From the Office of President Lesley Hallick

Last weekend, the Pacific University Board of Trustees met and deliberated on a number of issues, including approval of the budget for the 2015-2016 fiscal year. I am pleased to share that the approved budget has significant investments in salary increases for benefit-eligible faculty and staff.

This year’s budget process has been one of difficult decisions, and I am certain many of you have felt the strain. We started the budgeting process with a $12 million deficit — that is, the sum of our projected expenses, along with our collective investments, was $12 million more than our projected revenue.

Though the total approved budget is 5 percent larger than 2014-2015, our expense increases combined with our expectations for the future were even larger.

To balance increased costs with strategic investments, we had to make some choices. Each area found ways to increase revenue when possible and to cut costs — although many were one-time cuts, which will likely necessitate a more comprehensive analysis next year.   

I am pleased, however, that our approved budget meets three primary goals:

• We held tuition increases to a minimum, even freezing or reducing tuition in a few strategic areas
• We continued to invest in our people through salary increases and comparability (market) adjustments
• We funded ongoing investment opportunities and maintained a budget to explore innovative ideas in the future

Tuition

Overall, we set out to reduce the rate of tuition increases wherever possible. Undergraduate programs in the colleges of Arts & Sciences, Business, and Education (CASBE) will see a tuition increase of 3.5 percent, the smallest in the past 11 years. This coupled with an increase in financial aid resulted in an average tuition increase for undergraduates of only 2.2 percent. The exact amount for each student will depend upon his or her individual financial aid situation. We strategically froze, or even decreased, tuition rates for some key programs, including graduate-level education programs, pharmacy and athletic training, as well as programs in the School of Healthcare Administration & Leadership. In other graduate programs, there were modest increases. In all cases, we endeavored to increase the tuition as little as possible consistent with continuing to deliver quality programs.

Salaries

A major goal of the 2015-2016 budget is the investment in our employees. There are several facets to the compensation package that are complex, and faculty members will each receive an individual explanation with their April contracts.  

1.5% Salary Increase

All benefit-eligible employees will receive a 1.5 percent across-the-board salary increase for 2015-2016. For 12-month appointments, this will generally take place on the first period after June 30, 2015. For those on nine-, 10- or 11-month contracts, the increase would generally take effect at the beginning of the new contract year.

Comparability Increase

For the last several years, we have worked toward adjusting employee salaries as compared to like positions at other institutions. The goal of this multi-year project is to bring each group to at least the median of their “comparable” group of national peers, by discipline, rank and years of experience.    

An investment of $635,000, plus fringe benefit costs, will be used for faculty comparability adjustments, in order to bring individuals to a minimum of 95 percent and groups to an average of 98.5 percent of their salary benchmarks. If their group average is already at or above 98.5 percent, they will not receive a comparability adjustment, but they are still eligible for an increase if, as an individual, they are below 95 percent of the median of their peers. Overall, approximately 65 percent of faculty will receive some comparability adjustment. We anticipate that the fourth and final phase of these adjustments will occur in 2017-2018, if not before, and will take all faculty groups to at least an average of 100 percent of their peer group median.

As part of this effort, we will conduct a position-by-position comparability analysis for all Pacific staff in 2015-2016, with adjustments to be built into the 2016-2017 budget where needed. As a proxy for comparability adjustments this year, all benefit-eligible staff will receive an additional 1 percent salary increase effective July 1, 2015.

Senior administrator salaries (those of vice presidents and deans) will be adjusted using the same principles as those used for faculty, i.e. the senior administrators will also receive the 1.5 percent across-the-board increase, and if their salary is significantly below the peer data for that position, they will receive a comparability adjustment. It is anticipated that less than half of the senior administrators will receive such an adjustment.

Benefits

The 2015-2016 university budget continues the university’s contribution of 9 percent of benefit-eligible employees’ salary to retirement.

The budget also accounts for a substantial increase in employer costs for medical and dental benefits for employees. 

Depending upon the plan choice, some employees will also see changes to their premiums and deductibles.

The Pioneer Education Health Trust plan has a 12.66 percent increase in medical premiums and a 2.4 percent increase in dental premiums, along with changes to deductible and out-of-pocket maximums.

The Kaiser Permanente plan has an 8.7 percent increase in medical premiums and a 4.9 percent increase in dental premiums, along with an increase in out-of-pocket maximums and lab, x-ray and prescription copays.

No changes will be made in the proportion of premiums paid by the employer and paid by the employee.

$500 Salary Increase 

In addition to the earlier increases I have noted above, all benefit-eligible employees will receive a $500 annual salary increase to help bring base level salaries up for all, and to address the increased benefit costs. This will permanently increase the base salary by $500 going into subsequent years. 

Because the benefit changes take effect April 1 and will be reflected in the March 31 paycheck, we plan to use contingency dollars to advance this $500 annual salary increase proportionately through the end of the fiscal year, June 30 ($41.67 per month for the balance of this fiscal year, which we will provide in one payment rounded up to $170 paid as a lump sum in the last March paycheck).

Investment Opportunities

The budget also includes support for ongoing investment opportunities, including many of the new programs started over the past few years, as well as the new criminal justice, law and society undergraduate program and the vision science PhD program approved by the board in December.

It continues support for junior varsity sports teams, including phase two of the rollout, which will introduce volleyball and soccer. It also funds a new locker room and storage area.

The budget also provides additional resources for programs experiencing significant enrollment growth, including occupational therapy, physical therapy and pharmacy.

Investment opportunities overall, however, were funded at about 10 percent less than originally scheduled in the budgets projected in December. At the same time, the budget reflects a 4 percent reduction in the originally proposed overall operating costs for the university.

Imagine Pacific 2020

Closely tied to all of our planning, including budgeting, is Imagine Pacific 2020. This multi-year, data-driven process is designed to help us understand our processes, programs and allocations, recognize opportunities for efficiency and improvement, and set the stage for Pacific University to thrive in the years to come.

Over the last few months, individual programs reviewed their historical data and, for the remainder of this academic year, will be providing additional information about their programs, ideas for investment, and efficiency opportunities.

Next week, all faculty, staff and students will be invited to provide their own ideas in an individual survey that will be anonymous and quite brief. We hope that as many of you as possible will utilize this opportunity to submit your vision of Pacific’s future, as well as your suggestions to make it as affordable as possible for our students.

I look forward to continuing to meet with governance groups and any others who would like to meet to continue these important discussions with the Pacific community. The next session will be a budget forum for all employees and students from 2:30 to 4 p.m. Thursday, April 2, in McCready Hall in the Taylor-Meade Performing Arts Center, and will engage other campuses via technology. 

Other Business

Also at its meeting this weekend, the Board of Trustees:

• Outlined 2015-2016 capital projects which include upgrades to University Avenue, required by the City of Forest Grove’s approval of Pacific’s master plan, as well as needed upgrades to Strain, Price and Pacific Halls to serve strategic growth in the natural sciences and other programs.
• Approved refinancing Pacific’s 2005 bond series, assuming market rates continue at historic lows, which should result in immediate and long-term savings in debt service.
• Approved promotions to tenure for several faculty members and reviewed faculty promotions and sabbaticals (listed below). Congratulations to all of these faculty on the achievement of these significant milestones.

Warmest regards,