UofL Interim President Postel addresses university budget to packed house

Interim President Greg Postel addressed a number of topics to a full house Monday in Floyd Theater, with the budget shortfall and $48 million deficit front and center.

Postel, who is seven weeks into the job, said he has been meeting with as many different groups around campus as possible to address concerns about the budget and other topics, such as the university's probationary SACS accreditation status.

Before diving into the budget, Postel outlined numerous positive news stories out of UofL, including the generation of Fulbright Scholars, increase in applications compared to this time last year, and the Student Success Building currently under construction. He also noted his meetings with donors and potential donors have been promising.

“This university has folks who are extremely passionate about what we do and they want to support us. Some of them have been on the sidelines because they are concerned and want to see resolution before being comfortable about opening up their checkbook and resuming contributions,” Postel said. “That gives me a lot of momentum to continue on the path we are on and resolving issues.”

The $80 million, state-funded Student Success Building is on schedule and expected to open next summer.

“What’s exciting is it represents a new opportunity for new and improved types of teaching,” Postel said. “There will be areas that are focused on new and innovative learning and teaching techniques and our students will clearly be the winner.”

Postel also touted UofL’s commitment to community engagement, its active student government and its successful athletics programs.

“But these positives being the case, obviously we’re also faced with a lot of challenges. This is part of living, it is part of operating and it is just what we have to work through,” Postel said. Among the current challenges are:

SACS accreditation. Postel said UofL has navigated three steps toward resolving our current probationary status with SACS, including the passage of Senate Bill 107, a comprehensive response to SACS, which is available on the UofL President’s website, and the formation of governance committees to ensure internal documents are synced and accurate in accordance to state law. The next step is a SACS site visit in September, and an accreditation review in December.

“There is no reason to think the university won’t resolve this issue in December,” Postel said.

State audit and forensic audit. The state auditor finished a review in the winter, which Postel said covered governance, transparency and checks and balances. A forensic audit continues and is expected to be complete in early May. This audit is examining transactional issues.

“Between the two we’ll have a good understanding about the process and making sure history doesn’t repeat itself,” Postel said. “It’s critical we get past this as soon as we can. Our donors are out there, they’re strong, they’re still Cardinals at heart, and they’re waiting to give money. They just want to understand a resolution before their comfort level returns.”

UofL Hospital. Postel also briefly touched upon the transition of UofL Hospital from Kentucky One Health management to University Medical Center management. The hospital includes about 2,300 employees and a bed census of about 300 patients per day. He expects the transition to be completed this summer.

Budget

Postel saved the budget conversation for last, stating his objective was to “help people think about budgets in a slightly different way.”

“The budget is a guiding document. It may or may not reflect the actual experience. The actual experience becomes the result of the work of the community during the year. Our objective is to beat the budget,” he said. “What I want to impart today is the budget we present to the Board of Trustees will be nothing more than a best-guess estimate of what things will look like at this point next year.”

Central Administration has until May to present the budget to the Board of Trustees for approval and has received hundreds of ideas from faculty, staff and students across campus on ways to cut costs and boost revenue.

Postel admits he was surprised about the size of the deficit when the process began in January.

“That being said, this is a big organization. From a percentage point of view, this is manageable,” he said. “When I came into this situation in January, we had to do a quick assessment and things were not good. Cash was low, resources were significantly depleted. It was very precarious. We were on track to spend ourselves into real trouble. We had to take some quick corrective action and stop the bleeding.”

Postel said he’s confident everything is going to be OK and we’ll get to a point where “we’ll be able to have nicer conversations about how to use our resources.”

“We have to put something down on paper in May. It’s going to be wrong. We’re going to do so much better than that. I hope that’s some encouragement,” he said.

Q&A

Postel answered some questions from the crowd, including how the new budget model can benefit units, such as A&S, that generate net dollars, and how to avoid compromising the student experience during the budget shortfall.

He said they are studying models that work for net contributors and admitted one of the biggest solutions is an increase in enrollment.

“We need more students on campus and more online students. We have about 23,000 students and that is not sufficient for all of the things we want to do,” he said. “We need to be extremely aggressive with this. But we can’t ask people to do that unless there is a fair model.”

Postel also said that, despite the tight budget, many student benefits will be untouched, including the flat tuition rate for next school year. UofL is the only school in Kentucky not raising its tuition next year. He also noted the state-of-the-art Student Success Building and the $40 million renovation to the SAC as examples of UofL's commitment to students' experience. 

The full forum is available below: