Eastern Michigan University reins in multi-million dollar shortfall, strikes near-balanced budget
Seven months ago, Eastern Michigan University officials called a budget shortfall projected to exceed $5 or $6 million "discouraging."
John Lumm at a recent Eastern Michigan University Board of Regents meeting. The school's chief financial officer says the school has balanced its budget.
Chris Asadian | AnnArbor.com
A poorly performing investment portfolio coupled with an unexpected fall in enrollment led EMU Chief Financial Officer John Lumm to warn in September that the school was experiencing a shortfall that would likely expand if EMU didn't make significant cuts— and quickly.
As officials determined where they could cut the budget, the shortfall increased steadily, eventually reaching $4.6 million in September. Yet in recent months the shortage has shrunk rapidly —lowering to $3 million by February— and officials reported a near-balanced budget during a Board of Regents meeting on Tuesday.
Now the school is just $100,000 in the red, a sum officials say EMU can easily tackle.
"All in all we have to be very pleased with the financial performance in the university," said Regent Mike Morris.
The lowered deficit, Lumm said, is due in part to the investment portfolio rebounding from its poor performance and turning September's $1.9 million loss into a $2.4 million return as of March 31. EMU recouped the rest of the deficit by cutting programs and expenses. The school used attrition, cut back on overtime, lowered energy use, curbed auxiliary costs such as travel and equipment purchases, eliminated some financial aid and deferred select projects.
Nonetheless, Lumm warned that the school's budget performance "could change" if enrollment levels for the upcoming spring and summer sessions don't reach projected levels.
"We assumed that the enrollment levels would remain the same" as last year's levels, Lumm said.
And despite striking a balanced budget, EMU is projected to finish the fiscal year (ending in July) having raised roughly $5 million less than officials predicted. That's largely due to the enrollment shortfalls, Lumm said.
Kellie Woodhouse covers higher education for AnnArbor.com. Reach her at kelliewoodhouse@annarbor.com or 734-623-4602 and follow her on twitter.
Comments
Geoff Larcom
Thu, Apr 19, 2012 : 2:23 p.m.
Regarding the previous comment on students working in the call center of the EMU Foundation, here is some detail on that situation from Tom Stevick, vice president of advancement and executive director of the EMU Foundation: "It's important to note that the call center operates from the beginning of the fall semester to the end of the winter semester, which in this case is next week. The April closing is part of our standard operations every year. Normally, of the 30 or so student employees, only 10-15 might return for work the following fall due to graduation, other jobs, class schedules or other circumstances. "With the possible sale of the Cooper Office Building, which houses the calling center, we are looking at outsourcing the calling next fall for a year until a more permanent solution can be found. Our plan is to take the call center off site for one year, during which we hope to build up our base of donors, and then return it in 2013." Note: Geoff Larcom is executive director of media relations at Eastern Michigan University.
Rob Pollard
Thu, Apr 19, 2012 : 6:01 p.m.
Thanks for the info. I would say, I think changing it from students to an anonymous "off site" center would actually hurt "building up the base." For the school I graduated from, Michigan, while I wouldn't say I'm thrilled to get fundraising calls, I am much more willing to briefly chat with them, even if I not giving money at the present time, b/c I know these are students calling. I share with them an obvious connection (i.e., we both went to the same university). I assume, if I were an Eastern grad, I'd be much more willing to take a call from a fellow Eagle, then some person calling from North Dakota (or overseas). I hope this is not just PR speak by Mr Stevick and EMU students are actually re-hired in 2013.
MorningGirl
Thu, Apr 19, 2012 : 4:32 a.m.
If they're doing that much better, then they can restore the hours they cut from my job last year. :-)
greg, too
Thu, Apr 19, 2012 : 2:21 a.m.
"The lowered deficit, Lumm said, is due in part to the investment portfolio rebounding from its poor performance and turning September's $1.9 million loss into a $2.4 million return as of March 31. " Does anyone else find that to be fishy? And if it is true, the city of Ypsi, maybe even the state of MI, needs to hire that guy to turn around their finances.
Groundbreaking
Wed, Apr 18, 2012 : 10:40 p.m.
Don't forget about adding two more individuals to Unemployment. Eastern Michigan University closing Flint site http://www.annarbor.com/news/ypsilanti/eastern-michigan-university-closing-flint-site/#comments
Lovaduck
Wed, Apr 18, 2012 : 4:01 p.m.
Good for them!
sellers
Wed, Apr 18, 2012 : 12:24 p.m.
While I think sports/athletics can add a drastic cultural and entertainment value at a campus, I encourage Eastern to review what eliminating the NCAA membership would do to visibility, school awareness, marketing as well as cultural life in comparison to the savings in budget as well as the national attention given to a school who drops NCAA membership. Note - I'm not saying it should be done - gather data to support/refute what is often said by the community. Also, leverage the student body to do the research with the faculty - and be sure to include folks from the Athletics' department to be fair - and don't spend on an outside consultant.
greg, too
Thu, Apr 19, 2012 : 2:17 a.m.
that would seem to be an odd way avenue as they just spent millions on their horrible football team's facilities. and I highly doubt anyone goes to EMU for the sports culture outside of the players themselves.
GirlNextDoor
Wed, Apr 18, 2012 : 12:20 p.m.
The full extent of budget cuts are just coming to light, unfortunately for my EMU student. Eastern Michigan University Foundation will close its phone center, which currently employs approximately 30 student callers. They work Sunday through Thursday nights calling EMU alumni, raising thousands of dollars for the university. They will be outsourcing all the phone center work that has been done by EMU students for many years. My junior has worked there for three years, and found out last night that Sunday will be her last day of work. She is very upset for losing her job, but she said she will miss the wonderful coworkers and supervisors the most. Tough lesson for a 21-year old -- losing your job to outsourcing; welcome to the real world, baby.
Harry
Wed, Apr 18, 2012 : 4:47 p.m.
As a alumni of EMU I have never given any money to EMU. I also have never given money to my high school, middle school or grade school. Why would I. They are government run institutions. St Judes is my charity of choice. I could never justify taking money from St Judes to give (indirectly) to the teachers union.
Kellie Woodhouse
Wed, Apr 18, 2012 : 4:05 p.m.
I wasn't aware of this change. Thanks for sharing.