Nearly 300 Urbana-Champaign employees have applied for the voluntary separation programs the campus hopes will save enough money to have a long-term financial impact.
But just how big an impact the programs will have won’t be known until this spring.
Information session
Voluntary Separation Incentive Program
10:30-11:30 a.m. Feb. 19
Room 1025 Beckman Institute
Registration not required
The Voluntary Retirement Program for faculty members and the Voluntary Separation Incentive Program for academic professionals and civil service employees offer qualifying employees a lump-sum payment equaling 50 percent of their current annual base salary.
On Monday, associate provost for human resources Elyne Cole said that 33 faculty members had applied for the retirement program and 263 other employees had applied for the separation incentive. Faculty must be retirement-eligible to participate in the faculty program. Academic professional and civil service employees may opt for resignation or separation although at this point these employees have not indicated which they are considering.
Applications will be reviewed in April. Employees have until April 2 to apply for either program.
The separation programs are long-term solutions rather than short-term ones such as the furlough days, campus officials said at an informational meeting for employees Feb. 11.
Michael J. Andrechak, associate provost for budget and resource planning; Cole; and Richard Wheeler, interim vice chancellor for academic affairs, have been hosting the meetings to answer questions about the ongoing process of managing the finances of the university.
Wheeler said that President Stanley O. Ikenberry and Urbana Chancellor Bob Easter have been working on political partnerships at the state level while others on campus plan for a $50 million shortfall for next fiscal year.
“We’re making sure that we’re not making cuts to make cuts,” Wheeler said. “We have to protect the (caliber) of the institution.”
The university is using cash reserves to make payroll, and while furloughs are “absolutely” a short-term measure, the retirement and separation programs are long-term strategies, officials said.
Wheeler said the number of employees who are applying for the separation programs is close to what administrators hoped it would be
Simply put, the university has more people on its payroll than it can afford to pay, Wheeler said.
At the meeting, someone asked whether civil service employees will take furlough days.
Cole said that the current contract does not allow for the same furlough days that faculty members and academic staff members must take. At the time the furlough program was put in place, the only programs available for civil service employees would have been short-term layoffs, she said.
Currently, the university is pursuing a furlough policy for civil service employees, she said.
Without the policy, only layoffs are available.
“It’s a complicated process,” she said. “But there is no definite plan on the table.”
Despite the anticipated cost savings from the programs, some employees at the Urbana-Champaign campus have received notices of non-reappointment.
Cole said 26 notices had been given out in the last six weeks but also said it’s typical to ask departments to send out such notices this time of year, she said.
“It doesn’t really say whether it’s more or less for this time of year,” she said.
Budget facts
At the end of January, the state was $431 million behind in payments to the UI. The Urbana-Champaign campus’s share was about $200 million, which represents about 28 percent of its operating budget. Eighty to 90 percent of those funds are for salaries.
To meet payroll and other obligations, the university is using all unrestricted cash, but this is causing even more financial strain because the university is losing millions in interest earnings.
For now, the UI is continuing these measures so that it can pay employees.
W. Randall Kangas, associate vice president in the University Office for Planning and Budgeting, said the state’s commitment to a payment plan would make guaranteeing payroll much easier.
“While failure to meet payroll is not imminent, we also don’t want to have to create deficits that would take years (or more) to repay,” Kangas said.
State funding
Presidents and chancellors from all state universities sent a letter last week to Gov. Pat Quinn and Comptroller Dan Hynes asking them to urge state leadership to make public university funding a priority.
“The presidents and chancellors of Illinois’ public universities write today to urge your commitment to a reliable schedule for the payment of the state appropriation and swift action to resolve the state’s financial crisis that now threatens our long-term viability,” the letter said.
The letter said public universities provide economic development engines that could lead the state out of economic crisis and provide new jobs in developing technological sectors.
“Every dollar spent on higher education is repaid many times over in job-creating activity at all levels. During periods of economic recession, universities help set the stage for recovery though investment in human capital and discoveries that create new industries and transform existing ones. In short, Illinois’ public universities are keys to sustained job growth and economic recovery,” the letter said.
The letter ended by asking the public university appropriations to be fully funded for FY2010 with a reliable payment schedule.
Ikenberry delivered a speech with a similar message to the Civic Federation of Chicago on fiscal sustainability Feb. 9.
“The federation is widely recognized for your long-standing advocacy of social and fiscal responsibility in government, including your recent ‘Fiscal Sustainability’ initiative. Never in history have we needed you more,” Ikenberry said.
He asked the federation to hold elected officials accountable for state appropriation promises.
“You can help,” Ikenberry said. “Now is the time for all of us to speak out and help Illinois face its challenges and build consensus around constructive solutions. You can help the people of Illinois be aware of what is at stake. And you can support policy makers who are willing to face up to the difficult challenges and lead Illinois forward.”
Online resources
University administration has established a Web page for universitywide information on furloughs, voluntary pay reduction and separation programs. It is a source for frequently asked questions, contact information for human resource and employee relations professionals and media coverage of the state and university budget situation.
In addition, each campus has set up a Web site with campus-specific budget information. Stewarding Excellence@Illinois recently was created to provide a central source for information and communications about Urbana campus efforts and activities. According to a mass e-mail from Easter and Wheeler, “the site will serve as a single, easily accessed place to find current budget news, regular updates on related projects and initiatives and an archive of our activities along the way.” The site also will offer a place for employees to contribute ideas and ask questions about the budget process. Employees can subscribe to receive weekly notices when new information is posted.
