On Wednesday, Oct. 24, APU’s Student Government Association (SGA) invited two members of the board of trustees and two members of the administration board to attend their weekly meeting. The four members addressed the budget shortfall and the community’s concerns.
Board of Trustees Chair David Poole and Pastor Albert Tate represented the board of trustees, while Vice President David Bixby and Provost Mark Stanton spoke on behalf of the administration board.
Stanton provided details in response to questions about the budget shortfall and how it will affect students.
“The university entered into the current school year with a $17 million shortfall from the previous school year, and in addition to that approximate number, a $3 million commitment to finish work on the physical therapy buildout on West campus,” Stanton said. “So we have essentially made a $20 million adjustment in the budget this year through both macro and area reductions. The macro reductions were things that have impacted faculty, staff and administrators across the university, and then some area reductions were within specific areas of budgets within the university.”
The Office of the Provost shared the first two phases of their restructuring process and timeline in an email to faculty and staff on Oct. 15. The email stated that the main goal of phase one, already enacted, was to balance this year’s budget by making $20 million in reductions. They did this by freezing the annual wage increase and retirement contribution, reducing travel and meal costs, decreasing capital and expenditures and taking department allocation actions.
Phase two goals include area-by-area transformational process, evaluation of outcomes and creating financial plans for the future. They will adjust next year’s budget by $10 million to ensure they can reinstitute the macro cuts made this year. Restructuring will be made on both university-wide and area-specific scales. University-wide changes will be announced during the weeks of Oct. 15-Nov. 16.
Position eliminations and voluntary retirements or reductions will be made during this time. Several associate deans and those in higher leadership plan to retire in 2019, and their positions will be eliminated upon their retirement. Many in higher leadership reduced their roles by large percentages, and several deans and vice presidents have decreased the administration workload in their areas.
The email also said moving forward they will change their approach to key aspects of financial planning.
“We will project a financial plan, not a budget,” the email read. “The term budget implies that the money is present or guaranteed. A financial plan is subject to modification throughout the year based on actual income.”
In response to a question, Stanton explained how the adjustments are made.
“All of the decisions are made through a sequence of events that include the operations committee, the office of the president and the president’s council, which is essentially made up of the top leaders of the institution,” he said. “Our acting CFO would say that some of the items we have very little control over. We have external financial partners, a bank and bond holders that have certain expectations of us. So [regarding phase one this year] we had to act very quickly to make certain adjustments to satisfy their expectations.”
Stanton also said the board avoided making budget cuts that would affect student employment hours. The only time budget cuts can affect student employment hours is when they cut back on banquets and catered meetings, which are prepared and served by student employees.
It was also noted that although the shortfall was a large number, it only reflects 8 percent of the university’s overall budget.
The administration board will present next year’s budget to the board of trustees in Jan. 2019.
The trustee and administration members also addressed student concerns about the recent changes in the student life handbook. An article regarding those updates will follow shortly.