Regents declare financial exigency; consider structural options

by UA Office of Public Affairs

On a vote of 10-1, the Board of Regents approved a declaration of financial exigency for the University of Alaska. This difficult decision is a direct result of a massive $136 million (41 percent) reduction in state funding, projected additional losses from declining enrollment and reduced research activity, and the lack of sufficient reserves to fund our current operations through the year.

“Given the poor hand we’ve been dealt, financial exigency is the only tool for us. It will allow us to prepare a plan for continuing our mission,” said UA President Jim Johnsen. “None of us wants to be here today, and as I look at the faces of our students, faculty and staff – their anxiety and their loss – I wonder, how can our university, something so great, that has been built up by so many for so long, be crippled by so few so quickly.”

“We will not have a university after February if we don’t make a move,” said Regent Gloria O’Neill.

Board of Regents’ Policy and University Regulation 04.09, provides for the declaration of financial exigency when there is a shortfall in projected revenues compared to projected expenditures over the same period; and, the imbalance will have a material adverse effect on university operations.

Financial exigency allows rapid downsizing of units, programs, services, and personnel to address a fiscal crisis.

The board also discussed two options for further consideration: a lead campus model, and a single accreditation model. Though administrative reductions may proceed more quickly, the Board asked for more detailed information to be presented at its meeting on July 30. Specific programmatic reductions will be proposed at the board’s September meeting.

After deciding on programmatic reductions in September, notices to affected faculty and staff would be distributed shortly thereafter and work would begin to address the “teach-out” responsibilities of the university owes to affected students. Either approach will require close cooperation with the Northwest Commission on Colleges and Universities (NWCCU), the organization that provides UA campuses institutional accreditation. Maintaining institutional accreditation is of paramount importance for the university.

“We have to start by looking at our enrollment,” Johnsen said. “We have 26,000 students, with various majors, in multiple locations. How do we organize and resource ourselves to meet their needs?”

The UA community will have the opportunity to provide public input to the Board of Regents on reductions throughout August and early September, before the board takes action to approve programmatic reductions at its September meeting.

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