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February 9, 2010

Present:  Chair Overton, Past Chair Martin, Secretary Hergeth, Parliamentarian Weiner, Provost Arden; Senators   Akroyd, Argyropoulos, Bernhard, Carver, Croom, Edmisten, Fahmy, Fleisher, Franke, Genereux, Hatcher, Havner, Headen, Khater, Kidd, Kiwanuka-Tondo, Krim, Kotek, Levy,  Murty, Paur, Roberts, Sawyers, Townsend, Walker, Williams

Excused:  Senator Anson, Auerbach, Miller-Cochran

Absent:  Senators Hemenway, Kocurek, Poling, St Amant

Guests:  Lee Fowler, Athletic Director; Betsy Brown, Vice Provost for Faculty Affairs

1. Call to Order
Past Chair Martin called the ninth meeting of the 56th session to order at 3 p.m.

2. Welcome and Announcements
Past Chair Martin welcomed Senators and Guests. Announcements

Past Chair Martin announced that Chair Overton is out today serving on jury duty.  He welcomed Senator Mark Walker, the new senator from the College of Management. 

The General Faculty meeting will be held on March 23, 2010.  Please contact a member of the Executive Committee if you would like to add an item to the agenda.

Past Chair Martin announced that the elections for Senators and for Chair-Elect of the Faculty are coming up.  The Chair-Elect serves one year as Chair Elect, two years as Chair, and one year as Past Chair.  It is a four year commitment.  The announcement will go out to the full faculty.  Nominees will be presented to the Faculty Senate, and the Faculty Senate will narrow the nominees down to two who will then stand for election by the General Faculty. 

Executive Committee
Past Chair Martin updated the faculty on items discussed in the Executive Committee meeting.   

Much of the discussions were agenda items for future meetings. There were also some requests for  an update on the Korean campus initiative. 

Past Chair Martin stated that some discussion came to the Executive Committee from the Committee on International Programs, requesting a way to get international programs and activities into the T&P guidelines.  He stated that this topic has come up in the past, and while nothing excludes international activity, some people would like to have something stated more explicitly.  

Past Chair Martin stated that there was discussion about the non tenure track contracts.  Apparently one college thought they had instructions that non tenure track contracts could only be renewed for one year, which is not the case.  They can be up to five years, but the issue is how to deal with those contracts in tough budget years. 

Past Chair Martin stated that ideas for future agendas included things like formalizing some mechanism of governance and how to ensure policies come through this body appropriately.  There was discussion on how to make this the best place to work and a number of things related to benefits.

Past Chair Martin stated that the committee also talked a lot about the budget.  There are a lot of budget items that go to the deans, and the Senate has received a lot of good budget updates in terms of the college distribution. A frequent question is what happens at the next level.  Another topic is how the Senate communicates what we do and what the needs of campus are?  These are some of the issues that were talked about with some regularity and there were some suggestions that we might want to start a practice of regularly inviting a dean to the Senate meetings to begin to deal with some of that connection and communication.  These are all questions related to how should faculty governance best function. 

3. Approval of the Minutes, January 26, 2010
A motion passed to approve the minutes.

4. Remarks from Interim Provost Arden
Update on the Budget
As you are aware about 55% of the North Carolina budget comes from income tax, and that is not resolved until around April or May, so we really do not have a good estimate of where we are, but we have to start the planning process now.

The revenues are a little behind predictions for the year, the predictions for the year are a little low from what they were last year.  We have been told that it is highly unlikely that there will be another reversion in the current budget year.  That does not mean that we will not have a spending freeze.  The directions that we are giving to the Deans and unit directors are:

Provost Arden stated that we have to be very sure that these funds get expended, and we have to be sure that they will be expended by June 30th; therefore those letters will be going out.  The amount of money going to each college varies considerably, from three hundred to eight hundred thousand dollars, depending on the needs of the colleges. 

About one month ago the Governor sent a letter to the state budget office that instructed them to ask all state units to prepare 3,5 and 7% scenarios going from the current year into the 2010-11 fiscal year.  That went to GA, and GA negotiated with downtown, and they now have asked all the campuses to provide a 5% reduction strategy or plan. 

Provost Arden stated that we have been asked for planning purposes to prepare a 5% permanent budget reduction as we move forward into the next year.  You will remember when we went from the last fiscal year into the current fiscal year we did a 10% reduction scenario.  Of that 10%, 5 % was a permanent reduction, which went back to the state.  The other half we used to put back for the 5% one time reversion out of the current budget year that the governor asked us to do.  The concept was that we would be banking that money for future years.  Not all of that 5% is available because there are things we have to take care of out of that 5%. So for example going from last year’s budget to this year’s budget there are certain inflationary increases built into that budget.  These are mostly things like increases in utilities and those types of things.  This year those things were not funded by the state, so we had to fund some of that ourselves out of the 5% that we are holding back.  There was a list of other things that we had to hold back as well. What we estimate roughly is that about one half of that 5% is going to be available to put toward a 5% reduction plan for the coming year.  We have gone to each of the colleges and asked them to develop a 3% permanent budget reduction scenario.  That 3% plus the 2.5% that we have left from the permanent reduction that we have already implemented would be enough to cover the requested 5% as we move forward.

Provost Arden stated that when we talk about a 10, 5, or 3% reduction we are talking about a reduction in the state appropriation. If you remember last year, the state appropriation was $425M in the academic affairs budget line, and for a 10% budget reduction that translated to a $42.5M reduction.  When we actually apply that to the budgets that the Provost has or the Vice Provosts have or the Chancellor has, their budgets and even the Academic Affairs budget are larger than those appropriations, and the reason is that appropriation coming from the state contains some things that are not in the academic affairs budget. But it does not contain some things, the most important of which being tuition and fees. 

Recap:  Going into next year the planning exercise is 5%.  We are going to meet that roughly with about 2% held back from the reduction out of the current year.  We are asking all the units to plan for another 3% and what that translates into is roughly 2.5% of your academic budget. Once we have all those facts on the table we will look at differential allocations, and when the final numbers come down, the Provost believes we should do like we have done it in the past. The likelihood that if we really do implement a 3% reduction we will find that most colleges are going to work around a one or two percent reduction. 

What things do you think will change?

Provost Arden stated that the reality is that as you go through subsequent years of budget cuts your flexibility is significantly diminished.  In other words going from a 2 to a 3% cut does not hurt nearly as much as going from a 5 to a 6% cut.  You start with using what we did last year.  We used up a lot of vacant positions last year.  You also use up a lot of potential flexibility as well, so we may have to look at that because some of the colleges that got hit harder in the last couple of years may not be able to withstand that kind of differential again.  There were some colleges that got cuts 2 to 3 times the percentage cut of other colleges.  We have to revisit that to see if we still want to apply those principles as rigorously as we have done.

May we see the recurring based budgets for the last 5 to 10 years?

Provost Arden stated that he thinks that is a reasonable request. 

What sort of timing is used with these cuts?

Provost Arden stated that we all talk about making cuts strategically and making pragmatic cuts, but at the end of the day the vast majority of our cuts end up being not across the board. They are somewhat horizontal because it is only a limited number of places where you get the money, and there is only a limited time frame to make those decisions.  One of the processes that we started six months ago was to try to increase some degree of responsiveness and efficiency in our system and recover some long term flexibility from being out of the cut, for example administrative cuts.  The problem is for those kinds of changes or even programmatic changes, the process that we have to go through is not over one budget year, it is a conversation that has to occur, has to involve the faculty, so it is not something that you can implement in one year. Sometimes many of the things that we do here, we do on a short term basis, which has always been concerning.  We started a process of trying to develop the long term years, but it is going to take some time to develop some of those recommendations.

Are we trying to protect this university’s core principles?

Provost Arden stated that the core principles are our highest budgetary priorities.  Historically when faced with these decisions, we tended to protect first and foremost undergraduate instruction, even at the expense of professional and graduate instructions, and certainly the expense of research. So when I talk about having to revisit principles, it does not necessarily mean that we have to change them or that I have a mindset about how they ought to be changed, but as you get deeper and deeper into cuts, these fundamental core questions do come about.  There is absolutely no doubt that graduate and professional instruction is getting hurt.  Where does that play in the big picture?  How do we make progress on both of those fronts at the same time?  How do we really become a top tier research university while we make sure that we stay a university that encourages instruction renovation and is very open to cores section of the North Carolina public?  These are very real questions and invariably when resources are very limited you have to make some pretty hard decisions.  You can’t hurt other core areas of the university.  We would like to think that we could do it all equally but the reality is that we don’t. 

Questions from Mike Levy   

It is one of the major issues that we face and at times our identity of who we are as a university and the issue of accessibility as well, and what is our role in the diverging population of the next generation of North Carolinians.  I think that there is almost no doubt that if the budget cuts continue or even as they are now, we will need to revise that plan that says we should hit 40,000 students by year 2017. I don’t know how we could do that with diminished resources.  The other part of this is not to just look at this in isolation, but to accept that there is an issue here of a growing population of North Carolina with a growing youth that needs to go to a high quality instruction, and how is that going to be met and what is North Carolina State’s role in that.  How do we fit into that and what is the right way of going about it?  It may well be that the model that we have right now are not models that are going to hold up in the future.  I don’t see how they are going to hold up in the future.

Is the move toward being a true liberal arts university dead?

Provost Arden responded that he hopes not.  I think it is going to be challenged at the moment.  His big concern is not the coming fiscal year, but the following fiscal year.  If you look at the data that shows the way the federal stimulus money buffered the impact of State funding on public institutions going from the 2008-09  to the 2009-2010 year, it was very significant and most of that stimulus money runs out within the next year or so. The deal is if the stimulus money is doing its job and the economy starts rebounding or re-growing, then tax revenues should kick in and the additional tax revenue should offset the withdrawal of the stimulus funds, but that is a big if.  The reality is if the economy still bubbles along and doesn’t really rebound and tax revenues don’t rebound for two or three years, at the time when stimulus money is withdrawn over the next twelve months, we are in deep trouble. 

Are you getting a sense that we are getting close to the vertical cuts where entire departments are being eliminated?

I would speculate that the cuts that we are talking about here or the length of the cuts that we have going into the next fiscal year, that major program elimination would not be necessary.  I think if it would go into the following year and the economy doesn’t improve and the stimulus funds are withdrawn, then we are starting to talk more about an additional 5, 10 or 15% cut.  I don’t see any alternative.  I definitely hope that that isn’t the case. 

Will you comment on the Korean Campus?

The Korea project that began at the beginning of the year held certain opportunities and I think it was worthy of a year of investigation and I think that it still holds opportunities. But I can tell you that not only are your concerns being heard, but I have voiced pretty much all of the same concerns myself.  Don’t think that I am not passionate about international globalization of this campus or that Korea would not be a good place to establish a strong preference among many other places.  The issue is that there are very many liabilities associated with this at this point and time and I have yet to see that a lot of those liabilities have been resolved satisfactorily, so there will be an action of the Board of Trustees and I think what you are going to see is that we are coming to the end of that planning .We want to be able to keep our options open, we want to be able to continue some level of planning over certain activities and we need to look at our options, but I think you are going to see us pull back somewhat and look at this very clearly and critically.  We owe it to ourselves and we owe it to our stakeholders to be very critical of these kinds of things.  I think at this point in time when we are very stressed for resources, when we really have to focus on our core mission here it is very important for us to spend our time and our resources depending how best we can do that and can some of the objectives of the Korea project be met in a less resource intensive, less risky way. 

There is a broader perspective that concerns me and that is that for the first three months on this job I was concerned because I didn’t understand where the specific project fit into our globalization strategic plan.  I finally realized that we don’t have a globalization strategic plan, but the reality is that we have a very good strategic plan as a university.  We have talked about what our priorities are and they are all right on the money.  You can go to any one of those including globalization and there is not a plan for what you mean by globalization, what tools will be employed and how you are going to get there. So it concerns me that we don’t go too far down any given path before we have that strategic plan figured out.  It may well be that developing a branch campus is great, but it could also be that that action is not a great strategy for achieving what we want to achieve.  It is high risk, high cost, high input, and definitely doesn’t have any greater output than some of the less costly and less risky ways of doing it.

My personal feeling is that at this point in our history, that the branch site may not be the most bang for the buck strategy for what we want to achieve. 

How are budget cuts down the road going to affect tenure?

Provost Arden stated that his philosophy is that it has no bearing what so ever.  He would never make promotion tenure decisions based on budgetary reasons. He personally does not think it should play a role.

5. Update on Administrative Process Review
Senator Sawyer stated that the Chancellor put together a Steering Committee back in October that was charged with identifying administrative processes in need of improvement or in need of streamlining.  Over the last three or four months the committee has met and  has evolved into a catch all for all types of issues and policies that are perceived to be a burden on faculty and staff because of burdensome approval processes or multiple layers or the process itself.  He pointed out that the most important piece of information on the handout is the URL www.ncsu.edu/finance/business/administrative-process/index.php.  He said that is the best place to find out what the committee is doing. 

Senator Sawyers pointed out that the committee has identified what they refer to as quick action or quick fix items such as cutting down on the levels of approvals required for travel reimbursements or travel authorizations.  Other items reviewed are modifying the External Activities Report to be more user friendly.  He stated that they are making some very positive improvements in a number of areas.  There is a link from the site to provide suggestions in a suggestion box where you can tell them concerns or issues you would like the committee to review. 

Senator Sawyers pointed out that the committee has made changes to some bigger projects such as the alcohol policy, the processes behind document scanning, EPA hiring has been a really big issue, sponsored process management, simplifying graduate students actions, and the whole travel reimbursements and travel authorization process as well.

Senator Sawyers encouraged the faculty to click on the suggestion button to submit issues that they have had to deal with.  

The task force will continue to review issues and will report back to the Senate.

6. Report from the University Research Committee
Senator Genereux updated the Senators on the University Research Committee activities (continuation from last Senate meeting).

7. Adjournment
A motion passed to adjourn the meeting at 4:35 p.m.

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