FY22 budget planning process update

Ohio University President M. Duane Nellis shared the following message with the Ohio University community on Tuesday, March 16, 2021.

To my Ohio University Colleagues:

Recently, I shared an update on our plans for fall semester, and we announced the decision to hold Spring Commencement in person. As we look ahead, I wanted to share an update on our work to rebalance our University budget and how you can engage in that process.

Ending our University-wide Furlough ahead of schedule

Over the course of this past year each of you and your families have made significant sacrifices. You have upended the way you live, the way you work, the way you teach and the way you serve our students and our University. You have also adjusted your finances as a result of our University-wide furlough plan. Your dedication to the University and your tireless work in the midst of this sacrifice have been humbling and inspiring. With that in mind, my leadership team and I have made two important decisions to help our employees as we move into the next fiscal year.

• First, the University-wide furlough will come to an end ahead of schedule at the end of March. We will continue to honor the planned furlough days in appreciation of the tremendous challenges our employees have faced over the course of the year. In addition, should OHIO end the fiscal year with an operational surplus, leadership will evaluate the potential opportunity to refund to furlough-reduced employees a portion of the initial 9-month furlough.
• We will also implement an interim policy to allow vacation-eligible administrative employees and faculty (10, 11 and, 12-month appointments) to increase maximum vacation carry over by 10 days (80 hours) in FY22 only. This will be managed systematically by University Human Resources. 

Thanks in part to your sacrifice, and with the restoration of funding through the state share of instruction, additional federal stimulus funding, and significant measures taken to decrease expenses, we greatly improved our operating performance for fiscal year 2021. We are now evaluating the impact of incremental federal funding expected for public universities in Ohio as a result of the recently passed American Rescue Plan Act of 2021 and continuing to work diligently to control expenses. Given these changes, including unexpected state and federal funding, we are forecasting a small year-end surplus and can eliminate our University-wide furlough plan and still achieve a balanced budget.

As we move away from the use of the University-wide furlough, which will have created approximately $9.5 million in temporary savings through March 31, we will need to define longer term solutions. In addition to the difficult decisions we have already made, it will take careful planning and innovative ideas to fully balance revenue and expenses in FY22 and beyond. Although we do anticipate some level of post-pandemic enrollment rebound, we do not yet know the speed or scope of that change. Even as we look ahead to potential recovery, it will not deliver a return to our peak revenues.

Recognizing that a sustainable balanced budget is not achieved overnight, we are committed to engaging our community in the development of solutions.

Planning and Engagement Structure

Over the coming weeks, my leadership team and I will partner with the University community to identify immediate and long-term solutions. These solutions must not only move us toward a balanced budget position but also protect the student experience and unique value proposition that OHIO offers. In addition, any recommended reductions or investments should position our University for success in an increasingly competitive environment.

We will leverage our established structure for shared governance and organizational planning as we move forward, including gathering input from Budget Planning Council and President’s Cabinet. Both of these groups include representation from Faculty Senate, Administrative Senate, Student Senate and Graduate Student Senate.

Our Executive Vice President and Provost Elizabeth Sayrs and our Senior Vice President for Finance and Administration and CFO Deb Shafer will meet with each of the academic colleges in the coming weeks to share a more detailed budget update and solicit innovative ideas from our academic leaders and faculty. Similarly, Vice Presidents in all Administrative Divisions will meet with their division staff to discuss our budget challenges and request input and insight from employees at all levels. I encourage each and every one of you to consider ways in which we can be more efficient, reduce costs, and generate new revenues as a University without negative impact on the student experience. You are invited to bring those ideas forward in these upcoming budget meetings or contact your representation on Budget Planning Council (BPC).

As we all consider both macro and micro ways to rebalance our budgets, it is important to note that no ideas are off limits. Any idea that reduces recurring expenses should and will be considered. As I said earlier, the evaluation of those ideas must consider any impact to the student experience, and ensure our continued ability to deliver high-quality, innovative academic programming that meets the needs of today’s student.

As we gather ideas from the University community, we will move plans forward to President’s Council and ultimately to me or, when appropriate, to the Board of Trustees, for final decisions.

Timeline for Decision Making

It is important to recognize that the budget rebalancing process will not have a clear and finite end. Just as our revenues have evolved over the last several years, they will continue to evolve in the years to come. This is a dynamic time in higher education that demands a dynamic response.

As such, this will be a continual process and our decision-making will be ongoing. We expect to evaluate several short and long-term strategies to build a sustainable budget throughout the spring, and as decisions are made, we will communicate those proactively with you through OHIO Employee News and our State of the Budget website.

Finally, I want to reassure you that while we are resolved to focus our decision-making on students and their needs, we deeply understand that those decisions can have personal impact on you – the dedicated faculty and staff members who serve our mission. I am personally committed to weighing every decision carefully, with clear awareness of the impacts of our actions.

I hope you will join me in a willingness to come to the table with innovative ideas in response to our challenges and in service to our students above all. 

Sincerely,
M. Duane Nellis
President