Press-Republican

September 27, 2013

PSU to utilize reserves in 2014-15

By ASHLEIGH LIVINGSTON
Press-Republican

---- — PLATTSBURGH — SUNY Plattsburgh officials anticipate having to allocate $1.3 million in reserve funds to balance the college’s spending plan for next school year.

“Financially (for 2014-15), we’re OK,” Vice President for Administration John Homburger told the Press-Republican. 

“The problem is ... that we still will continue to have to use our savings account.”

The money, which would come from a reserve fund estimated to comprise $5.7 million at the close of June 2014, would help cover about $1.8 million in contractual salary increases for SUNY Plattsburgh employees, which, he noted, the college recently learned it will likely be responsible for next school year.

At times, the state, which negotiates such increases, has funded them.

“They negotiate it, and then (sometimes) they make us pay for it, and I’m OK with that as long as it’s recognized that there’s got to be some kind of resource there to help us with it other than making us take action to react to it,” Homburger said.

CONTRACTUAL INCREASE

SUNY schools are in year three of a five-year tuition increase granted by the SUNY 2020 Act, which also promises that the state will maintain its current level of financial support to the schools.

“But it doesn’t mean that if there’s a contractual increase that they will give us the support for that,” college Budget Officer Clark Foster said.

“They’ve done what our biggest fear was,” added Homburger. “We’ve been enjoying a $300 increase in tuition for the last three years ... but now they’re starting to take things that we have no control over and tell us (to) use that money for that.”

ENERGY AUDIT

College officials are also cognizant of the possibility SUNY Plattsburgh may be held responsible for two other large expenses, which would result in the need to use additional reserve funds.

One of those is an energy audit, which is required of all SUNY schools through an executive order from Gov. Andrew Cuomo.

Homburger said he is hopeful that the cost of the audit, estimated at $400,000, will be covered by the SUNY Construction Fund, a public benefit corporation intended to help support SUNY facilities.

This is a reasonable hope, he noted, as the fund recognizes its responsibility to finance the mandate and is advocating to do so.

Still, Homburger said, the college has set aside money from its cash reserve to foot the audit bill, should it have to.

“We do that from a conservative standpoint,” he said.

STRUGGLING SISTER SCHOOL

SUNY Plattsburgh, along with the other state universities, must also consider the possibility of being required to cover a share of the debt being incurred by SUNY Downstate Medical Center’s University Hospital of Brooklyn at Long Island College Hospital.

In July, the New York Times reported that the struggling facility, which SUNY Downstate acquired in 2011, was losing $15 million a month and bringing little money in.

“We haven’t heard a recent number as to how much they’re losing per month at this point,” Homburger said.

Early estimates indicated his institution could be held liable for a onetime payment of between $500,000 to $800,000; however, he noted, so far, SUNY Chancellor Nancy Zimpher hasn’t let that happen.

“I give the chancellor credit; she’s kept it away from us … she’s trying to keep it away from the other units and whatnot, but when you’re talking about cash to keep the door open and keep the water running, anything can happen,” Homburger said.

Should SUNY Plattsburgh have to pay a portion of the hospital debt, as well as for the energy audit and salary increases, he noted, “it would really deplete our reserves to a point that we would be … vulnerable.

“That’s essentially the worst case (scenario) because the faster this reserve gets depleted, the less resource we have to initiate other kinds of things that could revitalize a program or do something like that.”

ENERGY SAVINGS

The college, however, makes an effort to plan conservatively, Homburger added, to cover unpredictable costs and expenses out of its control.

The hope, he said, is to generate additional savings by reducing utility costs and from normal employee turnover.

“Our tradition has been to string out vacancies, so we’re not laying people off,” Homburger said.

In addition, the school has installed new roofs and windows on many of its facilities in recent years, as well as meters to monitor water and electricity use across all campus buildings, all of which reduce utility expenses.

“Although we have invested in things that are supporting the academics and the college, we’ve also been investing in these longer-term kind of savings,” Homburger said.

Email Ashleigh Livingston:alivingston@pressrepublican.com