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This year, faculty and staff members will not receive a mid-year compensation package intended to compensate employees who have not had a salary increase in the past four years.
At a Board of Regents meeting Thursday, Associate Vice President for the Office of Planning, Budget and Analysis Andrew Cullen said that the University has seen an estimated 145 percent increase in year-end Instruction and General fund reserves since 2008. But the Higher Education for Development (HED) organization recommends that 3 percent of the total I&G budget be in reserves, and UNM is still $500,000 short of that goal.
Cullen said FY 2012 year-end I&G reserves totaled about $46.6 million, as compared to a total of $19 million in 2008. He said that about $21.5 million resides in academic affairs and about $16.2 million resides in the University’s undesignated funds balance, which is the central reserve for the University.
But Cullen said the $16.2 million is designated for a number of commitments and dedications, including a one-time payment to employees in August that cost about $2.5 million. He said that after all dedications and commitments are applied to the reserve fund balance, about $8.7 million remains, which is less than the HED’s recommendation of 3 percent in reserves, which would amount to $9.2 million.
“We’re actually just a little bit shy of the recommended HED reserve,” Cullen said.
Faculty and staff members have not seen pay increases in four years, and to help soften that blow, the University was trying to find a way to offer bonuses in the middle of this academic year.
Cullen said the administration considered using year-end reserves for uncommitted money that could be applied to the mid-year compensation package, but because the reserves are still less than the recommended amount, a mid-year compensation package isn’t possible.
“It’s been four years running now that we haven’t had any increases in salaries for our employees,” he said. “So we looked for uncommitted dollars and found that … one-time funds weren’t really an option.”
Cullen said the administration found that the University has had an increase in student credit hours, but because tuition and fee costs are the same for students taking anywhere between 12 and 18 credit hours, and because the University saw a decrease in graduate enrollment, the budget falls short of the HED recommendation.
According to the UNM Fall 2012 Official Enrollment Report, this fall students registered for a total of 340,000 credit hours, an increase of about 14 percent in student credit hours since 2008 when credit hours numbered about 298,000. But with graduate enrollment at about 4,500 students this year, the graduate enrollment has dropped about 8 percent since last year.
“What we see is that pooled tuition and fees are actually tracking just slightly below our budget, so although our student credit hours may be increasing, funding is not,” he said. “So based on those two factors, the administration can’t go ahead and look at a mid-year compensation package at this time and I know a lot of people may be upset about that.”
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Changes In Electrical Service
The regents unanimously approved a $90,000 budget increase to fund a project that will change electric service for the KNME TV station and Domenici Hall from PNM electric service to UNM electric service.
The project will save an estimated $76,000 per year in electricity costs and improve reliability for the two buildings that depend on electric service that is often inefficient.
Plans for the project were approved by the regents in November 2011, but unexpected costs required an increase in the budget, which was originally estimated to cost $660,000. The budget includes costs for creating underground electric lines that will supply the buildings with electricity.
The new lines are expected to be more reliable than the current electric lines, which are above ground, although the PNM lines will still be connected to both buildings to allow the PNM lines to provide electricity should the UNM lines fail.
At a Finance and Facilities Committee meeting Thursday, Budget Officer Vahid Staples of the Office of Planning, Budget and Analysis said the office received four bids in a Request of Proposal process, all of which were higher than the original estimated costs. He said that before a bidder was selected, the office tried to rearrange the budget but found that the estimated budget wasn’t feasible.
The new costs will be funded by $500,000 from the Physical Plant Department Utility Capital Reserves and $250,000 from the Physical Plant Utility Operation Carry Forward fund.
