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Athletics Facilities Financing Revenue Increases 26% in FY14

With four of the five revenue sources that support the financing plan for Intercollegiate Athletics facilities showing double-digit growth for the 2014 fiscal year, total proceeds for the 12 months from July 2013 through June 2014 exceeded $29.4 million – a 26.4% increase from FY13.

While income from pledge seat sales declined to $9.9 million, the fact that overall revenues increased significantly shows that the revised, multifaceted approach for financing the facilities, which was updated from the original model in 2012, has helped stabilize the financial model to meet debt service payments for California Memorial Stadium and the Simpson Center for Student-Athlete High Performance.

For the 2014 fiscal year, premium seat revenue (non-pledge) grew to $885,166 (up 27% compared to FY13), philanthropy and other commercial revenues were over $7.7 million (up 78%), leasing and rental revenues were $540,477 (up 184%), and investment earnings were $10.3 million (up 52%).

As a result, total cash received through June 30, 2014, was $77 million and the balance of the Fund Functioning as an Endowment (FFE), considered a key metric to the financing model, was $63.4 million, or $7.9 million ahead of the forecast base-case scenario. Should the FFE remain on track to meet forecast base-case figures through 2053, it would have a balance of $394.1 million against an outstanding principal balance of $75 million that would be due in 2112.

Controller's Office Spotlight: Berkeley Financial System (BFS) 9.2 Contracts and Grants implementation

Tracy Okamura, Program Manger - Contracts and Grants, leads a planning session with analysts

As we continue to identify ways to build our financial strength, we are pleased to bring to Berkeley a robust system for Contracts and Grants financial management.

As many of you may know, our processes for managing Berkeley’s Contracts and Grants financials no longer met our needs. With over $700 million in transactions processed annually by more than 2000 employees, it was imperative that we implemented a platform that integrated well with our current systems and allowed for growth. Keeping Berkeley’s operating principles of inclusion and service orientation at the forefront, our Controllers Office, led by Delphine Regalia, stepped up to the challenge of finding and implementing a suitable replacement system. The Berkeley Financial System is the financial backbone of the University. The upgrade had to be quick, seamless, and well communicated. 

True or False?

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Click on any item to view its answer.

The lack of state funding is eroding our public character.

FALSE: The changes in the composition of our funding sources have not had any impact on the public character of Berkeley. We have experienced a 50% decline in nominal dollars in state appropriations over the past seven years and we have never been more of a public institution as measured by the composition of our student population or faculty. We are fully committed to our public purpose, mission and values and there is little reason to think this will change.

Most of our funding goes to pay for administration.

FALSE: More than 70% of our revenues are spent on teaching, research and academic departments. An additional 13% goes to Student Affairs, with about 15% allocated to fund our operations. And this has been on a declining trajectory. The salaries of the Senior Management Group have also declined, accounting for less than 1% of our total budget.

The number of applications to Berkeley has increased.

TRUE: Another record number of students have applied for enrollment in UC Berkeley’s 2013-14 freshman class. In all, more than 67,000 individuals submitted applications, up nearly 10 percent from the previous application period.

Berkeley's revenues are growing.

TRUE: Despite the huge disinvestment in higher education by the state, Berkeley's revenues have increased over time.

Tuition increases are making it impossible for lower-income families to pay for college.

FALSE: About 40% of our undergraduate students effectively pay no tuition because their families earn under $80,000 a year. The total cost of attendance for our lowest income students has been flat in real terms over the past several years. In addition, as of this year, we are the only public university in the U.S. to offer financial aid to families with incomes between $80,000 and $140,000, via our Middle Class Access Program (MCAP). In effect, this insulates students from families in this income bracket from tuition increases if other factors stay the same.

Berkeley students receive more Pell Grants than all the Ivy League schools combined.

TRUE: Berkeley has 38% of undergrads receiving awards compared to 17% for the combined Ivy League. See our latest report on Pell Grant statistics.

Posted by John Wilton on July 11, 2014

Over the summer, I decided to put pen to paper and document why our current financial path is not sustainable. I also wanted to offer solutions to secure the future of this great university.

Publications

In his paper,"Time is Not on Our Side," Vice Chancellor John Wilton examines the current policies shaping Berkeley’s financial outlook and identifies the serious challenges they'll create if we don't act. In part two, Wilton offers real solutions to put Berkeley and the UC system on a sustainable path for the future.
Read the latest from Vice Chancellor Wilton:
Time Is Not On Our Side Part 1
Time Is Not On Our Side Part 2

Intercollegiate Athletics Facilities Financing
Vice Chancellor Wilton provides a summary of the financing approach for the new intercollegiate athletics facilities, California Memorial Stadium and the Simpson Center for Student-Athlete High Performance.
Read more about the new facilities financing model here.