A LETTER FROM PRESIDENT RUNTE REGARDING THE BUDGET

September 30, 2002

Dear Colleague:

Governor Warner's press conference last week on the state's budget situation did not bode well for higher education. Between now and October 15, the Governor and his staff will be analyzing the plans that all state institutions were required to submit on September 20. The Governor has stated that not every agency will receive the same percentage of reductions. For some agencies the cuts will be lower; for others, particularly those with other substantial sources of support, reductions at or above 15 percent may be inevitable.

Although we will not receive our official reduction target until October 15, and we want to remain optimistic that Old Dominion will receive a lower cut, we need to exercise prudent fiscal management and prepare for the worst. I cannot at this time share with you the specifics of our budget reduction plans since they are earmarked "Confidential Governor's Working Papers"; however, I can share with you the principles that were used in developing them.

We submitted four preliminary reduction scenarios at 5%, 7%, 11% and 15% levels. This translates to the following amounts in general fund reductions: $3.8 million, $5.3 million, $8.4 million and $11.5 million, respectively. With 80% of our $142.6 million Educational and General budget devoted to personnel and 75% allocated to instruction and academic support, unfortunately, at these levels of reductions, we could not entirely protect either our staff or academic programs.

The following principles guided our budget reduction decisions:

· Protect academic programs wherever possible. We took, in every case possible, significantly larger cuts from administrative units. This principle enabled us to protect rather effectively academic units in the 5% and 7% reduction plans. At the higher levels of cuts, however, we were unable to continue this protection and, as a result, the pain was shared equally among all academic and administrative areas.

· Increase administrative efficiency. The plans include consolidating and eliminating some administrative functions, while minimizing the impact to customer service.

· Continue essential services. We must continue to teach our students, provide a safe campus environment, and provide services that allow us to retain and recruit qualified students, faculty and staff. We must ensure that courses are offered, although class sizes will be larger and faculty will be teaching more students.

· Maintain current level of student financial aid. The Governor's comments alluded to the possibility of a mid-year tuition increase. We need to ease the financial burden a tuition increase would place on needy students. For this reason, we have not reduced the financial aid allocation.

· Position the University for 2003-04 and beyond. We are convinced that cuts will have a negative impact on the University. We nonetheless need to position ourselves and invest in strategies that will enable us to emerge as a better and stronger institution in the future.

Although it is clear that difficult financial times lie ahead, the University must not stand still. Your support and commitment will be critical in determining our success in that regard. We need to pull together during these trying times and work through these challenges by looking for opportunities to enhance our future.

Sincerely yours,

Roseann Runte
President