Frequently Asked Questions about Budget Situation

Updated January 12, 2011

Following is a list of Frequently Asked Questions, including some suggestions proposed by the Chancellor's Staff Advisory Council (CSAC), the faculty and other related to the current budget situation. If anyone has further questions, they are encouraged to submit them via the Budget Update Web site, and we will update this FAQ in the coming weeks.

Why are we making these budget reduction decisions now when it is uncertain what the magnitude of the cut will be?

1. For the current year 2010-11: The state’s revenue shortfall is so significant for next year [approximately $3.5 billion] that the Office of State Budget and Management (OSBM) issued a memo that reduced the university’s annual state appropriation by an additional 2.5 percent (or $1 million). This is in addition to the 1 percent ($400,000) instituted at the beginning of the current fiscal year. Even though we planned very conservatively this year, because this additional cut comes at a time when we are already half way through the fiscal year, a 2.5 percent reduction in our budget allocation will have an impact that feels more like 5 percent for the second half of this year. This totals $1.4 million of our $40 million state allocated budget. We are required to find this savings now in order to comply with the  directives for the current year.

2. For next year 2011-12: As explained in an earlier budget update, we have been directed by the UNC system to create plans for a permanent 15 percent cut for the coming budget year, 2011-2012, in which the state faces an anticipated budget shortfall of about $3.5 billion. We will likely not know until after the new fiscal year is under way what magnitude of cut we will actually face, but we have been informed that our plans for 5 percent and 10 percent reductions, which were submitted last fall, will be insufficient. Therefore, we are implementing plans now to cut the 10% while developing plans, in consultation with campus groups and leaders, for the additional 5% in the coming months.


Is UNC Asheville able to independently furlough employees or would furloughs be a system-wide decision?

After a campus furlough plan has been developed, each Chancellor can seek permission from the UNC President for permission to impose a furlough in the 2010-11 fiscal year if s/he determines that a furlough is warranted.


At what point would the Administration consider furloughs on our campus?

If we are unable to achieve the required budget savings through other austerity measures by the end of the academic year, we have the authority to implement a furlough before the end of the fiscal year in order to comply with the current year budget cuts.


Many staff members have no state funds in their salaries, please explain why they would or would not be subject to furloughs and/or salary reductions?

This would be part of the Furlough guidance that we need to review and clarify. A Furlough Plan for our campus is currently being developed in the event that we will need it later in the fiscal year. If salary reductions are required, the regulating agency would determine what positions are affected and to what extent.


Since some faculty, coaches and others have employment contracts that commit to a certain salary per year, how will possible salary reductions or furlough affect those employees?

If the university has a legal contract with an employee, this is a property right that cannot be removed. Therefore, they will not be affected by a furlough.


If we do have furloughs and potential salary cuts, some staff may need to seek second jobs. Will we follow current policies about seeking permission?

Yes.


Have any decisions about outsourcing of some jobs been made as discussed in November and December?

Several areas and functions are still under consideration for serving our students and our campus in more cost-effective ways. For example, we are actively considering contracting out some of the new work that will be required to manage large events in the Kimmel Arena beginning in mid-2011. Outsourcing, which has the potential to replace existing staff members, continues to be our least preferred option. Budget-based decisions made before the semester break will need to be reassessed in light of these new, more stringent, budget cuts.


The Governor has realigned many state departments. Is the university system considering transferring some functions from each campus to GA to reduce costs?

UNC General Administration has been moving in this direction for some time, to the advantage of many campuses, especially the smaller ones. For example, our dramatically improved payroll process now includes a GA-led Shared Services Group that has standardized some of the technical payroll processes for nine campuses. Similarly, GA is offering to serve as the central Banner hosting site for a large number of campuses. Though these services come at a cost to us and may not save large amounts of money, the standardization and support of these critical processes will dramatically increase the reliability of the service, provide back-up and recovery that we have not been able to afford, and lessen the administrative burden on many of our one-person functions.


How will our campus and our students be affected by the potential reduction of course sections?

• Class sizes will likely be larger. As class sizes increase, there may be a decrease in the one-on-one interactions between faculty and students.

• Some classes may not be offered as frequently as in prior years. Although we will be working with academic departments to try to ensure that students can enroll in courses that are critical for their degree requirements, it is possible that some students will not be able to graduate in the timeframe they had planned. In the case of student athletes, an extension of time-to-degree may necessitate additional scholarship funding. For students who are not athletes, more time to degree may result in a tuition surcharge and/or additional burden on parents and families.

• Some students may not be able to enroll in elective courses that they planned or hoped to include in their undergraduate coursework. Our focus for course offerings will be those classes that satisfy ILS or major requirements. It may be necessary to restrict enrollment in certain classes to students whose declared major requires the course for their degree.

• With fewer sections of course offerings, students may not have as wide a variety of class times from which to choose for a given course. This may affect their ability to manage their time in classes with their other obligations, such as employment or child care.

Why are some vacancies considered "critical," and therefore can be filled, others not; how is this determined?

We will be filling only those vacancies that have been deemed critical to fulfilling our mission. These decisions have been based on the priorities identified in the Budget Strategy for Resource Allocation, which was recently updated and approved by the University Planning Council.

1. Positions that are central to the academic core, e.g. teaching faculty with priority to tenured and tenure-track faculty.
2. Positions that are essential to the student educational experience and student safety, and positions that ensure compliance with federal and state regulatory requirements.
3. Positions that are essential to our SACS reaffirmation and NCAA recertification.
4. Positions that are necessary to generate additional revenue for our campus.
5. Fulfilling our public responsibility: Diversity, affordability, accessibility, and community engagement opportunities that address existing campus priorities.

In order to preserve funding for our most critical positions, Senior Staff already have abolished several vacant positions before the winter break and others are not being filled at this time. In addition, we may transfer existing staff members to higher need vacancies on campus, as we have in the past.


What purchasing and travel restrictions are being put into place and when will they be effective?

The purchasing and travel restrictions are effective immediately. Visit this Web page for information on expenditures from state general funds.


Why not use construction funds to make up for the budget cuts? How can UNC Asheville continue its construction projects while it is facing such significant cuts?

Construction that is currently under way is expected to continue: renovation of Rhoades Hall and Rhoades Tower, completion of the Center for Health & Wellness, Governor’s Village renovation and construction of the new residence hall. The revenues for these construction projects are not transferrable to other needs. The residence hall projects
are designed to pay for themselves through housing fees, and therefore do not affect the state allocations or campus budget. The Center for Health & Wellness is nearly complete and was funded by the state for this specific purpose. Even if we wanted to redirect the funding for these construction projects to other priorities, we are prohibited by law from doing so.


What about salary adjustments?

Our guidance from the Office of State Budget and Management clearly states, “No career-banding adjustments, in-range adjustments or other salary adjustments may be made. Allowable compensation adjustments only include promotions and reclassifications,” with additional restrictions placed on allowable reclassifications. We anticipate that exceptions will be rare.


Why not institute pay cuts, across the board or voluntary?

Many on our campus have suggested that pay cuts across the board could help us save jobs, however, the university system does not currently have the authority to institute pay reductions within any job category. In the future,this option may well be considered by state regulatory bodies that have this authority.

Before anyone considers a voluntary pay cut, the following should be considered:

• Someone voluntarily cutting their pay cannot be assured that jobs can be saved as a result.
• Pay cuts could possibly be imposed by the state at a later date, compounding the voluntary cut further.
• The long-term financial effects of such a decision could be significant. Seek individual and independent advice on the many ways that such a decision could affect your financial well being.

Can employees volunteer to take leave without pay?

For SPA and EPA employees, an employee must exhaust accumulated vacation/bonus leave before taking leave without pay. Employees can volunteer to take leave without pay, however, it may set expectations that savings would result in job preservation and we cannot assure that. The university needs to find permanent savings, and the savings from this type of action would be temporary, one-time savings.


Can UNC Asheville, or the University System or state employees pay a higher portion of the insurance cost?

No, this is determined by the State Health Plan. Any change would require legislative action.


Can UNC Asheville or the University System or state employees take a reduction in benefits, fewer holidays, less earned leave, different insurance coverage, etc?

For SPA employees, the State Personnel Commission controls the number of holidays and leave accrual rates. Legislative action is required to modify health and retirement benefits. Our campus does not have authority to change any of these benefits.


Can UNC Asheville offer early retirement?

The only option currently available is the phased retirement program for faculty. However, there is ongoing discussion at the state level about opening phased retirement to other employment categories. We will share any additional information if and when we receive it.