During a follow-up cost-savings presentation to campus Tuesday, University of Northern Colorado President Andy Feinstein shared the university-wide options and the division-level cost-saving model that are under consideration to eliminate the $10 million structural deficit by fiscal year 2021 — the first step toward strategically investing in the future and “moving the institution forward.” 

Feinstein discussed the four strategies, which emerged from a campus-wide effort last fall that included soliciting campus for potential cost-saving ideas and extensive work to narrow the list to 13 options by the cabinet and further review by the President’s Leadership Council. In addition, Budget 101 presentations and feedback from a cost-savings open forum and online survey in January informed the process.

After considering all of the feedback, Feinstein decided to pursue these four strategies:

Dependent Tuition Waivers

Keep dependent tuition waivers at 100 percent for current employees, reduce it to 50 percent for anyone hired after June 30, and eliminate the dependent tuition waiver for graduate courses, with an exception for dependents enrolled by this fall. Tuition and fees would continue to be waived for employees to take up to nine undergraduate or graduate credit hours per year. “We are the only public university in Colorado that offers a 100-percent waiver for dependents,” Feinstein said. “But many people across our campus expressed tremendous concern about changing this. I heard you.”

Health Insurance Contributions

Reduce employer contributions, beginning July 1, to health insurance for exempt staff and faculty (the state determines benefits for classified employees. The would save the university about $700,000 per year and still keep the university at a competitive rate; premiums would increase $420 per year for individuals and $1,150 per year for families). While Feinstein said he struggled with this option and understands this is essentially a pay cut, health insurance is a significant cost for UNC, with the total cost of health insurance increasing 27 percent since 2013.  “As I have said to you before, I am committed to finding a way to address faculty and staff salaries as we move forward,” Feinstein said.

Faculty Early Retirement Incentive

Offer faculty early retirement incentives. The incentive, 50 percent of base salary and 18 months of health insurance, wouldn’t be a guarantee, meaning decisions would need to ensure that programs are not severely impacted. Cost savings will depend on how many eligible faculty participate. “Paying out the financial incentives will limit savings in the first year,” Feinstein said. “But after that, we could save as much as $1.2 million per year, depending on how workload is addressed.”

Division-Level Cost Savings

If the above strategies are implemented, about $8.5 million in division-level savings would still be needed to resolve the budget deficit. That figure could change if UNC receives less than the $4.2 million more in state funding next year that Gov. Polis proposed last week (that proposal includes a restriction on raising tuition.) Fluctuations in enrollment and utilities also factor into the budget and also could affect the amount. To set the division-level goals, Feinstein discussed these previously shared approaches. The model that will be used looks at IPEDs data for categorical expenses across the university and compares UNC to eight peer institutions identified in 2011. Nine Colorado competitors were also reviewed across the spending categories. Using this approach, resulting division cost-saving goals would be between 3.1 and 7.4 percent, with over half of divisions close to 5 percent. Feinstein has told vice presidents to “make use of vacant positions and natural attrition,” and that “layoffs will have to be very carefully considered” in “making every effort to limit the human impact” of decisions. “Many decisions need to be made by people who really understand their effect,” Feinstein said. “I am not passing my responsibility on to the VPs and deans but working with them, empowering them, and leveraging their expertise to address and overcome our short-term challenges while strategically planning for the future. This will be a team effort.”

Feinstein and chief financial officer Michelle Quinn will work closely with vice presidents in reviewing budget proposals through February. These guiding questions have been created to help vice presidents in making budget decisions:

• Are we making students and their success a priority? 
• Have we made every effort to limit the human impact? 
• Have we considered the effect on the rest of the university? 
• How will this affect our work to support diversity, equity and inclusion? 
• Is the decision sustainable? 
• Have we done enough homework? 
• Have we engaged the right people?

“Our first priority is our students and their success,” Feinstein said. “We also know that our faculty, staff and administrators are critically important to fulfilling our success to our students. We have to keep this front and center as we identify savings.

“Next fall, we will come together as a campus to affirm our values and articulate our vision for the future of UNC. The work we’re doing now is a stepping stone to that long-term thinking.”