Budget situation addressed at board meeting

Because of the challenges posed by the current economic climate and the prospect of lower state revenue projections, the University will likely be required to make budget adjustments, President David P. Roselle told members of UD's Board of Trustees at its December meeting.

Roselle noted that when UD faced similar challenges in 1990-92, it not only met them but emerged from the experience as a better university.

That success, Roselle said, was partially due to the fact that resources at other state-assisted universities in the area were even more constrained than at UD, a condition the president said, that still prevails.

During the 1990-92 budget adjustments, Roselle said, it became clear that most parents, lawmakers, citizens and other members of the UD community looked for budgetary difficulties to be resolved without any negative impact on either programs or people.

At that time, Roselle said, it was possible to handle most budget problems by reducing administrative budgets, but additional measures may be required to address the current budgetary situation.

"Administrative costs at the University have increased at a very modest rate per year for the last decade, and our institution is well-known to have an efficient and relatively low-cost administration," Roselle said. "It is unlikely that any sizeable budget problem can be handled this time by only administrative cost reductions."

The majority of UD expenditures, Roselle said, are for programs and people, so, to accommodate any significant budget problem, programs and people will be affected.

In addition to administrative cost reductions, Roselle told trustees that UD has initiated a hiring freeze. Exceptions to this policy will require the approval of the provost and the executive vice president.

"The values that will underpin our efforts to reduce costs are that we will protect what is done in the classrooms and laboratories, and we will protect the other experiences expected and enjoyed by our students," Roselle said. "We also will be mindful of UD's commitments to competitive compensation, additional scholarships and fellowships, modern living and learning environments and a student-friendly campus."

Roselle also said certain budgetary realities are not within control of UD, including increases in health insurance, other insurance coverage after the events of Sept. 11, utility charges, the stock market and the weakened financial position of the state of Delaware.

The state's inability to appropriate funds in the amount requested, Roselle said, is not the result of poor relations between the University and legislators, but the result of lower state revenues than had been forecast.

"We recognize that the state has a problem and we are confident that Gov. Ruth Ann Minner and her legislative colleagues will be of as much assistance to UD as possible," Roselle said. "We continue to hope that they will find ways to address salary increments and a reasonable capital appropriation."

"Going back to 1990, an important memory is that the trustees were understanding of the budget problems and were supportive of measures to decrease their negative impact," Roselle said. "We hope and believe that this will also be the case in 2002 and, as we learn more about the magnitude of our problem, we will work with members of the Finance Committee and others to fashion what we hope will be an appropriate FY 2003 budget proposal."