University of Montana staff who work full time and are paid out of the general fund are eligible for voluntary buyouts, including severance worth six months of their pay.
Wednesday, UM President Sheila Stearns shared the context of the offer, which comes on the heels of similar offers to faculty earlier in the year. She said some 1,260 people are paid out of the general fund, a number she said has been going down and should continue to drop.
"We do need to drive that down. We absolutely have to in order to have a balanced budget," Stearns said.
The university's general fund expenditures are $131.9 million in the current 2018 fiscal year, and of that, $117.5 million — 89 percent — goes to personnel, according to UM. The amount going to personnel should be closer 75 percent, or $99 million, according to a benchmark UM aims to hit.
"It's not one of those things that's going to drop to 75 (percent) overnight," Stearns said.
But she said UM must progress. She earlier said UM is spending too much on salaries and benefits and consequently not enough on things like the library, technology and other areas of the operation.
Staff Senate President Maria Mangold said a task force will be looking at how to fill gaps, and a survey will solicit staff's ideas. Although she said morale is low, she said the situation offers an opportunity for innovation.
She also said UM will not sacrifice front-line services to students.
"The severance is a very individual choice, and we don't want to influence that in any way, and we're thrilled that it's an option, period," Mangold said. "But we want to ensure that the survivors, or those who remain here, are not being overburdened."
At meetings Wednesday, Vice President of Finance Rosi Keller outlined the specifics of the offer. She said employees who take the buyout will terminate on Dec. 31, 2017, and they will receive six months of pay and medical and dental coverage through the end of 2018. Staff includes employees such as some department administrative assistants and financial aid officers.
To pay for the buyouts, Keller said UM will use money the Montana Legislature reserved for the purpose. She said she hoped the offer is attractive because voluntary reductions are preferable.
"That just reduces the amount of individuals we have to involuntarily let go," Keller said.
In response to a question, Keller said UM would not be rehiring even if many staff leave a single department, such as IT. Rather, it will "creatively restructure" the way it provides services.
"The intent of this is clearly to reduce the number of employees, as the president has indicated," Keller said. "So this isn't intended for you to leave and us to hire right behind you."
At this point, she said UM has not set a limit on the number of people who can accept the buyouts. UM doesn't have a target for the number of staff who accept offers, but she said if every employee takes an offer, the campus will set a limit and take them on a first-come, first-served basis.
In December 2016, Montana Commissioner of Higher Education Clayton Christian asked UM President Royce Engstrom to step down and requested that Stearns, retired commissioner, temporarily lead UM. Stearns agreed.
Pending approval by the Montana Board of Regents, General Electric executive Seth Bodnar takes the helm in January 2018. Stearns has said she wants to leave the table set for Bodnar and does not want to postpone budget decisions.
Earlier this week, Stearns said most employees will have a sense by mid-January if they may be subject to involuntary reductions before June 30, 2018.
"I believe we are building brick by brick, strategy by strategy, the framework to preserve academic excellence with a balanced budget for 2019 and beyond," Stearns said in an email.
At the meeting Wednesday, she said UM has been making progress in getting its personnel costs in line with its declining enrollment. She credited predecessor Engstrom with earlier reductions. In the 2014 fiscal year, for instance, UM funded 1,415 people out of its general fund compared to 1,260 this fiscal year.
The president also noted the current offer is one of several strategies the campus has employed in an attempt to balance its budget. In addition to a couple of rounds of faculty buyouts, it also wants to boost retention and enrollment and ensure students register for spring semester.
UM is in the midst of a process to prioritize its programs, and the outcome should identify where UM will put resources. Stearns said the information will be valuable going forward.
"It's like a huge gift to the new president to have that insight into each one of your programs and how they operate and what their challenges are," Stearns said.