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Budget Town Hall Follow-up

From: 
Carl Lejuez, interim provost and executive vice chancellor
Sent: 
Wednesday, June 13, 2018, 11:30 a.m.
To: 
KU Lawrence All Staff, Faculty and Affiliates

Colleagues,

Thank you to those of you who participated in last week’s budget information session, both in person and online. It was encouraging to see so many individuals who, like me, genuinely care about the university’s long-term wellbeing. The recording as well as the presentation materials are available for you to review on the Provost Office website.

There were several takeaways from our open exchange that I think are important and worth summarizing:

Over the past several years, leadership overcommitted resources. Individually, each commitment has merit and can be viewed as consistent with our goals as a research-intensive state flagship university. However, budgeting was done annually based on highly optimistic projections regarding costs and revenue and it often did not consider long-term impacts of the costs should future revenue decline. This practice of budgeting year-to-year can’t continue and we will work with multi-year budget models in the future.

At this point, we have few alternatives regarding the size and scope of the cut we need to make. Based on the data, I see no way to make cuts smaller than the $20 million one-time base budget cut that I have proposed. This magnitude of cut is necessary to safely get us through the next year and right our ship quickly in future years. Please note: My reference to “one-time base budget cut” may have been confusing. A cut to base budget is a permanent cut to certain annual expenses that reduces spending in the budget by $20 million going forward. My expectation is that this single cut allows us to greatly reduce the likelihood of additional cuts in future years.

A balanced budget is the best way to steward this great public institution. The trend of overspending our year-to-year revenue and draining our reserve funds can’t continue. It will only serve to make our situation worse. In addition to a significant cut now, we also will need to significantly limit commitments we make in the future. If we determine it is within university interests to say “yes,” we will need to have new resources already in place to support it, or we will need to identify what we discontinue so necessary resources are available. We will be guided in these decisions by a focus on what is best for our educational, research, and service mission at  KU.

The cut will have a substantial effect on faculty hiring this coming year. Given the magnitude of our reduction and the limited degrees of freedom many units have to make cuts, most units will not be able to fill open faculty lines this year. Put plainly, faculty hiring this coming year will be impossible in most units and extremely limited in other units where resources such as endowment and grant funds are available to support a hire. With so few faculty hires, some have suggested that I should enact a faculty hiring freeze; however, I generally favor limiting centrally imposed unilateral decisions, and I believe deans are in the best position to determine and communicate hiring decisions. I expect faculty hiring will begin returning to normal the following year, but I do realize that even one year of limited hiring will certainly impact our research and teaching mission. All decisions that affect our staffing come with a cost, and we promise to be mindful that reductions such as this can create added burdens that trickle down. I heard many share the concern that eliminating positions doesn’t eliminate the work, which then falls to other faculty and staff. I understand and grasp the uncertainty and anxiety felt by staff and faculty in all areas of campus. That knowledge will inform our work and communications. We cannot take our employees for granted as we make these decisions.

Cuts should begin and have begun at the top and I am continuing to look at other opportunities — including several ideas mentioned at the forum — to decrease our central administration costs and curtail commitments. I heard and appreciate your concerns about existing contracts with outside vendors. We are reviewing all our contracts and in one case we already have reached out to faculty to gather feedback about our next steps. I am committed to sharing all we can about each contract. I predict we will find even more areas of central administration that can be cut without adversely affecting the essential functions and services needed to run the university. Our efforts to cut centrally more deeply will be used to reduce the impact felt by the units.

A common thread in feedback I have received is the importance of knowing what went wrong and how we can ensure something like this will not happen again. My goal is to move KU to a position of strength and be as transparent as possible with our financial information, both in the town hall but also in everything we do moving forward. This transparency means openly sharing the information needed to inform you and answer your questions regarding how we got to where we are now and continuing this practice with all our key decisions as they are made. I will be fully accountable for the decisions to be made and open to criticism for any evidence of poor stewardship while I am in the leadership role. As it became clear to me that we needed to dig deeper and make changes, our Lawrence campus financial team was and continues to be incredibly valuable to me. They patiently and thoroughly answered all my questions and provided me with the full picture of our situation. Thank you.

Next Steps

Our next budget information session will take place near the start of the fall semester, and we plan to continue the sessions on a regular basis to provide updates and the opportunity to dig deeper into the details of our budget and financial decisions together. In the weeks ahead, we will finalize the amounts of the cuts in the next fiscal year for each unit. Your respective dean or vice provost will be in touch soon about their process and plans.

This challenge will be hard, but I am confident we have the grit and talent to not simply survive, but to succeed. As before, I want and need your feedback. You can use this page to send me your ideas and concerns anonymously.

Carl

Carl Lejuez
Interim Provost and Executive Vice Chancellor

Office: 785-864-4904
Twitter: @KUProvostCarl

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