Still 'a long way to go' to $125M over the next 3 years

By Neil Offen

noffen@heraldsun.com; 419-6646

DURHAM -- Duke University is making "substantial progress" in meeting the goal of trimming its budget by $125 million over the next three years, but still must do more, top university administrators said Thursday.

"We're about where we thought we would be," Duke Executive Vice President Tallman Trask III told a university employee forum in the Bryan Center. "But there's still a long way to go. I'm not ready to say $125 million is no longer the target."

Last March, Duke President Richard Brodhead announced that with donations down and a shrinking endowment because of the economic downturn, the university would have to become smaller as it reduced its spending. Duke then embarked on a series of efforts -- everything from a moratorium on pay raises to turning down heating and cooling in campus buildings to, most significantly, offering buyout packages to hourly workers -- to reduce its budget.

The cost-cutting measures -- including the early retirements of nearly 300 of those hourly workers -- have resulted in a savings of around $25 million and a reduction of the university work force by the equivalent of 372 total positions.

But the university's budget this year has a deficit of $70 million, said Hof Milan, Duke's vice president for finance. "And that means that $45 million is [still] uncovered."

Personnel remains the university's main expense -- around 60 percent of the budget -- and while the officials repeatedly told the audience that no layoffs or furloughs are envisioned, more buyout offers are on the horizon.

The offers planned for next month will be made to about 100 regularly salaried employees, estimated Kyle Cavanaugh, vice president of human resources. Rather than a broadly offered package, "each school, each unit, each division, will look at positions that if someone did retire, could they eliminate or restructure that position."

Employees qualifying for the buyout package would have to meet Duke's Rule of 75, where an employee's age and consecutive years of service total 75 or greater.

"This is another of our work force strategies designed to reduce our costs," Cavanaugh said. "The idea is to make sure layoffs won't be necessary."

Trask noted that many of Duke's peer institutions -- including Harvard and Stanford, as well as UNC -- have had to let staff go. "Duke is one of the very few schools not to announce any layoffs," he said.

Despite what Cavanaugh called "an incredibly difficult time," Provost Peter Lange said morale on campus remains good, and that "is one of our greatest assets."