In response to a loss of sales tax revenue, the University of Arkansas at Fort Smith will realign its organizational structure beginning July 1 that will result in $1.69 million in annual savings or new revenue, UAFS Chancellor Dr. Terisa Riley announced Monday (April 12).
Major changes will include moving to a three college academic model including the College of Health, Education, and Human Sciences, the College of Business and Industry, and the College of Arts and Sciences. The university will also create a Center for Student Success and Retention. The changes will assure that all employed faculty and staff, other than those who are paid strictly through grant funding, will remain employed at the university in fiscal year 2022 with no reeducation in salary or demotion, according to UAFS.
Along with the approximate $1.69 million in continued annual savings or new revenue, the changes will amount to a one-year surplus of $530,000 because of a continued hiring freeze for fiscal year 2022 and the sale of equipment at the Blue Lion at UAFS Downtown.
The Fort Smith Board of Directors approved a resolution April 6 authorizing an agreement with the Board of Trustees of the University of Arkansas wherein they would assume the lease of the Blue Lion facility at 101 N. Second St. in downtown Fort Smith. The board also approved $118,022 be added to the 2021 budget to pay for the lease for the year and for upgrades. Of that, $30,000 would go to the purchase of equipment at the facility that is owned by UAFS, according to Assistant City Administrator Jeff Dingman.
Along with reassigning its lease of the Blue Lion, UAFS will discontinue its Season of Entertainment along with other programs and practices, Riley said in an email to faculty.
“Our music and theatre groups will primarily share space on campus and perform in campus facilities in the future,” she said.
In her email, Riley said students should see minimal changes as a result of the organizational structure. The biggest change they will notice will be the names of the academic colleges where degrees are conferred, she said. Examples of that are a chemistry degree will now come from the College of Arts and Sciences rather than STEM, a psychology degree from College of Health, Education, and Human Sciences, rather than the College of Communication, Languages, Arts and Social Sciences. Accreditation of each program will remain and agencies will be notified by the Office of the Provost of changes to the structure, she said.
Riley said several three-college models were considered by budget subcommittees formed to study how best to help UAFS financially. The adopted structure is modified from the version that was presented based on the comments received during the presentation as well as further consideration of the merger of governance structures, accreditation and licensure requirements, membership of current advisory boards, she said.
“All three academic colleges will be new and consist of mergers of existing programs,” Riley said. “On a positive note, a Center for Student Success and Retention will provide a more intentional focus on the First Year Experience, Transfer Student Experiences, and strategies to help students persist and graduate from college in a timely manner.”
She said the university would not create new positions in order to create the Center for Student Success & Retention. Instead, it will group existing departments and hire a new assistant or associate provost for student success with a vacant, budgeted salary line.
“Based on the dire concerns we had about enrollment projections due to the pandemic, the VCFA (Vice Chancellor of Finance and Administration) and I held open forums for employees and students. In our forums we reviewed the FY21 budget and shared the information we had about the estimated budget deficit, which we believed might be upwards of $8 million for FY21,” Riley said in the email to faculty.
In order to have a balanced budget for fiscal year 2021, the university reduced travel, put in place a hard hiring freeze and used institutional reserves among other actions. Riley asked students and employees to respond to a confidential survey with suggestions for increasing revenue, reducing expenses, improving communication and increasing efficiency, she said.
“Using the information collected in the hundreds of confidential survey responses, I formed six budget subcommittees In order to research the suggestions from their colleagues and students and to make recommendations to the University Budget Council. The subcommittees were focused on the following: Revenue generation, facilities, compensation and benefits, student enrollment/success, university organizational structure, and IT/instructional technology,” Riley said.
Those subcommittees met from May 2020 to January 2021. The subcommittee chairs reported on their recommendations during January, and the reorganization strategy was developed, she said.
“There are many other strategies that have been identified and for which we expect to investigate further in the future,” Riley said.
SALES TAX REVENUE TO END
An extension of a ¼-cent county-wide sales tax that helps support the university was defeated by voters in the Nov. 3 general election, with 56.43% of the votes saying no to the tax extension. When Westark College joined the University of Arkansas system and set to transition to a four-year institution, the college was no longer eligible to receive millage revenue.
Sebastian County voters approved a ¼-cent sales tax to go into effect Jan. 1, 2002, the same day the institution became the University of Arkansas at Fort Smith, to help fund the transition and growth of the university. That sales tax sunsets Jan. 1, 2022. Arkansas Act 1087 of 2013 gave UAFS the authority to request a sales-tax
The sales tax generated $6.29 million for UAFS in 2019. Riley has said without the sales tax the university will need to cut approximately $6 million from its annual budget of approximately $80 million. In December, Riley said the university did not want to pass the full amount of lost sales tax revenue to students. At one point, Riley said for the university to continue with operations as they are, tuition and fees might have to increase. In December, she said the university does not plan to do that and has made a commitment to not change tuition and fees for the 2021-22 school year.
“The loss of the sales tax is a major reason that we have to generate more revenue or decrease our expenses,” Riley said.