Earlier today, I delivered the annual budget presentation. I write this afternoon to provide an overview of what I shared this morning with the members of the campus community who were able to attend the presentation. You can access a copy of my PowerPoint presentation here: /content/dam/nkuhome/docs/2014annualbudgetpresentation.pdf
I started the presentation by sharing an update about the implementation of our strategic plan, Fuel the Flame. Over the Spring semester, we formed nine teams that have been working to develop implementation plans. These implementation teams have sought and received input from the campus community through open forums and online feedback forms.
Later this Summer, the implementation teams will present their proposed plans to campus leadership. And at the Fall Convocation, I will share more details about those plans.
The second portion, and the primary purpose of my presentation this morning, was to update the campus on the University’s 2014-2015 budget. The University is in a solid financial position because of prudent management, but there are temporary challenges in the internal and external environment that necessitate budget reductions.
As you know, earlier this semester, in anticipation of state operating budget reductions and continuing fixed cost increases, I asked each vice president and the athletic director to prepare plans for a 5% reduction in recurring expenses. While each division had the same 5% target, I encouraged the vice presidents not to give across-the-board reductions, but rather to make strategic decisions.
Earlier this month, the vice presidents and the athletic director presented their preliminary plans to me. I accepted each of the proposed plans as developed, with the exception of Legal Affairs and Government and Community Relations, the two smallest divisions. The only way for these small units to meet their target was to eliminate student employment or student engagement activities. I didn’t find those alternatives acceptable, so I authorized budget reductions in those areas below the 5% target.
In addition to a cumulative reduction of approximately $2.5 million in operating budgets, the proposals presently call for eliminating approximately 35 staff positions, approximately half of which are presently occupied, and 14 faculty positions, three of which are presently occupied.
These decisions are difficult. We worked very hard to minimize the number of people who will be adversely affected. These affected employees constitute approximately 1% of our workforce. But with a 5% reduction on a very lean operation, we will not be able to avoid layoffs. Staff, temporary faculty, and adjunct faculty positions will be affected, but no tenure or tenure-track faculty member will be terminated as a result of these plans.
For those who are directly affected, the University will offer 60-day advanced notice, rather than the standard 30-day notice provided for in our policies. Moreover, these individuals will qualify for additional severance based on their length of service to the University. At a minimum, an employee will qualify for four weeks of severance; at the maximum, an employee will quality for 12 weeks of severance.
Human Resources will work directly with each employee, and we will offer as much support as possible during what will be a difficult transition for those employees.
I know that this is not the news you wanted to read. I hope you know that this is not the news I would have liked to share. But these actions are necessary to position the University for future growth.
Indeed, during the last portion of the presentation, I identified several reasons why I continue to believe that our University’s best days are ahead of us. State capital funding – $97 million for the health innovations center – is only one reason that I am optimistic.
As I said at the end of my remarks, there is something very special happening at Northern Kentucky University. We are presently facing some temporary financial challenges, but we have an extraordinary opportunity to transform our excellent University into an outstanding institution. The path may not be smooth, and the work will not be easy. But we have the people and the culture to succeed and to thrive. And when we do, the rewards for our students and our community will be great.
Thank you for your service.
Geoffrey S. Mearns
Northern Kentucky University
800 Lucas Administrative Center
Highland Heights, KY 41099