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2019-2020 Operating & Capital Budget Plan May 2019 Operating and Capital Budget Plan FY2020 CONTENTS Operating Budget - Highlights Table 1: Composite Operating Budget 4 Table 2: Composite Operating Budget - by Campus 5 Operating Budget - Details Table 3: Ithaca Campus - Budget Summary 8 Table 4: Ithaca Campus - Budget Details 9 Table 5: Cornell Tech - Budget Summary 12 Table 6: Weill Cornell Medicine - Budget Summary 14 Capital Plan Table 7: Capital Activity Summary 16 Table 8: Sources & Uses of Capital Expenditures by Campus 19 Appendices A: Academic Year Tuitions 21 B: Common Student Fees 22 C: Tuition & Fees - Selected Institution Comparison 23 D: Room & Board Rates - Selected Institution Comparison 24 E: Actual & Projected Enrollments 25 F: Undergraduate Financial Aid 26 G: New York State Appropriations 27 H: Investment Assets, Returns & Payouts 28 I: Capital Activity Detail 29 J: Debt Service by Operating Unit 33 K: External Debt Financing Summary 34 L: Facilities & Administrative Costs and Employee Benefits Billing Rates 35 M: Workforce - Ithaca Campus 36 Figure 1. Fiscal Year 2020 Revenues $4.77 billion Qatar Foundation 2.0% Other Sources Sales & Services of 7.0% Tuition & Fees Enterprise 25.8% 3.7% Medical College Service Revenues Investments 30.6% 6.6% Gifts 5.4% Sponsored Programs 15.7% State & Federal Appropriations 3.2% 1 Figure 2. Fiscal Year 2020 Expenditures $4.70 billion Repairs & Debt Maintenance 1.9% Qatar 1.4% 2.7% Utilities, Rent, & Taxes 3.5% General Operations 18.0% Salaries, Wages & Capital Expenses Benefits 1.8% Financial Aid 60.1% 10.6% From the Vice President TO THE CORNELL UNIVERSITY BOARD OF TRUSTEES The Cornell University fiscal year 2020 operating and capital projects. The capital projects currently underway or planned budgets for the Ithaca Campus, Cornell Tech, and Weill to begin in fiscal year 2020 for the Ithaca Campus are Cornell Medicine are presented on the following pages. expected to address $195.8 million of maintenance backlog. Overall, revenues are planned at $4.77 billion, a 3.6 percent The major project in the capital budget for Cornell Tech increase over the current year forecast. Operating is completion of the Verizon Executive Education Center. expenditures are also expected to increase 3.6 percent to This project marks the completion of phase one on the $4.70 billion. Ithaca Campus revenues are planned to grow Roosevelt Island campus. For Weill Cornell Medicine the by approximately 2.4 percent or $59.8 million. The two most significant projects in the capital budget are a majority of this increase is due to tuition rate growth and new student housing project estimated at $235.0 million enrollment growth in professional degree programs. and a major clinical expansion on East 72nd Street, which Cornell Tech continues to grow with a projected increase is projected to cost $335.0 million. Planning for both in revenues of 8.7 percent or $4.0 million. This growth projects will occur in fiscal year 2020 with the majority of reflects the continued planned growth in academic expenditures to occur in future years. programs. Revenues at Weill Cornell Medicine are projected to increase 4.8 percent or $101.2 million, the Long-term planning is supported by a 10-year financial majority is due to growth in the clinical revenues. Figures 1 planning model and 10-year capital plan of major and 2 on the preceding page provide a functional overview projects for each individual campus and the university as of revenues and expenses for the entire university. a whole. The 10-year financial planning model supports principled decision-making for resource allocation with The overall university budget remains balanced. The a focus on strategic priorities while enforcing financial fiscal year 2020 budget does include a modest planned discipline. A key component of the 10-year model is to use of fund balances from prior years totaling $12.9 link planned increases in tuition rates as well as million to fund specific strategic investments on the compensation to an inflationary measure. Ithaca Campus and at Weill Cornell Medicine as well as 2 the continued expansion of Cornell Tech. The use of The 10-year capital plan identifies preliminary total project prior year funds is temporary in nature. cost and funding plans for each major project. Each component will be further evaluated and refined as the The university’s capital budget for fiscal year 2020 plan evolves and individual project planning progresses. projects spending across all three campuses to total $336.3 million. The most significant project in the capital The fiscal year 2020 operating budget and capital budget budget for the Ithaca Campus is the North Campus as well as our long-term planning models position the Residential Expansion project. This $250.0 million university well from a budget and planning perspective investment will increase the on-campus housing capacity to meet the priority needs. The aspirations of our faculty by approximately 2,000 beds. This project will be and students will continue to challenge us to use our completed in two phases with the first phase to finish by limited resources most effectively. Through the the fall of 2021 and the second phase will complete one continued commitment and support from our alumni, year later. trustees, faculty, staff, and students, I remain optimistic that we will meet these challenges. Design efforts are also underway for a full renovation of McGraw Hall and development of the new Multidisciplinary Building that will support several academic priorities that cannot be accommodated with existing facilities. The Paul J. Streeter remainder of the capital budget for the Ithaca campus Vice President for Budget and Planning focuses on planned maintenance and building renewal Composite Operating Budget Highlights Cornell University’s composite operating plan for FY 2020 is Use of Resources based on the plans of its three main campuses: the Ithaca FY 2020’s planned expenditures are projected to be $4.70 Campus, Cornell Tech and Weill Cornell Medicine (with billion, an increase of 3.6 percent from the FY 2019 forecast. campuses in New York City and Doha, Qatar). Table 1 on the facing page shows the overall university plan, with summary • Salaries, Wages and Benefits are projected to and detailed plans for each campus immediately following. increase $118.6 million or 4.4 percent, due to the annual salary improvement program, a slight increase Resources in endowed benefit rate for the Ithaca and Cornell Revenues are projected at $4.77 billion, an increase of 3.6 Tech campuses, and growth in supplemental percent from the FY 2019 forecast. compensation related to WCM clinical activities. • Undergraduate Financial Aid is expected to increase • Tuition and Fees are planned to increase 4.3 percent, by $15.3 million or 5.6 percent from the FY 2019 based on approved tuition rates and fee increases forecast due to increases in tuition rates, housing and along with targeted enrollment growth in graduate dining rates, and a projected increase in the amount level programs. of student financial need. • The net decrease in Investment/Endowment • Graduate and Professional Financial Aid is Distribution is expected to be 0.5 percent based on a projected to increase by $5.0 million or 2.4 percent reduction in total payout to 5.15 percent. from the FY 2019 forecast mainly from the Ithaca • The combination of Unrestricted and Restricted Campus and Cornell Tech’s anticipated increases in Gifts for general operations are expected to decrease enrollment. 1.0 percent. Restricted gifts in current and prior years • General Expense and Purchased Services are include one-time gifts and sponsored gifts for which projected to increase 3.6 percent or by $30.0 million similar future giving is not certain. The plan amount from the FY 2019 forecast. This increase reflects 3 is considered to be conservative. inflationary cost pressures plus support for faculty • Sponsored Programs (Direct) costs of grants and startup and growth in WCM clinical activities. contracts (excluding Qatar) are expected to increase • Utilities, Rent and Taxes are projected to decrease 6.7 percent and recoveries of Facilities and 0.1 percent due to a slight decline in natural gas Administrative Costs are projected to increase 4.0 commodity prices at the Ithaca Campus. percent. Sponsored direct and facilities and • Debt Service for FY 2020 is expected to decrease by administrative cost recovery are planned to total 10.5 percent due to unit debt being paid off and a $710.9 million. decrease in the internal borrowing rate. • State and Federal Appropriations are planned at $150.3 million. This figure is based on projections Use of Fund Balances and provided by the State University of New York Non-Operating Activity (SUNY) and the New York State Executive Budget. FY 2020’s non-operating activity and projected use of fund (See Appendix G for additional details on state balances, carried over from prior years, are planned as follows: appropriations). • • Revenues from the Physician Organization are $71.5 million transferred to plant funds to support capital expenditures, projected to increase $60.4 million over the FY 2019 • $7.3 million transferred to funds functioning as forecast due to a steady growth in current clinical endowment and transfers from non-operating activities driven by negotiated fee increases for Weill activity, and Cornell Medicine’s (WCM) physicians and increased • $12.9 million use of prior year fund balances to presence at New York Presbyterian Hospital (NYPH) support strategic investments. Queens and Brooklyn Methodist. • Educational Activities and Other Sources are projected to increase $4.4 million or 1.3 percent over the FY 2019 forecast due to an anticipated increase in entrepreneurial activities on the three campuses.
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