Trustees approve revised budget10/16/2013
The University's Trustees today approved a revised balanced budget to address a deficit brought about by a decline in enrollment. In addition, the Board took several important actions impacting employees, including closing the University during Christmas week through New Year’s Day, providing five days of paid leave to employees.
In a memo to campus, Provost Mike Sherman and Chief Financial Officer David Cummins explained the details of the budget, including the effect on academic and academic support units.
To summarize: Earlier budget reductions totaled more than $25 million. To address the additional $15 million shortfall created by a 6 percent decline in fall enrollment, the colleges and departments identified new opportunities for savings, expense reduction or revenue generation.
As a result:
- In the revised budget, the academic units took further reductions of 3.9 percent or $5.2 million. Much of the savings, achieved through existing vacancies, should be considered one-time until a more thorough review determines the effect on course offerings and program delivery. This will start shortly.
- The academic support units took further reductions of 7.2 percent or $6 million, achieved through additional position eliminations, employee separations, reallocating resources, deferring major purchases and increasing efficiencies.
- Approximately 30 employees have been notified that their positions are being eliminated or their contracts are not being renewed. Most of these employees will continue to work through the end of the year. The change will generate savings of $1.8 million per year.
At the meeting, President Luis Proenza called the process of balancing the budget "difficult and painful." Between the two rounds of budget reductions, about 150 positions have been or will be eliminated, most of them already vacant through attrition.
Separately, the president reported that the University has observed a "dramatic increase" in applications for next fall, but he cautioned about raising expectations for increased enrollment.
"We do not know what effect this will have on enrollment," he said, "in that we cannot predict the yield from those applications."
In other Board action:
- The Board approved a merit-based 2 percent raise pool for nonunion faculty members who teach in the School of Law or serve as academic department chairs or school directors. This adjustment matches the raises approved earlier this year for full-time faculty represented by the American Association of University Professors.
- To recognize employees for their efforts to contribute to student success during this challenging economic time, the Board approved five days of additional paid leave over the holidays. This paid time off is equivalent to 1.9 percent of compensation.
With the extended shutdown, the University will now close Dec. 23, 26, 27, 30 and 31, in addition to the previously scheduled holidays. Physical Facilities estimates the University will save $25,000 in energy costs per day. Over the 12-day shutdown, the potential energy savings could be as much as $300,000.