Continued struggle to balance budget stresses importance of realistic projections
News | Chris DeWuske
On Sept. 24, faculty gathered in The Underground to hear administrative decisions on the budgetary shortfall. President Jay Barnes opened with a brief statement about the economic struggles for colleges and prayer for the university.
Joe LaLuzerne followed, asserting that the seminary has grown in terms of enrollment and the number of students taking credits. The problem however, lies with the density of credits students are taking. LaLuzerne further stated that CAPS/GS had a strong summer with momentum building towards enrollment for spring 2014 with 327 applications and 1344 inquiries.
This information does not come as a relief to some, as the university will need to make further cuts to meet its shortfall.
Senior Vice-President of Finance and Administration Kathleen Nelson, took the stage to discuss budgetary challenges confronting the university. The fiscal 2013 audit is slated to be finished in early November for publishing publicly. She summarized that there will be a small loss from operations due to the offset of expense management from faculty curtailment.
Data presented estimates a $2.1 million shortfall for CAS. Although it's too early to determine, CAPS/GS programs are not expected to see any significant variances. Seminary programs will result in a $1.3 million shortage, particularly from its transitions from quarter to semester classes. The seminary planned for flat net tuitions.
“We thought we were looking at it conservatively,” Nelson assessed. “While the total headcount is favorable, the number of credit hours those students are taking has decreased substantially.” The result is a 20 percent net tuition variance.
Other factors contributing to concerns include rising healthcare costs. A new healthcare plan starts in January, but administrators are watching the impact of the Affordable Healthcare Act.
The resulting budget contingency is $1.8 million.
"When I became provost nine months ago this certainly was not what I anticipated I'd be coming to talk with you about, but such is the reality of our community,” Deb Harless stated.
Despite the targeted $7 million cuts administrators wish to make deeper cuts in areas segment teams felt were necessary to keep.
Faculty will not be receiving an annual salary raise and will be seeing a reduction in retirement benefits for fiscal 2014.
“We certainly need to bring back annual raises and we need to increase our retirement measures,” Harless continued. “But we need to find a more sustainable way to go forward with our budget, and thus we began the prioritization process with the goal of identifying and implementing reductions to our overall university budget.”
The President’s Cabinet received the prioritization reviews from faculty on Sept. 6 and reviewed them on Sept. 30. Lower than anticipated revenue for the fall will soak up much of the $1.5 million buffer built into the reviews, resulting in further cuts.
“I think it's important to note that while the cabinet worked hard with the recommendations from the segment teams, it's also the case the cabinet will move forward with some of its own recommendations.”
Bethel intends to notify faculty of cuts on Oct. 15 to help facilitate the transition between jobs. An announcement will be issued regarding the number of positions eliminated and if they were tenured.
“Out of respect for the individuals who will be impacted by those, we will not be publishing a list of who those people are,” said Harless. “We want people to be able to share that information as they see fit.”
Most generous Voluntary Separation Incentive Payments (VSIP) severance packages in the spring were 50 percent of salary pay. Currently, tenured faculty will receive 49 percent, associate professors up to 41 percent, assistant professors up to 28 percent and instructors about 15 percent salary, based on years of service and rank. Full-time faculty will also receive benefits until severance pay ends.
Consequently, performance reviews for staff changes and practices have been delayed until fall 2014.
“Thinking about our enrollment situation, we budgeted to be down significantly in CAS this year, and we were down more than we anticipated," Barnes said.
CAS enrollment is down 100 students from last year, 30 more than predicted. Barnes stressed the importance of retention for everyone, not just admissions.
Faculty attending the community gathering expressed concerns with consistent errors with the university’s predictive modeling. Bethel will invest in institutional research to combat monetary problems in the future. However, Barnes suggested current enrollment issues are a product of decreased household income.
The gathering also covered the purchase of the property of Pine Tree Drive, made possible by the help of an investor and the market rate of the property. The purchase of 2 Pine Tree is supposed to help increase programs in business and economics, natural and health sciences and invest in study abroad and diversity opportunities. Although planned to be backed by investors committed to growth, many remain skeptical.
In a time when deeper cuts are being made to already significant progress, students and faculty alike are wondering if this is the right time to acquire more real estate.
With administration remaining optimistic for Bethel’s future, some faculty members remain apprehensive with their own fate on campus hanging in the balance.