Raising event parking rates at the Nutter Center: $386,000
Selling Nutter Center arena naming rights, increasing charges for arena parking, privatizing student parking and outsourcing management of on-campus housing and childcare are among a list of concepts Wright State University trustees could use to address a worsening budget forecast.
Fall enrollment revenue at WSU is down $2.8 million from the original forecast, trustees learned Friday. A 22 percent drop in international enrollment wiped out any benefits from a nearly 1 percent increase in domestic students.
“Our critical economic driver at Wright State University is enrollment,” said WSU Trustee President Doug Fecher, emphasizing that if these trends continue tough choices lie ahead.
WSU Chief Financial Officer Jeff Ulliman told trustees that this and other factors could conspire to leave Wright State with only $27 million in the bank by the end of the year, down from $162 million at the end of 2012.
University officials say it’s too early to decide whether they need to adjust the budget remediation plan adopted this year. It calls for cuts of $27.7 million from the budget over two years and using $18.9 million from reserves.
But even part of the plan university officials call a “success” illustrates how difficult it is to quickly steer a budget the size of WSU’s into the black.
Ulliman said the 153 employees who took a retirement incentive as part of the budget plan will save the university $14.4 million. But the incentives offered those workers will cost $8.3 million, and vacation and sick leave payouts will cost another $2.2 million. Also, some of those positions will need to be filled, albeit with lower-paid workers.
So the projected savings dwindle to $900,000 this year, and $7.5 million next year.
Fecher noted that the school’s main priority is shoring up its cash reserves, and pointed to a list of possible ways to do that over the next five years. It was created by a consultant and staff as part of a state-mandated efficiency exercise.
One of those proposals was renegotiating a contract with the on-campus soda vendor, Pepsi, which Ulliman said has been done and should bring in $600,000.
Other proposals include saving money by privatizing some university functions and selling assets. Privatizing parking could bring in an estimated $6.8 million, the proposal says. Naming right to the Nutter Center concourse could bring in another $1 million.
In total, the proposals could rake in $13.3 million over five years, though university officials say that is a very rough estimate.
One of the suggestions is to sell unused property, possibly bringing in $1.8 million. Trustees on Friday voted to consider selling some unused property near Yellow Springs.
The university, meanwhile, is expanding its footprint across Colonel Glenn Highway, having purchased four office buildings through an affiliated entity for $11.3 million.
The purchases were made in 2014 by Double Bowler Properties — a WSU affiliate funded with a university-backed line of credit — and a pair of entities created to help keep the purchase price low by keeping Wright State’s name out of the transaction. The purchases were announced Friday.
University officials say the buildings will house some administrative offices, and Double Bowler hopes to lease out unused space to offset the cost to WSU.
Wright State Trustee Michael Bridges said the properties were purchased with an eye toward the future, and it would be irresponsible to sell them now to address a short-term budget problem.
“The university has been here for almost 50 year and it’s going to be here for 50 more,” he said. “The market at that time and currently is very much a buyer’s market and with buildings costing so much to build … the admin recommended and the board was in agreement that it would be a wise long-term strategic move to acquire some very cost-effective real estate which is essentially adjacent to the campus.
“I believe it was necessary for the long-term growth of the university.”