1. home and garden

Municipal Secondary Market Disclosure
Information Cover Sheet
This cover sheet should be sent with all submissions made to the Municipal Securities Rulemaking Board, Nationally
Recognized Municipal Securities Information Repositories, and any applicable State Information Depository, whether the
filing is voluntary or made pursuant to Securities and Exchange Commission rule 15c2-12 or any analogous state statute.
See www.sec.gov/info/municipal/nrmsir.htm for list of current NRMSIRs and SIDs
IF THIS FILING RELATES TO A SINGLE BOND ISSUE:
Provide name of bond issue exactly as it appears on the cover of the Official Statement (please include name of state where
issuer is located):
Provide nine-digit CUSIP* numbers if available, to which the information relates:
_____________________
_____________________
____________________
____________________
_____________________
_____________________
IF THIS FILING RELATES TO ALL SECURITIES ISSUED BY THE ISSUER OR ALL SECURITIES OF A SPECIFIC CREDIT OR
ISSUED UNDER A SINGLE INDENTURE:
Issuer’s Name (please include name of state where Issuer is located):
1) State Board of Regents of the State of Utah; Utah State University; $39,155,000; Student Fee and Housing System
Revenue Refunding Bonds, Series 2007
2) State Board of Regents of the State of Utah; Utah State University; $15,010,000; Student Fee and Housing System
Refunding Revenue Bonds, Series 1999A
Other Obligated Person’s Name (if any): ___________________________________________________________________
(Exactly as it appears on the Official Statement Cover)
Provide nine-digit CUSIP* number(s), if available, of Issuer:
1) 91754R—ME4; MF1; LW5; MG9; LX3; MH7; MJ3; MK0; MM6; LY1; LZ8; ML8; MN4; MA2; MP9
2) 917563—AV0; AW8; AX6; AY4; AZ1; BA5; BB3
*(Contact CUSIP ’s Municipal Disclosure Assistance Line at 212.438.6518 for assistance with obtaining the proper CUSIP numbers.)
TYPE OF FILING:
Electronic (number of pages attached)
71
Paper (number of pages attached)
If information is also available on the Internet, give URL:
Page 1
WHAT TYPE OF INFORMATION ARE YOU PROVIDING? (Check all that apply)
A. X
Annual Financial Information and Operating Data pursuant to Rule 15c2-12
(Financial information and operating data should not be filed with the MSRB.)
Fiscal Period Covered: March 1, 2009
B. X
Audited Financial Statements or CAFR pursuant to Rule 15c2-12
Fiscal Period Covered: June 30, 2008
C.
Notice of Failure to Provide Annual Financial Information as Required
D.
Other Secondary Market Information (Specify):
I hereby represent that I am authorized by the issuer or obligor or its agent to distribute this
information publicly:
Issuer Contact:
Name: Rickey G. Allen
Employer: Utah State University
Address: 2400 Old Main Hill
Telephone: 435.797.1064
Email Address: [email protected]
Title: Controller
City: Logan
State: UT
Zip Code: 84322
Fax: 435.797.1025
Issuer Web Site Address: www.usu.edu
Dissemination Agent Contact, if any:
Name ______________________________________________ Title ____________________________________________
Employer ___________________________________________________________________________________________
Address ____________________________________________ City _____________ State _____ Zip Code_____________
Telephone___________________________________________ Fax ____________________________________________
Email Address _______________________________________ Relationship to Issuer_______________________________
Obligor Contact, if any:
Title ____________________________________________
Name Same as Issuer Contact
Employer ___________________________________________________________________________________________
Address ____________________________________________ City _____________ State _____ Zip Code_____________
Telephone___________________________________________ Fax ____________________________________________
Email Address _______________________________________ Obligor Web site Address ___________________________
Investor Relations Contact, if any:
Name ______________________________________________ Title ____________________________________________
Telephone___________________________________________ Email Address ____________________________________
Page 2
Annual Financial Information and Operating Data
Fiscal Year 2008
State Board of Regents of the State of Utah
Utah State University
Student Fee and Housing System Revenue Refunding Bonds
Series 2007 - $39,155,000
Rated “AAA” (MBIA Insured; underlying “AA”) by S & P
Series 1999A - $15,010,000
Rated “AAA” (MBIA Insured; underlying “AA”) by S & P
March 1, 2009
Page 3
Annual Financial Information and Operating Data
Related to
State Board of Regents of the State of Utah
Utah State University
Student Fee and Housing System Revenue and Refunding Bonds
Series 2007 - $39,155,000
Series 1999A - $15,010,000
This report presents the annual financial information and operating data for the 2007 and 1999A
Bonds in compliance with the continuing disclosure undertaking as outlined in the OFFICIAL
STATEMENT dated May 2, 2007 and January 8, 1999, respectively.
The report includes updated information in the following areas; revenues pledged under the
bonds; revenues, expenses, and debt service coverage; management’s discussion of revenues;
fall housing occupancy report; enrollment information; tuition and fee schedule; and the overall
debt structure of the University.
Submitted with this report is Utah State University’s audited Annual Financial Report for the
fiscal year ended June 30, 2008.
The chief contact person for the State Board of Regents of the State of Utah and Utah State
University in regards to this bond issue is:
Mr. Rickey G. Allen, Controller
Old Main, Room 21, Utah State University
Logan, Utah 84322-2400
(435) 797-1064 - Fax (435) 797-1025
Additional requests for information may be directed to:
Mr. Dan R. Christensen, Manager of Accounting and Financial Reporting
Old Main, Room 26, Utah State University
Logan Utah 84322-2400
(435) 797-1055 - Fax (435) 797-1077
Page 4
SECURITY FOR THE 2007 and 1999A BONDS
General
The Bonds are payable from and secured solely by a pledge and assignment of the Revenues from a
specific portion of the University’s student housing system (such portion being referred to herein as the
“Student Housing System”) subject to payment therefrom of Operation and Maintenance Expenses, and
moneys on deposit in the funds and accounts established by the Resolution, subject to any required rebate
of all or a portion of the earnings on such amounts and the investments thereof to the United States of
America pursuant to the requirements of the Code. The University generates Revenues primarily from
rentals and other income from the Student Housing System, Student Building Fees, Land Grant Income,
and income from other pledged services.
The 2007 and 1999A Bonds are not an indebtedness of the State, the University or the State Regents
but are special, limited obligations of the State Regents, payable from and secured solely by the
Revenues, and such funds and accounts established by the Resolution as described in the OFFICIAL
STATEMENT. The issuance of the 2007 and 1999A Bonds did not directly, indirectly, or contingently
obligate the State Regents, the University or the State of Utah or any agency, instrumentality or political
subdivision thereof to levy any form of taxation therefore or to make any appropriation for their payment.
Neither the State Regents nor the University has any taxing power.
Municipal Bond Insurance. The scheduled payment of the principal of and interest on the 2007 and
1999A Bonds when due is guaranteed under municipal bond insurance policies issued concurrently with
the delivery of the 2007 and 1999A Bonds by MBIA.
The 2004 Bonds were refunded in advance of their maturity by the 2007 Bonds.
Revenues
The 2007 and 1999A Bonds are limited obligations of the University payable solely from the limited
sources of Revenues described below. The following Revenues are to be used first to pay the Operation
and Maintenance Expenses of the Student Housing System, and then are to be used to pay the principal
of, premium, if any, and interest on the Bonds:
Student Housing System Revenues. The University receives rentals, charges, fees, income and other
revenues from the ownership and operation of the Student Housing System consisting of (a) the Living
Learning Community comprised of 6 buildings containing traditional suite-style spaces; (b) the
traditional (room and board) hall facilities comprised of Mountain View Tower, Valley View Tower
and Richards Hall, including the dining facilities for the students residing in each such facility known
as The Junction; (c) the apartment style facilities comprised of Merrill Hall, Bullen Hall, Moen Hall,
Greaves Hall, Reeder Hall and Snow Hall; (d) the apartment housing comprised of the 39 buildings
known as Aggie Village, the six buildings known as West Stadium Villa and the 11 buildings known
as the Townhouses; (e) the trailer court known as the Mobile Home Park; (f) all parking services,
including the Big Blue Terrace, the Aggie Terrace and the other parking areas; (g) the Taggart Student
Center, including , but not limited to, the dining services operations therein known as Quick Stop, The
Hub, Aggie Marketplace, the Skyroom, and the Bookstore and all other University business operations
in the Taggart Student Center (collectively, the “Student Housing System”); (h) the Quadside Café
located on the first floor of the Merrill-Cazier Library; and (i) all other facilities financed as projects
under the Resolution together, in each instance, with all appurtenances and properties, real, personal
and mixed, of every nature used or useful in connection with any of the above-described buildings and
facilities while any of the Bonds authorized under the Resolution remain outstanding.
Page 5
Student Building Fee. The University imposes and collects a student-building fee (the “Student
Building Fee”) from each full-time and part-time graduate and undergraduate student attending the
University for the use and availability of certain facilities and buildings of the Student Housing
System. The Student Building Fee currently assessed against each full-time student is $30.00 per
semester (pro-rated for less than full-time). The amount of the Student Building Fee to be assessed
against students attending the University shall be fixed from time to time by the University, as required
under the provisions of the Resolution.
Land Grant Income. Land Grant Income includes all revenues and income derived by the
University from Land Grants described in Section 7 of Article X of the constitution of the State of
Utah and in the Act of July 16, 1894, Ch. 138, 28 Stat. 109, adopted by the Congress of the United
States. The School and Institutional Trust Lands Administration administers the 1862 Land Grant
fund on behalf of the University.
Other Revenues. The University has also pledged (a) net income derived from the operation of
concessions, and other facilities specified in the Resolution and (b) earnings on certain of the funds
and accounts created by the Resolution and held by the Trustee (subject to certain arbitrage rebate
requirements).
Items not Included as Revenues. Revenues shall not include (a) proceeds received on insurance
resulting from casualty damage to assets of the Student Housing System, (b) the proceeds of sale of
Additional Bonds or Contracts issued or executed for Student Housing System purposes, (c) moneys
received under any Security Instrument or any Reserve Instrument (as defined in the Resolution), (d)
appropriations by the Legislature of the State, or (e) any other revenue of the University not
specifically identified above.
The University owns an additional housing facility known as the “Student Living Center” that was
purchased subject to a note, which matures in 2011, for the purchase price. The Student Living Center
is not included in the Student Housing System and the revenues from the Student Living Center are not
included in the Revenues.
The pledge of the Revenues is subject to the use of the Revenues to pay the Operation and
Maintenance Expenses. “Operation and Maintenance Expenses” includes all actual operation and
maintenance expenses related to the Student Housing System incurred in any particular fiscal year or
period to which said term is applicable or charges made therefore during such fiscal year or period,
including amounts reasonably required to be set aside in reserves for items of Operation and Maintenance
Expenses, the payment of which is not then immediately required.
Revenues, Expenses and Debt Service Coverage
For the fiscal year ended June 30, 2008, the University received approximately 71.4% of its net
pledged revenue available for debt service from pledged auxiliary operations, approximately 18.6% of the
net pledged revenue available for debt service from student building fees and 8.8% of the net pledged
revenue available for debt service from land grant revenues. Interest income also contributed a small
portion to debt service.
In fiscal year 2008, 57.7% of the Student Housing System operation and maintenance expenses were
for salaries, wages and staff benefits; 23.3% were for administrative costs, custodial services, rentals,
telephone services, operating supplies, data processing services, etc.; 13.4% were for utilities; and 5.6%
were for minor repairs and maintenance.
The following table includes amounts for fiscal years 2004 through 2008 and is based on information
extracted from the University’s audited financial statements.
Page 6
Page 7
1.91X
Debt service coverage (Net Revenues)
779,863
188,185
105,752
1,073,800
$3,195,475
2,121,675
7,339,717
5,944,196
13,283,913
$24,808,079
9,402,491
15,405,588
2006
801,150
297,590
79,418
1,178,158
$3,053,275
1,875,117
8,464,701
6,564,904
15,029,605
$27,262,559
10,357,837
16,904,722
2007
844,769
398,710
51,968
1,295,447
$4,532,811
3,237,364
8,472,274
6,217,992
14,690,266
$28,960,151
11,032,521
17,927,630
2008
1.71X
1.75X
1.22X
1.35X
$0
$0
$168,090
$1,550,996 (4)
(2)
(2)
(3)
0
0
520,428
0
818,875
1,827,414
1,821,828
1,823,234
0
0
0
0
996,433
0
0
0
$1,815,308
$1,827,414
$2,510,346
$3,374,230
892,640
238,335
81,577
1,212,552
$3,111,658
1,899,106
7,355,350
5,543,431
12,898,781
$24,198,466
9,400,579
14,797,887
2005
Debt service is reported on an accrual basis for each fiscal year
Interest has been paid from capitalized interest from bond proceeds of the 2004 bonds.
$1,368,392 of the interest was paid from capitalized interest from the bond proceeds of the 2004 bonds.
$401,017 of the interest was paid from construction delay penalty proceeds from the project contractor.
$0
0
819,667
0
997,476
$1,817,143
Debt service (housing revenue bonds) (1)
2007 Bonds
2004 Bonds
1999A Bonds
1994A Taxable Bonds
1994B Bonds
Total debt Service
(1)
(2)
(3)
(4)
900,786
186,771
8,491
1,096,048
$3,469,999
2,373,951
Net revenue from Student Housing System operations
Other
O h pledged
l d d revenues:
Student Building Fee
Land Grant Income
Interest on reserves and other revenue
Total other pledged revenues
Total Net Revenues
6,775,897
5,665,677
12,441,574
$23,959,684
9,144,159
14,815,525
Operating expenses and other deductions:
Salaries, wages and staff benefits
Other current operating expenses
Total operating expenses and other deductions
Revenue from Student Housing operations
Cost of goods sold
Gross income
2004
Utah State University
Student Housing System and Other Revenue Sources
Summary of Revenues, Expenses and Debt Service Coverage
For Fiscal Years Ending June 30
Management’s Discussion of Revenues
Revenues for the Bonds are classified under two categories: (i) revenues from operation of the
Student Housing System; including Student Housing, Dining Service Operations, Taggart Student Center,
University Bookstore and the Parking Facilities; and (ii) other pledged revenues; including the Student
Building Fee, Land Grant Income, and Interest Income (as defined below) on reserves. The Student
Housing System and other pledged revenues are detailed in “STUDENT HOUSING SYSTEM AND
OTHER PLEDGED REVENUE SOURCES” below.
From 2004 to 2006, gross revenues from operation of the Student Housing System remained fairly
constant. In 2007 and 2008 gross revenues increased significantly with the addition of the new Living
Learning Community. Efforts are continually being made by managers of the various operations to
provide quality services while at the same time containing the costs of delivery.
Other pledged revenues have been relatively steady except for Land Grant Income which has ranged
from $186,771 to $398,710 during the past five years.
Student Housing System
Student Housing. Over the past few years, the University has faced a very competitive student
housing market. University students are not required to live on campus and there is currently a strong
market for off-campus housing. Most notably, the traditional style residence hall, single-student housing
units have presented a significant challenge to the University as the competition has drawn students to
newer apartment style units.
In response to this competition, the University has continued its marketing efforts for its housing
facilities. These marketing efforts emphasize the advantages of the University’s housing facilities, which
include on-campus location, easier access to University information and services, and reduced
transportation costs.
Additionally, the University has made efforts to make its housing facilities more attractive to
students. These efforts include the construction of the new Living Learning Community buildings funded
by the 2004 bonds and the on-going renovation of the existing housing facilities.
Finally, in response to the competition, the University has made efforts to keep rates competitive
through cost containment practices without sacrificing a desired level of service and quality. In fact,
while keeping its rates competitive, the University has been consistently ranked as one of the best at
responding to the service calls of students residing in its housing facilities. The University has a goal of
responding to each service call within approximately 15 minutes.
Dining Service Operations. The University periodically makes adjustments in the management team
and organization structure to more effectively manage the operations. These adjustments are expected to
enhance the profitability of the Dining Service Operations.
The Taggart Student Center. The Taggart Student Center derives its revenues from rents charged to
tenants and occasional users of the facilities. Revenues in the Taggart Student Center have remained
fairly constant in past years and it is anticipated this trend will continue. The Taggart Student Center
operations are sensitive to the needs of the students. This sensitivity contributes to the level of student
satisfaction and paves the way for the approval of additional Student Building Fees if needed.
The University Bookstore. The University Bookstore is housed in the Taggart Student Center. Rents
paid by the University Bookstore flow into the pledged revenue through the Taggart Student Center. In
Page 8
addition, the University Bookstore has been a viable operation providing net revenues annually which are
available for debt service.
Parking Services. Parking Facilities are comprised of the Big Blue Terrace, the Aggie Terrace, and
approximately 7,100 “for fee” flat surface stalls on the University’s main campus. The Big Blue Terrace
was renovated in 2004 and currently meets seismic code requirements and the Aggie Terrace was
constructed with proceeds from the 2004 Bonds and opened in fiscal year 2007. The “for fee” flat surface
parking has been developed over the many years the University has been operated and is managed
centrally by the University’s Parking Services operation.
Student Building Fee. A Student Building Fee has been approved at $30.00 per semester for a fulltime student. The total funds available from this fee are dictated by enrollment.
`
Land Grant Revenue. Land Grant Revenue, during the past five years, has provided between
$186,771 and $398,710 per year into the Housing System. The State has made some adjustments in its
holdings in an attempt to increase and stabilize the revenue. The average revenue for the past five years
has been $261,918.
Interest Income. Interest Income on Reserves is primarily generated by the $500,000 repair and
replacement reserve held by the Trustee.
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Page 9
STUDENT HOUSING SYSTEM AND OTHER PLEDGED REVENUE SOURCES
Student Housing System
The current Student Housing System derives its source of income from the
Student Housing.
Year Placed
in Service
(1)
Last Major
Renovation
Capacity
Single Housing:
Living Learning Community
Snow Hall
Mountain View Towers
Valley View Towers
Aggie Village
Bullen Hall
Richards Hall
Merrill Hall
Greaves Hall
Moen Hall
Reeder Hall
2007
1995
1966
1966
1962
1959
1958
1958
1956
1956
1956
new
ongoing (2)
ongoing (2)
ongoing (2)
ongoing (2)
2008
(2)
2002
(2)
2008
(2)
2008
(2)
2008
(2)
2008
(2)
512 student beds
234 student beds
370 student beds
362 student beds
160 student beds
144 student beds
270 student beds
216 student beds
70 student beds
72 student beds
72 student beds
Family Housing:
Townhouses
Mobile Home Park
West Stadium Villa
Aggie Village
Old Main West
Wuthrich House
1995
1991
1965
1962
2008
2008
ongoing (2)
n.a. (3)
ongoing (2)
ongoing (2)
ongoing (2)
ongoing (2)
76 apartments
93 spaces
24 apartments
387 apartments
3 apartments
1 apartment
Unit Name
following:
(1) Major renovations include refinishing floor coverings, walls and cabinetry.
(2) All units are routinely refurbished with carpet, paint or other minor repairs on an ongoing basis.
(3) The Mobile Home Park is scheduled for closure in 2011.
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Page 10
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3,066
968
1,514
2,482
491
93
584
2,489
880
1,045
1,925
472
92
564
Occupancy
%
81
91
69
78
96
99
97
3,089
960
1,528
2,488
492
109
601
Capacity
2,343
876
970
1,846
406
91
497
Occupancy
Fall 2007
%
76
91
63
74
83
83
83
2,700
952
1,144
2,096
495
109
604
Capacity
2,158
867
761
1,628
425
105
530
Occupancy
Fall 2006
%
80
91
67
78
86
96
88
2,563
1,024
958
1,982
459
122
581
Capacity
2,036
915
571
1,486
434
116
550
Occupancy
Fall 2005
%
79
89
60
75
95
95
95
2,627
1,022
1,016
2,038
462
127
589
Capacity
2,010
942
537
1,479
413
118
531
Occupancy
Fall 2004
%
77
92
53
73
89
93
90
Capacity in Student Housing has changed each year primarily for the following reasons: Mobile Home Park occupancy is declining due to the planned closure of the park in 2011. Trailers are being moved from the park and this will continue as the closure approaches. The
traditional style residence halls have presented a significant challenge as competition has drawn students to newer apartment style units. The University recognizes the need to make changes with respect to these units and is analyzing various alternatives in an effort to raise the
occupancy level.
level In 2006,
2006 36 Aggie Village single student apartments were converted back to family housing.
housing In 2007,
2007 3 Aggie Village family apartments were converted to single student apartments.
apartments In Fall 2006,
2006 two buildings in the Living Learning Community opened,
opened
adding 128 traditional suite-style spaces. In Fall 2007, the other four buildings in the Living Learning Community opened, adding 384 traditional suite-style spaces. In 2008, the Old Main West building (3 family apartments) and the Wirthrich House (1 family apartment) were
purchased. In 2008, 5 Aggie Village family apartments were converted to single student apartments and some Valley View Towers apartments were converted to office space which reduced the student beds in that building by 14.
Total All University Housing
Single Housing:
Apartment Style
Traditional Style
Total Single Housing
Family Housing:
Apartments and Townhouses
Mobile Home Park
Total Family Housing
Capacity
Fall 2008
Utah State University Housing Services - Fall Occupancy Report
Dining Service Operations. The Dining Service Operations that constitute part of the Student Housing
System are as follows:
“The Junction” provides dining service for Richards Hall, Mountain View and Valley View Towers as
well as Bullen Hall. Residents of these halls are required to have a meal plan as part of their housing
contract.
“The Hub” is a fast food outlet located in the Taggart Student Center. The operations included in this
food court are “Taco Time,” “Road Runner Wraps,” “Hazel’s Bakery,” “Pasta LaBella,” “Teriyaki Stix,”
“Hogi Yogi,” “Sunset Strips,” “The Grill” and “Café Ibis.” All franchises are owned and operated by
Utah State University.
“Aggie Marketplace” constructed in 2005 and 2006 from the 2004 Bonds proceeds, is a large, casual
dining facility located in the Taggart Student Center. The central kitchen for this operation also provides
catering for the entire University.
“The Sky Room” is a full-service restaurant located in the Taggart Student Center serving faculty, staff
and students.
“The Quick Stop” is a convenience store serving the campus community. This operation is also located
in the Taggart Student Center.
“Quadside Café” is a small, casual dining facility serving the campus community. This operation is
located on the first floor of the new Merrill-Cazier Library, which opened during fiscal year 2006.
Other Pledged Facilities and Revenue Sources
“Taggart Student Center” is a facility supporting various student activities and houses pledged
operations including The Hub, Aggie Marketplace, The Sky Room, Quick Stop and the University
Bookstore.
“The University Bookstore” provides students with the opportunity to buy textbooks, various school
supplies, clothing identified with the University’s logo, and other items.
“Big Blue Terrace” provides parking for vehicles, and serves the needs of faculty, staff and hourly
users. It has a capacity of 320 vehicles.
“Aggie Terrace” is a parking terrace that was built as part of the new Living/Learning Center, funded
by the 2004 bonds. It has a capacity of 612 vehicles, and serves the needs of resident students, commuter
students, faculty, staff and hourly users.
“The Student Building Fee” for the Housing System provides $30.00 per semester from each full-time
graduate and undergraduate student (pro-rated for less than full-time). The University has other student
building fees which are not pledged under the Resolution. See “Tuition and Fees” below.
“Land Grant Income” is derived by the University from Land Grants described in the constitution of the
State of Utah and in the Act of July 16, 1894, Ch. 138, 28 Stat. 109, adopted by the Congress of the
United States.
“Interest Income” is derived from certain Reserve Accounts held by the Trustee.
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Page 12
Enrollment
Enrollment Statistics - Head Count
2008
2007
Fall Semester
2006
2005
2004
Total enrollment
23,925
24,421
23,623
23,107
23,908
Resident enrollment
Nonresident enrollment
21,428
2,497
21,902
2,519
21,383
2,240
20,956
2,151
21,570
2,338
Undergraduate enrollment
Graduate enrollment
20,289
3,636
20,625
3,796
19,775
3,848
19,300
3,807
19,994
3,914
Full-time enrollment
Part-time enrollment
13,737
10,188
13,609
10,812
13,050
10,573
13,301
9,806
14,037
9,871
Tuition and Fees
General
Payment in full of all tuition and fees is required by the end of the third week of class each semester.
The schedule set forth below shows resident and non-resident tuition and fees per credit hour for the
2008-2009 academic year. Students taking certain courses offered by the College of Business, the
College of Engineering, and the College of Education are assessed at a higher rate. However, for
purposes of this disclosure, those additional tuition fees are not shown.
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Page 13
Page 14
$335.51
467.21
598.91
730.61
862.31
994.01
1,125.71
1,257.41
1,389.11
1,520.81
1,652.51
1,784.21
1 784 21
1,915.91
1,915.91
1,915.91
1,915.91
1,915.91
1,915.91
2,047.61
2,179.31
2,311.01
2,442.71
2,574.41
2,706.11
2,837.81
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
$320.88 $1,081.40
446.69 1,505.37
572.50 1,929.34
698.31 2,353.31
824.12 2,777.28
949.93 3,201.25
1,075.74 3,625.22
1,201.55 4,049.19
1,327.36 4,473.16
1,453.17 4,897.13
1,578.98 5,321.10
1,704.79
5,745.07
1 704 79
5 745 07
1,830.60 6,169.04
1,830.60 6,169.04
1,830.60 6,169.04
1,830.60 6,169.04
1,830.60 6,169.04
1,830.60 6,169.04
1,956.41 6,593.01
2,082.22 7,016.98
2,208.03 7,440.95
2,333.84 7,864.92
2,459.65 8,288.89
2,585.46 8,712.86
2,711.27 9,136.83
$1,144.25
1,592.78
2,041.31
2,489.84
2,938.37
3,386.90
3,835.43
4,283.96
4,732.49
5,181.02
5,629.55
6,078.08
6 078 08
6,526.61
6,526.61
6,526.61
6,526.61
6,526.61
6,526.61
6,975.14
7,423.67
7,872.20
8,320.73
8,769.26
9,217.79
9,666.32
NonResident
Students
International
Tuition
$395.80
551.21
706.62
862.03
1,017.44
1,172.85
1,328.26
1,483.67
1,639.08
1,794.49
1,949.90
2,105.31
2 105 31
2,260.72
2,260.72
2,260.72
2,260.72
2,260.72
2,260.72
2,416.13
2,571.54
2,726.95
2,882.36
3,037.77
3,193.18
3,348.59
Resident
Students
$1,387.05
1,930.82
2,474.59
3,018.36
3,562.13
4,105.90
4,649.67
5,193.44
5,737.21
6,280.98
6,824.75
7,368.52
7 368 52
7,912.29
7,912.29
7,912.29
7,912.29
7,912.29
7,912.29
8,456.06
8,999.83
9,543.60
10,087.37
10,631.14
11,174.91
11,718.68
NonResident
Students
Graduate (2)
$14.45
14.45
16.72
18.27
20.54
22.09
24.02
25.46
27.73
30.00
30.00
30.00
30 00
30.00
30.00
30.00
30.00
30.00
30.00
30.00
30.00
30.00
30.00
30.00
30.00
30.00
$20.30
20.30
23.03
24.98
27.71
29.66
32.73
34.29
37.27
40.00
40.00
40.00
40 00
40.00
40.00
40.00
40.00
40.00
40.00
40.00
40.00
40.00
40.00
40.00
40.00
40.00
Pledged
Not Pledged
for Debt
for Debt
Service Under Service Under
Resolution
Resolution (1)
Student Building Fees
$34.75
34.75
39.75
43.25
48.25
51.75
56.75
59.75
65.00
70.00
70.00
70.00
70 00
70.00
70.00
70.00
70.00
70.00
70.00
70.00
70.00
70.00
70.00
70.00
70.00
70.00
Total
Building
Fees
(1) A portion is pledged to other bond issues, and the remaining portion is earmarked for Taggart Student Center maintenance.
(2) Students taking certain courses offered by the Colleges of Business, Engineering, and Education are assesed at a higher rate.
New
Students
Cr.
Hrs.
Undergraduate (2)
NonAll Other Resident
Resident
Students
Students
U.S.A.
Utah State University
Tuition and Fees Schedule 2008-2009
Per Semester (effective Fall 2008 Term)
$209.50
209.50
223.00
237.75
242.75
246.25
276.00
296.25
301.50
306.50
306.50
306.50
306 50
306.50
306.50
306.50
306.50
306.50
306.50
306.50
306.50
306.50
306.50
306.50
306.50
306.50
Total
Fees
Other
$545.01
676.71
821.91
968.36
1,105.06
1,240.26
1,401.71
1,553.66
1,690.61
1,827.31
1,959.01
2,090.71
2 090 71
2,222.41
2,222.41
2,222.41
2,222.41
2,222.41
2,222.41
2,354.11
2,485.81
2,617.51
2,749.21
2,880.91
3,012.61
3,144.31
New
Students
$1,353.75
1,802.28
2,264.31
2,727.59
3,181.12
3,633.15
4,111.43
4,580.21
5,033.99
5,487.52
5,936.05
6,384.58
6 384 58
6,833.11
6,833.11
6,833.11
6,833.11
6,833.11
6,833.11
7,281.64
7,730.17
8,178.70
8,627.23
9,075.76
9,524.29
9,972.82
NonResident
Students
International
Total
$530.38 $1,290.90
656.19 1,714.87
795.50 2,152.34
936.06 2,591.06
1,066.87 3,020.03
1,196.18 3,447.50
1,351.74 3,901.22
1,497.80 4,345.44
1,628.86 4,774.66
1,759.67 5,203.63
1,885.48 5,627.60
2,011.29
6,051.57
2 011 29
6 051 57
2,137.10 6,475.54
2,137.10 6,475.54
2,137.10 6,475.54
2,137.10 6,475.54
2,137.10 6,475.54
2,137.10 6,475.54
2,262.91 6,899.51
2,388.72 7,323.48
2,514.53 7,747.45
2,640.34 8,171.42
2,766.15 8,595.39
2,891.96 9,019.36
3,017.77 9,443.33
Undergraduate (2)
NonAll Other Resident
Resident
Students
Students
U.S.A.
$605.30
760.71
929.62
1,099.78
1,260.19
1,419.10
1,604.26
1,779.92
1,940.58
2,100.99
2,256.40
2,411.81
2 411 81
2,567.22
2,567.22
2,567.22
2,567.22
2,567.22
2,567.22
2,722.63
2,878.04
3,033.45
3,188.86
3,344.27
3,499.68
3,655.09
Resident
Students
$1,596.55
2,140.32
2,697.59
3,256.11
3,804.88
4,352.15
4,925.67
5,489.69
6,038.71
6,587.48
7,131.25
7,675.02
7 675 02
8,218.79
8,218.79
8,218.79
8,218.79
8,218.79
8,218.79
8,762.56
9,306.33
9,850.10
10,393.87
10,937.64
11,481.41
12,025.18
NonResident
Students
Graduate (2)
DEBT STRUCTURE OF THE UNIVERSITY
June 30, 2008
Outstanding Bond Debt of the University
Series
Purpose
Research
2003 (1)
Research/Land
2002A (2)
Research/Refunding
Total
Student Fee/Housing Revenue
2007 (3)
Housing/Refunding
1999A (4)
Housing/Refunding
Total
Student Building Fee Revenue
2004A (5)
Building/Refunding
Original
Principal
Amount
Final
Maturity Date
$705,000
23,735,000
December 1, 2015
December 1, 2017
$471,000
19,135,000
19,606,000
39,155,000
15,010,000
April 1, 2035
December 1, 2014
39,155,000
10,925,000
50,080,000
11,065,000
April 1, 2026
Total All Outstanding Bond Debt
Current
Principal
Outstanding
9,925,000
$79,611,000
______________________________________________
(1) A rating was not requested from any rating agency. These bonds are issued on parity with the
Research 2002A Bonds.
(2) Rated “AAA” (Ambac Assurance Insured; no underlying) by Fitch and “AAA” (Ambac
Assurance Insured; underlying “AA”) by S&P. These bonds are issued on a parity with the
Research 2003 Bonds.
(3) Rated “AAA” (MBIA Insured; no underlying rating “AA”) by S&P. These bonds are issued
on a parity with the Student Fee and Housing System 1999A Bonds.
(4) Rated “AAA” (MBIA Insured; underlying rating “AA-”) by S&P. A rating was not requested
from Fitch or Moody’s.
(5) Rated “AAA” (MBIA insured; underlying rating “AA”) by S&P. No underlying rating was
requested from Fitch or Moody’s.
The University has complied with the covenants of its bond agreements. Amounts due on bonds,
notes and contracts payable in future years as of June 30, 2008 may be found in the University’s audited
financial report for the year ended June 30, 2008, Notes to the Financial Statements Note H, Bonds,
Notes, Contracts and Other Non-Current Liabilities.
(The remainder of this page has been intentionally left blank.)
Page 15
Page 16
(1)
(2)
(3)
$471,000
$81,572
$24,690,281
$10,925,000
$1,857,703
$36,907,505
256,188
112,125
882,250
768,688
649,250
524,750
393,938
1,371,188
1,282,813
1,189,875
1,092,188
989,750
1,761,550
1,692,425
1,619,800
1,542,691
1,458,756
1,952,013
1,952,013
1,940,013
1,888,638
1,826,538
1,952,013
1,952,013
1,952,013
1,952,013
1,952,013
Interest
$88,845,208
3,101,188
3,102,125
3,122,250
3,133,688
3,109,250
3,104,750
3,118,938
3,116,188
3,117,813
3,119,875
3,117,188
3,109,750
3,126,550
3,127,425
3,124,800
3,117,691
3,128,756
3,781,238
3,777,440
3,140,013
3,138,638
3,121,538
3,778,541
3,773,228
3,779,872
3,775,436
3,781,039
Total Debt
Service
$9,925,000
745,000
790,000
830,000
580,000
610,000
640,000
675,000
710,000
440,000
460,000
495,000
520,000
550,000
340,000
355,000
375,000
395,000
415,000
Principal
$5,286,172
108,938
71,125
31,125
271,750
242,375
211,500
179,063
144,875
402,475
381,300
355,519
327,950
299,625
479,137
466,884
453,150
437,950
421,431
Interest
$11,065,000
Series 2004A
$15,211,172
853,938
861,125
861,125
851,750
852,375
851,500
854,063
854,875
842,475
841,300
850,519
847,950
849,625
819,137
821,884
828,150
832,950
836,431
Total Debt
Service
Stadium/Spectrum Building (3)
$79,611,000
2,845,000
2,990,000
2,240,000
2,365,000
2,460,000
2,580,000
2,725,000
2,490,000
2,625,000
2,760,000
2,025,000
2,120,000
1,945,000
2,045,000
2,145,000
2,250,000
2,380,000
4,137,000
4,330,000
3,888,000
4,005,000
4,205,000
3,296,000
3,438,000
3,605,000
3,767,000
3,950,000
Total
Principal
$49,135,661
256,188
112,125
882,250
768,688
649,250
524,750
393,938
1,480,126
1,353,938
1,221,000
1,092,188
989,750
2,033,300
1,934,800
1,831,300
1,721,754
1,603,631
2,971,256
2,769,774
2,584,501
2,389,379
2,177,788
3,784,997
3,641,801
3,488,750
3,326,372
3,152,067
Total
Interest
Total All Bonds
$128,746,661
3,101,188
3,102,125
3,122,250
3,133,688
3,109,250
3,104,750
3,118,938
3,970,126
3,978,938
3,981,000
3,117,188
3,109,750
3,978,300
3,979,800
3,976,300
3,971,754
3,983,631
7,108,256
7,099,774
6,472,501
6,394,379
6,382,788
7,080,997
7,079,801
7,093,750
7,093,372
7,102,067
Total Debt
Service
These bonds are issued on a parity with each other and are secured by a separate and distinct debt service reserve fund, indenture of trust and pledge, and security documents. They are not issued on a parity basis with any other debt of the University.
These bonds are issued on a parity with each other and are secured by a separate and distinct debt service reserve fund, indenture of trust and pledge, and security documents. They are not issued on a parity basis with any other debt of the University.
These bonds are secured by a separate and distinct debt service reserve fund, indenture of trust and pledge, and security documents. They are not issued on a parity basis with any other debt of the University.
$5,002,709
$39,155,000
$19,135,000
Total
1,200,000
1,250,000
1,295,000
2,845,000
2,990,000
119,225
35,427
Principal
2034
2035
1,710,000
1,790,000
476,528
411,215
342,859
273,423
199,026
Interest
2,240,000
2,365,000
2,460,000
2,580,000
2,725,000
2,484,543
2,481,034
2,481,969
2,407,791
2,411,625
1,350,000
1,410,000
1,485,000
1,550,000
1,630,000
Principal
2029
2030
2031
2032
2033
6,872
4,156
1,247
2,483,319
2,484,689
2,485,728
2,484,986
2,484,597
Total Debt
Service
1,745,000
1,835,000
1,930,000
2,025,000
2,120,000
62,000
65,000
68,000
17,990
16,077
14,013
11,801
9,416
Interest
$39,155,000
Series 2007
2024
2025
2026
2027
2028
490,671
396,878
287,722
172,791
51,625
51,000
53,000
55,000
57,000
60,000
Principal
$15,010,000
Series 1999A
1,365,000
1,435,000
1,505,000
1,575,000
1,670,000
1,925,000
2,015,000
2,125,000
2,235,000
2,360,000
2014
2015
2016
2017
2018
859,329
795,612
726,715
651,185
570,181
Interest
$705,000
Series 2003
Student Fee and Housing System (2)
2019
2020
2021
2122
2023
1,555,000
1,620,000
1,690,000
1,765,000
1,845,000
Principal
2009
2010
2011
2012
2013
Fiscal Year
Ending
June 30
$23,735,000
Series 2002A
Research (1)
Utah State University
Debt Service Schedule of Outstanding Bonds (Fiscal Year)
FINANCIAL INFORMATION REGARDING THE UNIVERSITY
Economic Outlook
This past year has realized a significant downturn in the Utah, national and world economies. The
impact is now affecting the University, requiring budget reductions for the current fiscal year 2009 and
fiscal year 2010. The University has set priorities in this process – to minimize direct financial
impacts on our students, to be strategic by targeting the cuts so that we protect the long-term future of
USU by maintaining our core programs and functions, and to not undermine our effectiveness by
negatively impacting important revenue streams.
Although overall enrollments declined 2%, USU’s main campus enrollment increased 1.4% and
full-time enrollment overall increased 0.9%.
Utah State University is currently engaged in a highly successful comprehensive campaign which
has provided and continues to provide substantial financial support for University programs, capital
facilities, scholarship endowments and other priorities. The University expects significant future
benefits from these generous gifts.
Utah State University’s financial strengths include a diverse source of revenues, including those
from the State of Utah, student tuition and fees, sponsored research programs, private support and selfsupporting enterprises. These diversified sources of revenue continue to provide financial stability and
reduce the impact of the difficult current economic times.
Management believes that USU’s financial position will continue to enable the University to
accomplish its mission of being one of the nation’s premier student-centered, Land-grant and spacegrant universities.
Management’s Discussion and Analysis of the
University’s Financial Statements for Fiscal Year 2008
The administration of the University prepared a narrative discussion, overview, and analysis of the
financial activities of the University for fiscal year 2008. For the complete discussion refer to the
University’s Annual Financial Report for fiscal year 2008.
Financial Summaries
Utah State University’s financial reporting is in accordance with standards outlined by the
Governmental Accounting Standards Board (GASB) Statement No. 35, Basic Financial Statements
and Management’s Discussion and Analysis – for Public Colleges and Universities. These financial
statements focus on the financial condition of the University, the results of operations, and cash flows
of the University as a whole.
The following summaries provide financial data for fiscal years 2008, 2007, 2006, 2005 and 2004
in the GASB Statement No. 35 format.
Page 17
Utah State University
Statement of Net Assets
(This Summary has not been Audited)
2008
2007
Fiscal Year Ended June 30
2006
2005
2004
Assets
Current assets
Cash and cash equivalents
Short-term investments
Accounts receivable - net of allowances
Credits receivable
Notes receivable - net of allowances
Inventories
Prepaid expenses
Total current assets
Non-current assets
Restricted
Cash and cash equivalents
Short-term investments
Investments
Accounts receivable
Real estate held for resale
Accounts receivable
Notes receivable
Investments
Real estate held for resale
Property, plant and equipment - net of accumulated depreciation
Total non-current assets
Total assets
$14,532,738
25,941,475
62,395,138
1,046,727
1,352,398
4,361,470
1,197,587
$22,566,125
32,030,422
49,038,075
696,749
3,501,496
4,341,041
1,315,515
$31,370,798
56,416,102
52,214,952
860,361
4,727,324
3,489,327
1,256,994
$88,153,189
3,307,772
50,421,925
774,674
14,255,867
3,226,615
1,387,860
$16,177,969
134,990,424
50,005,499
880,676
12,807,076
3,261,755
981,433
110,827,533
113,489,423
150,335,858
161,527,902
219,104,832
1,830,194
2,584,402
64,549,635
479,908
1,144,530
39,700,779
11,858,958
159,382,469
1,892,647
2,969,578
64,668,189
422,268
223,530
1,678,718
9,149,370
122,175,592
3,481,348
48,564,929
5,540,642
293,824
1,743,363
5,966,456
9,478,761
37,017,659
9,359,889
214,294
3,846,842
473,251,698
462,574,497
2,198,548
3,545,498
53,820,329
1,537,017
292,530
1,470,442
9,643,948
85,608,853
26,711
446,452,844
96,072,594
26,711
387,331,977
6,513,326
75,033
367,078,492
754,782,573
665,754,389
604,596,720
543,055,388
439,550,752
865,610,106
779,243,812
754,932,578
704,583,290
658,655,584
Liabilities
Current liabilities
Accounts payable
Warranty reserve
Bonds, notes and contracts payable
Liability for compensated absences
Liability for early retirement
Deferred revenue and deposits
Funds held for others
42,137,931
41,014,889
42,238,641
44,831,277
5,691,241
3,328,816
3,742,246
15,258,354
436,726
4,988,408
3,135,713
3,702,379
16,904,015
368,566
4,685,159
2,858,174
2,094,531
17,616,544
416,271
5,057,740
2,396,368
1,999,022
22,606,255
275,966
36,314,353
150,000
5,195,421
2,598,719
1,909,166
22,811,886
352,124
Total current liabilities
70,595,314
70,113,970
69,909,320
77,166,628
69,331,669
Non-current liabilities
Bonds, notes and contracts payable
Liability for compensated absences
Liability for early retirement
Deferred revenue and deposits
103,226,740
11,675,906
6,072,865
540,000
102,913,793
11,348,553
7,728,328
1,490,000
103,371,551
10,228,645
3,411,558
1,390,000
106,491,670
9,614,451
3,988,655
1,190,000
70,995,070
8,462,927
2,828,411
540,000
121,515,511
123,480,674
118,401,754
121,284,776
82,826,408
192,110,825
193,594,644
188,311,074
198,451,404
152,158,077
365,976,770
364,321,023
363,959,130
319,087,126
295,695,915
62,758,503
12,887,287
55,064,706
12,928,513
51,768,038
12,808,912
53,463,328
12,913,258
53,543,646
13,052,611
165,825,038
25,033,881
41,017,802
110,653,146
5,037,578
37,644,202
87,557,831
7,240,085
43,287,508
71,293,827
5,124,619
44,249,728
65,827,762
29,076,747
49,300,826
$673,499,281
$585,649,168
$566,621,504
$506,131,886
$506,497,507
Total non-current liabilities
Total liabilities
Net assets
Invested in capital assets - net of debt
Restricted for
Non-expendable
Primarily scholarships and fellowships
Loans
Expendable
Research, instruction and public service
Capital projects
Unrestricted
Total net assets
(Source: Information taken from the University's audited basic financial statements. This summary itself has not been audited.)
Page 18
Utah State University
Statement of Revenues, Expenses and Changes in Net Assets
(This Summary has not been Audited)
2008
2007
Fiscal Year Ended June 30
2006
2005
2004
Operating revenues
Tuition and fees - net of scholarship allowances
Federal appropriations
Federal grants and contracts
State grants and contracts
Local grants and contracts
Private grants and contracts
Sales and services of educational departments
Conferences and institutes (non-credit)
Service departments
Auxiliary enterprises
Other
$67,072,029
5,371,060
104,371,373
7,927,539
2,079,890
13,898,855
10,907,585
5,801,971
3,105,180
31,953,390
13,126,223
$65,353,015
4,228,154
108,071,198
5,768,648
2,434,210
10,413,494
9,609,624
4,050,350
3,713,249
30,612,027
11,536,862
$62,404,674
4,519,483
130,034,950
8,925,577
2,335,012
10,710,585
12,321,813
5,955,768
1,420,515
28,091,536
5,412,252
$60,977,894
4,551,497
128,248,720
6,895,456
2,365,285
8,563,120
11,933,370
5,838,699
2,219,825
27,227,556
7,236,609
$56,372,165
4,780,969
144,262,639
10,527,411
2,378,564
8,731,562
8,729,301
6,252,539
928,924
31,983,733
6,160,397
265,615,095
255,790,831
272,132,165
266,058,031
281,108,204
Salaries and wages
Employee benefits
Other operating expenses
Scholarships and fellowships
Depreciation
211,832,891
76,518,914
119,292,179
23,911,210
28,602,378
198,920,065
77,167,278
116,746,716
22,018,865
27,191,607
190,973,865
72,807,323
119,593,626
17,876,138
27,215,377
186,841,215
70,058,886
113,795,925
19,716,820
23,872,370
178,760,308
63,930,563
132,220,211
18,944,712
20,686,416
Total operating expenses
460,157,572
442,044,531
428,466,329
414,285,216
414,542,210
(194,542,477)
(186,253,700)
(156,334,164)
(148,227,185)
(133,434,006)
160,245,542
7,517,287
398,710
19,767,335
55,244,735
6,314,152
(48,534)
144,866,453
6,198,367
297,590
19,077,245
10,976,195
21,034,564
123,550
144,576,550
2,159,967
131,585,986
1,207,121
125,802,220
1,198,087
7,362,761
8,103,422
4,953,746
9,220,735
439,068
11,013,826
11,080,892
444,460
249,439,227
202,573,964
162,202,700
147,406,656
149,539,485
54,896,750
16,320,264
5,868,536
11,722,777
5,594,877
17,263,096
(4,153,839)
5,861,235
2,260,094
3,800,495
(3,310,924)
3,042,945
(3,097,100)
43,079,936
394,679
188,185
8,856,427
(3,937,323)
7,663,262
(1,624,084)
32,953,363
6,030,293
54,621,082
454,908
28,052,091
87,850,113
22,350,557
60,489,618
(365,621)
44,157,570
585,649,168
563,298,611
506,131,886
506,497,507
460,176,851
$673,499,281
$585,649,168
$566,621,504
$506,131,886
$504,334,421
Total operating revenues
Operating expenses
Operating loss
Non-operating revenues (expenses)
State appropriations
State grants
State land grant revenues (1)
Financial aid grants and contracts (2)
Private gifts
Investment income
Other
Net non-operating revenues
Income before other revenues (expenses)
(820,529)
16,105,479
Other revenues (expenses)
State appropriations for capital purposes
State grants and contracts for capital purposes
State land grant revenues
Private grants and gifts for capital purposes
Interest on capital asset related debt
Additions to permanent endowments
Other additions (deductions) - net
Total other revenues
Increase (decrease) in net assets
Net assets - beginning of year as restated
Net assets - end of year
4,061,683
105,321
238,335
854,775
(4,262,441)
1,122,443
(1,665,208)
21,051,012
18,923
186,771
7,214,148
(1,730,269)
3,631,008
(2,319,502)
(Source: Information taken from the University's audited basic financial statements. This summary itself has not been audited.)
(1) State Land Grant revenues were reported as other revenues (expenses) prior to fiscal year 2007.
(2) Financial Aid grants and contracts were reported as operating revenue prior to fiscal year 2007.
Page 19
2008 Annual Financial Report
A Component Unit of the State of Utah
Utah State University
Tooele Regional Campus
Utah State University
Uintah Basin Regional Campus
Utah State University
Brigham City Regional Campus
Message from the President
2-3
Independent State Auditor’s Report
4-5
Management’s Discussion and Analysis
7-17
Financial Statements
Statement of Net Assets
Statement of Revenues, Expenses and
Changes in Net Assets
22-23
Statement of Cash Flows
24-26
Notes to Financial Statements
27-47
Executive Officers and Board of Trustees
20-21
49
President's Message
From the President…
Utah State University has welcomed many students,
faculty and professionals since its founding in 1888. And
now as the University closes the year 2008 at a time of
financial volatility in our state and nation, we should be
proud of the continued excellence and contributions this
great university provides for today’s students.
The University has made great strides in the past year
to improve and strengthen the programs, facilities and
financial support for our students and faculty. Funding
from the legislature and federal government, as well as from
the many donors who contributed to our comprehensive
fund-raising campaign, allows us to provide more diverse
educational opportunities at our Logan campus, our branch
campuses and other locations across the state of Utah.
As we continue this path toward increasing success, we have an obligation to be prudent amid the
rapidly evolving circumstances of the nation’s economic outlook. During this time it is important
to remember our students. By providing the facilities, research programs and financial means to
succeed, we are investing in the future.
In August I was pleased to announce we had raised $225 million in our comprehensive campaign,
surpassing the original goal of $200 million. The funds raised during the campaign will be used to
support the University’s mission to provide a quality education. A portion will be used to fund more
than 700 partial- and full-tuition scholarships and to provide additional support to our stellar faculty.
These funds also allow us to provide additional resources, increasing research opportunities for our
faculty, undergraduate and graduate students. Funds will also be set aside to support building projects
on campus. Two of our colleges – The Jon M. Huntsman School of Business and The Emma Eccles
Jones College of Education and Human Services – have been renamed to recognize major gifts to
these units.
I am proud of our heritage as the state of Utah’s land-grant institution. We have worked to strengthen
our regional campuses, reflecting a stronger, more cohesive Utah State University system that provides
greater access to higher education opportunities. To support this effort, we have secured funds to hire
40 additional faculty members. With more than 10,000 students studying around the state, many of the
new professors will be hired for our regional campuses and partnership institutions. This dramatically
impacts our ability to extend Utah State’s academic reach throughout the state.
I have every confidence in the dedication and resolve of our university community to meet the challenges
of the coming year. We must ensure that future generations of Utah State University students have the
same opportunities we enjoy today. Our work makes a tremendous difference to the people of Utah,
and it also demonstrates to decision-makers how valuable this institution is to the state and nation.
The financial statements that follow are prepared according to generally accepted accounting principles
established by the Governmental Accounting Standards Board. These principles are recommended by
the American Institute of Certified Public Accountants and the National Association of College and
University Business Officers.
2
Stan L. Albrecht
President
Utah State University
President's Message
The Utah State Auditor’s Office has audited the financial statements for the year ended June 30,
2008. Their definitive opinion is included with this report. The financial highlights and statements
are intended to establish the University’s financial position as of June 30, 2008. They are also
intended to reflect the flow of financial resources to the University during the fiscal year 2007-2008,
while disclosing how these resources are applied in accomplishing our mission. We are pleased to
share this report with you.
w
3
Auditor’s Report
STATE OF UTAH
Office of the State Auditor
UTAH STATE CAPITOL COMPLEX
EAST OFFICE BUILDING, SUITE E310
P.O. BOX 142310
SALT LAKE CITY, UTAH 84114-2310
(801) 538-1025
FAX (801) 538-1383
Auston G. Johnson, CPA
DEPUTY STATE AUDITOR:
Joe Christensen, CPA
FINANCIAL AUDIT DIRECTORS:
H. Dean Eborn, CPA
Deborah A. Empey, CPA
Stan Godfrey, CPA
Jon T. Johnson, CPA
UTAH STATE AUDITOR
Independent State Auditor’s Report
To the Board of Trustees, Audit Committee
and
Stan L. Albrecht, President
Utah State University
We have audited the accompanying basic financial statements of Utah State University (hereinafter
referred to as the “University”), a component unit of the State of Utah, as of and for the year ended
June 30, 2008, as listed in the table of contents. These financial statements are the responsibility of
the University's management. Our responsibility is to express an opinion on these financial
statements based on our audit. We did not audit the financial statements of the Utah State University
Research Foundation, which represents approximately 5% of total assets and 10% of total revenues of
the University. Those financial statements were audited by other auditors whose report thereon has
been furnished to us, and our opinion, insofar as it relates to the amounts included for the Utah State
University Research Foundation, is based on the report of the other auditors. The prior year partial
comparative information has been derived from the University’s 2007 financial statements and, in our
report dated October 31, 2007, we expressed an unqualified opinion on the basic financial statements.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the University's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit and the report of other auditors
provide a reasonable basis for our opinion.
In our opinion, based on our audit and the report of other auditors, the financial statements referred to
above present fairly, in all material respects, the financial position of the University as of June 30,
2008, and the changes in financial position and cash flows thereof for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated November
11, 2008 on our consideration of the University's internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements,
4
The accompanying management’s discussion and analysis, as listed in the table of contents, is not a
required part of the basic financial statements but is supplementary information required by
accounting principles generally accepted in the United States of America. We have applied certain
limited procedures, which consisted principally of inquiries of management regarding the methods of
measurement and presentation of the required supplementary information. However, we did not audit
the information and express no opinion on it.
Auston G. Johnson, CPA
Utah State Auditor
November 11, 2008
5
Auditor's Report
and other matters. The purpose of that report is to describe the scope of our testing of internal control
over financial reporting and compliance and the results of that testing, and not to provide an opinion
on the internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards and should be considered in
assessing the results of our audit.
6
Management’s Discussion and Analysis
7
Introduction
Management's Discussion and Analysis
The following unaudited Management’s Discussion and
Analysis (MD&A) includes an analysis of the financial
condition and results of activities of Utah State University
(University) for the fiscal year ended June 30, 2008. The
analysis includes the University’s condensed and comparative
Statement of Net Assets, Statement of Revenues, Expenses
and Changes in Net Assets and Statement of Cash Flows
along with related graphs and comparative data. Also
included is management’s perspective of the University’s
economic outlook.
The University is a component unit of the State of Utah.
The financial statements include the accounts of Utah State
University Agricultural Experiment Station, Utah State
University Water Research Laboratory, Utah State University
Cooperative Extension Service, Utah State University
Uintah Basin Education Center, Utah State University
Southeastern Utah Center for Continuing Education, Utah
State University Tooele Continuing Education Center and
Utah State University Brigham City Continuing Education
Center, which are entities separately funded by state
appropriations.
The Utah State University Research Foundation and the
Utah State University Development Foundation, component
units of the University, have also been consolidated in these
financial statements. The Utah State University Research
Foundation is governed by a Board of Trustees appointed by
the President of Utah State University, under the direction
of the University’s Board of Trustees. The Utah State
University Research Foundation is a dependent foundation
of Utah State University. It is reported as a part of the
University because its primary purpose is to support the
mission of Utah State University in regards to research.
The Utah State University Development Foundation is also
governed by a Board of Trustees appointed by the president
of the University. The Utah State University Development
Foundation is a dependent foundation of Utah State
University and serves as the main fund raising arm of the
University.
The Utah State University Research Foundation annually
publishes audited financial statements. A copy of the
audited financial statements can be obtained from the Utah
State University Research Foundation, 1695 North Research
Parkway, North Logan, Utah 84341.
Overview of Financial Statements
and Financial Analysis
The Management’s Discussion and Analysis is designed
to provide an easily readable analysis of the University’s
financial activities based on facts, decisions and conditions
known at the date of the auditor’s report. The University’s
financial statements for fiscal year 2008, with fiscal year
2007 prior year data presented for comparative purposes, are
8
presented below. The financial statements, footnotes and this
discussion are the responsibility of management. This annual
report consists of a series of financial statements, prepared in
accordance with the Governmental Accounting Standards
Board (GASB) Statement No. 35, Basic Financial Statements
and Management’s Discussion and Analysis – for Public Colleges
and Universities. These financial statements focus on the
financial condition of the University, the results of operations
and cash flows of the University as a whole. There are three
financial statements presented: the Statement of Net Assets;
the Statement of Revenues, Expenses, and Changes in Net
Assets; and the Statement of Cash Flows.
Statement of Net Assets
The Statement of Net Assets outlines the University’s financial
condition at fiscal year end. This statement reflects the various
assets, liabilities and net assets of the University as of the fiscal
year ended June 30, 2008.
From the data presented, readers of the Statement of Net
Assets have the information to determine the assets available
to continue the operations of the University. They may also
be able to determine how much the University owes vendors,
investors and lending institutions. Finally, the Statement of Net
Assets outlines the net assets (assets minus liabilities) available to
the University and defines what that availability is.
Net assets are divided into three major categories. The first
category, Invested in capital assets, net of debt, reflects the
University’s equity in property, plant and equipment owned
by the University. The second category, Restricted net assets, is
further divided into two sub-categories: Non-expendable and
Expendable. The corpus of non-expendable restricted resources
as it pertains to endowments is only available for investment
purposes. Donors have primarily restricted income derived
from these investments to fund scholarships and fellowships.
The corpus of non-expendable restricted resources as it pertains
to loan funds is only available for the purpose of issuing loans
to students under the terms of the various donor and federal
government agreements. Expendable restricted net assets are
available for expenditure by the University but must be spent
for purposes as determined by donors and/or external entities
that have placed time or purpose restrictions on the use of the
assets. The last category, Unrestricted net assets, discloses the
net assets available to the University to be used for any lawful
purpose of the University.
Condensed Statement of Net Assets
June 30, 2007
Change
% Change
Assets
Current assets
$110,827,533
$113,489,423
($2,661,890)
-2.35%
Capital assets – net
473,251,698
462,574,497
10,677,201
2.31%
Other
281,530,875
203,179,892
78,350,983
38.56%
865,610,106
779,243,812
86,366,294
11.08%
70,595,314
70,113,970
481,344
0.69%
121,515,511
123,480,674
(1,965,163)
-1.59%
192,110,825
193,594,644
(1,483,819)
-0.77%
365,976,770
364,321,023
1,655,747
0.45%
Primarily scholarships and fellowships
62,758,503
55,064,706
7,693,797
13.97%
Loans
12,887,287
12,928,513
(41,226)
-0.32%
190,858,919
115,690,724
75,168,195
64.97%
41,017,802
37,644,202
3,373,600
8.96%
$673,499,281
$585,649,168
$87,850,113
15.00%
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Invested in capital assets, net of debt
Restricted – non-expendable
Restricted – expendable
Unrestricted
Total net assets
In fiscal year 2008, the University’s total net assets increased $87,850,113 (15.00%). This increase was primarily due to
the increase in private gifts resulting from the University’s capital campaign. This explains the increase in the restricted
net asset categories: Restricted – non-expendable, Primarily scholarships and fellowships, up $7,693,797 (13.97%) and
Restricted – expendable, up $75,168,195 (64.97%). The increase in Unrestricted net assets is primarily due to the University
setting aside unrestricted net assets to be used for long term capital projects including repairs and replacement. At June 30,
2008, unrestricted net assets held for this purpose were up $2,493,052 over fiscal year 2007.
The University’s total assets increased $86,366,294 (11.08%). The largest increase was in pledges receivable. Pledges
receivable were up $55,013,561 over the prior year accounting for 7.06% of the 11.08% total increase. Investments
increased $30,614,201 accounting for 3.93% of the 11.08% total increase. The remaining asset classifications experienced
a moderate net increase of $738,533 accounting for the remaining 0.09% of the total increase of 11.08%. Current assets
are down as the University has committed additional amounts of its cash and cash equivalents to investments in order to
enhance earnings opportunities. The large increase in Non-current assets - Other, of $78,350,983 (38.56%), is primarily
due to the long term nature of the pledges receivable and the University’s decision to commit what would have been current
assets to investments.
9
Management's Discussion and Analysis
June 30, 2008
The composition of the University’s net assets is displayed in the following graph:
Management's Discussion and Analysis
Composition of the University's Net Assets
Balance at June 30, 2008 - $673,499,281
Invested in capital
assets, net of debt
54.4%
($365,976,770)
Restricted
non-expendable
11.2%
($75,645,790)
Restricted
expendable 28.3%
($190,858,919)
Unrestricted 6.1%
($41,017,802)
Net Assets
Fiscal Year Ended June 30
2008
2007
Net assets
Invested in capital
assets, net of debt
$365,976,770
$364,321,023
75,645,790
67,993,219
Expendable
190,858,919
115,690,724
Unrestricted
41,017,802
37,644,202
$673,499,281
$585,649,168
Restricted
Non-expendable
Total net assets
Statement of Revenues, Expenses and Changes in Net Assets
Changes in total net assets as presented in the Statement of Net Assets are based on the activity presented in the
Statement of Revenues, Expenses and Change in Net Assets. The purpose of this statement is to present the revenues
received by the University, both operating and non-operating, and the expenses paid by the University, operating
and non-operating, and any other revenues, expenses, gains and losses received or expended by the University.
Operating revenues are received for providing goods and services to the various customers and constituencies of the
University. Operating expenses are those expenses paid to acquire or produce the goods and services provided in return
for the operating revenues, and to carry out the mission of the University. Non-operating revenues are revenues received
for which goods and services are not provided. For example, state appropriations are non-operating revenues because they
10
1
Condensed Statement of Revenues, Expenses and Changes in Net Assets
Fiscal Year 2008
Fiscal Year 2007
Change
% Change
Operating revenues
Tuition and fees (net of scholarship
allowances: 2008 – $31,375,161;
2007 – $26,280,568)
$67,072,029
$65,353,015
$1,719,014
2.63%
Contracts, grants and federal
appropriations
133,648,717
130,915,704
2,733,013
2.09%
Auxiliary enterprises
31,953,390
30,612,027
1,341,363
4.38%
Other
32,940,959
28,910,085
4,030,874
13.94%
265,615,095
255,790,831
9,824,264
3.84%
Salaries and wages
211,832,891
198,920,065
12,912,826
6.49%
Employee benefits
76,518,914
77,167,278
(648,364)
-0.84%
119,292,179
116,746,716
2,545,463
2.18%
Scholarships and fellowships
23,911,210
22,018,865
1,892,345
8.59%
Depreciation
28,602,378
27,191,607
1,410,771
5.19%
460,157,572
442,044,531
18,113,041
4.10%
(194,542,477)
(186,253,700)
(8,288,777)
-4.45%
160,245,542
144,866,453
15,379,089
10.62%
Private gifts
55,244,735
10,976,195
44,268,540
403.31%
Financial aid grants and contracts
19,767,335
19,077,245
690,090
3.62%
Other
14,181,615
27,654,071
(13,472,456)
-48.72%
249,439,227
202,573,964
46,865,263
23.13%
54,896,750
16,320,264
38,576,486
236.37%
Total operating revenues
Operating expenses
Other operating expenses
Total operating expenses
Operating loss
Non-operating revenues/expenses net
State appropriations
Net non-operating revenues
Income before other
revenues, expenses, etc.
11
Management's Discussion and Analysis
are provided by the Legislature to the University without the Legislature directly receiving commensurate goods and services
in return for those revenues. As noted below, without the non-operating revenues, in particular the state appropriations and
private gifts, the University would not be able to cover its costs of operations. These sources are critical to the University’s
financial stability and directly impact the quality of its programs.
Condensed Statement of Revenues, Expenses and Changes in Net Assets (continued)
Management's Discussion and Analysis
Fiscal Year 2008
Fiscal Year 2007
Change
% Change
Other revenues/(expenses)
State appropriations for capital purposes
$11,722,777
$5,594,877
$6,127,900
109.53%
Grants, contracts and gifts for capital
purposes
17,263,096
3,800,495
13,462,601
354.23%
Additions to permanent endowments
5,861,235
3,042,945
2,818,290
92.62%
(1,893,745)
(6,408,024)
4,514,279
70.45%
32,953,363
6,030,293
26,923,070
446.46%
Increase in net assets
87,850,113
22,350,557
65,499,556
293.06%
Net assets – beginning of year
585,649,168
563,298,611
22,350,557
3.97%
$673,499,281
$585,649,168
$87,850,113
15.00%
Other – net
Total other revenues
Net assets – end of year
The Statement of Revenues, Expenses and Changes in Net Assets (SRECNA) reflects an $87,850,113 increase in net assets
for the fiscal year ended June 30, 2008.
As noted in the SRECNA, the University experienced a net operating loss in fiscal year 2008 of $194,542,477. This
operating loss highlights the University’s dependency on non-operating revenues, state appropriations and private gifts to
meet its cost of operations and provide funds for the acquisition of capital equipment.
In fiscal year 2008, the University received $160,245,542 from state appropriations and $55,244,735 in private gifts to be
used for operations. These revenues along with an additional $33,948,950 from other sources covered all of the University’s
operating expenses for the fiscal year.
The University also receives funds for capital purposes and as additions to its permanent endowment funds. During fiscal
year 2008, the University received $11,722,777 from state appropriations and $17,263,096 from grants, contracts and
private gifts for capital purposes. Donations to the University’s permanent endowment funds were $5,861,235.
The largest increase in operating revenues, $4,030,874, came from the Other category which includes sales and services
of educational departments, conferences and institutes, service departments and other. Operating revenues increased by
$1,297,961 from the sales and services of educational departments and $1,751,621 from increased activity in the conferences
and institutes revenue. These sources account for 10.6% of the total 13.94% increase in the Other category.
Private gifts in the Non-operating revenue section increased $44,268,540, 403.31% primarily due to the University’s capital
campaign. A similar increase is seen in the Other revenue section for grants, contracts, and gifts for capital purposes.
This line item increased $13,462,601, 354.23% due to private gifts generated through the University’s capital campaign.
The University was also fortunate to have a significant increase in state appropriations for capital purposes which was up
$6,127,900, 109.53% over the prior year. Additions to permanent endowments increased $2,818,290, 92.62%, again a
function of the University’s capital campaign.
12
The following graph reflects the University’s sources of revenue available to meet current operating costs:
Operating revenue auxiliary enterprises
6.2% ($31,953,390)
Operating revenue other 6.4%
($32,940,959)
Non-operating - state
appropriations 31.1%
($160,245,542)
Non-operating private gifts 10.7%
($55,244,735)
Operating revenue net tuition and fees
13.0% ($67,072,029)
Operating revenue contracts, grants and
federal appropriations
26.0% ($133,648,717)
Non-operating - other
2.8% ($14,181,615)
Non-operating financial aid grants
and contracts 3.8%
($19,767,335)
Revenues Used for Operating Expenses
Fiscal Year Ended June 30
2008
2007
Operating revenues
Contracts, grants and federal appropriations
$133,648,717
$130,915,704
Net tuition and fees
67,072,029
65,353,015
Auxiliary enterprises
31,953,390
30,612,027
Other
32,940,959
28,910,085
265,615,095
255,790,831
160,245,542
144,866,453
Private gifts
55,244,735
10,976,195
Financial aid grants and contracts
19,767,335
19,077,245
Other
14,181,615
27,654,071
249,439,227
202,573,964
$515,054,322
$458,364,795
Total operating revenues
Non-operating revenues
State appropriations
Total non-operating revenues
Total revenues used for operations
13
2
Management's Discussion and Analysis
Revenues Used for Operating Expenses Fiscal Year 2008
(Operating Revenues $265,615,095,
Non-operating Revenues $249,439,227)
Total $515,054,322
Management's Discussion and Analysis
The University’s most important resource is its outstanding faculty and staff. In fiscal year 2008, 62.7% of the University’s
total operating expenses were for employee compensation. Even though the major portion of the operating expenses are
focused on employee compensation, the University still needs to be more competitive with peer institutions and nonacademic employers in order to recruit and retain this important resource that so directly impacts the University’s ability to
accomplish its mission.
The graph below outlines the University’s operating expenses by object:
Operating Expenses
Fiscal Year 2008
$460,157,572
Scholarships and
fellowships 5.2%
($23,911,210)
Depreciation
6.2% ($28,602,378)
Other operating
expenses 25.9%
($119,292,179)
Employee
compensation 62.7%
($288,351,805)
Operating Expenses
Fiscal Year Ended June 30
2008
2007
Operating expenses
Employee compensation
$288,351,805
$276,087,343
Other operating expenses
119,292,179
116,746,716
Depreciation
28,602,378
27,191,607
Scholarships and fellowships
23,911,210
22,018,865
Total operating expenses
$460,157,572
$442,044,531
14
The final statement presented by Utah State University is the Statement of Cash Flows. The Statement of Cash Flows
presents detailed information about the cash activity of the University during the fiscal year. The statement is divided into
five sections. The first section deals with operating cash flows and shows the net cash used by operating activities. The
second section includes cash flows from non-capital financing activities. This section includes the cash received and spent
for non-operating, non-investing and non-capital financing purposes. The third section includes cash flows from capital and
related financing activities. This section includes the cash used for the acquisition and construction of capital and related
items. The fourth section includes the cash flows from investing activities and shows the purchases, proceeds and interest
received from investing activities. A condensed version of these first four sections is provided below. The fifth section of
the Statement of Cash Flows is not included in the Condensed Statement of Cash Flows. The fifth section reconciles the net
cash used for operations to the operating income or loss reflected on the Statement of Revenues, Expenses and Changes in
Net Assets. This reconciliation is available for review in the Statement of Cash Flows on page 26.
Condensed Statement of Cash Flows
Fiscal Year 2008
Fiscal Year 2007
Change
% Change
($165,227,350)
($151,948,652)
($13,278,698)
-8.74%
(2) Non-capital financing activities
202,401,414
177,691,695
24,709,719
13.91%
(3) Capital and related financing activities
(24,874,647)
(39,265,412)
14,390,765
36.65%
(4) Investing activities
(20,395,257)
(47,588,205)
27,192,948
57.14%
Net decrease in cash and cash equivalents
(8,095,840)
(61,110,574)
53,014,734
86.75%
Cash and cash equivalents, beginning of year
24,458,772
85,569,346
(61,110,574)
-71.42%
$16,362,932
$24,458,772
($8,095,840)
-33.10%
Cash provided (used) by:
(1) Operating activities
Cash and cash equivalents, end of year
The University’s cash and cash equivalents declined by $8,095,840 to a total of $16,362,932. This decline is primarily
due to the use of cash and cash equivalents for investment purposes to ensure the best possible return on available University
resources while maintaining adequate cash flows.
15
Management's Discussion and Analysis
Statement of Cash Flows
Management's Discussion and Analysis
Capital Asset and Debt
Administration
The University made substantial progress on projects to
enhance the athletic facilities at the Dick Romney Stadium.
The most recent phase of this project began in July 2006
and includes the three-story Jim and Carol Laub Athletics–
Academics Complex to house a new sports medicine center,
offices for the head trainer and staff, an intern development
area, a student academic center, team meeting rooms,
coaches’ offices and a home locker room that can serve
125 athletes. The project is being funded with existing
project funds from the 2004, Series A Stadium/Spectrum
and Student Recreation Bonds supplemented by private
donations. It is estimated the total cost will be $12.5
million. It is anticipated that the facility will be completed
in September 2008.
Construction of the David G. Sant Engineering Innovation
building began September 2006. This new facility consists
of three floors totaling 34,000 square feet of space. The
building will provide the facilities to help develop and
demonstrate the innovative engineering skills of the
University’s faculty and students. This state-of-the-art
engineering innovation laboratory building will be used
to explore and develop technology ideas and prototypes.
This new facility will cost approximately $11.5 million
and is being funded approximately 50 percent from state
appropriations and 50 percent from private donations. It is
anticipated that the facility will be completed in September
2008.
The University made substantial progress in the process of
relocating the agricultural buildings from its North Logan
property to the South Farm location. This move will allow
for the expansion of the University’s Innovation Campus in
North Logan and also centralize the agricultural buildings
as part of the master plan for new facilities at the South
Farm. This move included the construction of the Matthew
Hillyard Animal, Teaching and Research Center for the
College of Agriculture at the South Farm location, completed
in June 2008 at a cost of $8.5 million. The total cost of this
agricultural relocation project is estimated at $10.7 million
and is being funded primarily by state appropriations. It is
anticipated that construction of the other components of
the project will be completed during fiscal year 2009.
The University has been authorized to begin construction
on a new $60 million state-of-the-art research facility to
be funded by the Utah Science Technology and Research
(USTAR) initiative. It is currently in the planning and
design phase and will be located on the University’s
Innovation Campus in North Logan. This new facility will
provide research teams with the necessary infrastructure
needed to advance innovation and commercialization in
their respective focus areas.
16
The University began the planning and design phase of a new
education facility to be located at the site of the old tennis
courts north of the Emma Eccles Jones Education building.
The construction will begin October 2008 and the building will
likely be completed in fall 2010. The state-of-the-art 60,000
square foot building will house the Emma Eccles Jones Early
Childhood Education and Research Center and the Dolores
Dore Eccles Center for Early Care and Education. This new
facility will cost approximately $17 million. It will be funded
from the proceeds of revenue bonds to be issued in fiscal year
2009. Although the revenue bonds will be secured by a pledge
of Facilities and Administration cost recovery (Indirect Cost
Recovery) revenue, it is anticipated that the debt service of the
bonds will be covered by private donations over a period of ten
years.
The University began the planning and design phase of the
Bingham Entrepreneurship and Energy Research Center to
be located on the Vernal Campus. The construction of the
33,000 square foot building will begin in late 2008 and is
anticipated to be completed in 2010. The building will be a
state-of-the-art, high tech educational facility to train students
in business, entrepreneurship, accounting, engineering, water
management, natural resources, environmental policy and
other programs. The new facility will cost approximately $20
million. It is being funded by a private donation, Uintah
Economic Development Special Service District funds and
anticipated proceeds from the sale of University property.
SYNERGY
capital facilities, scholarship endowments, and other
priorities. The University expects significant future benefits
from these generous gifts.
The Utah economy remains strong relative to many other
states amidst significant economic turbulence nationally.
Nevertheless, the State of Utah, like most states, is currently
experiencing a decline in projected revenues which has
resulted in moderate budget reductions for state agencies
and institutions. Other economic indicators however, such
as job creation which is slower than recent years but still
positive, commercial construction, and a favorable business
climate, remain positive and are expected to provide relative
stability to the state economy and funding for USU priorities.
Utah State University’s financial strengths include a diverse
source of revenues, including those from the State of Utah,
student tuition and fees, sponsored research programs,
private support, and self-supporting enterprises. These
diversified sources of revenue continue to provide financial
stability and significant protection against potentially
difficult future economic times. Despite the economic uncertainty facing the nation,
management believes that USU’s financial position will
continue to enable the University to accomplish its mission
of being one of the nation’s premier student-centered, LandGrant and Space-Grant universities.
David T. Cowley
Associate Vice President for Business and Finance
Utah State University
Strong, focused recruiting efforts continue to produce
impressive growth in freshman class size while maintaining
high academic standards. Overall, fall 2008 head count has
decreased slightly but enrollment at USU grew modestly when
measured in full-time equivalent students. Stable enrollments
at the main campus in Logan and continued growth at USU
regional campuses is expected for the foreseeable future.
Utah State University is currently engaged in a highly-successful
comprehensive campaign which has provided and continues to
provide substantial financial support for University programs,
Alumni Center
17
Management’s Discussion and Analysis
Economic Outlook Financial Statements
19
STATEMENT OF NET ASSETS
Financial Statements
June 30, 2008
2008
2007
Comparative Only
Assets
Current assets
Cash and cash equivalents (Notes A, B and D)
$14,532,738
$22,566,125
Short-term investments (Notes A, B and D)
25,941,475
32,030,422
Accounts receivable – net of allowances $724,206 (Note E)
62,395,138
49,038,075
Credits receivable (Note E)
1,046,727
696,749
Notes receivable – net of allowances $50,208 (Note E)
1,352,398
3,501,496
Inventories (Note A)
4,361,470
4,341,041
Prepaid expenses
1,197,587
1,315,515
110,827,533
113,489,423
Cash and cash equivalents (Notes A, B and D)
1,830,194
1,892,647
Short-term investments (Notes B and D)
2,584,402
2,969,578
64,549,635
64,668,189
479,908
422,268
Real estate held for resale
1,144,530
223,530
Accounts receivable (Note E)
39,700,779
1,678,718
Notes receivable – net of allowances $258,100 (Note E)
11,858,958
9,149,370
Investments (Notes A, C and D)
159,382,469
122,175,592
Property, plant and equipment – net (Note F)
473,251,698
462,574,497
754,782,573
665,754,389
865,610,106
779,243,812
Total current assets
Non-current assets
Restricted
Investments (Notes A, C and D)
Accounts receivable (Note E)
Total non-current assets
Total assets
20
STATEMENT OF NET ASSETS
2008
2007
Comparative Only
Liabilities
Current liabilities
Accounts payable and accrued liabilities (Note G)
$42,137,931
$41,014,889
Bonds, notes and contracts payable (Notes H and I)
5,691,241
4,988,408
Liability for compensated absences (Note H)
3,328,816
3,135,713
Liability for early retirement (Note H)
3,742,246
3,702,379
15,258,354
16,904,015
436,726
368,566
70,595,314
70,113,970
103,226,740
102,913,793
11,675,906
11,348,553
6,072,865
7,728,328
540,000
1,490,000
121,515,511
123,480,674
192,110,825
193,594,644
365,976,770
364,321,023
Primarily scholarships and fellowships
62,758,503
55,064,706
Loans
12,887,287
12,928,513
165,825,038
110,653,146
Capital projects
25,033,881
5,037,578
Unrestricted (Note A)
41,017,802
37,644,202
$673,499,281
$585,649,168
Deferred revenues and deposits (Note H)
Funds held for others
Total current liabilities
Non-current liabilities
Bonds, notes and contracts payable (Notes H and I)
Liability for compensated absences (Note H)
Liability for early retirement (Note H)
Deferred revenues and deposits (Note H)
Total non-current liabilities
Total liabilities
Net assets
Invested in capital assets - net of debt (Note A)
Restricted for:
Non-expendable (Note A)
Expendable (Note A)
Research, instruction and public service
Total net assets
See notes to financial statements
21
Financial Statements
June 30, 2008
Financial Statements
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET ASSETS
For the Year Ended June 30, 2008
2008
2007
Comparative Only
Operating revenues
Tuition and fees (Net of scholarship allowance of $31,375,161)
$67,072,029
$65,353,015
5,371,060
4,228,154
104,371,373
108,071,198
State grants and contracts
7,927,539
5,768,648
Local grants and contracts
2,079,890
2,434,210
Private grants and contracts
13,898,855
10,413,494
Sales and services of educational departments
10,907,585
9,609,624
Conferences and institutes (non-credit)
5,801,971
4,050,350
Service departments
3,105,180
3,713,249
Auxiliary enterprises
31,953,390
30,612,027
Other
13,126,223
11,536,862
265,615,095
255,790,831
Salaries and wages
211,832,891
198,920,065
Employee benefits
76,518,914
77,167,278
119,292,179
116,746,716
Scholarships and fellowships
23,911,210
22,018,865
Depreciation
28,602,378
27,191,607
460,157,572
442,044,531
(194,542,477)
(186,253,700)
Federal appropriations
Federal grants and contracts
Total operating revenues
Operating expenses
Other operating expenses
Total operating expenses
Operating loss
22
For the Year Ended June 30, 2008
2008
2007
Comparative Only
Non-operating revenues/(expenses)
State appropriations
$160,245,542
$144,866,453
7,517,287
6,198,367
398,710
297,590
Financial aid grants and contracts
19,767,335
19,077,245
Private gifts
55,244,735
10,976,195
6,314,152
21,034,564
(48,534)
123,550
249,439,227
202,573,964
54,896,750
16,320,264
State appropriations for capital purposes
11,722,777
5,594,877
Private grants and gifts for capital purposes
17,263,096
3,800,495
Interest on capital asset related debt
(4,153,839)
(3,310,924)
Additions to permanent endowments
5,861,235
3,042,945
Other – net
2,260,094
(3,097,100)
32,953,363
6,030,293
87,850,113
22,350,557
585,649,168
563,298,611
$673,499,281
$585,649,168
State grants
State land grant revenues
Investment income (Note A)
Other
Non-operating revenues – net
Income before other revenues/(expenses)
Other revenues/(expenses)
Net other revenues
Increase in net assets
Net assets – beginning of year
Net assets – end of year
See notes to financial statements
23
Financial Statements
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET ASSETS
Financial Statements
STATEMENT OF CASH FLOWS
For the Year Ended June 30, 2008
2008
2007
Comparative Only
Cash flows from operating activities
Tuition and fees
$69,185,802
$66,599,918
5,371,060
4,228,154
127,996,835
130,476,268
10,907,585
9,559,841
Conferences and institutes (non-credit)
5,801,971
4,050,350
Service departments
2,754,945
3,700,312
Auxiliary enterprises
31,360,909
29,905,340
Other operating receipts
13,394,999
11,144,760
Payments to employees for salaries and benefits
(286,332,608)
(272,063,406)
Payments to suppliers
(120,905,902)
(117,753,813)
(23,911,210)
(22,018,865)
(2,445,273)
(2,351,884)
1,593,537
2,574,373
(165,227,350)
(151,948,652)
160,363,979
144,897,851
7,478,907
4,596,494
339,342
172,242
Financial Aid
19,692,980
19,217,554
Private gifts
14,550,682
8,954,150
(24,476)
(146,596)
202,401,414
177,691,695
Federal appropriations
Contracts and grants
Sales and services of educational departments
Payments for scholarships and fellowships
Loans issued to students
Loan payments received from students
Net cash used by operating activities
Cash flows from non-capital financing activities
State appropriations
State grants
State land grant revenues
Other
Net cash provided by non-capital financing activities
24
For the Year Ended June 30, 2008
2008
2007
Comparative Only
Cash flows from capital and related financing activities
State appropriations for capital purposes
$11,729,959
$5,023,118
Private grants and gifts for capital purposes
2,565,319
4,493,065
Proceeds from capital debt
6,880,705
47,746,360
Other
3,454,337
2,947,662
(39,790,297)
(47,800,384)
Repayment of capital debt and leases
(5,864,924)
(47,900,870)
Interest paid on capital asset related debt
(3,849,746)
(3,774,363)
(24,874,647)
(39,265,412)
(232,207,234)
(196,342,349)
199,587,894
135,112,525
Interest and dividends received from investments
12,224,083
13,641,619
Net cash provided by investing activities
(20,395,257)
(47,588,205)
(8,095,840)
(61,110,574)
24,458,772
85,569,346
$16,362,932
$24,458,772
Cash paid for capital assets
Net cash used by capital and related financing activities
Cash flows from investing activities
Purchases of investments
Proceeds from sale of investments
Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
25
Financial Statements
STATEMENT OF CASH FLOWS
Financial Statements
STATEMENT OF CASH FLOWS
For the Year Ended June 30, 2008
2008
2007
Comparative Only
Reconciliation of operating loss to net cash used by
operating activities
Operating loss
($194,542,477)
($186,253,700)
28,602,378
27,191,607
272,516
311,927
3,645,316
4,991,038
Inventories
(20,429)
(851,714)
Prepaid expenses
117,928
(58,521)
Accounts payable and accrued expenses
827,154
(643,742)
Deferred revenues and deposits
(2,456,783)
(936,779)
Compensated absences and early retirement
(1,095,140)
3,999,172
(577,813)
302,060
($165,227,350)
($151,948,652)
Fixed assets acquired by incurring capital lease obligations
$20,918,678
$4,325,517
Change in fair value of investments recognized as a
component of investment income
($6,700,207)
$8,456,865
($4,869)
($75,309)
Gifts-in-kind reducing private gifts and payments to suppliers
$272,516
$311,927
Gifts of capital assets
$664,777
$1,460,509
Adjustments to reconcile operating loss to net cash
used by operating activities
Depreciation expense
Gifts-in-kind reducing payments to suppliers
Changes in assets and liabilities
Accounts receivable
Net student loan activity
Net cash used by operating activities
Non-cash investing, capital and financing activities
Amortization of original issue discount, reoffering
premium and net loss of refunding of bonds
See notes to financial statements
26
Notes to Financial Statements
27
Notes to Financial Statements
issued after November 30, 1989, unless FASB conflicts
with GASB. The University has elected to not apply FASB
pronouncements issued after the applicable date.
A. Summary of Significant
Accounting Policies The significant accounting policies followed by Utah
State University (the University) are described below.
Basis of Presentation
The University is a component unit of the State of Utah.
The financial statements include the accounts of Utah
State University Agricultural Experiment Station, Utah
State University Water Research Laboratory, Utah State
University Cooperative Extension Service, Utah State
University Uintah Basin Education Center, Utah State
University Southeastern Utah Center for Continuing
Education, Utah State University Tooele Continuing
Education Center and Utah State University Brigham
City Continuing Education Center, which are entities
separately funded by state appropriations.
The Utah State University Research Foundation
(USURF) and the Utah State University Development
Foundation, component units of the University, have also
been consolidated in these financial statements. USURF
is governed by a Board of Trustees appointed by the
president of Utah State University, under the direction of
the University Board of Trustees. USURF is a dependent
foundation of Utah State University and is reported as a
part of the University because its primary purpose is to
support the mission of Utah State University in regards
to research. The Utah State University Development
Foundation is also governed by a Board of Trustees.
The Utah State University Development Foundation is a
dependent foundation of Utah State University and serves
as the main fund-raising arm of the University.
USURF annually publishes audited financial statements.
A copy of the audited financial statements can be obtained
from USURF at 1695 North Research Parkway, North
Logan, Utah 84341.
Basis of Accounting
For financial reporting purposes, the University is
considered a special purpose government engaged only
in business-type activities. Accordingly, the University’s
financial statements have been presented using the
economic resources measurement focus and the accrual
basis of accounting. Under the accrual basis, revenues are
recognized when earned and expenses are recorded when
an obligation has been incurred. All significant intraagency transactions have been eliminated. When both
restricted and unrestricted resources are available, such
resources are spent and tracked at the discretion of the
department within the guidelines of donor restrictions.
The University has the option to apply all Financial
Accounting Standards Board (FASB) pronouncements
28
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and deposits
with an original maturity of three months or less. (See
Note B.)
Investments The University accounts for its investments at fair value
in accordance with GASB Statement No. 31, Accounting
and Financial Reporting for Certain Investments and for
External Investment Pools. Changes in unrealized gain/
(loss) on the carrying value of investments are reported
as a component of investment income in the Statement of
Revenues, Expenses and Changes in Net Assets. Inventories
The value of the University Bookstore inventory is recorded
at average cost determined using the retail inventory method
while all other inventory values are essentially lower of cost
(first-in, first-out) or market. Obsolete or unusable items
are reduced to net realizable values.
Non-current Assets
Assets that are externally restricted to make debt service
payments, maintain sinking or reserve funds or that represent
assets of the University’s endowments are classified as noncurrent restricted assets.
Other non-current assets include those receivables that will
not be realized within the next year, investments and real
estate held for resale and the University’s property, plant
and equipment net of depreciation.
Property, Plant and Equipment The University componentizes certain research facilities to
accommodate the different useful lives of components for
depreciation purposes.
All buildings are carried on an estimated historical cost
basis, at cost at date of acquisition or at fair value at date of
donation in the case of gifts. All other physical plant and
equipment are stated at cost when purchased or constructed,
or fair value at date of donation in the case of gifts.
The University capitalizes all equipment with a unit cost of
$5,000 or more and an estimated useful life greater than one
year. Buildings costing $50,000 or more are capitalized, as
are improvements to buildings costing $50,000 or more that
extend the useful life of the building. Improvements other
than buildings costing $50,000 or more are also capitalized.
All library books inventoried in the University’s recognized
libraries are capitalized regardless of cost. Interest is
Net Assets
The University’s net assets are classified as follows:
Invested in capital assets, net of related debt: This
represents the University’s total investment in capital
assets, net of outstanding debt obligations related to those
capital assets. To the extent debt has been incurred, but
not yet expended for capital assets, such amounts are not
included as a component of, “Invested in capital assets,
net of related debt”.
Restricted net assets – non-expendable: Non-expendable
restricted net assets consist of endowment and similar
type funds in which donors or other outside sources have
stipulated, as a condition of the gift instrument, that the
principal is to be maintained inviolate and in perpetuity,
and invested for the purpose of producing present and
future income, which may either be expended or added
to principal. Also included in this category are funds
received from donors with the restriction that the funds
will be used to provide short and long-term loans to
students with all collections, both principal and interest,
also being restricted for this purpose.
Restricted net assets – expendable: Restricted expendable
net assets include resources in which the University is
legally or contractually obligated to spend in accordance
with restrictions imposed by external third parties.
Unrestricted net assets: Unrestricted net assets represent
resources derived from student tuition and fees, state
appropriations and sales and services of educational
departments. These resources are used for transactions
relating to the educational and general operations of
the University and may be used at the discretion of the
governing board to meet current expenses for any purpose.
These resources also include Auxiliary enterprises, which
are substantially self-supporting activities that provide
services primarily for students. Buildings
10 - 40 years
Improvements other than buildings
5 - 20 years
Equipment
3 - 15 years
Library collections
20 years
The University provides repair and replacement reserves for
certain properties as required by the related bond indentures.
Routine repairs and maintenance are charged to operating
expense in the period in which the expense was incurred.
Deferred Revenues
Deferred revenues consist primarily of amounts received
from contract and grant sponsors that have not yet been
earned, amounts received for tuition and fees and certain
auxiliary activities prior to the end of the fiscal year but
related to the subsequent accounting period. (See Note
H.)
Compensated Absences
Sick leave is not accrued but is reported in the period of
actual expenditure. Sick leave does not vest to the employee
but is allowed on an earned time basis. At the end of each
calendar year employees who have earned 48 days of sick
leave may convert up to four days of sick leave to annual
leave subject to other restrictions of the University.
Annual leave, including converted sick leave, is accrued
and reported as earned. Employees are allowed to carry a
maximum of 34 days annual leave. The 34 days is variable
depending on the number of sick-leave days the employee
is allowed to convert at calendar year end.
Gifts
Income Taxes
The University is excluded from income taxes under
Section 115(1) of the Internal Revenue Code. The
University is also considered a Section 501(c)(3)
corporation.
The University received $272,516 of gifts-in-kind, which
were recorded as revenue and expense during the fiscal year
ended June 30, 2008.
Classification of Revenues
Operating revenues: Operating revenues include activities
that have the characteristics of exchange transactions
such as: (1) student tuition and fees, net of scholarship
allowances, (2) sales and services of Auxiliary enterprises
and other departments, (3) most federal, state and local
contracts and grants and federal appropriations and (4)
interest on institutional student loans.
Non-operating revenues: Non-operating revenues include
activities that have the characteristics of non-exchange
transactions, such as gifts and contributions, and other
Non-current Liabilities
Non-current liabilities include principal amounts of revenue
bonds payable, notes payable and contracts payable that
are due beyond the next fiscal year, estimated amounts for
accrued compensated absences, early retirement and longterm deposits. 29
Notes to Financial Statements
capitalized when incurred in connection with the financing
of construction projects. For the year ended June 30, 2008,
the University capitalized $444,925 in connection with
construction projects.
The University computes depreciation using the straightline composite method over the estimated useful life of the
assets. The estimated useful lives are as follows:
Notes to Financial Statements
revenue sources that are defined as non-operating
revenues by GASB Statement No. 9, Reporting Cash
Flows of Proprietary and Nonexpendable Trust Funds
and Governmental Entities That Use Proprietary Fund
Accounting and GASB Statement No. 34, Basic Financial
Statements and Management’s Discussion and Analysis
for State and Local Governments. Examples of nonoperating revenues would include state appropriations
and investment income.
Scholarship Allowances
Student tuition and fee revenues are reported net of
scholarship allowances in the Statement of Revenue,
Expenses and Changes in Net Assets. Scholarship
allowances are the difference between the stated charge
for goods and services provided by the University, and
the amount that is paid by students and/or third parties
making payments on the students’ behalf. To the extent
that revenues from other sources are used to satisfy tuition
and fees and other student charges, the University has
recorded a scholarship allowance to eliminate overstating
total revenues to the University and properly record the
revenues at the original source. Segment Reporting
The University, through the Utah State Board of Regents,
issues revenue bonds to finance certain activities.
The University has deemed it not necessary to report
segments on these bond issues, based upon the criteria
provided in GASB Statement No. 34, Basic Financial
Statements and Management’s Discussion and Analysis
for State and Local Governments and GASB Statement
No. 38, Certain Financial Statement Note Disclosures.
Reclassification
Certain reclassifications have been made to the
prior year comparative information to conform with
the current year presentation. The reclassification
had no effect on the change in net assets reported for the
year ended June 30, 2007.
Prior Year’s Presentation
Summary totals and other specific dollar amounts for
the prior fiscal year (2007) are presented for comparison
purposes only.
B. Cash & Cash Equivalents and
Short-Term Investments Cash & cash equivalents consist of cash and deposits
with an original maturity of three months or less. Shortterm investments consist of investments with an original
maturity of one year or less. Cash, depending on source
of receipts, is pooled except when legal requirements
30
dictate the use of separate accounts. The cash balances and
cash float from outstanding checks are invested principally
in short-term investments that conform to the provisions of
the Utah Code. It is the practice of the University that the
investments ordinarily be held to maturity at which time the
par value of the investments will be realized.
The Utah State Treasurer’s Office operates the Utah Public
Treasurer’s Investment Fund (PTIF) which is invested in
accordance with the State Money Management Act. The
State Money Management Council provides regulatory
oversight for the PTIF. The PTIF is available for investment
of funds administered by any Utah Public Treasurer.
At June 30, 2008, cash & cash equivalents and short-term
investments consisted of:
Cash & Cash Equivalents
Cash
($766,794)
Money market funds
1,610,842
Repurchase agreements
4,260,703
Sweep account
4,054,044
Utah Public Treasurer’s Investment Fund
7,204,137
Total
$16,362,932
Short-Term Investments
Commercial paper and corporate notes
Total
$28,525,877
$28,525,877
D. Deposits and Investments
C. Investments The Utah State Money Management Act defines
the types of securities authorized as appropriate
investments for the University’s non-endowment funds
and the conditions for making investment transactions.
Investment transactions may be conducted only through
qualified depositories, certified dealers or directly with
issuers of the investment securities.
Statutes authorize the University to invest in negotiable
or non-negotiable deposits of qualified depositories
and permitted negotiable depositories; repurchase and
reverse repurchase agreements; commercial paper that
is classified as “first tier” by two nationally recognized
statistical rating organizations, one of which must
be Moody’s Investors Service or Standard & Poor’s;
bankers’ acceptances; obligations of the United
States Treasury including bills, notes and bonds;
bonds, notes and other evidence of indebtedness of
political subdivisions of the State; fixed rate corporate
obligations and variable rate securities rated “A” or
higher, or the equivalent of “A” or higher, by two
nationally recognized statistical rating organizations;
shares of certificates in a money market mutual fund as
defined in the Act; and the Utah State Public Treasurer’s
Investment Fund (PTIF).
The PTIF is not registered with the SEC as an
investment company. The PTIF is authorized and
regulated by the State Money Management Act, Section
51-7, Utah Code Annotated, 1953, as amended. The
Act established the State Money Management Council
which oversees the activities of the State Treasurer
and the PTIF and details the types of authorized
investments. Deposits in the PTIF are not insured
or otherwise guaranteed by the State of Utah, and
participants share proportionally in any realized gains
or losses on investments.
At June 30, 2008, the investment portfolio composition was
as follows:
Commercial paper and corporate
notes
Common and preferred stocks
$26,973,568
4,295,000
Mutual funds
51,058,210
Obligations of the U.S. Government
and its agencies
71,516,068
Private equity funds
Time certificates of deposit
Total investments (fair value)
The PTIF operates and reports to participants on an
amortized cost basis. The income, gains and losses - net
of administration fees, of the PTIF are allocated based
upon the participant’s average daily balance. The fair
value of the PTIF investment pool is approximately
equal to the value of the pool shares.
State law allows endowment funds of higher education
institutions to be invested in accordance with the Utah
State Board of Regents (Board of Regents) default
investment guidelines or in accordance with policies
adopted by the Institution’s Board of Trustees and
approved by the Board of Regents. The University
invests endowment funds in accordance with policies
adopted by the Board of Trustees and approved by the
Board of Regents.
1,089,258
69,000,000
$223,932,104
The University’s Investment Policy allows the
University to invest endowment funds in investments
authorized by the Utah State Money Management Act
31
Notes to Financial Statements
Funds available for investment are pooled to maximize
return and minimize administrative cost, except for funds
that are authorized by the University administration to be
separately invested or which are separately invested to
meet legal or donor requirements. Investments received as
gifts are recorded at market or appraised value on the date
of receipt. If no market or appraised value is available,
investments received as gifts are recorded at a nominal
value. Other investments are also recorded at fair value.
University personnel manage certain portfolios, while other
portfolios are managed by banks, investment advisors or
through trust agreements.
According to the University’s Investment Policy, the
governing board may appropriate for expenditure as
much of the net appreciation, realized and unrealized,
of an endowment’s corpus as is prudent under the facts
and circumstances prevailing at the time of the action or
decision. The appropriation must be for the purposes for
which the endowment is established.
The endowment income spending policy at June 30, 2008,
is 4 percent of the 12 quarter moving average of the market
value of the endowment pool. The spending policy is
reviewed periodically and any necessary changes are made.
The amount of net appreciation on investments of donorrestricted endowments that was available for authorization
for expenditure at June 30, 2008, was $7,792,387. The net
appreciation is a component of restricted expendable net
assets.
Notes to Financial Statements
or any of the following investments: readily marketable
equities which are diversified across a spectrum of market
capitalizations, multiple regions, by issue, industry and
sector; readily marketable fixed income investments
diversified by country, issue, sector, coupon and quality;
bonds having a minimum quality of “A” or better;
non-investment grade securities, limited to 15 percent
of a manager’s portfolio; foreign securities limited to
15 percent of a manager’s portfolio and alternative
investments that derive returns primarily from high yield
and distressed debt, natural resources, private capital,
commodities, private real estate assets or absolute return
and long/short hedge funds. In addition, endowment
funds may be invested as specifically directed by donor
agreement.
Deposits
At June 30, 2008, the carrying amounts of the University’s
deposits and bank balances were $73,023,174 and
$75,262,403, respectively. The bank balances of the
University were insured for $448,288 by the Federal
Deposit Insurance Corporation. The bank balances in
excess of $448,288 were uninsured and uncollateralized,
leaving $74,814,115 exposed to custodial credit risk. All
deposits were held by a qualified depository as defined
by the State Money Management Act. The State of Utah
does not require collateral on deposits.
Custodial credit risk for deposits is the risk that, in the
event of a bank failure, the University’s deposits may not
be returned to the University. The University does not
have a formal deposit policy for custodial credit risk.
Investments
Interest Rate Risk: Interest rate risk is the risk that
changes in interest rates will adversely affect the fair
value of an investment. The University’s policy for
managing its exposure to fair value loss arising from
increasing interest rates is to comply with the State’s
Money Management Act or the University’s Investment
Policy, as applicable. For non-endowment funds,
Section 51-7-11 of the Money Management Act requires
that the remaining term to maturity of investments may
not exceed the period of availability of the funds to be
invested. The Act further limits the remaining term
to maturity on all investments in commercial paper,
bankers’ acceptances, fixed rate negotiable deposits,
and fixed rate corporate obligations to 270-365 days or
less. In addition, variable rate negotiable deposits and
variable rate securities may not have a remaining term
to final maturity exceeding two years. For endowment
funds, the University’s Investment Policy requires
only that investments be made as a prudent investor
would, by considering the purposes, terms, distribution
requirements and other circumstances of the endowments
and by exercising reasonable care, skill and caution.
32
Credit Risk: Credit risk is the risk that an issuer or other
counterparty to an investment will not fulfill its obligation.
The University’s policy for reducing its exposure to credit
risk is to comply with the State’s Money Management
Act and the University’s Investment Policy, as previously
discussed.
Custodial Credit Risk: Custodial credit risk for investments
is the risk that, in the event of a failure of the counterparty,
the University will not be able to recover the value of the
investments that are in the possession of an outside party.
The University does not have a formal investment policy for
custodial credit risk. At June 30, 2008, the University had
$4,260,703 in repurchase agreements where the underlying
securities were uninsured and held by the investment’s
counterparty, but not in the University’s name. At June 30,
2008, the University also had $71,003,266 in U.S. agencies,
$4,295,000 in common and preferred stock, $55,499,445 in
commercial paper and corporate notes, and $502,365 in U.S.
Treasury securities which were held by the counterparty’s
trust department but not in the University’s name.
Concentration of Credit Risk: Concentration of credit risk is
the risk of loss attributed to the magnitude of a government’s
investment in a single issuer. For endowment funds the
University policy requires diversification of investments
across a broad spectrum and specific limits to concentration
of securities within categories of equities, fixed income
and alternatives. Rule 17 of the State Money Management
Council limits non-endowment fund investments in a single
issuer of commercial paper and corporate obligations to 5
percent. The Money Management Council limitations do
not apply to securities issued by the U.S. Government and
its agencies.
At June 30, 2008, the University held more than 5 percent
of total investments in securities of the Federal Home Loan
Bank and the Federal National Mortgage Association.
These investments represent 16.7 percent and 6.5 percent
respectively of the total investments.
Since June 30, 2008, a significant decrease in the current
market value of the University’s investments has occurred
due to extreme fluctuations in the market. However, the full
negative impact was not readily determinable at the time of
publication.
Investment Type
Fair Value
Less than 1
1-5
6-10
Greater than 10
Money market funds
$610,842
$610,842
Repurchase agreements
4,260,703
4,260,703
Utah Public Treasurer’s
Investment Fund
7,204,137
7,204,137
U.S. Treasury securities
502,365
102,727
$264,005
$135,633
Government National
Mortgage Association
10,437
10,437
U.S. agencies
71,003,266
1,530,202
69,368,126
$104,938
Commercial paper and
corporate notes
55,499,445
33,376,377
22,114,668
8,400
Mutual funds – bonds
Totals
Common and preferred stock
Mutual funds – equities
Private equity
Total
4,153,979
143,245,174
$47,084,988
4,295,000
46,904,231
1,089,258
$195,533,663
33
4,091,600
62,379
$95,838,399
$167,317
$154,470
Notes to Financial Statements
As of June 30, 2008, the University had the following investments and maturities:
Investment Maturities (in years)
Notes to Financial Statements
At June 30, 2008, the University had the following investments with quality ratings:
Quality Rating
Investment Type
Fair Value
Money market funds
$610,842
Repurchase agreements
4,260,703
Utah Public Treasurer’s
Investment Fund
7,204,137
U.S. Treasury securities
502,365
Government National
Mortgage Association
10,437
AAA
AA
BBB
$562,410
U.S. agencies
71,003,266
Commercial paper and
corporate notes
55,499,445
Mutual funds – bonds
4,153,979
31,876
3,770,380
$143,245,174
$71,597,552
$6,595,183
Totals
A
71,003,266
$2,824,803
$33,849,871
$18,777,521
$33,849,871
$18,777,521
Quality Rating (continued)
Investment Type
BB
B
Money market funds
Unrated
No Risk
$48,432
Repurchase agreements
4,260,703
Utah Public Treasurer’s
Investment Fund
7,204,137
U.S. Treasury securities
$502,365
Government National
Mortgage Association
10,437
U.S. agencies
Commercial paper and
corporate notes
$47,250
Mutual funds – bonds
Totals
34
$30,503
321,220
$30,503
$368,470
$11,513,272
$512,802
Accounts receivable consist of the following at June 30, 2008:
Current
Contracts and grants
Pledges receivable
Auxiliary and service enterprises
Non-current
$34,544,310
18,425,336
Total
$34,544,310
$39,700,779
58,126,115
1,642,060
1,642,060
993,615
993,615
1,640,253
1,640,253
184,216
184,216
Due from State Treasurer
1,322,904
1,322,904
Other activities
4,366,650
479,908
4,846,558
63,119,344
40,180,687
103,300,031
State appropriations
State grant – USTAR
Land Grant revenue
Total accounts receivable
Less allowance for doubtful accounts
Net accounts receivable
(724,206)
$62,395,138
(724,206)
$40,180,687
$102,575,825
Credits receivable, $1,046,727, reflect amounts due from vendors doing business primarily with the University’s Bookstore.
Student loans receivable are comprised primarily of loans issued through the Federal Perkins Loan Program (FPLP) and short-term
loans issued from funds set aside by the University for that purpose.
The FPLP loans provide for cancellation of a loan at rates of 10 percent to 30 percent per year up to a maximum of 100 percent if the
participant complies with certain provisions. The FPLP loans are payable after completion of academic degrees or termination as a
student with a term of ten years and an interest rate of 5 percent. In the event the University should withdraw from the FPLP or the
government were to cancel the program, the amount the University would be liable to the federal government for, as of June 30, 2008,
is $10,490,376.
As the University determines that loans are uncollectible and not eligible for reimbursement by the federal government, the loans are
written off and assigned to the U.S. Department of Education.
Other University short-term loans have a term of two to four months and carry an interest rate of 7 percent to 12 percent. The 12 percent
rate applies if the loan becomes delinquent. Notes receivable are as follows:
Current
Federal Perkins Loan Program
$364,781
Other
1,037,825
Total notes receivable
Less allowance for doubtful accounts
Net notes receivable
Non-current
Total Receivable
$12,117,058
$12,481,839
1,037,825
1,402,606
12,117,058
13,519,664
(50,208)
(258,100)
(308,308)
$1,352,398
$11,858,958
$13,211,356
35
Notes to Financial Statements
E. Accounts, Credits and Student Loans Receivable
Notes to Financial Statements
F. Property, Plant and Equipment
The University’s investment in property, plant and equipment consists of the following:
Balance
June 30, 2007
Additions
Transfers
Disposals
Balance
June 30, 2008
Property, plant and equipment not
depreciated
Land
Construction in progress
Total property, plant and equipment
not depreciated
$18,688,900
$46,800
($831,325)
($838,547)
$17,065,828
16,983,237
23,567,179
(18,030,071)
(45,787)
22,474,558
$35,672,137
$23,613,979
($18,861,396)
($884,334)
$39,540,386
$488,399,037
$1,195,905
$16,450,245
Other property, plant and equipment
Buildings
Improvements other than buildings
Equipment
63,438,272
2,411,151
108,086,000
14,630,671
65,158,931
2,133,519
725,082,240
17,960,095
(162,156,894)
Improvements other than buildings
Library collections
Total other property, plant
and equipment
($2,145,076) $503,900,111
(2,101,150)
63,748,273
(5,554,267)
117,162,404
67,292,450
18,861,396
(9,800,493)
752,103,238
(14,830,814)
1,516,240
(175,471,468)
(34,690,902)
(2,228,776)
1,879,035
(35,040,643)
Equipment
(66,285,152)
(8,906,848)
4,993,994
(70,198,006)
Library collections
(35,046,932)
(2,634,877)
(298,179,880)
(28,601,315)
0
$426,902,360
($10,641,220)
$18,861,396
Capital assets not depreciated
$35,672,137
$23,613,979
($18,861,396)
($884,334)
$39,540,386
Other capital assets at cost
725,082,240
17,960,095
18,861,396
(9,800,493)
752,103,238
760,754,377
41,574,074
0
(10,684,827)
791,643,624
Less accumulated depreciation
(298,179,880)
(28,601,315)
8,389,269
(318,391,926)
Capital assets – net of
depreciation
$462,574,497
$12,972,759
Less accumulated depreciation
Buildings
Total accumulated depreciation
Other capital assets net
(37,681,809)
8,389,269
(318,391,926)
($1,411,224) $433,711,312
Capital assets – summary
Total cost of capital assets
36
$0
($2,295,558) $473,251,698
Accounts payable consisted of the following at June 30, 2008:
Salaries and benefits payable
$25,201,220
Suppliers payable
14,431,249
Due to State Treasurer
1,651,511
Interest payable
758,705
Other
95,246
Total accounts payable and accrued liabilities
37
$42,137,931
Notes to Financial Statements
G. Accounts Payable and Accrued Liabilities
Notes to Financial Statements
H. Bonds, Notes, Contracts and Other Non-current Liabilities
Assets pledged for payment of bonds and contracts include the net revenue of Auxiliary enterprises, land
grant funds, specific student fees and reimbursed facilities and administrative costs. The gross amount of
capital assets purchased under capital lease as of June 30, 2008 was $31,951,600. Bonds, notes and contracts
outstanding at June 30, 2008 and 2007 were as follows:
June 30, 2008
June 30, 2007
$9,925,000
$10,245,000
Series A (1999) 3.80%-4.75%, 2002-2014, $15,010,000
10,925,000
12,215,000
Series (2007) 4.00%-5.00%, 2005-2035, $39,155,000
39,155,000
39,155,000
50,080,000
51,370,000
19,135,000
20,630,000
471,000
521,000
19,606,000
21,151,000
Bonds payable
Stadium/Spectrum and Student Recreation Bonds
Series A (2004) 2.00%-5.00%, 2004-2026, $11,065,000
Student Housing System Revenue Bonds
Total Student Housing System Revenue Bonds
Research Revenue Bonds
Series A (2002) 2.50%-5.25%, 2002-2018, $23,735,000
Series A (2003) 1.90%-4.40%, 2003-2016, $705,000
Total Research Revenue Bonds
Roosevelt Campus Construction Bonds
Series (1999) 2.50%, 2001-2020, $500,000
374,000
Total bonds payable
79,611,000
83,140,000
202,500
292,500
Notes and capital leases payable
Zions Mortgage, 3%, 1978-2011
GE Capital Solutions, 5.3690%, 1999-2010
148,445
Logan Park, LLC, 7.75%, 1999-2011
322,100
423,268
Zions Bank, 4.70%, 2003-2013
793,069
938,679
12,573,732
13,122,731
2,982
38,281
Caterpillar Financial Services, 4.65%, 2005-2025
117,477
122,280
Key Municipal Finance, 4.59%, 2006-2014
746,683
849,726
Bank of America, 4.017%, 2007-2016
350,738
386,318
Caterpillar Financial Services, 3.95%, 2003-2025
Zions Bank, 2.5%, 2004-2009
38
June 30, 2008
June 30, 2007
Bank of America, 3.58%, 2007-2016
$357,098
$392,409
Bank of America, 4.017%, 2007-2016
1,638,453
1,806,671
Bank of America, 4.18%, 2007-2017
391,461
484,222
SunTrust Leasing Corp., 3.97%, 2008-2018
616,631
650,000
1,857,925
1,958,581
Bank of America, 4.18%, 2007-2022
SunTrust Leasing Corp., 4.05%, 2008-2018
631,787
SunTrust Leasing Corp., 4.67%, 2008-2018
3,916,129
SunTrust Leasing Corp., 3.75%, 2008-2018
172,864
SunTrust Leasing Corp., 4.5%, 2009-2018
125,339
SunTrust Leasing Corp., 4.6%, 2009-2018
499,995
Total notes and capital leases payable
25,316,963
21,614,111
Equipment contracts payable, 2008-2012
1,764,647
843,842
106,692,610
105,597,953
1995A Bonds – refunding loss
(96,696)
(135,374)
2002A Bonds – RP
367,887
411,846
28,751
30,369
(1,838,129)
(1,906,845)
3,763,558
3,904,252
2,225,371
2,304,248
$108,917,981
$107,902,201
Total bonds, notes and equipment contracts payable
Unamortized original issue discounts (OID),
reoffering premiums (RP) and refunding losses on bonds
2004A/B Bonds – RP
2007 Bonds – refunding loss
2007 Bonds – RP
Total unamortized OID, RP and refunding loss on bonds
Total bonds, notes and equipment contracts payable net of
unamortized OID, RP and refunding loss on bonds
39
Notes to Financial Statements
Notes and capital leases payable (continued)
Notes to Financial Statements
Below is a summary of the changes in bonds, notes and equipment contracts payable for the fiscal year ended
June 30, 2008:
Balance at
June 30, 2007
Bonds
$83,140,000
$21,614,111
$843,842
$105,597,953
5,513,560
1,367,145
6,880,705
(3,529,000)
(1,810,708)
(446,340)
(5,786,048)
(78,877)
(5,864,925)
$79,611,000
$25,316,963
$1,764,647
$106,692,610
$2,225,371
$108,917,981
Additions
Deletions
Balance at
June 30, 2008
Total Net of
Unamortized
OID, RP and
OID, RP and
Refunding Loss Refunding Loss
Notes and
Capital
Leases
Equipment
Contracts
Total
Payable
$2,304,248
$107,902,201
6,880,705
The University has complied with the restrictive covenants of its bond agreements. Amounts due on bonds and contracts
payable in future years are as follows:
Bonds
Bond
Interest
Notes and
Capital
Leases
Notes and
Capital Leases
Interest
Equipment
Contracts
Contracts
Interest
Total Amount
Required
FY 2009
$3,296,000
$3,784,997
$1,777,201
$1,020,267
$618,040
$71,874
$10,568,379
FY 2010
3,438,000
3,641,801
1,850,187
941,501
549,215
41,125
10,461,829
FY 2011
3,605,000
3,488,749
1,829,421
860,182
474,186
18,824
10,276,362
FY 2012
3,767,000
3,326,372
1,785,267
783,844
123,206
1,498
9,787,187
FY 2013
3,950,000
3,152,067
1,872,799
706,600
9,681,466
FY’s 2014-2018
20,565,000
12,892,695
9,851,738
2,405,682
45,715,115
FY’s 2019-2023
10,765,000
9,124,784
5,219,762
731,097
25,840,643
FY’s 2024-2028
12,020,000
6,137,000
1,130,588
22,465
19,310,053
FY’s 2029-2033
12,370,000
3,218,875
15,588,875
FY’s 2034-2038
5,835,000
368,313
6,203,313
$79,611,000
$49,135,653
Total
$25,316,963
40
$7,471,638
$1,764,647
$133,321
$163,433,222
Deferred revenues and deposits consisted of the following at June 30, 2008:
Current
Tuition and fees
Non-current
$5,470,849
Contract and grant revenue
$5,470,849
8,799,488
Auxiliary and service enterprises
Non-operating
Total
Total
$540,000
9,339,488
925,972
925,972
62,045
62,045
$15,258,354
$540,000
$15,798,354
Non-current liability activity for the year ended June 30, 2008, was as follows:
Beginning
Balance
June 30, 2007
Additions
Reductions
Ending
Balance
June 30, 2008
Amounts
Due Within
One Year
Bonds, notes and contracts payable
Bonds payable
$85,444,248
($3,607,877)
$81,836,371
$3,296,000
Notes payable
21,614,111
$5,513,560
(1,810,708)
25,316,963
1,777,201
843,842
1,367,145
(446,340)
1,764,647
618,040
107,902,201
6,880,705
(5,864,925)
108,917,981
5,691,241
Liability for compensated absences
14,484,266
3,871,101
(3,350,645)
15,004,722
3,328,816
Liability for early retirement
11,430,707
2,476,687
(4,092,283)
9,815,111
3,742,246
Deferred revenue and deposits
18,394,015
14,358,354
(16,954,015)
15,798,354
15,258,354
44,308,988
20,706,142
(24,396,943)
40,618,187
22,329,416
$152,211,189
$27,586,847
($30,261,868)
$149,536,168
$28,020,657
Contracts payable
Total bonds, notes and contracts payable
Other liabilities
Total other liabilities
Total non-current liabilities
41
Notes to Financial Statements
The outstanding balance of bonds defeased and refunded in prior years totaled $40,640,000 at June 30, 2008. The bond
liabilities of the defeased and refunded bonds are not included on the balance sheet.
Notes to Financial Statements
I. Pledged Bond Revenue
The University issues revenue bonds to provide funds for the construction and renovation of major capital facilities. Investors
in these bonds rely solely on the net revenue pledged by the following activities for the retirement of outstanding bonds
payable. Student Fee and Housing System – is comprised of the net revenue from specific Auxiliary enterprises and student building
fee assessments. The Student Fee and Housing System includes all University housing except the Student Living Center,
Parking Services, all of University Dining Services, the net revenues of the Taggart Student Center, Student Building Fees
specifically identified in the bond resolution and land grant revenues. The University has pledged future net revenues of the
Student Fee and Housing System to repay $15,010,000 and $39,155,000 in bonds issued in February 1999 and May 2007,
respectively. Proceeds from the 1999 and 2007 bonds were used to refund bonds issued in 1994 and 2004 originally issued to
finance the construction and renovation of the Student Fee and Housing System facilities. Student Fee and Housing System
annual net revenues are projected to produce at least 110 percent of the annual debt service requirements over the life of the
bonds. The total principal and interest remaining to be paid on the bonds is $88,845,199. The bonds are payable solely from
the Student Fee and Housing System and are payable through 2035.
Student Fee Stadium/Spectrum Recreation Facilities System – is comprised of those student fees specifically identified in the
bond resolution and paid by students for the use and availability of the facilities. The University has pledged future revenues
of the specifically identified student fees to repay $11,065,000 in bonds issued in June 2004. Proceeds from the bonds
provided financing for the renovating and remodeling of the University’s football stadium and a student recreation center.
Student fee revenues are projected to produce at least 110 percent of the annual debt service requirements over the life of the
bonds. The total principal and interest remaining to be paid on the bonds is $15,211,172. The bonds are payable solely from
Student Fee Stadium/Spectrum Recreation Facilities System and are payable through 2026.
Research Revenue System – is comprised of the revenue generated from the recovery of allocated facilities and administration
costs to contracts and grants based on federally approved negotiated rate agreements. The University has pledged future
revenues of the Research Revenue System to repay $23,735,000 and $705,000 in bonds issued in July 2002 and March
2003, respectively. Proceeds from the 2002 bonds provided financing for the cost of acquiring, constructing, furnishing and
equipping three buildings as office and research facilities on the USU Innovation Campus. Proceeds from the 2003 bonds
provided for the acquisition of 550 acres of farmland approximately 12 miles northwest of Logan to replace University
farmland now assigned to the USU Innovation Campus. Annual principal and interest payments on the bonds are expected
to require less than 15 percent of revenues. The total principal and interest remaining to be paid on the bonds is $24,690,282.
The bonds are payable solely from the Research Revenue System and are payable through 2018.
42
Student Fee
and
Housing System
Student Fee
Stadium/Spectrum
Recreation
Facilities System
$18,772,399
$905,210
$19,976,868
905,210
19,976,868
Research
Revenue
System
Revenue
Operating revenue/gross profit
Non-operating revenue
398,710
Total revenue
19,171,109
Operating expenses
14,690,266
Total expenses
14,690,266
0
0
$4,480,843
$905,210
$19,976,868
$3,374,249
$809,095
$2,439,758
1.33X
1.12X
8.19X
Expenses
Net pledged revenue
Principal paid and interest expense
Debt service ratio
43
Notes to Financial Statements
The following schedule presents the net revenue pledged to the applicable bond system and the principal and interest paid
for the year ended June 30, 2008.
Notes to Financial Statements
J. Pension Plans and Retirement Benefits
As required by state law, eligible non-exempt employees of the University (as defined by the U.S. Fair Labor Standards Act)
are covered by the Utah Retirement Systems. Eligible exempt employees (as defined by the U.S. Fair Labor Standards Act)
are covered by the Teachers Insurance and Annuity Association (TIAA) and/or College Retirement Equities Fund (CREF).
The total employee compensation and the total contribution for each pension plan for the year ending June 30, 2008 and the
two previous years were as follows:
Contributions
Defined
Contribution
Plans 401(K)
Year
Compensation
Defined
Benefit Plans
2008
$807,547
$127,327
$127,327
2007
854,576
134,425
134,425
2006
955,147
142,674
142,674
2008
35,780,342
5,090,311
$577,738
5,668,049
2007
34,467,648
4,898,118
551,262
5,449,380
2006
33,303,804
4,457,948
527,864
4,985,812
2008
409,608
109,570
109,570
2007
356,879
95,465
95,465
2006
363,660
85,315
85,315
2008
136,230,908
19,348,204
19,348,204
2007
127,616,591
18,124,442
18,124,442
2006
122,108,917
17,339,467
17,339,467
2008
42,314,668
2007
38,271,247
2006
37,631,756
Total
Utah Retirement Systems
State and School System –
Contributory
State and School System – Noncontributory (includes amounts
(see note below) contributed
to a 401(K) plan with
Educators Mutual Insurance
Association (EMIA))
Public Safety with Social Security
System – Non-contributory
TIAA and/or CREF
Non-eligible employees
44
TIAA and/or CREF provide individual retirement fund
contracts with each participating employee. Benefits
provided to retired employees are based on the value of
individual contracts and the estimated life expectancy
of the employee at retirement. Contributions by the
University to the employee’s contract become vested at
the time the contribution is made. For the years ended June
30, 2008, 2007 and 2006, the University’s contribution
to this multiple employer defined contribution plan
was 14.2 percent of the employees’ annual salary or
$19,348,204, $18,124,442 and $17,339,467, respectively.
The University has no further liability once annual
contributions are made.
The University provides an early retirement option to
employees who qualify and are approved by administration in accordance with University policy. This option
is available to all employees whose accumulated age and
years of service are equal to or greater than 75, that have
met the minimum age requirements and where the early
retirement is in the mutual best interest of the employee
and the University.
The policy provides two mutually exclusive early
retirement options for eligible employees; either six
years (16.67 percent of base salary per year) or five
years (20 percent of base salary per year). The six-year
option requires a minimum age of 56 and the five-year
option requires a minimum age of 57. Benefits include a
monthly stipend equal to the agreed upon percent of the
retiree’s salary at the time of active employment along
with medical and dental insurance.
The projected future cost of these stipends, and medical
and dental insurance benefits have been calculated based
on the known amount to be paid out in the next fiscal
year plus projected increases of 1.7 percent (USU), 4.0
percent (USURF) for stipends and 6.8 percent (USU),
9.0 percent (USURF) for medical and dental premiums.
These increases are based on historical data. The
premiums for medical and dental benefits have also
been increased by an age-adjusted factor of 2.17. The
net present value of the total projected costs is calculated
using the estimated yield (4.053 percent) for University
investments in the Cash Management Investment Pool
and 5 percent for USURF. The net present value is the
amount recognized on the financial statements as the
liability for early retirement.
At June 30, 2008, there were 155 participants in the early
retirement program. The program is funded on a pay-asyou-go basis from current funds. Payments for the stipend
in the years ended June 30, 2008, 2007 and 2006 were
$1,718,943, $1,450,275 and $1,423,175, respectively.
Payments for the health care and life insurance benefits
for the years ended June 30, 2008, 2007 and 2006 were
$1,315,122, $1,016,452 and $1,025,980, respectively.
45
Notes to Financial Statements
Utah Retirement Systems plans include multiple-employer,
cost sharing, defined benefit plans and 401(K) defined
contribution plans. The defined benefit plans provide defined
benefits based on years of service and highest average salaries.
The defined contribution plans provide benefits based on
total contributions and the accumulated earnings. The plans
are administered by the State of Utah. These systems cover
substantially all eligible public employees of the State of
Utah, educational employees and employees of participating
local governmental entities. The pension benefit is vested
at the end of four years under all Utah Retirement Systems
plans in which University employees are participating. The
amount credited as the individual’s contribution is vested
at the time the contribution is made. For employees in the
contributory plan, the University contributes at a rate of 15.73
percent of gross earnings. Of this, 6 percent is credited as
the individual’s contribution and 9.73 percent is considered
the University’s matching contribution. For employees in
the State and School System – Non-contributory plan, the
University contributes 15.72 percent of gross earnings. Of
this, l.5 percent is contributed to a 401(K) plan and 14.22
percent is credited as the University’s contribution. For the
employees in the Utah Public Safety with Social Security
System – Non-contributory plan, the University contributes
26.75 percent of gross earnings. During the fiscal years ended
June 30, 2008, 2007 and 2006, the University’s contribution
to all Utah retirement plans was $5,880,370, $5,654,548
and $5,187,506, respectively. The University has no further
liability once contributions are made. The Utah Retirement Systems are established and governed
by the respective sections of Chapter 49 of the Utah Code
Annotated 1953 as amended. The Utah State Retirement Office
Act in Chapter 49 provides for the administration of the Utah
Retirement Systems and Plans under the direction of the Utah
State Retirement Board, whose members are appointed by
the governor. The Utah Retirement Systems issues a publicly
available financial report that includes financial statements
and required supplementary information for the State and
School System – Contributory Retirement plan, State and
School System – Non-contributory Retirement plan and
Public Safety Retirement System plan. A copy of the report
may be obtained by writing to the Utah Retirement Systems,
540 East 200 South, Salt Lake City, UT 84102, or by calling
1-800-365-8772.
EMIA provides a 401(K) defined contribution plan that can
be utilized by employees on the Utah Retirement State and
School System – Non-contributory plan. This contribution is
in lieu of the 1.5 percent that would have been contributed to
the Utah Retirement Systems 401(K) plan. The contribution
made by the University is at 1.5 percent of gross earnings.
Contributions by the University become vested at the time
the contribution is made. During the fiscal years ended
June 30, 2008, 2007 and 2006, the University’s contribution
to this 401(K) plan was $24,576, $24,722 and $26,295,
respectively. The University has no further liability once
contributions are made.
Notes to Financial Statements
K. Deferred Compensation Plan
Employees of the University may participate in several
deferred compensation plans adopted under the provisions
of Internal Revenue Code (IRC) Section 457 (Deferred
Compensation Plans with Respect to Service for State and
Local Governments). The deferred compensation plans
are available to all employees of the University. Under
the plans, employees may elect to defer a portion of their
salaries and avoid paying taxes on the deferred portion
until the withdrawal date. The deferred compensation
amount is not available for withdrawal by employees
until termination, retirement, death or unforeseeable
emergency.
The deferred compensation plans are administered by an
unrelated financial institution. As part of its fiduciary role,
the University has an obligation of due care in selecting the
third party administrators. In the opinion of the University
administrators, the University has acted in a prudent
manner and is not liable for losses that may arise from the
administration of the plans.
The University is in compliance with the requirements
of subsection (g) of IRC Section 457. All assets for
IRC Section 457 plans are externally held in trust for the
exclusive benefit of the participants or their beneficiaries
rather than as assets of the University.
L. Risk Management
General Liability Insurance
The University maintains insurance coverage for general,
automobile, personal injury, errors and omissions,
employee dishonesty and malpractice liability up to $10
million per occurrence through policies administered by the
Utah State Risk Management Fund. The University also
insures its buildings, including those under construction,
and contents against all insurable risks of direct physical
loss or damage with the Utah State Risk Management
Fund. This all-risk insurance coverage provides for repair
or replacement of damaged property at a replacement cost
basis subject to a deductible of $1,000 per occurrence.
All revenues from University operations, rental income
for its residence halls and tuition are insured against
loss due to business interruption caused by fire or other
insurable perils with the Utah State Risk Management
Fund. All University employees are covered by worker’s
compensation insurance, including employer’s liability
coverage by the Worker’s Compensation Fund of Utah.
Self-insurance for Employee Health and
Dental Care
On July 1, 1995, the University established a selfinsurance fund for employee health and dental care. GASB
Statement No. 10 requires a liability for claims be reported
46
if information prior to the issuance of the financial statements
indicates it is probable a liability has been incurred at the date
of the financial statements. The University’s estimated selfinsurance claims liability at June 30, 2008 and June 30, 2007
are as follows:
2008
2007
Estimated claims liability
at beginning of year
$3,019,843
$2,738,045
Current year claims and
changes in estimates
31,666,594
32,276,218
Claim payments,
including related legal
and administrative
expenses
(30,824,127)
(31,994,420)
Estimated claims liability
at end of year
$3,862,310
$3,019,843
The University has recorded the investment of the health and
dental care funds at June 30, 2008, and the estimated liability
for self-insurance claims at that date in the Statement of Net
Assets. The income on fund investments, the expenses related
to the administration of the self-insurance and the estimated
provision for the claims liabilities for the year then ended are
recorded in the Statement of Revenues, Expenses and Changes
in Net Assets and the Statement of Net Assets.
Contingencies
The University has been named in several lawsuits where
litigation is pending. It is unlikely that any judgments against
the University will be established or would otherwise be
material in nature. The lawsuits are such that any financial
settlement would be covered primarily by insurance held by
the University.
At June 30, 2008, the University had outstanding commitments
for the construction and remodeling of University buildings of
approximately $9,648,000.
Natural Classification
Other
Operating
Expenses
Functional Classification
Instruction
$74,721,367
$28,824,184
$17,537,044
$121,082,595
Research
46,508,761
15,349,116
44,867,360
106,725,237
Public service
21,776,208
6,555,495
14,592,141
42,923,844
Academic support
16,301,819
7,305,621
7,129,230
30,736,670
7,258,195
2,491,290
3,456,574
13,206,059
19,958,274
6,089,668
1,572,503
27,620,445
9,232,148
4,414,845
18,708,052
32,355,045
Student services
Institutional support
Operation and
maintenance
Employee
Benefits
Scholarships
and
Fellowships
Salaries
and Wages
Scholarships and
fellowships
Depreciation
$23,911,210
Total
23,911,210
Service departments
4,428,982
1,317,864
(6,259,132)
(512,286)
Auxiliary enterprises
11,647,137
4,170,831
17,688,407
33,506,375
Depreciation
Total operating expenses
$211,832,891
$76,518,914
$119,292,179
47
$23,911,210
$28,602,378
28,602,378
$28,602,378
$460,157,572
Notes to Financial Statements
M. Natural and Functional Classifications
Notes to Financial Statements
4848
EXECUTIVE OFFICERS
BOARD OF TRUSTEES
Stan L. Albrecht
Richard L. Shipley
President
Chairman
Suzanne Pierce-Moore
Raymond T. Coward
Vice Chairman
Executive Vice President and Provost
Grady B. Brimley
Fred R. Hunsaker
David P. Cook
Interim Vice President for
Business and Finance
Robert L. Foley
Noelle E. Cockett
Douglas S. Foxley
Vice President for Extension and
Agriculture
David Johnson III
M. K. Jeppesen
Paul D. Parkinson
Vice President for Information
Technology
Scott R. Watterson
Sydney M. Peterson
Brent C. Miller
Secretary to the Board
Vice President for Research
This report is prepared by the Office of the Vice President for
Business and Finance. Financial statement compilation and
preparation; statistical and financial highlights:
Ned M. Weinshenker
Vice President for Strategic Ventures
and Economic Development
David T. Cowley
Rick G. Allen
Gary A. Chambers
Dan R. Christensen
Vice President for Student Services
F. Ross Peterson
Associate Vice President for Business and Finance
Controller
Manager of Accounting and Financial Reporting
Vice President for University Advancement
All appointments were as of June 30, 2008
49
David G. Sant Engineering Innovation