Strategic Resources Initiative report, spring 2014

April 24, 2014

A message from Provost Rogan Kersh and Senior Vice President Hof Milam.

Wake Forest’s Strategic Resources Initiative was launched in fall 2012 to identify sources of new revenue and cost savings that could be applied to student financial aid, faculty and staff compensation, and other strategic University priorities, including academic programs and facilities.  As our work began, the financial outlook for higher education across the U.S. remained worrisome, even as internal financial pressures continued to mount.  The target SRI goal of $5-10 million in recurring operating funds is the equivalent of receiving a new endowment of $100-200 million.  The Initiative is a vital part of our strategy to establish Wake Forest on more solid financial ground.

In April 2013 after the initial year of work, the SRI Steering Committee (membership at Appendix A of the full report) issued a ‘discussion draft’ with $6.2 million in cost reductions and revenue increases over time.  Several WFU-wide presentations followed, along with many informal group and individual conversations; ultimately, faculty and staff provided valuable feedback resulting in changes to several SRI recommendations.

Realized savings and revenue increases from SRI recommendations were approximately $3 million in FY13. These funds were allocated as follows:

• Faculty/staff compensation:  Initial SRI savings were directed to boosting the merit pool for faculty and staff.  Over the previous three years, given the end of enrollment growth and strong downward pressure on tuition, the average merit increase was 2%; for 2013-14 the SRI savings-aided figure was 2.5%, an increase of nearly $1 million. We also devoted $860,000 to faculty funds as requested by deans (again, more particulars are in the full report).
• Student financial aid:  SRI savings also enabled an increase of $620,000 in the student financial-aid pot, now totaling more than $45 million annually.
• Strategic initiatives:  In 2013-14, SRI funds provided over $600,000 in support of initiatives ranging from technology upgrades to facilities renewal and replacement.

The revised set of recommendations from the first year is provided in the full report: go.wfu.edu/srispring2014.  The report is organized into four broad categories: Business Processes, Procurement, Technology, and Benefits.  While changes to our initial recommendations reduced the anticipated savings from several initiatives not yet implemented, realized savings in excess of projections on other initiatives indicate that our estimate of a little over $6 million in cost reductions and revenue increases is still on target.

The report also provides extensive detail on the proposed new parking fee for faculty and staff, given its swift emergence last year as an especially prominent discussion item.  To summarize our revised parking recommendation:

• The foremost goal of a parking fee is to help manage rising demand for parking on campus and minimize the need for expensive new parking lots or decks.  Additionally, the committee aimed to complement WFU sustainability initiatives and to produce revenue to be used for core SRI purposes outlined above.

• Per several suggestions, before implementing any policy a detailed study of transportation patterns on/around campus was carried out over the past year by our Office of Sustainability, working with faculty and staff colleagues as well as outside experts. The results affirmed a fee to park on campus.  The full report can be accessed at: http://go.wfu.edu/walkbikeride.

• A parking fee of 0.3% of pre-tax compensation (up to a maximum annual fee of $900) will be required for an on-campus parking permit for parking on campus during high-use weekday hours (8 AM to 5 PM), when school is in session, combined with a free-parking option for faculty and staff behind UCC. This plan will take effect on July 1, 2014.

• Also as was widely suggested, in order to avoid any negative financial impact of the fee, an amount equal to the parking fee will be added to compensation of all employees who work on Reynolda Campus as the new fiscal year begins on July 1, 2014.  We anticipate that a number of colleagues will choose to realize financial gains by electing the free-parking/shuttle option or carpooling, ensuring hoped-for sustainability benefits and reducing demand for weekday parking on campus.

Additional details of the parking program will be available as the new Parking Guidelines are released.

As the full report also details, our committee revised a number of other initial recommendations, including the tuition-benefit policy.

Continued attention to spending patterns and revenue sources is essential to Wake Forest’s sustaining our core purpose as well as exploring new ambitions. The Committee therefore has continued its work in 2013-14.  The focus in this second year has been in two primary areas – new and or enhanced sources of revenue (our committee’s first year was focused almost exclusively on expenses) and improved business processes in the human resources and compensation areas.

The Committee’s discussions about new sources of revenue focused on three areas: short-term opportunities which could be realized within 12-18 months, mid-term opportunities that could be implemented in two or three years with the appropriate research and development, and long-term opportunities which, while plausible ideas, may take three or more years and/or considerable investment to realize.  A broader discussion of these revenue opportunities can also be found in the full report.

The business process improvement project has been a multi-departmental exercise to look at our back office business practices in human resources and compensation, identifying areas of excessive manual labor, as well as opportunities for technology solutions.  Rick Matthews and several members of his team have been instrumental in identifying technology solutions to bridge these “pain points.”  Again, more detail is provided in the full report.

As we did last year, we anticipate broader campus discussions of these additional initiatives in coming months.  While these opportunities also have the potential for significant contributions to our SRI efforts, there will be a slower implementation time given the nature of these projects.

We look forward to your valued feedback on these additional SRI initiatives.