Mary Ellen Heuton, senior vice president for finance/chief financial officer, presented the board with the reforecast for the budget year ending June 30, 2016. The reforecast was made necessary by the governor’s October announcement of a four percent mid-year budget cut for state agencies
Heuton previously has said this latest cut in state allocations amounts to approximately $2.5 million for Marshall, including $1.9 million for the university operating budget and $600,000 for the Joan C. Edwards School of Medicine. Overall, the university’s state funding has been reduced by $11.5 million since 2013.
“We purposely budgeted conservatively this year because of the continuing uncertainty of state funding and that is proving to be a sound decision,” she said. “As the reforecast shows, we have a $2.6 million hole to fill between now and June 30. We are confident we can find that amount from the Marshall 20/20 initiative and other cost-cutting and revenue enhancement measures across the university. The 20/20 savings to-date have been coming in more slowly than we had projected, so we will collectively need to keep our foot on the gas to ensure we realize all the savings and revenue we think is there.”
Based on Heuton’s reforecast, the board today approved a resolution to set aside a two percent salary pool to be used for faculty and staff raises. The original Fiscal Year 2016 budget included a three percent salary pool.
Heuton said the salary increases will be effective in January.
“President White, President-elect Gilbert and the board felt very strongly that the university needed to keep its commitment to give salary increases this year,” she said. “They have made a pledge to invest in strategic priorities going forward and, of course, people are our greatest resource.”
The board also received a financial statement for the three months ending Sept. 30 and an investment earnings update, and approved a new Electronic Records Management Policy.
In other action, the board approved elimination of a degree program—the Bachelor of Applied Science (BAS). According to Provost Gayle L. Ormiston, the BAS program has had low enrollment since its inception in 2009. He added that there are currently no students in the program and the university’s Regents Bachelor of Arts (RBA) program can seamlessly accommodate any BAS student who might wish to return.
In his remarks, Interim President Gary G. White said President-elect Jerome A. “Jerry” Gilbert is already involved in the budget process and other important university issues.
White said Gilbert has been sitting in via Skype for weekly meetings with the vice presidents, and that he and Gilbert have been talking nearly daily by phone. He added that Gilbert has asked him to stay on at the university in a part-time consulting capacity to help continue the momentum on Marshall 20/20 and other budget-related issues
“Although our new president is not officially on board until January, I can assure you Dr. Gilbert is actively engaged with university leadership as we have been working through the budget reforecast before you today,” said White. “We are on exactly the same page about the direction the university is headed, so there shouldn’t be any slow-down or disconnect when he arrives. I’m honored that he has asked me to remain a part of this process and I plan to be involved as long as he wants me to be.”
White said the university remains in sound financial condition and that preliminary spring enrollment trends look good, with enrollment in almost all categories ahead of this time last year. He also cautioned that more state budget cuts likely are coming.
“We could absorb the latest state budget cut because we have a strong balance sheet,” he added. “But as we discussed at the last board meeting, this cut is not a temporary or one-time reduction in state funding. This reduced funding level will be the base for our state appropriation for Fiscal Year 2017, and I think we’re looking at up to four percent in additional cuts next year—maybe even yet another cut this year. The state budget situation is that serious. I’m convinced it will get worse before it gets better. We have to keep ourselves in a position to remain fiscally healthy and growing.
“Over the last couple of years, we’ve gained just about all the efficiencies we can from simple belt-tightening and canceling empty positions. At this point, we are being forced to make decisions about our priorities as an institution. We have a responsibility to manage our way through these budget challenges.”
Along those lines, White and Ormiston told the board that the Office of Academic Affairs and deans are beginning intensive reviews of the viability of all academic programs, including class size, graduation rates and number of students enrolled. They said the process will lead to a streamlining of the university’s academic operations, similar to what is being done with administrative departments through the Marshall 20/20 process, and should result in an institution better equipped to face the future.
White said, “I want to be perfectly clear. This is not about across-the-board budget cuts that will be absorbed equally by all departments and academic programs. You can’t simply cut or save your way to prosperity. These will be intentional changes to the programs and services we offer across the entire university and how we offer them. Some programs will receive more resources and some may be downsized or discontinued. There will be associated changes in faculty and staffing levels. There’s no way around it. We want to be able to continue to invest in new programs, initiatives, facilities and our people, and the only way to do that is to take a hard look at where we want to go and how we can get there. I am confident that through these measures, we will come out on the other side of our present budgetary challenges as an even stronger, better institution.”
At the close of the meeting, the board passed a resolution thanking White for serving as interim president over the past year.
Board of Governors Chairman Michael G. Sellards thanked White for his leadership.
“We hit a home run when we selected you to serve as interim president,” said Sellards. “We knew we needed someone who would keep the momentum of President Kopp going and you have done that and more. We will be forever grateful for your service.”