Union University has eliminated five staff positions and recreated budgets across the university to offset the smaller than expected revenue for the 2014-2015 year.
Budget heads are also using a zero-based system to calculate next year’s budgets.
The 2014-2015 original budget estimated a revenue of $90,162,330 and expenditures of $89,153,544.
The amended budget states that actual revenue came to $87,063,838.
The new goal for expenditures is also $87,063,838, leaving no room for extra expenses.
This means Union had to cut more than $2 million from planned expenditures.
“One of the things I say to remind people is we’re not for profit, but we’re also not for loss,” said Samuel W. “Dub” Oliver, university president. “We’re not trying to make a profit, we’re just trying to bring in enough resources to do everything we do.”
Oliver said the lower revenue came from a decrease in fall enrollment. This fall had a total of 4,018 undergraduate and graduate students.
Last year, enrollment at the university was 4,288 undergraduate and graduate students.
Undergraduate enrollment alone was 2,814 this past fall, compared to the fall 2013 enrollment of 3,028 undergraduates.
Oliver said the decrease came partly from a general decline in undergraduate enrollment, but also may have been affected by the cancellation of a Preview Day scheduled to occur the weekend Olivia Greenlee was found dead from a gunshot wound. Greenlee was a senior music major who would have graduated last May.
Oliver said he expects next year’s enrollment to be roughly the same as this year’s, with large graduating and incoming classes.
“When we see in our budget that we’re not going to have the income or revenue that we’re going to expect, then we have to adjust on the expenses side,” Oliver said.
Last fall Oliver asked all budget heads to consider if they could cut anything from their current budgets.
He said cuts needed to be targeted rather than across the board, and that he did not want cuts to impact the student experience.
The five staff positions, making up about one percent of full time employees at Union, were eliminated in the fall.
The positions were executive assistant to the president held by Melanie Rickman, a position in Union Station held by Kathy Southall, associate director of athletics held by Katie Woodruff, assistant director of institutional research held by Camille Searcy and assistant for special events in the Grant Center held by Daniel Hopper.
The five employees were laid off. Rickman had worked at Union since 1998, Southall since 1989, Woodruff from 2001-2006 and since 2008 and Searcy since 1993, according to an online personnel catalogue. Hopper began work at Union in 2011, according to human resources.
“That’s the hardest part of anything like this,” Oliver said about the layoffs. “It’s most hard for the people whose positions are eliminated. It’s really hard for everybody, but we made those decisions because we have to operate the institution within the resources we have.”
After the 2015-2016 tuition and fees were set in December, giving Union an estimated revenue, budget heads began to rebuild their budgets starting with a baseline of zero and justifying each expense.
Zero-based budgeting has not been done in several years, Oliver said.
“It’s a good stewardship exercise to do it every so often, because you then know exactly what’s in the budget,” Oliver said. “Ultimately there are students and their families who are paying for this experience, and we need to be as efficient with our operations as possible so as to be good stewards of what you have given us.”
Bill Nance, associate dean of the McAfee School of Business Administration, gave three workshops on zero-based budgeting to faculty and staff.
Nance said with regular budgeting an organization does not question the assumptions that are a part of pre-existing numbers. With zero-based budgeting, a budget head must start with zero and also come up with a new forecast of demand for the activities supported by the budget.
This may mean departments looking at how many students will need to take particular classes or the school considering how much potential students desire something like a debate team or social fraternities. After the demand has been estimated, budget heads must settle on goals.
“It allows you to reset your assumptions based on changes in the environment, based on changes in philosophy or approach, based on changes in goals,” Nance said. “So you get rid of everything that was baked in from the past and you reset, it should be based on data.”
First drafts were due from each budget head Feb. 23. From then until March 13, each budget head will meet with Oliver to discuss their proposed budgets. The board will then vote in April to approve the budget for 2015-2016.
Editor’s note: The paragraph regarding enrollment decrease was edited Feb. 25 for accuracy.