MSSU president lays out plans to trim spending

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July 22, 2008

Anonymous The Joplin Globe Tue Jul 22, 2008, 08:17 PM CDT

By Melissa Dunson

mdunson@joplinglobe.com

Despite learning that her employer, Missouri Southern State University, had nearly $8 million in budget deficits over the past three years, Susan Simmons walked away from a staff meeting Tuesday with a smile on her face.

She learned that she was not losing her job as the coordinator of MSSU’s teacher education program, but that tough times are ahead for all the university’s employees. And she said she appreciated knowing both.

Simmons was among more than 100 MSSU staff members who attended a summit on the institution’s financial situation. The meeting also was staged, officials said, to dispel a rumor that the university would be cutting jobs.

After 19 years of working at the university, Simmons said, the candid financial information presented during the summit made her feel respected.

“I just feel valued, and it’s a very, very nice feeling,” she said.

Pat Lipira, head of the kinesiology department and former softball coach, said she also appreciated that the university’s finances were discussed so candidly during the meeting. It didn’t make her feel alarmed, but informed, she said.

“I think it’s important that this is not a secret,” Lipira said. “I appreciated the candor and openness in letting us know what’s going on.”

Bruce Speck, who was hired earlier this year as MSSU president, conducted two identical sessions of the summit Tuesday for staff members and will conduct another presentation when faculty members return in the next few weeks.

He laid out the university’s current financial situation, how it got there and what he wants to do to improve it. Speck said he wanted to present the information to dispel rumors, and to create a sense of teamwork and ownership within the university’s employee base.

“I didn’t bring you here today to talk about cutting jobs,” Speck said. “We’re choosing not to do that because we think it’s not a good idea.”

Speck said his goal is to maintain the current number of university employees despite the fact that employee compensation and benefits compose the university’s largest expense at $35.3 million, or 51.5 percent of total expenditures. But Speck said employees should be prepared to take on added responsibilities as some vacant positions will be left unfilled.

Last year, MSSU had revenues of $66.1 million but spent $68.5 million. Administrators made up the difference by dipping into the university’s bank account. The same thing happened during the 2006-07 year, but the deficit was $4.4 million.

That trend looks to continue, as Speck said the projected deficit for the 2008-09 year is $2.6 million. It cannot continue like that forever, he said. Reserves before the 2008-09 deficit is paid total $5.8 million.

The path

State appropriations have dwindled over the past 30 years, according to Speck, who said the state went from paying 69.4 percent of a student’s tuition to 34.5 percent. All the while, operating costs such as those for utilities, wages and supplies continue to climb.

“We’ve had a decrease in funding and an increase in cost, and I don’t see that trend changing anytime soon,” he said.

As state funding decreased, Speck said, the university kept tuition constant and actually dropped it in 2006. At the same time, he said, the university continued or increased the amount of scholarships it was giving, and continued to hand out raises to staff and faculty members.

Speck said dropping tuition and increasing scholarships to increase enrollment did not work. MSSU increased its tuition by 20 percent from 2002 to 2004 and lost about 100 students, but actually made a profit. During constant tuition rates in 2004 and 2005, the university continued to lose students, and it also fell back into deficit spending.

In 2008, the university had about 5,600 students enrolled, compared with about 5,900 in 2002. Students are paying $33 more a credit hour now compared with then, and the university had a $2.4 million loss last year.

“It was a common-sense notion that has shown not to be effective in this case,” Speck said.

Missouri Southern spends $5.3 million a year, or about 23 percent of the money that tuition and student fees bring in, on MSSU-funded scholarships. That percentage should be more like 15 percent to 19 percent, Speck said, in comparison with other public universities.

“We are buying students to get our numbers,” he said.

The future

Earlier this year, the Board of Governors gave Speck a mandate to cut $500,000 from the 2008-09 budget. So far, Speck has shut down the Regional Economic Development Center that former professor Tom Simpson ran before taking a job in Iraq. Speck said the center was supposed to be self-supporting, but it cost the university between $80,000 and $90,000 last year.

Speck anticipates 2008-09 being a “lean” year for Missouri Southern, and said 2009-10 could be even tighter, but he thinks some of the changes being made now should start to show progress during that 2009-10 school year. At that point, he said, the goal is to begin rebuilding the university’s reserves.

Other cuts that Speck hopes will add up to a big difference include:

n Behavioral changes within the staff, including raising thermostats across the campus to 75 degrees, and turning off lights and computers when they are not being used.

n Paring down events such as the faculty dinner that cost the university $6,700 last year and the international party that cost $7,000. Both of those events will still take place, but in less expensive forms. Speck also said the university is discontinuing its practice of sending flowers to employees because of sickness or a family death.

n Cutting departmental costs by reducing each of their operating budgets by 10 percent. Speck said half of the reduced budget will be given to the departments in the fall, the other half in the spring.

n Reducing the travel Missouri Southern pays for, both within the area and internationally. Speck said nothing with the athletic schedule will change at least for another year, and he still wants to pay for students to travel internationally, but possibly reduce the program to only one trip per student.

n Changing how scholarships are given to do away with “stacking” scholarships and paying students more than the cost of tuition. Speck wants to reduce the amount of scholarships the university funds and supplement those with private donations. The scholarship changes are still under discussion, and Speck said whatever is decided won’t go into effect until the 2009-10 year.

Capital projects

Missouri Southern State University President Bruce Speck said the school is able to continue construction on the new Beimdiek Recreation Center, the new health and sciences building, and the renovations to the mansion building during the current financial crunch because they are being paid for out of the capital revenue fund. That money is designated by the source for specific construction projects and cannot be used for general operating expenses.