Hoping for Better Weather

By Brian Johnson
Assistant Vice President, Facilities, University of Idaho

Like many of your institutions, the University of Idaho is challenged with declining financial support from the state, mid-year holdbacks, and a grim financial outlook for the coming year. The tough economic times have resulted in two holdbacks imposed over the course of the current fiscal year. The reductions have not been nearly severe as some of the actions imposed in other states.

All told this year, we’ve reduced the Facilities budget here with one-time holdbacks in the amount of about $1M, or about 9% of our operating budget, not counting utility costs. These reductions were achieved through cancellation of some programmed renovation & repair projects, as well as through limiting expenditures against all operating budgets. Furthermore, the state has rescinded funding for a few repair projects totaling about $2M, which is about 2/3rd of the typical annual amount of project funding we see from the state for major renovation/repair needs.

Additional restrictions imposed this year include a hiring freeze, restriction of all non-essential travel, and tight controls on general operating and capital equipment expenditures.

In looking ahead to FY10, we expect a 7% permanent reduction in state funding for general education needs. The University chose to limit the reductions to be imposed on the Facilities group, recognizing the substantial negative impacts resulting from a 20% permanent reduction imposed a few years back. Accordingly, a $325K reduction is expected (approximately 3%) in Facilities, which will result in a loss of only three positions. Layoffs will not be required due to the hiring freeze imposed earlier this year.

Across the wider university, most areas are anticipating some levels of cutbacks in staffing and non-tenured faculty, along with a significant reduction in programs and degrees offered.

There is a new conversation emerging from the legislature at the time of this writing, suggesting that on top of the cuts described above, we may see an additional 5% in labor cost reductions imposed in FY10. This may be in the form of a 3% salary reduction for all state employees, with an additional 2% to be achieved through not filling vacant positions, through furloughs, personnel cuts, or other means, at the discretion of each agency.

We’ve taken a few steps to offset the incessant erosion of Facilities operating budgets. We are in the midst of implementing a number of campus improvements through our energy savings contract with McKinstry Essension. A number of lighting a building level HVAC improvements have been completed, improving the energy efficiencies. Further improvements are underway to include construction of a wood chip storage facility to improve energy recovery in our wood fired boiler, construction of a new chilled water storage tank and chiller system, and installation of variable frequency drives on the chillers at the main chiller plant.

We’ve also established a facility maintenance endowment fund, wherein ten percent of all private funds raised in support of capital projects must be placed in the endowment. Proceeds from the fund will support broad campus repair and maintenance needs, and will not be restricted to the facility for which the funds were raised. Although the fund has yet to generate any substantial income, it is a needed step that will serve the university well in the long term.

In the meantime, this is a dark and difficult economic storm to endure. We continue to strive to properly serve the facility needs of the campus, and remain hopeful for brighter weather on the horizon.