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Appendix 1: Proposed Services and Expenses for the Fiscal Year 2011/2012 FTE fee

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1. Fee Scope:

The services described for the existing RUAC IP Address Fee and the existing Data Network Surcharge should be funded by the FTE Fee, and for this first year only, the amount of expenses to be recovered by the fee shall be set to a net baseline amount based on actual amounts recovered by the old fees, rather than full cost recovery for these services.

2. Explanation of the net baseline amount to be recovered:

The normal process would be to develop a budget for the next fiscal year, determine the expenses, determine how much needs to be recovered through recharge, and then calculate the rate using the prior year’s FTE totals. But for this first year, we are limiting the amount to be recovered to what the campus has previously paid so that the cost to the campus as a whole is staying the same, it is only the method by which that cost is allocated that changes.

Over the last several years that the campus has been discussing an FTE fee, budget cuts have greatly impacted the campus use of the services that generate these historical fees. Specifically, the number of telephone lines has dropped by over 21% from FY 07/08 to FY 10/11. At the same time, use of computers has increased and the number of IP addresses has grown by over 11%.

  FY 07/08 FY 08/09 FY 09/10 FY 10/11
IP Addresses: 23,953 25,282 25,900 26,619
IP Address Recharges: $263,483 $278,102 $284,900 $292,809
         
Telephone Lines: 5,329 5,252 4,473 4,214
Data Network Surcharges: $415,694 $405,722 $348,870 $326,115

To reduce the impact of the loss of telephone lines, the baseline we plan to use for the first year is the average of the combined actual fees for FY 07/08 – FY 09/10 for a total expense to be recovered of $665,591.

  FY 10/11 FY 07/08 - FY 09/10
Combined Average
IP Address Recharges: $292,809 $275,495
Data Network Surcharges: $326,115 $390,096
  $618,924 $665,591

However, the $665,591 includes a combined average amount of $86,786 that comes from Housing & Residential Services for the students who live in university-owned residence halls. Our proposal is to not charge the student residents an FTE fee, but to continue to charge H&RS $11/IP address per year for them. So the net baseline amount that is to be recovered via the FTE fee is: $665,591 - $86,786 = $578,804.

3. Rate Calculation:

During the same time period, the #FTE has decreased by over 4%.

  FY 07/08 FY 08/09 FY 09/10 (TTM)
FY 10/11
#FTE: 6108.27 6172.05 5942.65 5823.12

The rate calculation is [expenses] / [# FTE] = Annual Rate. And since the FTE fee will actually be implemented on a monthly basis, then the Annual Rate / 12 = Monthly Rate.

As in this year, and for future rate calculations, the current fiscal year has not yet been completed, the #FTE that should be used for the calculation will come from the most recently completed Fiscal Year, in this case FY 09/10.

Annual Rate = $578,804 / 5942.65 = $97.40 per FTE

Monthly Rate = $97.40 / 12 = $8.12 per FTE

The proposed rate for Fiscal Year 2011/2012 is $97.40 per FTE per year, which will be implemented on a monthly basis at a rate of $8.12 per FTE per month.

Converted from a .doc to a group page on 6/2/2011.

Updated on 11/7/2011 with correct FY 10/11 RUAC numbers.