The University of Akron expects to dip into its reserve funds for $11.5 million for the 2019-2020 school year, according to the budget passed by the board of trustees Wednesday.

The budget includes $19 million less in expenditures than the original 2018-2019 budget, including $14 million less in personnel costs as a result of decisions not to rehire for some operational positions that were open.

“In all candor, this is a challenging budget characterized by tough choices,” interim President John Green said.

No current staff will be cut. About 80 positions were open that will not be filled, although the university has hired staff in other areas where programs are expanding.

Tuition, as previously announced, will increase by 1.5% for incoming freshman students who participate in the four-year tuition rate guarantee program.

Unionized staff will receive a previously guaranteed 4% raise. The trustees also approved an additional 2% raise for nonunion employees.

The budget assumes a decrease in enrollment of 4% for the fall.

The university anticipates bringing in $16 million more that it will spend out of the general fund, which pays for faculty and academic programs. But other departments, like the student union and athletics, are heavily subsidized by the general fund, resulting in the need to dip into savings to close the gap.

Each of those departments, except for athletics, were instructed to find ways to cut their general fund subsidies by 7%, Chief Financial Officer Nathan Mortimer said. Some departments chose to make cuts, while others pledged increases in revenue.

Athletics cut about $500,000 in operational costs and predicted another $500,000 in increased revenue from ticket sales. The department is expected to cut its reliance on the university's general fund by $8 million over the next three years, Mortimer told trustees in committee meetings last week.

University leaders initially anticipated a $16 million dip into savings for this fiscal year, but revised that estimate to $4 million in April.

It's possible the same could happen again, Mortimer said. The reserve fund currently has roughly $70 million of easily accessible money, which Mortimer said is “plenty.”

Targeted investments in areas of strong programming, like STEM degrees, are going to be key to the university recruiting more students and reversing enrollment trends, Mortimer said.

“We've got to focus on the revenue side of the equation,” he said.

 

Contact reporter Jennifer Pignolet at jpignolet@thebeaconjournal.com, at 330-996-3216 or on Twitter @JenPignolet.