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Published: 10/5/2013 - Updated: 6 months ago

$3M-$10M deficit looms over BGSU

Mazey seeks cuts, gets raise, bonus

BY NOLAN ROSENKRANS
BLADE STAFF WRITER
Bowling Green State University President Mary Ellen Mazey gives her 2013 State of the University address in the Donnell Theatre at the Wolfe Center for the Arts in Bowling Green, Tuesday, September 17, 2013. Bowling Green State University President Mary Ellen Mazey gives her 2013 State of the University address in the Donnell Theatre at the Wolfe Center for the Arts in Bowling Green, Tuesday, September 17, 2013.
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BOWLING GREEN — Bowling Green State University’s president on Friday announced the need for large budget cuts, and later was awarded a raise and bonus by the university’s board of trustees.

President Mary Ellen Mazey told faculty and staff in a morning email that BGSU faces budget shortfalls and will need to “significantly reduce” its operating budget. University leaders project a $3 million to $10 million deficit over the next several years, and the shortfall will be covered with budget cuts, not tuition hikes, Ms. Mazey said in a campuswide email.

“Simply put, our current operating model is unsustainable,” she said. “With student debt on the rise, we cannot continue to raise tuition to cover our costs. While we are aggressively pursuing new sources of revenue, it is clear that we must significantly reduce our operating costs.”

Ms. Mazey said in her State of the University speech last month the university’s operating model is unsustainable, and university leaders have said they did not want to put the burden of budget shortfalls on students through tuition hikes.

The university hired consulting firm Accenture for $500,000 to audit BGSU’s operations, evaluate programs, and identify cost-saving measures. The company’s report is expected in December. Ms. Mazey said the goal is to “achieve large-scale cost reductions without jeopardizing our core mission.”

“I understand that change can be disconcerting. It is important that we all be patient and all keep an open mind as we work through this process,” she said. “It is my hope that this project will provide a road map to a much brighter future for our university.”

She later defended the cost of Accenture’s contract, saying she expected the savings it finds will be much larger than the contract cost.

Chief Financial Officer Sherideen Stoll said a $3 million deficit for next fiscal year is the “best-case scenario.” The state is changing its formula for funding universities next year based on student success; a draft budget from the state showed BGSU getting $3 million more in state aid this year than it would under the new formula, Ms. Stoll said.

The university has lost about $30 million in state aid over the last six years, Ms. Stoll said, forcing significant reductions on campus. Any more cuts will be more difficult and complicated, which is why the university hired Accenture to help evaluate programs, she said.

“They do this for a living,” she said. “We don’t have that level of expertise.”

Ms. Mazey said Friday the university hopes to handle any potential job reductions through attrition. Layoffs, if necessary, would be based on performance, she said.

The BGSU Board of Trustees met at 1:30 p.m. and did not discuss the budget shortfall or Accenture’s contract. But after a nearly hour-long closed session — apparently to review Ms. Mazey’s performance — the board announced it was awarding her a 2 percent raise and $50,000 bonus.

Her base salary was about $383,000 before the raise, according to university figures. Her contract calls for her to be evaluated annually, and she can qualify for a performance bonus of up to 20 percent of her base salary.

Board Chairman Debra Ryan said Ms. Mazey met all the board’s goals. “It’s important for us to keep good leadership,” Ms. Ryan said.

Ms. Mazey was hired July 1, 2011, at an original base salary of $375,000. She received a 2 percent raise and $50,000 bonus last year. All administrative and classified staff were eligible for a 2 percent raise this year based on performance evaluations.

She said she appreciated the support shown by the board of her work, and said it was important that university positions, including hers, be paid a market rate to compete with other universities.

Contact Nolan Rosenkrans at: nrosenkrans@theblade.com or 419-724-6086, or on Twitter @NolanRosenkrans.



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