Chief Financial Officer Dan Durbin told senators the university entered the academic year with a balanced budget with expectations to generate sufficient revenue to cover expenses. These costs included last fall’s 1% salary raise and $1,000 bonus for university employees, and the return of retirement contributions to pre-COVID levels.

“We also had a provision for an additional 1% raise in the spring; we said we would revisit that raise based on how we were doing from a tuition revenue standpoint,” Durbin said. “We have looked through the fall semester and through spring registration. The good news is our tuition revenues are higher than last year; the challenging news is that those tuition revenues are below budget by almost $7.9 million.”

Despite this challenge, administration maintained the additional raise would be within the best interest of the university. The 1% raise was authorized by the Board of Trustees and went into effect in March. Senators were informed that a financial plan was developed to ensure adequate funding for the institution-wide pay increase. Tactics of this financial plan included withholding a 3% contingency back from the units to cover unforeseen costs, as well as an increased emphasis on the importance of funding available to colleges and units through the University of Louisville Foundation.

“While we have tactics to ensure that raise, we still continue to work on enrollment not only for spring, but for the fall and beyond. Applications look really encouraging at the moment, but it’s all hands on deck to make sure we can get back to our original estimates on enrollment so the university can be on good, solid footing next year,” Durbin said.

Kari Aikins, director of Total Rewards for UofL, provided senators with information on the . Segal, an HR consulting firm with expertise in higher education, is currently reviewing data collected from the employee survey. The survey closed March 1, and an aggregate report of this data, which Is being generated by Segal, will provide input on remaining aspects of the HR initiative.

“One of the projects that this data will be used for will be our guiding principles and compensation philosophy, which we want to make sure aligns with our employee feedback and incorporates that input. We will also be using the data as we move through benchmarking, development of the career progression, leveling and some other components of the study that are still to come,” Aikins said.

Committee reports and a of the virtual meeting can be found on the . The next Staff Senate meeting will be held April 12 via Microsoft Teams.

President Bendapudi and Dan Durbin, chief financial officer, provided senators with an overview of the . The budget was approved by the Board of Trustees on June 24, 2021.

Highlights of the budget included the return of employer retirement contribution to pre-Covid levels and an additional $3 million in endowment funding for the university. Durbin reported that for the second consecutive year, no increases were made to employee health insurance premiums or to employee parking permit fees.

Senators were informed about three proposed program closures. The Academic Programs committee recommended the closure of the master of arts in French, language and literature and the graduate certificate in translation and interpreting, as well the joint executive master in business administration degree previously offered in conjunction with the University of Kentucky’s Gatton College of Business and Economics. All three proposed program closures were approved and will go into effect on Aug. 1 of this year.

Two new academic program proposals were also presented to the Faculty Senate. The proposed programs include a bachelor of science in general studies through the College of Arts and Sciences and a master of science in health professions education through the College of ����ֱ�� and Human Development. The suggested implementation for the bachelor of science in general studies is the fall semester of 2022 and the master of science in health professions education is suggested to start for the spring semester of 2022. Both programs received approval from the senate.

Committee reports can be accessed on the . Due to technical difficulties, a video of the full meeting is not available, but a recorded portion of the meeting can be found .

The Faculty Senate does not meet in the month of August; the next Faculty Senate meeting is scheduled for September 1 via a hybrid format with the option of remote attendance via Teams, or in-person attendance at Ekstrom Library’s Chao Auditorium.

Executive Vice President for Finance Dan Durbin unveiled the proposed budget at a Board of Trustees workshop in late May. UofL is projecting an overall operating budget of $1.32 billion from all funds, including a general fund budget of $536.3 million.

Durbin stressed that the budget aligns closely with the university’s strategic plan, particularly focusing on making UofL a great place to learn by channeling significant funding toward student affordability and additional investments in academic areas

Returning students will pay less to attend UofL in 2021-22

The budget includes a $104 per semester tuition increase for all undergraduate and graduate students. However, that increase will be more than offset for continuing undergrads in 2021-22 by a minimum $400 per student per semester grant from UofL through CARES Act funding. Highest-need students can receive a maximum award of $1,500 in the fall with a mean award value of $781 across the continuing undergraduate students. Continuing graduate and professional students may also apply for CARES funding.

“Student affordability was priority one for us,” Durbin said. “Just as we did this past year, we are directing our CARES Act funding directly into our students’ pockets.”

In addition, students will see no increase in housing, dining or parking fees this year.

And, for the second consecutive year, UofL has purchased 700 laptop computers to support first-time students with the highest financial need.

Faculty and staff to receive salary bump, no increase in health insurance

The budget proposal also includes significant support for faculty and staff. Durbin noted the budget includes $5.2 million for a compensation supplement program. That includes a 1% salary increase as of August 1 and another potential increase in January based on the university meeting certain enrollment and financial targets.

Faculty and staff support also will include:

• Employee retirement benefits, reduced as part of cost-reduction efforts in 2020, will be restored on July 1 to an automatic university contribution of 7.5% for eligible employees, with an additional 2.5% match for a like employee contribution
• No increase in employee health insurance premiums for the second consecutive year, with the cost increase entirely borne by the university
• No parking fee increase for faculty or staff; monthly rates as low as $26 per month for full-time employees
• No change in the employee tuition remission plans (100% for eligible employees and their dependents)

“Even in tough financial times, it is vital that we invest in our people, whether they’re students, faculty or staff,” Durbin said. “We always wish we could do more, but this represents a sincere effort to support all members of our campus community.”   

Fiscal 2021 ends with balanced budget

Durbin and Rick Graycarek, assistant vice president for budget and financial planning, told the trustees the university expects to end Fiscal Year 2021 on June 30 with a balanced budget due to prudent financial planning and controls on spending throughout campus. Increased grant funding and better-than-expected enrollment were among the reasons cited for the strong budget.

The balanced budget is particularly important, Durbin said, as it shows a rebound from the financial crisis passed to President Bendapudi and her team by prior administrations. Only three years ago, the university’s poor financial status led to potential sanctions from the Southern Association of Colleges and Schools (SACS), which accredits higher education institutions, including UofL.

“What this administration – and this university – has done in the past three years is truly remarkable,” Durbin said. “The entire campus should be proud. Every corner of campus contributed to this financial turnaround.”

The university’s strong financial performance has been acknowledged by the world’s largest credit rating agencies. Both S&P Global Ratings (formerly known as Standard and Poor’s) and Moody’s Investors Service recently confirmed UofL’s progress by enhancing its financial outlook from “negative” to “stable.” That recognition helps reduce the interest rates on some university debt and further enhances the university’s profile in higher education. The tuition rate increase still must be approved by the Kentucky Council on Postsecondary ����ֱ�� this month.

The university is utilizing both centralized and unit-level mitigation strategies to ensure it can continue to deliver on its mission, said Vice President for Finance and Administration and Chief Financial Officer Dan Durbin, who led the budget presentation. To meet potential revenue or expenditure challenges during the fiscal year, each academic and support unit has set aside 5% of its annual general fund budget into a contingency account. Units also will restrict expenses to essential items only.

Undergraduate students can expect a modest 2% tuition rate increase. At the same time, UofL has equalized the cost of online courses to match in-person tuition rates, which will reduce tuition costs for many students; plus there will no longer be a different rate or surcharge for individual online classes, no matter the course load.

For faculty and staff, UofL’s FY21 budget calls for:

• Restoring salaries to pre-COVID-19 levels.
• Eliminating pay reductions implemented over the summer and restoring all salaries to pre-pandemic levels; the university will continue to allow for future pay reductions to be implemented only if the need arises.
• Eliminating university-wide furloughs while extending or instituting, on a limited basis, unit furloughs only where there is a clear need to do so.
• No increase in employee health insurance premiums.
• Modifying the university’s contribution to employees’ retirement plans from 7.5% to a 2.5% base, and maintaining its additional 2.5% match to employee contributions.
• No parking fee increases.
• Maintaining a 100% tuition reimbursement benefit for eligible employees and their dependents who enroll in classes at UofL.

UofL President Neeli Bendapudi highlighted the university’s commitment to help students, faculty and staff in the coming year.

“As we move into fiscal year 2021, my commitment remains that we will further bolster our efforts to provide student, faculty and staff assistance and do everything possible to make sure our Cardinal family is cared for in this difficult time,” Bendapudi said.

For Fiscal Year 2019, revenues were up by 5% to about $1.1 billion, and UofL’s net position increased by $23 million, a significant increase over the prior year’s performance of $3 million.

Durbin said the university’s financial position remains strong with total assets and deferred outflows of $1.3 billion.

One area UofL has struggled with in recent years has been with liquidity, or cash on hand. But that has also improved and our current ratio has increased from 1.32x from 1.11x, Durbin noted.

“We are continuing to make progress in all areas. We have had some revenue decreases, for example with state support and foundation numbers, but all other revenue sources were higher than they were in 2018, which is all good news,” Durbin said. “Especially at the HSC campus, which has turned a corner. 2019 was a critical year and everything is pointing in the right direction.”

Durbin also noted that Q1 revenues so far are up by about 2% year-over-year, despite some challenges from enrollment numbers.

“We have more students, but they’re taking less credit hours,” he said.

A budget planning and monitoring committee has been charged to advise the president and her leadership team about the allocation of current and future financial resources and ensure they are in alignment with the university’s mission and strategic plan. Durbin is a co-chair along with Provost Beth Boehm. Three subcommittees have been formed, including a funding request subcommittee, budget model allocation and administrative activity review.

University-wide budget goals, policies and priorities that the committee is exploring include:

• Corrective budget actions to avoid deficits
• University enrollment targets
• Employee compensation changes
• Fringe benefit changes
• Evaluation of university investments in programs and activities (cost vs. benefit)
• Other changes identified by the provost and CFO
• Investments in design and use of space
• Items recommended by subcommittees
• Enhance peer understanding of our budget by being involved

For the final bullet point, Durbin said the administration is working hard to involve more people in the budget planning and monitoring process.

“The more people involved, the more people will understand the budget and be able to help and provide input,” he said.

Heidi Cooley-Cook provided an update about the inaugural Cards Come Together event in October. She said the collection drives were particularly successful, and most of those donations stayed on campus. The Cardinal Cupboard collected nearly 2,000 pounds of food, which should get the pantry through winter break.

Conservative estimates indicate that 500 students, staff, faculty and alumni were involved in the week of service. The executive committee recommends that the event continue, but to also consider other dates and times that are not associated with homecoming.

Carcyle Barrett provided an update on the bylaw revisions, noting that they are not quite ready for a first reading, but senators’ opinions about the live document are invited prior to the February meeting.

The , and includes an update from President Bendapudi and a summary of the new internal budget model. Additionally, a student wellness committee has been formed to help create a healthy environment for all students.

Chair John Smith’s . He pointed out the increasing challenge of filling committee vacancies and encouraged senators to consider volunteering for those positions.��

“As leadership continues to advocate for a ‘seat at the table,’ we need to ensure we have people willing and desirous of filling those positions,” he said.

Vice Chair , as are most standing, ad-hoc and university-wide .��

The Staff Senate won’t meet in January. The next meeting is Feb. 10 in Chao Auditorium.

Durbin said the budget is meant to acclimate the Board of Trustees to the university’s priorities, but serves as a “status quo placeholder” this year, since we are on the verge of implementing a strategic plan. The two priorities are to be stable and predictable so we can start the work on that plan.

The proposed budget entails $23.8 million of costs, including a 2% salary increase. Durbin noted that this current year’s budget had $20 million of costs supported by one-time items, which is unsustainable.

“This budget is based on some assumptions, including the assumption that enrollment stays stable. If enrollment stays stable, we’re in good shape,” Durbin said.

There are tuition and fee increases requested to fund some priorities. The proposed face-to-face tuition increase is 2.5% for undergraduates, while the online learning fees have been restructured to match the current per-hour rate plus a $50 tech fee.

“We have been careful not to price ourselves out of the market,” Durbin said, showing a slide of our tuition, which remains lower than the University of Kentucky and Eastern Kentucky. Our proposed rates for the 2020 budget are also lower than UK’s proposed rates, including out-of-state, which is 2.5% at UofL compared to 6.2% at UK.

“We don’t think these fee increases place us at a competitive disadvantage,” Durbin said.

Durbin also noted that 62% of all beds will cost less in 2020 versus 2019, so housing costs will also be lower.

He also discussed the foundation’s spending policy and how it is expected to impact the university. The foundation had to rein in some spending this year to ensure the endowment funds stayed intact and were positioned to grow.

“We looked at every line of the budget. We will have some pain this year, but in the longer term, we will be good,” he said. “We think of this year as a re-set,” Durbin said. “In our current state – with stable enrollment and adjustments and tuition and fees – we have a balanced budget.”

Durbin’s full presentation is .

President Neeli Bendapudi also provided an update for the senate, stating that she feels better about the budget than she did three months ago.

Still, administrators did recently discover the $20 million base budget covered by one-time dollars and had to make significant adjustments accordingly. One of those adjustments was in closing the Humana Gym. Doing this, Bendapudi said, saves UofL about $1 million a year.

Bendapudi apologized to the Faculty Senate for the way the administrators handled the decision-making and communication around the gym’s closing.

“I sincerely believe this decision was the right thing for the university. But we failed during the process. I will own that and I promise it will not happen again,” she said. “We’re learning. We’ll do better.”

Bendapudi plans to host a retreat this summer with her senior leadership team to discuss a new rubric for these types of decisions, including who provides input, who approves and how to communicate.

Keith Sherman, executive director of the UofL Foundation, which owns the Humana Gym building, added there was no easy fix to this issue.

“The facility was well under water, so it became a question of how we stop the bleeding as quickly as possible,” he said.

After going through each line of the budget, administrators have also discovered that the same dollars were promised to multiple deans.

“We don’t want this to happen again. We want a budget committee to be actively engaged and for every single person on our campus to be able to pull up our budget and understand it,” Bendapudi said.

Bendapudi provided an update from the CPE, encouraging all faculty members to be mindful of our performance funding model.

“The best thing we can do is make sure our students succeed. It’s the morally, ethically and financially right thing to do,” she said. “What we’re hoping is that no student graduates without an internship, co-op or student learning/experiential opportunity. That gives them the best chances.”

Bendapudi also briefly discussed the recent Passport deal, stating that she is confident it was the best outcome for the university and for the community. Because of non-disclosure agreements, she is still not able to talk much about the negotiations surrounding Jewish Hospital.��She ended, however, by stating that she feels comfortable and confident.

Provost Beth Boehm also provided an update, noting that Vice Provost Mordean Taylor-Archer is retiring. Her areas include international and diversity. Diversity will be moved under the president’s office, and an open call for applications will be held for the diversity position with a short timeline.��Boehm admitted that our culture needs to be improved so we stop losing faculty of color.

“We have to work on our environment so people don’t even look for jobs elsewhere,” she said.

Meanwhile, the international office will be under the provost’s office.��

Michael Mardis, dean of students, has agreed to take on the international office in the interim and will work to figure out what that office will look like moving forward.

. The next Faculty Senate meeting is July 3 in Chao Auditorium.