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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black">Dear UCR Colleagues,</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black">We are writing to give you an update on the final outcome of the fiscal year 2023-24 UC Riverside operating budget. As usual, we have a lot of information to share, which makes for a
long email! </span><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#212121;mso-ligatures:standardcontextual">For those of you who are interested in learning more about the overall campus budget process and operations</span><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black">,
Stephanie Flores, Executive Director of Financial Planning & Analysis, and Gerry Bomotti, CFO, will hold a Zoom town hall presentation
</span><span style="font-size:11.0pt;font-family:"Arial",sans-serif">on<span style="color:black"> Wednesday, November 1. Please register
</span><span style="mso-ligatures:standardcontextual"><a href="https://ucr.zoom.us/webinar/register/WN_0iWb89vTRTmpk3OPFhiH6g#/registration"><span style="color:black;mso-ligatures:none">here</span></a></span><span style="color:black">.</span></span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<b><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black">REVENUES</span></b><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">The Governor of California continued to support the
</span><span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual"><a href="https://dof.ca.gov/wp-content/uploads/sites/352/Programs/Education/UC-Compact-May-2022.pdf"><span style="color:black">“compact”</span></a><span style="color:black">
with the University of California, which is primarily based on enrollment growth, even though the University did not meet its targets. The state provided the University with a 5% increase to our state funding, which translates into an approximate 2.3% increase
in our core budget at UCR. We also received a total of $6.3M as our share of the state funded enrollment growth dollars, based on a two-year allocation from the state of $67.8M through the FY23 operating budget (intended for both FY23 and FY24 enrollment growth).
Tuition revenue, which is the second largest source after state funds in our core budget, did not see growth, because we had to adjust for an overestimate of tuition and non-resident tuition growth from the previous fiscal year (resulting from flat enrollments
from FY23 to FY24). We did receive a third installment of UCOP adjustments made for UCR (and UCSC and UCSB) to ensure all campuses are within 95% of the average of state funding per student.
</span></span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">Effective for FY24, the UC system has revised the enrollment-based allocation formula for distributing state funds to each UC campus (known in the past
as “rebenching”). One of the adjustments to this formula is now to weight the undergraduate FTE for students from disadvantaged backgrounds (i.e., students who attended a
</span><span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual"><a href="https://www.ucop.edu/operating-budget/_files/legreports/20-21/admission_enrollment_of_students_from_lcff_high_school.pdf"><span style="color:black">LCFF+</span></a><span style="color:black">
high school) at 1.13, up from 1.0. The UC goal is to increase this weight to 1.5 by FY27. UCOP expects to use these formula changes to phase out the “95%” adjustments (mentioned above) that were phased in over the past three years.</span></span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">The chart below lists these and other revenue increments that comprise our FY24 core budget growth:</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">State cost adjustments</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">$13.7M</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">State funded enrollment growth (see above)</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">$6.3M</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">Adjustment to 95% UC-wide student funding</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">$9.3M</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">Other miscellaneous increases*</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">$1.4M</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">Increased investment earnings</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">$3.8M</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">Central reallocations**</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">$4.1M</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<b><span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">Total</span></b><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<b><span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">$38.6M</span></b><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">*Cohort/nonresident tuition increment: $45K; remainder from lottery funds $360K; UCOP distribution of saved funds from retirement system support: $243K;
updated FY23 allocation of state cost adjustment from UCOP: $777K</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">**Savings from performance of Consolidated Benefit Rate pool of funds for UCR.</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">This total represents a 5.2% overall increase in our core budget compared with FY23.</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">UCR also received permanent allocations from some specific additional restricted state investments:</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">Student Basic Needs enhancement:</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<td width="78" valign="top" style="width:58.5pt;padding:0in 5.4pt 0in 5.4pt">
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">$182,000</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">Student Rapid Rehousing enhancement:</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<td width="78" valign="top" style="width:58.5pt;padding:0in 5.4pt 0in 5.4pt">
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">$18,000</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">Student Mental Health Program enhancement:</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<td width="78" valign="top" style="width:58.5pt;padding:0in 5.4pt 0in 5.4pt">
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual">$82,000</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">The state also allocated an additional $1.5M to UCOP to support students with disabilities. Although UCOP has not yet finalized allocations to the campuses,
UCR will receive some portion of these new funds.</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">There was some good news for our capital budget. You may recall that last year UCR received $51.5M toward a new undergraduate teaching and learning facility
(UTLF) with legislative intent to provide another $51.5M in the following next two years. In the most recent legislative session, the state withdrew these cash funds, and instead provided all the debt financing needed to fully fund this $154.5M facility for
UCR. This allows us to proceed with the planning and construction of the UTLF! We hope to begin construction next spring and to open the building in fall 2026. The UTLF will help us address our classroom and class-lab shortages. In addition, the new School
of Business Building (scheduled to open in fall 2024) will provide 570 new classroom seats, and we will make some use of the classrooms in the new SOM Education II building to support campus needs, starting in winter 2024.
</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">More good news for capital expansion: UCR, in partnership with the Riverside Community College District, was awarded $126M from an intersegmental state
student housing grant application to build a new student housing project, North District Phase II. The Board of Regents approved this capital project at their September 2023 meeting, site work will begin this fall, and the building is scheduled to open for
occupancy for fall quarter 2025. </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">Unfortunately, there was no state investment in deferred maintenance this past year, but the campus is moving ahead on the initiative in our strategic
plan to upgrade at least two teaching labs per year to improve the instructional infrastructure for our students.
</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<b><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">INVESTMENTS</span></b><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">As is the case in most years, our major new investments for FY24 went toward salaries and benefits. We also invested $7M in new permanent funding to support
the new TA salary scales and graduate student fellowships. Together, this $33.5M accounts for 86% of all new core revenue and a 5.9% increase over those costs in FY23. We again faced annual fixed cost increases (e.g., utilities) of $1.8M, and we allocated
$772K in permanent funds to the Student Disabilities Resource Center. The remaining new monies were used to make an investment in central Human Resources ($2.25M), per the recommendation of the Campus Finance Committee.</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<b><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">FINAL THOUGHTS</span></b><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">We have high hopes that a
</span><span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual"><a href="https://www.universityofcalifornia.edu/press-room/university-california-board-regents-endorse-proposed-bond-measure-fund-investments"><span style="color:black">General
Obligation bond</span></a><span style="color:black"> will be put on the November 2024 ballot. This bond would provide the university with sorely needed funds for capital investments. Our
</span><a href="https://provost.ucr.edu/document/cfc-ay23-24-priority-list">capital priorities</a><span style="color:black"> at UCR, determined in consultation with the Campus Finance Committee, are deferred maintenance needs,
</span>seismic upgrades, student housing, teaching/learning space, and research space.
<span style="color:#212121">Our first and second priorities for new buildings are a computer science and engineering building and a natural sciences instruction and research building</span><span style="color:black">.</span></span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual">The members of the Campus Finance Committee are expected to review their recommendations with their constituencies via regular communications. You can
find your committee representative </span><span style="font-size:11.0pt;font-family:"Arial",sans-serif;mso-ligatures:standardcontextual"><a href="https://provost.ucr.edu/campus-finance-committee">here</a><span style="color:black">, and you can see the minutes
of the monthly CFC meetings </span><a href="https://provost.ucr.edu/campus-finance-committee">here</a><span style="color:black">. We hope to see you at the
</span><a href="https://events.ucr.edu/event/campus_town_hall_9669">Town Hall</a><span style="color:black"> on November 1.</span></span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black;mso-ligatures:standardcontextual"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333;background:white">Sincerely,</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333;background:white"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333;background:white">Elizabeth Watkins</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333;background:white">Provost and Executive Vice Chancellor</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333;background:white"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333;background:white">Gerry Bomotti</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#333333;background:white">Vice Chancellor, Planning, Budget and Administration</span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;line-height:normal"><span style="font-size:4.0pt;font-family:"Arial",sans-serif;color:#212121"> </span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:black"><img border="0" width="243" height="74" style="width:2.5347in;height:.7708in" id="Picture_x0020_1" src="cid:image001.png@01DA0B10.3BB85790" alt="A blue and black sign
Description automatically generated"></span><span style="font-size:11.0pt;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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