The university finished last year with an operating surplus of $2.2M due to exceptional enrollment in graduate and degree completion programs, and to the salary and retirement cuts which were still in effect at the close of the fiscal year. Without the cuts the surplus would have been $1.2M. Either way, this is a significant improvement, as three of the previous four years finished with deficits. With enrollment continuing strong we are projecting a small surplus for this year.
This progress is due to the hard work and sacrifice of faculty, staff and administration. Thank you!
We continue, however, to face financial challenges. Most every one of us has experienced FPU’s need to improve its financial health in one way or other. Until this year many of us shared in salary cuts, and we are still at a 2 percent retirement match instead of the 6 percent we enjoyed five years ago. Several departments are short of staff, and we continue to lose valuable employees because we can’t pay enough. We are reminded each year to be frugal in our spending. We have an aging infrastructure with minimal savings set aside to cover the cost of maintenance and replacement, and we have not, until recently, planned for an operating cash reserve.
Our financial health definitely needs to improve. Because it relates so strongly to our ability to recruit and serve our students, recruit and retain employees, and serve our community, President Jones has made sustainable financial health a strategic priority and has the strong support of the FPU Board of Trustees and President’s Cabinet to achieve this.
In October 2018 we restored the salary cuts. Next will be the third faculty step promised to those involved in the transition to faculty rank seven years ago. Following this, as finances permit, we will balance restoring the retirement match, funding a cash reserve and taking care of deferred maintenance. Ultimately, we want to provide more competitive salaries and regular cost of living adjustments. Along the way we will need to comply with California’s minimum wage increases.
To pay for these, along with a surplus to cushion the unexpected, will require $6M per year.
Meeting this need will require strategic changes in how we operate. President Jones has established task forces on enrollment, retention, advancement and improving academic efficiencies to work on this. We will also continue to work on controlling operating expenses and financial aid. In addition, I encourage each of you to explore ways your own department can positively impact enrollment, retention, advancement or costs. In all of this we need to look for long-term strategic solutions that will result in a thriving university.
The university leadership is committed to achieving these goals and facilitating the needed changes. As Dr. Joe noted in a recent letter to the community, “Our work in the academy is about the future. We are committed to building systems that will strengthen our ability to empower students in succeeding. Change creates anxiety for many, and relief for others, but with corporate care it can build strengths that have been dormant in a community.”
We have many strengths, and we have the will. Given the determination and commitment of the president, board, cabinet, and faculty and staff, I am confident that we will make significant progress toward sustainable financial health over the next three years.