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POSTING DATE: April 8, 2010

A budget forum, led by President John Pritchett for all faculty and staff to discuss the upcoming budget situation was held on Monday, April 5. More than 100 members of the University community attended the forum during which questions were asked about the future of FAU’s budget situation. The forum was videotaped and is available by visiting the following link mms://streamwms.fau.edu/FAU/Open_Budget_Forum.wmv. Below are some of the questions that were addressed during the forum. Future forums are anticipated and information regarding their time and location will be made available via email and on this webpage.

Q. Will there be layoffs, furloughs or salary reductions in the 2010-11 fiscal year?

A. The University continues to review its options for the 2010-11 fiscal year and any number of options and/or combination therein will be discussed in the coming weeks. As such, it is important that faculty and staff continue to remain involved through suggestions, attendance at meetings and participation in the video meetings.

Q. What is the status of dollars generated by Clearwire?

A. Three years ago FAU agreed to a long-term lease of its excess bandwidth capacity to Clearwire Corporation as  a result of technological advances that enabled the University to reduce its reliance on its present bandwidth configuration. By Board of Trustees approval, the non-recurring income from Clearwire has been directed to campus-wide  initiatives that directly support the goals of the University's strategic plan. Those goals include improvement of the IT infrastructure, emphasis on programs that enhance student success, and improvements of the research infrastructure.

Q. Does the Board of Governor’s New Florida Initiative help FAU’s budget situation?

A. The Florida Board of Governor’s unveiled an initiative called New Florida. It is geared toward creating a new Florida economy based on knowledge and innovation. The Florida Legislature has not yet voted on the initiative and it is unclear how the funding would impact FAU’s 2010-11 budget. For more information on New Florida, visit www.flbog.edu/new_florida/.

Q. How can I make suggestions regarding FAU’s budget?

A. Suggestions regarding FAU’s budget planning may be sent to Provost Diane Alperin, alperind@fau.edu or Interim Senior Vice President for Financial Affairs Dennis Crudele, crudele@fau.edu.



POSTING DATE: April 2, 2010

Q. What is the most recent information on the state budgeting process as it affects FAU?
A. Both the House and the Senate are about halfway through the budget construction process for the 2010-11 fiscal year and have voted out their respective versions. Both versions contain cuts to the State University System’s recurring base budget ranging from $110.4 million in the Senate to $120.2 million in the House. While both the House and Senate have added additional dollars to the State University System budget, these amounts are of a one-time, non-recurring nature and there is no indication that they will be continued next year. The issue of utilizing non-recurring dollars coupled with the anticipated cessation of the $12.1 million in federal stimulus dollars in fiscal year 2011-12 requires us to prepare now for next year’s reductions.  

Q. When will the House and Senate budgets go to conference committee to be brought into agreement with one another?
A. It is anticipated that the conference committee will begin work after April 5. with a final vote on the 2010-11 budget by the end of the legislative session on April 30.

Q. What will happen once a final budget bill has been approved by the conference committee?
A. The bill will be presented to the full legislature for a final vote and then sent to Governor Crist, who can approve or reject it in its entirety or reject part of it using the line-item veto.

Q. Will there be budget reductions at FAU this year? Next year?
A. We do not expect any reductions to our budget through June 30, 2010. However, the outlook for 2010-11 and beyond remains grim. FAU, along with the other state universities, will be preparing to manage the large base budget deficit that will occur in years 2010-11 and 2011-12 due largely to dependence on non-recurring dollars and the elimination of the federal stimulus dollars totaling $12.1 million. In order to mitigate the deficit, FAU is preparing for a 4 percent budget reduction of E&G dollars for the 2010-11 year, while developing a restructured budget model for the next three years.

Q. Will there be a tuition increase at FAU, and, if so, how much?
A. Under guidelines put forth last year by Governor Crist that allow state universities to increase tuition by as much as 15 percent annually, FAU expects to seek a 15 percent increase, effective in the fall of 2010.  Currently the legislature is recommending an 8 percent tuition increase, and the difference between the 15 percent allowable and the 8 percent, which is 7 percent, may be implemented by the Board of Trustees as the differential tuition amount. It is important to remember that not all students will be charged the additional 7 percent differential as the law dictates certain conditions by which some students will remain exempt from the charge. Those conditions are Florida PrePaid contract holders purchased before July 1, 2007, students who were enrolled at FAU prior to July 1, 2007, and those who have had continuous enrollment since 2007 will also be exempt from paying the differential amount. The total tuition increase, if it is approved, is expected to be in the $4 million dollar range and will fall short of offsetting the budget cuts the university will have to absorb.

Q. How can I stay involved in the budget process?
A. On Monday, April 5, the University community is invited to participate in what is expected to be the first in a series of budget forums led by President John Pritchett and Provost Diane Alperin. The University’s current budget situation will be discussed during the forum and faculty, staff and students may provide suggestions to manage the University budget and ask questions related to the budgeting process.The forum will be held on Monday, April 5, from 9-11:20 a.m. at the following locations:
Boca Raton: NU 201
Dania Beach: SEATECH AUD
Davie: LA 139
(note room change)
Fort Lauderdale: HEC 608 (note room change)
Harbor Branch: HB 105
Jupiter: SR 270
Treasure Coast: JU 319


Q. What is the timeline for developing a University budget for the new fiscal year?
A. The University’s budget process must be completed by June 30, 2010, and is effective on July 1. Beginning in mid-April and running through June, University officials will share budget recommendations with the BOT at committee and full Board meetings. A calendar of upcoming BOT meetings is available at www.fau.edu/BOT.


POSTING DATE: May 28, 2009

Q. How much has the University’s 2009-10 budget been cut by the Florida Legislature?

A. FAU’s budget for the 2009-10 fiscal year, which begins on July 1, was cut by $16.7 million during this year’s legislative session. This came as somewhat good news, since there was a possibility it could have been cut by as much as $38 million. However, when added to the nearly $20 million in cuts that the University has absorbed over the last 18 months, the additional reduction is still deeply damaging, necessitating major cutbacks in expenses.

Q. What actions will be taken to cut expenses?

A. Through a collaborative process that has been under way for months, a proposed plan has been developed that will be presented to the Board of Trustees on June 10, 2009. This plan is designed to accomplish three objectives: to identify ways in which costs can be reduced, create an overall framework for the 2009-10 budget and lay a foundation for future budgets. Unfortunately, to achieve the level of cost reductions necessary to cope with the cuts effectively, some personnel must be laid off, some unfilled positions eliminated and some majors and degree tracks discontinued.

Q.  Will any FAU campuses or sites be closed?

A. No. FAU will continue to operate at its seven current campuses and sites. With that in mind, delivery of services and the availability of some academic programs may change.

Q. How many people will be laid off and how many unfilled positions will be eliminated?

A. According to the proposed plan, approximately 30 current FAU employees, primarily administrators and staff, occupy positions that will be eliminated as of July 1. This is a very sad necessity that impacts these employees personally, their families and the entire FAU community. All of the affected employees have been contacted individually, and the University has committed to provide them with support services and counseling to help them through this difficult period of transition.

The majority of these employees work in administrative and staff capacities. Only five faculty positions are affected, and they are in the College of Engineering and Computer Science, which recently underwent a complete reorganization that led to their elimination. The fact that our faculty will remain essentially intact will enable us to continue to offer our students a comprehensive array of courses to facilitate their progress to graduation.

University-wide more than 140 unfilled positions have been identified for elimination.

Q. How many majors will be discontinued?

A. The deans and other college leaders have been working diligently for the past six months to evaluate the viability of every academic program the University offers. That process has led to the identification of approximately 45 majors that do not meet minimum standards of productivity and have been recommended to be discontinued. Of course, students currently enrolled in these majors will be allowed to continue through graduation, but no additional students will be accepted. The deans are working with faculty members in the affected programs to make the phase-out process go as smoothly as possible.

Q. What other money-saving steps are being taken?

A. Over the years, FAU’s distributed campus structure has given rise to duplication of services in areas such as admissions, registration, financial aid, human resources, purchasing and other support functions. Planning is now under way to consolidate many of these services through reassignment of personnel and utilization of online technology. Restructuring of this type is essential to ensure the future viability of the University. We are also adopting a multi-year budget planning process that will help us improve our ability to predict the University’s overall funding status beyond the current one-year horizon. 

Q. How much will tuition and fees increase?

A. All of Florida’s state universities have been given permission to raise tuition by as much as 15 percent, beginning in the 2009 fall semester. The legislature increased the base tuition rate system-wide by 8 percent, leaving it to the individual universities to decide how much higher it should go, to the 15 percent ceiling. The additional increase, above 8 percent, is called differential tuition. FAU originally intended to seek an additional 5 percent in differential tuition, for a total increase of 13 percent. However, when the legislature declined to maintain full state funding of the Bright Futures scholarship program, which is important to so many of our students, we decided to seek the full 15 percent tuition increase pending BOT approval. The additional 2 percent will go entirely toward need-based student financial aid. In terms of dollars, we expect differential tuition to generate about $900,000 next year; of this amount, nearly $500,000 will go toward need-based financial aid.

Additionally, we are taking a new approach to our fee structure that will permit us to realize more income from this source while reducing the annual impact on students. Instead of electing to increase one fee significantly during a given academic year and leaving the others alone until a future year, we are seeking small increases in all them, including the Activities & Services fee, the athletics fee, the health fee, the technology fee and the transportation access fee. Small, incremental increases in all the fees should be easier for students to deal with than large single-fee increases. As always, students have played a central role in the decision-making process about fees, and they will participate in determining how this income should be spent. Committees made up of a majority of students, plus faculty and staff, have been working on this matter for some time.

The Board of Trustees will consider these proposals on June 10 and is expected to vote on June 24, 2009. If the tuition and fee increases are approved, a typical full-time FAU student can expect to pay about $500 more next year. At the same time, there will be more need-based financial aid available, including Pell Grants, which are scheduled to go up by $600 in 2009-10.

Q. How much will FAU receive in federal stimulus money and how will that money be used?

A. The University expects to receive about $12 million annually in federal stimulus money each of the next two years. It is important to realize that this money is non-recurring and not an appropriate source of funding for recurring expenses, such as salaries and ongoing program costs.

Q. How is the University’s future course being planned?

A. A true sea change is taking place statewide and nationally in the funding of public universities. Under the guidance of the Board of Trustees, FAU is taking a proactive stance in redefining itself as a 21st century institution by introducing Project Vision, an initiative that will seek the participation of students, alumni, faculty, staff and friends in the community. A Project Vision website will soon be launched, giving all interested parties the opportunity to contribute their ideas about how FAU should be redesigned to function most effectively and efficiently in the years ahead, with the goal always being to maintain and develop the University’s ability to deliver a top-quality educational experience to its students.


POSTING DATE: May 08, 2009

Q. When will the 2009 session of the Florida Legislature end and how does the final version of the state budget affect FAU?

A. On Monday, May 4, House and Senate negotiators reached agreement on a state budget compromise, paving the way for a final vote on Friday, May 8. Approval of the budget is normally the last item of business the Legislature deals with before adjournment. FAU fared slightly better than expected, taking a cut of about $16.7 million instead of the "worst case scenario" $28.5 million that could have resulted if the original House version of the budget had been adopted. We are very grateful to everyone who worked to move negotiations away from the House version and toward the Senate version.


Q.  Will FAU receive any additional income to help offset these cuts?

A. Each of the next two years, the University expects to receive about $12.2 million in non-recurring federal stimulus money. Even with this amount factored in, FAU is still facing a $16.7 million reduction for the 2009-10 fiscal year. While the federal stimulus money will help in the short term, it will not provide a permanent solution for our ongoing budget problems.


Q.  How much does the total budget cut for 2009-10 come to after additional income from the federal stimulus and the tuition increase have been factored in?

A. After accounting for all sources of potential revenue such as federal stimulus funding and increased tuition, the $16.7 million reduction is the total cut. This means tough decisions and difficult actions are inevitable. The collaborative decision-making process that began last year will continue to be used, as programs are examined for viability and every aspect of the University's way of doing business is scrutinized for cost-effectiveness. The focus will remain on preserving and protecting the University's ability to fulfill its core mission, the delivery of services to students.


Q.  Does that $16.7 million represent the entire budget reduction that FAU will face when the 2009-10 fiscal year begins on July 1?

A. Yes. However, if total state revenues fall short of projections, additional mid-year reductions would be necessary. It is important to remember that these reductions come on the heels of the approximately $18 million lost in state appropriations during the current (2008-09) fiscal year.  The amount of increase between that which is approved by the legislature and what the university decides to charge (up to 15 percent) is termed differential tuition. Prepaid contracts purchased before July 1, 2007 will not be affected by the differential tuition increase, and students who were enrolled at FAU prior to that date will also be exempt from paying the differential amount. The total tuition increase, if it is approved, is expected to be in the $5 million dollar range and will fall far short of offsetting the massive budget cuts the university will have to deal with.


Q. Will there be layoffs in July?

A. No decisions have been made as yet regarding layoffs.


Q. When will the University's 2009-10 budget be finalized?

A. A final vote will be taken at the Board of Trustees meeting on June 24, 2009.



POSTED: April 15, 2009

Q. What is the most recent information on the state budgeting process as it affects FAU?

A. Both the House and the Senate are approaching the end of the budget construction process for the 2009-10 fiscal year, and we anticipate that they will vote on their respective budgets very soon. Both versions contain additional cuts to FAU, over and above the $15 million that was anticipated. The Senate's reduction includes approximately $20 million in recurring general revenue beyond the $7 million that was cut from our budget in January. In the House budget, this amount is approximately $38 million. Both the Senate and the House include a base tuition increase ranging from 7 to 8 percent, a differential tuition increase and non-recurring federal budget stabilization funds of approximately $12 million to partially offset the reductions. Additionally, Indian Gaming money has been built into the Senate budget but does not appear in the House budget.   into law.

Q. When will the House and Senate budgets go to conference committee to be brought into agreement with one another?

A. It is anticipated that final votes will be taken on the bills on Friday, April 17. Members of the legislature who will serve on the joint conference committee will probably be named late Friday or early next week.

Q. What will happen once a final budget bill has been approved by the conference committee?

A. The bill will be presented to the full legislature for a final vote and then sent to Governor Crist, who can approve or reject it in its entirety or reject part of it using the line-item veto.

Q. Will there be a tuition increase at FAU, and, if so, how much?

A. Under new guidelines put forth by Governor Crist that allow state and universities to increase tuition by as much as 15 percent annually, FAU expects to seek a 13 percent increase, effective in the fall of 2009.  The amount of increase between that which is approved by the legislature and what the university decides to charge (up to 15 percent) is termed differential tuition. Prepaid contracts purchased before July 1, 2007 will not be affected by the differential tuition increase, and students who were enrolled at FAU prior to that date will also be exempt from paying the differential amount. The total tuition increase, if it is approved, is expected to be in the $5 million dollar range and will fall far short of offsetting the massive budget cuts the university will have to deal with.

Q. How can I stay involved in the budget process?

A. For months now, we have been gathering ideas from around the University regarding how best to cope with the current budget crisis. In addition to the budget reduction ideas received directly from students and employees via this website, FAU administrators have been working with faculty and staff to ensure that everyone has a chance to provide input. President Brogan has held discussions regarding the budget situation at open forums such as the Faculty Senate and Board of Trustees meetings, and more are planned for the future. We encourage you to continue to share your thoughts by taking advantage of all of these resources as the process moves forward.


POSTING DATE: Feb. 13, 2009

Q.   Could the recently passed federal stimulus package benefit FAU?

A. We do not yet know the details of the $787 billion federal stimulus package that was passed by Congress and signed into law by President Obama, so at this writing there is no clear answer to that question. However, even if FAU does receive some stimulus money those funds will be a non-recurring source of income and would not address the University’s long-term challenges. The budget-cutting process must move forward regardless of whether or not FAU receives any one-time federal stimulus funding.

Q.  What is the latest information on how the statewide budget crisis is affecting FAU?

A. The latest projections show that the state's budget crisis is escalating rapidly and will probably reach $700 million by the end of the fiscal year on June 30. The outlook for next year is even worse, with a $5 billion to $6 billion overall shortfall expected. The Florida Legislature met in special session in January and cut more than $200 million from the budgets of the 11 state universities. For FAU, this means an immediate current-year budget reduction of $12 million, with another $15 million cut expected on July 1.

To manage these additional deep cuts, we will use the same guidelines that were developed last year to identify areas in which funding can be reduced or eliminated. Once again, this process will be carried out in accordance with the strategic plan on a holistic, University-wide level, with the goal of enabling us to do more with less while protecting the academic core functions of the University to the best of our ability. However, cuts this extreme will indelibly change the face of the university. This is a difficult process that will require many difficult decisions. At the end of this process, though there will be significant changes to the university’s operations, we believe its mission of a quality education for its students will remain intact.

Q.  What happened to cause the state's budget shortfall?

A. The largest components of the state’s General Revenue fund are sales tax collections, documentary stamp and intangibles tax collections, and corporate income taxes. Due to the ongoing deterioration of the housing market in Florida, rising unemployment, increasing gasoline and energy prices, turmoil in the credit market caused by increases in mortgage foreclosures and defaults stemming from sub-prime lending practices, and other adverse economic factors, these revenues have declined. Sales of many items, such as furniture and appliances, are tied to the reductions in new housing construction, creating additional downward pressure on revenues.

Q.   Will there be layoffs at FAU?   If so, when will they occur and how will they be handled?

A.         Unfortunately, the severity of the state budget crisis and the repeated cuts to FAU’s budget have made a redesign of the University's employment structure necessary. Strategic, long-term budget decisions  have made layoffs inevitable. Furloughs (unpaid days off) and reduced work schedules are also being considered. Layoffs are a last resort, utilized only after other ways of achieving savings, such as through hiring and travel freezes, have been put into effect, as they have at FAU. The majority of layoffs will take place in July, at the beginning of the new fiscal year. At this time, it has not been decided how many FAU employees will be laid off or how the process will move forward. Additional information will be provided as soon as it is available.

A.         Yes, there is that possibility. At the January meeting of the Board of Trustees, President Brogan said he is working on a comprehensive budget reduction plan that could include such measures as shutting down some programs, expanding class sizes, consolidating duplicative services and increasing the University’s reliance on distance learning technology. Again, what is taking place is an overall redesign of the way the University is organized. Everything is on the table as ways to affect savings are explored.

Q.   Will President Brogan’s new contract have any impact on the University’s budget?

A. The FAU Board of Trustees awarded President Brogan a new six-year employment contract with a base salary that was higher than that of the contract he signed in 2003. This increase was to have gone into effect in March 2009, but, at President Brogan’s request and the Board’s unanimous approval, it will be delayed until March 2010.

Q.   What is the status of faculty salary negotiations?

A.            After several months of collective bargaining negotiations with representatives of the United Faculty of Florida (UFF) union an impasse was declared, which means that the parties are deadlocked over the matters being negotiated, including salary. A primary point of disagreement concerned the discrepancy between the 1 percent salary increase and $1,000 non-recurring bonus offered to UFF members by the University and the 10 percent salary increase sought by UFF. The next step in the process is for both sides to present their positions to a Special Magistrate assigned by the Florida Public Employees Relations Commission. If, after hearing arguments by both sides, the Special Magistrate’s recommendation is rejected by either party, the matter will go before a committee of the Board of Trustees and then before the entire Board for approval. The Board’s decision will be binding. Although these steps to resolve the impasse are moving forward, there is always the possibility that the two sides will be able to reach a negotiated settlement .

Q.   Although spending is frozen, there are a number of activities still ongoing throughout the University, including construction projects on FAU campuses, student activities, fundraising events, research expenditures and athletic events. Why aren't these projects affected?

A.         As is the practice at all public universities, different functions/activities are funded from differing sources and many of those sources restrict how their funds can be used by the University. For example, by Florida Statute, construction projects at FAU are funded by Public Education Capital Outlay (PECO) dollars, generated from a tax levy on electric, gas and communications services. PECO funds are used to build, repair and renovate buildings and, by law, PECO funds cannot be used to pay for University operations. Further, federally sponsored programs (i.e., research funded through National Science Foundations and other federal agencies) prohibit the use of their funds to support education and general operating expenses. Some other activities in which the University engages, including athletics, student financial aid, auxiliary enterprises, student government and concessions, are funded from sources outside the state’s general revenue collections and many have restrictions on how the funds may be used.
  
The FAU Foundation has continued to channel funding into many of the University’s programs, but must abide by the specific, often restricted terms laid down in donors’ gift agreements.
 
FAU's Educational and General (E&G) operating budget is funded primarily through the state's General Revenue dollars, and these are the only funds that are affected by the state's financial difficulties at this time.

Q.   Will summer school be held this year?

A.         Yes. In line with the University’s commitment to protect core academic functions, a robust schedule of summer classes will be offered in Terms 1, 2 and 3.

Q.  When does the Florida Legislature meet again and what additional actions are expected with regard to the budget?

A.         The regular two-month session of the Florida Legislature will begin on March 3. Additional spending cuts of $3 billion to $4 billion are expected to be approved. If this takes place, FAU will lose another $15 million in 2009-10 operating funds.

Q. Will there be a tuition increase?

A.         Florida's public universities currently charge the lowest tuition rates in the nation. In November 2008, Gov. Crist endorsed the concept of allowing the Boards of Trustees of Florida’s public universities to seek tuition increases of up to 15 percent, and a bill authorizing that is expected to come before legislators during the 2009 session Currently, the annual in-state tuition fee for undergraduates at FAU is about $3,650 well below the national average of $6,585.No decision has yet been made about a tuition increase at FAU, but if one is sought and obtained it will not go into effect until Fall 2009. (However, anyone who bought prepaid tuition contracts before July 1, 2007 will still be able to attend any state university in Florida without paying extra charges.) The revenue increase that would be realized from a tuition increase would be insufficient to completely counterbalance the deep budget cuts.


POSTED: Jan. 11, 2009

Q. During the special session held in January 2009, what action did the legislature take on funding for higher education ?

A. The news continued to be grim. On Friday, Jan. 9, both legislative chambers passed appropriations bills that included more than $200 million in cuts to higher education statewide during the current fiscal year. Gov. Crist signed most of them   into law.

Q. How will FAU be affected by these additional cuts?

A. The budgets of FAU and all other SUS institutions will be cut by another 4 percent in lottery and general revenue reductions. For FAU, this means a budget reduction of $7,076,953, which we have been anticipating as a result of Gov. Crist's 4 percent holdback late last year.

Q. How will FAU address these cuts?

A. The 4 percent cut facing FAU in the 2008-09 year should be managed by utilizing about $4 million that was held in reserve in anticipation of these cuts. The additional dollars will be drawn from existing funds that have not yet been expended by University departments.

Q. What does the 2009-10 budget look like for FAU?

A. The upcoming year is even more dire than the current year's situation. FAU is facing up to $22 million in cuts. The guidelines formulated during last year's budget-cutting process by the budget task force will be used once again. The strategic plan will be utilized to identify areas in which reductions must be made.

Q. Will there be layoffs at FAU for the 2009-10 year?

A. The additional deep budget cuts facing FAU have made layoffs inevitable, but every effort will be made to keep them to a minimum.


POSTED: Nov. 25, 2008

Q. What took place at the Nov. 21 General Revenue Estimating Conference in Tallahassee?

A. At the conference, estimates of the various components of general revenue, such as sales tax collections, state documentary stamp taxes, taxes on insurance, auto and title lien fees, etc., were projected. Unfortunately, there was very little good news. In fact, the forecasts were worse overall than they were last August.

Conferees released the outlook for 2008-09 and 2009-10. The following is a summary of their analysis:

Since the Aug. 15 Estimating Conference, weaknesses in the state, national and world markets have further reduced state revenue collections. As a result, the state's anticipated general revenue for 2008-09 has been reduced by an additional $1.4 billion, or 6 percent. When added to the August reduction of approximately $1.8 billion, this creates a decrease of $3.2 billion—about 13 percent lower than the March 2008 estimate.

General revenue for 2009-10 is also being revised downward by an additional $2.3 billion, a reduction of approximately 9.5 percent. Combined with the August reduction, 2009-10 general revenue is $4.5 billion less than what was projected last March—a decrease of about 18 percent.

Based upon the report, it appears that it will take until 2012-13 to get to the same levels of general revenue that were achieved in Florida in 2005-06. Net general revenue in 2005-06 was $27.1 billion; in 2008-09 it is projected to be $21.9 billion. The projection for 2011-12, assuming that the economic recovery will begin in late 2009-10, is $26.5 billion.

Q. What economic factors underlie Florida's general revenue problems?

A. The primary reasons are restricted credit, the spread of recessionary conditions in the U.S. and around the world, increases in unemployment and losses in wealth due to declines in the housing and stock markets. All of these factors have contributed to the significant reduction of state revenues from sales tax, documentary stamps, intangible tax and corporate income tax sources.

Q. What will the impact of these reductions be in 2008-09?

A. The current general revenue deficit for 2008-09 is $2.2 billion. This amount reflects the non-recurring funds of $672 million the governor transferred from the Budget Stabilization Fund, carry-forward balances from 2007-08 and transfers from other trust funds. The 4 percent holdback applied to all state agencies will generate approximately $1 billion, leaving a remaining deficit of about $1.2 billion.

It is unclear how much, if any, of the Lawton Chiles Endowment Fund, with a current balance of $1.1 billion, will be used to assist with the deficit. This fund, which was established with proceeds from the state's 1997 tobacco settlement, has already lost hundreds of millions of dollars due to market declines. Last spring, the legislature gave Gov. Crist the authority to tap into this fund to help meet budget shortfalls. If it is not used to mitigate the current shortfall, an additional 5 percent will need to be cut from the state agencies' budgets, increasing the total to 9 percent —or $14.6 million for FAU. If the Lawton Chiles Endowment Fund is liquidated to meet the shortfall—which is highly unlikely—our reduction would be $7.3 million, or 4.5 percent.  A realistic estimate would be around $11-12 million.

Additionally, as was reported on Oct. 29 by the Lottery Estimating Conference, lottery revenues are down considerably due to lower ticket sales. Because of carry-forward balances in the lottery fund, the impact is likely to be around 5 percent this year. For FAU, this would be a reduction of approximately $832,000.

Q. How high could FAU's budget reduction for 2008-09 go?

A. In total, our reduction for 2008-09 could be as much as $15.4 million.

Obviously, this reduction is significantly greater than the 4 percent reduction that the governor was proposing through the 1 percent per quarter holdback. The legislature ultimately will make revisions to our budget through the appropriation process, and it seems very likely that a special session will be held in January. The legislature could dip into other cash reserves to mitigate the reduction in statewide revenues. Additionally, the amount of reduction that higher education is required to absorb could be either more or less than the proportional reduction.

Q. What is the anticipated impact for 2009-10?

A. It is difficult to estimate the recurring reductions for 2009-10. While general revenue is projected to be about $435 million more than in 2008-09, non-recurring revenues are $1.6 billion less, leading to a 5 percent reduction in total 2009-10 revenues. Also, we do not yet know the impact of mandated increases in expenditures, such as Medicaid, on the state’s budget. On the positive side, we may receive greater tuition flexibility that will mitigate the projected reductions in general revenue and lottery funding. Based upon the recent general revenue and lottery forecasts, and without factoring in the mandated expenditures, we would be looking at a recurring general revenue reduction of approximately 12 percent, or $19.5 million, and a lottery reduction of 9.5 percent, or $1.58 million, for 2009-10, for a total recurring reduction of $21 million. Again, this does not reflect either increases in state expenditures or possible new tuition funding, and it assumes that the higher level of general revenue will be achieved in 2009-10.

Q. Who will be deciding on the 2008-09 and 2009-10 budget reductions?

A. Ultimately President  Brogan and the FAU Board of Trustees are responsible for making the decisions necessary to develop the University’s operating budget. Last year, President Brogan put together a task force comprised of a spectrum of University students, staff and faculty who developed guiding principles to identify comprehensive and strategic potential budget reductions that enabled FAU to continue to fulfill its key mission while minimizing the adverse impacts of the budget reductions.

Given the projected budget reductions, we will continue to utilize the principles identified by the budget task force to develop the process by which these difficult budgetary issues will be managed.

Q. An e-mail went out to faculty members on Monday, Nov. 24, 2008, stating that collective bargaining negotiations with the United Faculty of Florida union had reached an impasse. What does that mean?

A.  Only employees who are represented by the United Faculty of Florida union, or UFF, are affected by this. All other University employees are not impacted, including all employees who recently received the salary increase and bonus approved by the Board of Trustees in October. Employees who are unsure whether they are represented by the UFF may check with Associate Provost for Academic Personnel Diane Alperin.

After several months of collective bargaining with the UFF, the University’s negotiating team advised the union’s team that the University will pursue the statutory impasse resolution process to resolve the contract issues still being negotiated, including the issue of wages. The University had proposed a 1 percent salary increase and a $1,000 non-recurring bonus for all UFF-represented employees, similar to what was provided to eligible out-of-unit employees earlier this month. The union rejected this proposal and countered with a demand for a 10 percent salary increase package for faculty. The union’s proposal would cost the University nearly $8 million annually.

A memorandum was sent to in-unit faculty describing the issues at impasse and the process moving forward. The memo may be viewed at: http://www.fau.edu/announcement/Impasse_memo_to_faculty_from_DA_11-24-08_FINAL.pdf

As indicated in the memorandum sent to in-unit employees, the BOT has now notified the Florida Public Employees Relations Commission of the impasse and requested that a panel of mediators, called Special Magistrates, be proposed to assist in the process. Within 30 days both sides will jointly select a Special Magistrate. Following this, the Special Magistrate will conduct a hearing and listen to both sides. He or she will then make a recommendation after a period of time and both parties will have the opportunity to accept or reject the recommendation. If either side rejects the recommendation of the Special Magistrate, a hearing will be conducted by a committee of the FAU Board of Trustees. This is a quasi-judicial proceeding at which both parties will present their cases. The committee would then make a recommendation to the full BOT, which will make a final, binding decision on each of the open issues. The entire process generally takes 60-90 days.

The University did not make the decision to declare impasse lightly. It is the University’s highest priority to reach resolution of these key issues and provide all employees a salary adjustment as soon as possible.

Q. Why are some job positions being filled if there is a hiring freeze in place? Why have some employees received salary increases beyond the 1 percent that went into effect this month?

A. Early this year, President Brogan, with the concurrence of the Board of Trustees, instituted a freeze to restrict the filling of line and OPS positions effective January 11, 2008.

The freeze applies to all fund categories, including educational and general, auxiliary accounts and activity and service accounts, but does not apply to contract and grant expenditures directly related to the performance of the grant. However, some exceptions have been authorized by the President, Provost and/or Vice Presidents. These exceptions, which could include filling unfilled positions or redistributing the duties of a vacant position to existing employees and providing them with additional compensation in lieu of hiring a new person, are made on a case by case basis and only when the freeze would have impacted the ability of a unit to deliver essential services to the University community.


POSTED: Nov. 18, 2008

Q. What does the budget forecast look like for the rest of this year?

A. The state's projected revenue collections for 2008-09 have been adjusted downward by approximately 7 percent, or about $1.6 billion. The governor has submitted a budget amendment proposing to use some $670 million from the state’s reserve funds to partially offset these reductions, which amount to about 3 percent of the total shortfall. This would leave in place the anticipated 4 percent shortfall of general revenue and lottery dollars for the current year. Please note that this shortfall represents about a 3 percent reduction of our total Educational and General (E&G) budget, which consists of student fees as well as general revenue and lottery funds.

If these amounts hold, our current-year reduction will total about $7 million. As part of last year's budget reduction process, the Provost identified $2.4 million in additional reductions to be held in reserve. We also held in reserve $1.9 million from out-of-state tuition increases and the elimination of charges for convenience fees, for a total of $4.3 million. We would still need to identify additional current-year reductions of $2.7 million to meet the full $7 million reduction.

Q. Will Tallahassee leaders meet on the budget issue in the near future?

A. State economists will meet on Friday, November 21, to revise revenue projections. State legislators may have to hold a special session after January 1, 2009 to discuss the status of the state’s finances.

Q. When will FAU salary increases go into effect?

A. Florida Atlantic University's Board of Trustees has approved a performance-based salary increase for eligible FAU employees for the 2008-09 fiscal year. Funds are being provided to award a $1,000 non-recurring, lump-sum bonus payment and a one percent (1%) base salary increase to eligible non-unit employees. The lump-sum payment will be made on Friday, November 21, and is subject to applicable taxes. The one percent (1%) base salary increase has an effective date of Nov. 1, 2008.

Q. Will faculty salaries go up as well?

A. FAU is currently engaged in collective bargaining negotiations with the faculty union. As this year's negotiations move forward, the University's focus remains on providing a strongly competitive compensation package to both existing and future faculty members, while responsibly keeping within the institution's fiscal limitations. Throughout the current budget crisis, the University has continued to commit hundreds of thousands of dollars each year to raising the salaries of faculty members who have achieved promotion. Faculty members receive a 9 percent salary increase upon earning promotion to associate professor and an additional 12 percent upon promotion to full professor. Despite the unprecedented economic difficulties that FAU is currently facing, the University has offered to the faculty a 1 percent salary increase and a one-time $1,000 bonus. The faculty union has rejected the offer and counter-proposed a 10 percent salary increase.

Q. How does President Brogan's new contract affect the operating budget? Does his existing contract call for additional compensation during this fiscal year?

A. By law, the State of Florida may only contribute up to $225,000 in public dollars to the salary of a president. That law has not changed since 2003, and the president’s new contract will not contravene the law. The balance of his salary will be paid with private dollars allocated through the FAU Foundation.

The FAU Board of Trustees approved a new six-year contract for President Brogan in September. A new contract was necessary for President Brogan as his original contract was set to expire in March of 2009. The new contract does not go into effect until March 2009. (UPDATE: At the request of President Brogan, the 10 percent increase in his compensation that was to have gone into effect in March 2009 will be deferred until March 2010).

President Brogan has advised the Chair of the Board of Trustees that in March 2009, when his new contract begins, he will reserve the right to delay acceptance of the portion of his salary that exceeds his current compensation until he is satisfied that compensation levels for the University faculty have been fully addressed. While eligible non-unit employees began to receive a 1 percent increase and a one-time $1,000 bonus this month, the collective bargaining process for employees represented by a union remains ongoing.

President Brogan’s existing contract, which ranks him 10th among his SUS peers, allows the Board of Trustees to provide him with a performance bonus. This month, the Board of Trustees conducted their annual evaluation of President Brogan in which they rated his performance a 3.93 out of a 4.0 scale. Looking at comparative data from the other SUS institutions, if the BOT had decided to give President Brogan a performance bonus it would likely have exceeded $50,000; however, given the economic conditions in the state and at the University, President Brogan and the Chair of the BOT, Nancy Blosser, agreed that he would decline such a bonus if offered for the 2007-2008 year. In the past six years, President Brogan has rejected four bonuses due to economic hardship faced by the University.    


POSTED: July 31, 2008

An Important Message from Dr. Jessell to the University Community
Concerning the Budget Shortfall for Florida Atlantic University

Almost to the day a year ago, I wrote to you about potential revenue shortfalls facing the State of Florida and the need to restrict travel, equipment purchases, and the hiring of new faculty and staff. These shortfalls were anticipated on the basis of lower sales tax and corporate income tax collections caused by several factors, including a weakened housing market, and lower consumer and construction spending.

As these revenue shortfalls materialized during the fall semester, we developed a budget reduction program that eliminated over $8.5 million from the 2007-08 fiscal year budget. As it became apparent that even more drastic reductions would take place in 2008-09, a budget reduction plan was set in place to review strategic priorities and to recommend comprehensive budget reductions that would be consistent with Florida Atlantic University's mission, goals and objectives. The recommended budget reduction plan was presented to the Board of Trustees in May and was incorporated into the University's 2008-09 operating budget. In the end, the 2008-09 Educational and General operating budget was reduced by $18.7 million as compared to the 2007-08 budget, which was partially offset by a 6 percent tuition increase for most students and an increase in lottery funding.

Unfortunately, state general revenue continues to decline, and we can expect that the numbers will come in under projections. For the months of March, April, May and June, revenue was $361.3 million below the estimated collections, estimates that were already adjusted downward. This translates to over a 4 percent reduction to estimated collections. To illustrate the magnitude of this issue, general revenue for June 2008 was $2.167 billion, as compared to $2.470 billion in June 2007, a difference of over $300 million for just one month.

In addition to reductions in general revenue, the largest component of our Educational and General budget, state lottery collections, also continues to slide. Lottery revenue, which in February was projected to increase by $120 million in 2008-09, was revised last Friday to be $34 million less in 2008-09 compared to 2007-08.

What does this information mean in terms of FAU's 2008-09 Educational and General operating budget? Our operating budget, which was approved only a few weeks ago by FAU's Board of Trustees, was based upon projected levels of general revenue, lottery and student fee revenues appropriated by the Legislature. Actual revenue collections are well below projected amounts, and unless there is an immediate turn-around of state revenue collections, the projected amounts used to develop our budget will not be achieved.

Based upon the lower than projected collections of general revenue and the revised downward estimates of lottery funding, FAU could experience additional budget reductions of over $12 million in 2008-09. It should also be noted that these amounts do not include any shortfalls that may arise from lower enrollments, as many of our part-time students struggle to balance work, family and educational demands. While the University did set aside reduction reserves of $4.3 million during the budget construction process, we would still need to identify approximately $8 million of additional budget cuts.

On the basis of the information we have today, and with the concurrence of President Brogan and Board of Trustees Chairwoman Nancy Blosser, we are continuing with the University-wide freeze on all travel, equipment purchases from operating capital or expense funds, and filling of line and OPS positions implemented last year. This freeze will apply to all fund categories, including educational and general, auxiliary and sponsored research overhead accounts. This freeze will not apply to contract and grant expenditures directly related to the performance of the grant. All funding categories of the University must be monitored and evaluated to ensure the optimal use of combined financial resources. The effective date of this freeze is Thursday, July 31, 2008. All expenditures not approved or encumbered as of this date are affected.

Obviously, there may be a need for exceptions to the freeze in order to meet essential and contractual obligations associated with our ability to meet the teaching, research and service missions of the university. On behalf of the President, the University Provost and Vice Presidents are authorized to approve only essential travel, equipment purchases and personnel appointments. Requests for exceptions should be submitted in writing to the appropriate individual.

We are fully aware of the hardships and difficulties this freeze will cause. We can assure you that this decision was carefully made following much consideration. Certainly, as we work on a comprehensive budget reduction program, the freeze will be reevaluated. By working together and identifying savings and efficiencies throughout the University, our goal to meet the key components of our mission without the need to reduce staffing and the quality of service to our students, faculty and staff will be realized.

Over the next few weeks, we will begin discussions on a contingency budget reduction plan using the same principles we utilized in the development of the 2008-09 budget reduction program. We will have comprehensive discussions on where and how these reductions will take place. Of course, we will continue to look for innovative ways to maintain services at reduced costs and other operating efficiencies. Then we will look at strategic ways to reduce the budget while doing everything possible to fulfill our key mission of educating students while protecting the University's employee, financial and physical resources. This job will not be easy as each proposed reduction must be evaluated not only in terms of immediate savings but also in long-term benefits and costs.

We greatly appreciate your understanding of the difficult situation facing Florida Atlantic University and the State of Florida, and the need for this action. We will continue to update this web page as information becomes available.


POSTED: May 23, 2008

Click Here to Download PowerPoint File

To FAU Students, Faculty and Staff :
   
Above is a link to a PowerPoint presentation on the 2007–08 budget and the proposed 2008–09 operating budget reductions. This PowerPoint will be shared with the FAU Board of Trustees this week; however, President Brogan wanted to ensure that the document was available for the FAU community to view as soon as it was complete in an effort to continue the flow of information on this very important topic.
  
As you are aware, Florida Atlantic University will experience very significant budget reductions in the year ahead. This is true for the other universities in the S tate U niversity S ystem as well as all state agencies as a result of declining state revenues. During the past several months, U niversity staff ha s been working diligently in dealing with the budget shortfalls to ensure that FAU will continue to support its students, faculty and staff in the best possible way while fulfilling the University’s key strategic goals and objectives. As you know, the U niversity has a strategic plan to which the budget is tied , and each year, as the budget is constructed, the goals and objectives of the strategic plan are used as a guideline for expenditures. It was essential, therefore, that the strategic plan be followed when dealing with reductions in order to minimize the adverse impact of these reductions.
  
Last June, as the U niversity was finalizing its 2007-08 operating budget, it received wor d from the Chancellor of the State University System that it should prepare for significant reductions to the budget that had just been prepared and approved by the Board of Trustees only a few days earlier. At that time, the U niversity implemented a freeze on all non-essential hires and purchases to ensure that it would be possible to accommodate the mandated reductions. During a period of just a few weeks, the University identified reductions totaling approximately $7 million, and these were approved by the Board of Trustees on August 28, 2007. Key objectives in making this first round of reductions were minimizing the impact on instruction and enrollment, ensuring the timely progression of students pursuing degrees, protecting personnel, and maintaining consistency with the strategic plan. It is believed that these objectives were met.
I
n January, when it became well apparent that the s tate’s economy was continuing to deteriorate and that more reductions would be necessary, President Brogan established a task force to review comprehensive and strategic concepts to guide these potential reductions.  This task force was comprised of FAU faculty, students, staff and administration and met approximately three weeks per month and spent countless hours reviewing the current budget and engaging in an interactive process of fact - finding and research. Using the strategic plan as a guide, goals one and three were identified as key to honoring the U niversity’s mission. In addition, a series of guiding principles helped the task force in their work.
   
In the following slides , you will be able to view the timeline through which this year’s budget reductions took place. An organized approach to this process began in July and has continued throughout the year. As indicated earlier, the reductions were made with the strategic plan in mind. The mission, vision and values statements are all consistent with the proposed reductions , as are each of the goals.
  
However, no matter how much planning and thoughtful research is involved in a process such as this, the U niversity will be negatively impacted in many ways. But with crisis comes opportunity , and , even in difficult times, the U niversity is always looking to maximize its efficiency and creativity. There are some positive outcomes from this process, especially fulfilling the University’s commitments to students, faculty and staff and the efficient use of all of our resources.
   
You will notice in the budget reduction plan that every area of the U niversity participated in the reductions with the exception of police and safety services, which are necessary for the health and safety of the U niversity community. Areas that participated in the reductions include the president’s division, academic affairs, student affairs, financial affairs, and partner campus support services and administration. You will notice, too, that 100 percent of the anticipated tuition revenue — almost $4 million — went to reduce the impact on the academic programs of the U niversity. As such, non-academic units absorbed reductions averaging 40 percent more than their proportional share in order to keep the academic core reductions at a minimum.
  
There are several funding initiatives that will add funds to the Un iversity’s budget; these include a 6 percent tuition increase for in-state graduate students and out-of-state undergraduate students. The elimination of free, online credit card payments for tuition and fees (though online payment via checking accounts is still available at no charge) a nd a revision of the office supplies contract will achieve additional savings.
  

These are difficult times for FAU and its faculty, staff and students. These reductions will bring forward numerous challenges we must work together to overcome.
  
On Wednesday, the BOT will view this presentation. This meeting will be webcast, and you are welcome to view it from your computer. After the meeting, the U niversity will send out a U niversity-wide e-mail summarizing the meeting’s outcome and providing any new information on this site.
  
Thank you for your attention to this very important matter.

 



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