“Any time we talk about a layoff among our friends and colleagues it really is a very difficult conversation,” Schrader said. “In terms of the layoffs, we expect that the number will be much lower than last year’s 47 notices and so again we are looking at a very conservative view but expect that the numbers will be much lower.”
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When trustees slashed more than $30.8 million from last year’s budget, they planned to lay off around 120 employees but attrition allowed administrators to shrink that number to around 47.
No date has been set for when new layoff notices will be issued to employees. The amount of money the university will save through the potential layoffs is yet to be determined, said chief business officer Walt Branson.
The layoff announcement came during the university’s FY 2019 budget hearing which, featured far fewer specifics than last year’s session when when every detail of the budget was posted on Wright State’s website.
The board approved the nearly $278-million budget by a vote of seven to one with a ninth trustee absent from the meeting. Trustee Bruce Langos was the only board member to vote against the proposal.
The Story So Far
Then: Wright State trustees slashed more than $30.8 million from the school’s budget last year in an attempt to correct years of overspending.
What’s New: Wright State could lay off up to 40 employees as part of next year’s round of budget cuts. That number could shrink depending on attrition though.
What’s Next: Wright State is looking toward the end of the fiscal year on June 30 to see if it can avoid being put on state fiscal watch. If projections pan out, WSU will add $7.2 million to reserves and avoid fiscal watch.
The budget presentation to trustees on Friday was not made available to the general public until after the meeting where the board voted on it. The actual 2019 budget will not be made publicly available on Wright State’s website until later this month, something Branson said was due to the fact that he and his office have been spending most of their time trying to avoid state fiscal watch.
While more budget cuts were expected ahead of Friday’s board meeting, Langos criticized the administration for not coming up with a better long-term solution to Wright State’s financial woes.
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“It is a recipe for disaster. We have to focus on turning ourselves around, not taking more cuts because it’s just not going to work,” Langos said about the proposal. “I’m so concerned about revenue.”
Revenue is expected to decline by around $10 million again during FY 2019, largely thanks to continued decreases in enrollment, according to the budget proposal. State appropriations are also projected to decrease by around $1.4 million.
Enrollment on Wright State’s main campus is projected to decrease by 6.5 percent overall, amounting to around an $8 million drop in tuition and fee revenue. The tuition and fees students pay is Wright State’s largest single source of revenue, as it is for most colleges.
The enrollment dip is largely fueled by a 32.4 percent projected decline in out-of-state and international students, according to the proposal. Wright State’s Lake Campus in Celina, which has around 1,426 students, is expected to increase its enrollment by about 8 percent.
Reversing the downward enrollment trend and growing revenue was brought up by nearly every trustee who spoke during Friday’s meeting.
“This year’s budget is different because now— having stopped that deficit spending — we’re able to think strategically about how to increase the revenue for the future which is the point many of the trustees made at the table today,” said board of trustees chairman Doug Fecher.
‘Try to be disruptive’
Langos suggested the university do something drastic to boost enrollment and reverse Wright State’s revenue misfortunes.
One way the school could attract students is by providing a flat rate for students to take an unlimited number of courses, he said. Something like that, Langos said, would surely attract students from all over Ohio.
“Let’s try to be disruptive with it. How can we shock the other universities that we compete with,” he said.
Langos and his fellow trustees have long called for new ideas to boost enrollment and bolster and diversify Wright State’s revenue.
» RELATED: Wright State was warned that more cuts were needed a year ago
Wright State has hired a company called Ruffalo-Noel-Levitz to figure out how to boost enrollment, Schrader said. The company "partners with colleges and nonprofit organizations to help them enroll their classes, graduate their students, and engage their donors," according to its website.
The university will likely see a small impact from the company’s strategy this fall with more benefits coming later on, Schrader told trustees. It’s important though for Wright State not to get ahead of itself on the benefits of the partnership, Schrader said, “to make sure in the middle of next year that we aren’t trying to chase some sort of loss in enrollments.”
Schrader told Langos that she appreciated his “disruptive ideas” and that the firm will help Wright State’s leaders come up with innovative ways generate more tuition dollars. Langos fired back at Schrader though, criticizing the administration for hiring the company in the first place.
“In all fairness Cheryl, I don’t need to pay a consultant to tell me what I just said,” Langos said.
‘It is the minimum’
The FY 2019 budget calls for the university to add $3 million to its reserves, something which trustee C.D. Moore referred to as “the minimum.”
“I think $3 million is low. I consider that a threshold…It is the minimum,” Moore said.
The $3 million is half of the $6-million goal Wright State set for the current fiscal year, which ends on June 30. The comments prompted Fecher to ask Schrader “can the board rest assured that money will be put toward rebuilding reserves rather than being spent somewhere else?”
WSU’s total reserves plummeted from $162 million in 2012 to a projected $31 million in 2017, which amounts to a $131 million decline over five years, according to the school’s budget.
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Budgeting for more than a $3-million surplus next year would have meant more cuts, Fecher said.
“That we’re budgeting for any surplus is a step in the right direction,” Fecher said. “To budget for a higher surplus likely would have meant more sacrifice among the staff and faculty here at the university and we’ve had enough of that for the last two years.”
The hope is that the university will add even more to its reserves than $ 3 million, Schrader said. But, she said the university needs to be careful about how it rights its “financial ship” in making sure that leaders don’t detract from the school’s mission.
“We have to be very careful that we recover at our own pace and by that I mean we have to make sure that we are not just always cutting (but) that we are investing and continue to invest as much as we can,” Schrader said.
‘A long way’
The university needed to add at least $6 million to its reserve fund by June 30 to stay off state fiscal watch. As of Friday, Branson said the university is still expected to add around $7.2 million to its reserves.
The state measures every public college’s fiscal health with something called a “Senate Bill 6 score,” an annual rating of 0 to 5. Any school that falls below a 1.75 two years in a row is put on notice. Wright State projected its score last year was a .8, meaning one more year below a 1.75 would put the school on fiscal watch.
If placed under fiscal watch status, the WSU trustees and administration would have to adopt a financial recovery plan with an eye toward ending the status of fiscal watch within three years, according to state law.
» RELATED: Wright State trustee calls university’s next budget a ‘recipe for disaster’
Though avoiding fiscal watch allows WSU leaders to breath a slight sigh of relief, Langos reminded them Friday that it came at a cost.
“The people that actually kept us off fiscal watch… it wasn’t anyone in this room,” Langos said, referencing last year’s 47 layoffs. “It’s not something we’re proud of but we should keep them in the back of our minds.”
Wright State officials will not know for sure whether the university will avoid fiscal watch until late this year. But, after decreasing spending by more than $50 million in FY 2018, fiscal watch no longer seems inevitable, both Schrader and Branson have said.
While the university may avoid fiscal watch, Schrader said it can never return to the budgeting tactics that created Wright State’s financial crisis in the first place.
If projections pan out, FY 2018 will mark the first time since 2012 that the university has stayed on budget. Last year the university spent $24.6 million more than it generated and the year before that it overspent by $38 million.
“We have come a long way toward righting our financial ship,” Schrader said. “Of course there is still work to be done.”