Dear Colleagues,

How are you doing?  I hope everyone is taking time to de-stress and recharge.

A few updates from the Faculty Senate (FS):

1) Please consider reporting 8-week grades for all students (we are not considering a S/U grading option for Fall 2020 & the deadline for students to take a “W” is Oct. 23).

2) At our upcoming FS Business Meeting (Oct. 22) we will have an open discussion on the use of SAI for TPR and AFE for Fall 2020. To convey your opinion, contact your appropriate Senator (see https://www.wcu.edu/discover/leadership/faculty-senate/about-the-faculty-senate/current-senators.aspx).

3) On Sept. 22, the UNC System FA Chairs & SGA President wrote a letter, Recommendations on Budget Deliberations, to System President Peter Hans & BOG Chair Randy Ramsey.(1)

4) WCU Budget Exercise – Each division will determine how it would cut recurring spending by 10% in FY2021-22.(2)

Please feel free to contact me directly at kotto@wcu.edu with questions, concerns, and/or feedback.

Be well,

Kadie

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(1)  To:       Peter Hans, President, UNC System

Randall C. Ramsey, Chair, UNC System Board of Governors

From:   Timothy J. Ives, Chair, UNC System Faculty Assembly

Garrett Killian, Chair, UNC System Staff Assembly

Isaiah M. Green, President, Association of Student Governments

Re:       Recommendations on Budget Deliberations

Date:    September 22, 2020

The University of North Carolina has a tremendous impact as a primary economic driver for the people of our state. We are aware of the negative impacts of the COVID-19 pandemic on the vitality of our constituent institutions.  Therefore, it would be prudent to address financial challenges through a process that is strategic, deliberate, consultative and transparent.  Students, staff, and faculty across the UNC System stand ready to be essential partners in efforts to cope effectively with all budget shortfalls.

By directly acknowledging the value of the human capital of the System, any budget adjustments should be strategic instead of across-the-board elimination of programs and personnel.  Any such adjustments should also recognize the potential uneven impacts upon students, staff, and faculty across the System, particularly those who are underserved and who strive to promote the diversity of the System.  Many, if not all, campuses have not fully recovered from the 2008 recession, with little flex currently available in their budgets.  This is especially true for the smaller campuses that may not have as much non-state funding.

Further, there is a need to retain our valued staff and faculty, especially as the UNC System is considered a target for other major universities across the country, especially public universities.  At the very least, all financial decisions should be prioritized to protect the core academic mission of each individual campus, and their corresponding student success.  In that spirit, and as requested, the following serve as our initial recommendations.

• On every campus, any committee or task force directed to set priorities or manage a budget reduction process should be represented from the outset by the Faculty Chair or their designee, the Staff Chair or their designee, and the Student Body President or their designee. As of September 10, 58% of campuses have committed to having senate chairs on such a committee but assuring that all three groups will be represented across the System is work that still needs to be done.
• Any reduction or potential reduction of student programs and funding to student programs should be discussed with the larger student body through multiple methods, whether that be through the campus Student Government Association or otherwise, similar to how the tuition and fee processes operate on the majority of our campuses.
• Any campus budget reductions should take into consideration their specific Strategic Plan along with the UNC System Strategic Plan, to ensure that each campus can maintain growth and excellence.
• To minimize or significantly reduce furloughs, especially for those who will be disproportionally affected with prolonged furloughs (e.g., 3 months or longer), the use of unpaid days of service (e.g., one to two days per month) may need to be considered for all, similar to what was implemented during the recession period of 2008 to 2010.
• Consider use of untouched sources of potential and temporary sources of funding. As one example, the UNC Investment Fund, touts over $6.5 billion in assets as of 3.31.2020.  Part of the Fund’s primary objective is Support the current and future needs of the Fund’s Member institutions.  These times most certainly meet that objective.  Without touching the endowment principal, and with an annual return on investment of approximately 5%, short-term use of the accrued interest for a two-year period, as an example, would yield $650 million that could be apportioned as three-year loans for the campuses.
• If budget shortfalls mandate it, then a System-wide pro-rated plan for salary adjustments, including campus administration, should be considered for a specific time period (e.g., six to twelve months) in order to avoid any terminations, as we are all in this together. This would not apply to any faculty or staff who make less than $50,000 annually.
• Ensure maintenance of adequate health care coverage, including mental health services, for all System employees during this transitional period.
• Encourage the General Assembly to offer retirement and early retirement packages to staff.
• Similarly, ask the Board of Governors to consider offering phased retirement packages to eligible faculty.
• To avoid filling some positions immediately, consider reassigning staff. For example, if an athletics department doesn’t have any fall sports, then some staff could be reassigned temporarily to areas where there may be a need, and where they can be easily trained.
• Maintain all student aid at current levels, whether it is for scholarships, grants, graduate teaching assistants, etc.
• Place a two-year moratorium or strong limitation on new building construction, repair, and renovation expenditures in favor of coverage of salaries and benefits for those staff and faculty who will be the most severely impacted by reduced campus enrollments or early closings.

These are a few of our initial recommendations.  We are committed to protect the teaching, research and public service mission of the UNC System.  We stand ready to be actively involved with the budget review process on every campus, all in our ongoing work to support the UNC System, and most importantly, to ensure student success.

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(2)  WCU Annual Budget Process -2020‐21 for the 2021‐22

The cycle for the 2021‐22 budget will mirror prior years, but will include some additional
components, related to budget reduction planning.

Budget Cycle Timeline
 Sept. 28th ‐ Budget Cycle Kick‐Off with BAC, CLC, Academic Department Heads
 Oct. 12th – New Request Process Opens
 Dec 18th – Prioritized Non‐Recurring Requests Due from Divisions
 End of February – Division Heads Complete Budget Reduction Exercise
 March. 2nd – EC Reviews Results of Budget Reduction Exercise
 March – All Divisions Hold Opening Hearings
 March 26th – Prioritized Recurring Requests Due from Divisions
 Spring TBD – Chancellor’s Campus‐Wide Budget Hearing
 Spring TBD – CLC‐BAC Meeting at Conclusion of Budget Cycle

Specifications:
 New requests will be accepted for recurring and non‐recurring funds, even though
divisions will simultaneously be engaged in a budget reduction planning exercise.
 Division heads will talk about both their efforts to reallocate funding within their own
division for the year, as well as the outcomes from their budget reduction exercise,
during their division hearings in March and at the Chancellors University‐wide hearing
later in the spring.

 Budget Advisory Committee members and the committee charge can be found here:
BAC 2021-22 Budget Reduction Exercise
We anticipate that the State of North Carolina may experience a significant decrease in tax
revenue in FY21. This is very likely to impact state funding for UNC System institutions in the
current and future fiscal year(s).

WCU will start planning for this possibility by undergoing a budget reduction exercise, using the
following approach:
• Each division will determine how it would cut recurring spending by 10% in FY2021-22.
• This task can be managed at the division/college-level, or at the department level, at the
discretion of the Vice Chancellor/Dean.
• Numbers will be provided for each area to equate 10% to a dollar figure.
• Reduction planning detail should not be at the position or fund level, but rather should
include a proposed reduction dollar amount associated generally with Salaries &
Benefits, Services, and Supplies & Materials, by department.
• Reductions need to be related to spending. While utilizing reserves or increasing
revenue may be how some units manage actual cuts, those tools won’t be utilized for
this exercise.

A few more important notes:
• This exercise is meant for planning only. The intention is to ready campus leaders for
the task if/when it is required. Further, this will help senior leadership understand the
impact these reductions could have and will help them continue to advocate for
sustained campus funding.
• If/when the campus does experience budget reductions, it is unclear whether the level
might be higher or lower than 10%. We have chosen this level of reduction for the sake
of exercise only.
• All units will engage in this planning, regardless of whether they are state supported, or
supported by fees/receipts.

Timeline:
Divisions will conduct this exercise between mid-October and the end of February.

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