ETSU President to discuss the school's budget
Officials at East Tennessee State University are meeting with the media Monday afternoon about the school's finances.
A press conference is set for Monday afternoon at 3:00. We're told President Brian Noland will talk about the university's budget.
We will have a crew at the press conference and bring you more facts later beginning on News 5 WCYB at 5.
Below is a copy of the letter sent to staff from Dr. Noland.
Historically, the University has developed budgets based on the presumption that student enrollment would either increase moderately or would remain level, thereby providing a constant base for planning purposes. While we have seen significant enrollment growth over the past ten years, during the last three years those enrollment assumptions have not been met. As a result, you will be hearing in the next few days from deans and other heads of administrative units how the University will address budgetary issues associated with reduced enrollment. In the long term, I believe these issues can best be addressed by setting and reaching enrollment targets, and that will require careful attention to enrollment and retention strategies that we employ now and in the future—and you may expect focused attention on those objectives. In the short term, however, we must take actions to assure that the University’s budgets are adjusted responsibly to address the needs of actual student enrollment.
Let me first address the items that will not be impacted by the budget shortfall. First, the University will fully fund the 1.5 percent salary enhancement for employees in the current year and will fully fund the additional 1.5 percent for a salary equity pool to further adjust employee compensation. Second, the University’s continued pursuit of a responsible growth agenda will not be compromised by the budgetary adjustment we are pursuing. You will in the current year see consistent support of the growth agenda and of enhancing student recruitment and retention—that is, the student completion agenda that is central to current state policy depicted in Complete College Tennessee Act legislation.
It is also important to note that the budgetary gap has been driven by ongoing and accumulating student enrollment deficits over the last three years and is not related to or impacted by the addition of scholarship football. There will continue to be full transparency in projected expenditures for athletics—and pro formas for those expenditures will document adherence to the University’s guiding principles and its academic mission.
In recent weeks I have met with my senior executive leadership team and with college deans, and we have developed a plan for addressing budgetary challenges. I am writing you to describe that plan and to clarify the scope of budgetary adjustments that we will be making in the current fiscal year. Let me emphasize that those adjustments are going to reflect serious attention to a set of guiding principles. We will maintain our historical values, our mission, our commitment to a growth agenda, and our commitment to students, faculty, and staff at the University. I believe the University can adjust our budgets to reflect actual enrollments while adhering to those principles.
Based on current trends, we expect our Fall, 2013 undergraduate enrollment to be down about 3 percent. If the overall enrollment picture further changes positively or negatively in Fall 2013, we will make additional budgetary adjustments to reflect that reality. While deans and other university leadership will focus on the details of implementing budgetary adjustments, I would like here to identify a set of strategies that the University will pursue to bring our budget into closer alignment with our actual enrollment. The following strategy emerged from careful deliberations by the University’s executive staff and by college deans, and it includes the following:
1. The University will expend all budgetary units to realize across-the-board budgetary reductions of 1.5 percent, which is equivalent to $1,900,000.
2. The University will implement a hiring freeze aimed at realizing $1.5 million over the course of the year of which $750 thousand will be realized in initial actions. It is recognized that this strategy and the item listed above are linked and that units that cannot realize savings through a hiring freeze may have slightly larger across-the-board reductions to realize.
3. The University will effect adjustments in entrepreneurial revenue distribution by $540,000 (depending on enrollment) by freezing the current model.
4. The University will extend its mandatory computer replacement policy from four to five years—thus realizing computer replacement cost savings of $300,000.
5. The University will save $110,000 through delaying motor pool replacement of vehicles.
6. The University will eliminate cell phone allowances for all employees with salaries that exceed $50,000—thus realizing savings of $80,000. In addition, the University will not authorize expenditures for new cell phones, and I-pads will not be purchased for individuals by state or Foundation funds. This action means that we are suspending reimbursement of employees for personal purchase of those devices—though we will, of course, continue to purchase University owned devices.
The plan we are pursuing represents a responsible alignment of expenditures with the actual revenue impact of recent enrollment trends at the University. We will continue to monitor carefully the effectiveness of the plan we are putting in place, and—at the same time—we will be looking at longer term improvements in budgetary planning, review of programs and services, and the degree to which we are all committed to the University’s pursuit of the growth agenda. At the same time we will continue to review both the effectiveness of our strategies for using fee revenue policy (scholarships) to address enrollment enhancement and our use of entrepreneurial strategies to achieve the objectives for which they were originally implemented. In summary, it should be noted that the actions we are taking represent temporary measures for one year, and each of them may or may not be a part of permanent reductions after the University undertakes its review of programs and services and of longer term improvements in our budgetary process.
The “take away message” I hope you derive from this is that we should all reflect immediate and purposeful attention to the growth agenda and to student recruitment and success. Thank you for the serious attention you will give to pursuing this plan in the months ahead.
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