The Interim President of the Vermont State University has released details of a plan for administrative staff cuts. The Board of Trustees approved the plan last week and bargaining units were then notified about the details of the “Administration Optimization Plan.” Interim President Mike Smith tells WAMC North Country Bureau Chief Pat Bradley implementation of the plan has begun and layoff notices were issued Thursday to affected employees:
Last year we ran a $22 million structural deficit. The legislature's been very good to us to say okay, we're going to help you with one time money until you can eliminate that structural deficit. And we plan to do that and have fiscal stability going into the future by 2027. So we started about a month ago with a faculty plan. Then the faculty said to us, well wait a second, why don't you look at administrative costs as well? And we said fine, let's do that as well and we decided to look at this. And this is the plan that we came up with: a reduction of 34 full time faculty with 21 at the executive management supervisory level. That’s about $3.1 million in savings. We said we're going to look at budgets as well in terms of what we share with the Chancellor's Office and Community College of Vermont and expect to reduce those budgets by $600,000. We are recommending that we change our health care plan for a savings of $3 million. And we're recommending that we change our retirement benefits program to align with other organizations. Right now, there's no vesting requirements. There's no employee contribution to the retirement program. And so with all these sort of changes and with the faculty changes that we announced in the beginning of the month, and we had done a report that showed that we had programs that were low enrolled, and we said in the future we will not be offering those programs. Starting in 2024, there were 10 programs. And then we said, okay were other programs are under enrolled, let's look at them and see if we can consolidate those programs. And that's what we did as well. And then we looked at what the faculty impact would be and we offered buyouts to the faculty. Then combine that report with this report that we just did and the implementation that we're doing right now and you will see that we're going to be saving about $12 million as we move forward with these two reports. That will allow us to be fiscally stable and fiscally sustainable by 2027. That is something that this university and its legacy universities have never been able to achieve for many, many years. And we will achieve it with the implementation of these two reports.
Mike Smith, with the reduction in staff, it's meant to be a cost saving measure. Are there any severance packages that you are giving these employees and how does that factor into the finances if you are giving severance packages?
Yes. We have factored that into the finances. On the faculty side we said a buyout will be six months of salary, six months of health care. And we have a tuition reimbursement program here that if your child goes to the university you get free tuition. We would offer that at the end of the academic year, we would offer that as an extension on to the academic year, which would be six months of salary, six months of healthcare, and then the tuition reimbursement. On the administrative optimization side it's a little bit different. It's a severance package. So, and it's governed, even though we really focused on executive and management and supervisory positions, most of those positions unlike other places most of those positions here are in a union. So we have to follow the union contract which says the severance package must be negotiable. But I envision it to be, and I told the unions this, I envision that the severance package because in the union contract is on years of service really isn't that much. I said I really anticipate that the severance package will be similar to what I'm offering over on the faculty side. So I'm hoping that we can settle that out with the union as quick as possible because these are good employees that really need to be rewarded for the years of service they've been here.
How did you end up deciding where to make the cuts?
Any sort of reductions are difficult. But what we did is look at each position and examine sort of the organizational structure and the reporting layers within that position, the span of control and can it be increased without adversely impacting organizational performance? We look at what impact does the recommendation have on revenue generation and students in other parts of the organization? Who in the chain of command, for example, can assume the work and be effective in a manner? And then lastly, what fiscal impacts will that position have if it's eliminated? What fiscal impacts will it have on the university? No one factor dominated the decision. We sort of looked at it holistically as we put this together,
Did you also take a look at making the cuts evenly between the colleges?
In most cases we did look at proportionality. But in some cases where, you know, a specific function for the entire university was headquartered on a campus, that did take a disproportionate hit on that campus.
Well, Mike Smith, you literally leave right at the end of the month. Has the incoming interim president David Bergh worked with you on this plan at all?
Not on the plan but he certainly has been aware as it got to the final form in terms of what we've been doing. I've been here six months. I know the organization. The VP’s know the organization. And I just thought it was better for me to do it now and get on to an area where he could think about implementation and other issues and have a plan where you're not constantly worrying about where you're going to be financially in the future. I think the worst thing for a university is for it to be uncertain of where it's going to be in the future financially and this plan sets up where we're going to be financially in the future and that is financially stable and fiscal sustainability and fiscal stability in 2027.
Faculty layoffs will be effective at the end of the academic year. Administrative layoffs will occur at different times. Some will leave at the end this semester, others in January, and some are effective on June 30th, 2024.
