Ohio University

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State of the Budget

Responding to our time, preparing for our future

State of the Budget

In a time of uncertainty and disruption, our call as a university remains to build a sustainable future for the students we serve, to be stewards of this remarkable and historic institution, and to help this and future generations grow in knowledge, wisdom, and lifelong learning.

To achieve these goals, we must respond swiftly to fiscal challenges that have been significantly amplified by the impact of the COVID-19 pandemic. And, we must do so in a way that does not diminish our academic quality or the student experience we deliver, but rather ensures that we continue to strengthen both. 

This task will require collaboration, innovation and ongoing, purposeful commitment to our students and their success.


Current Financial Landscape

Though we were facing a challenging financial landscape before the global pandemic, OHIO is in a position to survive the financial challenges and uncertainty brought by COVID-19. We have the benefit of strong reserves, but we must act quickly and prudently to avoid depleting them. We must and we will make lasting, positive change.

What We Know

Updated May 14, 2020

Immediate Financial Impacts of the Pandemic

Since 2018, Ohio University has experienced a decrease in overall enrollments, which has had a significant impact on university revenues. A budget reduction plan was created to be phased in over five years with the use of strategic and operational reserves to ensure continued institutional strength while right-sizing the institution based on evolving enrollments. The Ohio University Board of Trustees committed to allowing the use of $65.8 million in reserve funding as changes were made. The university planned to use $26.2 million in fiscal year 2020. Now, the anticipated use of reserve funding for the fiscal year, ending June 30, is $51.6 million. Additionally, the nearly doubling of the use of reserves in just three months demonstrates the severity of the impact on the institution’s financial positions and the need for urgent action. Here's a look at what we know about our current fiscal year, ending June 30, 2020:

Expenses - Budget: $757.3M, Forecast: $724.4M; Personnel/Non-Personnel Expenses — Budget: $489.4M personnel, $267.9M non-personnel, Forecast: $487.6M personnel, $246.8M non-personnel; Revenue — budget: $758.9M, forecast: $705.0M; Use of reserves — budget: $26.2M, forecast: $51.6M; Drivers of change in reserve use — $22.8M Covid-19 revenue losses & refunds, $17.4M expense savings: reduced travel supplies, & services, $1.2M incremental principle & interest expense (HCOM), $6.9M state cuts, $9.9M cost of VSRP

*All figures are subject to change

What We Don't Know Yet

Updated May 12, 2020

Pandemic Impacts Moving Into FY21 and Beyond

While it is too early to predict with clarity how the pandemic may impact our fiscal year 2021 finances, we are certain those impacts will be significant. Governor DeWine has indicated that universities should expect to receive 15-20 percent less in state share of instruction funding in the coming fiscal years as all state agencies look to reduce their budgets.

National surveys indicate a potentially disruptive impact on enrollment. Our national unemployment is at a generational high, which may impact student’s ability to enroll or return. In addition, concern about the potential for courses to be online during a portion of the fall semester or anxiety about leaving one’s home community may impact decisions. 

Ohio University is committed to doing all we can to support students financially, including increasing scholarships, holding tuition flat, and working with families to navigate changes in financial aid eligibility. In addition, we are actively planning toward Fall in order to be prepared to meet any restrictions around social distancing, testing and tracing, enhanced cleaning, or other precautions that may be recommended by the State of Ohio and Inter-University Council.

Ultimately though, we expect the combined impact of the SSI reduction and enrollment shifts to significantly increase our dependence on reserves.
 

Our Current Response

Updated June 23, 2020

Actions We Have Taken or Plan to Take

Our initial actions, announced on April 28, included:

  • Hiring freeze: Only critical positions that result in cost-savings being approved
  • Suspension of promotional reviews for staff
  • In-progress Capital Projects re-reviewed and new Capital Projects are suspended
  • All operational spending limited to essential purchases or services for the remainder of FY20
  • President Nellis and Provost Sayrs taking a 15% pay reduction

On May 1, we made our first significant staff reductions, impacting members of our AFSCME Bargaining Unit. 139 employees were notified that their positions would be eliminated effective May 31.

On May 15, 53 instructional faculty received a one-year notice of non-renewal. They will have an ongoing appointment for the upcoming academic year through May 15, 2021. In addition, we abolished 149 administrative positions as part of reductions and realignments. The University expects to rehire 55 administrators into new positions, for a net reduction of 94 positions.

On June 23, 81 employees were notified that their positions were eliminated. This personnel reduction included 63 classified positions, which was the only employee classification not impacted by earlier reductions, as well as 17 administrative positions, and one hourly position that is classified as non-bargaining unit/unclassified are impacted across the institution. This decision followed civil service reform measures, which were approved at the June 19 Board of Trustees meeting. The University expects to rehire 23 classified and administrative employees into new positions within the College of Arts and Sciences, for a net reduction of 58 positions.

The June 23 action was the last planned action of the FY20 fiscal year. In total, after rehiring, the University will have eliminated 344 filled positions across all campuses. This represents a total reduction of 7 percent. 

These decisions were made based on a number of factors and should in no way minimize or erode the positive contributions that our colleagues who received notifications made to our university. Rather, a lack of available work, reduced demand for certain programs and services, and necessary restructuring to improve operational efficiencies led to the choices that were made.

We have also announced a University-wide furlough plan to be implemented in fiscal year 2021, which begins July 1, 2020, and applies to all administrative, faculty and classified non bargaining employees. Find more information on the FY21 Staff Furloughs webpage, including a listing of frequently asked questions. In addition, many Vice Presidents and Deans as well as our Athletic Director have committed to reductions of 10 percent or more, and our head football coach and head men’s basketball will take voluntary salary reductions of 10 percent. 
 

What This Means for Bobcat Students – Our Continued Commitment

 

Students listen to a lecture in a classroom

As we make necessary changes in response to financial challenges,  we can and we will protect the student experience, evolving in ways that are responsive to students’ interests and needs.

  • Ohio University will not increase tuition to balance the budget. In fact, our Board of Trustees recently approved a proposal to hold tuition flat for students entering the 2020-21 academic year. 
  • We will continue to invest in in-demand programs that current and future generations of Bobcats are seeking through our strategic reserve funds. 
  • We remain committed to affordability, predictability and cost transparency through our OHIO Guarantee+ program – providing level-rate housing, dining and fees, locked in for 12 consecutive semesters
  • We will remain dedicated to protecting the unique Ohio University student experience and ensuring the best possible student outcomes. That commitment will drive our decisions.
  • We will address the institution’s current budget challenges together while continuing to monitor and react to national changes in the higher education sector.

FY21 Staff Furloughs

Next fiscal year, beginning July 1, 2020, a furlough will be instituted for all administrative, faculty and classified non bargaining employees. To minimize the impact on employees in our lower pay bands, an interim furlough policy was developed.

 

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We are committed to transparency with our University community regarding our financial challenges and how we are responding to them. We also invite your constructive solutions and ideas. We will continue to update our FAQ both with new information on this developing situation and answers to your specific questions.

 

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