Division of Liberal Arts and Social Sciences: (358 undergraduate day students - 98 below goal of the strategic plan by 2014)

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  Communication major: 38 day students are communication majors / 21 semester hours (1.8 full-time day faculty teach them): ratio = 22/1 (22 below goal)
  
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  English major: 25 day students are English majors / 48 semester hours (4 full-time day faculty teach them): ratio = 6.3/1 (5 below goal)
  
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  History major: 29 day students are history majors / 24 semester hours (2 full-time day faculty teach them): ratio = 14.5/1 (1 below goal)
  
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  Liberal studies major: 1 day student is a liberal studies major: no ratio computed
  

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  Media studies major: 5 day students are media studies majors: no ratio computed
  

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  Spanish major: 1 day student is a Spanish major / 36 semester hours (3 full-time day faculty teach them): no ratio computed (9 below goal)
  

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  Criminal Justice major: 80 day students are criminal justice majors / 27 semester hours (2.3 full-time day faculty teach them): ratio = 35/1 (5 above goal)
  
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  Political Science & Law and Society majors: 34 day students major in either political science or law and society / 21 semester hours (1.8 full-time day faculty teach them): ratio = 19/1 (16 below goal)
  
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  Psychology major: 81 day students are psychology majors / 39 semester hours (3.25 full-time day faculty teach them): ratio = 25/1 (21 above goal)
  

Theology and Philosophy: (21)

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  Theology & Philosophy majors: 21 day students are theology, philosophy, or marriage/family majors / 75 semester hours (6.3 full-time day faculty teach them): no ratio computed (4 below goal)
  

If these ratios continue for a third year in a row, the university should authorize the hiring of at least two additional natural science professors, one criminal justice professor, one television/film professor, and one sports management professor. We will also have to begin looking at various majors in the division of business and within the liberal arts department of the division of liberal arts and social sciences for creative redesign proposals.

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  DeSales University will seek to reduce its present fixed costs by approximately $3 million during the first three years of this Strategic Plan: 2010-2015 (SP).
  
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  DeSales University will increase undergraduate day tuition between 2-4% per year during the time of this plan (met tuition goal for fiscal 2012 with a tuition increase of 3.7%).
  
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  DeSales University will increase salaries between 1-3% per year during the time of this plan (met salary and wages goal for fiscal 2012 with an overall increase of 2%).
  
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  DeSales University will seek to return to a retirement contribution of 10% during the time of this plan (moved from 8% to 9% in fiscal 2012).
  

The board of trustees approved the operating budget for fiscal 2013 at its March 15, 2012, meeting. This budget provides operationally generated funds of $805,079 and a contingency and reserves fund of $1,025,000. Other significant highlights in the budget are as follows:

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  Undergraduate tuition increase of 3.57% from $28,000 to $29,000 (achieved SP goal);
  
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  Room and Board increase of 4.28% from $10,520 to $10,970;
  
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  ACCESS and graduate program rate increases ranging from 3.37% to 3.78%;
  
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  Freshman class of 425 (revenues) and 450 (financial aid) for a weighted discount rate of 47.65%, compared to 46.5% for fiscal 2012;
  
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  A 3% salary pool for increases (achieved SP goal - annual inflation in the Lehigh Valley was 3.6% for calendar 2011);
  
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  No increase in our employees’ share of health care costs;
  
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  Increase in the university’s TIAA-CREF matching contribution from 8% to 9%;
  
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  Increased student life fee, and began to phase-in funding of the international learning plan.
  

Although full-time traditional enrollments were increased by 65 students for each semester for the fiscal 2013 budget, a strong freshman class should enable us to exceed the desired delta of 100 registrations between actual and budget registrations in the undergraduate program. This delta was144 and 152 students in fall and spring semesters, respectively, during fiscal 2012.

We once again needed to budget a substantial increase in our institutional financial aid budget, with $21.36 million budgeted for fiscal 2013, compared to $19.27 million and $17.05 million budgeted in fiscal 2012 and 2011, respectively. The actual freshman discount rate once again increased during fiscal 2012 from 48.5% to 48.9%, representing the 7^th consecutive increase after a trend of decreases over the previous seven years, which had seen a discount rate of 51.3% in 1999 drop to 37% in 2005 (the discount rate had been planned to decrease to 37% by fiscal 2010 in the five-year strategic plan ended June 30, 2010). Despite the increase in discount rate, we were able to mitigate its impact by including 15 more students in the freshman class’ financial aid budget (425) than in the revenue budget (410):

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  Budgeted class of 410 yields net tuition revenues of $6,125,000 based on the tuition rate of $28,000 and budgeted discount rate of 45%;
  
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  Actual class of 445 yielded net tuition revenues of $6,367,060 based on the tuition rate of $28,000 and actual discount rate of 48.9%.
  

The increase in the CPI of 3.6% for the calendar year ended December 2011 means that, despite the larger freshman class, we have once again lost some ground in our efforts to achieve certain financial goals in the new SP. As a result of these larger discount rates over the past few years, the overall discount rate for full-time undergraduate students was approximately 44.8% in fiscal 2012, compared to 43.5% in fiscal 2011.

Unfortunately, once again we were not able to yield any discretionary spending savings of significance for the fiscal 2013 budget, not entirely unexpected given the level of reductions included in the recent past.

Capital Projects-related Goals:

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  DeSales University will seek to build the Gambet Center for Business and Healthcare during the final years of this strategic plan;
  
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  DeSales University will build the first units of new housing when necessary during this plan;
  
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  DeSales University will seek to build a new outdoor track with seating and a storage facility; a lighted turf field with seating and a storage facility; an outdoor facility for concessions, restrooms, and officials’ changing room; several practices fields; and a new parking lot for athletic competition during the years of this strategic plan;
  
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  DeSales University will seek to build the Bishop Joseph McShea Student Union Building during the early years of the next strategic plan;
  

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  DeSales University will reduce its existing debt by $10 million during the five years of this strategic plan.
  

The university successfully made all required principal payments on our long-term debt during fiscal 2012 ($1.625 million), keeping us on pace to reduce existing debt by $10 million during the plan.

Refinancing of Debt/Debt Term Modification

In addition to these payments, the university successfully modified the term of the 2004 university revenue note during March 2012. This note was originally issued to fund the construction of Welsh Hall.

Given the current favorable interest rate environment, Daryl Peck of Concord Public Financial Advisors, Inc., our financial advisor, contacted KNBT to discuss potential rates for the scheduled variable term of the note, and KNBT offered a very competitive new fixed rate of 2.95%, effective March 30, 2012, through the remaining term of the note. This new rate would yield a net present value savings estimated at $149,000 to $638,000 over the remaining term, with the ultimate actual amount dependent on the future movement of interest rates.

DeSales University will benchmark its financial strength against the full-time day enrollments of the undergraduate program. The intent is to grow this number from 1,450 to 1,700 during the five years of this strategic plan

Our primary assessment tool related to this goal is our profit by department analysis which monitors the degree to which the net financial operations of our traditional undergraduate program can operate at “break-even”. The model assumes that maintenance and facility costs are the responsibility of the traditional undergraduate program, since the buildings were built and our personnel staffed, to service that population of students. Successful achievement of this overall goal enables the university to drive larger levels of operationally generated funds, as the ACCESS and graduate programs are both very positive net OGF contributors due to their lower levels of direct costs.

Eight complete years of comparative data are now available and an analysis of several trends noted thus far was compiled. The most significant is the consistent increase in the growth of the undergraduate program. This growth has been influential in allocating indirect costs across the greater numbers of students with the end result indicating that the undergraduate academic program covered 97.74% of its costs for fiscal 2011, compared to 94.8% for fiscal 2010. This percentage increase was achieved due to the cost reduction/restructuring efforts during the summer of 2010 as well as an increase in enrollments from 1,492 FTE in fall 2009 to 1,555 FTE in fall 2010. Fiscal 2009 is the only year thus far that the traditional program has successfully fully covered its costs of operation at approximately 100%.

A comparison of the gross profit margins of the ACCESS and graduate programs for fiscal years 2004 through 2011 indicates that the ACCESS program’s contribution to the university’s financial results once again increased to 33.55% in fiscal 2011 from 32.4% in fiscal 2010 after having decreased from 43.8% in fiscal 2004 to a low water mark of 28.2% in fiscal 2008. The economy likely continues to drive ACCESS registrations, which have historically tracked inversely proportional to the general economy, and fiscal 2011 continued this long-term trend. Conversely, the graduate program’s contribution to the annual surplus has increased from 12.95% in fiscal 2004 to 28.84% in fiscal 2011 (24.36% in fiscal 2010).

The profit by department analysis is driven by the annual audited statement of activities. Observations have already been utilized in the annual budget process, as the comparative analysis was a significant factor in the decision to begin to assess a $400/semester “differential tuition” fee for the tv/film and nursing programs as part of the Fiscal 2008 budget. As indicated above, it has now become one of our primary benchmarking analyses.

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  DeSales University will define financial viability for faculty lines within an academic major as follows:
  

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  By 2012-2013, financial viability for a faculty line will be 15 students per faculty member dedicated to the full-time undergraduate day student population;
  
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  By 2014-2015, financial viability for a faculty line will be 20 students per faculty member dedicated to the full-time undergraduate day student population;
  
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  Six majors within the Division of Liberal Arts and Social Sciences (Education, English, History, Philosophy, Spanish, and Theology) are exempt from the 20/1 requirement for faculty lines because of their commitments to Salesian character development and international skills development needed for the “DeSales Experience”;
  
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  Any proposal for a new major must provide evidence of student demand that is equal to or greater than the 20/1 ratio.
  

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  DeSales University will seek to grow operationally generated funds to 6% of the annual budget during the time of this strategic plan;
  
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  DeSales University will distribute 50% of the operationally generated funds (i.e., 3% of its annual budget) to its various endowment funds each year of the strategic plan;
  
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  DeSales University will distribute 50% of the operationally generated funds (i.e., 3% of the annual budget) to new building projects and summer renovation projects.