SOU president lays out trajectory, timeline for budget realignment process

SOU President Rick Bailey talks Thursday at a town hall meeting for university employees about progress made balancing the schools budget. Bob Palermini photo/palermini.com
January 12, 2023

Rick Bailey met with university employees at town hall meeting Thursday morning

By Holly Dillemuth, Ashland.news

Faculty jobs will likely be lost, programs will likely be cut, and tuition at Southern Oregon University will likely continue to rise incrementally. Those are among expected impacts to be announced later this spring as the university works to “right-size” the approximately $66 million budget, according to SOU President Rick Bailey.

Bailey convened the first employee town hall of the year on Thursday morning in the Rogue River Room of the Stevenson Union, drawing faculty and employee attendance from many departments and divisions across campus. Of that projected $66 million budget, the university must cut about $10 million to $13 million, or about 20% of the budget, to stabilize the institution’s finances going into the 2024-2025 fiscal year.

“I am hoping that we have a draft of what this plan looks like by the end of February,” Bailey said during the town hall. “Here’s why: I want to have a conversation with everyone in a position that will be a part of that draft.

“I want them to hear it from me,” he added. “No offense, I don’t want them to hear it in the press, I don’t want them to hear it at a board meeting, I want them to hear it from me.”

Bailey said his plan is to have those conversations with affected faculty in late February and early March.

“I understand and I respect that there is a lot of anxiety in this room right now,” Bailey said. “There’s a lot of people who are watching this.

“A lot of it is based on uncertainty,” he added. “No one knows what the final recommendation is going to look like yet, including me. I know that once that draft (recommendation) goes out, at least that part of the anxiety will quell. But then there will be another year and a half to make that transition happen without driving everyone crazy, so those are things that we’re all going to have to work on together.”

During the town hall, Bailey took questions from those in the audience and online and read feedback that SOU has received via email on the Academic Affairs draft proposal, which can be viewed at sou.edu/president/next-steps/.

As reported by Ashland.news in December, five areas of the university were tasked with submitting initial proposals 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

“This is a draft,” Bailey said. “Here’s what a group of thoughtful people put together. If there are alternative suggestions, then share them, please. 

“We’re not wedded to what’s there,” he added. “We’d like to consider other options.”

Bailey stressed transparency by the university in the process, and announced a special listening session by the SOU Board of Trustees at 3:45 p.m. Thursday, Jan. 19.

“I think it does show good faith on the board that they’re willing to listen, no matter what the issue, including, ‘hey, this has not been as transparent as we wanted,’” Bailey said.

“We’re not at the finish line yet,” he added. “We’re still a work in progress.

“I am comfortable being open to those critiques in front of the board.”

SOU President Rick Bailey talks at a town hall meeting Thursday for university employees about progress made balancing the schools budget. Bob Palermini photo/palermini.com
Bailey lays out timeline

Following the town hall, Ashland.news caught up with Bailey to talk about details of the meeting, including transparency.

“This is about process, it’s about transparency, it’s about general inputs and learning voices and likely it’ll become more targeted once there are elements of the draft that start to be released,” Bailey said.

Bailey laid out the timeline of the process going forward, including two town halls planned on the campus in February. A student town hall is planned from 5:30 to 6:30 p.m. Feb. 2 in the Rogue River Room. Community members and SOU employees are welcome to attend, Bailey said.

When Bailey meets with SOU students on Feb. 2, he plans to share as well that, while he has said he doesn’t want to put more burdens on students, that doesn’t mean there won’t be tuition increases coming in the future.

“We will use thoughtful incremental tuition increases as we move forward,” he told Ashland.news last week. “We won’t let it get out of control.”

When asked whether students at the campus in Ashland and Medford are aware of pending cuts, Bailey said the town hall on Feb. 2 is one way to spread the word.

“Likely there are students here at SOU who really don’t know everything that’s going on,” Bailey said, in an interview Friday. “And so we have to continue to be aggressive at sharing with them what we’re doing and how we’re doing it and why we’re doing it.”

“My hope is that students know that the reason that we are going through all of this is truly for them. They’re the central reason that we’re doing this, because we don’t want to put more and more on their backs — and not just our current students, but the students who follow them.”

Bailey early on in the town hall emphasized that he wants it to be known that the university will see tuition increases, even if he has said he doesn’t want to put more burden on students.

“We’re going to fight back against skyrocketing tuition,” he told those watching in person and those watching via the livestream. “What I would like for us to consider is to try to be that institution that routinely is raising tuition the least, compared to our counterparts.”

An employee town hall to continue to discuss the realignment process is planned from 9 to 11 a.m. Feb. 16. Following that meeting, in late February, Bailey intends to finalize a recommendation he will present to the SOU Board of Trustees in March.

A town hall will be held from 10 a.m. to noon on March 9, and Bailey said it is likely that many will already know the contents of the plan moving forward. The SOU Board of Trustees will meet Friday, March 17, to review a draft recommendation from Bailey. The board is expected to take a vote at its April 21 meeting.

“As we go through this process  … there will be people who lose their jobs and that’s awful,” Bailey told Ashland.news Friday. “And so I’m not insensitive to the gravity.”

Bailey said the day that a recommendation is approved by the board, the goal will be to move in a compassionate manner, and that day, “We are not handing out pink slips.

“One of the driving, guiding work will be compassion,” Bailey said. “How do we do this in a compassionate way for the employees who are affected? And how do we do this in a compassionate way for the students who will be impacted by this?”

Southern Oregon University employees ask questions about the universities planning process at a town hall meeting Thursday. Bob Palermini photo/palermini.com
Optimism, despite financial ‘crisis’

Bailey continues to express continued optimism moving forward about the state of the university long term. 

“I am convinced that we have an opportunity to make some bold decisions that change the cycle of having to go through these cuts every few years,” Bailey said Friday, Jan. 6.

“We have to become a more nimble, smaller institution,” Bailey added.

Before the university went on holiday break in December, Bailey held a town hall sharing the bleak news of the increase in the structural deficit — which ranges between $10 million and $13 million — that requires the university to cut $3.7 million from the 2022-23 budget alone.  

Bailey put out the call in December to faculty who were already considering retirement by 2024 to announce it before he goes to the SOU Board of Trustees with his recommendation in March, in order to help shape the strategy moving forward. Bailey shared Friday that some faculty have already made their retirement announcements known to administration. 

“I’m very grateful for the people who, in a selfless way, have understood where we’re at and have stepped up,” Bailey told Ashland.news. “It’s our intent to mitigate the challenges that this transition brings.”

Bailey said the announcements of pending retirements will help the university shape its strategies moving forward as it aims to “rightsize” the university’s financial situation.

“Unfortunately, about 80% of our budget is people and pensions and medical benefits and, over the years, we’ve really trimmed down everything else,” Bailey said Friday. “So there’s not a whole lot to give in the other areas.”

Employees listen to SOU President Rick Bailey at a budget town hall meeting Thursday. Bob Palermini photo/palermini.com
Benefit costs continue to increase

Greg Perkinson, vice president of Finance and Administration at SOU for the past five years, commented on the financial situation at hand in a separate interview with Ashland.news earlier this week. 

“That labor component, three years ago, it was 56 cents on the dollar,” Perkinson said. “So if your salary was $100,000, we were ultimately paying $156,000 … this current year, when we recalculated that, it has increased to 79 cents on the dollar. So what we have, effectively, is state employees who have really nice benefits … The challenge is the cost of those benefits is not within our control.”

That includes retirement and medical benefits for employees, which Perkinson called, “fantastic and a huge cost to the university.”

“I don’t want to call it unsustainable but at some level it is, and our ability to change that is about nil,” he said.

Perkinson hopes the university can receive more funding for higher education from the Oregon Legislature.

“About a third of our money comes from the state,” Perkinson said. “Ideally, we would flip that (to two thirds) and get the state to really pony up and give us better support.”

Currently, the state gives SOU about $26.8 million, out of a projected $66 million in revenue.

“If you looked at the same kind of data 20 years ago, that one third, two-third split is opposite,” Perkinson said. “Two-thirds of the money came from the state and one-third came from student tuition. It happened over time.

“We want the legislators and the governor to believe in the public good. That is what we do and hoping that will incentivize them to give us better funding support.”

Perkinson emphasized that public universities, SOU included, have become dependent on significant student tuition increases.

“When I got here at the end of 2017, SOU had recently approved — effectively, it was a 9% increase — and it took us from being one of the lowest tuition rates in the state to being sort of in the middle of the pack,” Perkinson said.

In the years since, Perkinson said the majority of increases in tuition have been around 4 or 5%, with the occasional 6 or 7% increase.

Staying below the inflation rate for increases is his goal moving forward.

“For me, it’s being mindful of the affordability challenges that our students have,” Perkinson said.

Perkinson was seated in the front row while Bailey continued his message at the town hall.

During the Oregon Legislature’s session in February,  Bailey plans to continue to advocate for the state of Oregon to play a larger role financially.

“Part of our challenge, not just at SOU but across the state, is that our state pays relatively lower amounts per student than our neighboring states,” Bailey told Ashland.news. “That’s an issue.

“So I would like that to change, but I also know that we need to play our part as well as a university.”

Bailey said in discussions with state legislators, he believes they are “keenly aware” of what SOU is doing.

“I think they are going to acknowledge the difficult decisions that we’re making,” Bailey said. “I think that it will likely lead to more support for our institution — specifically our institution moving forward, when we demonstrate … how serious we’re taking the challenge. So it’s all interconnected.”

Bailey met in December with then-Governor-elect Tina Kotek, who was sworn into the top office in Salem on Monday, Jan. 9.

Bailey appeared optimistic about the meeting. He described their discussion regarding the challenges SOU faces as “robust.”

“I think she is excited about our willingness to make bold decisions,” Bailey said. “I think she’s very excited about our entrepreneurial approach to investments and revenue generation and I think we’re going to have her full support.”

He intends for the proposed cuts to be made over time and not be completely implemented until 2024, giving the university time to show appreciation to those who will be impacted by the cuts as well as those planning to retire.

“The idea is we have time to transition those who are affected over the course of several, several months … and the goal will be student-centered on how do we help the students through that transition as well. Any effect to academics — we’re still going to find pathways to teach those students out, to let them finish their programs; to partner with other institutions who can help out with that.”

Bailey said there will be a plan to ensure students impacted by the cuts can finish out their programs, even if the university must partner with other institutions to make it happen.

“As challenging as this is, as stressful as this is, I am hopeful and optimistic of getting on the other side of it,” Bailey said, “and really building an institution that thrives moving forward, longterm.”

Bailey said the university’s new fiscal model will be very conscious of ensuring that revenues are always higher than costs.

“If we’re going to add a new program or a new service … then we are at the same time going to ask, ‘what else are we going to not do? so that we don’t grow beyond our fiscal capacity,” he said.

Longtime mathematics faculty member weighs in

Sherry Ettlich, director of Science, Technology, Engineering & Mathematics (STEM) Division at SOU, was among those who attended the town hall in person.

Ettlich joined SOU as an assistant professor of mathematics in 1987, and has served as chair of the Mathematics Department twice during her career at SOU, between 1995-2003 and 2008-2015. Her career has spanned more than three decades and she has served as director of the STEM division since 2014. So she’s seen a few financial difficulties.

Ettlich took a moment to count the retrenchments over the years — two formal retrenchments, she determined, and several other budget reductions.

“People’s careers advance and change, I’ve just been lucky I could have mine change and stay here,” Ettlich told Ashland.news following the town hall. “I’ve been here through a number of presidents and a few provosts, several deans.”

Every financial difficulty she’s experienced at SOU has been unique, proving there’s no cookie-cutter solution.

“You can bring an informed perspective, but you can’t just assume it’s the same,” she said.

Asked if she has advice for faculty new to the experience of difficult financial situations, she said she encourages individuals not to panic and to “let the process play out.”

“I remember back when I was first hired, the Legislature went into session, I was afraid I would lose my job because there were all these budget talks and things and they did impact the university in different ways,” Ettlich said.

Ettlich noted it was this way for a full decade, actually.

“But it was never quite as bad as my imagination would take it,” she said.

She noted that there is a lot of fear among faculty because it can be hard for the process to play out.

“I’ve got a lot of brand new faculty in my division that are very nervous,” Ettlich said, noting her door is always open to talk with her about the experience.

“I think this is a very challenging process that we’re going through,” Ettlich said. “I’m hopeful that some of the changes we’re making will make it so that we aren’t repeating this as much as I’ve experienced in the past. There’s nothing that makes it easy or straightforward. It is just a hard and difficult process to go through.”

Until Ettlich knows where the draft is going to put things for Ettlich’s program, she said she’s cautious about causing too much anxiety among students.

“I’m hoping that we have the minimal possible impact on students and their program of study and their progress towards meeting their career and educational aspirations,” Ettlich said. “Whatever is decided, we will work hard at ensuring that students can complete the program they’re enrolled in … that we support them in whatever changes come down the road. But I just can’t make promises and I don’t want students creating scenarios that are unlikely or blowing them out of proportion, how they’ll impact them.”

What does Ettlich think about the process so far?

“I think we’re doing it as well as we could do,” she said. “I know that some of my folks don’t feel as if it were as transparent as they’d like, but there’s no way to have complete conversations with every individual on campus over everything, and proceed along the timeline that we need to proceed.”

Others working through transitions

At the town hall, Bailey also acknowledged Mail Tribune reporter Kevin Opsahl, thanking him for his fairness in reporting and service to the community.

“There’s some really interesting changes happening in our community just this week,” Bailey said. “One is that the Mail Tribune’s last issue will be tomorrow (Friday).”

“You probably also saw some changes that are happening with our friends at Oregon Shakespeare Festival,” he added, referencing the departure of Executive Director David Schmitz and more than a dozen layoffs and furloughs.

“I think all of us would agree that a successful OSF is a successful SOU – we are joined at the hip,” Bailey added. “So everything that can be done to be of service to them, we want to do that.

“The things that are happening at the Tribune and OSF and all of our other universities … all of the challenges that we’re facing, I think it’s safe to say we’re not doing this alone. Everything is involved in something similar to this. 

“It does show that we’re not outside the norm,” he added. “We’re doing the things that we need to do for us. We’re doing it because we care about our students … and we’re trying to change that model in a way that helps them.”

Reach Ashland.news reporter Holly Dillemuth at hollyd@ashland.news.

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Bert Etling

Bert Etling

Bert Etling is the executive editor of Ashland.news. Email him at betling@ashland.news.


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