Budget Reduction Information

As we address our current budget deficit, our guiding philosophy has been and will be to protect the jobs of the people of our campus community from the negative impact of this deficit as long as possible.  With that in mind, we have decided our course of action based on the availability and allocation of funds within our budget.  Fiscal Year 2016 was inaugurated with a 3.5% reduction to our FY15 base budget resulting in an immediate loss of $1.86M.  Through careful management of contract costs and institutional funds, we were able to absorb this hit without effecting our core.  In response to the January rescission of $1.27M, our first action was to use institutional reserves to allow time to develop an internal strategy.   

Planning a response to the January rescission was still in progress when news of February’s oil and gas revenue shortfall was announced.  This shortfall impacted our budget by an additional $1.51M and again forced us to dig deeply into our budgets, plans and creativity.  We determined that buffering the impact to campus via institutional reserves was once again necessary.  Cross-divisional discussions were held throughout these months in an effort to grow consensus around viable options. 

A third blow was dealt to our budget as a result of the second rescission in March.  Having lost approximately $2.78M at that time, news of losing $1.83M during this month was jarring.  And finally, the state opened the last quarter of our fiscal year with what we hope to be the final withdrawal of funding of $298,000.  The continued repeated depletion of reserves has been determined an unsustainable solution to this sizable withdrawal of state funding thereby leading us to adopt a second strategy.  Our cross-divisional discussions have produced a list of viable options for addressing this year’s deficit; all of which protect the jobs of the people in our campus community.   

Our next strategy is two-fold.  First, we have decided to reduce and redistribute an amount across a selected group of orgs equal to the 5-year average remaining balance in each.  This strategy was selected for its mildest negative impact to departmental operations.  Second, we will reabsorb salary and benefits savings from positions that were vacant between July 1, 2015 and today.  This strategy, while diminishing some of our capacity for next fiscal year, leverages unused dollars and allows us to continue hiring into open positions through the remainder of the year.  

Completely insulating our budget from the negative impact of state funding withdrawal is impossible due to the scale of the reductions.  UCO is fortunate to have these operating dollars available in these orgs as they will allow us to prolong the protection of our salary and benefits dollars; a strategy many in the state have been unable to afford.  During this season of budget development, we will work to keep you informed each step of the way.  Information regarding position control and department-initiated budget adjustments will be communicated the week of April 11, 2016. 

The hopeful spirit in which you are working toward dealing with this unprecedented impact to our budget is appreciated.  It is this air of courage that pervades the essence of who we are and what we are here to accomplish.