State Board Approves 2015-2017 Budget Request

September 11, 2014

The State Board of Higher Education met in a special meeting on Sept. 3 to review the NDUS 2015-2017 capital projects budget request, after approving the operating budget request at its June 26 meeting.  The full 2015-2017 budget request includes both the operating budget and one-time funding for capital projects. This request will now be sent on to the Governor for consideration when crafting his budget recommendation.

OPERATING BUDGET

When crafting the operating budget, the Board and Interim Chancellor Skogen focused on six main strategies:

  • Maintaining student affordability
  • Improving student retention and completion
  • Enhancing student safety and security
  • Elevating the research enterprise
  • Supporting collaborative efforts
  • Supporting the new student credit hour higher education funding model

The sections below breakdown the four areas that make up the operating budget request.

Student Affordability

The Board took some additional steps to help ensure student affordability for this biennium. This operating budget request assumes a tuition freeze at all campuses in 2015-2017. It also states that the ACA/CTE State Scholarship ($1,500 per year merit award) be continued and increased to $2,500 per year. The Board also requests that the State Grant Funding award (a needs-based scholarship) be increased by 4 percent per year bringing it from $1,650 to $1,784.

Major Program and Initiative Requests

The major program and initiative base funding requests focus on a few key areas – student safety, increased IT security, implementation of software designed to improve retention and graduation rates, and an increase in research funding.

To help keep NDUS students safe, the Board is requesting $2.5 million in base funding to complete efforts started in 2013-2015 to offer 24-7 campus security coverage.

To expand IT security, as well as eliminate assessments (including public libraries) and fully fund system-wide IT systems through the centralized technology arm of the North Dakota University System (Core Technology Services), the Board is requesting $4.5 million in base funding.

Predictive Analytics Reporting (PAR) and Starfish/Hobsons are technology programs designed to help track student progress, intervene when necessary and improve communication with students. The request includes $1.9 million in base funding for system-wide implementation of these programs.

In addition, the base funding request for major programs includes an increase in ND EPSCoR  (Experimental Program to Stimulate Competitive Research) funding to increase competitiveness and external funding.  The request also includes base funding for statutorily required emergency and continuity of operations planning, an expanded internal audit function to add three more positions, and the College-Career Readiness initiative in partnership with K-12.

There are some additional one-time funding requests also included under major programs and initiatives. Other than start-up costs for campus security, centralized technology services, PAR and Starfish/Hobsons, the request includes one-time funding of $750,000 for consulting services to continue subsequent stages of the deferred maintenance inventory and utilization study, $500,000 to expand the use of open education resources to reduce student costs, and continued funding to support the UND School of Medicine and Health Sciences Workforce Initiative.

Student Credit Hour Funding Model

The new funding model is based on weighted student credit hours at NDUS institutions. The number of weighted student credit hours increased by 437,000 between 2009-2011 and 2011-2013. This request brings funding to the highest level in each tier. Based on these factors, the full funding model request is a $49 million increase.

Cost to Continue

The cost to continue includes the continuation of FY15 salary increases, utility cost increases from new facilities and estimated increased rates/usage, and operating inflation estimated a 2.4-2.5 percent. It also assumes a tuition freeze at all campuses in 2015-17.  The total cost to continue is $26.7 million.

 

CAPITAL PROJECTS BUDGET REQUEST

The budget request for capital projects is made up of one-time funding for facility repairs, remodels and renovations, as well as new buildings and infrastructure. In order to protect the state’s assets and meet the educational needs of 21st century students, the North Dakota University System’s capital budget strategies focus on the following:

  • Protection of the health and safety of our students, faculty and staff
  • Managing our deferred maintenance backlog
  • Addressing capital needs that ensure continuation of accreditation
  • Flood recovery and protection
  • Strategic initiatives

The capital projects requests have been prioritized based on these five criteria, with consideration being given to those projects which alleviate the most deferred maintenance.

Last biennium, the legislature granted the request for funding for the new UND School of Medicine and Health Sciences with the understanding that the funding needed for completion would be appropriated during this biennium. This request includes the $62 million needed to complete that project.

To address flooding concerns in Valley City, VCSU is requesting $25,850,000 to construct a new fine arts building and demolish a building housing programs that are within the flood zone and demolishing another antiquated building on-campus; thereby, reducing the deferred maintenance burden by nearly $7.8 million.

The three projects at the top of the list for health and safety concerns are the construction of a new VCSU heating plant replacement, construction of NDSU Dunbar Hall II (and demolition of Dunbar Hall), and the renovation of the DCB Nelson Science Center. These projects total $61,287,789 while reducing the deferred maintenance burden by $15,971,504.

The request also highlights three major deferred maintenance projects for funding. By replacing the major campus infrastructure at BSC, the campus water and sewer infrastructure at NDSCS and the switchgear, electrical service and windows at LRSC, deferred maintenance will be reduced by $16,146,423 at a cost of $16,521,423.

The capital request also includes projects based on program and accreditation needs such as funding for Phase 1 of the NDSCS Fargo campus expansion, construction of a WSC Allied Health facility and renovation of two facilities at NDSU—Sudro Hall and Engineering. Additionally, the Board is requesting funding of $1.3 million for 15-17 special assessment payments, an increase in extraordinary repair funding from 15 to 50 percent of the OMB funding formula (industry recommended level=100%) through base funding, and a system deferred maintenance pool of $20 million that could be allocated to campuses based on specific criteria.

The total one-time funding request for specific campus capital projects is $202,559,212, excluding the $62 million

legislative appropriation for the UND School of Medicine and Health Sciences and $31.63 million for NDSU agriculture-related entities. This total eliminates  $44,881,587 in deferred maintenance.