THE UNIVERSITY OF NORTH CAROLINA SYSTEM As part of a system-wide Fall 2020 scenario-planning assignment, the UNC System Office of Budget and Finance worked with each of the 17 UNC System institutions to produce the enclosed document. This document contains financial models and scenario plans to identify potential worst-case scenarios resulting from COVID-19. These scenario plans were directed by Chair Ramsey of the Board of Governors and provide important consideration and data for continuing UNC System operations and providing instruction and essential services to our students, faculty, and staff. The document was developed and formatted by the UNC System Office as a compilation of constituent institution submissions. On July 17, Chair Ramsey said in a statement that ?This scenario-planning directive is an important part of our Board?s responsible oversight as we continue to confront and adapt to an unprecedented and unpredictable situation. This financial analysis gives us an essential understanding of a situation that we hope not to be facing.? The System Of?ce developed a planning worksheet for FY 2020-21 for compiling this information in a consistent format identifying both potential revenue impact and expense levers System-wide and for each institution. The seven potential scenarios assume various enrollment decreases, ranging from a minimum of 2% through a maximum of 50%, with an emphasis on the through -10% models. Variable decreases in revenue and expenses were also incorporated into each financial model. University of North Carolina System COVID19 – Estimated Revenue Impact Scenario Summary Estimated Revenue Impact Scenario Planning for 2020-21 UNC System A B Impact Percentage C1 C2 C3 -2.0% D E Annual Budget “New Normal” (status quo) Social Distancing Only Scenario A Scenario B Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 0.0% 0.0% State Appropriation 0.0% 0.0% 0.0% Tuition Revenue (net) 0.0% 0.0% -2.0% Student Fees (net) 0.0% 0.0% -2.0% -40.6% -43.8% -53.1% -68.8% $ Financial Aid (external) 0.0% 0.0% -2.0% Athletics (less fees) Housing (net) 0.0% -5 0% -10.0% -25.0% -50.0% 0 0% 0.0% 0.0% 219,701 - - (4,394) - $ $ - (109,851) - $ - $ - $ - $ (24,210,000) $ (60,525,000) $ (121,050,000) $ (302,625,000) $ (605,250,000) 598,500,000 $ - $ - $ (11,970,000) $ (243,140,625) $ (261,843,750) $ (317,953,125) $ (411,468,750) -5 0% -10.0% -25.0% -50.0% $ 706,000,000 $ - $ - $ 0.0% -25.0% -50.0% -50 0% -50.0% -50.0% -50.0% $ 245,800,000 $ - $ (61,450,000) $ (122,900,000) $ (122,900,000) $ (122,900,000) $ (122,900,000) $ (122,900,000) 0.0% -45.2% -45 5% -46.0% -47.5% -50.0% $ 305,500,000 $ - $ (138,086,000) $ (139,002,500) $ (140,530,000) $ (145,112,500) $ (152,750,000) Dining (net) 0.0% -25.0% -45.2% -45 5% -46.0% -47.5% -50.0% $ 201,500,000 $ Parking 0.0% (14,120,000) $ (35,300,000) $ - (54,925) 0.0% $ 2,668,000,000 $ $ $ (21,970) -5 0% -10.0% -25.0% -50.0% $ 1,210,500,000 $ - - (10,985) $ - (70,600,000) $ (176,500,000) $ (353,000,000) - $ (50,375,000) $ (91,078,000) $ (91,682,500) $ (92,690,000) $ (95,712,500) $ (100,750,000) $ - $ (24,182,000) $ (24,342,500) $ (24,610,000) $ (25,412,500) $ Sales, Services, & Other Aux. 0.0% -15.0% -30.0% -30 0% -30.0% -30.0% -30.0% $ 483,300,000 $ - $ (72,495,000) $ Patient Services 0.0% -5.0% -5.0% -5 0% -5.0% -5.0% 720,000,000 $ - $ (36,000,000) $ Research & Grants 0.0% 0.0% 0.0% 0 0% 0.0% 0.0% 0.0% $ 1,410,400,000 $ - $ - $ - $ - $ - $ - $ - Gifts & Investments 0.0% 0.0% 0.0% 0 0% 0.0% 0.0% 0.0% $ 1,023,500,000 $ - $ - $ - $ - $ - $ - $ - $ 9,626,500,000 $ - $ (220,320,000) $ 0.0% -45.2% -45 5% -46.0% -47.5% -50.0% $ Total Revenue Percent Change -5.0% $ 53,500,000 100% - $ (26,750,000) (144,990,000) $ (144,990,000) $ (144,990,000) $ (144,990,000) $ (144,990,000) (36,000,000) $ (36,000,000) $ (36,000,000) $ (36,000,000) $ (36,000,000) (607,536,000) $ (897,883,125) $ (1,015,213,750) $ (1,367,205,625) $ (1,953,858,750) 0.0% -2.3% -6 3% -9.3% -10.5% -14 2% -20.3% Scenario A Scenario B Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Potential Expense Levers (cumulative as you move from left to right) Instruction, Student Services, Academic & Institutional Support Student Auxiliaries and Fee Activities Sales & Services No Changes - Hiring freeze and redirect lapsed salaries. - Across-the-board reductions in discretionary spending (i.e. travel, supplies, etc.) - Delay scheduled replacements by 1 year (IT, furniture, equipment, etc.) - Rely more heavily on adjunct professors (to the extent allowed by SACS) - Consolidation of administrative functions - Consider 9-month contracts for student-focused positions. - Increase faculty teaching load and/or student-to-faculty ratio - Fund balance depletion - Closure of student health centers, unions, rec centers, etc. for - Reduce services fall No Changes - Furloughs in areas where - Closure of student housing and dining halls for fall services are limited - Redirect fund source for debt service urlough of all related -Reduce - Discontinue sales and service activities - Furlough or elimination of staff No Change operating hours Contracts & Grants No Change Gifts & Investments No Change -Hiring freeze and reduction of certain research - Discontinue research in certain areas activity - Deplete F&A fund balances and fund shift or eliminate admin that relies on F&A -Suspend capital or other projects relying on - Reduce of financial aid funded from fundraising or interest income gifts/endowments - Examine ROI of fundraising resources Appalachian State University – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 18,582 State Appropriation $ Tuition Revenue (net) $ 85,000,000 Student Fees (net) $ Financial Aid (external) - 150,000,000 $ - (372) - $ - $ $ - $ - $ 45,000,000 $ - $ - $ 45,000,000 $ - $ - Athletics (less fees) $ 16,000,000 $ - $ Housing (net) $ 23,000,000 $ - $ Dining (net) $ 16,000,000 $ - $ Parking $ 2,000,000 $ - $ Sales, Services, & Other Aux. $ Patient Services $ Research & Grants $ Gifts & Investments $ Total Revenue $ Percent Change - (929) $ (1,700,000) $ - (1,858) $ - (4,646) $ - (9,291) $ - (4,250,000) $ (8,500,000) $ (21,250,000) $ (42,500,000) $ (900,000) $ (18,281,250) $ (19,687,500) $ (23,906,250) $ (30,937,500) $ (900,000) $ (2,250,000) $ (4,500,000) $ (11,250,000) $ (22,500,000) (4,000,000) $ (8,000,000) $ (8,000,000) $ (8,000,000) $ (8,000,000) $ (8,000,000) (10,396,000) $ (10,465,000) $ (10,580,000) $ (10,925,000) $ (11,500,000) - $ (4,000,000) $ (7,232,000) $ (7,280,000) $ (7,360,000) $ (7,600,000) $ (8,000,000) $ (904,000) $ (910,000) $ (920,000) $ (950,000) $ (1,000,000) (3,000,000) $ (6,000,000) $ (6,000,000) $ (6,000,000) $ (6,000,000) $ (6,000,000) - 20,000,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - 9,000,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 446,000,000 $ - $ (11,000,000) $ 35,000,000 100% 0.0% -2.5% (36,032,000) $ (57,436,250) $ -8.1% -12.9% (65,547,500) $ (89,881,250) $ (130,437,500) -14.7% -20.2% -29.2% Appalachian State University Response Scenario A Scenario 8 Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Instruction, No Changes Budget Reduction Strategies (Personnel) Student Current Staffing Levels: Services, 0 Faculty Employees: 1,470 (775 Tenure Track/695 Non-Tenure Track); Total Salary: Academic 0 Employees: 404 (337 State?Funded/67 Non?State Funded); Total Salary: Institutional 0 SHRA Employees: 950 (787 State-Funded/163 Non-State Funded); Total Salary: Support . . . . . . . Beginning wuth Scenario C3, would need to consrder temporary and/or permanent reductions In faculty and administrative staff (dependent upon approval). This may include the following options in order of financial impact (positive to negative) 0 Implementation of temporary furloughs (up to 12 months) as needed; may require 60?day notice under WARN Act. Would generate greatest amount of savings and require least amount of time to implement 0 Temporary salary reductions for EHRA Non-Faculty employees (if necessary; would require 30-day notice and savings would be minimal in comparison to furloughs as this is the smallest population of employees on campus) 0 Reductions-in-Force (RIF) May require up to 90-day notice for EHRA employees and up to 365-day notice for SHRA employees. Would require payouts of earned vacation time as well as severance pay with benefits. Consider retirement incentives to encourage retirement of long-term employees (requires approval) Hiring freeze on all non?essential vacant positions 0 Within SACS guidelines, hire adjuncts and lecturers on a year-to-year basis into positions reserved for tenure-track faculty until financial situations affording tenure?track positions return 0 Where possible, shift any State-funded employees over to non-State sources move Advancement salaries over to ASU Foundation funds) Budget Reduction Strategies (Operating) Budget Reduction Strategies (Ogerating) 0 Further reduce non-essential operating expenses 0 Items outline in C1-C3 0 Rescind Off-Campus Scholarly Assignments (OCSA) 0 Consider further departmental reorganizations 0 Eliminate low enrolled courses unless required for 0 Adjust class sizes and teaching loads to meet financial graduation and consider as possible self-study challenges 0 Reorganize departments to create efficiencies 0 Streamline gen-ed courses 0 As tuition revenues decline, reduces amount of tuition 0 Return Lab School to Public School district (requires which can be applied to need-based aid and graduate legislative/BOG approval) assistantships Student No 0 Fund balance depletion (still Budget Reduction Strategies (Personnel) Auxiliaries and Changes required to pay debt service on 0 Implementation of temporary furloughs (up to 12 months) as needed; may require 60-day notice Fee Activities: capital leases) under WARN Act. Education 0 Delay previously scheduled Hiring freeze and/or elimination of all non?essential vacant positions Technology equipment and classroom Budget Reduction Strategies (Operating) upgrades 0 Fund balance depletion (still required to pay debt service on capital leases) 0 Further reduce non-essential 0 Delay previously scheduled equipment and classroom upgrades operating expenses 0 Further reduce non?essential operating expenses 0 Consider further departmental reorganizations Scenario A Scenario 8 Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Student No Fund balance Mget Reduction Strategies (Personnel) Auxiliaries and Changes depletion (still Current Staffing Levels: Fee Activities: required to 0 EHRA-NF Employees: 2 (Non-State Funded); Total Salary: Campus pay debt 0 SHRA Employees: 191 (11 State?Funded/180 Non?State Funded); Total Salary: Services service) Reduce Would need to consider temporary and/or permanent reductions in staff (dependent upon approval). This services and may include the following options in order of financial impact (positive to negative): hours/days of 0 Implementation of temporary furloughs (up to 12 months) as needed; may require 60-day notice under WARN Act. operations 0 Temporary salary reductions for EHRA Non?Faculty employees (if necessary; would require 30?day notice and savings Increase would be minimal in comparison to furloughs as this is the smallest population of employees on campus) touchless/ 0 Reductions?in?Force (RIF) May require up to 90 day-notice for EHRA employees and up to 365?day notice for SHRA contactless employees. Would require payouts of earned vacation time as well as severance pay with benefits. operations - Hiring freeze and/or elimination of non?essential vacant positions Auxiliary operations Mget Reduction Strategies (Operating) would 0 Fund balance depletion (still required to pay debt service) continue 0 Closure of dining facilities would begin with Scenario C-1, winter break operational mode would begin with Scenario funding 0 Eliminate parking operations scholarships at 0 Reduce payments to AppalCART/revert to holiday bus route schedule a reduced level 0 Auxiliary Operations would discontinue funding scholarships Student Athletics has already Budget Reduction Strategies (Operating) Auxiliaries and submitted a furlough plan in 0 Fund balance depletion (still required to pay debt service) Fee Activities: which has since been 0 Assess potential elimination of additional sports Athletics approved, and additionally, 0 Further reduce non-essential operating expenses has implemented planned operating budget reductions including the elimination of three sports (men's soccer/tennis/indoor track field) 0 Consider further departmental reorganizations Budget Reduction Strategies (Personnel) Current Staffing Levels: 0 EHRA-NF Employees: 83 (Non?State Funded); Total Salary: 0 SHRA Employees: 19 (Non?State Funded); Total Salary: Would need to consider temporary and/or permanent reductions in staff (dependent upon approval). This may include the following options in order of financial impact (positive to negative): 0 Implementation of temporary furloughs (up to 12 months) as needed; may require 60?day notice under WARN Act. In comparison to options 2 would generate greatest amount of savings and require 0 Temporary salary reductions for EHRA Non-Faculty employees (if necessary; would require 30 days notice and savings would be minimal in comparison to furloughs as this is the smallest population of employees on campus) 0 Reductions-in-Force (RIF) May require up to 90 days notice for EH RA employees and up to 365 days notice for SHRA employees. Would require payouts of earned vacation time as well as severance pay with benefits. 0 Hiring freeze or elimination of non-essential vacant positions Scenario A Scenario 8 Scenario C1 Scenario Scenario Scenario Scenario C2 C3 Student No Changes 0 No changes Current Staffing Levels: 0 Closure of Student Health Center, Student Auxiliaries and in housing or 0 EHRA-NF Employees: 91 (Non-State Funded); Total Salary: Union and Campus Recreation Centers for Fall Fee Activities: fee- 0 SHRA Employees: 170 (Non-State Funded); Total Salary: 2020 semester Student supported 0 Closure of student housing for fall semester Affairs areas 0 Student Fee-supported areas would begin fund balance except for students who have nowhere to live 0 Fund balance depletion (similar to Spring 2020) and offer housing in one depletion 0 Reduction of services and implementation of furloughs or building to limit operational expenses (required to temporary salary adjustments in areas where services are 0 Reduce or temporarily eliminate programming pay debt limited for recreation, campus activities, leadership service) 0 Continue to offer access to student health, counseling and education, intercultural student affairs, and 0 Reduced wellness/ prevention services via Zoom for Healthcare platform career services services and similar to spring 2020. Continue to offer in-person services for 0 Furlough of all non-essential employees in areas furloughs in students living off-campus where able based on facility and operational areas where 0 Continue to offer University Recreation programming in needs as well as temporary salary reductions services are electronic formats similar to spring 2020. If allowed by State, among essential EHRA Non-Faculty personnel limited offer limited in-person opportunities to exercise in recreation (per UNC System guidance) facilities for off-campus students who remain in Boone 0 Utilization of fund balances to pay debt service 0 Continue to offer programming in Campus Activities, Leadership Education, Intercultural Student Affairs in electronic format similar to Spring 2020 0 Continue to offer career services to students in an electronic format similar to Spring 2020 0 Continue to host online career fairs for students 0 Housing would have 100% revenue loss for this scenario, not a partial amount based on enrollment changes. Housing would begin depleting fund balance and implementing furloughs in areas where able based on facility and operational needs; Utilization of housing fund balance to pay debt service Sales No Change 0 Increase 0 Reduce Bookstore operations to minimal level Services touchless/cont 0 Reduce Post Office operations to minimal franchise authority levels actless 0 Transition to 100% online activities operations 0 Furlough or elimination of all non?essential staff (included in Campus Services staffing data reflected above); temporary salary reductions for essential EHRA Non-Faculty employees (per UNC System guidance) Contracts No Change Grants In the event that the University were to experience a reduction in research grants, the following strategies may be implemented: 0 Hiring freeze and reduction of certain research activity 0 Discontinue research in certain areas 0 Deplete fund balances and fund shift or eliminate admin that relies on Gifts No Change Suspend capital or other projects relying on fundraising or interest income 0 Reduce of financial aid funded from Investments Bi?s/ endowments 0 Examine ROI of fundraising resources East Carolina University – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 25,459 - - (509) (1,273) (2,546) (6,365) (12,730) State Appropriation $ 310,000,000 $ - $ - $ Tuition Revenue (net) $ 140,000,000 $ - $ - $ (2,800,000) $ (7,000,000) $ (14,000,000) $ (35,000,000) $ (70,000,000) Student Fees (net) $ 55,000,000 $ - $ - $ (1,100,000) $ (22,343,750) $ (24,062,500) $ (29,218,750) $ (37,812,500) Financial Aid (external) $ 65,000,000 $ - $ - $ (1,300,000) $ (3,250,000) $ (6,500,000) $ (16,250,000) $ (32,500,000) Athletics (less fees) $ 23,000,000 $ - $ (11,500,000) $ (11,500,000) $ (11,500,000) $ (11,500,000) $ (11,500,000) Housing (net) $ 24,000,000 $ - $ $ (10,848,000) $ (10,920,000) $ (11,040,000) $ (11,400,000) $ (12,000,000) Dining (net) $ 22,000,000 $ - $ (5,500,000) $ (9,944,000) $ (10,010,000) $ (10,120,000) $ (10,450,000) $ (11,000,000) Parking $ 4,000,000 $ - $ $ - $ 215,000,000 $ - $ (10,750,000) $ Sales, Services, & Other Aux. $ 18,000,000 (5,750,000) $ - - - $ - $ - $ - $ - $ (1,808,000) $ (1,820,000) $ (1,840,000) $ (1,900,000) $ (2,000,000) (2,700,000) $ (5,400,000) $ (5,400,000) $ (5,400,000) $ (5,400,000) $ (5,400,000) (10,750,000) $ (10,750,000) $ (10,750,000) $ (10,750,000) $ (10,750,000) Patient Services $ Research & Grants $ 50,000,000 $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 20,000,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ 946,000,000 $ - $ (24,700,000) $ Percent Change 100% 0.0% -2.6% (55,450,000) $ (82,993,750) $ -5.9% -8.8% (95,212,500) $ (131,868,750) $ (192,962,500) -10.1% -13.9% -20.4% East Carolina University Response Scenario A Scenario 8 Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Auxiliaries No Changes Operating Operating Operating Operating Operating Reductions: Operating Athletics, Reductions: Reductions: Reductions: Reductions: 0 $55,080 Athletics Reductions: Housing, 0 $27,540 Athletics 0 $55,080 Athletics 0 $55,080 Athletics 0 $55,080 Athletics Scholarships from 0 $55,080 Athletics Dining Scholarships from Scholarships from Scholarships from Scholarships from Vending Scholarships from Parking, Sales, Services, Other Vending 0 $5,778,245 Dining Operations and Student Programs 0 $771,844 Supplies, Equipment, Services $97,382 Travel, Training, Professional Development $4,454,000 Athletic Expenses: Training Table, Charters, Recruiting, Competitions, Equipment and Uniforms $974,840 Bookstore Purchases for Resale, Travel, Student and Temp Workers Vending 0 $1,217,881 Supplies, Equipment, Services 0 $144,067 Travel, Training, Professional Development 0 $18,951,817 Dining, Cleaning, and Maintenance of Facilities 0 $200,000 Services and Clinical Care in Student Health 0 $2,791,680 Bookstore Purchases for Resale, Travel, Student and Temp employ, Parking Lot Maintenance $11,608,000 Suspend Athletic Operations Vending 0 $1,170,237 Supplies, Equipment, Services $135,640 Travel, Training, Professional Development $18,789,817 Dining Operations, Cleaning, Maintenance of Facilities, Utilities, Travel, Supplies, Scholarships $500,000 Student Program Expenditures and Services in Student Affairs $2,803,680 Bookstore Purchases for Resale, Travel, Student and Temp employment, Parking Lot Maintenance and Patrol, and Transit $11,608,000 Suspend Athletic Operations Vending 0 $1,000,000 Housing Programs and Student Health Services $1,170,237 Supp?es Equipment, Services $135,641 Travel, Training, Professional Development $18,789,817 Dining Operations, Cleaning, Maintenance of Facilities, Utilities, Travel, Supplies, Scholarships $2,823,680 Bookstore Purchases for Resale, Travel, Student and Temp employment, Parking Lot Maintenance and Patrol, and Transit $11,608,000 Suspend Athletic Operations $1,500,000 Housing Programs and Student Health Services $1,170,236 Supplies, Equipment, Services $135,641 Travel, Training, 8: Professional Development $18,951,817 Dining, Cleaning, and Maintenance of Facilities $2,883,680 Bookstore Purchases for Resale, Travel, Student and Temp employ, Parking Lot Maintenance $11,608,000 Suspend Athletic Operations Vending $368,902 Housing Programs $1,170,236 Supplies, Equipment, Services $135,641 Travel, Training, Professional Development $20,000,000 Dining, Cleaning, and Maintenance of Facilities $2,883,680 Bookstore Purchases for Resale, Travel, Student and Temp employ, Parking Lot Maintenance $11,608,000 Suspend Athletic Operations Scenario A Scenario 8 Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Auxiliaries No Changes Personnel Personnel Personnel Reductions: Personnel Reductions: Personnel Continued? Reductions: Reductions: 0 $4,242,844 Furlough or Not Fill SHRA or 0 $4,431,430 Furlough Reductions: Athletics 0 $96,000 - RIF - $4,449,081 EHRA Non-Faculty or Not Fill SHRA or . $5,233,759 Housing SHRA or EHRA Furlough or Not 0 $82,394 Furlough or Not Fill EHRA Faculty EHRA Non-Faculty Furlough or Not Dining, Non-Faculty Fill SHRA or 0 $262,308 RIF SHRA or EHRA Non-Faculty . $82,394 Furlough or Fill SHRA or EHRA Parking Sales $1,728,530 EHRA Non? Not Fill EHRA Faculty Non?Faculty Service; Othe'r Ff?rbugh or . 262,308 RIF SHRA or . $82,394 Furlough vacant SHRA . $82,394 EHRA Non_Facu ty or Not Fill EHRA Aux' Iarles or EHRA Positions Furlough or Not Faculty Athletics, . $21,619Furlough Fill EHRA Faculty . 262308 SHRA Housmg, or Not Fill EHRA or EHRA Non- Faculty Faculty Parking, Sales, Services, Other Implications: Implications: Implications: Implications: Implications: Implications: Athletics won't to be competitive in Division Significant furloughs in auxiliaries, including Student Dining, Parking, Housing, Student Health, Student Stores, Print Shop, and Academic Affairs which will significantly curtail operations and available services Athletics would not be competing, therefore, we would honor our scholarships, pay debt service, and suspend athletic operations Significant furloughs in auxiliaries, including Student Dining, Parking, Housing, Student Health, Student Stores, Print Shop, and Academic Affairs which will significantly curtail operations and available services Athletics would not be competing, therefore, we would honor our scholarships, pay debt service, and suspend athletic operations Reduced Student Affairs Student Programs and Services Significant furloughs and/or in auxiliaries, including Student Dining, Parking, Housing, Student Health, Student Stores, Print Shop, and Academic Affairs which will significantly curtail operations and available services Athletics would not be competing, therefore, we would honor our scholarships, pay debt service, and suspend athletic operations Reduced Student Affairs Student Programs and Services Significant furloughs and/or in auxiliaries, including Student Dining, Parking, Housing, Student Health, Student Stores, Print Shop, and Academic Affairs which will significantly curtail operations and available services Athletics would not be competing, therefore, we would honor our scholarships, pay debt service, and suspend athletic operations Reduced Student Affairs Student Programs and Services Significant furloughs and/or in auxiliaries, including Student Dining, Parking, Housing, Student Health, Student Stores, Print Shop, and Academic Affairs which will significantly curtail operations and available services Athletics would not be competing, therefore, we would honor our scholarships, pay debt service, and suspend athletic operations Reduced Student Affairs Student Programs and Services Significant furloughs and/or in auxiliaries, including Student Dining, Parking, Housing, Student Health, Student Stores, Print Shop, and Academic Affairs which will significantly curtail operations and available services Scezario Scegario Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Student Fees 0 No Changes Operating Operating Reductions: Operating Reductions: Operating Reductions: Operating Reductions: Reductions: 0 $262,797 Contracted 0 $2,159,661 Eliminate 0 $2,600,838 Eliminate 0 $3,728,838 Eliminate 0 $112,133 Bus Routes . $15,095 Contracted Services . $5,089 Graduation Expenditures . $3,536 Reserves . $122,026 Supplies, Equipment, Services . $191,909 Technology and Software for Students and Faculty . $23,510 Travel, Training, Professional Development Services 0 $103,367 Graduation Expenditures 0 $45,000 Reserves . $2,117,609 Supplies, Equipment, Services 0 $1,859,817 Technology and Software for Students and Faculty 0 $421,096 Travel, Training, Professional Development 0 $4,395,673 Athletic Expenses: Training Table, Charters, Recruiting, Competitions, Equipment and Uniforms 0 $1,500,000 Bus Routes, Travel, Operations, Utilities in Student Affairs 0 $4,426,508 Student Program Expenditures and Services in Student Affairs New Technology Requests, Classroom Technology Refreshes, LMS Training and Support, Student Printing Subsidy, and Pirate Techs, Reduce Network Refresh 0 $283,318 Contracted Services 0 $111,318 Graduation Expenditures 0 $45,000 Reserves . $2,194,992 Supplies, Equipment, Services 0 $457,831 Travel, Training, Professional Development 0 $4,837,648 Athletic Expenses: Training Table, Charters, Recruiting, Competitions, Equipment and Uniforms 0 $4,490,664 Bus Routes, Travel, Operations, Utilities in Student Affairs 0 $2,000,000 Student Program Expenditures and Services in Student Affairs New Technology Requests, Classroom Technology Refreshes, LMS Training and Support, Student Printing Subsidy, and Pirate Techs, Reduce Network Refresh 0 $347,497 Contracted Services 0 $135,172 Graduation Expenditures 0 $45,000 Reserves 0 $2,427,639 Supplies, Equipment, 81 Services 0 $498,310 Travel, Training, Professional Development 0 $6,708,030 Bus Routes, Travel, Operations, Utilities in Student Affairs 0 $2,000,000 Student Program Expenditures and Services in Student Affairs 0 $3,813,573 Suspend Athletic Operations New Technology Requests, Classroom Technology Refreshes, LMS Training and Support, Student Printing Subsidy, and Pirate Techs, Reduce Network Refresh, IT Positions, and Software/ Hardware Contracts 0 $471,792 Contracted Services 0 $174,929 Graduation Expenditures 0 $45,000 Reserves . $3,160,346 Supplies, Equipment, Services 0 $641,505 Travel, Training, Professional Development 0 $10,365,813 Bus Routes, Travel, Operations, Utilities in Student Affairs 0 $1,904,493 Student Program Expenditures and Services in Student Affairs 0 $6,003,447 Suspend Athletic Operations Scenario Scenario A Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Student Fees No Changes Personnel Personnel Reductions: Personnel Reductions: Personnel Reductions: Personnel Reductions: Continued Reductions: 0 $5,457,606 Furlough 0 $22,636 Furlough or 0 $22,636 Furlough or 0 $45,272 Furlough or 0 $496,702 or Not Fill SHRA or Not Fill EHRA Faculty Not Fill EHRA Faculty Not Fill EHRA Faculty Furlough or Not Fill SHRA or EHRA EHRA Non?Faculty 0 $120,000 Reduce 0 $5,548,266 Furlough or Not Fill SHRA or 0 $8,219,855 Furlough or Not Fill SHRA or 0 $8,657,335 Furlough or Not Fill SHRA or EHRA Non-Faculty Graduate EHRA Non-Faculty EHRA Non-Faculty Non-Faculty 0 $130,000 Reduce Assistantships 0 $200,000 Reduce . $120,000 Reduce . $120,000 Reduce Temp Student 0 $1,590,477 Reduce Graduate Graduate Graduate Wages Temp Student Assistantships Assistantships Assistantships Wages $1,664,303 Reduce . $2,012,805 Reduce . $2,040,432 Reduce 0 $43,800 RIF SHRA or Temp Student Temp Student Temp Student EHRA Non-Faculty Wages Wages Wages . $46,863 RIF SHRA or . $267,395 RIF SHRA or . $453,298 RIF SHRA or EHRA Non-Faculty EHRA Non?Faculty EHRA Non-Faculty Implications: Implications: Implications: Furloughs will Athletics won't to be competitive in Athletics would not be competing, therefore, we negatively affect Division I would honor our scholarships, pay debt service, employee morale and retention Reduced bus routes which will take students longer to get to campus Reduced student employment opportunities Reduced technology and software for student learning Drastic reduction in ed tech staff, technology, and software to support student learning Fewer student programs, longer bus wait times, which will adversely impact students getting to class on time. Reduced Dining services for students and staff. Reduced Campus Living Residence Hall programs, which connect students to the university and helps student retention Furloughs will significantly reduce available student services in addition to negatively affecting employee morale and retention Reduced graduate assistantships may affect enrollment Reduced student employment opportunities Reduced training and professional development may affect compliance and increase risk and suspend athletic operations Drastic reduction in ed tech staff, technology, and software to support student learning Fewer programs, activities, and career services for students. Longer bus wait times which will adversely impact students getting to class on time. Reduction in Dining Services for students staff. Reduction in Campus Living Residence Hall programs which connects students to the university and helps student retention Furloughs will significantly reduce available student services in addition to negatively affecting employee morale and retention Reduced graduate assistantships may affect enrollment Reduced student employment opportunities Reduced training and professional development may affect compliance and increase risk SceIAario Scegario Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Tuition No Changes Personnel Personnel Reductions: Personnel Reductions: Personnel Reductions: Personnel Reductions: Revenue Reductions: 0 $28,953 Fund EHRA or 0 $93,861 Fund EHRA 0 $686,474 Fund EHRA 0 $1,287,918 Fund 0 $23,611 Furlough SHRA Positions by or SHRA Positions by or SH RA Positions by EHRA or SHRA or Not Fill CSS Foundations Foundations Foundations Positions by 0 $1,221,783 0 $59,027 Furlough or 0 $118,053 Furlough 0 $295,134 Furlough or Foundations Furlough or Not Fill Not Fill CSS or Not Fill CSS Not Fill CSS 0 $756,145 Furlough or EHRA Faculty 0 $3,054,455 Furlough or 0 $6,108,912 Furlough 0 $15,272,278 Furlough Not Fill CSS 0 $1,027,472 Not Fill EHRA Faculty or Not Fill EHRA or Not Fill EHRA 0 $30,544,556 Furlough Furlough or Not Fill 0 $2,527,259 Furlough or Faculty Faculty or Not Fill EHRA SHRA or EHRA Non- Not Fill SHRA or EHRA 0 $4,607,581 Furlough 0 $11,696,841 Furlough Faculty Faculty Non?Faculty or Not Fill SHRA or or Not Fill SHRA or 0 $23,304,823 Furlough 0 $89,561 Reduce 0 $223,902 Reduce EHRA Non-Faculty EHRA Non-Faculty or Not Fill SHRA or Graduate Graduate 0 $447,805 Reduce 0 $1,119,512 Reduce EHRA Non?Faculty Assistantships 0 $156,813 Reduce Salary Reserves Assistantships 0 $423,385 Reduce Salary Reserves Graduate Assistantships 0 $853,269 Reduce Graduate Assistantships 0 $1,515,350 Reduce 0 $2,239,025 Reduce Graduate Assistantships 0 $1,153 Reduce 0 $2,886 Reduce Temp Salary Reserves Salary Reserves 0 $2,703,863 Reduce Temp Student Student Wages 0 $5,772 Reduce Temp 0 $14,432 Reduce Salary Reserves Wages Student Wages Temp Student 0 $28,862 Reduce 0 $350,000 RIF SHRA Wages Temp Student or EHRA Non-Faculty 0 $1,061,812 RIF SHRA Wages or EHRA Non-Faculty 0 $2,812,248 RIF SHRA or EHRA Non-Faculty Operating Operating Reductions: Operating Operating Reductions: Operating Reductions: Reductions: 0 $100,343 Equipment Reductions: 0 $2,058,138 Supplies, 0 $4,529,678 Supplies, 0 $101,964 Travel Contracts 0 $106,118 Equipment, Equipment, Professional 0 $343,769 Supplies Maintenance Services Services Development Services Contracts 0 $137,000 0 $137,000 0 $177,643 Supplies, 0 $815,221 Supplies, Maintenance Maintenance Equipment, 0 $236,021 Travel Equipment, Contracts Contracts Services Professional Services 0 $64,925 Reserves 0 $199,688 Reserves Development 0 $493,408 Travel, Memberships 0 $1,456,194 Training, Training, 0 $1,078,104 Travel, Travel, Professional Professional Development Memberships Professional Development, Contracts Development Memberships Scergario Scegario Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Tuition No Changes Implications: Implications: Implications: Revenue Furloughs will negatively affect Furloughs will negatively In addition to negatively affecting employee morale and Continued employee morale and retention affect employee morale retention, furloughs at this level will adversely affect increase and retention faculty loads and operations including possible shut down of Reduced graduate assistantships programs and services to students, employees, and may affect enrollment Reduced graduate community assistantships may affect Reduced training and professional enrollment Reduced graduate assistantships will affect enrollment development may affect compliance Reduced training and Reduced training and professional development may affect professional compliance development may affect compliance Reduced supplies, equipment, contracts, and services will negatively affect student programs and campus services and Reduced supplies, the protection and upkeep of assets equipment, contracts, and services will will likely result in reduced services to students, negatively affect student employees, and other constituencies, increase response programs and campus times, and increase compliance risks services and the protection and upkeep Foundations will have difficulty funding additional positions of assets for these dollar amounts Financial Aid No Changes Progressively reduce financial aid awarded to students. Would likely affect student recruitment and retention and result in larger write?offs and bad debt. Analysis indicates unmet need is one of the most important factors for student success. Patient N0 Reductions: Services Changes 0 $3,024,267 Furlough or Not Fill SHRA, CSS, or EHRA Non?Faculty 0 $4,960,983 Furlough EHRA Faculty 0 $2,764,750 Reduce Supplies, Equipment, Services Drastically reduces ability to take care of patients and provide necessary student educational experiences Research and No Changes Grant funding is not spent until it is received so we would adjust for any reduction in new grant awards by performing less Grants externally funded research Elizabeth City State University – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 1,664 State Appropriation $ Tuition Revenue (net) 40,000,000 - - (33) (83) (166) (416) (832) $ - $ - $ - $ 1,500,000 $ - $ - $ (30,000) $ (75,000) $ (150,000) $ (375,000) $ (750,000) Student Fees (net) $ 2,000,000 $ - $ - $ (40,000) $ (812,500) $ (875,000) $ (1,062,500) $ (1,375,000) Financial Aid (external) $ 9,500,000 $ - $ - $ (190,000) $ (475,000) $ (950,000) $ (2,375,000) $ (4,750,000) Athletics (less fees) $ 200,000 $ - $ (50,000) $ (100,000) $ (100,000) $ (100,000) $ (100,000) $ (100,000) Housing (net) $ 2,500,000 $ - $ - $ (1,130,000) $ (1,137,500) $ (1,150,000) $ (1,187,500) $ (1,250,000) Dining (net) $ 1,000,000 $ - $ (250,000) $ (452,000) $ (455,000) $ (460,000) $ (475,000) $ (500,000) Parking $ 100,000 $ - $ - $ (45,200) $ (45,500) $ (46,000) $ (47,500) $ (50,000) Sales, Services, & Other Aux. $ 300,000 $ - $ (45,000) $ (90,000) $ (90,000) $ (90,000) $ (90,000) $ (90,000) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Patient Services $ Research & Grants $ 300,000 $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 7,500,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ - $ Percent Change - 64,900,000 100% $ 0.0% (345,000) $ -0.5% (2,077,200) $ -3.2% (3,190,500) $ -4.9% (3,821,000) $ (5,712,500) $ -5.9% -8.8% (8,865,000) -13.7% Elizabeth City State University Response Scer;ario Scenario Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Tuition No No Change 0 Suspension 0 Suspension of 0 Suspension of Permanent personnel reduction of administrative Revenue Change of all all University all University and operation positions University sponsored sponsored Increase faculty overload travel using travel using travel using Possibility of reduction of underperforming academic state funds state funds state funds programs 0 Reduction in 0 Reduction in Consolidation of administrative functions and Operation operation consider 9?month contracts for student?focused budgets for budgets for positions supplies supplies and Note: Realignment of ECSU Academic Programs personnel occurred in FY20 Student Fees No Change 0 Reduce allocations to student activity operations for fall Close of student health, rec centers and furlough all Athletics Hou?ng Dining Parking Sales, Services, Other Auxiliaries homecoming activities) Furlough of non?essential staff positions non-essential staff positions that are not required Elimination of fall sports - reduction in travel budget and supplies Elimination of fall sports reduction in travel budget and supplies Personnel reduction of administrative and operational positions and/or Elimination of fall sports 0 reduction in travel budget and 0 Reduce supplies and travel budget supplies 0 Reduce supplies and travel furlough of all positions budget 0 Repackage of scholarships 0 Possibly 0 Personnel reduction of admin and furlough of staff operational positions and/or furlough of all positions No Change 0 Closure of all facilities except for Viking Village (debt Close all Facilities covenant) Furlough associated employees Reduce administrative staff and remaining operational staff Furlough all employees associated with those halls Reduce admin staff and remaining operational staff Redirect fund source for debt service 0 Reduce retail/ dining location hours of service 0 Possibility furlough of staff Close all retail locations; reduce main dining hall to one service per day; furlough employees associated with retail locations No Change Suspend ALL parking operations; furlough employees related to parking Reduce operating hours of Post Office, Ticket Office, Bookstore, Fayetteville State University – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 5,575 - - (112) (279) (558) (1,394) (2,788) State Appropriation $ 55,000,000 $ - $ - $ Tuition Revenue (net) $ 11,000,000 $ - $ - $ (220,000) $ (550,000) $ (1,100,000) $ (2,750,000) $ (5,500,000) Student Fees (net) $ 6,000,000 $ - $ - $ (120,000) $ (2,437,500) $ (2,625,000) $ (3,187,500) $ (4,125,000) Financial Aid (external) $ $ - $ - $ (520,000) $ (1,300,000) $ (2,600,000) $ (6,500,000) $ (13,000,000) Athletics (less fees) $ 150,000 $ - $ (37,500) $ (75,000) $ (75,000) $ (75,000) $ (75,000) $ (75,000) Housing (net) $ 5,000,000 $ - $ - $ (2,260,000) $ (2,275,000) $ (2,300,000) $ (2,375,000) $ (2,500,000) Dining (net) $ 3,500,000 $ - $ (875,000) $ (1,582,000) $ (1,592,500) $ (1,610,000) $ (1,662,500) $ (1,750,000) Parking $ 300,000 $ - $ $ (135,600) $ (136,500) $ (138,000) $ (142,500) $ (150,000) Sales, Services, & Other Aux. $ 1,000,000 $ - $ (150,000) $ (300,000) $ (300,000) $ (300,000) $ (300,000) $ (300,000) $ - $ - $ - $ - $ - $ - $ - 100,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 122,050,000 $ - $ Patient Services $ Research & Grants $ Gifts & Investments $ Total Revenue $ Percent Change 26,000,000 - 14,000,000 100% 0.0% - (1,062,500) $ -0.9% - $ (5,212,600) $ -4.3% - $ (8,666,500) $ -7.1% - $ (10,748,000) $ -8.8% - $ - (16,992,500) $ (27,400,000) -13.9% -22.4% Fayetteville State University Response Scen?ario Scenario 8 Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Tuition No Change No Change 0 Reductions in operational spending; i.e. travel, equipment, supplies 0 Consolidation of administrative Revenue services, etc. operations 0 Hiring freeze of all non?essential positions 0 Furlough or elimination of 0 Hire adjunct professors where possible positions 0 Furlough or eliminate part?time staff 0 Increase faculty teaching load Student Fees No Change 0 Deplete fund balance 0 Closure or student center and student health center Athletics Hou?ng Dining Parking Sales, Services, and Other Auxiliaries Contracts Grants 0 Reduce student activities and events 0 Furloughs positions where student health, student center, and student activity services are limited student activities 0 Eliminate student activities and events; i.e. homecoming 0 Furloughs all positions supporting student health, student center, and 0 Suspension of all fall sports and events; i.e. homecoming 0 Reductions in operational spending; i.e. travel, equipment, supplies services, etc. Furlough of all positions 0 Hiring freeze of administrative and operational positions 0 Elimination of scholarships 0 Elimination of sports 0 Elimination of employee positions No Change 0 Deplete fund balance 0 Closure of residential halls 0 Reduction in hours of operation; dining hall and all retail locations 0 Furlough/eliminate part?time staff 0 Furloughs all employees supporting residential halls 0 Reduction in hours of operation; dining hall and all retail locations 0 Furlough/eliminate part-time staff 0 Deplete fund balance 0 Reduction in hours of operation; dining hall and all retail locations 0 Furlough/eliminate part-time staff 0 Closure of all retail locations 0 Furlough or eliminate employees 0 Reduction in services; dining hall one meal per day No Change 0 Suspend all parking operations 0 Furlough of all employees 0 Reduce parking operations 0 Furlough positions in areas where services are reduced 0 Reduce hours of operations and auxiliary related services 0 Furloughs or elimination of positions in areas where services are reduced 0 Eliminate part-time staff 0 Discontinue operations and all services 0 Furlough or eliminate employees 0 Hiring freeze, furloughs and reductions in activity 0 Deplete fund balances 0 Furlough or eliminate administrative and operational staff North Carolina A&T State University – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 11,766 - - (235) (588) (1,177) (2,942) (5,883) State Appropriation $ 95,000,000 $ - $ - $ Tuition Revenue (net) $ 50,000,000 $ - $ - $ (1,000,000) $ (2,500,000) $ (5,000,000) $ (12,500,000) $ (25,000,000) Student Fees (net) $ 24,000,000 $ - $ - $ (480,000) $ (9,750,000) $ (10,500,000) $ (12,750,000) $ (16,500,000) Financial Aid (external) $ 50,000,000 $ - $ - $ (1,000,000) $ (2,500,000) $ (5,000,000) $ (12,500,000) $ (25,000,000) Athletics (less fees) $ 3,000,000 $ - $ (750,000) $ (1,500,000) $ (1,500,000) $ (1,500,000) $ (1,500,000) $ (1,500,000) Housing (net) $ 10,000,000 $ - $ $ (4,520,000) $ (4,550,000) $ (4,600,000) $ (4,750,000) $ (5,000,000) Dining (net) $ 13,000,000 $ - $ (3,250,000) $ (5,876,000) $ (5,915,000) $ (5,980,000) $ (6,175,000) $ (6,500,000) Parking $ 1,500,000 $ - $ $ (678,000) $ (682,500) $ (690,000) $ (712,500) $ (750,000) Sales, Services, & Other Aux. $ 4,000,000 $ - $ (600,000) $ (1,200,000) $ (1,200,000) $ (1,200,000) $ (1,200,000) $ (1,200,000) - - - $ - $ - $ - $ - Patient Services $ - $ - $ - $ - $ - $ - $ - $ - Research & Grants $ 35,000,000 $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 26,000,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ 311,500,000 $ - $ Percent Change 100% 0.0% (4,600,000) $ -1.5% (16,254,000) $ (28,597,500) $ -5.2% -9.2% (34,470,000) $ (52,087,500) $ (81,450,000) -11.1% -16.7% -26.1% North Carolina A&T State University Response Dear Bill and Clinton: This communication and accompanying schedules are in response to the request from Chair Ramsey and the Board of Governors related to Fall 2020 Budget preparations. The following items were requested: 1. A report from each chancellor on the financial impact of closing their campus and reducing tuition and room and board fees. 2. A plan from each chancellor to reduce their budgets by between 25% and 50%, to account for the reduced revenue resulting from campus reduced enrollment under various degrees of closure. 3. How the cancellation of fall athletics will impact each campus and their specific plans for shortfalls in revenue. The Fall 2020 Scenario Planning Schedule received from the Finance team served as the basis for addressing requests 1 and 2. Please see the attached schedule entitled “NCAT Fall 2020 Reduction Scenario Planning – July 24, 2020.” This schedule details the actions required to meet the reductions at the various scenarios. It is important to note that budget reductions at the magnitude of 25% and 50% would significantly impact the operations of the University and would require flexibility to execute actions that campuses currently do not possess. As it relates to assessing the impact of canceling of Fall Athletics, we unfortunately have found this scenario to be a reality. In assessing the impact, the most critical revenue losses are in football and sponsorship revenues. When netting the savings generated from reduced travel, game day, facilities, and other expenses, we anticipate the net impact to the University to approximate $350,000 or 2.5% of the total Athletics Budget. Please let us know if you have further questions. Sincerely, Harold L. Martin, Sr. Chancellor North Carolina State University Response Continued Scenario A Scenario 8 Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Tuition No Change No Change 0 Suspension of all 0 Hiring freeze for all 0 Reduce number 0 Discontinue select 0 Declare financial Revenue University state funded of fixed term academic programs, exigency by academic sponsored travel positions faculty Reduction in force for department using state funds 0 Reduce number of 0 Consolidate faculty and staff 0 Release or furlough 0 Restrict supplies adjuncts - insure academic 0 Reduce service levels tenured faculty (will and materials to full workload for all programs information technology, require BOG policy essential/ mandatory only permanent faculty 0 Increase student- faculty ratio on all online courses 0 Reduce library hours, furlough 10% of employees 0 Program closure for low producing programs 0 Reduce student programming office hours 0 Reduce IT services not associated with fee (reduction for noted under student fees), furlough 25% of workforce related to those areas. compliance, and Advancement, Consolidation of all administrative functions, employees associated with student focused functions move to 9-month contracts Reduce general education course scheduling Close library, furlough associated employees Suspend all preventative maintenance activities, furlough associated employees, reduce housekeeping to minimal for building standards, furlough associated employees, deplete University Reserves change) 0 Suspend all help desk activities 0 Suspend all state funded research activities, furlough associated employees not paid by grants or other sources Scenario A Scenario 8 Scenario C1 Scenario (2 Scenario C3 Scenario Scenario Student Fees No Change No Change 0 Reduce allocations 0 Temporary closure of 0 10% reduction in 0 Increase number 0 Increase to student activity student center and force for all of furloughed number of operations for fall recreation center, employees related employees by permanently 0 Elimination of furlough associated to Student Services additional 25% personnel budget for employees; reduce suspending of all 0 Pay debt service and non- homecoming utility footprint with student from available personnel activities, reduce building closures; programming fund balance expenses by operations of reduce funding to 0 Permanent remaining additional Health Center, support replacement reduction of Student 25% furlough technology equipment Health Services by 0 Pay debt nonessential staff, for one year 25%, inclusive of service from reduce non? 0 Further reduction in employees available personnel student activities 0 25% reduction of IT fund balance expenses, funding - reduce SGA services, inclusive of remaining depletion of fund budget, furlough employees balance, use CARES employees related to Act funding to student activities that support mission will be suspended for critical operation fall Financial Aid No Change 0 Enrollment decline 0 Further enrollment decline Athletics Hou?ng - fewer students to award aid from external sources (federal and state) 0 Reduce number of students awarded aid-based enrollment 0 Elimination of fall sports reduction in travel budget and supplies 0 Reduction of game day expenses, advertising, uniform expenses, and team travel, deplete fund balances 0 Permanent reduction of 10% of Athletics personnel expenses, elimination of athletics program(s) No Change 0 Closure of the majority of residence halls for which there is no debt covenant; furlough employees associated with those halls 0 Reduce administrative and operational staff, reduce other non?personnel expenses, suspend repair and renovation projects, and capital outlays, use of available fund balances 0 Permanent reduction in workforce for 10% of staff previously Furloughed 0 Permanent 10% of remaining admin and operational employees Furlough 90% of employees, permanently reduce personnel and non-personnel expenses by 25%, close older residence halls 0 Furlough 90% of employees, close all residence halls aside from suite styles and apartments Scenario A Scenario Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Dining No Change Revise Close all retail locations; reduce Williams Close remaining dining operations (main hall) utilize catering operations food dining hall to one service per day for any students who remain on campus service Reduce staff associated with Move contract to catering only contract maintaining the facilities to part time, Utilize fund balance for remaining contract obligations and maintenance Reduce reduce non?personnel expenses, use of bare minimum operation retail fund balances, eliminate support of location other initiatives (scholarships, hours of sponsorships, etc.) service Limit hours of main dining hall Use fund balance to support deficit Parking No Change Suspend ALL transportation operations; Permanently 0 All activities suspended; use fund balance to furlough the majority employees related reduce 10% of make debt service payment for fall to parking and shuttle services, use fund personnel and balance for debt service payments non-personnel expenses listed in Sales, Services, No Change Reduction of ancillary services, reduced Same Action as C1 0 Same Action as C1 ancillary services suspended and Other Auxiliaries hours for post office, ticket office and one card office Reduction of scholarship support furlough of majority of staff supporting these areas Depletion of fund balance - ancillary services suspended 10% of personnel and non?personnel expenses permanently reduced North Carolina Central University – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 7,291 - - (146) (365) (729) (1,823) (3,645) State Appropriation $ 85,000,000 $ - $ - $ Tuition Revenue (net) $ 35,000,000 $ - $ - $ (700,000) $ (1,750,000) $ (3,500,000) $ (8,750,000) $ (17,500,000) Student Fees (net) $ 14,000,000 $ - $ - $ (280,000) $ (5,687,500) $ (6,125,000) $ (7,437,500) $ (9,625,000) Financial Aid (external) $ 35,000,000 $ - $ - $ (700,000) $ (1,750,000) $ (3,500,000) $ (8,750,000) $ (17,500,000) Athletics (less fees) $ 2,500,000 $ - $ (625,000) $ (1,250,000) $ (1,250,000) $ (1,250,000) $ (1,250,000) $ (1,250,000) Housing (net) $ $ - $ $ (5,424,000) $ (5,460,000) $ (5,520,000) $ (5,700,000) $ (6,000,000) Dining (net) $ 8,000,000 $ - $ (2,000,000) $ (3,616,000) $ (3,640,000) $ (3,680,000) $ (3,800,000) $ (4,000,000) Parking $ 1,500,000 $ - $ $ (678,000) $ (682,500) $ (690,000) $ (712,500) $ (750,000) Sales, Services, & Other Aux. $ 3,500,000 $ - $ (525,000) $ (1,050,000) $ (1,050,000) $ (1,050,000) $ (1,050,000) $ (1,050,000) 12,000,000 - - - $ - $ - $ - $ - Patient Services $ - $ - $ - $ - $ - $ - $ - $ - Research & Grants $ 13,000,000 $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 10,000,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ 219,500,000 $ - $ Percent Change 100% 0.0% (3,150,000) $ -1.4% (13,698,000) $ (21,270,000) $ -6.2% -9.7% (25,315,000) $ (37,450,000) $ (57,675,000) -11.5% -17.1% -26.3% North Carolina Central University Response Scenario A Scenario Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Instruction, No Change No Change 0 Suspension of all state funded travel 0 Consolidation of administrative functions Student 0 Restrict travel and materials to essential only 0 Consider 9?month contracts for student- Services, 0 Hiring freeze on all non?essential state funded positions focused positions. Academic 0 Reduce library hours, furlough related employees 0 Increase faculty teaching load and/or Support, 0 Consolidate academic programs student?to?faculty ratio Institutional 0 Reduce hours for administrative offices, implement related Suspend all preventative maintenance Support furloughs or reduced salary based on hours activities . . . 0 Reduce IT services (not associated with fee); furlough 25% or Reduce housekeeping to workforce building standards, furlough associated 0 Reduce number of adjuncts and fixed term faculty, ensure full employees workload for tenured faculty 0 Suspend state funded research activities 0 Declare financial exigency by department; release or furlough tenured faculty (requires BOG policy change) Student 0 Reduce allocation to student activity operations for fall 0 Closure of Campus Center, Student Rec Facility, Student Health Center Auxiliaries and 0 Elimination of Homecoming budgets with no fall sports 0 Closure of student housing and dining halls for fall Fee Activities 0 Furloughs in areas where services are limited 0 Closure of Eagle Card Office 0 Suspension of all Fall sports (Athletics); furlough related 0 50% Reduction of University Print Shop staffs 0 Redirect fund source for debt service 0 Suspension of transportation and shuttle services 0 Reduce funding to support related technology replacement 0 Reduction of all student activity funding; no SGA budget 0 Suspend for Housing and Dining facilities 0 Furlough of all related employees 0 Utilize fund balance to service debt 0 Suspension of all parking operations Sales 0 Reduce 0 Discontinue sales and service activities Services operating hours 0 Furlough or elimination of staff of Post Office and Bookstore 0 Close ticket office for fall semester Contracts 8: 0 Hiring freeze and reduction of state funded research activity 0 Discontinue research for state funded grants Grants Gifts 0 Suspend capital or other projects relying on fundraising or interest income 0 Reduce of financial aid funded from Investments gifts/endowments 0 Examine ROI of fundraising resources North Carolina State University – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 32,525 - - (650) (1,626) (3,252) (8,131) (16,262) State Appropriation $ 425,000,000 $ - $ - $ Tuition Revenue (net) $ 260,000,000 $ - $ - $ (5,200,000) $ (13,000,000) $ (26,000,000) $ (65,000,000) $ (130,000,000) Student Fees (net) $ 85,000,000 $ - $ - $ (1,700,000) $ (34,531,250) $ (37,187,500) $ (45,156,250) $ (58,437,500) Financial Aid (external) $ 55,000,000 $ - $ - $ (1,100,000) $ (2,750,000) $ (5,500,000) $ (13,750,000) $ (27,500,000) Athletics (less fees) $ 80,000,000 $ - $ (20,000,000) $ (40,000,000) $ (40,000,000) $ (40,000,000) $ (40,000,000) $ (40,000,000) Housing (net) $ 45,000,000 $ - $ $ (20,340,000) $ (20,475,000) $ (20,700,000) $ (21,375,000) $ (22,500,000) Dining (net) $ 35,000,000 $ - $ (8,750,000) $ (15,820,000) $ (15,925,000) $ (16,100,000) $ (16,625,000) $ (17,500,000) Parking $ 10,000,000 $ - $ (4,550,000) $ (4,600,000) $ (4,750,000) $ (5,000,000) 100,000,000 $ - $ (15,000,000) $ (30,000,000) $ (30,000,000) $ (30,000,000) $ (30,000,000) $ (30,000,000) $ - $ - $ - $ - $ - $ - $ - Sales, Services, & Other Aux. $ - - $ - $ (4,520,000) $ - $ - $ - $ - Patient Services $ Research & Grants $ 340,000,000 $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 235,000,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ 1,670,000,000 $ - $ (43,750,000) $ Percent Change - 100% 0.0% -2.6% (118,680,000) $ (161,231,250) $ (180,087,500) $ (236,656,250) $ (330,937,500) -7.1% -9.7% -10.8% -14.2% -19.8% STATE Of?ce of Finance and Administration Campus Box 7201 Vice Chancellor Raleigh, NC 27695-7201 P: 919.515.2155 ofa.ncsu.edu F: 919.515.5121 MEMORANDUM TO: Clinton Carter, UNC System Senior Vice President for Finance and Administration and CFO FROM: Charles A. Maimone, NCSU Vice Chancellor, Finance and Administration SUBJECT: NC State Response to BOG Chair Ramsey?s Request for Budget Reduction Planning DATE: July 24, 2020 On behalf of Chancellor Woodson, I?m submitting NCSU response to the request from BOG Chair Ramsey that the UNC System Of?ce conduct a quantitative analysis to address these three questions: 1. Financial impact of closing campus and reducing tuition and room and board fees. 2. A plan from each chancellor to reduce their budgets by between 25% and 50%, to account for the reduced revenue resulting from campus reduced enrollment under various degrees of closure. 3. How the cancellation of fall athletics will impact each campus and their speci?c plans for shortfalls In revenue. We offer the following analysis for NC State. Using the assumption of a 25% and 50% reduction in fall enrollment, we have calculated the ?nancial impact to each of the functional areas identi?ed by the UNC System Of?ce template as primary functional areas common to all campuses. It should be noted that given our current trends in enrollment, and preparation work for the fall semester, we do not see a scenario in which a 25% or 50% reduction in enrollment is likely to occur at NC State. Given the magnitude of the 25% and 50% revenue reduction scenarios, we assume that in both cases, the campus would be closed and all classes would have moved online. Without relief from external sources, NC State's three primary expense levers will be: 1. Use of Available Fund Balances - Consume available fund balances, thus eliminating all maintenance, renovation and expansion plans. The remaining balances will be held as emergency funds for debt service payments and other unavoidable expenses. 2. Reduce staf?ng by leveraging available authority for related temporary emergency furloughs, temporary salary reductions and reductions in force. 3. Reduce operating expenses and renegotiate all service contracts to the extent possible while meeting reduced operating requirements. Impact to Revenue by Function NC State Response to BOG Chair Ramsey’s Request for Budget Reduction Planning Page 2 July 23, 2020 Impact to Expenses by Function  Both scenarios require a significant reduction in operating expenditures (65% for 6 months) and depletion of cash balances (90% of all available funds). While this short term strategy addresses the immediate deficit, reductions of this magnitude would have long term effects on the units delaying critical maintenance of facilities, equipment replacement and increased risk of not meeting future debt service obligations.  Both scenarios require reductions in personnel. For the 50% scenario Athletics will need to reduce personnel costs by 86.6% for the next 6 months, Dining by18.4% Housing by 15.8%, and the student fee units would need to reduce personnel expenses by 83%.  In developing reduction strategies, all efforts were made to protect instructional positions and core academic services. However, some critical academic support roles, such as advising, likely would need to be reduced. Impact to Athletics (Question #3) Specifically, to address question #3, regarding how the cancellation of fall athletics will impact each campus and their specific plans for shortfalls in revenue.  We are waiting for decisions by the NCAA and ACC conference about fall sports.  NC State Athletics, student fees represent only 7% of total revenues. NC State Athletics relies heavily on TV revenue, Ticket Sales and ACC Distribution to support the Athletics program. Football and Men's Basketball are the primary sources of these revenues. NC State Response to BOG Chair Ramsey’s Request for Budget Reduction Planning Page 3 July 23, 2020  We will attempt to renegotiate personnel and sponsor contracts along with establishing procurement restrictions. Based on our initial scenarios - scenarios in which we meet our current employment contract terms and remain committed to scholarship obligations - we will not be able to rely on available fund balance, personnel and operating reductions to totally cover the shortfall in Athletics. Cancellation of fall sports will require additional fund raising and debt refinancing to address the balance of such a shortfall. Notes for your consideration Current On-campus Activity In addition to our efforts over the spring and summer to reactive research and return faculty and laboratory assistants to campus, Student Athletes, Resident Assistants, Research Assistants and Teaching Assistants have begun returning to campus. Many have already moved into our residence halls. Our approach moving forward to closing the campus - would need to address each of several major functional operations as separate and distinct. o For example, our Research enterprise was reactivated in April and has avoided any reduction in revenues. o Additionally, our Agriculture and Industrial Extension services have been reactivated and are returning to near full operations, which include activities and programming in all counties across the state. If we are forced to close NC State’s main campus, we will likely - under every scenario - continue on-campus research and on-site extension activities. We would allow our corporate private partners to continue work on Centennial Campus. We would need to honor our obligations to students living on campus, who do not have any alternative shelter (housing and dining) options. We are monitoring Housing and Dining payments which are on pace to generate the budgeted revenue. The number of faculty and staff members returning to campus has increased each month to care for buildings and grounds, and to prepare classrooms and laboratories for our scheduled fall opening. As noted above, closing would require unique and distinct consideration for each of these different segments of our university community. Enrollment Status Our undergraduate enrollment is on pace and tracking the same as last year with an increase in total registered credit hours. Graduate student enrollment is trending lower but we are closing the gap as we near opening. For both Graduate and Undergraduates, our worst case planning scenarios involve a maximum 10% reduction in enrollment revenues. We sent tuition and fee bills to students on July 8, informing all students that we do not plan to reimburse tuition and fee payments should we move online. Payments received for the first 14 days compare favorably to the same time last year. We are tracking every week and anticipate our collections will match last year’s collection with the possible exception of Graduate enrollment. Conclusion Under all scenarios discussed above, we are confident that NC State will continue to be able to provide instruction, research and extension services. All courses taught face to face or as hybrids would move online and continue, thereby preserving tuition and fee revenue. If the pandemic NC State Response to BOG Chair Ramsey’s Request for Budget Reduction Planning Page 4 July 23, 2020 requires NC State to close campus facilities, classes and fee services will continue as on-line services. Major enterprises impacted directly by a campus closure, such as Continuing Education, Athletics, Veterinary Teaching Hospital, Housing, Dining and Transportation, would experience significant revenue loss – likely in the 25% to 50% range. However, each unit continues to plan for reducing expenses by using strategies made available to the university including furloughs, reduction in force, and temporary salary reductions. cc: Chancellor Woodson University of North Carolina Asheville – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 3,296 - - (66) (165) (330) (824) (1,648) State Appropriation $ 40,000,000 $ - $ - $ Tuition Revenue (net) $ 15,000,000 $ - $ - $ (300,000) $ (750,000) $ (1,500,000) $ (3,750,000) $ (7,500,000) Student Fees (net) $ 8,500,000 $ - $ - $ (170,000) $ (3,453,125) $ (3,718,750) $ (4,515,625) $ (5,843,750) Financial Aid (external) $ $ - $ - $ (200,000) $ (500,000) $ (1,000,000) $ (2,500,000) $ (5,000,000) Athletics (less fees) $ 1,000,000 $ - $ (250,000) $ (500,000) $ (500,000) $ (500,000) $ (500,000) $ (500,000) Housing (net) $ 7,000,000 $ - $ $ (3,164,000) $ (3,185,000) $ (3,220,000) $ (3,325,000) $ (3,500,000) Dining (net) $ 4,000,000 $ - $ (1,000,000) $ (1,808,000) $ (1,820,000) $ (1,840,000) $ (1,900,000) $ (2,000,000) Parking $ 500,000 $ - $ - $ (226,000) $ (227,500) $ (230,000) $ (237,500) $ (250,000) Sales, Services, & Other Aux. $ 500,000 $ - $ (75,000) $ (150,000) $ (150,000) $ (150,000) $ (150,000) $ (150,000) $ - $ - $ - $ - $ - $ - $ - 10,000,000 - - $ - $ - $ - $ - Patient Services $ Research & Grants $ 4,000,000 $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 8,000,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ - $ Percent Change - 98,500,000 100% $ 0.0% (1,325,000) $ -1.3% (6,518,000) $ (10,585,625) $ (12,158,750) $ (16,878,125) $ (24,743,750) -6.6% -12.3% -17.1% -25.1% -10.7% Office of the Chancellor 252 Phillips Hall, CPO #1400 UNC Asheville, One University Heights Asheville, North Carolina 28804 Mr. Randy Ramsey Chairman, UNC Board of Governors 910 Raleigh Road Chapel Hill, North Carolina 27514 T 828 251-6500 F 828 251-6495 www.unca.edu July 24, 2020 Dear Governor Ramsey, Please find attached UNC Asheville’s requested Fall 2020 Budget Scenario planning narrative. This document highlights the financial impact of UNC System directive scenarios B, C1, C2, C3, D, and E together with enrollment declines of 2%, 5%, 10%, 25%, and 50%. This planning narrative was developed by Vice Chancellor for Budget and Finance John Pierce and me together with all UNC Asheville Senior Staff members contributing to the final document. I recently briefed all Faculty Department Chairs and Academic Program Directors, the University Budget Committee, the Faculty Senate Executive Committee, and the Staff Council Executive Committee about this directive to solicit their insight and comments. The UNC Asheville senior staff, general staff and faculty leaders are committed to implementing the best possible health and safety protocols and to ensuring that our campus and the University System sustain enrollment and revenue and remain fiscally prudent during the global pandemic. Our current enrollment numbers for the incoming first-year and transfer classes remain strong with very little melt during the last four weeks. UNC Asheville’s continuing student numbers are solid, indicating strong student retention from Spring 2020 to Fall 2020. Course instruction for Fall 2020 are planned in three formats: in-person (40%), hybrid (30%), and online (30%). We have seen an increase in student requests for more online or hybrid classes, and our faculty remain flexible to offer course instruction that provides the best educational experience for all UNC Asheville students. Please call me directly with any question or concern about UNC Asheville’s plans for Fall 2020. Thank you for your leadership and guidance as we prepare to return to in-person instruction that is so valuable to our academic mission. Best regards, Nancy J. Cable, Ph.D. Chancellor Cc: Dr. William Roper, UNC System Interim President Mr. Peter Hans, UNC System President-Elect Mr. Clinton Carter, UNC System CFO UNC System University Online Only Scenario Planning for Fall 2020 University of North Carolina Asheville July 24, 2020 Scenario B – Social distancing only UNC Asheville estimated shortfall: $1.325M 1. The potential largest expense is unreimbursed COVID-19 expenditures for health and safety, and for social distance protocols. We would aggressively seek reimbursement through federal and state grants (for example, we are confirmed to receive a NC Policy Collaboratory Grant of $665,000 for research, student health advocates, rapid response and community social bridging in the 18 counties of WNC). 2. We would not anticipate a $1M dining loss in a social distancing only situation (we will social distance in dining facilities by decreasing indoor capacity and increasing outdoor seating and take-out options). If dining revenues decline by $500K, we will reduce dining contractor payments who could then reduce their contract employees commensurate with the revenue decline. 3. We would reduce faculty and staff travel, which would save about $500K. We would reduce our athletic expenses with a reduction in fall sport travel and game management costs due to a reduced fall sports program and no spectators. Our fall Athletics programs are not heavily dependent on revenues from ticket sales or gate receipts. Scenario C1 – Online only; enrollment down 2%; retain fees; no housing and dining income UNC Asheville estimated shortfall: $6.718M 1. As identified in the UNC Asheville Revitalization Plan presented to System leaders in December, spending per student for the last four years has been significantly below peer and UNC System benchmarks and our employee turnover is a significant concern. A projected shortfall of over $6M will exacerbate the current lack of fiscal capacity at UNC Asheville and deepen our financial constraints. 2. In addition to the travel and other savings noted in Scenario B, and without housing and dining revenue, we would reduce our dining program resulting in lower payments to our dining contractor, and would reduce housing staff to a skeleton crew level. This will likely produce at least $2.5M to address the shortfall in revenue. 3. During the last two fiscal years of ongoing budget constraint, we have left vacant 71 open positions (mostly administrative positions) which generated annual operating savings of almost $3M. We would continue to leave vacant those open positions. 4. We might also consider drawing down $1.3M in endowment earnings, and would likely implement a University-wide reduction in operating budgets of 5-10%, saving about $1.6M in operational expenses. Scenario C2 – Online only; enrollment down 5%; loss of fee and tuition revenue from enrollment decline UNC Asheville estimated shortfall: $10.785M 1. In addition to leaving vacant our open positions and the hiring freeze implemented by the UNC System in March 2020, we would consider adopting an equitable program of employee furloughs that would protect some positions with a base salary of $45,000 or less and that would allow some non-faculty staff to furlough a portion of their pay and time at work. We would reduce temporary employees to only those necessary for skeleton operations and we would scale back, but not eliminate completely, student employment. Library expenditures would be temporarily reduced and adjunct faculty would be scaled back to mission critical levels. Athletic operations would be reduced. 2. In addition to the savings identified above, we would consider reducing facilities operations to a skeleton crew, and furloughing other administrative positions in Human Resources, Finance, Info Tech, Institutional Research, Community Engagement, and the Osher Lifelong Learning Institute, thereby generating operational scale savings of over $3.0M. We would scale back student union and campus recreation operations, and consider adopting a deeper furlough program to further reduce expenditure. At this level, we would consider reducing some academic administrative functions, and likely keep open current unfilled faculty positions. We would also likely consider repurposing a small amount of existing reserves. Certain positions would be considered for 9-month employment versus 12 months. Scenario C3 – Online Only; Enrollment down 10%, other assumptions the same as Scenario C2 UNC Asheville estimated shortfall: $12.358M 1. In addition to the expense reductions identified in Scenario C2, the added $1.573M shortfall would likely result from depleting certain fund balances (we are beginning our first-ever comprehensive campaign and would not want to reduce our fundraising resources at this time). 2. Staff would work to secure funds from federal and state resources and grants if possible. We would continue to scale back non-essential services and personnel to meet this extreme estimated budget shortfall. 3. Student employees and all temporary employees would likely be considered for furloughs, or lay-offs, all operating budgets would be reduced by 20-25%, any open positions would remain vacant unless tied to health and safety, and all university outreach to community partnerships would be paused. Scenario D – Online Only; Enrollment down 25%, other assumptions consistent with Scenario C3 UNC Asheville estimated shortfall: $14.7M 1. We believe that it is highly unlikely Scenario D and Scenario E will occur. We currently expect that projected enrollment will be sustained even if the UNC System determines that we must shift to online instruction only. UNC Asheville student course registration for classes from all cohorts has been strong through the last two months: returning student retention is slightly stronger than previous years, incoming first year student numbers remain solid at 600, and inbound transfer student cohort is also very strong at over 300 students. 2. Even if, in the face of the active virulence of COVID-19 at this time, some students do not return to the residence halls, we project that our headcount and FTE enrollment will remain solid. 3. Our estimated revenue shortfall in Scenarios D and E is less than the amounts indicated in the UNC System template, primarily because, as was voted by the Board of Governors on July 23, 2020, each institution will charge full tuition and fees regardless of instructional format. 4. We would not consider any increase to the faculty teaching load because our faculty teaching load (4/4) is the highest in the UNC System. We would consider additional voluntary and nonvoluntary furloughs and would further consolidate academic administrative functions. We would also work to reduce vendor contractual commitments for flexibility. Without the ability to impact faculty in a way that would be equitable to the impact we would ask of staff in terms of any reductions to salary, furloughing or any other strategies, we would have a difficult time achieving these savings. 5. Scenario D, as for all 17 institutions, would challenge our academic mission and administrative efficacy, would prompt accreditation concerns, and would seriously jeopardize the existing robust research underway at UNC Asheville in sciences, social sciences, public health, and the humanities. Scenario E – Online Only; Enrollment down 50%, other assumptions consistent with Scenario D UNC Asheville Estimated loss: $18.4M 1. We believe that this scenario is even less likely than Scenario D. 2. We would use our remaining cash reserves, suspend at least 75% of our administrative and academic operations for as short a duration as possible, and make a passionate plea to all federal, state, and community entities for financial support if we had to weather this unlikely storm. 3. As noted recently, this scenario may essentially be a liquidation event for many, if not most, of the universities in the UNC System. University of North Carolina at Chapel Hill – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 27,857 - - (557) (1,393) (2,786) (6,964) (13,929) State Appropriation $ 545,000,000 $ - $ - $ Tuition Revenue (net) $ 290,000,000 $ - $ - $ (5,800,000) $ (14,500,000) $ (29,000,000) $ (72,500,000) $ (145,000,000) Student Fees (net) $ 135,000,000 $ - $ - $ (2,700,000) $ (54,843,750) $ (59,062,500) $ (71,718,750) $ (92,812,500) Financial Aid (external) $ 155,000,000 $ - $ - $ (3,100,000) $ (7,750,000) $ (15,500,000) $ (38,750,000) $ (77,500,000) Athletics (less fees) $ 100,000,000 $ - $ (25,000,000) $ (50,000,000) $ (50,000,000) $ (50,000,000) $ (50,000,000) $ (50,000,000) Housing (net) $ 50,000,000 $ - $ (22,600,000) $ (22,750,000) $ (23,000,000) $ (23,750,000) $ (25,000,000) Dining (net) $ 18,000,000 $ - $ Parking $ 10,000,000 $ - $ Sales, Services, & Other Aux. $ 305,000,000 $ - Patient Services $ 505,000,000 $ Research & Grants $ Gifts & Investments $ Total Revenue Percent Change - $ (4,500,000) $ - $ - $ - $ - $ - (8,136,000) $ (8,190,000) $ (8,280,000) $ (8,550,000) $ (9,000,000) (4,520,000) $ (4,550,000) $ (4,600,000) $ (4,750,000) $ (5,000,000) $ (45,750,000) $ (91,500,000) $ (91,500,000) $ (91,500,000) $ (91,500,000) $ (91,500,000) - $ (25,250,000) $ (25,250,000) $ (25,250,000) $ (25,250,000) $ (25,250,000) $ (25,250,000) 865,000,000 $ - $ - $ - $ - $ - $ - $ - 510,000,000 $ - $ - $ - $ - $ - $ - $ - $ 3,488,000,000 $ - $ (100,500,000) $ 100% 0.0% - -2.9% $ (213,606,000) $ (279,333,750) $ (306,192,500) $ (386,768,750) $ (521,062,500) -6.1% -8.0% -8.8% -11.1% -14.9% UNC System Fall 2020 Scenario Planning UNC Chapel Hill Submission The COVID-19 global pandemic continues to pose a substantial and indeterminate threat to the financial health and sustainability of the University of North Carolina at Chapel Hill (“UNC-CH” and “University”). The University faces significant uncertainty for all major revenue sources and has incurred large, unexpected costs to date as a result of COVID-19. Given this uncertainty, the University implemented several management actions in spring 2020 intended to preserve financial flexibility in the wake of the pandemic. These include elimination of non-essential expenditures, restrictions on hiring and salary adjustments, and postponement of construction projects. As the University prepares to reopen in fall 2020, we anticipate significant additional expenses to ensure the on-campus safety and health of the campus-community. The need for financial aid will also likely increase due to significant losses in income for many of our students and their families. Federal and state relief funds have only partially offset incurred revenue losses and estimated reopening expenses to date. In accordance with the Board of Governor’s request for scenario planning, the following expense analysis provides a preliminary view of actions that UNC-CH would take under each scenario provided. UNC-CH recognizes the critical financial implications of any changes in operational status and has responded to the scenarios in kind. In all scenarios, the University intends to continue the budget management measures implemented in spring 2020. These measures would be complemented by reductions to fund balance, personnel, and operating expenses as discussed in the scenarios below. When evaluating the expense actions contemplated under the scenarios, please note the following considerations. The scenarios focus on enrollment declines and assume auxiliary impacts are directly tied to enrollment changes. While this assumption is not supported by auxiliary operations and revenue models at UNC-CH, the following expense analysis does not change the scenarios. Enrollment reports and tuition and fee collections to date indicate minimal impact to UNC-CH enrollment for fall 2020 and suggest enrollment declines of 25 or 50 percent are extremely unlikely. Additionally, sponsored research achieved a new record in FY20 with revenues exceeding $1B. With UNC-CH’s ongoing leadership in coronavirus research and the premium on research activity, this upward trend is expected to continue. Scenario Analysis for Fall 2020 Scenario A Scenario A states zero revenue impact in fall 2020. Under this scenario, UNC-CH would proceed with budget measures put in place in spring 2020. These measures include elimination of non-essential expenditures, restrictions on hiring and salary adjustments, and postponement of construction projects. Scenario B Scenario B assumes fall 2020 operation with full social distancing in place and students able to remain on campus throughout the semester. This scenario assumes no reduction in tuition and fee revenue but does include revenue losses in athletics, dining, sales and outside services, as well as patient services. UNCCH expense management actions under this scenario will depend on the financial standing of each affected unit, particularly any available unit fund balance. At the revenue impacts assumed in this scenario, the University anticipates using fund balances to absorb these losses (excluding athletics). Fund balance depletion, while mitigating impacts in the short term, would be extremely difficult in the case of sustained losses. Additionally, utilizing fund balance to cover revenue loss delays critical capital projects and renovations and increases pressures on existing debt payments. UNC-CH Athletics is primarily funded from four major sources: ticket sales, media, conference distributions, and external funding. If college athletics is disrupted or postponed, each of these major sources would be threatened. Under Scenario B, the substantial impact in UNC-CH Athletics revenue loss would necessarily result in a reduction of operating expenses and personnel to the extent allowable under existing legal authority. In scenarios where revenue loss is greater than 50 percent (scenarios C1-E), such financial impacts would require borrowing or gifts to support ongoing operations in addition to the actions taken under Scenario B. Scenarios C1-C3 Scenarios C1-C3 assume two, five, and ten percent enrollment reductions with corresponding reductions in tuition, student fees, and auxiliary revenue. Without external funding relief, UNC-CH would rely on three main levers to cover expenses: 1) fund balance depletion; 2) reduction in staff leveraging all authorities granted on personnel actions; and 3) reduction in operating expenses for campus units. For housing, dining, parking, and other auxiliaries, UNC-CH anticipates using fund balances to absorb these losses. This short-term strategy undermines the best practice of maintaining three months of operating reserves on hand, hurts capital and physical plant renovation investment, and significantly limits flexibility in the long-term. However, fund balance depletion allows UNC-CH to forestall more drastic measures in personnel and operating expense reduction. Scenarios D,E Scenarios D and E present worst-case scenarios of 25 and 50 percent reductions to enrollment accompanied by sizeable impacts to other revenue sources. Under these scenarios, and without external funding relief, UNC-CH would be required to implement extraordinary, unprecedented, and wide-ranging actions. These would include complete depletion of fund balances and substantial program and personnel reductions across the University. University of North Carolina Charlotte – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 27,133 - - (543) (1,357) (2,713) (6,783) (13,567) State Appropriation $ 260,000,000 $ - $ - $ Tuition Revenue (net) $ 120,000,000 $ - $ - $ (2,400,000) $ (6,000,000) $ (12,000,000) $ (30,000,000) $ (60,000,000) Student Fees (net) $ 100,000,000 $ - $ - $ (2,000,000) $ (40,625,000) $ (43,750,000) $ (53,125,000) $ (68,750,000) Financial Aid (external) $ $ - $ - $ (1,800,000) $ (4,500,000) $ (9,000,000) $ (22,500,000) $ (45,000,000) Athletics (less fees) $ 7,500,000 $ - $ (1,875,000) $ (3,750,000) $ (3,750,000) $ (3,750,000) $ (3,750,000) $ (3,750,000) Housing (net) $ 40,000,000 $ - $ $ (18,080,000) $ (18,200,000) $ (18,400,000) $ (19,000,000) $ (20,000,000) Dining (net) $ 23,000,000 $ - $ (5,750,000) $ (10,396,000) $ (10,465,000) $ (10,580,000) $ (10,925,000) $ (11,500,000) Parking $ 12,000,000 $ - $ 7,500,000 $ - $ Sales, Services, & Other Aux. $ 90,000,000 - - - $ - $ - $ - $ - $ (5,424,000) $ (5,460,000) $ (5,520,000) $ (5,700,000) $ (6,000,000) (1,125,000) $ (2,250,000) $ (2,250,000) $ (2,250,000) $ (2,250,000) $ (2,250,000) Patient Services $ - $ - $ - $ - $ - $ - $ - $ - Research & Grants $ 45,000,000 $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 22,000,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ 727,000,000 $ - $ Percent Change 100% 0.0% (8,750,000) $ -1.2% (46,100,000) $ (91,250,000) $ (105,250,000) $ (147,250,000) $ (217,250,000) -6.3% -12.6% -14.5% -20.3% -29.9% UNC CHARLOTTE Of?ce of the Chancellor 9201 University City Boulevard. Charlotte, t! 704.687.5700 fl 704.687.1700 nuvw.11ncc.edu July 24, 2020 Mr. Randall C. Ramsey, Chair UNC Board of Governors Dear Chairman Ramsey: I am pleased to submit UNC Charlotte?s revenue reduction analysis in accordance with your request dated July 14, 2020. Of particular note is that the anticipated revenue impacts for Scenarios C2, D, and assume no receipts of mandatory fees, as was directed by the System Office for this analysis. In light of the action taken by the Board of Governors at its meeting yesterday, the ability to charge mandatory fees will significantly change the projected impact to revenues under those scenarios. I want to thank the Board of Governors for this support and its ongoing commitment to UNC Charlotte and our students. As I discussed with you earlier this week, our leadership team, faculty, and staff have been working diligently to develop the plans to safely reOpen our campus in the fall. We are eager to welcome our students, faculty and staff back and to resume campus life. I look forward to working with the Board of Governors, President Hans, and the System Of?ce as we strive to provide North Carolinians with access to an excellent educational experience. Please do not hesitate to contact me if you have any questions about our submission. Very truly yours, MZM Sharon L. Gaber Chancellor The UNIVERSITY of NORTH CAROLINA at CHARLOTTE ill; l. l-gnl?JI-Hn. UNC Charlotte Narrative for UNC System Revenue Reduction Scenario Planning The information and template do not reflect the Board of Governors action this week to clarify that mandatory fees will be charged for the 2020-21 academic year regardless of any changes in instructional format that may occur. . For the purpose of this exercise, UNC Charlotte assumes that the reduction in student enrollment and resulting tuition and fees is driven by the pandemic, both directly and indirectly. The direct concerns include uncertainty about reopening plans for the state, any unforeseen legislation related to the state budget forced furloughs at a state level), and potential resurgence of cases that could further impact operations on campus. The indirect concerns include the inability of students to pay due to students' or parents' loss of employment or other capacity to pay. We further assume that, in addition to reduced tuition and fee revenue in fall 2020, we will have a second year of impact in general funds from appropriations as the impact to appropriations follows the tuition impact by more than a year. This is due to the timing inherent in the funding formula for changes in enrollment that will result in lower appropriations. In addition, the loss of appropriations due to enrollment declines far exceeds the reduction in tuition revenue. Finally, the assumptions built into this model do not reflect the Board of Governors action allowing assessment of mandatory fees.The ability to charge mandatory fees has a significant positive impact on our ability to sustain campus operations. Maintaining flexibility regarding housing and dining operations will be important for campuses with bond covenants that will be noncompliant at the suggested levels of revenue reduction. Many campuses, including UNC Charlotte, are required to maintain stated debt service coverage ratios as part of covenants on their bond portfolios. Our covenant is based on revenue and debt service for housing and dining combined. Under our specific covenant, if we fail to meet this ratio in any given fiscal year the effect is limited to required disclosures, but could have a detrimental impact on our debt rating. Failure to achieve the required ratio in two consecutive years is considered an event of default. In addition, budget scenarios C1 through E, assume very large reductions in housing revenue which would result not only in noncompliance with the debt service coverage ratio, but also provide insufficient cash to service the debt. The only way to rectify this situation would be to operate housing and dining in a way that would not require 1) refunding large portions of revenue or 2) making drastic cuts in expenses that would preclude offering appropriate services to students who still need those services. Our top priority is safety of our students, faculty, and staff, but within the boundaries of safety there will likely be varying alternatives for levels of operations in student housing. This requires flexibility to determine how we will manage housing in regards to remaining open or closing. As a fee for service, it will be difficult to make a case for retaining housing fees if we are required to have students vacate the residence halls. . This would not be the case if we are able to continue safely operating housing even at a reduced level; this also directly impacts dining. Lastly, we assume that treatment modalities will improve in the next year (by summer of 2021) to the point that full operations of the campus will be possible. While technology and safety will continue to be important in new ways, we assume that our enrollment in fall 2021 will result from "normal" factors and will remain at least flat relative to fall 2020. Because we assume that our enrollment will remain flat or grow between fall 2020 and fall 2021, we would respond to losses resulting from current year enrollment declines by prioritizing temporary measures to reduce costs including, but not limited to, a hiring freeze on vacant positions and reducing or eliminating overtime; utilizing salary reductions, furloughs, and/or reductions in force would be a last resort. We would also make reductions in other-than?personnel expenses. It is also important to note that the reductions directed in the template are based on annual, not semester, amounts although the exercise is intended to focus on fall 2020 enrollment only. In analyzing the specific impact of these reductions to Athletics revenue, we have determined that we will be able to absorb these reductions on a one-time occurrence. While the cancellation of fall sports creates revenue losses, primarily from ticket sales, guarantees and sponsorships, we would realize significant cost savings from avoiding associated expenses related to team travel, game operations, officiating, marketing, ticket operations, and other miscellaneous cost related to competitions (less medical/injury, reduced equipment replacement, etc). Coupling these reductions with the fact that UNC Charlotte has historically budgeted conservatively and has been good stewards of resources, we are able to withstand these projected losses for this fall. And depending on the severity of the reduction, we have also modeled targeted furloughs for all staff above a certain pay rate, as well as proactively prepared to reduce operational budgets for every unit. in responding to the System Office?s proposed revenue reduction analysis, we used the following chart and determined our most likely response under each scenario: Revenue 0:21;; 0223;153:9230 onggzeoh" Onllne Fall 2020 Online Fall 2020 Online Fall 2020 scenario Planning for (status quo} Only Mand. Fees Enroll: Enroll: 40% Enroll: -25% 0 Enroll: 50% A UNCC Scenario A Scenario Scenario C1 Scenario C2 Scenario C3 Scenario Scenario A tlcipated Revenu- Impacts Enrollment - (543) (1,357) (2,213) (5,783) (13,507) State Appropriation 5 5 5 5 Tuition Revenue-(net) 5 5 (2,400,000) 8 (6,000,000) 5 (12,000,000) 5 (30,000,000) 5 (60,000,000) Student Fees (net) 5 (2,000,000) 5 (40,625,000) 5 (43,750,000) (53,125,000) 5 (58,750,000) FinancialAid (external) 5 5 (1,800,000) 5 (4,500,000) 5 (9,000,000) 5 (22,500,000) (45,000,000) Athletics (less fees) 5 (1,875,000) 5 (3,750,000) 5 (3,750,000) 5 (3,750,000) 5 (3,750,000) 5 (3,750,000) Housing (net) i 5 5 (18,080,000) 5 (18,200,000) 5 (18,400,000) 5 (19,000,000) (20,000,000) Dining (net) 5 5 (5,750,000) 5 (10,395,000) 5 (10,465,000) 5 (10,580,000) 5 (10,925,000) 5 (11,500,000) Parking 5 5 (5,424,000) 5 (5,450,000) 5 (5,520,000) (5,700,000) (0,000,000) Sales, Services,&0therAux. 5 (1,125,000) (2,250,000) 3 (2,250,000) (2,250,000) 5 (2,250,000) (2,250,000) Patient Services 5 5 5 Research&Grants 5 (2,250,000) 5 (2,250,000) 5 (2,250,000) 5 (2,250,000) 5 (2,250,000) Gifts 8t Investments 5 5 5 5 5 Total Revenue 5 (8,750,000) 5 (48,350,000) 5 (93,500,000) 5 (107,500,000) (149,500,000) 5 (219,500,000) Percent Change 0.0% 4.2% 45.7% 42.9% 44.8% -20.5% 30.2% Scenario A: ?New Normal? No response required. Scenario B: Social Distancing Only Under the social distancing scenario, the template shows that UNC Charlotte would incur a total loss of revenue of This would primarily be covered by postponing the start of some self-liquidating capital projects and reducing the fund balance reserves in Athletics and other receipt-supported auxiliary units Each following scenario assumes that all the changes from the previous scenarios (cumulatively) will take place, plus the new reductions identified. Scenario C1: Online Fall 2020; Enrollment A Mandatory Fees Under this 2% enrollment reduction scenario, student tuition revenues and the concurrent reductions in fees for UNC Charlotte is Similar to the social distancing scenario, some of this reduction can be covered with postponing additional capital projects and further reducing auxiliary fund balance reserves However, reductions in housing and dining reserves would eventually result in an inability to pay our debt service. (The issue of the covenant on our bond portfolio is related to actions necessitating a refund of revenue which is separate from the ability to maintain sufficient cash to actually service the debt.) In addition, the impact of the enrollment decline would result in a reduction or elimination of some student workers and temporary positions, not filling vacant positions, and furloughing some campus staff Furthermore, a drop in enrollment would translate to a reduction in external student financial aid administered by the University on behalf of students and we would have to forego much needed infrastructure repairs and maintenance items The total of new changes in this section added to the total from the previous section brings us to reductions totaling Scenario 02: Online Fall 2020; Enrollment A A 5% enrollment reduction would result in a total loss of in student tuition revenues and fees for UNC Charlotte. In addition to increasing the expense reductions listed in the previous scenarios by an additional the Parking and Transportation Services area would eliminate planned bus purchases and would be at risk of defaulting on various contracts Furthermore, the university would postpone the replacement of major computer and equipment needs for another year continue current limits on travel and professional development for faculty and staff and make additional reductions in operations The total of new changes in this section added to the cumulative total from the previous sections brings us to reductions totaling Scenario C3: Online Fall 2020; Enrollment -10% A Should UNC Charlotte experience a 10% reduction in student tuition revenues and the concurrent reductions in fees, the total loss of revenue would be Because the cost structure of most core mission functions is overwhelmingly personnel, it is not reasonable to assume that a 10% enrollment reduction in FY 2020- 21 can be met with a 10% reduction in non~personnel costs in the General Fund. Given the multi-year impact, reductions for tuition revenues would have to be met with expense reductions that lean directionally toward personnel. However, the impact differs in auxiliaries where the impact is felt in the fiscal year in which the reduction in enrollment takes place. In addition to increasing the amounts for the items listed in the previous scenarios by various student events will be reduced or cancelled The total of new changes in this section added to the cumulative total from the previous sections brings us to reductions totaling Scenario D: Online Fall 2020; Enrollment -25% A A 25% decrease in enrollment would push the campus toward financial exigency. Even if the tactics identified for the above scenarios were fully deployed, we would fall drastically short of covering the lost revenue. In housing and dining alone we would need to reduce expenses by 60% to avoid violating our bond covenant and this level of reduction would reduce services at a magnitude unacceptable to students. This would, in turn, even further reduce revenue. We would likely have to identify academic programs to close or temporarily curtail and the associated faculty reductions would necessitate a declaration of financial exigency. Although not as extreme as the following scenario, the results on campus operations would be similar and for similar reasons. Scenario E: Online Fall 2020; Enrollment -50% A Unless there was a very significant and immediate infusion of cash from the State of North Carolina or other external-to-campus source, a 50% decrease in enrollment revenues (tuition and appropriations) would precipitate an "orderly shutdown" of campus. Here's why: 0 UNC Charlotte has moved deliberately toward a safe, face-to-face campus opening. This opening includes what is projected to be a "full house" (overall flat enrollment) and a record freshman class, typical in recessions as enrollment is In order to teach those students in three modalities - face?to- face, hybrid, and remote we have engaged faculty, instructional technologists, information technology professionals, and others - in a demanding race to be prepared for fall semester. In order to open a safe campus, we have engaged housing and dining staff in restructuring their operations and engineers of all types, cleaning professionals, and others to ensure that air handling and sanitation meet the new needs of campus. In summary, the human capital of the University has been operating flat-out to prepare for face-to-face opening and will continue to do so; this has a significant cost to the University. 0 Should enrollment and enrollment-driven revenues drop by 50%, only a significant and immediate infusion of cash can avoid an exigency situation. By the point at which such an enrollment drop would be known, in mid-September, nearly 25% of the fiscal year would be complete. In a cost structure that is 70% personnel, under no circumstance can eliminating other-than?personnel expenses address a gap of that magnitude. Because of the costs of a shutdown including the cost of benefits for furloughs, termination costs for a reduction?in- force, and the time required for approvals of employee severance, the campus cannot reduce costs fast enough. While depleting fund balances would occur, the magnitude and speed of the decrease would result in shut-down, as it would in the private sector absent government intervention. The cost reductions required to try to address rapid revenue decreases would make it unlikely if not impossible to sustain the operations needed to generate student enrollment. University of North Carolina Greensboro – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 18,249 State Appropriation $ Tuition Revenue (net) $ 70,000,000 Student Fees (net) $ Financial Aid (external) $ Athletics (less fees) $ Housing (net) $ 27,000,000 Dining (net) $ 16,000,000 Parking - 180,000,000 $ - (365) (912) - $ - $ $ - $ - $ 40,000,000 $ - $ - $ 55,000,000 $ - $ - $ (1,100,000) $ 3,000,000 $ - $ (750,000) $ (1,500,000) $ $ - $ $ - $ $ 4,000,000 $ - $ Sales, Services, & Other Aux. $ 8,500,000 $ - $ - $ (4,000,000) $ - $ (1,400,000) $ - (1,825) $ - (4,562) $ - (9,124) $ - (3,500,000) $ (7,000,000) $ (17,500,000) $ (35,000,000) (800,000) $ (16,250,000) $ (17,500,000) $ (21,250,000) $ (27,500,000) (2,750,000) $ (5,500,000) $ (13,750,000) $ (27,500,000) (1,500,000) $ (1,500,000) $ (1,500,000) $ (1,500,000) (12,204,000) $ (12,285,000) $ (12,420,000) $ (12,825,000) $ (13,500,000) (7,232,000) $ (7,280,000) $ (7,360,000) $ (7,600,000) $ (8,000,000) $ (1,808,000) $ (1,820,000) $ (1,840,000) $ (1,900,000) $ (2,000,000) (1,275,000) $ (2,550,000) $ (2,550,000) $ (2,550,000) $ (2,550,000) $ (2,550,000) - Patient Services $ - $ - $ - $ - $ - $ - $ - $ - Research & Grants $ 30,000,000 $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 45,000,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ 478,500,000 $ - $ Percent Change 100% 0.0% (6,025,000) $ -1.3% (28,594,000) $ (47,935,000) $ -6.0% -10.0% (55,670,000) $ (78,875,000) $ (117,550,000) -11.6% -16.5% -24.6% Date: July 24, 2020 To: Dr. Bill Roper, Interim President, UNC System From: Franklin D. Gilliam, Jr., Chancellor Re: UNCG Budget Scenario Planning Please find attached UNC Greensboro’s Budget Scenario Planning spreadsheet. For the past few months our faculty and staff have been working extremely hard on plans to welcome students back to campus this Fall, guided by these core principles – the health and safety of our community; our steadfast commitment to academic excellence; and commitment to offering programs and unique opportunities that are essential to a vibrant campus experience. For your reference we have also attached our Return to Campus document, which has been shared with our students and parents, to illustrate the breadth and depth of our preparations. This scenario planning exercise reveals impacts that could potentially range from significant to catastrophic for UNCG. In several of the scenarios, the result would jeopardize the momentum we’ve generated since my arrival five years ago (i.e. record enrollment, number one ranking in the state on social mobility, record research and fundraising, $1B economic impact in the Piedmont Triad region, meeting all of the UNC System’s strategic performance metrics). In the most extreme scenarios, the budget reduction would do damage with significant lasting negative impacts. UNCG would be less able, or potentially unable, to effectively prepare thousands of students for productive careers in the North Carolina workforce, creating a long-term negative impact on our economy. More immediately, the livelihoods of hundreds and perhaps thousands of employees would be adversely affected – particularly given that public higher education is such a labor- and capital-intensive industry. In the United States, total higher education industry spending is greater than $650 billion annually. UNCG is an annual $500 million plus enterprise and is no exception to that labor and capital structure. Approximately 65% of UNCG’s expenses are personnel cost: salary and benefits. The core of any university is academics, student life, research, and economic impact in its community. For our primary constituents – students – time to graduation will be extended and graduation rates will decline. Many students will stopout or drop out, negatively impacting their socioeconomic mobility and the state’s ability to generate an educated workforce. For our employees – who provide or support education, research, and community impact – terminations, layoffs, and furloughs will result. These losses will deeply impair our ability to provide excellence across the range of services that UNCG currently provides. Following is a summary of those impacts. UNCG will use most of the expense levers listed in the planning spreadsheet provided as a template to accomplish a balanced budget. Scenarios D and E will lead to a much smaller UNCG with budget reductions of $78.9 million and $117.5 million respectively. Both scenarios D and E will lead to hundreds of terminations and widespread furloughs across the University. No employee category will be exempt or untouched. These actions will have a negative impact on our students’ progress to degree, knowledge production, and the local economy. Scenarios C1, C2, C3, D, and E will require terminations, layoffs, and furloughs of faculty, and SHRA and EHRA staff. Essentially, scenarios D and E will certainly put UNCG at risk of survival as a strong Research 2 university, and reduce substantially our capacity to produce graduates who are ready to thrive in the North Carolina workforce (teachers, nurses, business leaders, etc.). Academics Under scenarios D and E, there will be widespread termination of experienced non-tenure track faculty. Even with these widespread terminations, we will still have to take personnel actions with tenure track faculty. Thus, we believe scenarios D and E will require the System to declare fiscal exigency to allow termination of tenure track faculty. We cannot get to a balanced budget and maintain excellence without resorting to strategic cuts in academic programs, student life, and all aspects of administration. Information technology investment, library investment, scholarly activity, and research and economic development will all be seriously curtailed or eliminated. Our ability to market our academic programs and drive enrollment growth will be seriously curtailed or eliminated based on communications cuts. The end result would be a gut-punch to the degree offerings available to students, as well as a serious decline in contributing applied research to the Piedmont Triad region, state, and nation. Enrollment and University Advancement In business terms, enrollment and advancement are our sales force. Terminations, layoffs, and furloughs in these areas will result in a decrease in our ability to generate external revenue. Increased revenue from enhanced student enrollment and philanthropy are critical for UNCG in the COVID and post-COVID world. We must have a robust enrollment management operation given the looming enrollment crisis, namely the decline of high school graduates post-2025. Having and maintaining a strong fundraising team is critical for any university to compete in what has become a hypercompetitive higher education marketplace. This is particularly salient for UNCG given that we planned to launch a campaign in September 2020 (now, theoretically, pushed back to September 2021). Scenarios D and E will lead to a significant loss of employees in advancement and enrollment, seriously degrading our ability to grow revenue when most needed. Student Life Student life programming plays a major role in students’ academic success and plays a major role in our ability to recruit and retain students. Cuts across scenarios C1, C2, C3, D, and E will result in closed residence halls, cuts to programs that retain, counsel, and challenge students; and reductions to health and wellness services that will likely result in increased mental health challenges and costs. In addition, UNCG has made significant investments in student success. As a result, UNCG is among one of just a few schools to meet our System strategic performance metrics. Cuts across all scenarios put these System-mandated goals in jeopardy. Multiple sports would need to be cut, resulting in UNCG not meeting current NCAA minimum requirements (14 sports) to compete in Division I. In scenarios D and E, the best case would be to have a Division III athletic program. Finance and Administration The most dramatic impact on finance and administration will be two-fold: furloughs, layoffs, and terminations, coupled with reduction in key services that feed, house, and transport our students. Additionally, our ability to maintain our campus will be significantly degraded. UNCG already has greater than $450 million in deferred maintenance. Scenarios C1, C2, C3, D, and E will require us to further delay maintenance, putting the viability of dozens of capital assets at risk while putting the health and safety of our students, staff, and faculty at risk. Pending debt payments based on revenue from student fees could face default, as state funds cannot be expended on housing, dining, parking, or athletic debt. Strategic financial investment in UNCG’s future will be seriously degraded. In addition, compliance with federal and state laws and UNC System regulations would be seriously impacted. In short, the significant achievements over the last five years and the resultant momentum that is catapulting UNCG – and our state – forward would be stunted. Retreating from R2, DI status will taint our status as the #1 university in North Carolina for social mobility. It would put at risk the academic engine that today is producing hundreds of nurses, teachers, and local business leaders each year. Put another way, given the makeup of our student population, we will no longer be able to take such a vast array of students and enable them to transform their lives, and those of their families, in some cases for generations. With 80% of our alums living in our state, the results of such actions would severely hamper the development of the middle class in North Carolina. University of North Carolina at Pembroke – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 6,857 - - (137) (343) (686) (1,714) (3,429) State Appropriation $ 80,000,000 $ - $ - $ Tuition Revenue (net) $ 10,000,000 $ - $ - $ (200,000) $ (500,000) $ (1,000,000) $ (2,500,000) $ (5,000,000) Student Fees (net) $ 9,500,000 $ - $ - $ (190,000) $ (3,859,375) $ (4,156,250) $ (5,046,875) $ (6,531,250) Financial Aid (external) $ $ - $ - $ (460,000) $ (1,150,000) $ (2,300,000) $ (5,750,000) $ (11,500,000) Athletics (less fees) $ 1,000,000 $ - $ (250,000) $ (500,000) $ (500,000) $ (500,000) $ (500,000) $ (500,000) Housing (net) $ 7,500,000 $ - $ $ (3,390,000) $ (3,412,500) $ (3,450,000) $ (3,562,500) $ (3,750,000) Dining (net) $ 5,000,000 $ - $ (1,250,000) $ (2,260,000) $ (2,275,000) $ (2,300,000) $ (2,375,000) $ (2,500,000) Parking $ 500,000 $ - $ $ (226,000) $ (227,500) $ (230,000) $ (237,500) $ (250,000) Sales, Services, & Other Aux. $ 3,000,000 $ - $ (450,000) $ (900,000) $ (900,000) $ (900,000) $ (900,000) $ (900,000) $ - $ - $ - $ - $ - $ - $ - 23,000,000 - - - $ - $ - $ - $ - Patient Services $ Research & Grants $ 500,000 $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 6,500,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ 146,500,000 $ - $ Percent Change - 100% 0.0% (1,950,000) $ -1.3% (8,126,000) $ (12,824,375) $ (14,836,250) $ (20,871,875) $ (30,931,250) -5.5% -10.1% -14.2% -21.1% -8.8% University of North Carolina at Pembroke Response Scenario A Scenario Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Instruction, UNCP has been scenario planning for the past month on reductions. Here are the strategies we are and/or will deploy to meet budget constraints: Student No Change No Change 0 Continue hiring freeze and only replace critical positions Services, 0 Utilize attrition/retirements as an opportunity to reorganize or disseminate work amongst remaining team members Academic 0 Deploy furlough and RIF options to reduce expenditures in underperforming units Support, 0 Utilize current EHRA non-teaching staff qualified to teach under accreditation standards to absorb one course Institutional 0 Teaching faculty will absorb one additional course in their load Support 0 Increase number of students in courses to reduce number of course sections when feasible 0 Implement strategic reductions in operating/discretionary spending travel, supplies, etc.) 0 Delay scheduled replacements and/or non-priority maintenance by 1 year (IT, furniture, equipment, etc.) 0 Rely on adjunct professors (to the extent allowed by SACS) Downsize/Right size/Streamline administrative/business support operations to a required level versus preferred level Explore outsourcing to generate cost savings 0 Conduct low productivity exercise to identify underperforming programs that can be eliminated Student 0 Continue hiring freeze and only replace critical positions Auxiliaries 0 Utilize attrition/retirements as an opportunity to reorganize or disseminate work amongst remaining team members and Fee Right size/reduce services based on student population (hours/products) Activities 0 Renegotiate contracts for our bookstore/dining operations with our provider (ex. actual cost plus (see 0 Reduce operating/discretionary spending to maintain strict fund balances for operations with debt to maintain 1-year payment reserve attachment 0 Shutter buildings to reduce operational and energy costs for additional detail) Sales Services Contracts Grants Gifts Investments Furlough employees to maintain a workforce driven by student population Discuss athletic program discontinuation Shutter more expensive licensed dining locations to reduce costs Pay off debt early in areas with healthy cash balance to reduce annual costs Explore refinancing debt for longer terms if needed due to budget impact/student population impact Increase fund raising efforts to support various student programs that are critical to student success Examine what services provide value and prioritize services we would like to maintain. Eliminate underutilized sales and service operations Explore opportunities to outsource services to reduce costs Continue hiring freeze and only replace critical positions Utilize attrition/retirements as an opportunity to reorganize or disseminate work amongst remaining team members Furlough/RIF staff to rightsized operation for current population Mandate salary support for all employees involved in research project in all new proposals Merge duties in our small operation to reduce staffing expenses by at least 1 FIE Utilize A to wrap up projects coming to a close to maintain reputation Utilize attrition/retirements as an opportunity to reorganize or disseminate work amongst remaining team members Deploy furloughs and RIF options but maintain high performance team Reset remaining team to increase efficient fundraising efforts for student support programs Implement salary initiatives for fundraisers to generate percentage of their salary to support operation UNCP - Attachment Parking Reduction 2% (226,000) Our parking operation is extremely lean with no debt and a healthy reserve to accommodate a 50% loss in revenue. 5% (227,500) However, the reserve was being built to support the new campus parking upgrades to include gated lots that would fold 10% (230,000) into the future campus controlled access plan. With the current budget uncertainty, we are still in a good position to 25% (237,500) move forward using will hold our plans for parking upgrades until we have a better outlook on parking. 50% (250,000) Dining Reduction 2% (2,250,000) We contract our dining operation to Sodexo Management, Inc. They provide full-service dining and catering management 5% (2,250,000) on our campus. For all of the proposed scenarios, we will negotiate reduced rates for their food service delivery to our 10% (2,250,000) campus as we did in the spring at the onset of the impacts of COVID-19. Similar to our approach in the spring, we 25% (2,250,000) implemented a layered approach of shuttering the more expensive licensed operations and maintaining services solely in 50% (2,250,000) our main dining hall on a reduced schedule. Our operation will be driven soley by student demand. The employees who run the Sodexo operation are not UNCP employees and will not require payouts if the operation is shuttered. In addition, we are in a good position to pay the remaining debt owed to Sodexo for the invenstment made in our School of Business dining operation in the amount of $991,597 using leftover fund fundraised for the construction project. Note: Our unique population of students suffer from a greater degree of food insecurity than most campus populations. We will have to work strategically with our CARE Resource center to proactively support students with this challenge. Housing Reduction 2% (4,294,000) For all of the proposed scenarios, we will prioritize the placement of students in our facilities that have debt obligations 5% (4,322,500) and shutter those buildings that do not. This will have a domino effect on the reduction of staff, utilities, and operating 10% (4,370,000) expenses. However, no plan will allow us to eliminate insurance premiums. We were able to utilize CARES institional 25% (4,512,500) funds to reimburse our housing operation for spring refunds. We will hold these funds in our reserve to cover debt 50% (4,750,000) payments. The impact of significant budget cuts in any scenario will reduce the investment in student engagement programs which have been critical to our retention efforts for our population of students. Athletics Reduction Our athletic conference is currently discussing if there will be fall sports. At this time, we have frozen all expenditures 2% (500,000) with the exception of salary. We have our furlough plan ready for approval depending on the conference decision. We 5% (500,000) have also been able to recoup a very small amount of funds from CARES HMSI funds for replacement revenue. However, 10% (500,000) we will begin implementing the first wave of budget cutting strategies to include furloughs in the next three week 25% (500,000) dependent on conference decisions and student enrollment. We have actively began fundraising efforts to help subsidize 50% (500,000) athletic expenses to support our student athletes in these uncertain times. We have also found ourselves additional course sections (due to room capacity limits and social distancing) and will utilize qualified coaches to assist with teaching. Lastly, we are discussing the implications of sunsetting women's golf and football to accommodate the budget situation due to impace of and decreased enrollment. Student Fees Reduction 2% (190,000) With the limitations surrounding gatherings due to we are actively resetting the options to offer our students 5% (3,859,375) an engaged experience on our campus as well as see a natural reduction in expenses to support reduced 10% (4,156,250) 25% (5,046,875) 50% (6,531,250) University of North Carolina Wilmington – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 15,801 State Appropriation $ Tuition Revenue (net) $ 80,000,000 Student Fees (net) $ Financial Aid (external) $ Athletics (less fees) $ Housing (net) $ 21,000,000 Dining (net) $ 13,000,000 Parking - 150,000,000 $ - (316) - $ - $ $ - $ - $ 35,000,000 $ - $ - 28,000,000 $ - $ - 4,000,000 $ - $ $ - $ $ - $ $ 4,000,000 $ - $ Sales, Services, & Other Aux. $ 4,000,000 $ - $ - (790) $ (1,600,000) $ - (1,580) $ - (3,950) $ - (7,901) $ - (4,000,000) $ (8,000,000) $ (20,000,000) $ (40,000,000) $ (700,000) $ (14,218,750) $ (15,312,500) $ (18,593,750) $ (24,062,500) $ (560,000) $ (1,400,000) $ (2,800,000) $ (7,000,000) $ (14,000,000) (1,000,000) $ (2,000,000) $ (2,000,000) $ (2,000,000) $ (2,000,000) $ (2,000,000) $ (9,492,000) $ (9,555,000) $ (9,660,000) $ (9,975,000) $ (10,500,000) (3,250,000) $ (5,876,000) $ (5,915,000) $ (5,980,000) $ (6,175,000) $ (6,500,000) $ (1,808,000) $ (1,820,000) $ (1,840,000) $ (1,900,000) $ (2,000,000) (600,000) $ (1,200,000) $ (1,200,000) $ (1,200,000) $ (1,200,000) $ (1,200,000) - - Patient Services $ - $ - $ - $ - $ - $ - $ - $ - Research & Grants $ 12,000,000 $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 50,000,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ 401,000,000 $ - $ Percent Change 100% 0.0% (4,850,000) $ -1.2% (23,236,000) $ (40,108,750) $ -5.8% -10.0% (46,792,500) $ (66,843,750) $ (100,262,500) -11.7% -16.7% -25.0% University of North Carolina Wilmington Response Aid Scenario A Scenario 8 Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Tuition No Change No Change 0 Reduction/delay in 0 Reduction/delay 0 Reduction/delay in Reduction/delay in 0 Reduction/delay in Revenue purchase of goods in purchase of purchase of goods purchase of goods purchase of goods and services goods and and services and services and services services Delay scheduled 0 Delay scheduled 0 Delay scheduled 0 Delay scheduled replacement of replacement of replacement of replacement of equipment equipment equipment equipment Delay or freeze new 0 Delay or freeze new hires in Institutional hires in Institutional 0 Delay or freeze 0 Delay or freeze Support Units and Support Units and new hires in new hires in Academic Affairs Academic Affairs Institutional Institutional Support Units and Support Units and Pause launch of new 0 Pause launch of new Academic Affairs Academic Affairs degree programs degree programs Apply furloughs to 0 Apply furloughs to areas to appropriately areas to appropriately scale to demand scale to demand As most programs at 0 As most programs at UNCW either have UNCW either have stable or growing stable or growing enrollment, we would enrollment, we would try to avoid the try to avoid the elimination of entire elimination of entire degree programs as degree programs as such cuts would cause such cuts would cause further revenue further revenue impacts (creating a impacts (creating a perpetual revenue perpetual revenue spiral) spiral) *These are separate and discrete from positions delayed or frozen in auxiliary or fee supported areas described below Student 0 Will eliminate programming and activities proportionate to existing fee allocations that support athletics, health services, Fees student activities, ed. technology, and security (see attachment for more details) Financial 0 Automatic offsetting expense Scenario A Scenario Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Athletics No Would be achieved via a 0 Include all expense reductions in scenario Change reduction in travel expenses 0 Consider reductions to sports portfolio attributable to shorter seasons in all sports, reduction in marketing expenses and reduction in event and game day operations (predominately temporary labor). These cuts will deeply impact the experience of our student athletes and be a significant loss to students, alumni and all Sea Hawk fans. Sports is a meaningful tool in our development and recruiting operations, but the loss is hard to measure directly. On the other hand, not having a football program materially reduces our exposure in this area (as our athletic budget is not reliant upon football ticket revenue to subsidize other operations). Housing No Change 0 The revenue shortfall will primarily be offset with reductions in facility expenses and furloughing of staff. 0 Fund balance will be utilized to cover the following fixed cost: 0 Debt service this could potentially have a negative impact on our credit rating and limit future growth opportunities 0 Applicable payments for insurance and utilities Dining Vendor contract with Aramark 0 Vendor contract with Aramark would be adjusted consistent with the drop in meal plans which would be adjusted consistent with resulted in the aforementioned loss of revenue the drop in meal plans which 0 Fund balance will be used to cover the fall debt service payments resulted in the aforementioned loss of revenue Parking No Change Eliminate temp employees and furlough staff Fund balance to cover debt service and fixed cost Sales, Would scale services and staffing 0 Would scale services and staffing across auxiliary and support services to offset the loss in revenue Services, across auxiliary and campus support and Other lines of business to offset the loss in 0 Reduce contribution to academic scholarship fund provided through bookstore Auxiliaries revenue Contracts No Change 0 Teaching buy?out and other research related expenses would be reduced Grants UNCW- Attachment Mandatory Fee Impact Chart Fee Type & Programing Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Athletics 205,884 4,182,019 4,503,713 5,468,794 Health Services 58,212 1,182,431 1,273,388 1,546,256 Student Activities Activities Impacted Supports athletic department salaries, team travel and 7,077,263 operations. Supports salaries, maintenance and operation of the student 2,001,038 health center. Used to defray the cost of the various campus-wide student 114,297 publications including the student newspaper, a literary magazine, and a radio station, and TV channel. Allocated to the SGA for distribution to campus organizations for 484,276 activities that they deem are in the best interest of the student body. Media 3,325 67,539 72,734 88,320 SGA 14,088 286,163 308,176 374,213 Campus Life (Student Union) 36,682 745,104 802,420 974,367 1,260,946 Supports the operation and programming of the Student Union. Rec & Intramurals 67,250 1,366,025 1,471,103 1,786,340 2,311,734 recreational sports program and other physical education Postal 3,987 80,990 87,220 105,909 137,059 Athletic Facilities 28,575 580,425 625,074 759,018 982,258 Cultural Events 11,417 231,900 249,739 303,254 392,447 ID/Debit Card Office 3,190 64,792 69,776 84,728 109,647 Leadership 6,114 124,184 133,737 162,395 210,158 Commencement The Green Initiative Fund 8,506 172,778 186,068 225,940 292,393 Funds the commencement events. 2,658 53,993 58,146 70,606 91,373 Ed & Tech Supports the cost of operating and maintaining the intramural 142,193 2,888,305 3,110,482 3,777,014 4,887,901 Campus Security Fee 7,974 Campus Rec. Facility* 53,428 1,085,261 1,168,742 1,419,187 1,836,595 Union Fee* 46,517 161,979 174,439 211,819 274,119 944,879 1,017,562 1,235,611 1,599,025 programs. Covers cost of maintaining a full service U.S. Postal Service contract station. Athletic Facility Operations Fee supports the cost of regular maintenance of the athletic facilities, fields, and grounds including the cost of salaries and benefits for maintenance ultural Events Fee support cultural initiatives organized by offices and departments across campus including events and activities related to the arts, diversity and inclusion, and community engagement. Supports the University’s ID Card operations and support. The ID card is used for identification purposes, a library card, and as a campus card for dining and vending . Supports the Leadership Center and the mission to cultivate a dynamic, experiential, and student-centered environment that provides opportunities for leadership . The Green Initiative Fee provides funding to promote sustainability and green ambassador efforts. The Ed & Tech Fee is Used by colleges and schools to equip and operate computing and scientific laboratories, which supplement classroom instruction.  The fee is also used by central administration to support and maintain the technical infrastructure on campus. Used to assist in campus-based and UNC system-wide safety and security initiatives, staffing and security measures. Debt Service fees are pledged to support the construction and/or renovations. Debt Service fees are pledged to support the construction and/or renovations. *Notes that fund balance will be required to offset a fixed cost or mandatory obligation to the university. University of North Carolina School of the Arts – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 1,075 - - (21) (54) (107) (269) (537) State Appropriation $ 35,000,000 $ - $ - $ Tuition Revenue (net) $ 11,000,000 $ - $ - $ (220,000) $ (550,000) $ (1,100,000) $ (2,750,000) $ (5,500,000) Student Fees (net) $ 4,500,000 $ - $ - $ (90,000) $ (1,828,125) $ (1,968,750) $ (2,390,625) $ (3,093,750) Financial Aid (external) $ 6,500,000 $ - $ - $ (130,000) $ (325,000) $ (650,000) $ (1,625,000) $ (3,250,000) Athletics (less fees) $ $ - $ - $ Housing (net) $ 2,500,000 $ - $ - $ (1,130,000) $ (1,137,500) $ (1,150,000) $ (1,187,500) $ (1,250,000) Dining (net) $ 2,000,000 $ - $ (500,000) $ (904,000) $ (910,000) $ (920,000) $ (950,000) $ (1,000,000) Parking $ 100,000 $ - $ $ (45,200) $ (45,500) $ (46,000) $ (47,500) $ (50,000) Sales, Services, & Other Aux. $ 4,000,000 $ - $ (600,000) $ (1,200,000) $ (1,200,000) $ (1,200,000) $ (1,200,000) $ (1,200,000) - - - - $ - $ - $ - $ - $ - $ - $ - $ - Patient Services $ - $ - $ - $ - $ - $ - $ - $ - Research & Grants $ - $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 3,500,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ - $ Percent Change 69,100,000 100% $ 0.0% (1,100,000) $ -1.6% (3,719,200) $ -5.4% (5,996,125) $ -8.7% (7,034,750) $ -10.2% (10,150,625) $ (15,343,750) -14.7% -22.2% University of North Carolina School of the Arts Response Scenario A Scenario 8 Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Instruction, No Change No Change Hiring freeze and redirect lapsed salaries. 0 Consolidation of functions and Student Across?the?board reductions in discretionary spending travel, organizational restructure Services, supplies, etc.) 0 Consider 9-month contracts for Academic 0 Delay scheduled recapitalization by 1 year (IT, vehicles, furniture, student?focused positions. Support, equipment, etc.) 0 Increase faculty teaching load Institutional 0 Utilize adjunct professors, guest artists, temp employees to reduce and/or student?to?faculty ratio Support costs/increase flexibility 0 UNCSA wide flexible furloughs NOTE: UNCSA's conservatory educational model limits ability to NOTE: Scenarios and trigger leverage economies of scale. financial exigency for integrated residential HS program is not fully reflected in this exercise, but creates unique needs and budget demands associated with residential HS students. Student 0 Utilize existing fund balances 0 Closure of impacted auxiliary programs/functions for fall Auxiliaries and 0 Reduce services 0 Closure of student housing and dining halls for fall Fee Activities 0 Furloughs in areas where services are reduced 0 Redeploy other resources to fund debt service 0 Furlough of auxiliary employees NOTE: size and model limit ability to 0 Flexible furloughs across the board generate large fund balances for contingencies 0 Institute and Early Retirement Initiatives NOTE: UNCSA's options to extreme financial challenges would include "mothballing" facilities and associated furloughs Sales 0 Reduce operating 0 Discontinue sales and service activities Services hours 0 Furlough or elimination of staff NOTE: UNCSA's size hinders our ability to generate significant revenues to compensate for financial challenges and sustain prolonged economic trials Contracts Not Applicable for UNCSA Grants Gifts No Change 0 Suspend capital or other projects relying on fundraising or investment 0 Reduce amount of financial aid funded from Investments income gifts/endowments 0 Examine ROI of fundraising resources Western Carolina University – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 11,105 State Appropriation $ Tuition Revenue (net) $ 18,000,000 Student Fees (net) $ Financial Aid (external) $ Athletics (less fees) $ Housing (net) $ 19,000,000 Dining (net) $ 17,000,000 Parking - 130,000,000 $ - (222) (555) (1,111) (2,776) (5,553) - $ - $ $ - $ - $ (360,000) $ (900,000) $ (1,800,000) $ (4,500,000) $ (9,000,000) 25,000,000 $ - $ - $ (500,000) $ (10,156,250) $ (10,937,500) $ (13,281,250) $ (17,187,500) 30,000,000 $ - $ - $ (600,000) $ (1,500,000) $ (3,000,000) $ (7,500,000) $ (15,000,000) 4,000,000 $ - $ (1,000,000) $ (2,000,000) $ (2,000,000) $ (2,000,000) $ (2,000,000) $ (2,000,000) $ - $ $ (8,588,000) $ (8,645,000) $ (8,740,000) $ (9,025,000) $ (9,500,000) $ - $ (4,250,000) $ (7,684,000) $ (7,735,000) $ (7,820,000) $ (8,075,000) $ (8,500,000) $ 2,500,000 $ - $ $ (1,130,000) $ (1,137,500) $ (1,150,000) $ (1,187,500) $ (1,250,000) Sales, Services, & Other Aux. $ 1,500,000 $ - $ (225,000) $ (450,000) $ (450,000) $ (450,000) $ (450,000) $ (450,000) $ - $ - $ - $ - $ - $ - $ - 6,500,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 266,500,000 $ - $ Patient Services $ Research & Grants $ Gifts & Investments $ Total Revenue $ Percent Change - 13,000,000 100% 0.0% - - (5,475,000) $ -2.1% - $ - $ (21,312,000) $ (32,523,750) $ -8.0% -12.2% - $ - $ - (35,897,500) $ (46,018,750) $ (62,887,500) -13.5% -17.3% -23.6% VS estern Office of arollna the Chancellor UNIVERSITY July 24, 2020 Dear Interim President Roper, President?elect Hans and Chairman Ramsey, Please find attached the completed template from Western Carolina University for the Budget/Revenue Scenario Planning. We have taken this exercise seriously and provided the requested information. i have shared our response with our university governance leaders and engaged directly with senior administrative leaders. In addition, my leadership team and I continue active planning for the fall semester and a range of potential revenue and budget shortfalls. In contemplating the scope and depth of the proposed scenarios offered here, it becomes quickly apparent that our ability to deliver our academic, research, and regional service mission would be rendered effectively impossible, particularly at the level of 25-50%. Cuts in scenarios C1-C3 would have a significant and negatively substantial impact on our university across all divisions with serious erosion in our delivery of instruction and in the total student experience. Cuts in scenarios and would be simply devastating to our students, our faculty and staff, and our region, resulting in catastrophic furloughs and terminations that would threaten our ability to deliver even the most minimal level of operations; no person or unit on campus would be unaffected. As you begin review of response as well as the other UNC System campus responses, I ask you to keep a few thoughts in mind. 0 campus community has come together to develop effective instructional plans for the fall semester, including meaningful face to face components, while working diligently to ensure the well?being of those living and working on campus. 0 WCU faculty and staff have done tremendous work in preparing for a range of instructional modalities and we are currently prepared for classes to be delivered via a range of face-to?face (FZF), hybrid (including both F2F and online components), and online modalities. Only a very small percentage ofour residential students received an online-only course schedule for the fall. 0 To date, our enrollment numbers reflect an increase over point-in?time data from last fall and we expect enrollment to be up or stable this fall. 0 Retention and graduation rates at WCU have been on a steady increase for the past decade. Our freshman retention rate has improved from a previous plateau of around 70% to consistent performance at around 80% and we are poised to continue that strong performance. Four and six?year graduation rates have risen almost ten percentage points, respectively, in the same penod. Kelli R. Brown, Chancellor 501 HF Robinson 1 University Drive Cullowhee, NC 28723 828.227.7100 tel 828.227.7176 fax wcu.edu 0 A successful reopening this fall with residential instruction and student life amidst the ongoing global pandemic will hinge largely on the confidence and focus of our faculty and staff. We are working extremely hard to preserve morale and confidence as we move forward. - WCU leadership continues to plan for the fall in coordination with our local and regional partners. The success of our region depends heavily on the continued success of the University. WCU is the second largest employer in all of far Western North Carolina (only the Casino employs more) with an economic impact of more than half a billion dollars in WNC alone; nearly $1billion state~wide. Thank you for your consideration of our response to the planning exercise. We recognize that budget/revenue planning is necessary in the best of times and critically essential during these unprecedented days. I couldn?t be more proud of what our University has accomplished over the past months. lam certain that together we will emerge from this crisis with a renewed commitment to our region and our State as higher education will be a critical driver of economic excellence for North Carolina in a post?pandemic world. Sincerely yours, Kelli R. Brown ChanceHor Western Carolina University Response Continued Athletics Hou?ng Dining Parking Sales Services Contracts Grants Scenario Scenario Scenario Scenario Scenario C3 Scenario Scenario A C1 C2 Tuition Revenue No No Change 0 New positions planned for growth with growth funds will not be 0 New positions planned Change filled for growth will not be filled 0 Non-personnel operating budgets (travel, services, supplies) will be reduced 0 furloughs will be instituted Student Fees N0 Change 0 Reserves (fund balance) will be used furloughs/ staff reductions instituted 0 Non-personnel operating budgets (travel, services, supplies) will be reduced Financial Aid No Change 0 We believe financial aid distributions will vary directly with enrollment. i.e. 2% fewer enrolled will equate to 2% fewer awards. We don't believe any adjustments need to be made here. 0 Loss of revenue due to social distancing would actually be $250k and will be offset by reduced game day costs and fewer personnel to handle crowds Expenses associated with games will not be incurred. Furloughs and staff reductions will be implemented in targeted areas. 0 Non-personnel operating budgets (travel, services, supplies) will be reduced. No Change 0 offset from reserves 0 mothball of buildings, creating utility, staff and maintenance savings 0 offset from reserves IO mothball of buildings, creating utility, staff and maintenance savings 0 offset from reserves IO mothball of buildings, creating utility, staff and maintenance savings 0 offset from reserves 0 mothball of buildings, creating utility, staff and maintenance savings - Meal Plan revenue would not be impacted as long as enrollment isn?t changed. In a worst-case scenario, the university would forgo 100% of commissions (S 75k). I This would not require changes and would be covered by reserves. IO Retail sales would be impacted. 0 Variable costs would not be incurred (food, most labor, utilities, etc). 0 Our agreement with outsource provider limits our exposure to only debt service, not variable costs. 0 Debt would be covered from reserves. No Change 0 Reserves (fund balance) will be used and furloughs/ staff reductions instituted Losses offset from reserves No Change 0 Research and grant dollars at WCU would not be impacted by a move to virtual instruction. Winston Salem State University – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 4,787 - - (96) (239) (479) (1,197) (2,393) State Appropriation $ 65,000,000 $ - $ - $ Tuition Revenue (net) $ 14,000,000 $ - $ - $ (280,000) $ (700,000) $ (1,400,000) $ (3,500,000) $ (7,000,000) Student Fees (net) $ 9,500,000 $ - $ - $ (190,000) $ (3,859,375) $ (4,156,250) $ (5,046,875) $ (6,531,250) Financial Aid (external) $ $ - $ - $ (460,000) $ (1,150,000) $ (2,300,000) $ (5,750,000) $ (11,500,000) Athletics (less fees) $ 450,000 $ - $ (112,500) $ (225,000) $ (225,000) $ (225,000) $ (225,000) $ (225,000) Housing (net) $ $ - $ $ (4,520,000) $ (4,550,000) $ (4,600,000) $ (4,750,000) $ (5,000,000) Dining (net) $ 5,000,000 $ - $ (1,250,000) $ (2,260,000) $ (2,275,000) $ (2,300,000) $ (2,375,000) $ (2,500,000) Parking $ 500,000 $ - $ $ (226,000) $ (227,500) $ (230,000) $ (237,500) $ (250,000) Sales, Services, & Other Aux. $ 2,500,000 $ - $ (375,000) $ (750,000) $ (750,000) $ (750,000) $ (750,000) $ (750,000) 23,000,000 10,000,000 - - - $ - $ - $ - $ - Patient Services $ - $ - $ - $ - $ - $ - $ - $ - Research & Grants $ - $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 16,000,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ 145,950,000 $ - $ Percent Change 100% 0.0% (1,737,500) $ -1.2% (8,911,000) $ (13,736,875) $ (15,961,250) $ (22,634,375) $ (33,756,250) -6.1% -10.9% -15.5% -23.1% -9.4% Winston Salem State University Response Scenario A Scenario Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Instruction, No Change No Change 0 Further reduce travel, supplies and materials to essential only 0 Consider 9-month contracts for Student 0 Enhance oversight of hiring of all positions with priority of essential student?focused positions. Services, 0 Hiring freeze on all non?essential state funded positions and Reduce course offerings Academic redirect lapse salaries 0 Increase faculty teaching load Support, 0 Review hours of operation for all essential services and eliminate and/0r student-to-faculty ratio Institutional non-essential services 0 Adjust preventive maintenance 0 Assess Academic Programs cycles" Support . . 0 Reduce contracts and servnces; delay equnpment replacements to the extent possible 0 Review and reduce IT services to the extent possible, delay system upgrades and contractual services 0 Consolidation of administrative functions Student 0 Fund balance depletion 0 Closure of Student Health Center and Campus Centers Auxiliaries and 0 Reduce/Eliminate external community services 0 Significantly reduce opening of student residential halls based upon Fee Activities 0 Furlough in areas where services are outstanding debt obligation levels reduced/limited 0 Significantly reduce student services and student engagement options for the Reduce Athletic Program Operation" fall 0 Redirect fund source for debt service 0 Furlough of all employees related to center closures Sales 0 Close Ticket Office for 0 Discontinue or reduce sales and service activities as practical within contract management Services Fall semester - 0 Furlough or elimination of staff Furlough Staff Make adjustments in Parking and Shuttle Services 0 Reduce operating hours of Service Units 0 Reduce/eliminate external community Service Units 0 Furlough Staff" Contracts 0 Hiring freeze and reduction of certain research activity 0 Discontinue research in certain areas Grants 0 Review Trust fund balances and fund shift, where possible Gifts 0 Suspend capital or other projects relying on fundraising or interest income 0 Reduce financial aid funded from gifts/endowments Investments 0 Examine ROI of fundraising resources North Carolina School of Science and Math – Estimated Revenue Impact Scenarios Estimated Revenue Impact Scenario Planning for 2020-21 “New Normal” (status quo) Social Distancing Only Revenue Source Scenario A Scenario B Annual Budget Online Fall 2020 Online Fall Online Fall 2020 Online Fall 2020 Online Fall 2020 Enroll: -2% ∆ 2020 Enroll: -10% ∆ Enroll: -25% ∆ Enroll: -50% ∆ + Mand. Fees Enroll: -5% ∆ Scenario C1 Scenario C2 Scenario C3 Scenario D Scenario E Anticipated Revenue Impacts Enrollment (FTE) 680 - - (14) (34) (68) (170) (340) State Appropriation $ 23,000,000 $ - $ - $ - $ - $ - $ - $ - Tuition Revenue (net) $ - $ - $ - $ - $ - $ - $ - $ - Student Fees (net) $ 500,000 $ - $ - $ (10,000) $ Financial Aid (external) $ - $ - $ - $ - $ - $ - $ - $ - Athletics (less fees) $ - $ - $ - $ - $ - $ - $ - $ - Housing (net) $ - $ - $ - $ - $ - $ - $ - $ - Dining (net) $ - $ - $ - $ - $ - $ - $ - $ - Parking $ - $ - $ - $ - $ - $ - $ - $ - Sales, Services, & Other Aux. $ - $ - $ - $ - $ - $ - $ - $ - Patient Services $ - $ - $ - $ - $ - $ - $ - $ - Research & Grants $ - $ - $ - $ - $ - $ - $ - $ - Gifts & Investments $ 2,000,000 $ - $ - $ - $ - $ - $ - $ - Total Revenue $ - $ - $ (10,000) $ Percent Change 25,500,000 100% $ 0.0% 0.0% 0.0% (203,125) $ (203,125) $ -0.8% (218,750) $ (218,750) $ -0.9% (265,625) $ (265,625) $ -1.0% (343,750) (343,750) -1.3% North Carolina School of Science and Math Response Scenario A Scenario Scenario C1 Scenario C2 Scenario C3 Scenario Scenario Instruction, No Change No Change 0 Use savings from foodservice, health clinic, athletics to offset 0 Use savings from foodservice, Student reduced funding health clinic, athletics to offset Services, 0 Reduce temporary staff funding and/or do not fill vacant reduced funding Academic positions 0 Reduce temporary staff funding Support, and do notf-ill and/or eliminate Institutional vacant posutlons Support Student 0 student fees are made up of revenue from summer programs. The timing of the collections will not affect fall Auxiliaries and revenues Fee Activities 0 does not charge students tuition, room board, or other mandatory service fees. 0 A reduction in enrollment does not negatively impact from a financial perspective. 0 Reduction of food service, health clinic services, and athletics would result in a savings. Sales No Change 0 Discontinue foodservice and health clinic services Services 0 Reduce contracted staff Contracts Not Applicable to Grants Gifts Not Applicable to Investments is not anticipating a loss in enrollment for Fall 2020. If the decision is made to go fully remote, competition would come from the K-12 market in North Carolina. Many K-12 schools in NC have already announced plans to go fully remote for high schools for the Fall 2020 semester. would anticipate a potential increase in demand for our on-line courses, which would increase our overall enrollment.\