Wright State president cut $50M in first year, kept eye on future

» RELATED: Wright State to start issuing layoff notices to 26 employees this week

Weeks before Schrader arrived, trustees slashed more than $30 million from Wright State’s fiscal year 2018 budget, but declines in revenue forced the new president and her team to implement close to $20 million more in cuts during her first year for a total budget reduction of nearly $50 million.

In June, chief business officer Walt Branson announced the university would likely see a $10 million decline in revenue during Schrader’s second year in office, signaling more layoffs among other cuts.

The most challenging problem Schrader said she encountered was $5.5 million in surprise health care costs that popped up in February. Medical claims increased and decreased by as much as $500,000 in a single week this past year, according to the university.

An exact cause for the fluctuations is unknown, but Branson and trustee Sean Fitzpatrick have said the large claims could have come from employees or their family members who had major medical problems this year or are about to retire or leave the university.

“You’re moving forward, and everybody’s doing what they need to do, and then you run into something that you can’t mitigate. You just need to work through it,” Schrader said of the unexpected health care costs.

The medical claims were one of several difficulties Schrader and her team had to work through this year.

» RELATED: WSU board chairman cautions university: ‘Keep eyes on the road’

Just last week, Wright State began issuing layoff notices to 26 employees, whom Schrader declined to identify as either staff or faculty. The university has laid off about 93 people in the last two years while several other jobs have been left vacant. Barring any more unexpected financial problems, Schrader said she doesn’t foresee additional layoffs in the school’s near future.

Enrollment proved to be a continuing problem as well. Total enrollment is expected to drop below 17,000 this fall for the first time since 2007. As it is for most colleges, tuition is Wright State’s biggest single source of revenue, so the enrollment decline poses yet another issue for Schrader.

“Look at the significant challenges that the university has faced,” said Bruce Langos, an outspoken member of the board of trustees who was appointed after Schrader was hired. “I think a number of the problems are bigger than what she thought they might be.”

Year 1 performance

Schrader addressed Wright State’s financial and legal problems in a speech in her first week as president. A little more than a year later, she has managed to avert what many saw as inevitable a year ago: State fiscal watch.

WSU will likely avoid being placed on watch, and the school will add around $7 million or so to its savings account, Schrader and other administrators have said. The savings comes after the university spent more money than it generated for five straight years.

“It can’t be underestimated how dramatic the turnaround has been in that short amount of time … clearly we are in a position that we were not expected to be in at this point,” Schrader said.

» RELATED: U.S. senators keep close eye on VA as GI Bill changes take effect

The state measures every public college’s fiscal health with a “Senate Bill 6 score,” an annual rating of zero to five. Any school that falls below a 1.75 two years in a row is put on notice. Wright State projected its score last year was a 0.8, meaning another year below a 1.75 would put the school on fiscal watch. Administrators don’t expect that to happen.

Schrader has been quick to point out that more work needs to be done.

Her administration’s budget for fiscal year 2019 calls for $3 million more to be added to Wright State’s reserve fund. The fund decreased from $162 million in 2012 to a projected $31 million by June 30, 2017 and if next year’s goal is met, the university would end the year with at least $54 million in reserves.

Noting “the job is not over,” WSU board chairman Doug Fecher said Schrader has done a good job of moving Wright State toward the tail end of its budget crisis.

Year 2 challenges

Some issues remain that Schrader will have to tackle in her second year on the job.

A contract with Wright State’s faculty union is one of the bigger issues. The union’s contract expired in June 2017 after negotiations stalled the previous March.

Members of Wright State’s chapter of the American Association of University professors have threatened to strike if a deal is not reached. Union members have also harshly criticized Schrader, with history professor Noeleen McIlvenna going so far as to call her an “unproven president.”

At this point, the union blames Schrader for the lack of a contract, said Martin Kich AAUP-WSU president. Even with a contract still hanging in the balance, Kich said the university is in a better place than it was a year ago.

» RELATED: Ohio State raised more than $600 million in donations last year

“If they can correct five years of overspending in about a year and a half, that shows you that the problems were self-created and fixable,” Kich said.

Besides a faculty contract, Schrader is focused on preparing a strategic plan for the board of trustees to consider in October.

Throughout her first year, Schrader took part in several “summits” at which she asked students, faculty and staff to provide their ideas on what Wright State should be like come 2025. The extensive brainstorming sessions have helped Schrader get a feel for the institution and even provided some of the most memorable moments of her presidency so far, she said.

With Wright State’s biggest problems starting to settle, Schrader said in her second year she’ll be able to spend even more time on her strategic plan and making WSU the university “that Ohio needs it to be.”

“It has of course been a whirlwind, but the wonderful thing about going into year two is that not everything is new,” Schrader said. “You can really get to some of the business at hand.”

FIVE FAST READS

• UD cuts ties with annual “Dayton 2 Daytona” trip

• State suing Dayton company for ‘shoddy work’

• Fairborn vet one of thousands pushed into debt by VA mistake

• Clark State to offer registered nursing program at Beavercreek location

• Algae plaguing Ohio lakes could force Kasich to take executive action