Nellis and other OU officials

From left, OU officials during a media availability at Walter Hall in January 2019: Deborah Shaffer, vice president for finance and administration and treasurer for the Board of Trustees; President Duane Nellis; OU Trustee Chair David Scholl; and former Provost and Executive Vice President Chaden Djalali.

The Ohio University Board of Trustees on Monday (May 12) gave a full-throated defense of the university administration and President Duane Nellis. 

The Trustees made their defense in a press release issued shortly after the board’s digital-only board meeting ended on Monday.

Meanwhile, OU’s VP for finance, Deborah Shaffer, said during the meeting that this Friday (May 15), OU plans to announce furloughs (temporary leave) for employees through a tiered strategy based on salary level.

Shaffer emphasized during the meeting that the furloughs will not be sufficient to pull OU out of its dire financial straits, which are similar to what colleges are experiencing across the country due to the ongoing COVID-19 pandemic. 

“Furloughs are temporary and short-term actions,” Shaffer said. “They will not permanently adjust the university’s operating position, (and) they will not be enough to address the significant long-term challenges the president has outlined that we will face here at Ohio University and that all of higher education will face nationally.”

This news comes in the wake of the university administration announcing the first round of layoffs related to the coronavirus pandemic on May 1, with 140 union workers (a group including custodians, cooks and maintenance staff) set to lose their jobs at the end of the month. President Nellis said during the meeting Monday that cuts are coming in all areas of the institution.

“I cannot promise to hold any area harmless from budget reductions if we are to ensure the stable future of our university,” Nellis said. “But such decisions must be strategic and focus on preserving as much as possible our academic core.”

 

A GROUP OF OU PROFESSORS this week presented an alternative vision of the budget, one that doesn’t directly call for mass layoffs on the level that are widely expected.

OU was already facing significant budget problems prior to the pandemic due to declining enrollment over the last three-plus years. As The NEWS reported in early March, the OU administration had said OU academic colleges would likely need to cut their budgets by a total of roughly $26 million over the next three years; meanwhile, OU’s administrative units would need to develop a plan to make reductions of “at least $8 million” across their budgets.

This was before the scale of economic devastation from the pandemic was anticipated or envisioned.

Some students, faculty and staff made the case during a recent protest (see story above) that OU’s budget has been mismanaged for years, citing a growth in administrative positions and the relatively high salaries of administrators (OU’s two top earners – the head basketball and football coaches – make more than $500,000 each).

Meanwhile, members of the OU Chapter of the American Association of University Professors and other faculty members recently released an “open-source alternative budget plan” for the university. It includes an online document that collects input from faculty members across the university suggesting alternative ways the university can cut its budget without need for severe personnel cuts.

“Since 2012… spending on all administrator salaries and benefits has increased by 28.4 percent above inflation: the total salaries of the top 250 administrators in 2012 came to $27,888,775,” the paper reads. “Seven years later, the total amount spent on the salaries of this same echelon spiked to $38,487,852. This rise represents an increase of 38 percent in seven years. So for example, if we adopted the administrative salaries and benefits budget set to 2011-12 and adjusted for inflation, we would realize a savings of $36.8M ($171.1M - $133.3.M = $36.8M savings).”

During a press conference after the Board of Trustees meeting Monday, Trustees Chair David Scholl was asked about a proposal from the OU AAUP group for the university to cut all salaries to not more than Ohio Gov. Mike DeWine’s salary, or $153,650. Scholl said he thinks that’s an “unrealistic” course to take, citing “employment agreements” with employees that might preclude the university’s ability to make such cuts.

“When you’re recruiting talent to any sector or any job, you’ve got to be driven by sector economics so… if you look at the market for executive leadership and the high level of talent in those leaderships and the task of that job, that’s where it all starts from,” Scholl said. “That’s how those salaries are kind of competitively set.”

Scholl added that top administrators are being asked to take salary reductions “within reason.” 

“I think the comparison to the governor’s salary is just not taking into account the reality of that relationship that we have with those individuals (top-paid employees),” Scholl said.

OU President Nellis and Provost Elizabeth Sayrs have taken a voluntary 15 percent pay cut, OU previously confirmed, and Nellis and Sayrs both said recently that all of OU’s deans and senior provost-level staff have been asked to take voluntary 10-percent pay cuts; Nellis noted that some of those employees have taken a higher cut from their salaries.

NELLIS, SAYRS AND SHAFFER outlined OU’s current budget outlook during Monday’s meeting. Some highlights:

• OU is expecting to spend almost $56 million of its reserves in the next fiscal year starting in July, whereas it originally planned to only use about $18 million.

• Schaffer said that all administrative and support units have been asked to model 20 percent cuts to their budgets, although some areas such as OU’s IT department will not be asked to cut that much because of their importance in continuing OU’s educational mission during the pandemic.

• OU’s Athletics department is similarly being asked to cut 20 percent of its budget, and that’s on top of lost revenues that Athletics will need to “absorb” due to canceled NCAA tournaments and other events this spring, Shaffer said. That totals about $1 million in lost revenues, the Trustees said in their release.

• OU did receive $9.7 million for institutional spending from the federal CARES Act and $9.7 million for student support but that won’t be enough to stem the losses OU already has accrued from the pandemic, Nellis said.

Nellis further added that the university is not sure what enrollment will look like for this coming fall, with some surveys suggesting that many students across the country might take a “gap year” or decide to attend college closer to home. The university is preparing to move forward with planning to reopen campus for fall semester like normal, but said it’s too soon to know whether OU can safely do that.

 

IN THE OU TRUSTEES’ press release defending Nellis and hs administration, they cited several pressures on OU’s finances during the ongoing pandemic.

These include the state of Ohio cutting its higher education budget by $110 million recently, with a decrease for OU of $6.6 million; another impending state funding cut of possibly $35 million later this year; OU refunding housing, dining and parking fees to students this spring, costing about $18 million; and the aforementioned sports revenue cuts.

Meanwhile, the Trustees during their meeting voted not to increase tuition for the next class of OU undergraduate students, which will result in a loss of about $2.5 million in revenue per year.

Despite these pressures, the Trustees offered staunch support for decisions made by Nellis and his administration. They said Nellis has made significant progress on several strategic goals in recent years, including a “strategic initiative” to fully integrate all of OU’s campuses under “one leadership model”; worked with faculty on implementing a reform of OU’s general education curriculum; and emphasized a need to invest in “instructional innovation and digital transformation” as a campus-wide initiative.

“I have learned that a university president and executive leadership frequently operate in a relatively threatening environment, even when operations are smooth, enrollments are high, and alumni are pleased,” Trustee Chair Scholl said in the release. “Inclusive of the distractions, and challenges, how President Nellis leads is essential to the university’s future and its impact on the Ohio Appalachian Region. The Trustees are confident that President Nellis’ steady, consistent and resolute leadership for the state and the region has been indispensable in this period of unmatched volatility for higher education, the university, and society under strained and highly uncertain economics brought on by the pandemic.”

The release also put the blame for some of OU’s financial difficulties at the feet of state government, arguing that Ohio’s state subsidy for instruction (SSI) has increased by less than a quarter of the inflation rate from 2000 to 2020. 

IN OTHER ACTIONS during the meeting, the Trustees also moved to not ratify a collective bargaining agreement with OU’s 1699 union (that agreement had tentatively been reached between the union and OU administration prior to the pandemic). 

“The COVID-19 pandemic has since created unforeseen business circumstances that significantly altered the financial condition of Ohio University,” a release from OU about the Trustees’ decisions during the meeting reads. “Because the board did not ratify the tentative agreement, the two parties will resume negotiations and continue bargaining in good faith the terms and conditions of the subsequent collective bargaining agreement.”

As mentioned above, the Trustees did not approve tuition increases for undergraduate students but did approve a 2 percent increase tuition and fee increase for students in OU’s Heritage College of Osteopathic Medicine students.

The Trustees also approved the addition of five new degree programs at the university. They are as follows:

• Bachelor of Applied Human and Consumer Sciences Degree in Hospitality Management in the Restaurant, Hotel and Tourism program in the Patton College of Education.

• Master of Education in Theater Education in the Department of Teacher Education in the Patton College of Education.

• Master of Science in Project Management in the Department of Engineering Technology and Management in the Russ College of Engineering and Technology.

• Master of Science in Translational Biomedical Sciences in the Graduate College.

• Master of Sustainability, Security and Resilience in the Environmental Studies program in the Voinovich School of Leadership and Public Affairs.

Finally, the trustees approved a $1.87 million project to “realign University Terrace” in Athens, a project that will demolish existing roadway between Race Street and South Green Drive (near OU’s Clippinger Hall) and build a new one “aligned further from the building” to improve accessibility to that building and a new chemistry building being constructed in the parking lot of Clippinger Hall. That construction will happen during the second half of 2020.

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