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Owens begins recovery plan in response to state fiscal watch

By Jared Meade, Manager, Public and Media Relations at Owens

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Leaders of Owens Community College informed the campus community today that the College anticipates being placed onto Fiscal Watch sometime next year.  At the same time, they announced the beginning of a recovery plan that will help the college stabilize its finances and continue to fulfill its vital role as a leading education provider and economic engine within our communities.

“We will be challenged to be more entrepreneurial, to share difficult sacrifices, and to move this college forward,” Mike Bower, Ph.D., and President of Owens College told the gathering.  “We can and WILL transform this College.”

Based on Ohio law, a college can be placed onto Fiscal Watch for a number of reasons.  In Owens’ case, the trigger is a set of composite ratios that measure fiscal health.  Fiscal Watch would require Owens to report its finances to the State more frequently and to develop and implement a 3-year recovery plan.   Based on the anticipated composite ratios for Owens, the State would not be required to appoint a conservator.

Fiscal Watch would not become official until the Ohio Board of Regents receives the College’s audit and calculates the official composite ratios and adopts a resolution to that effect. This would likely occur during the First Quarter of 2015 calendar year.  However, Dr. Bower told the College audience that Owens is not waiting to begin the recovery plan.

When talking about the recovery plan, which includes initiatives on the revenue and the cost sides of the budget, Dr. Bower said that “The College understands that it cannot solely cut its way out of the fiscal challenges and still be true to its mission.”

The President announced a five-part recovery plan:

  1. Revenue Enhancement through strategic enrollment growth, retention and completion.
  2. Develop new long-term revenue sources, including but not limited to a tax levy proposal.
  3. Analyze spending to ensure all spending is focused on recruiting and educating students and implementing a student completion plan.
  4. Reduce employment costs through position elimination.  The College’s leadership will consult with Deans and Department Heads in the coming weeks to align position eliminations with Owens’ needs moving forward.   The College community will be informed on which positions will be included in the reduction in January 2015.  At this time, it is not known how many positions will be impacted.
  5. Implement across-the board salary and wage reductions among non-bargaining staff beginning January 1, 2015, while requesting all bargaining units to make a similar sacrifice.  (Reductions will range from 2 to 5 percent with smaller reductions for those individuals in lower pay grades and higher reductions not to exceed 5% for those in higher pay grades.  President Bower will take a 6% salary reduction.)  In addition, the College will offer the opportunity for employees to take voluntary furloughs.

Owens has taken aggressive steps already to control costs and reduce prior shortfalls. Nearly $16 million was cut out of the Fiscal Year 2014 budget alone.  However, enrollment continues to decline. Owens has seen a 38% reduction in enrollment over the past four years. The loss of revenue associated with this in terms of both tuition and state funding continues to put pressure on the College’s finances, resulting in the expected Fiscal Watch.

“We are proposing some very challenging measures while focusing on initiatives which will improve our revenue,” Dr. Bowers said, in conclusion.  “We will write a story where Owens makes the tough decisions needed to regain fiscal health and builds on a legacy of high-quality education and continue to fulfill our vital role as a leading education provider and economic engine within our communities.”

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