Dec. 3, 2009

Hoffman outlines strategy for developing FY11 budget

by Anne Krapfl

Planning is under way on Iowa State's next fiscal year budget -- and that timing is normal. What's unusual this year is the depth of review and planning requested of college and division leaders, in the face of declining state revenues and the impact on state support for the three regent universities.

In a Dec. 2 memo to senior leaders, executive vice president and provost Elizabeth Hoffman laid out plans for developing Iowa State's FY11 budget, as well as the budgets one to two years beyond.

"The current financial situation presents an extraordinary challenge," Hoffman wrote in the memo to vice presidents, deans and the chief information officer. "The FY10 appropriations, reduced by the mid-year reversion, reflect a nearly $150 million loss in purchasing power over the past 10 years."

That change, coupled with others -- shifting boundaries among academic disciplines and advancements in technology, for example -- puts Iowa State in an unprecedented position to reconsider, reorganize and resize, she said.

"It is time to consider a future in which we will continue to serve our basic, core missions, but we will do so in different ways," Hoffman wrote. "I realize and expect that departments and programs may be eliminated or restructured. I know that service levels will change."

Long-term, inclusive planning

Hoffman asked all units to do "serious, substantive planning" over the coming months that looks at least two years out and, when appropriate or necessary, to involve other units in their planning. She asked them to look at what she called "fundamental aspects" of programs, activities and services, such as:

  • How a unit's programs and services serve the university's core mission
  • The size of a unit, relative to the number of people who benefit from it or are served by it
  • Staffing ratios within units, for example, students per academic adviser, administrative staff per faculty member, administrative staff per outcomes achieved
  • Who would be affected if programs or services change, within the unit and elsewhere at the university

She said the planning process must be inclusive and involve those with significant interest in the ideas being considered. The impact on faculty and staff must be part of the planning, Hoffman wrote, and ISU policies and processes must be respected if/when changes in staffing levels seem likely.

To keep the planning process moving, Hoffman asked for monthly updates from each vice president and dean, beginning in January.

A special look at some cross-unit functions

Hoffman also announced that five small teams will review, by Feb. 15, 2010, several targeted activities that cross organizational lines such as college, department, ISU Extension or the student affairs division. The five are:

  • Activities that support international students, programs, faculty and staff
  • Recruitment of undergraduate students
  • Activities and programs that support student academic success
  • Programs that support diverse and under-represented groups (for example, women and minority populations)
  • All Ph.D. programs, either offered through a single college or spanning more than one college

More information on these five reviews will be shared in the next few weeks.

Preliminary numbers for FY11

Hoffman offered some early guidelines for what the figures in the university FY11 budget may be. Those guidelines include:

  • State funding for Iowa State will be no higher than $220.8 million -- this year's appropriation minus the $24.5 million mid-year reversion. Additional cuts to that funding level are possible during the 2010 legislative session.
  • Units should develop expense budgets that are 5 percent to 10 percent lower than their original FY10 expense budgets. Units may choose to plan for even larger reductions according to their financial situations.
  • Fall 2010 enrollment will be down from this fall. The change is a moving number, currently estimated at 275 students.
  • Estimates for additional tuition revenue are based on the proposal currently before the state Board of Regents (6 percent increase for residents, 4.1 percent for non-residents). The board has delayed a final decision on 2010-11 tuition rates until its Feb. 4 meeting.
  • Utility costs will increase an estimated 2.5 percent. Actual increases to units will vary according to their utilities use.
  • The estimated cost of salary and benefits increases for merit employees covered by the AFSCME contract will be 2.4 percent for salaries and salary-driven benefits and 10 percent for medical and dental insurance. Medical and dental costs for faculty and P&S staff will increase an estimated 5 percent. There isn't a salary policy yet for faculty or P&S staff, but units likely will absorb the cost of those policies.