Watt’s FY13 budget plan outline email

The following email was sent this morning to faculty and staff by Rob Watts, interim president of GPC:

GPC Faculty and Staff Colleagues:

In my remarks last Friday at Clarkston, I promised to provide you an outline of the plan to get the college back into financial balance in fiscal year 2013, which begins July 1st, by today.  In drafting this plan, I have consulted with other leaders of the college and with staff at the University System Office.  In addition, many of you have contacted me with budget reduction ideas, a number of which are incorporated in the plan.  I deeply appreciate the thoughtful and serious messages you have sent me.  They all reflect a strong commitment to the college and our students.

As you review the plan, please keep a couple of things in mind:

First, the plan will inevitably need to be revised or refined as the year progresses for at least three reasons: (1) We will get more exact numbers from Ron Stark over time as his staff has a chance to rebuild the budget system; (2) we do not have final revenue and expenditure amounts for summer semester; and (3) we do not know what will happen with fall and spring enrollment and the corresponding effect on revenue.   Therefore, the plan will necessarily be dynamic.

Second, we must reduce the budget in FY13 both to eliminate the $16M deficit and to pay back the $9M loan we will receive to make it through the current fiscal year.  However, once the loan is paid back in FY13, the $9M payment will be freed up to come back into the college’s budget in FY14.  This means that we will have to do some things on a temporary basis for FY13 that can be reconsidered in FY14 when the college’s budget has stabilized.   FY13 will be a very difficult year; FY14 should be somewhat better.

The College will take the following actions in FY13 to bring its budget back into balance:

1.       Reduce operating expenses by $5.9M.  This would include:

·         Reducing advertising and marketing to essential items needed by college recruiters and substitute digital versions for print versions of college publications.  The absence of advertising will have an effect on next year’s enrollment; we will have to work to get our message out in other ways.  Please be aware that you may still see some college advertising over the summer, on MARTA buses for example.  We have a small number of advertising contracts that were signed and paid for before the current budget situation was known and that we must honor.

·         Eliminating non-essential out-of-state travel and reducing in-state travel; reducing expenditures for supplies and materials, equipment purchases, library collection purchases, and other operating expense categories to essential levels.

·         Delaying the replacement schedule for faculty and staff computers by a year.  The IT staff believes that the workstation replacement for faculty and staff can be “paused” for one year.  If we go longer than that, though, we run the risk of significantly affecting our academic programs.

·         Delaying a planned upgrade to our campus network by a year.  While we can wait a year, the network performance will suffer if not upgraded in FY14.

·         Scaling back Convocation and other similar college-wide or campus-wide events.  It is important for the entire college or entire campuses to gather on occasion during the academic year.  We will keep those events as lean as possible this year.

2.       Have SACS-qualified administrators, including the president, teach one or more courses this year.  This is estimated to save $138,000.

3.       Use the new revenue allocated by the Board of Regents for FY13 to reduce the deficit.  This would include:

a.       Using the $1M originally intended to construct wet labs at the Alpharetta campus.  The college definitely needs the wet labs in Alpharetta.  Students cannot get the science requirements for their programs in Alpharetta in the absence of labs.  We will need to construct those labs in a future year, but not in FY13.

b.      Using the $1M originally intended to expand online programs and military-outreach efforts.  The college is clearly a leader within the University System in online education and is also a military-friendly institution.  We will continue those commitments; however, we will not be able to expand them until the budget is stabilized.

c.       Using the $1.25M in other non-specific FY13 allocation items and the FY13 tuition increase.

4.       Eliminate vacant positions and continue the hiring freeze.  There is approximately $1.5M in savings available if currently vacant positions are eliminated at the college.  We do know, though, that there will be some critical positions we must fill: For example, faculty positions in dental hygiene, nursing, and sign language, to meet professional standards for those programs, and a director for our QEP, to meet SACS requirements.  There may be other such critical positions that need to be filled during the year.  Any hiring of critical positions must be approved by the president.

5.       Reduce expenditures on part-time staff to essential levels.   This is estimated to save $2.1M.The college cannot and would not want to eliminate the use of part-time staff.  Many areas of the college, the tutoring centers for example, are very dependent upon part-time staff; those centers could not serve students without them.  We will need to review the use of part-time staff throughout the college to determine the appropriate levels needed next year.

6.       Increase class sizes in order to reduce the number of small sections.  This is estimated to save $158,000.  For reasons of program accreditation, physical space, and other considerations, some class sizes must remain at current levels.  The vice president of academic affairs and the academic deans will need to work through the details of implementing this item.

7.       On a temporary basis, adjust faculty workload from 5-4 to 5-5.  This is estimated to save $900,000.  As I noted in my remarks last Friday, faculty workload was adjusted from 5-5 to 5-4 the last time I was here as interim president.  I do not want to go backwards.  For the year ahead, though, we must take this action.  The college will reconsider this item for FY14.  On a temporary basis, the workload for term-to-term instructors will also be increased to 6-6, saving an additional $290,000.

8.       Reduce personnel costs by $10.7M.  Review all of the college’s current initiatives against its core mission/restructure organizational units/reduce full-time and part-time staffing.  We must separate the nice-to-do-in-good-times projects from the must-do-even-in-constrained-circumstances functions.  We need to re-examine the way our functional areas are organized and staffed.  We must reduce our personnel costs, which represent more than 90% of the college’s budget, by $10.7M.  This is equivalent to approximately 185 filled positions.  We will work with area USG institutions to make employees aware of potential opportunities at those institutions.

Staff will need to stretch to take up the slack that will be created.  It is clear that the college will not be able to perform some of its current functions in the year ahead and that other functions must be done in different ways.  My focus will be on our access mission and on preserving academic and instructional quality.  Personnel reductions will not affect tenured and tenure-track faculty members.  The vice presidents and I will begin this organizational review immediately.   It is my goal to have further information for you in two to three weeks.

You will have noticed that I have not mentioned furloughs.  I am holding furloughs as a last action if fall semester enrollment is substantially under current predictions.  If at all possible, I want to avoid a second round of staff reductions in the case of an enrollment drop.  I would prefer to use furloughs in that case.  This means that all of us at the college should do everything possible over the summer to assist Student Affairs in the recruitment, admissions, and registration efforts for fall semester.  As soon as summer registration is completed, Dr. Vincent June will let the college know how we can all help for fall.

I received a couple of other ideas that are not under consideration at the present time:

·         Move to a year-round four-day academic and work week.  In theory, this should save on utilities.  My own experience from having done this in the summer of 2006 is that one saves less than one thinks.  The college must provide library and computer lab access to students over the weekend for the research projects; some science labs must be kept cool; and other buildings must be kept open on some Fridays and weekends to accommodate peak workload periods, which vary throughout the year, for a variety of different departments.  The college also teaches a number of classes on Saturdays.  For both academic and operational reasons, I do not think we can do a hard close of all buildings every Friday, Saturday, and Sunday throughout the year, which is really the only way there would be any significant savings on utilities.

·         Implement an early retirement program.  Several people mentioned this.  The Teachers Retirement System of Georgia is a separate state agency from the Board of Regents, and we cannot change any of their rules and regulations regarding retirement.  In addition, we are not in the position of being able to offer any financial incentives toward retirement this year, even if they were allowable.

I continue to welcome your thoughts and ideas.  As I noted in the opening, this plan will necessarily be dynamic and will be revised to reflect the latest and best financial information about revenues and expenditures available.

I will have further information for you in two to three weeks as we complete the review of all our initiatives against our core mission and of our organizational structure and staffing.  Again, my focus will be on our access mission and on preserving academic and instructional quality.

Rob