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O.      2007-08 Budget Revisions (FCR 8)
Mr. Branscum said that FCR 8 is the 2007-08 Budget Revisions. The budget revisions will decrease the university's total budget by a net $5.7 million, including revisions to the General Fund, Restricted Fund, and University of Kentucky Athletic Association (UKAA).
It is important to note that in response to the budget shortfall, the Governor issued an executive order in December 2007 reducing the state appropriations by 3 percent or $10 million. Additionally, student enrollment in 2007-08 was lower than expected, resulting in a projected tuition revenue shortfall of $5.9 million. The enrollment decline is primarily due to fewer transfer students and a smaller than expected number of first-time freshmen. The loss in state appropriations and tuition revenue will be offset with accumulated fund balances, excess budgeted funds for the Family Education Program, and a one-time transfer of $3 million from UK HealthCare.
With regard to the restricted fund, the federal government appropriated an additional $3.56 million for the Multi-State and Hatch research programs at the Agricultural Experiment station which must be expended by the end of the federal fiscal year, September 30, 2008.
With regard to UKAA, revenue is expected to increase by $3.67 million from the Southeastern Conference participation allowance, the Music City Bowl, and other sources. These funds will be used to support the football and men's basketball programs, facilities, and operations costs, and other administrative responsibilities. On behalf of the Finance Committee, Mr. Branscum recommended approval of FCR 8. Ms. Haney seconded the motion, and it carried without dissent. (See FCR 8 at the end of the Minutes.)
P.      Proposed 2008-09 Tuition and Mandatory Fees Schedule (FCR 9) and Proposed 2008-09 Room and Board Rates (FCR 10)
Mr. Branscum said that he would address FCRs 9 and 10 together. He noted that FCR 9 had been revised and distributed to the Board. Angie Martin, vice president for planning, budget, and policy, along with the assistance of Pat Terrell, vice president for student affairs, gave a PowerPoint presentation to the committee.
He said that FCRs 9 and 10 recommend that the Board approve the proposed 2008-09 tuition and mandatory fees schedule and the 2008-09 housing and dining rates. The tuition and mandatory fee rates reflect a 9 percent increase for resident students and a 6.6 percent increase for non-resident students. Undergraduate resident tuition and mandatory fees will increase by $320 and will now be $3,868 per semester for incoming freshmen.
In October and November 2007, the Council on Postsecondary Education discussed a possible 9 percent tuition rate increase for UK, but that was assuming an $18 million increase in state funds. Given the market pressures and affordability issues, the administration recommends staying with the original business plan model of a 9 percent increase even though state funds will