MARQUETTE Ã‚– The Northern Michigan University Board of Trustees heard a presentation on preliminary budget-cutting recommendations as part of its Dec. 12-13 meeting. The focus discussion was held in response to the recently approved executive order that trims $1.3 million from NorthernÃ‚’s state appropriation for Fiscal Year 2003, which ends June 30.
Ã‚“We outlined our tentative plan for absorbing the impact of the executive order so that we can achieve a balanced budget,Ã‚” said Mike Roy, vice president for finance and administration. Ã‚“It involves eliminating one and one-half positions that are vacant, decreasing the designated appropriations to university-supported programs and reducing the central budget and divisional budgets.Ã‚”
Personnel savings through the two positions and the existing Severance Incentive Plan will amount to $348,000. Roy said administrators are proposing a 2.5 percent across-the-board reduction in appropriations designated specifically for such operations as the Superior Dome, U.S. Olympic Education Center and Northern Initiatives. The combined reduction will be about $44,000.
Central budget reductions Ã‚– in funds for capital equipment replacement and learning technologies Ã‚– will amount to $400,000. Divisional budgets will also be adjusted downward by a total of $100,000, in proportion to their percentage of the base budget, as follows: academic affairs, $72,800; finance and administration, $21,600; and the presidentÃ‚’s division, $5,600.
Roy added that some of the adverse financial impact of the executive order will be offset by increased tuition revenue from enrollment growth that exceeded projections. The additional tuition and fee revenue will account for $407,000 of the reduction.
The recommendations were presented to the board for information and discussion purposes. However, as the NMU board reconvened its meeting in Marquette Friday afternoon, members learned that a supplemental appropriation bill passed in Lansing. If signed by the governor, it will restore 0.5 percent in one-time funding to higher education Ã‚– $260,000 to NMU.
Gavin Leach, associate vice president for finance and planning, said NMU will adjust its budget-cutting proposals based on the supplemental development. A revised budget including final cost-saving proposals will be presented to the board for approval at its February meeting.
With the possibility of additional executive orders between January and September and dim state appropriation prospects for the next fiscal year, NMU established a Budget Alternatives Committee on campus. The BAC is charged with recommending budget reductions, cost avoidance opportunities, operational savings and identifying additional revenue that total $8.5 million for Fiscal Year 2004 and $4.25 million for Fiscal Year 2005. The committee will deliver its recommendations to President Judi Bailey by March 1.
The board was also updated on the universityÃ‚’s conversion of its multiple administrative software programs to the Web-based Banner program. Costs have not been finalized, but the project may require an investment of up to $2.6 million over the next couple of years. The systems support the universityÃ‚’s financial, student services, student financial aid and human resources operations.
Roy told the board that moving ahead before Dec. 31 will result in avoiding additional software costs of more than $1.1 million. He also said that once the systems are implemented, the university will save more than $300,000 per year in hardware and software maintenance costs. In addition to the annual savings, Roy said the systems will allow the university to expand services and streamline some of its operations.
In other action at its Dec. 13 meeting, the NMU Board took the following action:
●Approved implementing an advanced law enforcement diploma program, beginning with the Winter 2003 semester. This adds a credential for those who successfully complete the existing in-service training available to certified police officers and other law enforcement personnel. The Public Safety Institute of NMU offers 24 courses to approximately 380 individuals per year. Participants will earn a diploma after accumulating 16 credit hours.
●Voted to reassign the military science department from the College of Arts and Sciences to the College of Professional Studies and to reassign the psychology department from the College of Professional Studies to the College of Arts and Sciences, both effective Jan. 1.
●Accepted more than $22,000 in gifts, nearly $860,000 in grants and $65,000 in agreements and contracts.
●Recognized departing board members Daniel DeVos of Ada and Barbara Labadie of Grosse Pointe Woods for their years of service to the university. Their terms expire Dec. 31.
●Appointed board members who will serve as committee chairs for the 2003 calendar year. The chairs, and their respective committees, are: Karl Weber, academic affairs; Scott Holman, executive; and Samuel Benedict, finance. Also appointed Alan Ackerman, Mary Campbell and Scott Holman to serve as ex officio members of the NMU Development Fund Board in 2003.
●Revised plans for the boardÃ‚’s annual retreat Feb. 13-14. It will be held at NMU rather than at an off-campus location. Added an April 8 on-campus meeting to its established schedule.