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MU officials propose budget overhaul

Marshall board
Apr. 16, 2013 @ 11:00 PM

HUNTINGTON -- The measures taken last week by Marshall University's administration to "sweep" departmental accounts into a centralized fund was not just a one-time measure.

President Stephen Kopp and Chief Financial Officer Mary Ellen Heuton will ask the university's Board of Governors to approve an overhaul to the operating policies of the university, which includes ending department-specific accounts, standardizing fees and centralizing institutional revenue.

The board meets on Thursday, April 18, in the Memorial Student Center. The Finance, Audit and Facilities Planning Committee meets at 9:30 a.m. in the John Spotts Room, while the Academic and Student Affairs Committee convenes at 10 a.m. in 2W37. The full board will come together following the committee meetings.

Across campus, the proposal is garnering mixed reactions. The Faculty Senate has scheduled an emergency meeting at noon Friday to discuss what happens at the meeting Thursday and possibly take action with a resolution.

"I think it's not fully developed and way too massive to be digested and voted on this week, especially given the atmosphere of mistrust on campus," said Marty Amerikaner, the faculty representative on the board of governors. "I think it represents a rather massive restructuring of the entire financial functioning of the university."

The 12-page section of the board agenda pertaining to new budget policies lays out not just the changes but also the reasons for the transition. At the heart is the anticipated reduction in state appropriations from about $28 million to less than $23 million, out of a university budget of more than $190 million.

"In our continuing efforts related to the financial health of Marshall University we have developed a vision and principles for guiding the development of a budget model over the coming years," the agenda states. "This vision is directed toward producing greater coherence and alignment of budgetary responsibility, authority and accountability within the University."

The administration wants to end the departmental accounts that are mostly supported by student fees, such as those charged for additional supplies needed in science, for student teaching or other more expensive programs.

The summary of the agenda explains that the account sweep conducted last week produced "an aggregate sum in excess of $10 million ... amassed in individual department accounts across the university.

"Many of these accounts continue to grow year-after-year with little or no central oversight for mission-critical expenditures," the summary states. "These revenues amassed over multiple years represent substantial lost opportunities for Marshall University."

The summary also points to issues with departmental policies on replacing equipment, stating that the current method has resulted in departments accumulating funds over several years to pay for computer and equipment lifecycle replacement. Changing to a centralized budget, the summary states, can reduce that cost as well as give the university better tracking of expenses and resources.

Some think the administration's proposal is a positive step.

"The goal they have, as I understand, will get us to a much more sane budgeting model, and, in the end, much more manageable," said Don Van Horn, dean of the College of Fine Arts.

He and other deans met with Provost Gayle Ormiston following the account sweeps last week. Many were upset that they weren't notified and were quoted in Marshall's student newspaper, The Parthenon, as saying their trust in the administration had been broken.

Van Horn said he was frustrated and confused at the time but has since come to have a better understanding of where Marshall is and where it is going.

"You always prefer to know in advance when things like this occur," he said. "But I also have a better understanding for some of the rationale for the way they started this process.

"What happened last week happened, we're not going to change that," Van Horn continued. "You could spend a lot of negative energy grousing about it or get involved for the best possible outcome."

But Amerikaner said there still haven't been answers given to faculty about why it was done so swiftly and so secretively, when the complexity of the Thursday's proposal clearly shows this is something that has been in the works.

"What's the emergency right now?" Amerikaner said, noting the proposed decrease in state allocations wouldn't take effect until after July 1. "Are we having trouble paying the bills?"

Student impact

The new policies would trigger changes to student fees. In the summary, officials are calling it a recalibration of the tuition and fee structure so "students can more readily predict" their costs. It further states the fee simplification is intended to be revenue neutral for in-state students.

To accomplish this, the administration proposes to "remove all but certain course and lab fees" by adding an amount not to exceed $100 per semester for in-state undergraduate students. But the modifications take into consideration higher-cost programs such as nursing, engineering and business.

That increase doesn't include tuition, classified as Education and General fees, which could rise by as much as $250 per semester.

Fees for the Marshall Recreation Center would increase by no more than $4 to about $200 per semester, though the summary notes the management company, Centers, requested a $14 fee increase.

The summary indicates each student would have to pay $730 more per year to make up the $5.11 million loss the university is expected to take in state appropriations. But the university does not want to place that much burden on students and their families.

"We recognize an increase of this magnitude would not be tenable for students to bear," the summary states. The university also plans to look at reductions in base expenditures and delaying some one-time purchases, while also looking at using some interest earnings from outside investments to help make up the loss.

However, if a standard fee is put in place that results in a $100 increase, and tuition increases by the maximum $250 that is noted in the summary, students would pay an additional $700 a year, plus $8 more for the rec center.

Van Horn said he understands the intent to be a simplifying of costs that students pay, while also providing programs with the resources they need.

"I'm OK with it as long as the institution achieves what I understand the goal to be," Van Horn said. "To build into our budgets the kinds of resources we need."

The university also is proposing to increase room and board by a maximum of 3.5 percent, and a maximum of 3 percent in tuition for the School of Physical Therapy. Tuition would not increase for the pharmacy school, although new fees will be requested to cover other costs.

Tuition for the medical school would not increase, despite an expected decrease in state appropriations of about $1.2 million. But the university is proposing that faculty members who also are practicing clinicians would have their salaries restructured, with a higher portion coming from patient support rather than state funding.

The university's budget proposal also suggests holding back 20 percent of the base and annual allocations, to be held in a contingency account, which will be used to meet department funding requests.

The hiring freeze for non-critical positions will remain in effect, with department officials being required to justify the need to fill a position.

These changes, the summary states, will allow the university to fund what it calls a "compensation enhancement pool" for faculty and staff with a goal of improving "below market faculty and staff compensation."



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