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Higher Ed Board discusses immediate, future budget cuts and serious impacts for Oregon public universities

Contact:
Di Saunders – Cell: 971-219-6869; Office: 503-725-5714

PORTLAND, March 6, 2009 – The State Board of Higher Education (the “Board”) met today at Oregon State University to review current and next biennium budget cuts and issues, board goals and strategies in the current fiscal environment, and diversity policies, among other items discussed by the Board.

OUS Budget Cuts and Implications
Jay Kenton, OUS vice chancellor for finance and administration, presented the detail of the $46 million in budget cuts to the current 2007-2009 biennium. Over $9 million in cuts was taken in December 2008, and another $37 million was assigned to OUS in February 2009 to be taken immediately. Out of February’s $37 million in cuts, $6.7 million will be taken in public service, academic support, and institutional support; with $30.3 million taken from fund balances in order to preserve student access and success, keep instruction in tact to the extent possible, and sustain the record levels of enrollment which have greatly expanded student access to higher education in Oregon, including to underserved populations. These cuts reduced the average of all campus fund balances from 9% to 6%, and dropped two campuses below the Board required level of 5% (see items below). Combining the December 2008 and February 2009 budget cuts, campuses took the following reductions (rounded): EOU = $1.9 million; OIT = $2.4 million; OSU = $12.2 million; OSU Statewide Public Services = $6.4 million; PSU = $8.6 million; SOU = $2.1 million; UO = $8.6 million; WOU = $2.3 million; Chancellor’s Office = $1.6 million. Board members expressed grave concern about how campuses will manage additional cuts likely in the 2009-2011 biennium with reserve levels already at minimal levels for all campuses. The Chancellor noted that further reductions in state funding in the current biennium are possible – beyond the already $46 million cut – and that further actions may be required during this fiscal year. The Board approved the allocations of these reductions as recommended.

UO and SOU Fund Balances    
Due to the recent February 2009 budget cuts, two of the System institutions, University of Oregon and Southern Oregon University, have fallen below the 5% minimum fund balance requirements of the Board. In order to bring the campuses back to the 5% range and to meet budget cut requirements, the universities will undertake the following: 

  1. UO proposed to increase spring 2009 tuition for resident students by $150 and for nonresident students by $350 for those enrolled in 8 or more credits; and for students carrying 7 credit hours or less, the tuition surcharge would be half of those amounts, $75 and $175, respectively. Because UO was able to work with their students to reduce their spring term incidental fee by $100, full-time resident students will only see an increase of $50 in tuition and fees overall. UO president Dave Frohnmayer also noted that 30% of the tuition surcharge revenues will be provided as need-based financial aid in order to preserve access. The UO president and administration worked very closely with UO students to discuss the need for the surcharge and how to help students manage the increase. The surcharge is supported by UO students as an alternative to decreases in the quality of the educational experience, decreases in classes and courses, faculty and staff cuts, and other cuts that impact student success and time to graduation. The tuition surcharge will raise $2.1 million out of the $8.6 million that UO must cut from their current biennial budget. The UO tuition surcharge was approved by the Board through the adoption of a temporary administrative rule amending OAR 580-040-0040.
  2. SOU’s fund balance level is also projected to fall below 5% due to the 2007-2009 budget cuts, so the Chancellor’s Office proposed that up to $420,000 be transferred from the Chancellor’s Office fund balance to SOU as an advance to be repaid once SOU’s finances are stronger. Although SOU’s enrollment has been increasing, they have already taken significant reductions over the past two years, and thus a tuition surcharge was not an appropriate option for SOU. The advance to SOU was approved by the Board.

Voluntary Work Reduction
Because of the budget cuts and fiscal situation being faced by the state of Oregon, the OUS is developing a voluntary FTE (full-time equivalent) reduction program. This program would permit unclassified employees to voluntarily reduce their FTE, with the impact of reducing their pay through the rest of the current fiscal year. A temporary administrative rule was approved by the Board today to clarify that the FTE reduction will not result in a reduction in vacation and sick leave accruals for both fairness and administrative ease. The OUS is providing the opportunity for voluntary FTE reduction to OUS employees in senior positions, such as the chancellor, vice chancellors, presidents, vice presidents, deans, and equivalent levels, which would save the OUS approximately 4.6% of those employees’ salary outlays between March 1 and June 30, 2009.

Cost Saving Measures    
Chancellor George Pernsteiner summarized a number of actions that will begin to be implemented in the next few months through the next few years in order to find additional cost savings and efficiencies to meet the current economic challenges and reduced funding from the state. These actions include: (1) a common acceptance system which is System-wide rather than campus specific, that will help students who are not able to gain entry to one campus due to capacity issues, to be able to gain acceptance to another OUS campus which does have the ability to enroll additional students; (2) shared services and other types of systems across campuses; (3) changes in rules involving low enrollment courses to ensure that courses have enough enrollment to be economically viable; (4) a more differentiated tuition system in which there will be a broader range of tuition charges across the seven OUS campuses, based more on the university’s mission and market; (5) beginning to plan for a change from a system of quarters to semesters, which must be coordinated with Oregon community colleges, and thus may be done by region versus statewide depending on the ability to align between OUS and community colleges; this will eventually provide cost savings and improve pedagogy; (6) look at different class and course structures, such as the offering of accelerated courses, weekend courses, and other types of models that will facilitate student time-to-degree and have broader options that fit students’ needs.

Within this environment of change and fiscal challenges, the Chancellor said that student success and innovation capacity will guide all decisions. Susan Weeks, vice chancellor for strategic programs and planning, summarized the principles and assumptions that would help advance the Board’s goals for higher education in the current financial environment. Principles include: do everything possible to maximize opportunity and educational attainment for Oregonians across the state; do not sacrifice the quality of degree programs or student learning to maintain access; preserve the capacity to advance innovation and competitiveness through research; and focus on ends rather than means, both in goals and policy framework to achieve them. Assumptions under which the system will operate include: we cannot maintain the status quo in either academic or administrative functions; all OUS institutions will need to make sacrifices in the current economic environment; preservation or reduction of programs and activities will be based on their ability to advance the universities’ and the System’s mission.

Diversity Policy  
Yvette Webber-Davis, OUS director of education policy & inclusion, provided background on and recommendations for an OUS diversity policy. She noted that the policy was requested by the Board in fall 2008, and a preliminary draft was reviewed by the Board in January 2009. The policy includes guiding principles in overall commitment to diversity, commitment to workforce enhancements, equity in student success, welcoming campus environments, vendor and contracting enhancements, continuous feedback, and commitment to key goals. Actions would include identifying opportunities and promoting expectations for diverse representation, inclusion, and engagement across OUS programs and activities; identifying strategies and progress toward the enhancement of workforce diversity, and student success among diverse populations; identifing campus climate challenges and successes, and discussing measures taken to promote welcoming campus environments; and describing the impact of these measures on student success; providing updates on vendor and contracting initiatives and practices, including identifying and incorporating into project proposals opportunities for outreach to promote engagement and seeking bids from Minority, Women, and Emerging Small Business contractors; including attention to diversity issues in the board’s strategic planning efforts, and seeking input from representatives of Oregon’s diverse communities; having the chancellor and campus presidents provide reports pertaining to diversity achievements and challenges not less than once per biennium; and having the board evaluate annually the chancellor and campus presidents on elements relating to the identification of, and progress toward, key goals and actions in all of these areas.

After some discussion and appreciation for the development of the policy, the board adopted the OUS Diversity Policy to assist it in understanding and assessing diversity efforts, and to enhance opportunities within OUS through the application of guiding principles and actions related to diversity. 

Campus Safety Task Force    
Marjorie Lowe, education advisor in the Governor’s Office, reported on the recommendations of the Governor’s Task Force on Campus Safety in Oregon. The 15-member task force was chaired by former president of the State Board of Higher Education, Henry Lorenzen, and included representatives from campus leadership, faculty, student services, security, students, community members, and members of police, fire, and mental health services. The recommendations covered the areas of emergency prevention, planning and response; students services: early identification of and intervention with at-risk students; federal and state confidentiality statutes and information sharing; and campus safety training and resources. Examples of specific recommendations included a requirement that all Oregon postsecondary education institutions develop comprehensive emergency plans – including multimodal communication tools – and regularly practice their responses; that all campuses should establish protocols to help identify students and others on campus who could pose a risk of harm to themselves or others, and establish cross-functional assessment and intervention teams, necessary student counseling and mental health services; campuses should reduce the incidence of sexual assault and rape through effective education, treatment, investigation, adjudication, and disposition policies and programs; campus personnel should receive regular training about information sharing laws, and develop protocols to exchange information; and all campus safety officers should receive the DPSST six-week training program or equivalent, and that a funding mechanism be developed for this.

In other action and discussion at the meetings, the Board:

  1. Accepted the Quarterly Management Report for the period ending December 31, 2008.
  2. OUS controller Michael Green reported on a very successful OUS bond sale that was priced on March 5 and will close on March 18. The total bonds sold were $136,170,000 at an interest cost of 4.72%, an excellent rate given the current financial environment. Of that amount, $118,680,000 was issued for the new OUS capital projects, and $17,490,000 was used to refund existing bonds to save debt service costs.
  3. Accepted the 2009-2011 capital budget technical adjustments including: Phase the UO Straub Hall deferred maintenance project; reduce scope of the UO Fenton Hall deferred maintenance project; add UO Allen Hall project; add the OSU Academic Success Project; move $5 million of Article XI-G bonds for the UO Power Plant to Lottery Bonds; replace $9.9 million of the $16.8 million Other Funds request for the UO Alumni Center with Article XI-F(1) bonds.
  4. Jay Kenton described the development of the Oregon Sustainability Center, a collaboration between OUS, Portland Development Commission, City of Portland, and other organizations. This would be a “living building” which would be self-sustaining, including electricity generation, water recycling and the like. Kenton noted the interest and excitement that this project has created in Oregon.
  5. Approved a new academic program: University of Oregon, B.A. in Latin American Studies, effective fall 2009.
  6.  Authorized Portland State University to award an honorary doctorate to Dr. Paul Hawken, an environmentalist, entrepreneur, author, and a leading voice for a more just and sustainable world, at the June 2009 commencement ceremonies.
  7. Heard reports from the Provosts Council; the Interinstitutional Faculty Senate; and the Oregon Student Association.

Heard reports from the Student Participation & Completion Committee of the Board; the Sustainability Committee; and heard updates from members who sit on the boards of OHSU, the Oregon College Savings Board, and the Joint Boards.

 

Oregon University System comprises seven distinguished public universities, reaching more than one million people each year through on-campus classes, statewide public services and lifelong learning. For additional information, go to www.ous.edu

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