35%
0.00%
289.35% .~: ..:
‘.’;’;””::;’::’«:
‘:::),,:”;<'::"iIllii:~'l1' : 1'95.76% -432,501 ·::·,'i40liC1l8.%
Operating Expenses
Salaries & Wages
Benefits
Training & Development
Student Aid Services
Special Events
Supplies
Business Operations
Plant Maintenance
Interest Expense
Resale Costs
Miscellaneous
Contingency/Reserves
Campus Contingency, Mandatory
Overhead
To the University
Other (Intercampus Agree & Univ Conf)
Depreciation
Total Operating Expenses
Excess Revenue over Expenses
Ann ual Budget Conversion to Cash BaSiS'7:IT3Vi'l'i"M1'ir---::7