Wright State will not see layoff savings until next year

Length of notice

Wright State is required to provide unclassified (salaried) employees a certain length of notice for termination, based on how long an employee has worked at the university:

Employed fewer than 3 months: 2 months' notice

Employed at least 3 years but fewer than 6 years: 6 months

Employed at least 6 years but fewer than 15 years: 9 months

Employed 15 years or more: 1 year

Wright State will not see much financial benefit from its recent layoffs until the end of 2017 because most people affected by cuts are still working at the university.

Of 23 positions being eliminated by WSU, 13 are unclassified salaried staffers who at a minimum have to be given at least two months’ notice before being laid off. The university is required to give a year’s notice to salaried employees who have worked 15 years or more.

Six faculty members, all instructors, will be laid off and four classified, hourly staff who were set to be laid off were instead moved into other open positions, said spokesman Seth Bauguess.

The six instructors, who are on one-year contracts, will leave Wright State at the end of the spring semester. Hourly staff must be given at least a two-week notice, according to the university.

“In my experience (staff reductions) don’t yield a large cash return in the short term,” said Ohio University economist Richard Vedder.

Union employees, such as professors at Wright State, are more difficult to lay off, but Bauguess said that is not why more were not terminated. The choices for the “belt tightening” were based more on the university’s “core responsibility” of educating students, Bauguess said.

Most of the unclassified salaried employees losing their jobs had to be given notice of nine months to a year, said Jeff Ulliman, vice president of business and finance.

Morale issue?

The lengthy advanced notice, Ulliman admitted, could cause tension among employees who have been terminated but will remain on staff for several months. The blow to staff morale such a situation could cause is a “unique problem” for the university, but not one that Ulliman thinks will “jeopardize the institution.”

While employees are being cut to alleviate some budget pressure, Ulliman also said finances were not the only consideration. Officials tried to prioritize the university’s needs, both Ulliman and president David Hopkins have said. Hopkins last month said the cuts were made in a way so they affected the fewest people possible.

“We’ve got to think about what we’re doing here and why we’re here,” Ulliman said.

The negative side effects of the cuts may outweigh the financial gain, Vedder said, as they could hurt student morale and decrease “campus cohesiveness.”

“Losing amazing faculty is extremely devestating to all of the students,” said Alex Ryan, a music student.

Ryan said the school probably will move on from the cuts and continue “changing the lives of many students to come.”

Parking revenue

Although Vedder criticized the cuts as a money saver, he said outsourcing parking may be a better strategy for the cash-strapped university. Wright State is considering outsourcing its campus parking operation, officials said during an October board of trustees finance committee meeting.

“Raising cash by leasing or selling assets has some greater promise,” Vedder said.

Privatizing parking would be more of a “one-time cash infusion” for WSU as opposed to the layoffs, which will save money over time, Ulliman said. Privatizing parking initially would cost the university $200,000 in negotiations, but could bring in an estimated $6.8 million, according to a proposal.

Officials have said the parking proposal is in the beginning stages and is not a sure thing.

If parking is outsourced, Wright State would enter into a contract with a company that would pay the university to handle its parking, Bauguess said. It would allow the university to get the money it makes from parking upfront.

The idea to outsource parking came from Wright State’s updated efficiency and affordability report it recently submitted to the state.

Ohio State model

The university has already spoken to a representative involved in the negotiations for Ohio State University to privatize its parking. Ohio State is four years into a 50-year privatized parking agreement that infused $483 million into an endowment fund that has been used to fund scholarships and building renovations, among other things, said Rob Messinger, director of communications for university business and finance.

The deal allows Ohio State to focus more on educational opportunities for students “instead of us being in the parking business,” Messinger said.

CampusParc, created by Australia-based investment firm QIC, is in charge of running Ohio State’s campus parking. CampusParc contracts a company called LAZ Parking to handle daily operations, according to CampusParc’s website.

LAZ Parking also handles parking at Boston College and Yale University, according to its website.

The downside to outsourcing parking is that Wright State would give up control of the operation, potentially for decades, to address a short-term problem, Vedder said.

It’s something officials will consider as they decide whether a parking deal would be the best way to raise cash quickly, Ulliman said.

“We wouldn’t do anything without vetting it first,” he said.