Budget reduction plans

Today’s Trustees meeting (video) approved a general outline for budget reduction plans as President Genshaft presented them (PDF) to the faculty senate. The handout only included specific information on potential layoffs within Academic Affairs and some other entities such as Student Affairs, so the regional campuses and in-unit parts of USF Health were not included. President Genshaft said that she did not intend to lay off tenured or tenure-track faculty, and this is definitely a good (or less-bad) outcome.

Layoff numbers in general: Within Academic Affairs, the outline is for a loss of two instructional faculty (non-tenure-track) positions and five non-instructional faculty lines (which may or may not be in the UFF-USF bargaining unit). There are dozens more staff who may lose their jobs, many USPS (represented by AFSCME), and a number probably A&P, and these latter may include some in the UFF-USF bargaining unit. I spoke with one regional-campus head, whose best impression was that no in-unit employees at that campus were layoff targets (and this was with a caveat that the campus head was not entirely sure about the unit boundaries), and VP Klasko (Health) promised me after the BOT meeting to get me more specific information about Nursing and Public Health. (He made the same promise to Faculty Senate President-Elect Larry Branch at the faculty senate meeting: kudos to Larry for being the first to point out the missing information.) If the information from Academic Affairs is scaled to USF Health and the regional campuses, there may be 5-15 layoffs within the bargaining unit. Auxiliary units and entities such as Physical Plant were not included, so several dozen USPS and A&P staff may be at risk. In general, it was frustrating not to have information about the entire university, and that was echoed by one trustee who was concerned that the board was approving the outline without much chance to reflect on it or complete information.

Reorganizations: The Academic Affairs outline referred explicitly to the move of three academic units between colleges: Economics from COBA to CAS, Rehabilitation Counseling from CAS to FMHI, and Architecture absorbed within VPA. The specifics within colleges were vague, and my impression is that some things may still be in flux, or the last details may still be in the process of being nailed down.

Unrestricted assets: On pp. 7-8 of the president’s speech to the faculty senate, or on a pie chart also passed out at the senate meeting, you can read specific claims that the administration makes about the $240m in university-only unrestricted assets, specifically that they are previously committed:

  • The statutory mandate of a 5% reserve
  • The trustees’ preference for a month (or two) of payroll in reserve
  • Overhead accounts for faculty research
  • Florida Phosphate Research Institute funds
  • Summer tuition that was lying over between fiscal years
  • Debt service and operations for auxiliary units

Administration staff also circulated a printed pie chart (I haven’t seen it online) with percentages and amounts tied to the claimed commitments. In addition, President Genshaft said that the amount of unrestricted assets were necessary to maintain the university’s bond ratings for bonded projects, and that unrestricted assets could not be used for recurring expenses, since they are one-time-only funds. The last is absolutely true in terms of the core amount of assets (though not interest earned on the assets). A number of faculty at the senate meeting in the early afternoon had some questions, as do I, and probably the best path to follow is to check the accuracy of these claims in terms of several issues:

  1. Is there documentation of these commitments as of summer 2007?
  2. Are the claims consistent with the growth in unrestricted assets — that is, is the claim of prior commitments for the 2007-2008 financial statement also true for prior years, and if so, how did the assets grow so quickly if prior years’ funds were similarly committed?
  3. What is the likely end-of-year portrait of unrestricted assets for 2007-08, and is that consistent with the claimed commitments?
  4. Are the claims consistent with the GASB definition of unrestricted assets? I thought that if money is pass-through or externally restricted (as in the Florida Phosphate Research Institute funding or overhead accounts with typical F&A restrictions), that shouldn’t be included in unrestricted assets. I may be wrong, but this is something to check.
  5. Why are auxiliary-unit debt service obligations and operating expenses coming out of the unrestricted assets of the university (auxiliary units excluded)?
  6. Is there any standard of practice in higher education for holding a very large reserve of fairly liquid assets?
  7. Is the amount of unrestricted assets a high priority in determining bond ratings, and how does it compare with other factors such as an income stream devoted to debt service, the institution’s history of prior projects, and the institution’s general managerial competence?

I suspect other faculty may have additional questions. Beyond the factual question, there is also the question of values and priorities: should a university’s highest priority be to keep a stash of cash when there is a legitimate financial problem that is causing damage to the institution’s core mission, and should the bond rating be a higher priority than the institution’s academics?

Addendum. Some other observations about the president’s speech to the faculty senate:

  1. The president mentioned the concerns she had with stagnant faculty raises. The faculty have even greater concerns and is glad that she shares them!
  2. The president said USF would investigate the direct student loan program. Good!
  3. The president said HR would do what the chapter had asked in the fall, which is the creation of a single point of contact for employees who receive layoff notices, to receive outplacement assistance as well as internal placement in other openings.

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