SOU faces ‘right-sizing’ decisions in realignment, including reducing payroll

SOU President Rick Bailey listens to a question at a town hall in Stevenson Union on Friday, Dec. 2. YouTube video screen capture
December 6, 2022

Employees thinking of retirement asked to come forward as university faces deficit of $13 million or more over next two-year budget 

By Holly Dillemuth,

Senior-ranking Southern Oregon University faculty and staff who are already considering retirement in the next 18 months are being asked to make their decision official by Jan. 12 to lessen the estimated blow of upcoming cuts to rightsize the university from its projected $13 million to $14 million deficit by summer 2024.

SOU President Rick Bailey didn’t wait long to get to the heart of financial matters during the second of four planned “town hall” meetings in Stevenson Union on Friday, Dec. 2. For 90 minutes, he addressed faculty members and union representatives and answered questions about financial adjustments that are expected to be made across the budget board, including categories of finance and administration, academic affairs, enrollment management and student affairs, and advancement and athletics, all following a process he called “programmatic analysis.” 

The in-person meeting held on SOU’s campus was also available on YouTube. The next meeting is planned for Jan. 12, with an additional meeting planned in February.   

SOU faces the shortfall due to declining enrollment revenue, something Bailey has continually said he won’t try to fix by increasing tuition for students. In an interview with earlier this year, Bailey said the university faces a $5 million shortfall this year and a recurring, structural deficit of $13 million over the next three years.

The university is in the second year of its 2021-2023 biennial budget. Fiscal years run July 1 to June 30 the following year. Planning for the next biennial budget covering 2023 to 2025 must be completed in the spring. The current two-year budget projected combined operations revenues of more than $82 million for the fiscal year ending June 30, 2022, but as of June the actual revenue was expected to be more than $4 million less than that, just over $78 million. The budget adopted June 17 projects revenues of about $84 million and expenditures of nearly $91 million in the 2022-23 fiscal year, but calls for reducing expenditures by the $6.8 million it would take to close the gap.

Looking for ways to reduce expenditures

“We’re hearing rumblings that there may be people thinking about retiring,” Bailey told faculty and staff on Friday.

Bailey said those nearing retirement have likely “given decades of service to our students, to this university, to our community,” and that he and the university owe a debt of gratitude to them for their dedicated service.

SOU President Rick Bailey answers a question at a town hall in Stevenson Union on Friday, Dec. 2. YouTube video screen capture

“No words that I say will be enough to express that gratitude,” he said. “If you are in that group, and you’re considering it, I would love for you to tell (human resources) by Jan. 12. I say Jan. 12 because that’s the next time we’re going to be in here,” he added.

Bailey said the number of those who announce their retirement for mid-year 2024 or sooner will have an effect on the process to identify cost savings for the university, and will likely lessen the burden that might affect their colleagues, Bailey added.

“It would really be interesting before (Jan. 12) to know who would be a part of that group because, again … it might, I think it will, have an effect for the bottom line for us and likely will affect how deep we are exploring.”

Bailey emphasized he’s not encouraging long-time faculty and staff to consider retirement across the board.

“I don’t want it to be, ‘if you’ve been here for a long time, think about heading off into the sunset,’” Bailey said. “If you’re in that zone, you can put punctuation on that service by helping out everyone else. So please think about that.”

Each of the five areas of the university were tasked with submitting an initial proposal for changes. Strategies to further reduce costs could include:

  • Program reductions
  • Non-renewal of a contract instructor (year-long)
  • Reduction of contract instructor (term-by-term)
  • Curricular adjustments/efficiencies
  • Increase course fill rates
  • Reduce administrative overhead
  • Changing teaching software model of delivery

Strategies to further reduce costs in athletics listed the following options, but no specifics:

  • Incentives to staff who are close to retirement
  • Program reductions 

Strategies to increase revenue could include:

  • Fundraising to endow coaching positions
  • Enrollment quotas for programs

Bailey said he’d like to have recommendations for planned cuts by spring 2023. A special meeting may be called in March, he said.

“The board has given us a mandate that we need to achieve these savings by the summer of 2024 and they base that on a pro forma that says that two and a half years from now, we have this $13 million deficit,” Bailey said. “Because of the anxiety that everyone’s feeling, I felt it was important that we should have decisions/recommendations to the board by spring of next year, which is a couple of months from now and I know how fast that is.

“Part of that is because there will be a lot of people affected by that and now it gives us time on a case-by-case basis to work with everyone affected to really demonstrate our compassion and our respect for their service to this institution.”

The audience listens to SOU President Rick Bailey during a town hall in Stevenson Union on Friday, Dec. 2. YouTube video screen capture

Daniel Santos, chair of the SOU Board of Trustees and a 1975 SOU alum, is among those who will be part of making the decisions.

Santos was not at the meeting Friday but spoke to on Monday regarding the financial situation at the university.

“Southern Oregon has faced some challenges in the past — retrenchment a couple of times — and has managed to come out of that,” Santos said. 

Santos said while this is certainly a “challenge,” he sees opportunities to “reimagine SOU” with the appropriate budget to move forward.

“There’s ways to do that,” Santos said. “It’s going to require some tough decisions.”

“Right-sizing decisions,” he added.

“Has it been in the works for the past few years? Yes, we’ve just seen declining budgets that have resulted in deficits. We can’t continue to say, ‘Well, let’s hope for the best’ … We have to be better equipped to come up with appropriate budgets.”

When asked if particular programs would be included in cuts, he said, “No program is beyond review — smallest to the biggest.”

“I don’t think you get to these kinds of budget restructurings without looking at program reductions. Affiliated with those program reductions are staffing cuts — we try to minimize those and be compassionate as we can in whatever decisions are made.”

Bailey spoke candidly, acknowledging that the financial situation at hand at SOU — which he describes as sobering — is taking a toll on him, too.

“I had someone over the Thanksgiving break who asked just a very direct question,” Bailey said, ‘how do you sleep at night? … knowing this is what the institution is facing?’” he said. “And I will confess to you that sometimes I don’t. You can probably tell on those days because I probably don’t look my best. So yeah, all of us are feeling it. We’re feeling the stress that comes from having to make this type of heavy, transformational decision-making. It’s why the job is very lonely. It is.

“But, here’s what does help me sleep at night. Two things: One, I think about what would happen if we weren’t here and I mean we — what if we did nothing. What would come from that and how would that affect future students?

“I don’t want to speak overly dramatically, but I will tell you, that is a pretty scary picture for me. And at the risk of sounding completely ego-maniacal, I am glad that I am in this position, even with the challenges that we face because I fear what would happen if we weren’t here and willing to make the decisions that we’re going to make and what that means for the institution.

“Here’s the second thing: We owe it to students, now and in the future, not to let tuition become a runaway train,” he added.

Bailey said he refuses for SOU to go the way of continual tuition increases.

“We’re not going to wake up a couple years from now and be a school that charges tuition and fees over $30,000 a year,” he said. “We don’t want to be that school. So let’s make the tough decisions together.”

‘Top-down approach’

Bailey said the process of achieving $13 million in savings to right the university’s deficit will be a “top-down” approach at the end of the day, after all feedback is received.

“That is the way this is going to work,” he said. “Now it doesn’t mean that there’s not going to be inputs. If I ask for a show of hands of who wants to own this decision, I get it. So I’ll own it.

“For everything that we stop doing as an institution, there will be people furious with me. I get that. That — That’s hard. But I think the alternatives are worse.”

“But this is where your feedback is important. How do we make this not solely a top-down thing, understanding the president will own the decision. The board will explore and ultimately validate or invalidate that decision.”

Addressing members of SOU’s Faculty Senate, Staff Assembly, ASSOU, SEIU, and APSOU, Bailey said, “We’re open to ideas we haven’t explored yet.

“We’ve laid the cards on the table, this is kind of how we’re approaching it,” Bailey said. “If there’s something we’re missing, then my request is to work through those groups. Work through those groups … all five of those leaders have direct access to me. Present some ideas because we’re open to it, and that’s not lip service. We’re open to it.”

‘Exigency’ a possibility 

Bailey said he wants to do everything possible to avoid making the declaration of “exigency.”

“I think everything’s on the table before we do that,” he said. “The reason why I say that is, ‘exigency’ is a term that is used … specific to a contractual relationship with the union, but to the outside world, it is, SOU’s declaring bankruptcy. To those who are not in this room, that’s what it might mean. Am I confident in the future of this institution? Absolutely. I’m confident even if we have to do that. But it’ll be harder, a lot harder, because of the perception of the outside world.”

Bailey said the conversation with faculty, staff and students is ongoing and will continue into early 2023. He encouraged individuals to reach out with input.

“The question is: Can we in this process be  transparent enough and inclusive enough so that everyone knows that their voice is heard in this process, even though … at the end of the day, no one’s going to be happy with the decisions, because they will affect people we care about.”

Bailey said it’s possible that the Board of Trustees could meet in March to review and possibly consider a draft proposal of cuts.

“Every programmatic thing that we do, there would be time before that to have conversations, to let those individuals, to let those groups know that this is something that is being considered,” he said. “Also to give everyone a chance to talk directly to the board. And then there would be at the regularly scheduled board meeting in April likely their final decision.

“That gives 14 months to implement the changes.”

Luana Stevens, an office specialist in the Success at Southern/TRIO-SSS (student support services) program at Southern Oregon University, speaks during Friday’s town hall. Screen capture from YouTube video

Bailey took questions and comments following his remarks, including those from faculty, staff, students, as well as questions that came in online.

“I have to applaud you for taking the bull by the horns to help us realign what has been out of line for 10 years,” said Luana Stevens, an SOU staffer in attendance, adding that she had been at SOU for three years and had 30 years experience in education overall. “It’s not an easy job, but I don’t call you the ‘hatchet man.’ I call you the ‘savior man’ because you’re working to try and save this university for all the students, faculty, and staff that are here now and all of those that are to come.” 

The last two town halls will be held Jan. 12 and Feb. 16 at SOU.

To view a short video where Bailey summarizes next steps for the university, go online to

Reach reporter Holly Dillemuth at Executive Editor Bert Etling contributed reporting to this report.

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Bert Etling

Bert Etling

Bert Etling is the executive editor of Email him at

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