Council reviews 2015 budget, scholarship initiative

Debby Hernandez, Administration Editor

The budget for the university is expected to decline for fiscal year 2015, with a loss of $4.36 million from this year’s budget.

Based on the adopted budget, after the estimated deficit of $4.36 million for fiscal year 2015 is covered, the university will be left with a budget of $1.218 million for the year.

The Council on University Planning and Budgeting received specifics on the adopted budget for fiscal year 2015 and discussed a cash-in cash-out scholarship initiative on Friday.

Paul McCann, the interim vice president for business affairs and treasurer, said the numbers are based on the budget that was created in June.

McCann said the $9.363 million in reserve for a new science building was used during fiscal year 2014 to help offset the deficit the university accumulated at that time.

The deficit during 2014 was $6.126 million, while the university’s beginning budget for 2014 was $2.34 million.

After using the reserve, the university was left with a balance of $5.578 million at the end of 2014.

The loss is estimated to increase by $190,000, making the estimated end balance for fiscal year 2015 after covering losses $1.028 million.

Council member Grant Sterling said the way the loss of university income has been handled is not a solution, but a process to help slow down its effects.

“It seems to me that what this says is our effort to balance the budget, almost exclusively by not replacing retirees and making the cuts we can, is slowing down the rate at which the catastrophe is coming,” Sterling said. “By 2016, it’s not radically different than the debt by the end of fiscal year 2015.”

President Bill Perry said the 2016 budget remains unknown because some factors such as the amount of money from state appropriations and tuition will be affecting the budget.

“Until we know what the appropriation is going to be for 2016, until we know what the enrollment is going to be, how much we are going to be able to carry over through savings (for 2016), we don’t really know how it’s going to be,” Perry said.

He said he expects the university’s budget to balance in the next two years.

“It looks to me that next year and the following will be the years where the enrollment stabilizes and starts to climb back up, by 2016, we will be in balance; in 2017 we will be able to start moving up,” Perry said.

Perry said new revenue would be saved from enrollment, hiring freeze and attrition.

He said he expects enrollment to increase through new programs and continuing advancements in existing programs, particularly at the graduate level.

Perry said he estimates over the next two years to have some savings in from hiring freeze and attrition of about $6 million.

McCann said one initiative for the fiscal year 2015 budget is to allow department chairs and directors to decide how the money will be allocated within their department.

“One of the things we did was instead of breaking out that non-personnel category and giving everybody specific line-items within their areas, we have kept that non-personnel area in direct expenditure pool, (with) a couple of exceptions,” McCann said.

He said the goal is to allow them to be part of the decision-making process.

“They still need to be part of the solution, not us dictating from up-high how to use the money,” McCann said. “From my standpoint that is beneficial, I much rather have the people on the line being able to make those decisions.”

The unbudgeted direct expenditure pool during fiscal year 2013 was $12 million, while in 2014 it was $10.263 million.

The unbudgeted direct expenditure pool for fiscal year 2015 is $9.661 million, with a forecasted budget at the end of 2015 to be $9.443 million.

While department chairs and directors will be allowed to determine how much to spend on most items, some things will remain budgeted.

Budgeted items include permanent improvements, library books, scholarship and awards, and utilities.

Under permanent improvements a total of $882,000 was allocated for fiscal year 2015, a decrease of $189,000 from fiscal year 2014.

Library books will receive $1.287 million for 2015, which is $108,000 less compared to this year.

The budget for utilities for 2015 is $5.860 million, a decrease of $422,000.

Scholarships and awards will have a budget of $6.350 million in fiscal year 2015, an increase of $951,000 from this year.

In terms of attrition, the university allocated about $1.5 million for fiscal year 2015 and has already saved about $850,000. This leaves an estimated balance at the end of fiscal year 2015 of $653,000 left for attrition.

McCann said the estimated numbers could vary depending on when university personnel leave or retire; however achieving those estimates could be possible.

The council also reviewed a cash-in/ cash-out scholarship initiative.

David Emmerich, the chair of the council, said the initiative consists of a fundraising campaign to help offset some of the appropriated costs.

“A lot of appropriated dollars are being utilized to fund the Commitment to Excellence and Panther Promise, ” Emmerich said. “Additional fundraising dollars would be specific for the scholarships, and the appropriated dollars currently being used for these scholarships could be used for different academic areas instead.”

Council member Kathlene Shank said the fundraiser would be targeting mid-level donors.

Emmerich said the council will only be involved in the beginning process of the initiative.

The council will meet at 2 p.m. on Jan. 16, 2015 in the 1895 Room of the Martin Luther King Jr. University Union.

Debby Hernandez can be reached at 581-2812 or [email protected]