In an effort to provide information to our membership regarding the present budget situation and the subsequent non-renewal of contracts, the AAUP Executive Council submitted a list of questions to Provost Kerri Schuiling and VP for Finance and Administration and Gavin Leach on November 6th. You can read the questions and written responses from the administration by clicking here.

To help clarify some of the written answers, several members of the AAUP Executive Council met with upper administration on Thursday, November 12. Present at the meeting for the NMU AAUP were: Information Officer Dwight Brady, President Rebecca Mead and Data Analyst George Wilson. Members of the Administration who attended and provided feedback were: Assistant Provost for Institutional Research, Planning and Assessment Paul Duby, Controller, Sandy Haavisto, Assistant Provost for Undergraduate Programs Dale Kapla, Vice President for Finance and Administration Gavin Leach and Provost Kerri Schuiling.

What follows is an abridged transcript of that meeting. We are still seeking additional information regarding the criteria used for staffing courses.

Academic Affairs was required to take a 1.54 million dollar reduction. According to Provost Schuiling, the deans asked for cuts proportional to size of their respective budgets. According to Schuiling, departments were cut depending on “what the deans asked them.”

Mead: “You are saying the discretion was left to the department head?”

Schuiling: “Like it always is.”

Wilson: “If you compare courses in Winter 2015 to Winter 2016, some departments had the exact same course offerings and some saw really big declines in the number of course offerings. So were those all made by department heads?”

Schuiling: “Department head recommendation to the dean. From faculty meetings we have been at, faculty were well aware of what was going on. The department heads always seemed to me to be talking to their faculty and hadn’t had anybody express concern about that.”

Brady: “Well, faculty in HPER have been expressing concern.”

Schuiling: “So, if you are talking about the HP classes, one of the things we looked at was where else people can get these classes, and what was discovered is that a lot of those course are offered in the PEIF. This does mean you need a PIEF pass, but we are looking into ways that all students can have access to that if they wanted.”

Brady: “So, why is it that we see huge drops in HP, English, Education classes and no reductions in other departments?”

Schuiling: “Perhaps they were more efficient in their scheduling, I don’t know. I mean, there are some places where you could cut. English had an awful lot of reassigned time, and they began to look at whether they really needed that reassigned time. So, they did have a lot they decided they didn’t need. As a result, a faculty person previously having four to eight credits of release time is now teaching full-time.”

As we continued our discussion, Provost Schuiling stated, “If we are down again (down with regard to enrollment), I’m going to ask the Deans for recommendations on further cuts.”

George Wilson asked, “We are presently at the lowest level of full-time faculty in over a decade. If this continues, are you concerned about what this could do to our student to faculty ratios?”

Schuiling: “You would expect our faculty numbers to be lower because we have lost nearly a thousand students during that time.”

Duby: “We grew faculty when our enrollment was growing. As the enrollment is now shrinking, it makes sense that we need to adjust the workforce to match what the enrollment is.”

Brady: “What do you say to people who are in term positions? These are talented people who don’t know if they will have a job after their contract expires.”

Schuiling: “For fall, they are never notified until spring. At least that’s the way it worked when I was Associate Dean. I never knew…but generally speaking, I’ve always known the university to provide staffing if I had the rationale, I had a full class, they gave it to me. I never had them tell me no. I was always able to teach the courses the students needed. Some terms have been told, you’re going to get a new contract, some haven’t been told anything, because we are waiting to see what those numbers are. But there are some that will not be offered a contract. And what I’ve said to the deans, tell your department heads if those individuals are asking, probably right now it’s not looking good. We are looking at the SCHs and trying to align it with the faculty equivalents that we have. We are trying to make sure that contracts that aren’t being issued, that there’s not going to be fallout, that there’s going to be courses available that people can teach. We are double-checking, the president has asked for more data.”

Haavisto: “None of us save money by not teaching courses, I mean if we have 20 students, we make money on teaching courses. So it is not a cost saving measure, not to teach.”

Mead asked about the elimination of vacant full-time positions in response #4.

Schuiling: “Like the ERIP positions, there were a lot of those that were given up that won’t be refilled, but its dependent on the student enrollment in those areas.

While it is true enrollment has been declining since 2006, George Wilson pointed out that according to data from Institutional Research, the number of administrators is up 25% since 2006. He also pointed out the number of administrators has gone up from 127 to 137 in the past year. While deans and department head numbers were flat, the increase was accounted for by the addition of other management positions.

Members of the administration were skeptical of the numbers. After reviewing the data we provided, Provost Schuiling said the data were correct but outdated. According to her interpretation, the increase would have been one instead of ten in the past year.

We moved on from this point to the issue of the 9.4 million dollar refund from the Michigan Office of Retirement Services. Dwight Brady asked, “The 9.4 million was placed in what the administration calls the retirement fund. Does this mean we can never access this refund?”

Leach: “At the end of last fiscal year, we had a 36.2 million liability in MPSERS, and as they had that error, the money comes back into the institutions, but it also increases our liability because they offset it in the books.”

Brady: “You said the money went into a retirement fund, what is the difference between a retirement fund and a reserve account?”

Haavisto: “We created a “cost center” and it’s a deficit by about 35 million dollars. We didn’t take any of the departmental carry forwards and sweep it in and try to make the money less. It’s 35 million, and it will go up by the 9 million we got back, so it’s now up to 43 million. And what we need to do is build that into our budget. It’s not built in. In essence we recover a part of that (deficit) every year. It’s like a loan payment, where you create a loan at the bank and they send you a monthly bill and you set aside a portion of your monthly expenses to pay that, so we are hoping to recover that huge deficit balance over the next 23 years.

So, their billing error was in fact that, over time they had been charging us more for our loan payment than was scheduled. So, instead of sending us a bill for 500,000 it should have been 400,000. So the bank has been accumulating a prepayment on a loan. They don’t legally have the right to do that when you have a loan payment. You still owe the loan, it’s a matter of who is investing the cash.”

Dwight Brady asked, “So, there was some latitude for how universities could use the refund from the Michigan Office of Retirement Services, correct?”

Leach: “There was some latitude, the issue though is how it gets recorded. Sandy Haavisto added, “It’s not revenue, it’s just an increase in your loan balance.”

Regarding the balance, Haavisto said, “It’s been an increasing expense every year. It’s averages about 300,000/ year increase. The current annual expense is 5.2 million, they are telling us it could go up another 1.5 million over the next five years.

If we closed the university tomorrow, and I had to solve all the debt that is out there, the first people that would get all the money are the bondholders. And the bondholders, we owe 98 million dollars to. We have roughly 58 million in cash to pay them.”

So, what did we learn from this meeting? We confirmed Academic Affairs was cut by over 1.5 million. What is still not totally clear is how the budget cutting was implemented. We are told it was to be handled at the departmental level, but we still see large imbalances between what some departments cut and others did not. This indicates there were some directives based on SCH and efficiency of scheduling. Provost Schuiling did say departments were cut depending on, “what the deans asked them.” The cuts were not across-the-board. As a result, some departments made significant cuts while others were untouched.

The cuts may not be completely over, and we will learn shortly about the status of many term positions. Department heads and faculty members must be able to defend these positions by stressing the enrollment tied to each position.

We will double-check the data on administrative increases, and our data analyst George Wilson is also finalizing data on course availability comparisons between W16 and W15.

The issue of the 9.4 million was explained to a point of some clarity. In short, the NMU Administration decided to invest the money rather than simply give it back and reduce 9.4 million from the MPSERS liability. This is why the 9.4 million can be listed as additional liability on the books. In reality, the money is possessed by NMU and earning interest (presumably enough interest to pay the annual increase in the liability for the foreseeable future).

We hope the insights offered in this transcript have helped you better understand what is happening and perhaps how and why it is happening.