Plans for Budget Reductions March 23, 2009. Structure of the Budget State Appropriations49.6 Tuition and Fees17.9 Sales and Services13.6 Federal Grants.

Plans for Budget Reductions

March 23, 2009

Structure of the Budget

State Appropriations 49.6

Tuition and Fees 17.9

Sales and Services 13.6

Federal Grants and Contracts 5.6

State and Local Grants and Contracts 4.1

Capital Appropriations 2.6

Investment Income 2.1

Noncapital Gifts and Contracts 1.9

Capital Gifts and Grants 0.9

Nongovernmental Grants and Contracts 0.9

Other Operating Revenues 0.6

Additions to Endowments 0.2

Uses of Budget

•State budget and tuition are the primary sources of the “Education and General (E&G)” Budget

•Most normal university operations (teaching, maintenance, advising, etc) are paid from the E&G Budget

•Fees, capital, contracts and grants are generally not transferrable to E&G operations.  This holds for housing fees, athletics fees, etc.

•The state budget cut only affects the state portion of E&G operations

•Given state budgeting and tuition policy, taking advantage of growth will not provide enough resources to replace state funding and handle the additional enrollment

•WCU would need to grow to approximately 10,600 students for tuition increases to match the reduction in state funds at a 7 percent cut

Budget reduction strategies: 11 standards

1. It is critical that we come out of this situation as a stronger, more focused institution.

2. We must focus on institutional quality as defined by our responses to UNC-Tomorrow and our QEP.

3. We must maintain a sound and balanced educational program that is consistent with the functions and responsibilities of the institution.

4. To the extent possible, we will not cut budgets across the board.  We will use targeted approaches to budget cutting.

5. We must maintain the quality of the student experience to the fullest extent possible.

6. To the extent possible, we must maintain faculty development funding.  The only way we can improve academically is if the faculty continues to improve in quality.

7. Because we are currently under-staffed in IT and in accounting/budgeting functions, we need to maintain funding in those areas if possible.

8. We need to once again look at our organizational structures to assure that we increase efficiency and effectiveness and reduce duplication.

9. Institutional programs (not just academic programs) that are not core to institutional mission, that lack effectiveness or that have missions that overlap with other programs, need to be considered for elimination.

10.Where it is possible to define national or system efficiency standards, we need to assure that each area of the University meets or exceeds those standards.  This includes many areas that are being reviewed by President Bowles' PACE initiative.  To the extent possible, when an area does not meet those standards, we should use attrition to reduce the number of jobs in those areas.

11.Every position that becomes vacant should be frozen and then reviewed to determine if it is mission critical.  If it is possible to distribute the work formerly accomplished by that position to other people on campus, the position should be eliminated.

11 standards (cont’d.)

Budget Distribution

•By far the largest segment of E&G funding is in the Provost’s Division

•Administration and Finance is a distant second

•The Chancellor’s Division, Advancement and External Affairs, and Student Affairs together account for approximately 7 percent of E&G funding

Nature of Cuts

•We may see both reversions and permanent cuts

Revenue Sources (Percents)

State Appropriations

Tution and Fees

Sales and Services

Federal Grants and Contracts

State and Local Grants and Con-tracts

Capital Appropriations

Investment Income

Noncapital Gifts and Contracts

Capital Gifts and Grants

Other Operating Revenues

Additions to Endowments

Nongovernmental Grants and Con-tracts

Series10

5

10

15

20

25

30

35

40

45

50

Revenue Sources (Percents)

State Appropriations

Tution and Fees

Sales and Services

Federal Grants and Contracts

State and Local Grants and Con-tracts

Capital Appropriations

Investment Income

Noncapital Gifts and Contracts

Capital Gifts and Grants

Nongovernmental Grants and Con-tracts

Other Operating Revenues

Additions to Endowments

percentages

Budget Shortfall

Budget Reductions: Essential Points

• Applies only to state appropriation

• WCU’s state appropriation is approximately $95.5 million

• Every 1% equates to approximately $955,000

Budget Shortfall: The Reversion

• What is a reversion?– State sends a lesser amount than promised – One-time cut

• Effect on 2008-09 WCU’s E&G budget– 7% – Institution $6.7 million– Provost Division $4.9 million

• Handled by eliminating– Academic support dollars – Reserve funds including funds for 20 new faculty positions– Cuts to operating dollars across divisions

o Freeze on all but essential expenses

Budget Shortfall: Planning for Reductions to 2009-10 E&G Budget

Scenarios Reductions in Millions of Dollars

3% 5% 7% 8%

Institution $2.8 $4.6 $6.5 $7.4

Provost $2.1 $3.4 $4.8 $5.5

Summary: Reductions to Provost Area

FTE Dollars

Faculty Other Personnel Operations

42.52 22.50 3,916,244 1,566,921

Total FTE 64.02 Total Dollars 5,483,165

Reductions to Colleges

FTE Dollars

Unit Faculty Other Personnel Operations

Arts & Sci. 14.10 0 787,509 242,975

Business 7.74 6.00 855,793 109,483

Education 7.08 1.75 534,223 176,269

Fine & Perform. Arts 4.60 0 274,778 31,870

Heath & Human Sci. 6.00 1.00 535,419 70,616

Honors 0 0 0 21,276

Kimmel School 3.00 0 225,000 0

Reductions To Other UnitsFTE Dollars

Unit Faculty Other Personnel Operations

Library 1.00 1.00 122,690 115,870

Assessment 0 1.00 29,983 16,250

Coulter Faculty Ctr. 0 1.00 30,640 0

Educational Outreach 0 1.75 74,916 101,550

Enrollment Management 0 5.00 174,728 0

Graduate Sch. & Res. 0 1.00 74,478 52,675

Information Tech. 0 1.00 100,894 0

International Programs 0 0 0 20,665

Undergrad. Studies/QEP 0 0 0 40,247

Provost 2.00 365,193 630,312

Major Programs Eliminated/Suspended

• Institute for the Economy and the Future– [$433,007 and 7.02FTE]

• Clinical Lab Sciences Program– [$264,057 and 4.0 Faculty FTE]

• Summer Ventures Program (Suspended)– [$210, 576]

• Legislator’s Schools (Suspended)– [$206,199 and 3.0 FTE]

• Reading Center– [$102,783 and 2.0 FTE]

Administration and Finance

•17.6 positions will be abolished totally $795,761 including fringe benefits

•Of these positions, 2.5 will be transferred to receipted supported activities and the remaining 15.1 positions are currently vacant

•Student and non-student part time wages will be substantially reduced through the division ($73,060)

•Supplies will be reduced across the division by $312,961

•Utilities will be reduced by $365,143.  We have implemented many energy savings programs; however, if rate increases occur or abnormal weather event occur then we will be hard pressed to make these savings thus requiring that we utilize salary savings to fill the gap

Advancement and External Affairs

•Reduction in personnel: 2.2 FTE and $83,866

•Operations/marketing/contracting $154,000

Student Affairs

•Student Affairs has a total annual operating budget of approximately $16 million with only $750,000 funded by state funds while the rest is student fee and/or receipt funding.

•Student Affairs must cut one SPA position and shift expenses to student fee funding sources.

•Due to the decline in enrollment of fee paying students over the last two years, student fee budgets have already experienced two years of budget cuts. 

•Pressures on student fees have been compounded by the opening of the new 73,000 sq foot Campus Recreation Center which has significantly greater operating costs than the old 3,000 sq foot facility.

•The residence hall system is also in the process of replacing 800 beds of facilities that were completely paid off (ie, Helder and Leatherwood) with new facilities that have significant debt service.  There is also a need in the near future to make meaningful investments to renovate and upgrade older residence hall facilities.

Chancellor’s Division

•Merged Offices of Institutional Research and Assessment for increased efficiency. Resulted in elimination of two positions. (Overall savings: $40,096)

•Eliminated position for Director of Millennial Campus. ($102,192)

•Eliminated support position for EEO Director. (35,400)

•Reduced contracted services. (58,900)

•Eliminated all travel that is not required to further the institutional mission.

Total budget cuts from state funds - Chancellor’s Division: $236,588.

Chancellor’s Division (cont’d.)

Other measures:

•Postponement of speaker/performer for Chancellor’s Distinguished Speaker Series. ($20,000)

•Funding was not provided to Cheerleaders, Dance Team, and Pep Band to attend Southern Conference Tournament. (Cheerleaders and Dance Team raised their own funds to attend.) ($13,000)

•Suspension of Summer Commencement. ($15,000-$20,000)

Going Forward: Next Steps

•Mainly have responded tactically within the context of the 11-point policy

•Next steps will involve longer-term re-arrangement of resources to focus the institution much more clearly on the future and our core, high quality programs

•Process begins Monday with a retreat involving college/school deans, Provost, AVC and others to lay out clear expectations of one another

Going Forward: Next Steps (cont’d.)•Expect that we will see as a result

More clearly competitive programs and elimination/simplification of program specializations

Focused approaches to curriculum development

Policy proposals that simplify operations yet retain oversight and that can withstand audit

Stronger linkages among programs

Several programs that are critical and need to be strengthened will be improved

More effective organization

Clearer, more direct linkages between UBC-Tomorrow, the QEP and our program array

A much more competitive institution