G O V E R N A N C E

Faculty Council News: Council briefed on possible budget cuts
Employee Forum News: Forum shares input on UNC's pressing needs

The economy will likely get worse before it gets better. For the University, that soon could mean tighter budgets, starting with announced cuts in non-recurring state funds at the end of this fiscal year that may soon be increased from 2 percent to 4 percent.

The size of the budget cuts – and how the University should respond to them – was a focal point at the Oct. 10 meeting of the Faculty Council.

“Now is the time to find out how well prepared we are to make the right decisions for our University and to position ourselves for the recovery,” said Chancellor Holden Thorp.

Thorp said that he, along with Executive Vice Chancellor and Provost Bernadette Gray-Little and Vice Chancellor for Finance and Administration Dick Mann were working closely with the UNC General Administration to carefully monitor the situation to be prepared for whatever comes.

Earlier this month, Mann and Gray-Little sent a memo to vice chancellors and deans about the prospect of facing a non-recurring 2 percent cut in state appropriations through the end of the fiscal year.

Gray-Little said chances were good that an additional non-recurring 2 percent cut would be announced in the next few days. She said the net effect would be that the University would get 4 percent less of the funding it was expecting when the fiscal year began.

“Now is a time for us to support each other,” Thorp said.

Retirement plan changes
Another matter that generated intense conversation at the meeting was the reduction of available vendors for individuals’ 403(b) plans from seven to two. The change, which will go into effect Jan. 1, will leave TIAA-CREF and Fidelity Investments as the two chosen vendors for all UNC system campuses. (See related story for more details.)

Many faculty members expressed dismay at the change, raising issues about the loss of trusted financial advisers and the inability to keep their money with a state-based vendor.

Brian Usischon, senior director of benefits and employee services, emphasized that the choices were narrowed in response to final 403(b) regulations that the Internal Revenue Service announced in 2007 for public colleges and universities.

Usischon said the changes thrust more responsibility on the employer to manage the 403(b) accounts of employees, in part, and the restriction of choices was part of the broader effort to make the accounts more manageable.

The 403(b) accounts are supplemental retirement programs that employees can choose to participate in. They are different from the Teachers' and State Employees' Retirement System (TSERS) that all SPA staff members participate in or the Optional Retirement Program (ORP) that faculty members can choose over the TSERS, Usischon said.

While all employees must participate either in the TSERS or ORP, each employee chooses whether to participate in a 403(b) plan, he said.

As of September, for instance, 2,745 employees, or less than a fourth of the total workforce, participated in a 403(b) plan.

Of these, 29 percent had their 403(b) plans with TIAA-CREF, while 21 percent had their plans with Fidelity. The high level of participation, coupled with the financial stability of each company and the range of investment choices offered were important considerations in the final decision, he said.

AIG Retirement, which currently has nearly 19 percent of 403(b) participants, was eliminated from consideration because of its financial instability even before the federal bailout of the company was announced earlier this month, Usischon said.

In other action, the council approved an Educational Policy Committee resolution to rename all Artium Baccalaureatus (A.B.) degrees authorized to Bachelor of Arts (B.A.) degrees, beginning in December 2010.

Student Body President J.J. Raynor and University Trustee John Ellison appeared before the Employee Forum on Oct. 1 to lay out the many challenges the University will face in the coming years.

Ellison said the UNC system would see the college-age population grow by 80,000 students by 2017. Carolina will face the prospect of potentially enrolling some 4,000 of those students, he added.

The student population will increase as the retirement rate for tenured faculty will double. In the next five to 10 years, it is expected that around 500 of the more than 1,700 tenured or tenure-track faculty will retire.

To deal with both issues, the General Assembly will have to provide money, Ellison said. Additional building space will be needed to accommodate the rising number of students, and additional faculty members will have to be attracted to replace retiring faculty and to hire additional faculty because of the increased enrollment.

How well the University responds to those challenges and other pressing needs, Raynor and Ellison said, will help determine whether it becomes an even stronger institution than it is today.

“We are here to listen to you,” Ellison told forum members. And forum members responded by offering their suggestions and ideas.

Employee Forum Chair Tommy Griffin said that the ideas forum members generated would “live on long after we are gone.”

“When was the last time we had an opportunity like this in this room?” Griffin asked. “So think about it and ask your questions.”

Ideas shared at the meeting will be included with those that Raynor and Ellison are collecting from an array of people as part of the Carolina: Best Place to Teach, Learn and Discover initiative (see Administration).

During the summer, the pair began talking with students, staff, faculty, alumni and others. Trustee Chair Roger Perry and Chancellor Holden Thorp handed Raynor and Ellison their assignment in July. They will continue holding conversations through the year and forward their recommendations to the Board of Trustees in the spring. 

Vice Chair Brenda Denzler wanted to remind the University that it also has an aging corps of vital staff members, and serious attention needs to be paid to this group. One stone that could kill two birds, she added, would be free tuition at any UNC system institution for dependents of permanent employees. That would entice many people to work here, she said, and just as importantly would encourage more people already here to stay.

Secretary Marshall Dietz said the University would be strengthened if administrators emphasized the needs and contributions of staff as they do faculty and students. “Staff is always an afterthought,” Dietz said. “We need to do more. When Chapel Hill moves ahead, we need to move everybody ahead.”

Todd Hux from Facilities Services talked about putting money into merit pay. It exists on paper, he said, but not in people’s paychecks because funding for it has never been allocated by the General Assembly.

Alan Moran, also from Facilities Services, suggested offering reduced tuition to Carolina students who agree to work at the University for several years after they graduate.

Ryan Greenway, from the dean’s office in the College of Arts and Sciences, said affordable housing in Chapel Hill would help attract young faculty and staff members to work here.

Mike McQuown from the School of Public Health said the University would be better if people were treated more fairly across the board. “Folks are ignored,” he said.

Raynor and Ellison thanked forum members for their input and said their comments would be posted on a Web site developed for the initiative, bestcarolina.unc.edu. People can submit ideas to Ellison at Blount2@aol.com and Raynor at jjraynor@gmail.com.

In other action, the forum gave final approval to a set of guidelines that delegates to the UNC System Staff Assembly must follow.

It also approved a resolution from Denzler that calls for University Advancement to include at least two staff-oriented proposals as the University plans for the next major fundraising campaign.