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OHIO Board of Trustees approves budget for FY12

The Ohio University Board of Trustees approved a $750.9 million budget for the upcoming fiscal year and discussed strategic investments at meetings Thursday and Friday.

At the Resources committee meeting on Thursday, Acting Budget Director John Day presented the proposed University budget for fiscal year 2012. The budget calls for $9.5 million in planning unit reallocations, as well as savings through efficiency initiatives and early retirement and voluntary separation incentives, to close the budget gap resulting from reduced state funding and inflationary cost increases.

According to Day, it was crucial to fill that budgetary hole with base budget reductions and savings rather than one-time funds or tuition increases in order to ensure a sustainable budget and the continued financial health of the institution. He explained that this will give the University flexibility in case of continued economic difficulties.
This strategy also allows funds made available through tuition and fee increases to be applied solely to investments that support the institution’s core academic priorities.

Signaling their support for this strategy, the trustees passed a resolution on Friday calling for a 3.5 percent increase to the combined undergraduate instructional and general fees for students on the Athens campus.

This amounts to a 3.87 percent increase to tuition and a 1 percent increase to the general fee, or an additional $111 per quarter for a full-time student. The increase will provide $5.7 million for strategic investments in areas like undergraduate scholarships, instructional capacity, learning communities and disability services.

The board discussed room and board fees and approved Residential Housing’s proposed 2.5 percent increase to standard double room rates. They also approved varied increases to the rates of certain room types in an attempt to create a more consolidated and simple rate structure that is consistent with peer institutions in the state. To aid in this transition, returning students will receive a discount on the higher rate adjustments for multi-occupancy rooms.

There was no proposed increase to Dining Services’ board rates for next year.

Board members noted the importance of maintaining accessibility for students while still funding institutional priorities and building reserves.

“The budget you delivered balances all of the competing needs with some grace and you’ve done it with a process that makes sense,” said Chair C. Robert Kidder.

The fiscal year 2012 budget also includes base salary increases for eligible employees to offset the new $150 employee parking fee and increased health care premiums in addition to a 1.66 percent raise pool available for distribution on a merit basis to all faculty, administrators and non-bargaining unit staff.

Long-term planning
University officials also presented plans and policies that will lay the foundation for major capital improvements and future budgetary planning.

Associate Vice President for Finance Mike Angelini shared the first draft of a University debt policy, which outlines how the institution will prioritize projects to receive debt financing, use various financial instruments to determine an acceptable level of debt and internally administer both debt and debt service.

Priority projects, as described in the policy, are those that align with the mission of the University, as well as those that generate revenue or have some external funding. The policy stresses the importance of using debt conservatively in order to maintain an acceptable credit rating and debt burden ratio, a key measure of financial strength.

The creation of this policy was spurred by a debt affordability study from PMF, Inc., that indicated the university could issue $200 million to $300 million in debt over the next five years without adversely affecting the institution’s debt burden ratio or its credit rating.
The board discussed this study at April’s meeting in light of the University’s extensive capital and infrastructure needs. University officials expect to present a Comprehensive Capital Improvement Plan at the September board meeting.

Vice President for Finance and Administration Stephen Golding also presented an updated version of the University’s Six-Year Sources and Uses model. The model projects the University’s operating performance, including both revenues and expenditures, through fiscal year 2017. It is designed to increase transparency surrounding Ohio University’s budget and the resources available for operations and strategic investments and to aid in long-term planning efforts.

In other business, the Board of Trustees approved:

  • A resolution to increase the College of Osteopathic Medicine’s tuition and non-resident surcharge by 5 percent and to increase the instructional fee for the University Regional Campuses by 1.5 percent. This is the first increase to regional campus tuition in four years.

  • A resolution to approve a list of new and increased student course, technology and miscellaneous fees. All approved fees were reviewed and recommended by the Student Fee Committee and the Budget Planning Council.

  • A resolution to convert the tuition tables for ELearning, Independent Distance Learning and Executive Graduate Programs to standardized hourly rates.

  • A resolution to increase program fees for two off-campus graduate programs: the Master’s in Financial Economics effective January 2012 and the Professional MBA program effective May 2012.

  • A resolution to authorize the University to receive bids and award construction contracts for an $825,000 project to replace two chillers in the Computer Service Center and a $700,000 project for renovations to Hudson Health Campus Care. The former project will be funded with the issuance of bonds by the University, while the latter will be funded from reserves from the College of Osteopathic Medicine, Students Affairs, Finance and Administration and the University’s central reserves. 

  • A resolution to change the names of the Zoology Building, the HDL Center and the Facilities and Auxiliaries Building to the Clippinger Research Annex, the West Union Street Office Center and the University Service Center, respectively.

  • A resolution to authorize the vice president for Finance and Administration and the vice president for Research to apply for and accept Airport Improvement Program grants from the Federal Aviation Administration.

  • A resolution to approve the creation of a Master of Science in Geography in the College of Arts and Sciences.

  • A resolution to award emeritus/emerita status to staff and faculty on the Athens and regional campuses.

  • A resolution to appoint people to the Regional Higher Education Coordinating Councils at Chillicothe, Lancaster, Southern and Zanesville.

  • A resolution to change the name of the College of Osteopathic Medicine to the Ohio University Heritage College of Osteopathic Medicine.

  • A resolution to set Ohio University Board of Trustees meeting dates for the succeeding year.

  • A resolution to approve the University’s proposed audit plan for the next fiscal year.

  • Resolutions to elect Roderick J. McDavis as president of Ohio University; Thomas E. Davis as secretary to the Board of Trustees; and Stephen T. Golding as Treasurer of Ohio University from July 1, 2011 to June 30, 2012.