Washburn University Board of Regents
SUBJECT: FY2003 Budget Guidelines
The Administration developed guidelines for the FY 2003 budget in consultation with the Regent's Budget and Finance Committee whose last meeting was July 10.
The Budget Guidelines include a budget for tuition, sales tax and state aid revenues, a recommendation for performance increase policy for faculty and staff, and selected recommended operating expense increases.
Based upon Regents Budget and Finance Committee consultation, President Farley will present the Budget Guidelines at the July 24, 2002 meeting.
(date) Jerry Farley, President
BUDGET GUIDELINES REPORT
JULY 24, 2002
Developing budget guidelines is a critical step in the University's annual financial planning process. These guidelines become the road map for how change will affect the University. The University can adjust to its environment through reasoned and effective decisions that will systematically effect change, or it can be swept along by changes in the environment to which it must react without planning. Budget guidelines become the watershed between these two courses of action.
The budget for FY03 will recognize environmental changes and continue to adjust, refocus and move the University forward. By setting guidelines, the Board will authorize the University administration to proceed with a more exhaustive process. Campus leaders will make literally thousands of individual budget decisions that will result in a comprehensive budget following these guidelines and accomplishing desired outcomes. The Board will see that comprehensive budget later this fall.
Two major issues must be addressed now for the FY03 budget planning process. These are the general salary program and the level of tuition. There are several other basic decisions which impact these two global issues:
program priorities, and
Faculty and staff are the University's primary resource. Combined faculty and staff compensation totals almost 80% of the University's budget. If the University is to maintain the quality educational experience it desires for its students, the faculty and staff compensation package must be competitive. This is the only way the University can continue to attract and retain the highly qualified personnel. Thorough comparative salary surveys have been completed and reveal our salaries lag behind comparable institutions and other market comparisons. Thus, salaries and wages must be one of our budget priorities. Even so, other program initiatives must be funded as well. The final budget proposal to be prepared from these guidelines must successfully balance all these priority needs and initiatives.
Decision: Increase overall faculty and staff salary total. Funding available depends on other revenue decisions.
Recommendation: To maintain competitiveness with other Kansas institutions, increase overall faculty salary and non-faculty salary and wages total based on performance. Since every individual's salary increase is based on performance, and performance awards are not based on the current salary of the faculty or staff member, no overall average percentage is meaningful. Performance awards will be distributed to all faculty and staff based on the attached FY 03 Performance Pay Proposal.
Decision: Base budget on stable, decreasing, or increasing enrollment projections.
Recommendation: The most recent years' enrollment history indicates full-time first-time enrollment and transfers will continue modest increases. Part-time enrollments will stabilize somewhat because of demographics and the economy. Total projected enrollment for FY 03 is based on actual Summer 2001, Fall Semester 2001 and Spring Semester 2002.
Decision: Determine the tuition rate for FY 03.
Recommendation: Tuition totals 37% of the University's operating revenue. In order to provide funding for salary increases and other program improvements, a $10.00 per credit hour increase is proposed (9.09%). Washburn's tuition is:
below the national average for similar institutions,
competitive with Kansas State and Kansas when all fees are considered,
has increased less than the rate of inflation over the past ten years, and
has decreased as a percentage of Kansas per capita income over the past ten years.
Decision: Funding for priorities other than salaries.
Recommendation: While salaries are the top priority, other initiatives must be funded. Resources will be set aside to fund increases in priority programs such as Scholarships, the AIS project, women's soccer, and other select academic and athletic programs, mandatory increases in utilities and health insurance, and selected one-time allocations.
Sales tax - FY 01 actual collections adjusted for the 10.07% fifteen-month decline in collections - $622,356
Tuition - increase $10 per credit hour excluding Law - $1,527,410
Tuition - increase due to FY 02 unbudgeted enrollment increase - $844,000
State aid - same as FY 02 SB345 funding - $0
DRAFT (2% Pool)
FY 03 Performance Pay Proposal
July 3, 2002
The following methodology is proposed for awarding performance-based pay increases for faculty and staff for FY03. (The language used in this document is more readily applied to staff employees rather than faculty employees, but it is hoped that the translation is easily made.) The methodology described, which was the result of numerous discussions among faculty, staff, administration and members of the Board of Regents for its FY02 implementation, is based on two fundamental principles:
Principle #1: Keeping staff/faculty compensation competitive is a University priority.
Principle #2: Wage/salary increases should be based on performance.
(Note: Where salaries or wages in certain positions are too low for reasons not related to performance, adjustments to position salary level will be made separately from the performance evaluation process.)
Performance pay increases will be awarded using a multi-tier system.
Tier 0: Performance during the evaluation period meets only minimal
expectations. In such instances, no pay increase will be granted, but a
performance improvement plan will be put in place to enable the
individual to perform satisfactorily all of the functions of his/her position.
Tier 1: Performance during the evaluation period meets only minimal
expectations. Such individuals will receive a .50% increase to base
wage or salary, and a performance improvement plan will be put in
place to enable such individuals to fully meet the expectations of their
Tier 2: Performance during the evaluation period meets expectations.
Expectations of staff and faculty of Washburn University are very high,
but most individuals meet or exceed these expectations. Those
individuals whose performance meets expectations will receive a 1.5%
increase to base wage or salary.
(Note: This increase is a recognition of satisfactory or better
performance and helps keep wages and salaries competitive, thereby
aiding in the retention of employees. It is not a cost-of-living
adjustment, nor is it automatically awarded to every employee. Also,
please note that this 1.5% increase is NOT in addition to the Tier 1
increase of .50%.)
Tier 3: Performance during the evaluation period exceeds expectations.
The remainder of the wage/salary increase pool will be distributed to staff
and faculty based on the performance evaluation systems in place in the
various units, on a dollar rather than a percentage basis. Staff and
faculty whose performance has exceeded expectations as evaluated
by the methodology adopted by their academic or administrative unit
will receive a Tier 2 1.5% increase to base wage or salary plus additional
wage or salary increases based on the level of performance achieved.
There must be a meaningful differentiation between levels.