An upfront cost of $7.5 million to fund the Voluntary Separation Incentive Program at the University of Wyoming approved by the UW Board of Trustees on Friday could save the college about $6.5 million annually, a UW representative said.
The incentive program was a one-time offer to pay eligible academic personnel their nine-month budgeted salary in addition to benefits in exchange for their voluntary separation.
Applicants were required to have worked at UW for 20 years and the application window was open from Dec. 1-Feb. 1.
“We received many, many applications for (the Voluntary Separation Incentive Program),” said Dr. Kate Miller, UW Provost and Vice President of Academic Affairs. “More than we expected to.”
A previous separation incentive program offered in fiscal year 2017 provided the results the university was seeking by reducing salary costs, said Tami Benham Deal, associate vice president of academic personnel and budgets. Most of those who took advantage of the first incentive program were staff, creating an unbalanced staff to academic personnel ratio and a need for a second incentive program, she added.
When the second program was announced in December, only $5 million was allocated for funding.
“The total cost of this program for all 45 applicants … would cost about $7.3 million,” said David Jewell, UW associate vice president for budgeting and fiscal planning. “That is between $5.2 million of salaries and about $2.1 million of benefits.”
The $5.2 million represents a one-time incentive payment equal to the applicant’s salary with a cap of $150,000 per applicant, Jewell said.
“The benefits payment of $2.1 million represents (sick leave benefits) — they have the option to take their sick leave payout,” he said. “Some of them have chosen to take it as a lump-sum payout. Others have chosen to take it over a three-year period.”
Jewell recommended the university allocate $7.5 million and put it in a reserve account to pay the accepted applicants throughout the time determined in their application.
“If we accept all 45 applicants, the annualized budget savings … would be roughly $4.5 million of salaries, $2 million of benefits,” Jewell said. “That total savings is $6.5 million.”
Benham Deal said administrative staff hoped to see enough enrollment in the incentive program to reduce the university’s budget by about $4 million.
“As part of the fiscal year (2018) budget reduction plan … there was a Voluntary Separation Incentive Program that allowed us to be more strategic and focus exclusively on academic personnel,” Benham Deal said.
By the end of the three-month application window, Benham Deal said the program received 48 applications, 45 of which could be accepted.
“Let me be very clear, program or budget reductions have impacts,” Benham Deal said. “This program as well as our budget reductions will impact the number of positions we will ultimately have. It already has.”
She said the incentive program was created with the idea of minimizing the effect on students.
“Those impacts could be when they take courses and courses they have to choose from,” Benham Deal said. “But what we equally want to ensure, and what we are confident we will be able to achieve is no impact on their ability to graduate on time.”
In response to a question about research retention, Benham Deal said the incentive program would have a minimal effect on ongoing research at UW.
“In addition to the (Voluntary Separation Incentive Program), we are experiencing attrition,” Miller said. “We will lose research grants with that. There are a lot of people concerned with the state of the university.”