President Greg Postel presented to the UofL Board of Trustees at its May 18 meeting a university budget that includes no tuition increase in 2017-18.
The $1.238 billion budget includes $512 million in general funds, which support most of the university’s instructional and operational activities. Those funds come primarily from tuition and fees and from state appropriations. Non-general funds, primarily produced through affiliated corporations such as the UofL Research Foundation, the UofL Athletic Association and the UofL Foundation, will total about $726 million.
The budget addresses four priorities:
- Resolving a structural imbalance in the operating budget. The budget emphasizes efficiency in administrative operations, trimming travel expenses and implementing a hiring “frost” to more closely scrutinize the need to refill vacant positions.
- Keeping college affordable. The budget keeps tuition flat for all students and increases overall financial aid by $1.3 million. It also includes $2.5 million for the Credit for Credits program, in which students who complete at least 30 hours in an academic year receive a $526 credit toward the next year’s tuition. Students in the program will pay less in 2017-18 than they did last year.
- Strategic allocations. Using a $12 million reallocation pool from a 3 percent across-the-board budget cut in the past year, the university will direct funding toward targeted areas including academic quality and student recruitment.
- Establishing a firm financial foundation for future years. The budget includes a revised forecast of revenues and expenses, as well as savings realized through administrative efficiencies and capture of vacant salary lines.
Postel noted that while the budget is tight, it will enable the university to continue moving forward.
Interim CFO Susan Howarth told the board that the university has taken actions to offset a projected $48 million shortfall in 2017-18. Those actions included reducing operational costs by $9 million to $10 million, realizing $10 million in efficiencies and economies of scale in the university’s procurement practices, saving $10 million through the hiring “frost” and using $17 million in one-time funds from the university’s partnership with KentuckyOne Health. The KentuckyOne funds will be replaced through operational efficiencies as a result of the transition of management of University Hospital and the James Graham Brown Cancer Center to University Medical Center.
Also at the meeting, Kentucky Council on Postsecondary Education President Robert King provided an orientation session on board membership. King stressed that trustees’ loyalties must lie with the institution rather than with any particular university leadership. He also weighed in on UofL’s current SACS probation, stating that he is “confident that all the things you’re doing … will take you off probation.”
In other action, the board approved:
- Creation of an ad hoc committee on tenure and nepotism policy
- Construction of a television production studio. Athletics will fund construction of the $8 million facility, which is required as part of UofL’s membership in the ACC
- A long-term ground lease and development of the Churchill Park property near the Lynn Soccer Stadium. The property will be used for soccer practice fields.
- A motion to empower Postel to negotiate terms of a revised Yum! Center lease with the Louisville Arena Authority.