UCA leader: Preparation pays off

Despite pandemic, fiscal ’22 budget $7M above year before

FILE - The campus of the University of Central Arkansas in Conway is shown Oct. 27, 2008. (AP Photo/Danny Johnston)
FILE - The campus of the University of Central Arkansas in Conway is shown Oct. 27, 2008. (AP Photo/Danny Johnston)

CONWAY -- When the covid-19 pandemic hit last year, University of Central Arkansas President Houston Davis braced for the inevitable financial hit, just like all the other higher-education institutions.

But, more than a year later -- after the virus emptied dorms and classrooms and sent employees home -- the university's fiscal 2022 budget begins July 1 $7 million higher than the budget for the previous year and it includes a 2% raise for its employees.

"Preparation really does pay off," Davis said in a recent interview. "I think preparing for rainy days, preparing for those inevitable cycles that organizations and finances will go through, is important."

Unlike UCA, some colleges and universities around the state -- such as Arkansas Tech University in Russellville and Philander Smith College in Little Rock -- are laying off employees after a particularly brutal financial year.

Davis credited a large part of the positive financial outcome to UCA Chief Financial Officer Diane Newton.

"You've got to go back even before I got here in 2017. There was some clear thinking about resources," Davis said. "Dianne and her team certainly were very intentional about making certain to put a name and a function to every dollar and saying, 'Let's be very responsible about where we put ourselves financially.'"

Newton said Davis started off on the right foot.

"I knew he was the right one for the job when he said he'd like to do zero-based budgeting," Newton said, laughing. "You can do it a number of different ways, but the way we approached it was really kind of a soft approach. What we do is we went back to zero, basically."

Newton and her team went to all the department heads and asked for a spreadsheet of specifically what they spent money on over the past several years.

"We had an opportunity to talk through that," Newton said. "It was really, really helpful. It helped the academic departments and it helped us understand where the money was going, what they were using it for."

CAMPUSWIDE EFFORT

From that foundation, Davis quickly implemented the Resource Optimization Initiative, a campuswide effort to optimize the UCA budget in the face of unpredictable enrollment trends and limited state funding.

"The [Resource Optimization Initiative] process has really been about us thinking about one year, three years, five years, 10 years out. Every decision that you make has an impact on each of those windows," Davis said. "It's really thinking about our decision-making process around resources -- not with an eye toward Little Rock or Washington, D.C., bailing us out -- but what is it we can do within our existing resources? What is it that we can do within our likely scenarios of enrollment going forward?"

The fiscal 2022 UCA budget of more than $193 million is a 3.76% increase, or about $7 million, over the previous year's budget of about $186 million.

The major revenue generators, such as tuition and fees, state appropriations and auxiliary revenue, all saw increases.

The projected revenue in 2022 for tuition and fees increased from just more than $84.1 million in fiscal 2021 to $85.6 million for fiscal 2022.

The $1.5 million surplus comes after the tuition and mandatory fees were raised at the end of last month by the university's board of trustees.

Tuition and mandatory fees for UCA undergraduates will rise by 2.41%, going from $9,338 to $9,563 for 15 hours per semester for two semesters. Graduate student tuition will rise by 2.18%, going from a cost for 12 hours per semester for two semesters of $8,753 to $8,944.

The changes in tuition and fees included in the above costs were technology, facilities and fine/performing arts, as well as a slight increase in the general registration fee.

State appropriations are projected to jump by 10%, going from $55.2 million for fiscal 2021 to $60.7 million for fiscal 2022.

FEDERAL VIRUS AID

UCA, as well as other colleges and universities across the state, got a significant shot in the arm when the U.S. Department of Education announced last month that $350 million in federal coronavirus relief aid would be flowing their way.

UCA is set to receive nearly $27 million, including a minimum of nearly $13.5 million for student grants.

Auxiliary revenue increased from $44.3 million to $44.8 million for fiscal 2022.

Maintenance and operation expenses for the college are expected to increase by $1.1 million, jumping from $30.8 million to $31.9 million, to fund increases in technology contracts, food service and housing contracts, and other smaller adjustments.

The largest increase in expenses for the university's new budget is seen in employee salaries and benefits, growing by $2.3 million, from $80.5 million the previous year to $82.8 million for 2022.

Included in that number was $1.7 million toward a 2% cost-of-living adjustment for all UCA employees.

"The budget framework continues to align existing resources toward supporting student success, investing in strategic positions and initiatives, building financial reserves, and retaining employees at a competitive market salary," Davis said.

TRUSTEES PRAISED

Davis credited the university's board of trustees for its support and for making hard decisions during a tough year.

"Their support has meant the world to us," Davis said.

Newton said the university will continue on its path to save money and cut expenses where needed to weather the aftermath of the pandemic.

It's not over, she said.

"It's going to be something that we see a reflection of for the next probably three years, if I had to guess. But we're preparing for it and we know that we'll make it," Newton said. "We have right-sized our budgets to the point that there are things that won't get done, but we'll do what has to be done and what needs to be done. And it will still be a great experience for our students."

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