Friday, Isabella County Judge Paul H. Chamberlain will decide the legality of the FA strike. FA members picketed during a strike Monday before being ordered to return to class by Isabella County Judge Mark Duthie for Chamberlain.

If Chamberlain rules in the FA’s favor, the university does not have a plan to implement.

“If the judge fails to continue the restraining order, we have choices to make,” Shapiro said.

The administration also does not yet have a plan to reimburse students or take other action in response to Monday’s classes the FA has already missed. About 60 percent of classes on campus are taught by FA members.

University President George Ross and David Burdette, vice president of Finance and Administrative Services, joined Shapiro to meet with about 50 student leaders on campus Thursday to take questions about regarding the FA.

Interim Dean of Students Tony Voisin and Associate Vice President of Financial Services and Reporting Barrie Wilkes were also present.

The event was organized by the Student Government Association, who selected and invited the leaders.

Ross said students should not have been subjected to the confusion they experienced on the first day of class.

“I apologize for both groups because we shouldn’t be where we are right now,” he said.

Shapiro said he valued the faculty extremely, and wanted them to have a contract.

“We have wonderful faculty members — I know these faculty members and take pride in their accomplishments,” Shapiro said.

The administrative members present agreed there was a great deal of misinformation being promoted, and Shapiro urged students to be “critical comsumers.”

“Don’t believe everything you hear,” he said.

Visit our landing page for more coverage on the FA contract conflict.

Initially, the hotels and adjacent suites attached to the stadium were to open in time for the 2012 football game against Michigan State.

Barrie Wilkes, associate vice president of Financial Services and Reporting and university controller, said at last Wednesday’s board of trustees Finance and Facilities Committee meeting the university and Lodgco have not reached an agreement.

“The hotel, they had some drawings developed, (was projected to be) considerably more expensive than what they had hoped would work,” Wilkes said. “We’re to the point that the most important part is to get it done right and to get a deal that works for everybody.”

One of the problems is the property tax rate, he said.

“Athletics is disappointed, but not all that disappointed,” Wilkes said.

Wilkes said he is unsure when construction will start on the facility, but it will not be until after the MSU game.

“Having construction during the time MSU is here … that mess would be a problem too,” he said.

Lodgco will build the national-franchise hotel, which is expected to be entirely privately funded. Early plans for the hotel have included roughly 150 rooms, indoor and outdoor pools and a walkway connecting the hotel to stadium suites.

The hotel is still expected to be completed by the 2012 football season, where the Chippewas will host the Michigan State University Spartans for the first time in school history.

Barrie Wilkes, associate vice president of Financial Services and Reporting and university controller, monitors the progress of the development, which is still in its early stages.

“If we can get a design finalized and get all the pieces in place before (the July Board of Trustees meeting,) then we can go ahead as planned,” Wilkes said.

However, Wilkes was unsure as to whether the design will be completed by July.

Upon completion, the hotel is expected to give hospitality services administration students academic opportunities to learn daily hotel operations.

Gary Gagnon, assistant professor and internship director for marketing and hospitality services administration, is optimistic about the experience the hotel could provide for students. Gagnon said it could be a great location for hospitality classes or the Michigan Hospitality Education Alliance’s annual career fair, which is normally held in Grand Rapids.

“I would love to see our students have internships there,” Gagnon said. “It would be wonderful for students to be able to attend school here and work at the hotel.”

Clio junior Thomas Lorentzen, a hospitality major, said he hopes the hotel will give students opportunities to learn from real work experience.

“The new hotel could be a big help for the hospitality students,” Lorentzen said. “It could be a way for us to get real hands-on experience in the type of atmosphere we will be seeing after graduation.”

Central Michigan University sent out an email clarification Friday to faculty and staff in response to that article, which said no decision had been made in reference to senior officer and non-unionized worker pay for the 2011-12 fiscal year.

In an interview Tuesday with Central Michigan Life,  Kathy Wilbur, vice president of Development and External Relations, said to verify with Barrie Wilkes, associate vice president of Financial Services and Reporting and university controller, but the salary freeze was indeed likely.

“I think it’s going to be the case, I’m not the one who makes the decision, (but there has) certainly been discussion about it,” Wilbur said.

Calls to Wilkes since Tuesday have not been returned.

The clarification sent by the university said the Morning Sun misquoted Wilbur in the Sunday article. The Morning Sun responded by publishing an audio clip in which Wilbur was recorded as saying senior officers and other non-union employees would see the freeze.

“You’re going to see no salary increases for senior officers, and some of those other groups that aren’t represented in a union,” she said in the clip.

Senior officers and several other employee groups did have their salaries frozen in the current fiscal year.

Renee Walker, associate vice president of University Communications, said in an email to the Morning Sun Wilbur was only referring to information presented at a university forum in April, and that the clarification was still appropriate.

In an email, Steve Smith, director of public relations, said Wilbur said the potential freezes were under consideration but no decision has been made.

“Once a decision is made we will communicate directly with our employees,” Smith said.

Tim Connors, president of the Faculty Association and Communication and Dramatic Arts faculty member, was also quoted in the Morning Sun’s original story and said the university had taken on debts due to the university’s self-funded insurance program, which was also refuted in the Friday email, calling the statement “erroneous.”

“CMU’s self insurance program is very successful,” the email said.

Connors said he had no comment on the university’s message.

While administrative pay has seen an increase since 2005 at CMU, comparing the salary of former University President Michael Rao to University President George Ross is not fair, said David Burdette, vice president of Finance and Administrative Services.

“It’s not apples to apples,” he said.

Reportedly, Rao’s base salary was $232,760 in 2005. Ross’ base salary as president in 2010 was $350,000 — a 50-percent increase. Rao’s salary when he left CMU in 2009 was $302,557.

When Ross was previously employed in 2005 by the university in Burdette’s position, he made $159,529, as previously reported. In 2009, Burdette earned $209,090 — a 31 percent increase, according to the 2009 faculty salary list.

Thomas Storch, previous university provost, had a base salary of $164,430, according to previous reports. As interim provost, Gary Shapiro, earned $177,391, according to the faculty salary list. When he was promoted to provost in 2010, his salary became $253,000 — a 43 percent increase, as reported by CM Life.

With turnover, Burdette said the initial offer to a new employee needs to remain competitive, and the requirements for the position may have changed from one employee to the next.

Colbrin Wright, assistant professor of finance and law and a member of the Faculty Association, said the whole market needs to be examined when watching the trend of increasing salaries.

“It’s not so much about inflation or CMU,” Wright said. “This is market-based.”

Robert Martin, associate vice provost of Faculty and Personnel Services, said initial compensation offers to new faculty members are very competitive.

“When we are hiring somebody brand new, somebody who hasn’t worked for the university before, we would take stock of the discipline and standard national survey data, for faculty at the particular rank we would be hiring,” Martin said.

Burdette said the same process applies when hiring administrators. The president approves all salaries for senior officers after working with Human Resources to determine salary and benefits packages.

“I took Dr. Ross’s place … (and the) market affected my salary,” Burdette said. “When I had my (salary) conversation with Dr. Rao, I had no idea what (Ross) was earning.”

The university is dependent on the College and University Personnel Association, Martin said, because it publishes salary data for universities annually. He said the university compares itself with other public universities with overall budget size and student population similar to CMU’s.

“The combination of salary plus the benefit-package compensation is going to be as attractive as we can make it,” he said.

Barrie Wilkes, associate vice president of financial services and reporting and controller, said the university needs to remain competitive with Western Michigan University and other schools across the country.

“We’re not always successful,” Wilkes said. “Sometimes people do turn us down due to salary and benefit and compensation, so we have to try really hard.”

Burdette said no senior officers have volunteered to forgo their salaries or take cuts in light of Gov. Rick Snyder’s proposed budget. Up to 23.3 percent of state funds, or about $19 million, could be lost upon legislative approval.

Steve Smith, director of public relations, said administrative jobs are more demanding than most positions.

“They don’t just show up at 8 a.m. and go home at 5 (p.m.),” Smith said. “They have irregular, demanding schedules that require much more commitment. They’re here to lead the university. It’s not in their contract that they have to do that, it’s an understanding.”

With turnover, the university has not considered reducing the base salary offered to new employees.

“I don’t know that we’ve ever said, ‘We’ve got a budget cut, let’s reduce (salary offers),’” Martin said. “We’re cognizant always of the marketplace. Over time, salaries go up.”

Burdette said while the university does not implement pay cuts, several groups have taken pay freezes, including senior officers.

Presidential benefits

Ross’ salary is reviewed annually by the CMU Board of Trustees.

According to his contract, Ross is provided with a university-funded home with all housekeeping, utility and telephone costs provided for. His salary may be increased, but not decreased. He is allowed $10,000 annually to furnish the home, but anything purchased with that money becomes university property. The university also provides a car for Ross and is responsible for fuel, repair and insurance of that vehicle.

CMU also is responsible for social club dues “pertinent to the position of president and benefit CMU,” but Ross is responsible for taxes on those dues.

Ross’ salary is the second highest on campus. College of Medicine Founding Dean Dr. Ernest Yoder earns $385,000.

Burdette said Ross’ salary is not out of the ordinary.

Martin said the rationale for providing the president with a home and transportation is because “the president is the institutional face to the world.”

“The president can invite officials to a residence that properly reflects the institution’s interests,” he said. “For a fact, the residence afforded to the president of CMU is a very modest residence by comparison. Driving around in a Chrysler is a very modest portion of compensation for CMU’s president.”

In an interview with the Chronicle of Higher Education, Stephen Joel Trachtenberg, president emeritus and university professor of public service at George Washington University, said many factors contribute to a president’s salary and benefits: the size of the institution, overall experience of the president, if a school is private or public, performance in office and the market.

“The situation with presidential salaries and the compensation of senior administrative staff is similarly influenced by ‘exit options,’” Trachtenberg said in the article. “The CFO of a university could also work in private industry. The vice president of medical affairs could run a major city hospital or research institution.”

Faculty salaries increase with annual bargaining agreements, said Robert Martin, associate vice provost of Faculty and Personnel Services.

For example, Philip Kintzele, professor and accounting department chairman, earned $162,213 in 2005. In 2009, Kintzele’s salary increased 23.5 percent to $200,317, according to the 2009 faculty salary list. Kintzele was among the university’s top five earners in 2005.

Kintzele said professor merit salary adjustments are worked into faculty contracts. Professor merit salary adjustments are comparable to being re-promoted, he said, without getting a new title. Faculty members receiving the merit adjustments may earn up to $7,000.

“When you see any professor, when anybody has gone up more than about 12 percent or 13 percent it was because they got that professor merit increase,” Kintzele said.

Other high-earning faculty members in 2009 included accounting professors Thomas Weirich, who earned $200,537 and William Hood, who earned $198,249; and market and hospitality services professors J. Holton Wilson, who earned $183,370; and Robert Miller who earned $180,572.

Martin said Central Michigan University looks for the best possible faculty and staff members it can attract.

“We’re … looking at national data (from the College and University Personnel Association) … and the combination of salary plus the benefit package compensation is going to be as attractive as we can make it,” he said.

Steve Smith, director of public relations, said faculty pay is dependent upon demand of the subject they teach and their skill set.

At CMU, the highest earning faculty work in the accounting, management and hospitality departments of the College of Business.

“A lot of times, we don’t just compete with other universities, we compete with people who are very marketable out in the commercial realm,” Smith said. “Engineers, companies are looking for them all of the time and accountants, so, it’s more competitive than just the academic realm.”

Kintzele said the trend follows basic supply and demand.

“The supply of history and English professors is huge, there are so many out there with Ph.D.s and not all of them are employed in higher education,” he said. “Many work jobs in business and education and they’re not professors, yet in some disciplines there’s a shortage.”

Accounting is a discipline experiencing the opposite trend, Kintzele said.

“In accounting, there are only 180 to 200 new doctorates coming out of accounting, and more than that retiring,” he said. “There’s a short supply and high demand.”

Burdette said turnover is more prevalent in administrative positions than for faculty.

“Faculty, I think you’d say … tend to stay at a place longer than senior administrators,” he said. “That’s just a fact of life.”

Barrie Wilkes, associate vice president of financial services and reporting and controller, said faculty members have an opportunity to earn more than their contracted rates through teaching ProfEd classes or summer courses and developing programs.

“It’s not unusual to see an earned amount higher than what their contract is,” Wilkes said.

Martin said salaries for some disciplines are higher than for others, so the replacement cost is higher in those areas, as well.

“This has little to do with the value CMU places on any particular discipline, we value them all,” he said. “The market forces that are at work in general in the greater society impact the world of higher education, too.”

University President George Ross made the announcement Tuesday in an internal communication.

“Working with senior leadership and the university community, the team will develop the institutional vision statement, determine broad strategic initiatives, identify priorities, and recommend action plans and measurable outcomes,” Ross’ message said.

The 14-member team will begin work “in the next few weeks” and finish by March 2012.

Ross said the team will use the new mission statement and core values, the Presidential Transition Team reports and the university’s goals to achieve its tasks.

The Central Michigan University Board of Trustees approved a new mission statement during its February meeting. Ross received the completed Transition Team reports on Feb.1.

The following individuals are on the team:
Jason Bentley, director of First Year Experience
Charles Crepsy, dean of the College of Business Administration
Tracy Galarowicz, associate professor of biology
Pamela Gates, dean of the College of Humanities and Social and Behavioral Sciences
Denise Green, associate vice president of Institutional Diversity
Bryan Griffin, director of Annual Giving, Development and External Relations
Merodie Hancock, vice president and executive director of Off Campus and Online Programs
Lori Hella, interim-associate vice president of Human Resources
Steve Lawrence, associate vice president of Facilities Management
Lauren McConnell, assistant professor of Communication and Dramatic Arts
Vincent Cavataio, president-elect of the Student Government Association
Orlando Perez, chairperson of the political science department

Check back cm-life.com for more updates

A total of $13,810,306 went into CMU’s debt service, which is the combined amount of principal and interest allocated each year to pay debt. According to the university’s audited financial statements, this is more than it did 10 years ago.

In the 1999-2000 academic year, the figure was 2.3 percent and in 2009-10 the total was 3.7 percent.

Barrie Wilkes, associate vice president of Financial Services and Reporting, said CMU issued bonds when state appropriations and donations weren’t enough to fund large construction projects.

“A lot of the debt that we have taken on is for academic facilities,” he said, “so it’s actually contributing to and supporting the academic endeavor of the university.”

CMU’s current outstanding debt is $160,681,655 for campus projects as of June 30, 2010. It was $94,456,048 in 2000.

The increase in debt service correlates with the increase in bonds issued. The outstanding debt rolling over into the new decade is nearly double what it was in 2000.

Each bond issue has a payment schedule associated with it that dictates the amount of principal and interest to be paid and by when.

“We don’t have a choice to say, ‘Well this year, we think we’ll pay this much in principal and this much in interest,’” Wilkes said. “It is laid out for us.”

He said the university needs to continue to invest and grow because the infrastructure would fall apart and programs would become outdated otherwise.

Wilkes said he cannot think of a scenario in which the university could have all of its debt paid for. He also said he cannot imagine a situation where CMU would be able to pursue new building and program initiatives without incurring debt.

“You have to keep investing, and if you don’t have cash to be able to do that then you take on debt,” he said.

To keep the debt load under control, university officials and other stakeholders set priorities and invest in initiatives they feel are worth the investment, Wilkes said.

“We can’t do everything … so the university community needs to make decisions about what our priorities are,” he said.

Carol Haas, director of financial planning and budgets, said she receives the debt service schedule on an annual basis. It is in preparation of the budget and financial planning process starting in January of every year.

“It’s an expense that you have to plan for and we plan for it,” she said. “We know the schedule.”

Haas said she does not believe the university has dipped into the debt stabilization reserve account to cover the debt service cost in recent years.

“We were just able to refinance and bring down the interest rates without having to use the reserves,” she said.

Refinancing

Wilkes said the university refinanced in September 2009.

Refinancing takes place when the university has an opportunity to lower interest rates on their loans to save money, Wilkes said.

To issue bonds with low interest rates to begin with, Wilkes said CMU maintains a high credit rating through external audits.

Wilkes said the credit rating companies can improve CMU’s rating, leave it the same, downgrade it or put the university on a credit watch. It is determined after they evaluate CMU’s financial information, enrollment trends and the stability of upper financial management.

Standard & Poor’s and Moody’s, two agencies that rate higher education bonds, have issued CMU some of their top “A+” and “A1” ratings respectively.

“It’s a very good bond rating for a public institution,” Wilkes said, noting the university has never been downgraded or put on a credit watch.

Haas said budgeting for the current debt-to-equity ratio is not difficult because CMU isn’t a debt-laden university.

“Those ratios, debt to equity ratios, are items that indicate your financial solvency and we have good ratings,” she said.

Each budget center, or area that spends money, was asked to prepare a suggestion of budget cuts of 3, 6 and 9 percent by Feb. 8.

“We need a hotwire number, (which is) 9 (percent). Three percent is the starting point,” said David Burdette, vice president of Finance and Administrative Services. “We’re obviously going to be doing less with less.

“We need to begin the planning for budget reduction now.”

Kathy Koch, interim dean of the College of Education and Human Services, said she was expecting an announcement of some sort of cuts. The difference in each department, she said, from the 3 percent range to the 9 percent range, is massive.

“It’s a huge jump … We are looking at millions of dollars we have to cut,” Koch said.

She said she would be meeting with different departments this week to look over what things could be cut.

Based on the 2009-10 operating budget, if 3 percent of funding was cut from residential halls, it would result in a loss of $514,642.71. In the case of 6 percent cuts, residence halls lose $1,029,285.42. A total of $1,543,928.13 would be lost with a 9 percent cut.

If the College of Education and Human Services was cut by 3 percent, it would result in a loss of $549,011.49, if the cut was 6 percent, the loss would total $1,098,022.98 and, if it was 9 percent, there would be a loss of $1,647,034.47.

Vice presidents of the budget centers were directed to send preliminary reports to Interim University President Kathy Wilbur by Feb. 15.

Asking for three different possible cuts helps the university prepare for a variety of situations, said Steve Smith, director of public relations.

“There are so many variables right now we are dealing with,” he said.

The university is waiting to hear from Lansing as to the state’s financial situation. It is possible Gov. Jennifer Granholm will be calling back funds to the university, Smith said.

What to cut

Each center will not necessarily be cutting its budget by the same percentage.

After reviewing suggestions from the centers, it is important to go through and see which options are most necessary, Burdette said.

If one cut will affect another area on campus, it cannot be cut, he said.

“You have to watch the unintended consequences,” Burdette said. “We want to keep the next three or four years into consideration.”

John Fisher, associate vice president of residences and auxiliary services, said though the decision could be a while off, it is one that could affect students, faculty and staff alike.

“If we do get the larger percentages, students will see changes,” he said.

Fisher said if the percentage reduction is in the 6 percent to 9 percent range, layoffs are possible.

He said Residence Life is unique because it actually makes money and does not rely on the general fund for money each year. Although Residence Life is a special group in that way, he said, the department would be providing different plans for budget reduction. He could not comment on what those might be yet.

Budget urgency

The Senior Staff Budget Advisory Group has been researching for months to come up with options for university-wide cuts.

Wilbur is considering several million dollars worth of ideas. Burdette said about 120 suggestions have been sent to Wilbur from the Senior Staff Budget Advisory Group, some of those being from the CMU community submitting ideas online last semester.

“It’s difficult,” said Barrie Wilkes, controller and associate vice president of Financial Services and Reporting. “It’s hard to look across the campus and say we’re doing stuff we shouldn’t. That ship has sailed. We’re way past that.”

Burdette said no decision will be made in the near future, but budget concerns need to be addressed now. There will be a lot of discussion over the next several weeks.

“They have to stop right now and pay attention,” he said. “Unfortunately, people are very experienced at this kind of planning.”

Whatever cuts are implemented will be effective July 1, at the start of the next fiscal year.

Wilkes said he knew cuts would be coming, he just did not know when.

The funds are part of The American Recovery and Reinvestment Act, which was signed into law Feb. 17 by President Barack Obama.

The university is eligible to apply for $2,342,100 through a state appropriations bill that allows state universities to apply for a one-time grant to fill any budget shortfalls. Any money the university receives through the appropriations bill will be deducted from the appropriations the university receives from the state every year, said Barrie Wilkes, associate vice president of financial services and reporting.

Even with the stimulus money coming in, the university is still unsure if the “extra” money is being received.

“The question that I think is difficult to answer, looking at these (research) grants, ‘How many of these grants would have been awarded anyway?’” Wilkes said. “Is all of the stimulus money additional money on top of what already would have been spent? Essentially, it’s a net zero.”

Even though no additional funds to the university’s budget appear to be coming in, the stimulus money is saving the university from making additional budget cuts, he said.

According to recovery.gov, the ARRA funds retained or created 16 jobs at CMU with a grant of $172,531 in the Federal Work Study program.

The university is unsure if the funds alone have created new jobs.

“We get Federal Work Study every year,” Wilkes said. “So how do we determine that there are new jobs created versus what would have been created anyway?”

The number of actual positions created or retained is difficult to account for, said David Burdette, vice president of finance and administrative services. Those jobs are calculated by the full-time equivalent formula.

Full-time equivalent is measured by how many employees are defined as full-time by their employers. A full-time employee has their FTE number counted as “1.” If an employee works less than full-time, their FTE number is counted as a fraction.

The Work Study program counts a student employee’s FTE number based on their pay rate, which is a fraction, said Carol Haas, director of financial planning and budgets.

“It might not necessarily be new positions,” she said. “There are positions that are maybe saved because, otherwise, we wouldn’t have had that money and those dollars were allocated to specific students for them to continue to work.”

Thus far, the university has received $180,428 of the funds.

Federal law prohibits the university from receiving the funds before they spend it, Wilkes said.