What budget cuts will look like at UND became clearer Tuesday when interim President Ed Schafer announced several cost-cutting initiatives aimed at tackling a $9 million budget cut.
UND is offering buyouts to qualifying tenured faculty, temporarily freezing hiring and looking for ways to decrease expenditures in an effort to reduce spending.
Tenured faculty can voluntarily sign up to receive one year's severance pay equal to their annual base salary for willingly leaving their positions June 30. To qualify, the number of years a tenured faculty member has worked in the North Dakota University System added to their age must equal at least 70.
The program is one of several actions announced at the university Tuesday meant to address a 4 percent cut the university must make to the existing budget for the 2015-17 biennium, which is already nearly halfway complete, because of a change in the state's revenue forecast.
Ed Schafer addresses UND Budget Planning in email
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In an interview Tuesday evening, Schafer said this means cutting about $9 million total from the UND and School of Medicine and Health Sciences budgets. He acknowledges the process of reshaping UND's budget could be unnerving but wants faculty, staff and students to focus on being stronger in the end.
"You can't just continue to skim things off and push it down the road," Schafer said. "We have to look at net permanent reductions in operating costs. That's going to take everybody rowing the boat to make it happen, but in the end what comes out is a better, stronger university."
A temporary hiring freeze has also been implemented so administrators can review hiring priorities and only fill positions that are crucial to the university.
Schafer said in an emailed statement to the campus community a budget plan must be submitted to the North Dakota University System Feb. 22. Because of the short timeline it will be a broad plan and require more work later to address the changes or cuts by unit and department.
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Other cost-cutting initiatives announced by Schafer include sharing services with other institutions, looking at course-delivery loads and methods and space utilization as a recent study found the university has more square footage than is actually uses.
For instance, classrooms at UND have a 53 percent utilization rate, according to Herald archives, and the SBHE's target rate is a much higher 75 percent.
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"We're going to look at every corner of this university and find out where the priorities are," Schafer said.
Approval will also be required for some travel, membership renewals, equipment and consulting costs, and existing fund balances carried forward from fiscal year 2015 will be looked at to ensure the money is spent efficiently.
Schafer said rewarding performance through salary increases will remain a priority for fiscal year 2017, though it will mean reallocation of funds from elsewhere in the budget.
"From a revenue standpoint, I believe it is important to hold any rate increases that impact students to an absolute minimum," Schafer wrote in the campuswide email. "Doing so will require added discipline to control costs, find efficiencies and prioritize."
Schafer also stressed the need to look at long-term solutions, keeping tuition and fees affordable for students while also looking for solutions to the campus's deferred maintenance needs, $45 million of which are critical according to Herald archives.
"It's about putting the plan in place to strengthen the financial foundation of this university," he said.
Divisions have been asked to submit budget proposals with both 5 and 10 percent cuts. Initial proposals from units within UND are due to vice presidents March 15 and after more discussion, high-level administrators are to submit plans to Schafer by April 1. He will make the final decision April 15.
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Schafer, a former North Dakota governor who dealt with budget cuts during his time in office, said he hadn't personally received any feedback from faculty, staff or students after sending the memo out late Tuesday morning, though his schedule had been busy.
"Having been through this before I don't know if there are any comforting words you can say," he said. "You're in an exercise that looks at every single thing, and that can be unnerving. That can put you in a state of worry of 'what's going to happen to me tomorrow,' but if we focus on the priorities, the faculty, jobs and students and in the end come out stronger, I want them to be a part of that."
North Dakota University System Chancellor Mark Hagerott released a video statement Tuesday addressing budgetary issues at the 11 campuses the State Board of Higher Education oversees, including UND.
He asked colleges to cushion the blow for lower pay bracket and asked schools to be mindful of student services.
"When things are tight, when there's less money, we've got to think differently about how to share services, reduce costs, and this is a time basically to be innovative," he said.
Vice President for Finance and Operations Alice Brekke is scheduled to speak about the budget at a campus forum Feb. 25, though faculty at a recent University Senate meeting requested the meeting happen sooner.
Alongside the newly announced cuts, a $5 million budget shortfall has already been addressed. Brekke told the Herald that would be accomplished through short-term cost-saving measures such as not hiring positions as they come open and using buildings more efficiently, but exact details haven't been released. No salaries were reduced and no programs were eliminated in that round of cuts, but Brekke said "nothing is off the table," looking ahead.
When the potential for cuts was first announced by Gov. Jack Dalrymple's office they were estimated to be at least 2.5 percent. At that time, Brekke said the 2.5 percent cut would affect UND and the Med School's budget by about $8 million. UND Spokesman Peter Johnson said he didn't know why the higher 4 percent cut only affected the size of the cut by about $1 million.
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Applications for the buyout program, called the Tenured Faculty Voluntary Separation Incentive Program, will be accepted through March 21. Informational sessions will be held at 3:30 p.m. Thursday and 3:30 p.m. Feb. 22 in the River Valley Room of the UND Memorial Union.
Johnson said it was impossible to gauge the potential financial impact of the program because there is no way of knowing how many qualified faculty would sign up. He said a program of this kind is common for businesses looking to cut costs, though Johnson couldn't remember a time when it had ever happened at UND aside from some early retirement incentives.
Schafer said in the email that a similar program is under consideration for staff.
Once applications are submitted, university official will "assess the impact of the applications of budgetary and programmatic demands," the release said.
Johnson said it is not guaranteed all those who qualify and apply will be accepted and there would be opportunities for faculty and staff to provide feedback as the budget continues to be reshaped.
There will be opportunities to hear how things are going, going forward," he said. "There will be opportunities for people to weigh in."
