By Steve Holt, Staff Writer
First of two parts.
To long-time faculty and staff of the university, President Royce Money’s recent creation of 13 “strategic solution teams” to look at cost-cutting and revenue enhancement at ACU comes as a mild case of d‚j… vu.
In January of 1993, Money and other administrators heard suggestions from “analyst teams,” made up of university employees, given the same charge-to identify wasteful spending at ACU.
In the late ’80s and early ’90s, the university faced unprecedented financial hardships, eventually climaxing with an all-out budget crisis in 1992.
Executive Vice President Jack Rich, who was hired by Money as vice president over finance in early 1992, remembers the budget crisis of 1992 as a tumultuous time for many.
“I knew ACU was feeling pressure, but I didn’t know to what extent,” said Rich, who was hired in part to help sort out ACU’s financial hardships. “I don’t think it was widely understood the amount of pressure they were under at that time.”
The numbers told the story: A $3.3 million deficit, a net worth nearly half of what it is today, an endowment almost a third of today’s and a falling enrollment.
Dr. Jack Griggs, then the dean of the College of Business Administration, said the 1992 crisis occurred for two main reasons.
“We were having costs that we couldn’t control that were going up, and at the same time we weren’t having enrollment increases,” said Griggs, who now teaches accounting and finance classes in COBA.
According to Rich, enrollment had decreased 20 percent in the 4-5 years before 1992. In fact, fall enrollment during the 1991-92 school year dropped by 107 students, its sharpest drop in several years. This, combined with a decrease in the number of college-aged students because of the “baby bust,” resulted in a tight financial situation for the university, Rich said.
Money said the ACU financial situation reflected nation-wide trends.
“We were in the after effects of the oil crisis; enrollment not only at our institution was on the decline, but was on the decline at other institutions similar to ours,” said Money, who called for an examination of areas like registration and recruiting, financial aid, maintenance and purchasing in 1992. “I don’t see in ACU any anomaly in that respect.”
He added that communication with the faculty and staff of the university was crucial during this difficult time.
“I went in and explained things in very clear fashion, and that was something they believed was working through and worth making whatever sacrifices were necessary to keep the institution solid,” Money said. “The times were just right and people were willing to participate in a very difficult thing, and I think in that respect, the situation is true today as well.”
Griggs remembers Money’s “open book” leadership style as a factor that helped ACU out of the budget crisis of 1992.
“During that period of time we were going through an evolution of financial information being held somewhat tight to financial information being more widely shared,” Griggs said. “So I think maybe that period of time maybe hastened that change.”
But while university administrators look for ways to cut costs and enhance revenue in 2003, Rich is quick to say that our current financial situation is not a “crisis.” In fact, a diagram showing the vast numerical differences between the university’s financial situation in 1992 and 2003 was recently shown to both the board of trustees and the faculty.
“If we were in crisis, we would be making decisions much more rapidly with less deliberation, more in a sense of fear,” Rich said. “That’s not where we are at. We have some time to work through it, and in fact we’re taking a year to work through it.”
