Board of Regents Discuss Budget Overspending, Approve Hefty Raise for General Counsel at their Meeting

In a recent board meeting, discussions regarding budget overspending drew attention. This meeting witnessed key decisions on raises, faculty promotions, and the announcement of new academic programs. A focal point of discussion was revolving around the spending on contracts with Sodexo Management Services which have perpetually overrun their projected budget.

Reviewing The Sodexo Contract

It came to attention that the maintenance expenditures of the university consistently broke the budget, prompting university officials to reconsider its contract with Sodexo Management Services. The services provided by the facilities maintenance company were envisioned to shift employees out of the university’s system and into a third-party vendor, thereby freeing the university from having to participate in the state’s Kentucky Employee Retirement System.

However, with changes in the state retirement system, lowering the obligation the university would face, the officials are now considering “insourcing” maintenance, contrary to the initial plan. The current situation has been particularly challenging with maintenance expenditures regularly crossing the stipulated budget, emerging as a recurrent problem.

Budget Overspending

The budget overshoot issue became more significant as the university spent over 108% of its allocated maintenance budget. The university’s total budget for fiscal year 2024 was $389.9 million, with $17.1 million being allotted for maintenance. However, during the first three-quarters of the year, the maintenance expenses rose above $18.6 million.

The constant overspendings were partly attributed to rising inflation. However, critics suggested the overspending was due to lapses in budget management rather than mere inflation. The board addressed this issue by appointing a committee to review the prevalent spending procedures and provide recommendations.

Significant Raises and Approvals

Amid the budget discussion, another notable decision was the approval of a $33,688 salary raise for the university’s general counsel. The new employment agreement increases her annual base salary from $186,312 to $220,000 and is set to expire on June 30, 2028.

Besides the significant salary boost, the agreement also allows further raises at the University President’s discretion. This provision has sparked questions on the institution’s approach to budget management.

Other highlights of the meeting included the announcement of a 2% budgeted salary pool for faculty and staff, which led to the approval of tenure and promotions for over 20 faculty and staff members. The board also introduced five new academic programs including undergraduate certificates in personal branding, sport media and communication, and artificial intelligence and analytics; a graduate certificate in School of Social Work; and minors in piano pedagogy and commercial music.

A detailed budget presentation is set to be shared at the Board’s special meeting on June 7, illuminating more light on the financial trajectory and future steps of the institution.