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Regents Report: President Bracing For State Budget Cuts

SOCORRO, N.M. October 21, 2009 – The New Mexico Tech Board of Regents learned that enrollment of new students for fall 2009 is looking rosy, state finances are not looking rosy and employee health insurance premiums will likely increase in 2010.

Total applicants for fall 2010 are already at 495, well ahead of the 350 applicants in October 2008. Tech has already received 28 paid applications for fall 2010, in comparison to only nine in October 2008.

Admission Office director Mike Kloeppel said that the increased numbers are largely due to the recruiting efforts in the spring of 2009. Admission counselors and recruiters are working diligently this fall at college fairs and with high school counselors to bolster enrollment for 2010.

University President Dr. Daniel H. Lopez reported that he expects the legislature to mandate 3.5 percent cuts in higher education for the 2009-2010 fiscal year. The legislature met in special session starting Oct. 17 and another round of budget cuts is imminent.

“The Governor has been adamant about not hurting public schools,” Lopez said. “And the public school system represents about 46 percent of the state’s budget. Given that, it’ll be hard to address a shortfall of approximately $650 million in the state’s revenues.”

Lopez said that Rep. Lucky Barela’s proposal calls for a 2.8 percent in Instruction and General budget cut and a 6.5 percent cut in public service projects.

“The problem is that a lot of our public service projects are also teaching and research projects,” he said. “The Bureau of Geology and the PRRC hire many students to do research. If you cut their budget, you cut their ability to deliver educational services. It’s difficult to convince the legislature that these ancillary services are crucial to instruction.”

Lopez said he’s lobbying to change language in funding bills to allow universities to move money between categories, which is currently not allowed. Allowing for transfers between categories would make it easier to manage Tech’s budget in these difficult economic times, he said. However, the research divisions that do not contribute to teaching or public service projects will probably have to absorb 6.5 percent cuts in state funding, he said.

Lopez said the faculty has been extremely cooperative and collaborated with the Office of Academic Affairs in identifying areas where budgets can be trimmed.

Dr. Peter Gerity, vice president of academic affairs, said he regularly meets with academic department chairs to discuss budgets.
Faculty Senate Chair Dr. Bill Stone said the faculty appreciates the efforts of the administration and the Regents to minimize the effect of budget cuts.

“We don’t like having faculty positions frozen, but it’s better than layoffs,” he said.

The university currently has 11 faculty positions that are open and 40 staff positions that have not been filled.
In other financial news, human resources director Joann Salome presented the Regents with a proposal to increase employee health insurance contributions.

The Indemnity Plan payroll deductions would increase 10 percent; the PPO deduction would increase by 2 percent; and the high deductible plan would remain the same.

For an employee making more than $25,000 who has insurance for his or her family, the payroll deduction for the Indemnity Plan would increase from $268 per pay period to $294.79. The same employee with the PPO would see the deduction increase from $199.33 to $203.32.

Tech has 775 employees enrolled in the health insurance plan; 452 in Indemnity and 323 in PPO. The Indemnity Plan is no longer offered to new employees and the university is encouraging people to switch to the PPO plan. Last fall, about 80 employees switched.

The Indemnity Plan saw claims of $3.4 million last year, while the PPO had about $1.3 million in claims. Salome said her staff is working to improve the PPO and make it more attractive to employees to switch.

Complete details about the proposed changes will be made available later this week.

In other news:

  • The Regents learned that Dr. Warren Ostergren has begun a three-year term as chairman of the mechanical engineering department, replacing Dr. Sayavur Bakhtiyarov.
  • Assistant vice president of finance Leyla Sedillo presented the monthly financial analysis. She said the university is staying within its budget, which includes a 3.5 percent budget cut for 2009-2010 in anticipation of state-mandated cuts.
  • The Regents also approved budget adjustment requests, as presented by Sedillo, which reflected year-end balances from fiscal year 2008-09.
  • The Regents approved the budget for the Marion and Irving Langmuir Quasi Endowment for 2009-10.
  • Lopez presented an update on capital projects. He said the Jones Hall renovation is completed – much to the satisfaction of the chemistry faculty. The addition to the Petroleum Recovery Research Center has been completed. The Regents and Lopez participated in an official ribbon-cutting ceremony prior to the meeting. Also, the new laboratory building west of Workman is progressing, but has been slowed by lack of construction funds. The construction of the new geothermal hot water loop has been stalled by a dispute between two contractors. Once that dispute is resolved, construction will begin, Lopez said.
  • Dennis Morrison, the director of Tech's research division Institute for Engineering Research and Applications, informed the Regents of an upcoming trip to Saudi Arabia. Morrison has three ongoing projects in the Middle East, all sanctioned by the U.S. State Department. He is organizing a class on safely and securely handling sealed-source radioactive materials “from cradle to grave,” presenting a keynote talk on commercializing intellectual property from the university level and continued consultation work with the King Saud University in Riyadh.
  • Gerity reported that 13 students have fallen ill with what is likely the swine flu, or the H1/N1 virus, which, fortunately, have not been too severe. Most of the ill students have already recovered and those who are still sick are recovering normally. The Residential Life Office has provided isolated rooms for some students, while Chartwell’s has provided meals for the confined students.
  • The Regents approved a resolution to remove Dr. Ricardo Maestas from the bank signatory list. Maestas, recently left Tech to take the president’s position at Sul Ross State University in Alpine, Texas. He will be replaced as a signor by assistant vice president of research Richard Cervantes.
  • The Regents approved a list of excess property for disposal: an X-ray spectrometer and chiller, a correlation spectrometer, and germanium detectors with an electronics rack.
  • The Regents learned of a $441,570 contract between the university and Kinder Morgan Production Company, which conducts carbon sequestration work with the Petroleum Recovery Research Center.

– NMT –

By Thomas Guengerich/New Mexico Tech