The (Continuing) Days of the Shrinking Budget

• By Michael G. Steger
• 10/01/08

When it comes to the current budget climate at most of our campuses, I think the Rolling Stones summed it up best when they sang, “You Can’t Always Get What You Want.”

As economic conditions change, we see higher education reshaping how we budget and what we budget for. State schools have seen budgets for operations and maintenance fall due to recent tax cuts, and while many private institutions seem to operate under a constant tight budget leash, I do not believe any school is immune to the lack of available funds.

The situation takes many forms, such as lower enrollments due to personal or family economic reasons; donors not contributing because of reduced personal portfolio growth; and federal, state, and local funding being cut or reduced. Rising fuel, utility, and insurance costs are all contributing to the problem.

What do we, as managers, do to help to ensure that our most necessary items remain in the budget and not move to the deferred maintenance list?  We can start by making sure that our list of needs is as complete as it can be. Review all outstanding projects and items that have been moved to the deferred maintenance list; are the projects out there still viable and required? If there are jobs that aren’t needed anymore, be sure to remove them from the list.

Take the remaining projects and prioritize them using a systematic approach. This system should include how long the project has been on the list and how critical it is to the physical or structural integrity of campus. Does not doing the work create other work or problems, and does it affect any portion of the occupants’ physical safety or health? Finally, considerations such as cost (and then, let’s face the truth, whether it is a pet project for someone higher up the administrative ladder) will come in to play!

Once your projects have been prioritized, review them again with your staff and your boss, so there are no surprises. Present a budget request list that is easy to read and has concise descriptions. Take the time to present the request personally if your approval system allows for that. Making sure that your needs are clear is critical. 

Best-case scenario is you get all you asked for plus a pet project or two. Worst-case scenario is you get a very small portion of what you requested or a handful of projects that were low on your priority list (but higher on someone else’s list). Now what?

Review the approved projects and begin to reprioritize them as to when and how you will work them toward completion. In very tight budget times, it might be a safe bet to encumber the funds for the jobs you most want to do, and then begin work as soon as possible.

So far we have been talking about projects… how about your own departmental budgets? Being required to make cuts in these lines also creates some very uncomfortable situations. Trying to reduce budgets for lines that are “fixed,” such utilities, insurance, and contracts, can be a challenge. Not to mention the struggle to ratchet back repair and maintenance and other supply account lines.

When we look at utility accounts, we look for all areas that can be cut back. Begin by encouraging strict conservation measures. It is amazing how much water or electricity can be saved when a few thousand students, faculty, and staff take shorter showers, turn the lights off when leaving a classroom, or simply shut their computers and monitors down when logging off for the day. These savings add up quickly. Also consider equipment run times and air temperature set points, as adjusting these can also help curtail costs.

Another opportunity for energy savings is to review your rate structure with your utility. It is possible that by combining one or two accounts the rate could be lowered. While reviewing with the utility, also consider using the building automation system and/or sub-metering software to avoid demand changes.

Other last-resort ideas: It may be necessary to institute a hiring freeze or even lay off personnel. The obvious downside to losing staff positions is that the institution will suffer from reduced services. Additionally, capping the supply budgets can also help achieve savings. If we don’t have a maintenance person to change the light bulbs, we won’t be spending money on that material. As I noted, these are last-resort items, but certainly ones we may face.

As we reach our budget limitations and whatever we do to work through them, we hope we are able to do so in a positive light. Being positive in a negative situation shows solid character and as leaders, that is a large part of why we are there.

Michael G. Steger is director of Physical Plant Services for National Management Resources Corp. at Palm Beach Atlantic University in West Palm Beach, FL. He can be reached at [email protected].