University proposes budget for Board approval
Campus Times
April 23, 1999
The budget proposal for the 1999-2000 academic year at the University
of La Verne provides for an augmentation in salaries for faculty, administration
and staff and includes a tuition increase of about 2.89 percent or $450.
Yet the $60 million proposal will not supply numerous departments across
campus with all the requested equipment money, and eventually includes a
zero percent revenue increase for traditional undergraduate students.
"We have gone through an elaborate budget process this year much
more so than we ever have," Vice President of Academic Affairs Phil
Hawkey said.
"And the idea is to get a detailed understanding of what our income
and expenses and, most importantly, to get an understanding of what our
needs are," he said.
"Part of what we are finding out is that our needs and expenses
are growing faster than our revenues," Hawkey said.
"Next year's budget does not anticipate any growth in traditional
undergraduate enrollment," said Hawkey.
"Even though there is a 2.89 percent increase in tuition,"
he said, "we have pulled out of the budget the BCA [Brethren Colleges
Abroad program] and that represents essentially a $500,000 expense."
Last year's budget included the expense for the BCA but did not identify
the revenue. The new budget is making sure, according to Hawkey, that the
revenue from BCA actually goes toward the program by separating it from
the remainder of the budget.
"That is the reason it [the revenue increase] comes down to zero
percent," Hawkey said. "We didn't accurately account for the expense
with it [BCA] last year."
Hawkey said that the tuition increase was "modest."
"The average tuition increase is about five percent for private
colleges," he said.
Tuition for the College of Law is going up an average of 33 percent,
which will all go into pursuing ABA (American Bar Association) accreditation
for the school. For returning law students, it will go up 11.11 percent,
while it will increase by 27.7 percent for new students.
One group that will not have to worry about the tuition increase is
the University's employees who have worked at ULV for three years or more,
as well as their spouses and relatives.
Through the tuition remission program, they are taking classes at ULV
for free. Also, some employees of the city of La Verne are paying less to
go to school at the University. This tuition remission will be at the center
of another discussion.
"Tuition remission is a benefit to the employees of the University,"
Hawkey said. "It's a major expense, and I want to have a conversation
about how we best use it to meet the needs of the employees."
Some of the questions addressed would be how many times a tuition remission
student can take a class over again and how many degrees such a student
will be allowed to attain before he or she will have to start paying for
tuition.
Whether city employees will still receive a reduction "is going
to be part of the conversation," Hawkey said.
Referring to the reduction in equipment money for various departments,
Hawkey said, "Because the revenues are growing slower than our expenses,
we had to reduce some expenses in order to fund the budget.
"So some equipment was funded basically from the [University's]
savings account," he said. The equipment that was not funded was put
into a kind of a reserve which is divided into Tier I and Tier II.
"These are items that we'd like to fund," Hawkey said. "These
are items that are pre-approved budget expenditures that are not in the
budget."
Hawkey said Tier I consisted of items that were deemed important to
fund. These items had been funded in previous years. The items in Tier II
are new requests that had not been funded in the past.
"The only money that we can spend are revenues that come primarily
from tuition and fees," he said.
For the School of Continuing Education (SCE) and various master's programs,
enrollment for next year "is not precisely predictable," said
Hawkey. If enough students enroll, ULV will be able to fund Tier I. If the
revenues grow more, Tier II will be funded later in the year.
Another major issue with the revenue is that 94 percent of it comes
from tuition. There are plans to change that.
University Relations, whose job includes fund raising and alumni affairs,
has been underfunded in the past, according to Hawkey. He said that its
staff was sized at about half the amount necessary.
The plan is to use part of ULV's unrestricted endowment fund to pay
for additional University Relations staff. Its job will be to double the
endowment fund, which is divided into a restricted and a non-restricted
fund, and currently contains about $27 million.
The fact that the Financial Aid department overspent its ULV grant budget
by over one million dollars this year portrays another problem. This resulted
from the need to accommodate the surplus of new students enrolling this
year.
"We provide financial aid at a level about comparable to other
institutions, and it depends on the needs of the student and the academic
ability of the student," Hawkey said.
"Our problem has been that we haven't budgeted the full amount
[necessary]. So it's just a matter of proper budgeting."
Chief Financial Officer Steve Grey said, "If you will, it was a
planned event. It's because we had additional students that we did not plan
for." He said that part of the revenue that came from those students
was used to increase the financial aid that was given to them.
"That's the kind of business we like to do," Grey said.
"We sat down, we looked at how many students we were going to have
and then we did a planned calculation [on how much to spend]. So it's an
OK thing."
Grey also pointed out that the extra money was not taken from anyone
else's budget but was drawn from the increased revenue coming from students.
Another problem with the budget is that it falls about $800,000 short.
The $60 million budget includes entrepreneurial funds that are restricted
for the use of specific programs only.
After that, about $56 million net revenue remains. The net revenue expenditure
totals more than $57 million. The $800,000 to make up the difference will
come from ULV's savings account.
"It identifies an initiative we'll have to address over the next
year; how we increase revenues more or decrease expenditures," Hawkey
said. "We can't draw upon our savings very often."
So for what will the available money be used?
"One of the priorities is to fund increase in salaries to faculty
and staff," Hawkey said.
That is being done because the salaries have not been increased in the
past and "we're falling behind,"he said.
Another important issue in the budgeting process was the funding of
the new School of Education and Leadership and its dean. Also, the aforementioned
attempt to get ABA accreditation for the ULV College of Law, and the endowment
growth plans are other areas receiving major funding.
"We're putting resources into plant and maintenance," said
Hawkey, "which means fixing up some of the buildings and the grounds
that are deteriorating, as well as having resources for renovation and new
buildings."
Hawkey wanted to assure that all the figures in the budget were reasonable.
"The only thing we can spend is the revenues we generate, and it would
be a terrible mistake to have revenues estimated much higher than what we
are actually going to bring in, because then we end up spending money we
don't have," he said.
Budget proposals will be presented to the Board of Trustees for approval
on May 8.
