From staff reports
University leadership has endorsed a Budget Planning Council motion that calls for delaying some fiscal year 2009 investments until sources and amounts of revenues are solidified.
The BPC passed a motion April 4 recommending the delay as a safety net for the fiscal 2009 budget should revenues fall short of projections. This past Friday, the university's academic leadership, executive staff and President Roderick J. McDavis endorsed the measure, which the Board of Trustees' Resources Committee also will discuss at its meeting this week.
Several indicators at the national, state and university level have informed the recommendation, details of which the president and BPC co-chairs Bill Decatur and Kathy Krendl shared with faculty and staff in an e-mail earlier today.
The university's academic leadership and executive staff unanimously endorsed the BPC motion, seeing the recommendation as a smart tactic at a time when the economy is facing multiple challenges.
"I think that the rationale of the recommendation to avoid unit budget cuts is sound," said Honors Tutorial College Dean Ann Fidler. "I would not have any other place to cut that wouldn't damage my unit."
Several BPC members cited avoiding mid-year cuts and preserving jobs as reasons they voted for the motion.
"Given the increased amount of uncertainty in the economy -- and not just here but everywhere -- this move could help reduce pain later because you're proceeding in a thoughtful way," said College of Business Dean Hugh Sherman, also a member of BPC. "As a group, we don't expect the worst-case scenario from the state, but this leaves us a range of options."
The options BPC discussed, Sherman said, range from proceeding with planned salary and Vision Ohio investments retroactive to July to delaying the investments until October, thus capturing a few months' savings, to reducing the investment amounts or percentages. Which option ultimately is chosen will depend on how economic factors affect the university budget.
"I just didn't want to see us get caught in a situation where we had to lay people off because we were careless," Dominic Barbato, president of Graduate Student Senate and a BPC member, said of why he voted for the motion. "(BPC was) just making sure we had all our contingencies planned for so that when July 1 came, if we had a budget cut, we didn't automatically have to reduce jobs."
Wendy Merb-Brown, director of learning community programs and the Administrative Senate representative on BPC, agreed, emphasizing, "We don't want to spend the money before we have the money."
The decision to delay occurred now because the university has arrived at the time when planning units have to decide on staff reappointments for next year and raises are normally loaded into the financial system in time for meeting final budget deadlines.
"The delayed investments, along with some reserve funds, give the university a fiscal safety net of close to $9 million in contingency funding," said Director of Budget Planning and Analysis Rebecca Vazquez Skillings. "It provides me with a measure of peace that we can move forward doing the business of the university with wisdom."
She's also pleased the university has a roadmap for how to react when the university does have more information.
"Fortunately," Skillings said, "for guidance we have the first-year of the Five Year Vision Ohio Implementation Plan, with its clear-cut priorities for improving our quality, competitiveness and financial sustainability in future years."
The university will continue to monitor its budget, along with other factors, month by month to determine when it will invest and at what levels.
"Also, I want to stress that we're still in the budget development stage. The draft budget is completely preliminary, taken from a snapshot at this time," Skillings said. "We'll continue to get new information that informs revisions, upward or downward, of resources and expenditures."
Under the proposal, bargaining-unit salary and step increases (which are based on years of service) still would go into effect July 1, as would any faculty promotion and tenure increases. The Five Year Vision Ohio Implementation Plan (FYVOIP) draft initiatives for year one that don't require funding also would move forward and potentially some initiatives tied to one-time-only funding
Areas targeted for delay are startup of some multiyear investments in the Vision Ohio implementation plan and salary increases for all faculty and staff who are not bargaining-unit members, including Athens campus, regional campus, College of Osteopathic Medicine, Auxiliary Services, grant-funded and student employees.
BPC chose this class of investments for delay because they are tied to base budget, meaning that once made, they will require ongoing funding in subsequent years.
Specific one-time and base investments may undergo adjustment between now and when the Board of Trustees approves the budget in June.
The BPC's recommendation to university leadership came after considerable discussion. The vote was unanimous with one abstention. Council members talked about the impact on their constituents and wondered about alternatives and priorities.
"The good thing is that in the end," Sherman said, "people in the meeting shared the same goal: concern about employees across the institution."