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Financial Exigency Plan

Preamble

The Declaration of Financial Exigency is the most drastic action a university can take to preserve its role, scope, and mission. It is not entered into until all other measures have been thoroughly considered.

Owing to the seriousness of financial exigency, the faculty and the administration must be jointly involved in the decisions to salvage the institution. This policy is designed to bring these two constituencies together to face financial straits in a rational atmosphere of mutual trust and common concern for the university. The emergency action called for by a budgetary crisis must be grounded in the purpose of the university. Therefore, the formal statement of Texas Tech University’s mission will be the guiding principle throughout this plan.

 

Part I—Definitions

As used in this document:

Mission Statement.  As a public research university, Texas Tech advances knowledge through innovative and creative teaching, research, and scholarship. The university is dedicated to student success by preparing learners to be ethical leaders for a diverse and globally competitive workforce. The university is committed to enhancing the cultural and economic development of the state, nation, and world.

Financial exigency means that the financial position of the university as a whole, demonstrated by competent evidence, is such that the financial resources of the university, including all funding sources (specifically recognizing that all funds are not equally transferable for all uses), are insufficient to support existing academic programs to the extent that the university is unable to finance the full compensation of both all tenured faculty and all other faculty until the end of their appointment, including timely and proper notice. A legislative mandate reducing salaries across the board will not trigger declaration of financial exigency. Academic programs reduced or eliminated for academic reasons shall not be included within the scope of this definition. Reorganization shall not be included in this definition unless it results in the layoff of tenured faculty and is motivated by financial exigency. A financial exigency will last no longer than twelve months unless renewed by the same procedures outlined in this document.

Financial Exigency Advisory Committee, hereinafter called FEAC, is a committee composed of the Provost, Senior Vice President for Administration and Finance, president of the Faculty Senate, a dean chosen by the Dean’s Council, and three tenured faculty members selected by the Faculty Senate. The Director of Personnel and the president of the Student Government Association shall be non-voting members. The chair will be selected from the above group by the President of the university prior to the first meeting.

Program Evaluation Review Committee, hereinafter called PERC, is a committee composed of the dean of each academic college or school; a faculty representative from each academic college or school to be elected by the voting faculty of the college or school; the president of the Faculty Senate; an elected representative from the Horn Professors; the Provost, who shall serve as chairperson; and the Senior Vice President for Administration and Finance, who shall serve ex officio.

Academic Unit is a basic faculty group that recommends an individual be hired in the first instance and votes to recommend promotion and tenure of an individual at the beginning stage of the tenure process.

Working day is defined as a university calendar working day.

 

Part II—Declaring a Financial Exigency

Upon anticipating a financial exigency as defined above, the President shall notify the faculty and staff of the pending financial exigency and convene the Financial Exigency Advisory Committee (FEAC).

FEAC shall investigate and document all aspects of the university’s financial condition and recommend whether a financial exigency should be declared. Views on the financial problems of the university will be sought from the administration, faculty, staff, and students. The committee will:

  1. Review resource management efforts to date and their impact on the financial position and programs of the university.
  2. Consider alternative options to save resources and evaluate the potential impact the option will have on finances and programs.
  3. In this review and consideration of alternative, FEAC shall determine whether:
    1. Administrative expenses and positions that are not absolutely necessary to the academic functioning of the university have been reduced or eliminated.
    2. All activities that do not directly support the academic function of the university but which utilize resources directly or indirectly have been reduced or eliminated.

FEAC shall file a report within the time frame directed by the President.

The President shall make a report to the Board of Regents regarding the financial exigency and submit the written report of FEAC to the Board of Regents. The Board of Regents shall make the final decision regarding financial exigency. If the Board of Regents declares a state of financial exigency, each faculty member, academic unit, college or school, and administrator shall be responsible for executing the following procedures fairly and equitably.

If time permits, the declaration of financial exigency by the Regents will be required prior to the activation of Part III of this plan. If time does not permit, the President, after the filing of the FEAC report and after consultation with the Board of Regents, may immediately activate Part III of this plan.

 

Part III—Development of the Financial Exigency Plan

A. Preliminary Administrative Actions

The President shall initiate the process for meeting the financial exigency by sending written notice to the dean of each college or school who in turn will notify each academic unit, attaching thereto the FEAC report, the President’s recommendation and the Board of Regents’ statement declaring the exigency. The President shall simultaneously convene the Program Evaluation Review Committee (PERC).

The Provost will advise each college or school of the tentative monetary amount by which its budget will be reduced. The dean of each college or school will establish criteria for budget reduction and set a tentative monetary allocation for each academic unit and explain that this allocation may increase or decrease depending on the outcome of the process followed in Sections B, C, and D. These preliminary determinations of monetary amounts or allocations shall not prejudge or preempt the process to be followed in Sections B, C, and D. It is understood that the actions described in Sections B and C below will occur simultaneously.

B. Academic Unit Actions

The head of the academic unit (senior faculty member, chair, area coordinator, director, or dean) shall immediately send a copy of the President’s notice and the college plan when it becomes available to each faculty member in the unit and advise the faculty that a copy of the financial exigency report is available for inspection by individual faculty members. Each academic unit will, within the time limit designated by the dean, develop and present to the dean a written plan to accomplish the reduction. Each such plan shall include the following information:

The plans will detail the specific steps to accomplish any reduction, which might include the possible merger, suspension, or elimination of specific programs and which support the university’s mission. The plans will indicate any reasons (including documentation) for deviating from the order for layoffs noted below. Acceptable reasons include but are not limited to extraordinary distortion of the unit’s academic program, affirmative action policy, or academic excellence.

If necessary, the plans will identify the faculty members in the academic unit to be laid off according to the following order: first, personnel in nontenure track positions shall be laid off on the basis of rank, then time in rank. Second, nontenured personnel in tenure-track positions shall be laid off according to the following basis: first, rank; second, time in rank; and then time in tenure tracks at Texas Tech University. Finally, tenured personnel shall be laid off according to the following basis: first, rank; second, time in rank with tenure; and then total time with tenure at Texas Tech University. Those having lower rank or shorter terms will be laid off before those having higher rank or longer terms.

When faculty members are equal in all considerations, the academic unit in deciding who will be identified for layoff must consider the needs of the institution, the faculty members’ capabilities and qualifications for teaching in multiple disciplines, and the lengths of their service at this university.

Any faculty member identified for layoff shall receive a copy of the academic unit’s plan and shall have seven working days to respond to the plan after receipt of formal notification. The faculty member shall submit to the appropriate dean a written and documented argument against the layoff. The identified faculty member shall be advised of this right and the right to request a hearing as set out in Part IV.

C. The College or School Actions

The dean of each college or school shall appoint a representative advisory committee of faculty members whose positions are not likely to be identified for layoff to assist in developing a comprehensive plan to meet the financial exigency for the college or school. This advisory committee shall take into consideration the plans of the academic units, the maintenance of a strong multidisciplined program of academic excellence in the college or school, affirmative action, and cost effectiveness.

This Committee may recommend to the dean the reallocation of faculty positions and the mergers, suspensions, or elimination of entire programs or academic units in the college or school as long as the actions are supported by good reasons and are well-documented. The Committee shall present its recommendations to the entire college faculty.

The dean shall make preliminary decisions after consulting with this Committee and shall notify faculty members identified for layoff by the college or school process who were not identified by the academic unit process. These faculty members will be allowed to transfer to other units in which positions have become available if the faculty member’s seniority and qualifications permit. A faculty member identified for layoff by the college or school process shall have seven working days to respond after receipt of formal notification by submitting an argument and documentation against the planned layoff. A faculty member so identified shall also be advised of the right to request a hearing as set out in Part IV.

The dean shall be responsible for the final preparation of the plan within the time directed by the President and shall submit it and the advisory committee’s evaluation of that plan to the PERC. The dean’s plan shall consider the factors in paragraph one of Section C and the plan will be supported by good reasons and documentation. The plan must define actions that will meet the goals of the college or school for budget reduction and include ranked priorities for restoring programs, academic units and positions with a written and documented argument for each.

D. Program Evaluation Review Committee (PERC) Actions

The PERC or subcommittees thereof shall review each dean’s plan for overall acceptability, compliance with affirmative action standards and goals, and assurance that fair and equitable procedures were followed. Within three working days after receipt of the deans’ plans, the PERC shall certify the deans’ plans as acceptable according to the criteria or remand a plan (or plans) to the particular college or school for correction or supplemental documentation. A remanded plan shall be returned by the college or school within one working day with the appropriate corrections or supplemental documentation. The Committee shall again review such corrected or supplemented plan and certify it with such exceptions as needed.

The PERC shall consolidate the information in the plans and construct a profile of that part of the university which would remain and that part of the university which would be eliminated or modified. This profile shall be disseminated throughout the university community.

The PERC shall prepare a final report which shall include a summary of the deans’ plans, faculty responses, the profile of the university after the proposed cuts, and recommendations and modifications by the PERC based upon the priorities set out in the deans’ plans, faculty responses, individual hearing committee results, and compliance with affirmative action standards and goals. However, in preparing this report the PERC is to be aware that the overriding consideration is the mission of the university.

The report will be sent by the Provost to the President. After reviewing the report, the President will make an independent assessment of its strengths and weaknesses regarding the long-range goals of the university and then submit the report and his or her recommendation to the Board of Regents for final action and implementation.

 

Part IV—Individual Faculty Rights

After a financial exigency has been declared, a faculty member identified for layoff shall be given notice of the terms thereof, and shall have the opportunity to provide a written and documented argument against the layoff to the dean of the college for the dean’s action and final consideration in accordance with Part II.

The faculty member identified for layoff may, in addition, request a hearing before a three-member faculty committee. This request shall be made within seven working days after the notice of layoff is given. The request shall state the reasons why the faculty member should not be laid off and shall state the name of the faculty member the aggrieved party wants to appoint to hearing panel.

If a hearing is properly requested, a three-member faculty committee shall be appointed as follows and in the following order: a member of the committee shall be appointed by the aggrieved faculty member; a member of the committee shall be appointed by the dean of the college or school; and then a member of the committee, who shall serve as the chair, shall be selected by the two other members from a list of those elected to service on the tenure-hearing panel. The chair shall not be from the same college or school as the identified faculty member. At least one of the committee members should be from the academic unit of the aggrieved faculty member. No member of the committee may be a faculty member identified for layoff at the time of appointment.

The hearing will be conducted in accordance with guidelines issued by the Provost and university General Counsel. Due process will be provided as required by the nature of the factual issues in dispute. If the layoff is based on the application of neutral principles set forth in III.B., then the minimal process outlined in this section applies; if, on the other hand, the layoff resulted because of individualized assessments and comparisons, such as those also specified in III.B., then a more formal proceeding on the record with cross-examination will be required. The aggrieved faculty member may have the assistance of counsel. The hearing panel shall meet, receive evidence in any form, summarize the evidence, and make recommendations to the Provost within seven working days after the panel is appointed. A copy of the summary and recommendations shall be given to the aggrieved faculty member and to the dean of the college or school. Either may respond with a written commentary sent to the Provost within three days after the hearing panel’s recommendations have been forwarded.

The decision of the Provost is final and, if possible, should be made before the PERC submits its final report as set out in Part III, Section D.

Prior to laying off the identified faculty, the Provost shall make every effort to place the laid-off faculty members elsewhere in the university system. The alternatives will include retraining as well as assignment to another suitable position within the university for which the individual is qualified by background, training, and experience. The Provost shall also set up a center for counseling faculty, helping them seek jobs and advising them of their legal and economic rights.

The position of a faculty member who has been laid off may not be filled by any other person for three years unless the laid-off faculty member has been offered reinstatement and reasonable time to respond, not to exceed thirty days.

Laid-off faculty members will be awarded all benefits provided by law. To the extent possible, other severance benefits and privileges will be provided. Additional consideration shall be given to the maintenance of the individual’s professional status.

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