UofL’s interim president Greg Postel spent more than an hour answering employees’ questions about the budget Thursday in the first of two forums aimed at helping his administrative team identify priorities for 2018-19 and beyond.
He noted that the budget itself has not yet been created, and he wants to get as much input from as many people as possible to ensure the process is collaborative.
In addition to today’s forum – and Monday’s on the HSC campus – he will seek input from the faculty and staff senates, the SGA, CAO, academic leadership team and Board of Trustees, as well as use the comprehensive data culled from the recent budget survey. Out of more than 10,500 employees, 1,699 responded to the survey, which is a statistically significant sample.
The surveys also included “hundreds and hundreds” of comments, Postel said: “We feel very good about the data.”
Survey respondents listed their top budget priorities as having a strong revenue growth plan, a tuition increase, assigned unit budget reductions, a reduction in the number of administrators, a reduction in low-enrollment courses, and downsizing the athletics program.
A reduction in the number of administrators was the most common cost-saving solution advocated in the survey. Postel showed a graph illustrating the $1.4 million reduction in expense associated with the administrative staff, including the elimination of 34 positions.
“I agree with you. I think we were administratively heavy and we have been working on that. We’re not finished,” he said.
Personal priorities for employees, according to the survey, include position protection, performance-based compensation, unit budget restoration and salary increases. Postel said he is particularly concerned about the lack of salary increases at UofL.
“That’s not fair. The University of Kentucky has done a much better job with this. This is something that affects morale,” he said.
Another discussion that surfaced from the survey’s narratives is how to increase enrollment. Nearly 90 percent of employees believe we should grow our enrollment both at the graduate and undergraduate levels.
Strategies on how to do so include the creation of new, high-demand programs (our degree program mix has not changed much, Postel said), online programs and completer degrees.
“In my belief, improving retention also needs to be on this list,” Postel said. “Enrollment is an important conversation and it has to include the preservation of quality (not lowering admissions standards).”
Sixty percent of employees believe we should increase tuition, but Postel cautioned against accomplishing our goals on the backs of students.
Other cost-savings suggestions included creative class scheduling so buildings don’t sit idle, and energy conservation efforts. Fundraising efforts should be focused on scholarships, capital/deferred maintenance projects and research, according to the survey.
An audience member asked Postel to explain his understanding about performance-based compensation, noting that it is a problem in Arts & Sciences.
“Don’t assume the status quo next year. We’re doing research and looking at various performance-based compensation mechanisms,” he said.
A few students asked Postel about the status of the Cultural Center and how UofL is prioritizing diversity.
Postel said a job posting is now live to recruit a dedicated fundraiser for diversity initiatives. UofL has a $6.7 million budget for diversity and community engagement programs and that is not going to take any cuts, he said.
“But it’s not enough. This is an area that needs a dedicated fundraiser and we are going to get that done,” he said.
He also noted that the Cultural Center does need to be torn down, but his preference is for the money to be in place for a replacement first.
“The building needs to be razed. This plan has been in place for 8 years. Why didn’t anybody raise money for it? I don’t know. But we’re going to do it now. We can’t change the past, but we can work on this now,” Postel said.
Professor Avery Kolers asked Postel for assurance that the $600,000 NCAA penalty won’t come out of academics and questioned whether a firewall still exists between the academic and athletics budgets.
“Nobody needs to worry about the penalty coming from the academic budget. There is not a firewall between the university and athletics; athletics is a part of the university and the budget is the budget. Now, if something bad happened with athletics, we could get hit with it,” Postel said. “So there has to be a real cooperative relationship between the leadership of athletics and the rest of the university. I’m happy to say that today there is. That has not always been the case. Everyone has to have the same objectives and that is for the university to do well.”
A student asked how recent scandals have affected enrollment numbers and what is being done to rebrand UofL.
Postel said he hasn’t seen much, if any, effect on enrollment, noting that applications are actually up 3,000 this year.
“I think it’s hurt morale more than recruitment,” he said, adding that UofL has contracted a new agency to help with a campaign to “drown out the noise.”
“This university seems to be pretty resilient.”
As the budget process continues, there remain some unanswered questions:
- State appropriations: Governor Matt Bevin has recommended a 6.25 percent cut. The final decision will be made in mid-April. “What I can tell you is that all state universities in Kentucky are actively inserting ourselves into this conversation and we are vigorously contesting the governor’s proposals,” Postel said.
- Raises: This, Postel said, is a decision that’s in our control.
- “We have the ability to decide within limits how we will set our tuition,” he said.
- Asset preservation or deferred maintenance. State universities have a staggering number of buildings in various states of disrepair. This year, the governor has proposed a $300 million fund for the bonding capacity to service the debt to use toward deferred maintenance. UofL’s share is about $51 million. But, Postel said, there’s a catch: “In order for us to be eligible to receive the bonding capacity, we have to raise or put up $63 million of our own. So we will have $114 million to address about 20 to 25 percent of deferred maintenance, which would make a real dent on this campus,” he said. “But if we don’t come up with the match, we lose it. This is both an opportunity and a challenge. We have to figure out how to do this.”
‘A multi-year exercise’
There are a number of steps involved in the budget process and that will include the appointment of a new budgeting concept steering committee, work on refining unit-based revenue targets, decisions on salary adjustments and more.
Postel said it is important to view the budget as a multi-year exercise.
“It makes no sense to create budgets annually in a vacuum. If that’s all an institution does, it’s purely being reactive and that is no way to run a university,” he said. “A plan is how faculty, staff and students engage and making plans come to fruition make take longer than a year. One of the things that can erode morale is not feeling as though the organization has a direction. People want to come to work and say ‘we have a strategy and I’m part of that.’”
Postel will host another budget forum on Monday, Feb. 26 at 11:30 a.m. in the HSC auditorium.