OHIO's Budget Planning Council shares FY20 planning update

 

Ohio University's Budget Planning Council shared the following message regarding the FY20 Planning Process with OHIO faculty and staff on Thursday, March 7. 


Dear Colleagues,

We are reaching out to provide an update on budget planning for next fiscal year. You may recall that on January 15, we provided an update to the University community on our FY20 Planning Process and Assumptions. At the time of that communication, we were preparing for a discussion with our Board of Trustees that included:

  • Undergraduate tuition and fee increases

  • Budget planning assumptions

  • Enrollment/program growth strategies

  • Cost reduction plans

Our budget process and direction continues to evolve as we receive new information and make decisions. We are committed to continued communication with the University community through our shared governance structure at Budget Planning Council (BPC), communication within the planning units, and these campus-wide updates. 

Employee Compensation

University leadership have communicated their commitment to providing raises to employees - even in periods of financial restraint - to attract, retain, and recognize employees. Our human resource talent is vital to maintaining and enhancing the overall student curricular and co-curricular experience.

When employee compensation was discussed at BPC this fall, a primary point of discussion was how to strike the right balance between maintaining a competitive compensation plan (i.e. rationale to provide a raise pool) versus containing costs in a challenging financial environment (i.e. rationale to limit raise pools).

After much discussion at BPC and amongst University leadership, the recommendation was for a limited raise pool with the potential for additional increases mid-year if specific financial goals are achieved. A significant amount of discussion occurred regarding the most effective methods of allocating raise pools to ensure we are maximizing our compensation goals. 

The recommendation for next fiscal year (FY20) are:

  • A 1.0% raise pool effective July 1, 2019 (Annual Financial Impact: $3.68M).

    • All continuing, benefits-eligible employees hired prior to April 1, 2019, will be eligible for an increase

    • Classified employees meeting expectations will received a 1.0% “across the board” increase. All supervisors and employees are still required to complete performance management

    • Bargaining unit (FOP and AFSCME) employees will receive a 1.5% increase pursuant to the terms of the contracts

    • Raise guidelines for distribution of the 1.0% percent pool for Administrators and Faculty will be communicated to each planning unit by Human Resources in conjunction with the Spring reappointment process

  • The potential for an additional, contingent raise pool effective January 1, 2020. 

    • The awarding of this raise pool to non-bargaining unit employees will be contingent upon exceeding our aspirational institutional financial performance metrics

    • The goals and financial performance metrics will be communicated to the University community in July, after the passage of the state’s operating budget.

    • Our current planning for the contingent raise pool is .5% on Jan. 1, 2020

Revenue Enhancement and Cost Containment update

Administrative planning unit budgets are in the final year of 7% reductions initiated 3 years ago (accomplished over the three years of FY18-FY20). Vice Presidents continue to work with their planning units on cost reduction and avoidance strategies, opportunities to directly and indirectly support revenue growth and analyze and refine institutional planning assumptions. For FY20, the annual impact of these reductions is now $8.4M since FY17 and $20.6M has been removed cumulatively over the FY18-FY20 period.

The Provost met with the leadership of each College and Academic planning unit in January to review each Unit’s financial projections, identify new strategies for program and revenue growth, discuss cost management and reduction, and understand the collective impact of these efforts on unit and University multi-year planning.

Each college has been provided a potential financial target that incorporates the revenue growth and cost reduction strategies identified, and each college is identifying the number of years and amount of bridge funding required to achieve these financial targets. We will continue to encourage leaders of each college and academic planning unit to share their plans and direction with their departments. As the Provost’s Office finalizes decisions with the Academic Units, we will communicate the revenue, reduction, and bridging impacts.

We look forward to providing you with updates on our progress towards a sustainable financial model for Ohio University.

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Published
March 7, 2019
Author
Staff reports