University of Akron administrators on Wednesday presented a nearly balanced budget, announcing the elimination of an additional 50 employee positions, as the public university works to erase a $40 million deficit.
The cuts follow the elimination of 100 positions over the summer, “most of them vacant or a result of retirement or attrition,” an administrative email delivered to faculty and staff Wednesday said.
Staff reductions also follow the awarding of merit-based raises, up to 2 percent, for full-time faculty members at an estimated cost to the university of $1.2 million. Also Wednesday, trustees approved a collective 2 percent raise for nonunion faculty, chairs and directors. That raise, totaling $200,000, will be dispersed to individual employees based on merit.
The elimination of 150 positions this year is expected to lower personnel costs by $12 million. Most eliminated positions already were open or became vacant through retirements.
“It was our goal and hope to achieve sufficient savings without impacting active personnel,” UA President Luis Proenza said. “However, our cost-cutting efforts were not sufficient to remedy the structural deficit confronting us. Therefore, we have made the difficult and painful decision to identify and abolish a limited number of positions that are currently filled.”
The latest round of cuts directly affects 28 such employees. Most will work through the end of the year before their contracts are non-renewed, administrators said. Those employees include one faculty member, nine contract professionals and 18 staff.
$1.8 million in savings
Elimination of these 28 jobs is expected to save the university $1.8 million.
The university identified a $27.6 million deficit last winter. Then a projected 5 to 7 percent decline in fall 2013 enrollment prompted university leadership to cut 8 percent from each college and department over the summer. Those cuts would offset much of the expected $15 million loss in tuition revenue.
In all, $25 million was cut: $17 million in employee compensation and $8 million in operating costs. Funding for colleges, headed by deans, were reduced $12.2 million, an 8.8 percent decrease. Academic support units, run by vice presidents, were cut $12.8 million, a 14.1 percent reduction.
Trustees also approved a 2 percent tuition increase over the summer, which helped increase revenue by $4.5 million. Expenses were reduced by increasing efficiency, deferring major purchases and reallocating resources.
But the glut of cuts came through personnel reductions.
Proenza stood up following Chief Financial Officer David Cummins’ report to emphasize the reasons behind UA’s fiscal challenges: declining enrollment and a loss of government subsidy, or stimulus dollars.
“Both of those things could change,” Proenza told the board. “We are very actively trying to change the enrollment picture.”
Positive enrollment outlook
Jim Tressel, vice president of strategic engagement, provided trustees with a positive enrollment outlook for next year, based on an influx of applicants. Proenza, however, cautioned against optimism.
“We have the benefit of a very dramatic increase in applications, but we can’t yet at this moment predict the yield that that will bring us next year,” Proenza said. “But that we should expect some increase is probably a fairly good bet.”
With state funding pinned to student success, the university has committed to increasing academic advising services, more effectively identifying at-risk students and becoming more selective in admissions by redirecting under-prepared students to two-year and community colleges.
“The university is implementing a number of strategies to increase the enrollment next fall of academically prepared students who are more likely to succeed in a four-year university program,” Provost Mike Sherman and Cummins explained in an email.
As the calendar year changes, Proenza has encouraged department heads to reassess the position eliminations and any affect on course offerings or program delivery.
“It is vital that we rigorously assess programs, that we rigorously assess our staffing levels and competencies and requirements. And I’ve asked the leadership team to begin that process so that we can better understand ... changes that are taking place and what we anticipate as a result of the new challenges,” he said.
Doug Livingston can be reached at 330-996-3792 or email@example.com.