Members meet to discuss university budget; CMU has $5 million in cash reserves

• Tweet
• 

University finances was the topic of discussion Tuesday for the Central Michigan University Faculty Association when it met for the first time this semester in closed session.

Tim Connors, president of the Faculty Association, said the meeting was a chance for full-time tenure-track faculty to share public information about CMU’s budget processes.

“It’s always good to know,” the communication and dramatic arts professor said.

According to the Faculty Association’s meeting flyer, the group asserts the university can “afford to pay increases and benefits to its hard-working and dedicated employees without suffering financial ruin.”

David Burdette, vice president of Finance and Administrative Services, said employees are the university’s single biggest expense.

He said CMU has been successful financially because it has a conservative approach to budgeting and expenditures.

Barrie Wilkes, associate vice president of Financial Services and Reporting, said net assets, or reserves as they are called, come from every account all across campus. Net assets equates university assets minus liabilities, he said.

“Those financial numbers represent the total of everything spread across the university,” Wilkes said.

CMU has $258.3 million in university reserves, according to the university’s audited financial statements. Burdette said it is not $258.3 million in hard cash lying around for someone to claim, but made up of restricted expendable and unrestricted net assets.

“While the university may have a lot of money, it’s all spoken for,” he said. “There’s no unrestricted reserves just laying around for someone to make a claim for them.”

Burdette said the reserves are sometimes used to pay up-front costs for new construction projects. They are also used to cover costs associated with accidents or disasters until the university is reimbursed by insurance. He said there is roughly five-plus million dollars always available if there’s an immediate catastrophe.

“We also have wonderful insurance,” Burdette said. “We might need to dip into our cash to pay a vendor to come in and fix whatever’s going wrong and then we recover it with insurance.”

Each college on campus also has their own reserves, Burdette said.

“The revenue-producing units can accumulate revenues and if they don’t spend it all, they get to keep that,” he said. “That’s in their reserves. We don’t go out and take other people’s money.”

Members did not discuss contract bargaining because a team has not yet been chosen, Connors said.

“We’re nowhere near there yet,” he said.

Connors estimated bargaining will begin some time late next spring. The current contract has been retroactively in effect since July 1, 2008 and will expire June 30, 2011.