August 15, 2002
Dear Colleagues,
Earlier this week I promised that the Fiscal Year 2002-2003 Operating Budget would be posted on the web: it can be found at www.ulm.edu/03budg/. Since many of you have never had an opportunity to review the University's operating budget, some explanations describing the actions we took to construct this budget are required. Remember, to get an accurate picture of the changes, you must look past the summaries and analyze the individual department budgets: several examples follow.
For FY 2002-2003 we are estimating, for budget purposes, a 9.6 percent decline in revenue from student tuition. After factoring in the 3.4 percent tuition increase approved by the Board of Supervisors for FY 2002-2003 and the Pharmacy Fee increase, we expect to realize approximately $525,000 less than last year from tuition. This shortfall was incorporated into our planning assumptions as we developed the budget.
The State Appropriations bill for our budget includes an estimate of all self-generated funds (tuition, fees, etc.) which the University might collect. This estimate is purposefully set high so that we may be able to spend additional funds if they are generated, for example, by a sudden increase in students. This means that we are showing in the revenue budget $1,639,983 that we currently may not collect. However, State regulations also require that the budget submitted to the Board include an expenditure plan for all of these self-generated funds, as estimated in the appropriations bill. The corresponding expenditures for this amount are contained in the budget and are labeled "contingent upon available revenue." As the language indicates, should the monies become available, they will be spent in the designated areas.
Another area that appears to be a problem, but is not, is in the funding for the Library and Scientific Equipment. For Fiscal Year 2001-2002, we received $720,765 in Library and Scientific Equipment Funds, and it appeared as a line item in the operating budget. This year's operating budget indicates no funding for the Library and Scientific Equipment as a line item and is reflected in a corresponding drop in projected expenditures for the Library. However, the Legislature has appropriated $685,246 for this item in the Capital Outlay Bill this year; this funding method means that neither the revenue nor the expenditures will appear in our operating budget, but the monies will be available to the University.
Additionally, you should note that on Form ULS-1, Group Benefits increased by $1,674,068. This increase is by far the largest increase of any single budget item. Group Benefits, together with the mandated Civil Service merit increases, are the only items which were funded with increased state appropriations.
Many of you will also notice that the word "attrition" is used commonly in connection with the budget. For budget purposes, the term refers to the savings which result when the budgeted funds for a personnel line are not completely used. For example, the budget line for the Dean of Education is for $85,000 plus benefits of 23%. Should the position not be filled until January 1, only 50% of the budgeted salary would be used for this fiscal year, so that attrition of $42,500 would be assigned. Typically, the former administration budgeted for a large amount of attrition and eliminated positions as they became open without sufficient concern for its impact on academics, student life, or the proper maintenance of facilities. We do not believe that this method of "balancing" the budget is in the best interest of the University. In fact, this process removed the decision making process from our deans, department heads, and other managers, and this lack of local oversight has contributed significantly to our problems. We believe that a process where a plan is developed at the beginning of the fiscal year, resources allocated, and managers held accountable for results is a better method of managing a complex institution such as this University. Although painful at times, by working with the deans, department heads and other managers, we made the first step in that direction with this budget by eliminating 24 positions at the beginning of the fiscal year. We reduced the budgeted attrition from almost $3,000,000 to $1,400,000. We hope to further reduce this amount in next year's budget. The end result is more flexibility for deans and directors to manage their own budgets with limited central control.
Given our limited resources, we have made tremendous progress in addressing many of the most pressing needs on our campus. With an eye toward rebuilding the University's infrastructure, we have placed additional funds into the maintenance of buildings and grounds, student recruitment, student life, and fundraising. We were able to preserve the Academic Enhancement Fund, and increase the amount of funds under the direct control of the Provost. When our fall enrollment numbers are finalized, we will know if these monies are available.
Across campus we have created a more efficient administrative structure by combining the College of Liberal Arts and the College of Pure and Applied Sciences into a single college as well as recombining the three health sciences colleges into a single entity. On the departmental-level, we have realized additional savings by combining Mass Communication and Speech and Theater; and Math, Physics and Computer Science into single departments. Additionally, several administrative positions and their functions were reassigned over the summer in an effort to create a more rational and responsive management structure. Effective July 1, Enrollment Management, with the exception of the Registrar, began reporting to the Vice President for Student Affairs, and University Planning and Analysis began reporting to the Provost. All Physical Facilities (Physical Plant, Facilities, Capital Projects and Campus Planning) and Auxiliary Enterprises were transferred to the Associate Vice President for Business Affairs, a move designed to gain operational efficiency and underscore the efforts to improve the appearance of our campus. Lastly, we have worked to strengthen the institution by eliminating many of the general abuses tolerated by the past administration. The most troublesome areas involved the misuse of University resources in the utilization of graduate assistants, the calculation of release time for research, and the payment of course overloads.
This budget could not have been developed, nor progress made, without the dedication of Interim Provost Richters. He was a strong and constant advocate both for the faculty and for academic excellence. In the face of a fairly significant reallocation of dollars to critical areas, he displayed negotiating and compromise skills unsurpassed in my experience. We clearly could not have made the evolution in this budget without his long hours and attention to detail.
But like Robert Frost, we have "miles to go before we sleep, and miles to go before we sleep." After reviewing the last five months and working on this budget, I estimate that we have three to five years of hard work ahead of us, and believe that the only way to solidify our financial position is to recruit and retain a substantially larger number of students. There are no simple solutions to our multi-faceted problems. However, I firmly believe that by working together we can turn this institution around. For those of you who have not been here this summer, I hope you will notice that the mood on our campus and in this community has changed. This change has come about because of the work of many of you; you have stepped up to the challenge. I want to continue to work with you to make this a more student-centered institution, to strengthen academics, to develop our own identity, to increase student enrollment, and to get us back on a stable fiscal foundation.
James E. Cofer, Sr.
ULM President