‘We don’t have the reserves to wait out a volatile situation:’ How COVID-19 expedited University of Akron’s budget crisis

Reporting, writing, photos and graphics by Abbey Marshall

Editor’s note: Philathia Bolton, Vice President of The Devil Strip’s Board of Directors, is a professor at the University of Akron. Bolton was not involved in the reporting or editing of this story and did not see it before publication.

The University of Akron made deep cuts this past summer, laying off 18% of the faculty and consolidating programs and colleges, citing a projected $65 million budget shortfall and $360.4 million in debt.

It’s easy to blame a global pandemic: Fall 2020 enrollment was expected to drop at nearly every university nationwide amid Zoom classes, virtual coursework and socially distanced instruction.

But deep cuts were inevitable at the University of Akron, university administration says, after student enrollment declined by a third in the past decade, state funding was decreased, and the university was locked into debt payments after heavy investment in campus amenities.

Those cuts, says university spokesperson Cristine Boyd, were expedited by the anticipation of  financial losses from an enrollment drop and less state funding due to COVID-19.

The faculty blames university administration, including six presidents over the past six years, for what some call budget mismanagement and financial recklessness without regard for students or academics. 

Some faculty members claim the university is misrepresenting its financial position altogether, saying COVID-19 is an excuse to purge more positions than necessary — even filing a complaint of unfair labor practices against the university.

“It’s taken a really ugly turn this summer,” Pam Schulze, president of Akron-AAUP, UA’s collective bargaining unit, says of the tensions between the union and the university over collective bargaining negotiations. “I’ve never felt this kind of division between faculty and administration we have now. Never. And it’s been bad before.”

To understand the financial challenges facing the university, The Devil Strip analyzed previous budgets, reviewed previous financial decisions and spoke with more than a dozen faculty members, both currently employed and laid off. Many were hesitant to use their names publicly out of fear for retaliation, but their accounts informed this reporting.

UA spent in preparation for 40,000 students. There are now fewer than 18,000. 

In a press conference on July 15, the day layoffs were finalized by the board of trustees, President Gary Miller said the financial crisis set up years prior meant a reduction in staff was inevitable. The university told The Devil Strip they were facing $360.4 million in debt as of June 30, just weeks before the layoffs. 

That crisis was in part spurred by the “Vision 2020” initiative launched by former university president Luis M. Proenza in 2012, the year after enrollment peaked at just shy of 30,000 students. The vision was for UA to be a university competitive with other highly enrolled state universities, aiming for upward of 40,000 total students, including more students who lived on campus. 

Even in 2012 when enrollment levels were at 28,771, the goal was lofty. The university’s student base was traditionally made up of commuters who lived nearby and drove to classes each day or attended school part-time and worked. Proenza, faculty members recall, was adamant about changing that image, pushing the university’s facilities to grow and grow. 

Additionally, the university pursued campus modernization projects that came with a $630 million price tag throughout Proenza’s 15-year tenure. Not only did the university sink more than $60 million into a new, 27,000-seat football stadium that opened in 2009 — despite a loss of approximately $21.52 million per year on athletic programs for the last 10 years, the faculty union says — the administration also purchased Quaker Square for $22.7 million in 2007 with an additional investment of $700,000 to renovate for student use. On top of all that, the school tore down and rebuilt residence halls.

“The university was poised to be very successful 10 years ago,” says Sue Ramlo, former Akron-AAUP Vice President and a laid-off professor in what was formerly the Applied College of Science and Technology before it was dismantled this summer. 

“We had so many nontraditional students,” Ramlo continues, noting that many students were commuters in their mid to late-20s who took courses in tandem with a job. “That was the path of success. That got blown up by mismanagement.” 

Proenza stepped down in 2014 and the university abandoned Vision 2020 due to “long-term effects” of the 2009 economic crisis, Boyd says. At that time, significant debt had already been racked up.

The new facilities were built in anticipation of 40,000 students. But in the past decade, student enrollment has declined by more than a third. At present, enrollment is just over 17,800 students.

By 2020, the year the university turned 150, the university was facing a budget crisis — and faculty were facing major cuts as a result.

After Proenza stepped down, the university ushered in — and promptly out — six acting, interim and permanent presidents in six years.

Following Proenza, the board of trustees hired Scott Scarborough, who had financial and management expertise. Scarborough made a series of unpopular decisions among faculty and students, which included sweeping cuts to help dig the university out of debt. In 2015, Scarborough and the board approved a plan to reduce $40 million in university costs, including cutting the baseball program, outsourcing dining services, negotiating health care plans and slashing 215 jobs — a fourth of the university’s staff. The board also allocated $950,000 to renovate the presidential home despite a $60 million deficit. No faculty layoffs occurred at that time, however, and revenue from graduate and undergraduate tuition fees increased by $10 million.

Scarborough was removed from office in 2016. Three presidents, some of whom served interim terms, stepped in until Gary Miller took the reins in October 2019, only months before the COVID-19 pandemic wreaked havoc on campuses nationwide and talks of another round of sweeping cuts began.

Boyd says the university believes enrollment can increase “modestly” in the coming years through aggressive marketing and recruitment. She says the previous vision of 40,000 students was undone by long-term effects of the 2009 economic crisis.

But even in the face of another economic crisis, she says the university is working to not only retain students but increase enrollment through application fee waivers, eliminating the admissions requirement of standardized test scores and offering a $500 scholarship as an incentive to those who complete the application process. 

“In the midst of the pandemic, recruitment and retention of students are more difficult, but we are optimistic about our future post-COVID,” she says. “We remain invested in serving our students and our Akron community and fulfilling our promise to them for a better future.”

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COVID-19 expedited inevitable layoffs, administration says

Universities across the country felt the blow COVID-19 delivered, though University of Akron’s situation was exacerbated by its already poor financial situation and already declining enrollment.

In July, the university announced an estimated $65 million budget shortfall in the budget for the 2021 fiscal year. They acted fast to offset that loss by gutting academic programs and their instructors.

Payroll constitutes 60% of the university’s total budget, Boyd says. While enrollment decreased 34% since 2010, adjustments to personnel had not kept pace with that rapid decline: The size of the faculty had fallen by 18.5% and full-time, non-faculty employment decreased by 25.7%.

On July 15, only a month and a half before fall semester began, the board of trustees unanimously authorized the elimination of 178 positions, including 96 bargaining unit faculty, 70 of whom were tenured or tenure-tracked. An additional faculty member worked in the law school, which is not part of the bargaining unit faculty. The remaining positions were staff and contract professionals.

Additionally, 21 faculty members opted to voluntarily separate via retirement or resignation.

Faculty size reduced by 25.7% between falls 2019 and 2020 between layoffs and voluntary separations, falling to 421 from 567.

The general fund budget for the 2021 fiscal year, approved in August with expenses totaling $186.1 million, detailed $44 million in cuts and an additional $29.6 million in lost revenue compared to fiscal year 2020, which ended June 30. $35 million of those cuts came from payroll and other employee compensation. 

A separate auxiliary enterprises budget includes housing, dining services, and athletics. That budget shows a $23 million anticipated loss of revenue from 2020 to 2021. Athletics incurred a $4.4 million budget cut to help mitigate the losses, though many faculty members have advocated for more cuts to athletics, including a shift from Division I to Division II.

“We’ve tried all summer to work things out,” Schulze says. “They’re so determined to cut… They said that they had some plan to address [the budget crisis] maybe 3 years down the road, but because of COVID, they say they had to accelerate the pace of what they already planned to do.”

In a virtual press conference that took place on July 15 after the board finalized cuts, President Gary Miller confirmed that because of the university’s financial crisis prior to COVID-19, a reduction in staff was “something that would have to happen anyway.”

“Under normal circumstances, we would’ve taken three to four years of normal processes and making strategic decisions,” he said. “The COVID situation placed a burden on the institution to act immediately. We don’t have the reserves to wait out a volatile situation.”

The university maintains the same position it did in July, Boyd says.

“The University has not waivered on its analysis and the need to cut costs in all areas,” she says. “Given our financial challenges brought on by pandemic, coupled with our overall enrollment decline and our debt burden, it was critical that we were proactive and used every opportunity available to us to create sustainable financial stability for the University.”

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Projected financial situation does not match the reality

Schulze told The Devil Strip multiple times this summer that she believed the university was misrepresenting and overexaggerating their financial situation to make sweeping cuts. Indeed, so far, the university’s projections have not come to fruition.

UA initially said they anticipated a 15% drop in enrollment — or a $20 million loss — and an 8.8% reduction in state funding, or an $8.9 million loss. 

Ultimately, enrollment dropped 7.2%, equating to a $10.8 million loss in tuition, including the savings from awarding fewer scholarships. 

State funding fell by about 4.9% between 2020 and 2021 budgets, about half of what the university was anticipating, though the 2021 budget shows the lowest level of state funding since 2007.

“We were pleased that enrollment numbers increased before the start of classes,” Boyd says. “While enrollment was not as we had projected, we did experience more than a 7% loss, as well as losses in the amount of students residing in housing, a decline in food service sales, campus facility rentals, athletic revenues and a reduction in state funding. 

“The cost of cleaning, [personal protective equipment], and additional costs of signage, barriers, etcetera due to the pandemic also increased our expenditures,” she continues. “We also have to plan for the possible decline in the second semester enrollment, housing, etcetera. Even now, we expect the pandemic to cause additional revenue losses for the spring semester.”

Faculty received notice of their layoffs in the days following the university’s July announcement, and though there has been a back-and-forth process in the subsequent months between the university and the union refuting the decision, those faculty were definitively told they would not have jobs come fall semester. 

“I wasn’t really surprised, but I was very sad,” says Chelsea Monty-Bromer, who was laid off after teaching chemical biomolecular and corrosion engineering at the university for 11 years. “I have four graduate students at the University of Akron who are still seeking their PhDs. When you have a group like that, they’re really your family. I very much felt like I was abandoning them.”

After an “exhausting” few months of feeling steamrolled during negotiations with the administration, Schulze and the Akron-AAUP team filed a complaint against the university, alleging breach of contract through unfair labor practices used within negotiations. The complaint alleges that the university interfered with and coerced faculty with “false, misleading and threatening statements to bargaining unit members.”

In addition, the complaint alleges the university unlawfully delayed and failed to provide an accurate portrayal of its financial situation and would not provide data for Akron-AAUP to independently verify the administration’s claims of severe financial pressure that resulted in so many lost positions in a timely manner. 

Although the information was eventually provided,  Schulze says the delay gave the union’s financial consultant, Rudy Fitchenbaum, very little time to incorporate those figures into his report for their arbitration brief.

“The biggest thing that I would like to have seen are the university’s draft financial statements,” says Fitchtenbaum, a professor emeritus of economics at Wright State University. He has been working as a consultant analyzing the finances of colleges and universities for the AAUP and published a study on UA in an attempt to verify the university’s claim of economic crisis.

“I’m going to assume they’re not lying and instead they’re just not giving everyone the same data they use to understand the same issue,” Schulze adds. “But frankly, if it is as they say: why wouldn’t they provide the data so we could independently verify and see they’re right?”

The university, however, insists “the University of Akron complied with every request given to us by the AAUP in a timely manner,” Boyd says.

After months of deliberation, the arbitrator sided with the university’s administration in its termination of unionized faculty on Sept. 18. The 67 faculty members who were on the list and had not since retired since the July 15 announcement are unable to return to their jobs. The ruling saved the university $6.9 million.

“I was basically fired by email, and so was anyone else who was in our college,” says Ramlo, the union vice president. “I’m absolutely heartbroken. I am a 58 year old woman who was exemplary as a faculty member… in a world where there are no academic jobs.”

High administration salaries amid faculty cuts raise tensions

Though administrators vowed to take a year-long 10% pay reduction, Schulze says that’s not enough. She calls for a permanent 20% reduction.

According to Akron-AAUP, members of the bargaining unit faculty, which includes all full-time faculty except for visiting and law school faculty, earn a median annual salary of $81,646.

Administration officials make far more: President Gary Miller takes home $427,500 annually; Executive Vice President and Provost Dr. John Wiencek makes $315,000; Interim Senior Vice Provost Dr. Joe Urgo makes $250,000; Vice Provost and Director of Academic Administrative Services Dr. Rex Ramsier makes $286,094; and Interim Chief of Staff Dr. Cher Hendricks makes $150,000, according to a university records request made by The Devil Strip.

Proenza, who returned to faculty after stepping down as president in 2014, made an annual salary of $341,445 in a contract through 2027. This October Proenza took a buyout of $850,000, foregoing the $2.5 million sum that remained on his contract.

“This is a public institution. It’s funded by taxpayers,” Schulze says. “They owe those taxpayers the clearest explanation possible of how their money is spent. They aren’t forthcoming with clear data on where the money is actually going.”

Abbey Marshall covers economic development for The Devil Strip via Report for America. Reach her at abbey@thedevilstrip.com.