By Paul A. Anthony, Editor in Chief
A combination of planned and unplanned expenses has caused the university to take a closer look at its finances, a process that has already resulted in the reallocation of about $2 million.
Academic departments are operating this year with an 8 percent budget reduction, officials said, while President Royce Money has appointed 13 task forces to assess all areas of the university for ways to shave expenses and build revenue.
“ACU is not poor,” Money said. “ACU is not broke. What we’re trying to do is exercise discipline.”
Thanks to a stock market that until recently was in decline, skyrocketing utility and insurance bills and a decline in gifts, the university shifted almost $2 million to fund several planned expenses, Phil Schubert, vice president for finance, said.
Along with using a $750,000 contingency built into the budget, Schubert said the university cut department budgets across campus by 8 percent and cut capital expenditures-physical and campus improvements-by 20 percent.
Schubert said the moves were necessary so the school could battle its rising costs in a strong position, a luxury many colleges do not have.
“You don’t have to look far to hear about pressure points in higher education,” he said. “Publics and privates alike are struggling to align financial resources.”
Indeed, Texas A&M University cut a department and raised tuition by 40 percent, while Baylor University in Waco has incurred large amounts of debt to improve its campus, according to Dallas Morning News reports.
ACU also has been forced to fund projects through means other than how they originally planned, said Jack Rich, executive vice president of the university. A drop in giving has left the university short of what it expected in several areas.
Improving the College of Business Administration as it works toward national accreditation is the largest project the university had expected to be funded by gifts, Rich said.
“We made decisions knowing there were risks,” he said. “I don’t think this was unexpected.”
Rich and Money, who came to the university in the early 1990s as it faced a substantial financial crisis, stressed the current tightening is not similar to the situation 10 years ago, when the university cut faculty positions, merged colleges and took steps to stem falling enrollment, deteriorating infrastructure and ballooning deficits.
In the faculty’s annual pre-session conference Wednesday, Money presented a chart comparing the current fiscal situation to that of 1993, the last year the university lost money-$3.3 million, or more than 12.5 percent of the budget.
“We were reactive,” Money said of the decision-making process 10 years ago. “We had no choice.”
He contrasted that atmosphere with today’s decision-making, which he called proactive.
“I disagree with the opinion that we’re sliding right back to where we were in the early ’90s,” Money told the faculty, adding that the creation of the 13 teams would help to keep the school from such a crisis.
The 13 groups, termed “strategic solution teams,” are made up of faculty and staff and focus on such topics as capital expenditures, scholarships, academic programs, athletics and general administration.
Along with finding ways to cut costs, Money told the Optimist in a meeting with its staff, the groups’ mandate is to find ways to build revenue. He said their goal is open-ended.
“I’m not trying to put any restrictions on them,” Money said, although a letter to the faculty and staff said a report was expected by November so decisions could be made before Christmas break.
Money said nothing is off the table, although he added that a recommendation to do something as drastic as the recent department cuts probably would be “unlikely.”
Among the outside factors that have contributed to the belt-tightening are the state’s budget crisis, which resulted in a 14 percent cut to the Texas Equalization Grant, a decline in tuition revenue, a health insurance bill that jumped more than $1 million, a tripling of the school’s property and casualty insurance, a $750,000 increase in utilities and investments still recovering from the stock market’s 2000 collapse.
“Maybe [expenses] will come down,” Schubert said, “but these are the kinds of pressures we’re dealing with.”
Meanwhile, the university has intentionally spent more in certain areas in the hope that long-term returns will outweigh short-term losses, Schubert said. Those include COBA, multicultural enrichment, recruiting, scholarships and fund-raising.
The financial struggle comes as the university prepares for its centennial celebration in 2005-06.
The Board of Trustees Saturday set a goal of $150 million on a fund-raising campaign that would fund a social sciences building, COBA improvements and increase the permanent endowment, among other things.
Referring to the convergence of the financial situation and the centennial plans, Money said: “They must, in the literal sense, live together.”
And noting the university has never been without financial stress, Money challenged the faculty to tell him for which time period in the school’s history they would trade.
Rich echoed the sentiment, saying that while the current situation is not exactly routine, it is “not uncommon.”
“We’ve got a lot of decisions to make, but we’re in strong financial shape,” Rich said. “We’re having these discussions so we can stay strong.”
13 teams
President Royce Money created 13 “strategic solution teams”
that will look at cost-cutting and revenue-enhancing in their areas:
Academic Programs: Dr. Carol Williams, chair
Across the Institution: Kevin Roberts, chair
Athletics: Dr. Waymon Hinson, chair
Capital Expenditures: Kevin Watson, chair
Centers and Institutes: Dr. Jozell Brister, chair
Employee Benefits: Suzanne Allmon, chair
Entrepreneurial: Dr. K.B. Massingill, chair
General Administration: Dr. Joe Cardot, chair
International Students/ Global Influence: Dr. Rick Lytle, chair
Marketing and Recruiting: Dr. Foy Mills, chair
Student Academic Support: Dr. Jeanene Reese, chair
Student Life Programs: Susan Clark, chair
Student Scholarships: Gary West, chair
