The purpose of my letter is to share information regarding the conclusion of the first phase of developing the Fiscal Year (FY) 2011 budget. The focus of this first phase was to develop the budget reallocation recommendations that I will present to the Ohio University Board of Trustees at its April meeting. Between April and June, our Budget Planning and Analysis office will continue to update projections for revenues and expenditures based on changing variables including enrollment projections and related student financial aid needs. I will present the FY 2011 budget to the Board of Trustees at its June 2010 meeting.

In detailing the work that has been completed in the reallocation phase, it is important to understand the external factors that impacted the final decisions. As you know, the State of Ohio’s budget has a dramatic effect on Ohio University’s budget. The Athens campus will sustain a $10.4 million reduction in State funding in FY 2011 and must reallocate an additional $3.25 million to fund increasing health care and utilities costs and key Vision OHIO strategic priorities, including a raise pool for faculty and staff.

It is in that context that our University community has participated in an open, transparent discussion of how to best move forward in reallocating $13.75 million of the Athens campus budget. In developing my recommendations to the Board of Trustees, I received valuable input from Executive Vice President and Provost Pam Benoit and Interim Senior Vice President for Finance and Administration Mike Angelini, along with thoughtful suggestions and input from many faculty, staff, students and donors.

I thank the Budget Planning Council (BPC) for its detailed work in developing recommendations for my consideration. I also extend my gratitude to the University Senates for the resolutions they submitted, and to all who participated in the open budget forums, submitted ideas to the budget suggestions web site, or sent me emails.

Three common areas of discussion that emerged from this input phase focused on size of the administration, Intercollegiate Athletics, and the feasibility of assigning greater reductions to academic support units. Summaries of considerations and responses to these three issues are available online (Oak login required). 

One recommendation I will take to the Board of Trustees is that the University provide a one percent across the board raise pool for all faculty and staff, with an additional $750,000 merit pool for faculty, contingent on the Athens campus exceeding its enrollment goals for Fall 2010. Those goals will be defined with input from BPC  As you know, the initial budget assumptions for FY 2011 included a two percent merit raise pool. However, as planning units completed their reduction scenarios based on the Budget Planning Council’s preliminary assumptions, it became clear that providing this level of increase would require eliminating more than 180 instructional sections and hinder the University’s ability to provide support for our students who are eligible for an Ohio College Opportunity Grant (OCOG).

Offering a one percent across the board raise pool will allow the University to establish a $1 million pool of instructional funding which will be administered by the Executive Vice President and Provost to offer the top priority instructional sections across the University. This recommendation also supports Ohio University’s recruitment and retention efforts by preserving $600,000 to support over 3,000 OCOG-eligible students. These funds will be used to offset the entirety of the anticipated tuition and fee increase for incoming freshmen and $150 of the anticipated increase for all continuing students.

My recommendations will include an additional $1 million investment in Vision OHIO strategic priorities which includes: $400,000 for faculty hiring and program development to support the Athens campus Bachelor of Nursing degree program; $400,000 to support  the second year of the General Education Instructional Improvement Project in the College of Arts and Sciences; and $200,000 to help the Office of Enrollment Management enhance its recruitment efforts and yield strategies.  These investments will allow us to improve our academic offerings, continue to recruit outstanding students, and generate revenue.

I also will recommend to the Board of Trustees that we reduce General Fund support for Intercollegiate Athletics and close the budget gap for that unit. In addition to Intercollegiate Athletics’ expenditure reductions of $601,279 from General Fee sources in the coming year, I will recommend an increase of $600,000 in General Fee support to balance the Intercollegiate Athletics budget. The student-led General Fee Advisory Committee included Intercollegiate Athletics as one of its priorities for funding, stating that ICA allows students the opportunity to demonstrate their leadership skills and provides experience for undergraduate and graduate students as team assistants and graduate assistants. In addition to these benefits, our investment in Intercollegiate Athletics provides a significant return in the form of positive national attention and elevated awareness of Ohio University.

My budget reallocation recommendations implement a number of savings initiatives that planning units presented as part of a critically important multi-year process. The specifics of my recommendations are available online (Oak login required). 

Sadly, the implementation of some of these budget reallocations has forced us to eliminate jobs, resulting in the loss of valued colleagues at the University. This is an extremely painful time for them, for their families and for those who work alongside them. We have services in place through University Human Resources to support these colleagues as they seek job opportunities outside Ohio University. Information about these services is available online.

These decisions have not been easy and I have not taken them lightly. I have listened carefully to voices within the University community, as well as those of government leaders, donors and alumni. I have evaluated the most accurate, current data available and used those data to project how we must transform our University over the next decade. Multi-year planning is paramount, given that the State of Ohio budget is heavily reliant on $8 billion in Federal economic stimulus funding in the current year and in FY 2011. When that funding ends in 2012, the state will face an $8 billion dollar budget deficit. While the governor and legislature have historically shielded higher education from deep cuts, they will no longer be able do so. Ohio University will need to look for other revenue sources to offset the decrease in State funding on the horizon. Our Capital Campaign will be an important way for us to solicit continuing and new support from our alumni and friends. We also must engage in new revenue generating opportunities to support our academic mission.

Change of this magnitude will not be easy and it cannot happen in a single year. As we hear stories of difficult decisions that leaders of institutions across the country are making, it is clear that this is a dramatic time of change for all colleges and universities. Those universities that transform in response to the changing global society will emerge as leading institutions which not only survive, but thrive.

I graduated from Ohio University 40 years ago this spring. I am exceptionally proud to be an alumnus of a great institution and a steward of its present and future. Each of you stands with me as a caretaker of this remarkable place. As we come together with creativity, civility, and commitment we will shape its future as it leads and serves society. Thank you for all you do for Ohio University and the students we serve.

Cordially,
Roderick J. McDavis
President