2008
National Hispanic University
Business Plan
Edward Alvarez Board Chair
NHU Business Plan 2008 TABLE OF CONTENTS PART 1: The National Hispanic University A. THE NATIONAL HISPANIC UNIVERSITY HISTORY 1. Mission Statement 2. Admission Requirements 3. WASC Accreditation 4. Teacher Education 5. The Latino College Preparatory Academy 6. Student Profile 7. Faculty 8. Financial Profile 9. Board of Trustees B. THE PLAN FOR THE NEXT FIVE YEARS 1. Mission Statement 2. Transition to Liberal Arts College 3. Teacher Training and Education Emphasis 4. Partnerships with Key Institutions 5. Quality Retention PART 2: FIVE YEAR FINANCIAL PROJECTIONS PART 3: FISCAL YEAR FINANCIAL STATEMENTS PART 4: APPENDICES A-D A. Board of Trustees B. Organizational Chart C. Management Staff D. Faculty PART 5: APPENDICES E-J E. Enrollment Agreements F. Programs G. Hispanic Enrollment Data Chart H. Department Catalog I. Financial Statements J. Real Estate Appraisal Agreement
NOTE: Appendices E through I are available upon request, hard copy only.
NHU Business Plan 2008
PART 1: The National Hispanic University
NHU Business Plan 2008
A: THE NATIONAL HISPANIC UNIVERSITY HISTORY
NHU Business Plan 2008 1. Mission Statement The mission of The National Hispanic University (NHU) is to enable Hispanics, other minorities, women and others to acquire an undergraduate degree, or certificate, using a multicultural educational experience to obtain a professional career in business, education, or technology. The typical NHU student is one with tremendous academic capacity and desire, untapped by the traditional educational structure of our public school systems. NHU is dedicated to the challenge of meeting the unique requirements of students who have not yet met the requirements of the post-secondary public school system. NHU provides this opportunity in all phases of its operations, from the selection of professors to the design of the curriculum. A strong, proven, Summer Bridge Experience helps students prepare for the rigors of the college curriculum. This comprehensive approach contributes significantly to NHU’s higher retention rate when compared to the experience of public universities. 2. Admission Requirements To qualify for admission, students need to have attained a minimum secondary school grade point average (GPA), from the last three years of study, of 2.0, and need to demonstrate that they possess the interest and the motivation to successfully pursue studies at NHU. The University currently offers degree programs in Liberal Studies, Business Administration and Computer Information Systems. 3. WASC Accreditation NHU received full WASC Accreditation in 2002, the highest level possible for a university or college. This accomplishment culminated more than 20 years of research and practice, giving formal recognition to its unique understanding of Hispanic learning needs and the development of its emphasis in high expectations and academic support systems. WASC accreditation is important for several reasons: (a) it allows the university to participate more fully in programs with other WASC accredited colleges and universities, (b) it allows NHU to offer Federal and State financial aid programs to its students and, most importantly, (c) it allows students to transfer out and gain admittance to accredited graduate schools. WASC’s five year review process is currently underway.
NHU Business Plan 2008 4. Teacher Education NHU’s Graduate Teacher Education program is well recognized for producing a disproportionately large cohort of talented and accomplished teachers. Several graduates have achieved local and state recognition for their teaching skills. The State of California recently selected NHU as on one of only 6 schools to provide a Crosscultural, Language, and Academic Development (CLAD), certificate in addition to its normal offerings. NHU’s unique talent is in preparing teachers for classroom success in a state where diversity in culture and language are the norm. NHU’s location in a low income, underserved area, its faculty and staff, all reinforce and build competence, making its graduates highly recruited by local school districts. NHU has approval from the California Commission on Teacher Credentialing to grant Multiple and Single Subject Teaching Credentials (English, Math, Science, Social Science, Physical Education, Art and Spanish) and the Bilingual, CrossCultural, Language and Academic Development (BCLAD/CLAD) Certificates. NHU also has the California Commission on Teaching Credentialing for the Elementary Subject Matter for the Multiple Subject Teaching Credential. 5. The Latino College Preparatory Academy NHU established, under the sponsorship of the Eastside Union High School District (ESUHD), a public Charter High School in 2001; the Latino College Preparatory Academy (LCPA). LCPA enables high school English Language Learners to acquire critical skills in English and Spanish so that they graduate from high school with the academic and linguistic skills required for university level work. LCPA is located on the campus of NHU and has an enrollment of 400 students. The NHU philosophy of high expectations and strong support systems is embodied within the LCPA. A strong on campus relationship provides a direct pipeline to NHU and facilitates Teacher Training at NHU in a laboratory type setting. Retention, graduation rates and college acceptance rates for LCPA students significantly exceed those of the area’s public high schools.
NHU Business Plan 2008 6. Student Profile NHU’s undergraduate student enrollment is 700 total students taking a varying number of the units required for graduation. NHU recruits its student primarily from the LCPA and the ESUHD. Students are admitted who have attained at least a 2.0 grade point average in high school and who demonstrate, through an interview process, an understanding of the rigors of a college education. At present the majority of NHU students are part time students. The Universities cross enrollment agreement San Jose State University enables NHU students to complete graduation requirements at both schools. The potential of NHU students is best demonstrated by its prize winning debate team which over the past two years has achieved state and national success in competition with major universities (Appendix F). 7. Faculty A major NHU asset is its faculty. The NHU faculty, both fulltime (12) and part time (60) has demonstrated their commitment to the university’s mission by demonstrating success in obtaining accreditation, longevity and the acceptance of below market compensation (Appendix D). 8. Financial Profile NHU’s campus is located in an area of East San Jose, federally designated as a lowincome urban area. Its students come mainly from the surrounding areas. Nearly 80% of all students receive financial aid and private scholarship assistance. Students contribute only 25% of the universities operating costs. Historically NHU receives a significant portion of its revenues from private donors. In 2000 NHU began a three capital campaign and raised nearly $20,000,000 in private donations enabling it to purchase its campus site and construct a 65,000 square foot state of the art academic building, Sobrato Hall parking lot, athletic fields and related landscape improvements. Permanent financing for the new facilities was secured in 2004 from Lenders for Community Development (LCD) through the New
NHU Business Plan 2008 Markets Tax Credit Program. In 2007 the university secured a working capital loan from LCD to fund its operations through 2008. Both loans are due in 2011. NHU’s financial statements (Appendix I) are attached at Appendices. 9. Board of Trustees NHU’s Board of Trustees works as a vital part of the University fundraising program. The board has representatives from the Silicon Valley Community as well as leaders in the field of education. Through the efforts of the NHU Trustee’s, the university has received major gifts from leading foundations and major Silicon Valley corporations (Appendix A).
NHU Business Plan 2008
B:
THE PLAN FOR THE NEXT FIVE YEARS
NHU Business Plan 2008 1. Mission Statement All decisions, curriculum, academic programs, service, research, strategic plan, advancement and set of priorities must ultimately be measured and evaluated in relation to how well they promote or advance the mission of NHU. In other words, the NHU needs to continue being a mission driven institution as the best “practice” to providing qualitatively sound educational programs that reflect an unequivocal commitment to serving the educational needs of the underserved of America, in particular Latino students. NHU’s mission should be used as the foundation to build curriculum and programs, seek funding and resources, evaluate decisions and initiatives, assess effectiveness and successes, as well as selectively abandon practices and organizational structures that are contrary to its focus. The stark demographic reality in California and the rest of the nation necessitates a mission driven university that is focused on providing quality educational programs to the underserved of America—If not now? When? If not NHU? Who? 2. Transition to Liberal Arts College The NHU must commit to strengthening, enhancing and establishing itself as a solid liberal arts institution that serves the needs of Latinos in the region, state, and nation. Research shows that universities with an emphasis in the liberal arts produce students who are “well-rounded,” well prepared for the workplace, and can quickly adapt to the changing circumstances of the global economy and an uncertain future, particularly in terms of employment. These are partly the reasons why the “historically black colleges and universities” have focused their energy in creating high quality liberal arts programs that are well recognized. Indeed, 80% of the nation’s African American leadership and successful entrepreneurs have emerged from these colleges and universities. Additionally, the attention on quality liberal arts programs will prevent the tendency to scatter limited resources in a “surface deep” manner. NHU is committed to establishing a quality liberal arts program will allow it to create a set of priorities and strategic plan that is focused, so that the limited resources under which it operates will serve the students well in liberal arts.
NHU Business Plan 2008 3. Teacher Training and Education Emphasis A quality liberal arts program will be conducive to the creation of a substantial “blended or integrated” education program. A blended credential program is intended to start in the third year of university studies in a way that will allow students to finish their B.A. and teaching credential simultaneously. A logical “bridge” can be created between the liberal arts program and a “blended” credential program that will serve the needs of underserved and Latino students well. Currently, universities that include blended programs (Fresno State, Cal State San Marcos etc.) attract a disproportionately high number of underserved and Latino students resulting in a higher number of trained bilingual teachers. For the National Hispanic University, with a disproportionate high number of underserved and Latino students, a blended educational program will likely result in a higher number of undergraduates selecting teacher education. Graduates of this program would then receive a Masters Degree in Education after completing a fifth year of study. 4. Partnerships with Key Institutions A key NHU strategy is the creation of partnerships and collaboration with the other universities and colleges. As programs are developed with key local, regional, and state educational institutions, additional Cross Enrollment, Joint Enrollment and Articulation Agreements will be negotiated. Thus NHU will become more responsive to the needs of the underserved and Latino students. The partnerships need to be at both ends of the NHU experience, from those institutions that will provide students for the liberal arts and teacher education programs (e.g., San JoseEvergreen Valley Community College graduates transferring into NHU) to appropriate placements for NHU graduates who seek alternatives to further their education. Thus NHU will be able to provide various pathways to college graduation for each of it students. This strategy will include the following: • Recruitment: Implementation of strategic and focused outreach recruitment activities with high schools in ESUHSD and SJUSD serving large numbers of Latino students and create “bridges” or pathways for entering into NHU.
NHU Business Plan 2008 Prioritize students with a certain profile e.g., 2.0 GPA and above, qualify for financial assistance, full-time, and highly motivated. There are currently 45,000 Hispanic students attending local schools including 17,000 high school seniors. Only a small fracture of these students are entering or completing a 4 year education. • • Enhance and strengthen LCPA/NHU pipeline program. Enhance and strengthen the partnership with San Jose State and other local Universities. San Jose State can play a critical role in helping our undergraduate and teacher candidates obtain degrees and credentials, especially where completing the program may necessitate “joint courses” or transfer to San Jose State. As a recognized “Hispanic Serving Institution,” NHU can pursue a relationship with SJS that could attract federal and foundation dollars for the benefit of Latino students at both institutions. • Formalize a Dual Enrollment Agreement with San Jose-Evergreen Community College, permitting students to enroll at both schools taking selected courses at each. Recruit students who wish to transfer into our liberal arts program. Additionally, those seeking teacher educations can easily transfer into the blended program as juniors. There are presently 10,000 Hispanic students attending San Jose and Evergreen Community Colleges, less than 10% of those students are transferring to a 4 year college after completion of their AA. • Stanford University has demonstrated interest in NHU’s programs and it could become a key player in working with NHU in various areas, particularly in conducting research and services that address the needs of Latinos. In addition, a partnership could be negotiated that may serve as conduit to attract recent PhD’s to teach temporarily or permanently at NHU before moving on with their careers (Appendix F).
NHU Business Plan 2008 5. Quality Retention Quality Retention Programs are essential to the success of NHU. For the school year beginning in the Fall of 2008, the university will initiate the first phase of its First Year Learning Experience Program in partnership with Applied Materials Corporation. This comprehensive three year program will require funding in addition to the commitment from Applied Materials in order to permit full implementation of the program (Appendix F).
PART 2: FIVE YEAR FINANCIAL PROJECTIONS
SUMMARY
The following primer is organized into 7 sections corresponding to different pages of the financial plan. Each section is designed to provide definitional or explanatory background on the information contained in each sheet. The sections are as follows: SUMMARY 5-YEAR PROFORMA (Exhibit 1) ENROLLMENT (Exhibit 2) TEACHER EDUCATION PROJECTIONS (Exhibit 3) 5-YEAR TUITION SCHEDULE (Exhibit 4) FACULTY PERSONNEL EXPENSE PROJECTIONS (Exhibit 5) NON-FACULTYPERSONNEL EXPENSE (Exhibit 6) NON PERSONNEL EXPENSES (Exhibit 7)
NHU Privileged & Confidential
SUMMARY 5-YEAR PROFORMA (Exhibit 1)
Revenue Operating revenue: Operations from ordinary operating sources such as tuition, continuing education and contract work. Other Revenue – LCPA: Comprised mostly of lease payments for the FF&E provided to LCPA by NHU and payment of various administrative support including HR, Finance, Advancement and Teacher Education. Other Revenue - Indirects : This line reflects the expected indirect or overhead available to NHU from federal grants that NHU currently has. NHU projects 10% of total grant revenue as our “indirect” rate. As NHU pursues additional grant opportunities this line item is expected to increase. Other Revenue- Donations: Reflects annual donation levels, which NHU has been able to achieve historically. These amounts are net of programmatic costs. Less: Expenses Faculty Payroll Expense: Includes full-time and adjunct cost projections. These costs are also burdened to include fringe benefits including retirement plans. Non-Faculty Personnel Expense: Includes all non-faculty costs, from student services such as financial aid and the registrar to the Provost and President. These costs are also burdened to include fringe benefits including retirement plans. Non-Personnel Expenses: All other non-personnel related expenses such as Stipends and Scholarships, Supplies, Equipment, Interest and Utilities.
NHU Privileged & Confidential
SUMMARY 5-YEAR PROFORMA
2008-2009
Revenue Operating Revenue: Tuition Other Revenue: LCPA Other Revenue: Grants Other Revenue: Donations TOTAL REVENUE Less: Faculty Payroll Expense Non Faculty Personnel Expense Non Personnel Expense TOTAL COSTS: 1,317,975 2,715,517 2,877,500 6,910,992 1,592,200 2,753,999 3,442,604 7,788,803 2,220,700 2,883,955 4,092,904 9,197,559 3,085,000 2,971,677 4,424,126 10,480,802 3,638,000 3,027,554 4,587,350 11,252,904 2,785,680 1,500,000 500,000 4,785,680
2009-2010
5,000,489 350,000 1,500,000 500,000 7,350,489
2010-2011
8,762,930 400,000 1,500,000 500,000 11,162,930
2011-2012
11,171,754 400,000 1,500,000 500,000 13,571,754
2012-2013
13,831,674 400,000 1,500,000 500,000 16,231,674
CHANGE IN NET ASSETS
$
(2,125,312) $
(438,314) $
1,965,371
$
3,090,952
$
4,978,770
EXHIBIT 1
ENROLLMENT (Exhibit 2) Enrollment grows from an FTE (Full-time equivalent) population of 335 students in academic year 2008-2009 to 1,028 in the plan’s 5th year (AY 2013). This is accomplished thru a robust recruitment effort and an ongoing and targeted retention effort. A full-time equivalent student currently takes 24 units. NHU expects to move to a more traditional semester structure for undergraduates that will, probably in year 3 of the plan, involve a change in the definition of an FTE to 30 units per year. This will result in increased revenue, as students will be taking one additional class per semester to maintain full-time status. For each class level there are the full time student FTE, the part-time and the transfers. They are accounted for separately as NHU wants to benchmark performance and link employee expectations with university goals. This is especially true for recruitment and retention. NHU will hire recruiters specifically charged with meeting enrollment targets, both in numbers and profile, hence the breakdown. Retention metrics are tied to the Applied Materials Foundation’s gift and our institutional goals. Persons responsible will be evaluated in part on their ability to deliver on these metrics. Staffing the recruitment office early in 2008-2009 should provide sufficient time to admit the target numbers, preferably by Spring 2009. This date is important as the Cal Grant deadline is in early March and a student’s access to available funds is subject to timely submission of their application. NHU will complement the recruitment staff’s efforts with a continuation and augmentation of our recently started marketing / branding effort. Our recruitment efforts might seem ambitious but they are consistent with results from 3 years ago. Also complementing these efforts are initiatives in Early Childhood Education, which should serve to increase enrollment in both the AA and (soon be to be completed) BA levels. We received notice of a substantial private grant in addition to a federal earmark that will yield benefits in 2008- 2009.
NHU Privileged & Confidential
UNDERGRADUATE ENROLLMENT
2007-2008
Freshmen (FT) Freshmen (PT) Freshmen FTE Sophomore Sophomore (PT) Sophomore CC transfer Sophomore FTE Junior Junior (PT) Junior CC transfer Junior (FTE) Senior Senior (PT) Senior (FTE) TOTAL Undergraduate FTE
Projected Undergraduate Student Headcount (1 PT student = .5 FT)
2008-2009
100 50 125 60 90 10 115 35 40 5 60 15 20 35 335 625
2009-2010
180 85 187 80 90 50 175 55 70 40 130 25 30 55 547 980
2010-2011
210 40 230 140 90 65 250 70 70 60 198 40 45 106 784 1,075
2011-2012
230 30 245 175 70 75 285 115 70 70 220 60 60 150 900 1,185
2012-2013
250 25 263 200 50 100 325 150 60 85 265 90 85 175 1,028 1,315
146
88
58
43 335
350 300 250 200 150 100 50 Freshmen FTE Sophmore FTE Junior FTE Senior FTE
EXHIBIT 2
TEACHER EDUCATION (Exhibit 3) Teacher Education currently offers 3 programs. During the 2008-2009 academic year NHU expects 2 additional programs will be developed and approved by the authorizing organization. NHU will hire an additional recruiter to augment existing efforts and relationships. NHU will also continue development of a blended program that will provide current and future students the opportunity to obtain both a baccalaureate degree and a teaching credential in the time it takes to complete a traditional BA program. This is an exciting challenge that will meet a current and projected need for the region and state. Programs: Blended: A program that provides undergraduate, Liberal Arts students the ability to acquire both an undergraduate degree and Teaching Credential in the time it takes to a BA degree. Single Subject: Credential for teaching at the high school level in specific content areas. Multiple Subject: Credential for teaching at grade levels 1-8 in self-contained classrooms, usually K-5. Special Ed Tier 1: Prepares candidates to address Mild to Moderate Needs Special Ed Tier 2: Prepares candidates to address Mild to Moderate Needs Masters: Needed for students pursuing doctorates or career advancement. Tuition Rates: The scheduled tuition rates are currently ~20% below many peer competitors. FTE Projections: Projections are based on input from the Teacher Education faculty, a successful track record in this area and the addition of full-time recruitment assistance. NHU also benefits from long standing ties to local districts that value and hire our graduates.
NHU Privileged & Confidential
TEACHER EDUCATION PROJECTIONS
PROGRAM
Teacher Education - Blended Teacher Education - Single Subject Teacher Education - Multiple Subject Teacher Education - Special Ed Tier 1 Teacher Education - Special Ed Tier 2 Masters Total FTE # Annual average unit load TOTAL PROJECTED TUITION REVENUE $
2008-2009
38 47 15 100
2009-2010
17 38 53 20 20 30 178
2010-2011
28 50 60 30 30 45 243
2011-2012
35 75 75 45 45 45 320
2012-2013
65 75 90 60 60 50 400
840,000
$
1,509,010
$
1,878,000
$
2,475,000
$
2,910,000
EXHIBIT 3
5-YEAR TUITION SCHEDULE (Exhibit 4)
There are four key drivers of these revenue projections. They are: FTE projections that are linked to FTE numbers in the “Enrollment” tab (Exhibit 2), Projected revenue figures from the “Teacher Ed” tab (Exhibit 3) Projected per unit tuition rates shown just below each year’s FTE total (Exhibit 4), and The number of units considered full time equivalent.
In previous sections NHU described its efforts to drive enrollment growth in both the undergraduate and teacher education areas. NHU also briefly mentioned how transitioning to a more traditional semester system will lead to a full-time student taking 30 units annually. We will now focus on tuition and financial aid. This schedule includes 5-years of annual tuition increases. Annual tuition increases from almost $6,000 annually in 2008-2009 to over $10,000 in year 5 (assuming 30 units per year). This is very competitive with other comparable educational options and does not deviate from NHU’s mission of providing a quality, affordable and accessible undergraduate education for the underserved. Further, these rates are consistent with currently available public financial aid. This is a critical factor in meeting our mission. State funded education grants (Cal Grants) are currently supporting annual tuition and fees of approximately $9,702 (annual maximum, 4 years at full-time status). Federal grants (Pell) support at the approximate rate of $4,731 annually, again for 4 years at full-time status. For an eligible, full-time student this means that the annual projected tuition could be covered if they meet income and other requirements. There are also federally backed loan programs that can close any funding gap.
NHU Privileged & Confidential
5-YEAR TUITION SCHEDULE
2008-2009
Freshman Sophomore Junior Senior FTE Total Per Unit Tuition schedule Undergraduate Tuition Revenue Teacher Education Revenue TOTAL OPERATING REVENUE (est.) Planned Annual Tuition Rate $ $ $ 125 115 60 35 335 242 1,945,680 840,000 2,785,680 5,808 $ $ $
2009-2010
187 175 130 55 547 266 3,491,479 1,509,010 5,000,489 6,389 $ $ $
2010-2011
230 250 198 106 784 293 6,884,930 1,878,000 8,762,930 8,785 $ $ $
2011-2012
245 285 220 150 900 322 8,696,754 2,475,000 11,171,754 9,663 $ $ $
2012-2013
263 325 265 175 1,028 354 10,921,674 2,910,000 13,831,674 10,629
EXHIBIT 4
FACULTY PERSONNEL EXPENSES (Exhibit 5) Central to our plan’s development of a rigorous, engaging and meaningful academic experience is our faculty. Increasing the number, compensation and development of faculty are critical to our success. Highlights of this schedule are: An increase over the five years in the number of full-time faculty from 15 in year one of the plan to 30 in year five. A program to partially match an employee’s annual retirement contribution. Increases in full-time faculty compensation to more competitive rates. Increases in adjunct faculty rates to more competitive rates.
NHU Privileged & Confidential
FACULTY PERSONNEL EXPENSE PROJECTIONS
2008-2009
FT Faculty Salaries Adjunct Salaries Fringe Retirement $ 840,750 225,000 227,003 25,223 1,317,975 $
2009-2010
969,000 332,500 261,630 29,070 1,592,200 $
2010-2011
1,360,000 357,500 367,200 136,000 2,220,700 $
2011-2012
2,000,000 345,000 540,000 200,000 3,085,000 $
2012-2013
2,400,000 350,000 648,000 240,000 3,638,000
EXHIBIT 5
NON-FACULTY PERSONNEL EXPENSE (Exhibit 6)
This spreadsheet describes all non-faculty related costs. Costs are broken down into 3 component areas; Student Services, Administrative and Management. Important factors impacting this worksheet are: Recruitment budget increased substantially to reflect its importance. SAAC center budget increased to reflect the role of advising and tutoring in our retention efforts. The SAAC will also provide job placement assistance, something currently missing from our student services offerings. The planned addition of an enterprise software system in year 2 should allow us to serve a larger population without attendant increases in personnel, at least in years 2-4 of the plan. Annual CPI increases ranging from 2-4% annually are included, Salary adjustments to bring salaries closer to market are programmed at an average rate of 10% annually over the 5-year period. A program to partially match an employee’s annual retirement contribution is included and capped at 10% of gross earnings. There is also a management incentive plan that averages 10% per year for the 5-year period.
NHU Privileged & Confidential
NON FACULTY PERSONNEL EXPENSE
DEPARTMENT
Admissions & Registrar Recruitment Financial Aid Bursar Library SAAC Provost's Office TOTAL: Student Services / Academic Support Finance/Web OPIE HR Maintenance IT President's Office Advancement TOTAL: Administrative President Provost VP Finance TOTAL: Management $
2008-2009
2009-2010
2010-2011
2011-2012
2012-2013
1,386,056
1,396,961
1,456,940
1,506,014
1,516,919
947,088
954,540
995,523
1,029,055
1,036,506
382,373 2,715,517 $
402,498 2,753,999 $
431,492 2,883,955 $
436,608 2,971,677 $
474,129 3,027,554
EXHIBIT 6
NON-PERSONNEL EXPENSES (Exhibit 7)
This worksheet includes all non-personnel costs except consultants. The only item without historical precedent is advertising which NHU has only recently initiated. Advertising costs are higher in the early years as NHU build an NHU brand and increase awareness in our target geographic area. Purchase of an enterprise software system in year 2 to integrate, benchmark and communicate performance across the organization. Transition to a commercial loan in Year 3 of the plan. Telephone costs should hold at current levels or be reduced as NHU move to new technologies. Our current 5-year telephone system contract expires next year. NHU is exploring how overall utility costs can be reduced, especially for the older portion of the campus. Solar technology looks attractive but NHU has not included any investment costs in these numbers.
NHU Privileged & Confidential
NON PERSONNEL EXPENSES
Allocated Costs
Advertising Consultants Dues and Subscriptions Equipment Events/Meetings/Food Expense Materials & Supplies Administrative Postage, Printing & Duplication Stipends & Scholarships Travel Total Direct Expenses: Audit Fee Depreciation Insurance Interest / Mortgage Legal & Accounting Maintenance & Janitorial Supplies Administrative Taxes & Licenses Telephone Utilities Contingency Total Indirect Expenses: TOTAL EXPENSES:
2008-2009
100,000 250,000 30,000 25,000 50,000 170,000 210,000 35,000 250,000 250,000 1,370,000 60,000 330,000 70,000 575,000 20,000 125,000 90,000 12,500 95,000 130,000 1,507,500 2,877,500
2009-2010
75,000 258,750 35,000 150,000 60,000 175,950 217,350 40,000 359,404 275,000 1,646,454 60,000 330,000 75,000 575,000 30,000 125,000 93,150 13,000 95,000 150,000 250,000 1,796,150 3,442,604
2010-2011
55,000 267,500 37,500 150,000 70,000 188,267 224,957 45,000 631,945 275,000 1,945,169 70,000 330,000 80,000 900,000 30,000 130,000 96,410 13,000 98,325 150,000 250,000 2,147,735 4,092,904
2011-2012
60,000 295,186 40,000 150,000 75,000 208,034 230,581 50,000 783,773 300,000 2,192,575 75,000 330,000 85,000 900,000 35,000 140,000 99,785 15,000 101,766 175,000 275,000 2,231,551 4,424,126
2012-2013
70,000 302,566 45,000 75,000 75,000 215,316 236,346 50,000 939,517 300,000 2,308,744 75,000 330,000 90,000 900,000 35,000 150,000 103,277 15,000 105,328 175,000 300,000 2,278,605 4,587,350
EXHIBIT 7
PART 3: FISCAL YEAR FINANCIAL STATEMENTS
The National Hispanic University Statement of Cash Flows As of 6/30/2008 (Unaudited)
Cash Flows from Operating Activities: Change in net assets Adjustments to reconcile change in net assets to cash provided by operating activities: Depreciation (Increase) Decrease in current assets: Grants receivable Accounts receivable - net Prepaid Expenses Inventories Increase (Decrease) in current liabilities: Accounts payable Accrued expenses Accounts payable - other Net Cash Used for Operating Activities Cash Flows from Investing Activities: Fixed assets Investments Net Cash Used for Investing Activities Cash Flows from Financing Activities: Notes payable Deferred Revenue Net Cash Provided by Financing Activities Net Increase (Decrease) in Cash Cash at beginning of year Cash at end of year $ 1,943,607 150,344 2,093,951 345,774 139,658 485,432 $ (1,565,258)
324,610
184,859 91,036 (1,140) 1,841
(207,796) 23,543 (599,872) (1,748,177)
UNAUDITED
THE NATIONAL HISPANIC UNIVERSITY
(In Whole Numbers)
Statement of Revenues and Expenses (7/1/07 - 6/30/08 Unaudited)
Current Period Actual Current Year Actual
REVENUES Grants and Contracts Child Care Center Income ADA Categoricals Income Other Total Grants and Contracts Tuition & Fees Gain on Sale of Property Investment Income Interest Income Donations Leases Sales Other Income Total REVENUES EXPENSES Salaries & Fringes Advertising & Promotion Legal & Accounting Interest & Bank Charges Consultants Depreciation Dues & Subscriptions Equipment & Hardware Insurance Other Printing, Postage & Duplication Rent Repair & Maintenance Scholarships & Stipends Supplies & Materials Food Indirect Cost Tuition Remission Fund Raising Travel & Conferences Bad Debts Telephone Utilities Taxes & licenses Total EXPENSES CHANGES IN FUND BALANCE
55,681 107,556 4,907,526 5,070,763 2,372,545 1,673 563,424 583,606 2,304 395,319 8,989,634
55,681 107,556 4,907,526 5,070,763 2,372,545 1,673 563,424 583,606 2,304 395,319 8,989,634
6,752,630 501 85,228 566,327 358,468 324,610 43,537 27,296 61,392 288,900 20,493 224,861 165,136 473,642 233,329 148,920 87,354 81,748 2,132 244,638 0 110,306 244,844 8,599 10,554,892 (1,565,258)
6,752,630 501 85,228 566,327 358,468 324,610 43,537 27,296 61,392 288,900 20,493 224,861 165,136 473,642 233,329 148,920 87,354 81,748 2,132 244,638 0 110,306 244,844 8,599 10,554,892 (1,565,258)
UNAUDITED
THE NATIONAL HISPANIC UNIVERSITY
(In Whole Numbers)
Statement of Financial Position (at 6/30/08 Unaudited)
Current Year
ASSETS Current Assets Cash Grants Receivable Accounts Receivable Notes Receivable Due Fr/To Other Funds Prepaid Expenses Inventory Total Current Assets Property, Plant & Equipment Land & Building Vehicles Furniture & Fixtures Library Holdings Construction in Progress Less: Accum Depreciation Total Property, Plant & Equipment Other Assets Investments Deposits Total Other Assets Total ASSETS LIABILITIES Current Liabilities Accounts Payable Accrued Expenses Others Total Current Liabilities Long Term Liabilities Notes Payable Loans Payable Total Long Term Liabilities Other Liabilities Deferred Revenue Total Other Liabilities Total LIABILITIES FUND BALANCE Fund Balance - Unrestricted Total Fund Balance Fund Balance Restricted Total Fund Balance Changes in Net Assets Revenue Over(Under) Expenses Total Changes in Net Assets Total FUND BALANCE
485,432 1,325,286 299,704 5,960 1,140 16,679 2,134,202 21,376,310 51,266 450,569 (1,783,797) 20,094,348 837,653 44,658 882,312 23,110,862
$
410,298 573,960 30,128 1,014,386 11,546,607 11,546,607 150,344 150,344 12,711,337
$
11,544,370 11,544,370 420,413 420,413 (1,565,258) (1,565,258) 10,399,525
UNAUDITED
THE NATIONAL HISPANIC UNIVERSITY
Statement of Financial Position TOTAL LIABILITIES & FUND BALANCE (at 6/30/08 Unaudited)
$ 23,110,862
UNAUDITED
NHU Business Plan 2008
PART 4: APPENDICES A-D
NHU Business Plan 2008
A.
Board of Trustees
NHU Business Plan 2008
Chairman
Edward M. Alvarez, ESQ. President Central Valley Land Group, Trustee Emeritus Santa Clara University, Santa Clara University BSC, JD. Ed Alvarez has served as the Chair of the Board of the National Hispanic University for the past 7 years. In 2002, upon the death of the University founder, Dr Roberto Cruz, Mr Alvarez assumed the role of Chief Executive Officer overseeing the general operations of the University until a successor, Dr David Lopez was appointed in 2003. Thereafter, Mr Alvarez, together with Vice Chair John Sobrato oversaw the construction of the Universities Academic Sobrato Hall. Mr. Alvarez has an extensive background and experience in both education and the non profit sector. His education experience includes services on various advisory committees: including the Eastside Union High School District and the California Community Colleges Advisory Committee on Minority Affairs(a governor appointment). He was elected to the Eastside High School District Board of Trustees and served a 7 year term during which the District constructed 8 high schools. He served on the board of trustees of Notre Dame High School an all women’s school in downtown San Jose. He also served a 7 year term on the Board of Trustees of Santa Clara University as well as the Board finance committee, he is a Trustee Emeritus of the University. He served as a member of the Role Model board of trustees, a elementary school mentor program. Mr Alvarez also served a 4 year term as a member of the University of Santa Clara School of Law Board of Visitors. His teaching experience includes an adjunct professorship at Lincoln Law School and a visiting professor at the University of Santa Clara School of Business. During his law practice tenure he represented the Mission-De Anza Community College District and was instrumental in the formation of the School’s Foundation and it long term lease for its Great America property. Mr. Alvarez’ experience in the non profit sector includes: Legal counsel to Alexian Brothers Hospital San Jose and Member of the Board of Trustees(eight years) participating actively in their various reorganizations ; Board of Trustees of the Health Trust and Finance Committee member; he served a 4 year term of the San Jose Arena Authority, the entity that operated the Arena during its inception; he acted as legal counsel to the Alviso Health Trust, MexicanAmerican Community Services Organization; he was Chairman of the City of San Jose, Mayors Task Force on Redevelopment and he was a Presidential appointee to the Small Business Adminstration’s Advisory Committee on Minority Business Enterprises. Mr Alvarez is a graduate of the School of Law, Santa Clara University and practiced as a Certified Public Accountant prior to entering the practice of law.
NHU Business Plan 2008
Vice-Chair
John A. Sobrato SR., CEO, Sobrato Development Companies, The Sobrato Family Foundation was recognized by the Society of Fundraising Professionals as the Foundation of the Year in
2007. City Year Leadership award 2008, and Commercial Realtors Developer Hall of Fame 2008.
Trustees
Maria F. Hernandez-Schabbing, President, Epicentro Marketing Services. Ramon L. Jimenez, M.D., President and Founder, Orthopedic and Fracture Clinic. Dr. Tomas Arcineiega, Special Assistant to the Chancellor, Office of the President, CSU, San Marcos. Martha J. Kanter, Ed.D. Chancellor, Foothill-De Anza Community College District. Henry Michon, Corporate Senior Vice President of Dairy and Frozen Department, Safeway Incorporated. Previous VP of Corporate Main Meal, Dairy, Refrigerated, and Frozen Departments. Awarded Easter Seals National Corporate Philanthropist of the Year Award (in 85 years only two have been awarded). David J. Neighbors, Partner, Johanson & Yau Accountancy. Previously with KPMG Peat Marwick and Ernst and Young in San Jose, CA. Active member of AICPA and board member of the Silicon Valley/San Jose Chapter of the California Society of Certified Public Accountants. Joe Parisi, President, Therma Incorporated since 1967. Founder and board member of Joint Venture Silicon Valley. Raymond Ruiz, President, Community Development Resources, Incorporated. Norberto Sanchez, President and CEO, Norsan Group. Gabriel A. Sandoval, ESQ., Vice President, General Counsel, Rearden Commerce, Incorporated. Lou Sobh, CEO, Lou Sobh Automotive. Michael Walker, President, U.S. Bank Northern Califonia.
NHU Business Plan 2008
B.
Organizational Chart
NHU Business Plan 2008
THE NATIONAL HISPANIC UNIVERSITY ORGANIZATION CHART President Dr. David P. Lopez Executive Assistant Lourdes Robles & Patty Estrada
VP Finance & Administration Michael Ramirez
Grants & Contracts Dr. David Johnson
Provost Juan Necochea
Admissions & Registration Pamela Bustillo Outreach & Recruitment Mike Osorio Finance/AP/Payroll Merly Ortiz & Veronica Santos IT Services Andy Del Hierro TRIO Upward Bound/Talent Search Candelario Franco
Financial Aid Takeo Kubo Continued Education & Special Projects Gloria Romero Human Resources Tony Fuentes Maintenance Operations Reyes Yanez
Academic Operations & Faculty Liaison Laura Ramos Institutional Research Isabel Vallejo Library Mary Manning
Business Judy Clemons Computer Science/Math/Science David Johnson Liberal Studies Michael Mooney (Interim)
Early Childhood Education Edirle Menezes Student Success Martha Escalera Translation & Interpretation George Guim Teacher Education Neva Hofmann SAAC George Shamshayooadeh
NHU Business Plan 2008
C.
Management Staff
NHU Business Plan 2008
President
David Lopez, Ed.D. Curriculum and Instruction, New Mexico State University, Las Cruces. Member, California State Board of Education On September 1, 2003, Dr. David Lopez assumed the post of President of The National Hispanic University. His involvement as a former Trustee of the University and thirty years experience in higher education gives him the knowledge and skills to help take The NHU to the next level. The NHU was established over twenty years ago to provide accessible and affordable quality education for Hispanics and other economically marginalized, underserved, and underutilized students. Dr. Lopez earned his Doctorate in Education with a concentration on Curriculum and Instruction at New Mexico State University in 1979. He earned the Master of Arts Degree in Educational Administration at New Mexico Highlands University in 1975 and a Bachelor of Arts in Elementary Education the University of New Mexico in 1974. After three years of teaching in the College of Education at New Mexico State University in Las Cruces, Dr. Lopez continued his career at California State University, Fresno, where he became a tenured faculty member in the School of Education and Human Development. Concurrent with his career in higher education, Dr. Lopez served as a consultant in the private sector, helping to establish collaborative relationships between the corporate and education communities. These collaborative efforts included scholarship drives, expansion of exemplary local educational programs and parent education/involvement projects. Recent Awards & Recognitions: 2004 New Mexico State University Distinguished Alumnus for the College of Education 2005 Hispanic Net Community/Educator of the Year Award 2006 Appointed to California State Board of Education by Governor Arnold Schwarzenegger 2007 Selected as the Most Influential Latino Educator in Silicon Valley by established community based organizations sponsored by MACSA 2007 Member of the Board of Directors of the Silicon Valley Children’s Fund
NHU Business Plan 2008
Provost
Juan Necochea, Ph.D. Educational Administration University of California, Santa Barbara, Faculty Member of the Year CSU San Marcos (2007). Dr. Necochea was a professor at California State University, San Marcos for 11 years in the College of Education and was the recipient of the 2008 Brakebill Distinguished Professor Award. He also served as the Director of the Center for the Study of Border Pedagogy and Principal Investigator for the College Assistance Migrant Program (CAMP). Dr. Necochea entered the professoriate with ample experiences as a K-12 educator, with 10 years as a classroom teacher, six as an elementary school principal, and two years as a high school principal. Dr. Necochea received his Ph.D. from the University of California at Santa Barbara and has conducted extensive research and publications.
Vice President, Finance Administration
Michael Ramirez, M.B.A. University of California, Berkeley Current Work: The National Hispanic University VP Finance & Administration (2004 – Current). Oversee the finance and administrative operations of the organization including its childcare center and charter high school. Direct the operational activities in a cohesive manner to achieve organizational objectives. Provide input to the President, Board of Trustees and other senior managers on issues impacting our strategic initiatives. Manage the following departments: student services, finance, HR, IT, recruitment, maintenance, and grant advancement. applicable federal and state regulations. Previous Work: Enterprise Software RightOrder, Inc., CFO (2000 – 2004). Reporting to the CEO, coordinate all the financial internal and external reporting and direct day-to-day accounting functions. Establish and maintain Refine procedures to ensure compliance with all
financial controls and procedures. Responsibilities included oversee preparation of financial reports, manage all general accounting functions, prepare budgets, forecasts and other financial
NHU Business Plan 2008 analysis, manage all general accounting functions including A/P, A/R, payroll, cash management, capital expenditures and general ledger, ensure adequacy of internal controls, oversee annual audit process with outside auditors, coordinate preparation of tax returns, and manage and develop accounting staff. Software / Internet related Medical Services LifeChart.com, Controller (1999 – 2000). Reporting to the CEO, managed all phases of the accounting and finance process. Directed accounting staff in the development of consolidated financial statements with our Finnish subsidiary and managed completion of our external manufacturing relationship. Additional responsibilities included oversight of the online records management to comply with all regulatory laws, audited and managed our relationship with external fulfillment center, managed telecommunications, co-location and network operations, implemented new internal controls on product sales/distribution and new fixed asset controls, and management of all phases of the accounting process. Education: MBA, University of California, Berkeley BA, Psychology, California State University, Fresno Other: Intern, White House, Office of Public Liaison
NHU Business Plan 2008 Director, Human Resources Tony Fuentes, M.B.A. Pepperdine University Director, Institutional Research Isabel Vallejo, Ed.D. Educational Leadership and Administration, University of Texas, El Paso Director, Grants & Contracts David Johnson, Ph.D. Social Psychology, Stanford University Director, Library Sciences Mary Manning, M.A. Art, Art History & Library Science, University of Minnesota, Minneapolis Director, Translation and Interpretation Program George Guim, Ed.D. Organization and Leadership, University of San Francisco Director, Admissions and Registrar Pamela Bustillo, B.S. Sociology, Santa Clara University Director, Financial Aid and Scholarship Takeo Kubo, B.A. Mathematics, San Jose State University Chair, General Studies Department Adriana Ayala, Ph.D. History, University of Texas, Austin Chair, Liberal Studies Department Carlos Navarro, Ph.D. Government, Claremont Graduate School Chair, Teacher Education Department Neva Hofemann, M.A. Curriculum and Instruction, University of San Francisco Chair, Mathematics, Science, and Computer Science Department Michael Mooney, M.A. English Literature, CSU Hayward Chair, Business Department Judy Clemons, M.B.A. Business Management, West Virginia University Director, Pre-College Programs Candelario Franco, B.A. Social Sciences, San Jose State University Director, Bursar Office Wilbert Lleses, B.S. Biology, Davao Doctor College, B.A. Business Administration, The National Hispanic University
NHU Business Plan 2008
D. Faculty
NHU Business Plan 2008 Adriana Ayala, Ph.D. History, University of Texas, Austin, M.A. History, UT Austin, B.A. History, UC Berkeley. Judy Clemons, M. B.A. Business, West Virginia University, B.A. Business Administration, Bluefield State College. William Cruz, M.A. Technology, University of N. Iowa, B.A. Technology, National University of Education. Julio Garcia, Ph.D. Technology, University of N. Iowa, M.A. Technology, University of N. Iowa, B.A. Technology, National University of Education. George Guim, Ed.D. Organization and Leadership, University of San Francisco, M.A. Economics, University of San Francisco, M.A. Education, Stanford University B.A. Economics, University of San Francisco. Kathy Hess, Ed.D. Organization and Leadership, University of San Francisco, M.A. Reading, Psychology and Sociology, University of Michigan, B.S. English Education, E. Michigan University. Neva Hofemann, M.A. Curriculum and Instruction, University of San Francisco, B.A. Education, University of San Francisco. David Johnson, Ph.D. Social Psychology, Stanford University, M.A. Psychology, San Jose State University, B.A. Philosophy and English Literature, University of Colorado, Boulder. Michael Jordan, M.A. Philosophy, San Jose State University, B.A. Philosophy, CSU Chico. Mary Manning, M.A. Art History, University of Minnesota, M.A. Library Science, University of Minnesota, B.A. Library Information Science, University of Minnesota. Sarah Kates March, M.A. Speech Communication, San Jose State University, B.A. Speech Communication, Cal Poly, San Luis Obispo. Edirle Menezes, Ph.D. Child Development, Clark University, M.A. Cognitive Development, Universidade Federal de Pernambuco, Brazil, B.A. Psychology, Universidade Federal de Ceara, Brazil. Michael Mooney, M.A. English Literature, CSU Hayward, B.A. English Composition and Literature, CSU Hayward.
NHU Business Plan 2008 Carlos Navarro, Ph.D. Government, Claremont Graduate School, M.A. Political Science, UCLA, B.A. Liberal Studies, California State College, Los Angeles. Jesse Rizzo, C.A. Teaching Credential, San Jose State University, C.A. Administrative Credential, San Jose State University, M.A. Public Elementary Administration & Supervision, San Jose State University, B.A. Liberal Studies, San Jose State University. Christopher Rodgers, M.B.A. University of Phoenix, B.S. Business and Finance, San Jose State University. George Shamshayooadeh, M.A. English Literature, Islamic Free University, B.A. English Composition and Literature, Islamic Free University. Shawn Vecellio, Ph.D. Social Foundations of Education, State University of New York, Buffalo, M.S. General Education, Elmira College, B.S. Mathematics Education, Elmira College.