>Dear Colleagues,
>
>The University Budget Committee unanimously accepted a recommendation
>yesterday from Vice Chancellor Brown that we move forward with a partial
>allocation of the UTC budget for fiscal year 2001-2002. I have accepted
>the recommendation and will communicate it to President Fly and the Board
>of Trustees. The Board has been called to session on August 31 to consider
>and adopt this year's budget.
>
>The University Budget Committee reviewed the revenue assumptions heard
>during budget planning last spring. Essentially, the projections used in
>our planning were sound. State appropriations seem likely to provide for
>the three top priorities of the university:  (1) supporting the
>extraordinary costs in health insurance premiums for all employees, (2)
>providing about 68% of the 2.5% cost of living pay adjustment, and (3)
>providing a modest increase for a match for employees' 401.K plans. The
>total increase in state appropriations was $1,284,550 for a total
>appropriation of $39,146,550.
>
>Fee/tuition revenues for level enrollment grew from the 15% fee hike for
>undergraduates and 8% for graduate students. New revenue amounted to
>approximately $3,000,000.  This new revenue is reduced by scholarships
>already promised or awarded, resulting in net new revenue of approximately
>$2,500,000. Other revenue assumptions included the possibility of funds
>from enrollment growth. It will take our "fourteen day census" to be sure
>about revenue from fees.
>
>As for expenditures, the top priorities were grouped in descending order
>in last spring's deliberations.  The action Monday reiterated that the
>university should first allocate funds to pay the extraordinary health
>insurance premiums, provide for the employer's share of the 401.K, and
>authorize the 2.5% cost of living pay adjustment. In addition, the
>university will move forward to meet costs of natural gas price hikes, the
>COPS match, US Mail contract increase, Credit Card handling fees, faculty
>promotions, grant position rollovers to state funds, desegregation grant
>rollovers to state funds, UC Foundation grant rollovers to state funds,
>and some planned grade level increases.
>
>Those expenditures take about $2,500,000 of the "new revenue," leaving
>nearly $1,500,000 unallocated. The Committee recommended leaving that -
>and any other revenue possible from enrollment increases - for further
>deliberation.
   In adddition, the University Budget Committee reiterated its support of
the priority expenditures        from the new Facilities Enhancement
Fund.  Some $400,000 of that work will begin as soon as possible.

>As you have perhaps seen in the paper, two critical "reduction" requests
>are facing UTC. The appropriations bill for this year requires that UTC
>(and all of UT, as well as TBR) tell the legislature how we might cut some
>things we now support in the university budget to reallocate those funds
>to higher priorities - especially if the state has no new money for higher
>education next fiscal year. President Fly has given us a target of finding
>5% for such reallocation. He wants that information from our campus by
>October 15.
>
>In addition, Warren Neel, Commissioner of Finance and Administration,
>alerted all of us in the press last week that he fears there might not be
>enough money in the state's revenue picture to fund the entire
>appropriation just placed into law over the Governor's veto. He advises
>care in perhaps not spending up to 5% of this year's appropriation. We
>need to consider what to forego in that event.
>
>For both scenarios of budget analysis, we will use the University Budget
>Committee. We will devote sessions on September 10, 17, 24, and October 1
>to two tasks:  (1) analyzing UTC's budget to determine what might be
>improved substantially by receiving nearly $2,000,000 of reallocated
>dollars and (2) determining the lower university priorities from which the
>funds will be cut in fiscal year 2002-2003. That is roughly the same
>amount of money that Commissioner Neel warns might not be fully received
>from state appropriations this year.
>
>All meetings are open. We will schedule them for Fletcher 100 at 3:00 p.m.
>each Monday.
>
>After the Board of Trustees acts on August 31, we will provide more detail
>on the allocations.
>
>I appreciate the candor and the tough choices our University Budget
>Committee provide for our campus.
>
>Bill
>
>