Murray State Regents Approve Budget, Discuss New Initiatives

Jun 8, 2019

Credit Matt Markgraf / WKMS

Murray State University's Board of Regents approved a budget for the next fiscal year and a multitude of other initiatives in a lengthy meeting and packed agenda on Friday as the current year comes to a close.

Regarding a looming increase in pension contribution rates (for regional universities) should there be legislative inaction on pension costs before July 1, President Bob Jackson said Murray State doesn't have the luxury of waiting around to see what would or wouldn't happen. He said the university supports comprehensive pension reform.

"We’ve got to address the KERS system at Murray State University,” Jackson said, calling the issue overwhelming and “a backbreaker.” He said it’s the number one issue facing most of the public universities in Kentucky. He said Murray State has both a fiduciary responsibility and a moral obligation to address KERS as it relates to employees in the system, “to make sure it’s healthy and to make sure we’re not continually putting people in a system that’s 12 or 13 percent funded.”

Performance funding is another challenge, Jackson said, adding that this will be addressed "aggressively" over the summer, referring to meetings on this topic with the Council on Postsecondary Education.

Jackson stressed the need for a "laser-like" focus on enrollment as well as deferred maintenance. He noted the shifting of government funding for higher ed and the increasing need for private support.

The board approved a contingency plan should there be no special session this summer and KERS rates go to 84%, as would otherwise happen on July 1. Murray State would use reserves to cover the additional cost and would pay back the reserves over time.

Current Fiscal Year

Vice President of Finance and Administration Jackie Dudley said the current fiscal year is projected to have a smaller shortfall than earlier estimates of $4.2 million. This is due, in part, to a slight increase in Spring enrollment. She said the university is projecting to be around $2 million down and that this amount would be covered by budgeted contingency of the same amount.

Regent Dan Kemp is chair of the finance committee. He said the current year budget came out better than he had initially figured. He said the university managed the year well in reducing expenses and noted that the shortfall was not as much as earlier estimates. “All in all, I think under the circumstances it’s a good financial picture, a good report.” Kemp said if the university can increase enrollment, then he believes the financial picture will begin to look better.

Next Fiscal Year

President Jackson said the next budget will have a $3.8 million expense reduction, partly due to pension costs and appropriation decreases. The budget has a more "academic focus" with new investments, including online programs. It includes a $1 million increase in deferred maintenance, a 1% COLA and other pay increases, a 1% undergraduate tuition increase ($322,194) and a new 'asset preservation fee' (which will cover the increase for maintenance projects). The board approved investing $2.1 million in online programs and courses over three years ($862,000 this upcoming year). 

The budget has a decrease in state appropriation of $903,200.  Vice President Dudley said this is a combination of performance funding from last year and the current year that the university is not getting. 

Part of the $3.8 million cut went toward funding the COLA and other pay changes, Dudley said. Those adjustments amount to around $700,000. She explained that the number of FTE positions eliminated amount to 21. These were vacancies, retirements or transitional contracts, she said. Overall, FTEs are decreasing by 102. That large number is due to the outsourcing of dining. "Because of that, we gain in our benefit budget approximately $900,000 dollars. So our benefit budget decreased just by taking those out," she said. The elimination of positions totals $2,105,933. Unit reallocations and expenditure eliminations total $1,069,976.

With dining services outsourced, $12,652,695 from that line is gone in the budget. Factored into the budget is $7,266,872 in expected income from Sodexo. 

Regent Kemp asked Dudley if she thought the budget was conservative given that it is considering flat enrollment, and an increase in the Fall semester would come out ahead. Dudley said, “It is very conservative in my opinion because we do have a very small growth factor built in. It is small.” She said it’s a tight budget, but noted that it still contains a $2 million contingency that can provide some support.

“It’s a guide,” Dudley said. “It’s what we’ll continue to use throughout the year. What this budget does not do is that it does not provide for an increase in contributions to KERS,” she said, in reference to the possible increase to 84%. "It's very difficult to cut almost $4 million out. It's going to take longer term planning if that comes to be," she said.

Enrollment & Outreach

The final Spring 2019 headcount is 8,667 (up from 8,637 in Spring 18). The undergraduate headcount was 7,365 (down from 7,375) and the graduate headcount was 1,302 (up from 1,262). The preliminary Summer 19 headcount presented as of “Day 14” is 2,402 (down from 2,411). Vice President of Student Affairs Don Robertson said, however, that more up-to-date numbers show total headcount is now up 1.3%.

The first time freshmen goal for Fall 2019 is between 1,450 and 1,500. “We have a number of positive indicators we’re looking at in Fall enrollment,” said Robertson, pointing out that Summer Orientation registration is one of the strongest indicators for Fall - and it’s up nearly 11%. As of May 31, The number of admitted students is up 1% from the previous year. Campus visits and new student housing numbers are also up.

Regents approved revising freshman admission requirements, upon a recommendation from President’s Commission on Admission Requirements, Waivers and Scholarships.

Marketing consulting firm Stamats recommended Murray State place a greater emphasis on career opportunities, career services, career outcomes and internships. Other recommendations from their presentation include conveying how programs are delivered and enhancing online programs as well as how to better reach prospective students and their parents.

The firm also recommended new academic programs in cyber security, social work, statistics, engineering fields, actuary sciences, hydrology/water science, public health, psychology concentrations and organizational leadership.

The university is working on a proposal to simplify undergraduate tuition rates for Fall 2020 as a means to assist in the recruiting process. The model would move to four rates: a rate for Kentucky students and border counties, a rate for Tennessee students, a rate for other regional states (Alabama, Arkansas, Illinois, Indiana, Mississippi and Missouri) and another rate for other domestic and international students. Other "rewards" and scholarships are involved in the proposal that will likely be further discussed in future meetings.

New Centers And Programs

The board approved establishing the Center for Computer and Information Technology. Provost Mark Arant said the center has an opportunity to expand the “umbrella of TSM” (telecommunications systems management) to include more computer-related fields. He said the center has much potential for grants and activities such as esports and hacking tournaments for students.

The board approved establishing the Center for Autism Spectrum Disorders. A goal of this center is to address the regional need for timely and affordable diagnostic services. The center will provide support services for parents and schools through workshops and eventually direct care. (More about this center)

The board approved new academic programs: Bachelor of Arts in Culture and Language Studies, Bachelor of Arts/Science in Human Services and a Master of Science in Cybersecurity Management. 

Housing

John Whitney Jr. of the architecture firm Luckett & Farley presented a report identifying costs for the potential renovation or replacement of residential colleges Springer Hall II (Old Franklin), Old Richmond, Regents and White.

In total project costs: Springer II would cost around $21.4 million to replace or $17.9 to renovate. Old Richmond would be $15.5million  to replace and $13.4 million to renovate. Regents: $28.9 million replace, $21.3 million renovate. White: $26.1 million replace, $19.9 million renovate.

These residential colleges were identified due to their aging nature. The presentation was in the context of considering potential public-private partnerships for some housing, described by President Jackson.

Jackson said P3s are an attractive model and a land lease type option may involve replacing facilities in total or getting them off the balance sheet. Next steps include making potential recommendations at a future board meeting.

Other Topics

Murray State Racers are celebrating an historic year, with numerous accolades across the athletics department. Notably, Director of Athletics Kevin Saal pointed out the $277 million worth of media coverage involving the Racers Men’s Basketball Team and star player Ja Morant.

The board approved “Woods Park” as the name of the area previously occupied by Woods Hall, which has recently been demolished.

Regents elected Dan Kemp as the next Regent Chair and Jerry Rhoads as Vice Chair. Current Chair Susan Guess is stepping down after serving on the board for nine years. Also departing are Student Regent J.T. Payne and Faculty Regent Katherine Farmer. Replacing them are Trey Book and Melony Schemberger. The governor will appoint someone to fill Guess’ seat. (More about the board changes)

Watch The Meeting