Good Morning Chairman Yoder and members of the House Appropriations Committee, I am Kirk Schulz, President, Kansas State University. Thank you for the invitation to appear before you this morning.
During the first few months of my administration, focus has been on financial and decisional transparency. This is most apparent in athletics, where the new corporate structure encourages strong oversight by university administrators and the new athletic director has adopted a new code of transparency and fiscal accountability. My regular and frequent interaction with all constituency groups and stakeholders has been well received. As we move forward, the university administration will continue to emphasize this transparency because we believe that it will lead to appropriate decision-making in the institution's best interests.
* K-State's FY 2010 General Use Budget, consisting primarily of State General Fund (SGF) appropriations and tuition, is about $326 million.
* K-State's FY 2010 State General Fund (SGF) appropriation has been reduced by $22 million (about 12 percent) from the beginning FY 2009 level.
* In addition to these cuts, K-State had to identify about $7 million to fund increased costs for items such as utilities, employee fringe benefits, faculty promotions, classified pay plan adjustments and the minimum wage increase.
* K-State's 3.9 percent tuition increase generated about $6 million in additional resources.
* This means that K-State had to solve a $23 million problem. The problem was addressed this year by reducing departmental budgets by $14 million (3.5 percent for all units and more for most non-academic units) and by using $9 million in temporary stimulus funding and funds that had been set aside for one-time equipment purchases.
* The base funding reductions have been made by holding approximately 200 positions vacant and partially meeting critical needs with part-time temporary replacements, reducing our student employee labor force; and by cutting non-salary expenditures. The FY 2010 situation was more difficult because many units used virtually all flexibility to meet their share of K-State's $7.8 million FY 2009 rescission. K-State has tried very hard to not significantly reduce course offerings but has combined or delayed offerings of several sections across all colleges. As a result, many faculty members are assigned heavier teaching loads, creating workload discrepancies. For example, six faculty members in architecture are teaching double studios, which are huge teaching loads with nearly 20 contact hours. These increased teaching loads in all colleges greatly reduce a faculty member's ability to contribute to master's and doctoral committees or to produce scholarly work and competitive research opportunities.
* Because of the extraordinary efforts of our faculty, staff and students, we are meeting our core mission. Our enrollment was up in the fall and continues to be strong this spring. Extramural research awards are running ahead of last year's level and we are fulfilling our service and outreach mission. Unfortunately, our adaptation to this reduced resource level is not complete. We still need to identify about $15 million in further savings or new resources to address critical needs. First, our current base operating budget is not sustainable -- we need to replace $9 million in temporary resources that are being used to pay for base operations. Second, we need about $5 million to strategically restore resources that have been cut from core campus academic units that are operating in a non-sustainable fashion - for example, some of the approximately 200 unfunded vacant positions must be filled to ensure continuation of quality academic offerings. Last, we need about $1 million in central resources for contingent needs.
* Since last August, the entire K-State community has been actively engaged in determining how we should meet our budgetary challenges. Under a process agreed to by K-State administration, faculty, staff and students, 1,400 ideas about potential savings opportunities and revenue generation were submitted from across the campus. Those ideas have been collected, organized, evaluated, posted on the K-State Web site and shared with the entire university. Discussions about how to proceed are ongoing. The collaborative nature of this entire process has served us well. The list of ideas and resultant discussions will help us through the current difficult times and will provide the basis for improvement opportunities for years to come.
* Over the course of the last 18 months, K-State has endured its share of the state's budget burden. We are actively engaged in a process designed to preserve our ability to meet our core mission at current funding levels. Additional reductions would significantly reduce our capacity to meet the needs of the state and to positively impact the future of Kansas.
* Replacement of Campus Steam Line -- Replaces deteriorated steam lines, it is about to be bid.
* Call Hall, Kedzie Hall and Justin Hall Heating, Cooling and Control Replacement -- Addresses serious deficiencies in original domestic water, heating and cooling systems.
* Roofing Replacement Projects -- Replaces several campus roofs.
* Chemistry/Bio-Chemistry Fume Hood Building Ventilation System Replacement -- This project would use FY 2011 ARRA funds to address serious deficiencies in the original fume hood ventilation system that has deteriorated over years of chemical ventilation.
* Utilities Infrastructure and Power Plant Improvements -- This project replaces a power plant boiler and replaces the antiquated 4,160-volt electrical system (the Frankenstein room). Construction is 70 percent complete and is expected to be finished by June 2010.
* Renovate Academic and Academic Support Space in Old West Memorial Stadium -- This project would renovate academic and academic support space in West Memorial stadium when funds become available.
* Leasure Hall Renovation -- This project improves ADA compliance and renovates classroom space. An elevator was completed in January 2009. The classroom is currently being renovated. Additional ADA improvements are planned for the building's two restrooms.
* Willard Hall -- This project repairs and renovates exterior and interior building systems.
* Seaton Court Roofs -- This project repairs Seaton Hall and Seaton Court roofs, is under way and is partially complete. Final completion is expected by summer 2010.
* Roofs and Other Projects -- This project replaced two roofs and renovated general classroom space. It was completed in 2008.