UNR Budget and Enrollment Update

This is an update to NFA’s eight-part series on the University of Nevada, Reno budget crisis published in January 2024. (Some of the original articles have been updated–most recently Part 3B. Growth of Executive Positions and Salaries). 

Budget Shortfall for 2024–2025

At the April 30 UNR Campus Conversation, Vice President for Administration and Finance Andrew Clinger reported the “good news” that the previously projected shortfall of $31.7 million for FY2025 has been reduced to about $12 million. The stated reasons for a lower shortfall were the three-month delay in faculty COLAs, the 5% increase in student registration fees and tuition, and an improved enrollment outlook. VP Clinger clarified that the FY2024 budget cuts would remain in place, including 108 faculty and staff positions being held vacant and 5% cuts to department budgets. The administration has told the Faculty Senate Budget & Planning Committee they found additional commitments to be budgeted. 

The UNR budget is not out of the woods: it is deep in the forest. Previous administrations would have considered a $12 million budget hole to be a crisis. No information was provided about how the $12 million shortfall will be addressed for the fiscal year beginning July 1, 2024, but it is equivalent to an additional 100+ faculty and staff positions being kept vacant or eliminated. The cumulative budget shortfalls of $25 million in FY2024 and $12 million in FY2025 represent over 10% of the state-allocated operating budgets at UNR.

Enrollment Status

UNR’s Spring 2024 FTE enrollment is up 5.5% overall from Spring 2023 and the headcount is up by 15.3%. However, that counts the huge growth in enrollment from non-degree seeking undergraduates (a 190% increase to 4,900 students), primarily high school students taking dual and concurrent enrollment classes. Concurrent enrollment fees are only $75 per course, compared with the $788 UNR undergraduates pay in registration fees for a three-credit course. Future credit for concurrent Weighted Student Credit Hours would apply to the budget in the next biennium. In the meantime, this program, part of the UNR instructional budget, requires UNR personnel, including pay for the high school instructors, coordinators for each subject, travel funds to visit high schools, and administrative oversight. 

If we look at the enrollment of degree-seeking students, the headcount is down 1.3% from Spring 2022 to Spring 2023. At the most recent Campus Conversation, Provost Jeff Thompson reported that although new enrollment for Fall 2025 is down from this time a year ago, he did not have a percentage due to data-collection changes. In addition, continuing delays and errors in federal financial aid applications are impacting student recruitment and retention.

Possible Real-Estate Deals with Long-Term Consequences

At the April 30 Campus Conversation, President Sandoval talked about two potential real estate transactions, which were also announced at Faculty Senate meetings. First, the President is hoping to sell UNR land north of the Med School to the Department of Veterans Affairs as the site for a new VA hospital to replace the existing facility on Kirman Avenue. As reported to the faculty senate, the VA is considering the UNR location and one or two other potential sites to build the new hospital. Selling this land to the VA would rule out future northward growth for UNR and would displace lower-cost parking lots as well as several buildings. Proceeds from a land sale would be one-time money that could not be used for continuing budgets. Financial and other details of UNR’s offer to the VA were not disclosed.

Second, UNR is considering buying 18 parcels with homes and apartments south of I-80 between Lake and Evans streets, north of Sixth Street. To be dubbed “University Village,” the 49 or so residential units would provide faculty and graduate students with much-needed affordable housing in Reno’s expensive market. While we appreciate helping faculty and graduate students with housing, the projected price is $6.5 million plus an estimated $825,000 for improvements. The down payment would come from UNR’s property acquisition fund, while the rest would be financed with a loan from UNR’s Operating Fund assets (account reserves held at NSHE) and paid back through rent revenue. 

In another budget circumstance, we would applaud this decision. However, the long-term debt on this acquisition would limit future capital improvement funding because it would be added to the Business Building 30-year lease and bonds for the new engineering building, student achievement center, wellness center, and other buildings still being paid for. Another question is whether the properties in that neighborhood would be attractive to new faculty or graduate students at the rents required to pay for the loan, maintenance, and management, and President Sandoval did not mention a market study or business plan. The President has requested feedback through the Faculty Senate; you can provide comments here about whether future faculty and graduate students would be interested in living there.

Outlook

Provost Thompson and VP Clinger professed “cautious optimism” about the 2025–26 and 2026–27 budgets in the next legislative session, but that does not help for FY2025. President Sandoval has proposed a new ⅛-cent Washoe County sales tax for UNR and TMCC infrastructure and capital improvements, which would require legislative, county commission, and possibly voter approval. New revenue to fund higher education is highly desirable, but this is apparently the first time since 1885 [1] that county taxpayers have been asked to fund the state university. As mentioned by a speaker at the Campus Conversation, sales taxes are regressive.

The Ad Hoc Committee on Higher Education Funding, which will make recommendations in July, is a wild card. NFA has been actively engaged with the funding formula committee, and the NFA state board has published a set of principles for funding higher education. Faculty feedback on the preliminary recommendations for funding formula changes by the committee’s consultant would be appreciated, especially from department chairs and others who administer state-supported instructional budgets. 

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Our UNR budget analyses are based on public reports and records and interpreted as accurately as possible given uncertainties in the assumptions used for various reports. Corrections from authoritative sources are welcome. Contact: kent.ervin@nevadafacultyalliance.org.

Previous articles on the UNR budget crisis:

• Part 1. Overview (updated 1/3/2024)

• Part 2. Increased University Support for Athletics (updated 2/2/2024)

• Part 3. Growth of Executive Positions and Salaries (updated with total compensation data 5/1/2024)

• Part 4. Student Registration Fees (1/10/2024)

• Part 5. Business Building PPP (updated 2/6/2024)

• Part 6. Inflated Enrollment (updated 1/25/2024)

• Part 7. Underfunded COLAs (1/19/2024)

• Part 8. Summary and Solutions (updated 2/2/2024)

[1] In 1885, the Nevada Legislature directed Washoe County to issue $25,000 in bonds to fund the university’s move from Elko to Reno, to be paid by a property tax in Reno (1885 Statutes of Nevada, Chapter LXXI).

NSHE Funding Formula 1. Preliminary Recommendations of the Consultant

Part 1 of a series analyzing proposals for modifying the legislative funding formula for  NSHE colleges and universities. These articles delve into various proposals the Committee will consider on May 30 and finalize on July 25. The NFA state board issued a set of fundamental Principles for Funding of Higher Education. 

The NSHE Ad Hoc Committee on Higher Education Funding is working toward recommendations on changes to the funding formula for the seven NSHE colleges and universities.  At the April 26th meeting, consultants from HCM Strategists presented their preliminary recommendations for feedback from the committee.  The HCM recommendations were based in part on recommendations submitted by the seven presidents and on interviews with committee members and a few other stakeholders, but also represent HCM's view of best practices. 

The NFA is actively engaging with the committee, with little other faculty input so far in public comment periods. The NFA state board provided a set of Principles for Funding of Higher Education to committee members, and we have provided background data and analyses on how the current formula has affected funding and how it has been implemented in the state budgeting process.  Committee members have taken note of our information during the meetings.

The Committee has just two more meetings, on May 30 and July 25, to finalize its recommendations.

Here we present an outline of the main HCM recommendations as presented on April 26. Future posts will analyze some of the consequences if the recommendations are adopted.

HCM Recommendation 1: 

Create a separate enrollment-based portion of the formula that uses both full-time equivalent FTE and headcount enrollment and incorporates weights for Pell recipients and underrepresented minorities (URM)

HCM Recommendation 2: 

Modify the resident Weighted Student Credit Hours calculations:

• Include headcount enrollment with adjustments for student attributes
• Review nursing program costs in light of state needs and goals
• Include all summer course credit hours in WSCH
• Do a 3-year average for WSCH to avoid odd incentives of “every other year” counting for the year of measure.

HCM Recommendation 3:

• Include all  WSCH in the formula regardless of term (i.e., including summer) to remove the disincentive to offer summer courses. NSHE could request a budget enhancement but should pursue this policy with or without new funding.

HCM Recommendation 4:

Performance Pool changes. The current Performance Pool is a 20% carve-out from base funding that is at risk if an institution does not meet performance targets, but has rarely resulted in funding being jeapardized.

• (HCM preferred option 1) Performance Pool should incorporate or be based on share of outcomes or relative growth.

HCM-recommended Relative Growth Model:  A certain percentage of the total funding (20% in the HCM example) is carved out as a performance pool and earned back based on “relative growth” or how much an institution has changed from its own baseline on a percentage basis.  Institutions with higher relative growth get a larger share of the pool. Institutions with lower growth than other institutions (or negative growth) get a smaller share of the pool.

• (option 2) Modify the existing Performance Pool by re-baselining each institution’s targets each year.
• (option 3) No performance pool or fund with new money only

Other HCM recommendations:

• No new cost study to adjust student credit hour weightings—just modify key areas based on state workforce needs, such as nursing.
• No changes to Performance Pool metrics.
• Do not create separate formulas for different institutions

Committee Discussion on April 26

Some committee members pushed back generally on the idea of redistributing funding with no new funding. For example, the addition of all summer courses to WSCH counts in the formula would dilute the funding value per WSCH and redistribute funds among institutions by up to 0.5% of their total budgets. Chancellor Charlton and Chair Hardesty indicated that the charge of the committee was to recommend changes to the distribution formula, not to recommend additional funding, but there was also discussion that the Board of Regents could make budget enhancement requests to fund any formula changes. Some committee members also objected to HCM’s Relative Growth Model for the Performance Pool because it would be funded out of existing appropriations rather than new money.

NFA Analysis

Every formula change has “winners” and “losers” unless the changes are fully funded and there are hold-harmless provisions for a transition period.  A new formula that merely redistributes existing funding will be a failure. Some of the HCM recommendations may have unintended consequences based on current budgeting practices at the various institutions at NSHE (for example, how or whether summer school revenue is shared with departments). NFA will be providing analyses of the consequences of the various funding proposals in forthcoming posts. 

We welcome feedback from faculty, especially department chairs and others who manage budgets on the ground.  Contacts: Kent Ervin (kent.ervin@nevadafacultyalliance.org), Doug Unger (doug.unger@nevadafacultyalliance.org), Jim New (jim.new@nevadafacultyalliance.org).

NFA Series on NSHE Funding Formula

• Principles for Funding Higher Education
• Part 1. Consultant's Preliminary Recommendations
• Part 2. Reslicing the Higher Education Funding Pie: Winners and Losers
• Part 3. Unintended Consequences of Including Summer Courses in the WSCH Formula
• Part 4. Funding Student Support Services Based on Headcounts
• Part 5. A Separate Headcount Formula for the Community Colleges Could Decimate the Rural Colleges
• Part 6. Reimagining the Formula: A Win-Win for Students and Institutions, not Winners and Losers
• Part 7. NFA Responses to HCM Strategists Recommendations
• Part 8. NFA Work Session Recommendations
• Part 9. Comments on Final Recommendations

• 
  

As the end of the 2023-24 academic year draws near, we are happy to report that NFA has had one of its most successful years ever. It was a year marked by securing the largest-ever back-to-back cost of living adjustments for NSHE professionals in history, due in large part by the exceptional turn out of NFA members making public comment at Board of Regents meetings and advocacy on campus with constituents such as student leaders. We also saw restoration of long-term disability benefits, an NSHE priority, but one that past president Kent Ervin refused to let slip to the back burner. 

At the beginning of the academic year, the NFA State Board established five goals, and with a few weeks left before the year closes, we are happy to report that we have met or exceeded all of them.

Five goals:

1. Progress toward establishing one new collective bargaining unit - It is likely that a new bargaining unit may be established shortly after the start of the 2024-25 academic year. At least one chapter is reaching the critical level of support to ensure that more than 50% of their faculty will vote in favor. Once completed, it will take the remainder of the academic year, and perhaps the next, to negotiate their first bargaining agreement with administration.

2. Membership growth of 10% - Not only is membership growing, exceeding the 10% target by mid-January, it is accelerating. By April, growth has reached 20%, and we anticipate  22% before year-end. The story at some individual chapters is even more impressive. Both university chapters have grown about 15%, while the CSN chapter notched 19%, the TMCC chapter at 35%, and the GBC chapter a whopping 111%. In less than two years, TMCC-NFA has grown 121%, and is targeting 100 members before the end of the academic year. More than 54% of current teaching faculty at the college are now NFA members.

3. Restoration of GBC-NFA - As noted above, not only has the GBC chapter of NFA been reactivated, it is thriving. The State Board initiated a recruitment campaign in January, and by March the chapter had more than doubled in size and a new slate of chapter officers had been elected.

4. Quarterly newsletters - On this one we failed. The newsletters are not published quarterly because our activity has made it necessary to publish them monthly. All members receive the “Quarterly” Dispatch via email and readership exceeds 65% among the recipients.

5. Website update - Not only has the content on the NFA website been refreshed with dynamic content, such as current news and events, on the home page, we’ve also implemented electronic forms and payments for membership applications and PAC donations. Some membership growth is directly attributable to the new on-line application form that streamlines the process for applicants.

Of course, through the year, other issues and opportunities present themselves requiring our action. The passage of SJR7 in the 2023 legislature means that Nevada voters will be asked once again to determine if the Nevada Constitution should be amended to remove the status of the Board of Regents. The ballot initiative, known as Question 1, may offer many opportunities, but also creates uncertainty. NFA is organizing a series of town hall sessions for faculty to hear from and ask questions of stakeholders on both sides of the issue. No other constituent group will be as impacted as faculty if Question 1 passes.

CSN-NFA also successfully re-opened negotiations on their collective bargaining agreement for modifications that were contingent upon the outcome of the 2023 Legislative session, which was underway when the agreement was originally approved. The modified agreement includes cost-of-living-adjustments for new faculty who were not included in the adjustments approved by the Board of Regents for fiscal years 2023-24 and 2024-25. Other changes addressed inequities in workload for faculty in studio and lab classes.

At this time, NFA Officers are working with other faculty leaders and members of the Board of Regents to update Title 4 Chapter 4 of the Board of Regents Handbook, the chapter that defines the rights of faculty members to organize for collective bargaining. The language was written over 30 years ago and has only had minor modifications since then. It is significantly outdated, and in some cases, doesn’t reflect the reality of NSHE practices. 

It’s also the time of year when we start formulating goals for the next academic year. 

Proposed 2024-25 goals:

1. Political action: Every election is consequential, but it’s not hyperbolic to say that the 2024 election may be the most consequential ever for faculty in Nevada and the NFA. In addition to Question 1, NFA will be very actively supporting candidates who actively support us.

   1. For the Board of Regents, we will endorse only those candidates who unconditionally recognize and embrace our critical role in collective bargaining and shared governance. 

   2. For state government offices, the NFA is supporting legislative candidates who support collective bargaining and academic freedom as NFA continues its work to establish bargaining rights for NSHE professionals in state law.

2. Membership growth - We hope for a repeat performance in growth. Another year with 15-20% growth is within reach.

3. What can NFA do for you in the next year?  Please reach out to your chapter leaders or state NFA leaders with your suggestions or concerns.  The NFA State Board will be setting new priorities and goals at our summer strategy meeting.

The Ad Hoc Committee on Higher Education Committee is charged with making recommendations on a new funding formula for NSHE colleges and universities.  The NFA has been actively engaged in providing background information for the committee.  The NFA state board has issued our priorities and principles for the funding higher education for the benefit of students and the state, copied here and also available as a one-page document.

Nevada Faculty Alliance Priorities for Funding Higher Education

Reinvesting in Higher Education for the Common Good

●   Higher education drives upward economic and social mobility and should be affordable for all.

●   NSHE colleges and universities provide workforce development, ranging from training in technical sciences and advanced manufacturing to educating future teachers, nurses, engineers, doctors, dentists, lawyers, scientists, accountants, business managers, hospitality workers, public health workers, policy-makers, communicators, etc. All are important for Nevada’s economic growth.

●   Workforce and economic development is fueled by discoveries made by basic and applied research.

●   Student debt is a national crisis preventing generational improvement in living standards. The burden on students should be reduced through direct debt relief and by restoring student fees to pre-2008 levels.

●   Funding must provide for the actual cost of delivering high-quality education for students. A new formula that simply re-slices the funding pie will be a failure.

Principles for Higher Education Funding

Caseload and Operational Funding

●   Headcount funding should be tied to standards such as advisers per student (1 per 300 students, or more) and counselors per student. Some students require more wrap-around services because of their educational, socio-economic, cultural, or military backgrounds. Funding enhancements for these students should apply to all institutions and programs.

●   Evidence-based discipline and course-level credit-hour weightings are important for instructional caseload funding, but so are standards for the number of full-time instructors per student (>1 to 18) and the percentage of courses taught by full-time instructors (60% to 80% depending on institution type).

●   Infrastructure for research must be funded, along with investment in partnerships between NSHE and the state to pursue federal and private research funding.

●   Allocate funds for fixed costs for facilities, operations, and administration not based on student numbers.

●   At least 80% of student registration fees should go to fund instruction and student services, not be diverted to other functions such as intercollegiate athletics or capital improvements.

●   Maintain established proportions of state funding versus student revenue, with inflationary factors applied to both. Budget shortfalls should not be made up by increasing student fees.

●   To avoid pressure to relax academic standards, no funding should depend on grade assignments.

Outcomes-Based Funding

●   Discontinue the ineffective Performance Pool carve-out and establish outcomes-based funding with truly aspirational performance metrics but without jeopardizing base funding.

●   Outcomes metrics should not be based on absolute student numbers, but rather ratios that demonstrate access or success relative to target populations.

●   Graduation rates have too long of a time lag for the biennial funding cycle. Semester completion better measures current progress and captures non-degree-seeking students and transfer students.

●   Phase in outcomes-based funding in the new formula over several years to allow the institutions to adjust.

●   Incentives should recognize an institution’s own performance, not make it compete against other institutions.

Financial Aid

●   Set targets for state financial aid based on the financial needs of the students at each institution.

●   Provide need-based financial aid through state funding, not by redistributing student fees for Student Access.

●   Fee and tuition waivers for selected student groups should be 100% state-funded.

NFA Series on NSHE Funding Formula

• Principles for Funding Higher Education
• Part 1. Consultant's Preliminary Recommendations
• Part 2. Reslicing the Higher Education Funding Pie: Winners and Losers
• Part 3. Unintended Consequences of Including Summer Courses in the WSCH Formula
• Part 4. Funding Student Support Services Based on Headcounts
• Part 5. A Separate Headcount Formula for the Community Colleges Could Decimate the Rural Colleges
• Part 6. Reimagining the Formula: A Win-Win for Students and Institutions, not Winners and Losers
• Part 7. NFA Responses to HCM Strategists Recommendations
• Part 8. NFA Work Session Recommendations
• Part 9. Comments on Final Recommendations

State Employee Healthcare Premium Increases for Plan Year 2025

The Public Employees’ Benefits Program (PEBP) Board has approved increases to employee premiums for Plan Year 2025.  Beginning July 1, 2024, monthly premiums will increase by $8 to $53 (percentage increases from 8% to 25%) depending on your plan choice and dependent tier, as shown in the following table. 

Most plan provisions will remain the same for FY2025. PEBP is implementing a centers-of-excellence program for specific surgeries and a cancer treatment concierge program, intended both to save money and help patients get better treatment. Some changes, however, will increase participants’ out-of-pocket costs. High out-of-pocket costs force some participants to forgo necessary medical care. The deductible for the High Deductible Health Plan (HDHP) will increase from $1500/$3000 (single/family) to $1600/$3200 because of a higher IRS minimum for eligibility for Health Saving Accounts (HSAs). The supplemental contributions to HSAs or Health Reimbursement Accounts (HRAs) for all three plans will decrease from $600/$700/$800 (single/spouse or children/family) to $300/$400/$500, while the regular HSA/HRA contribution to the HDHP remains at $600.

Why Rates are Increasing

Each year, the PEBP actuary predicts medical inflation trends. Governor Lombardo used lower trends than those predicted by the actuary to design the 2023–25 executive budget for PEBP, and the legislature adopted those low trends. Because FY2024-to-date expenses and the actuary’s projection for FY2025 now indicate higher expenses, PEBP must fund the higher costs through employee premium increases or with reserves. Without using reserves, the employee premium increases would have been twice those shown in the table above. However, PEBP is potentially dipping into the Catastrophic Reserve (formerly known as the rate stabilization reserve) to mitigate employee costs.

PEBP Reserves

As of December 2023, PEBP’s total cash balance was $121 million, including $42 million in the Catastrophic Reserve. The cost to mitigate 50% of the employee premium increases for FY2025 is $7.3 million. Although PEPB will not go broke, spending reserves below the mandatory levels set by the actuaries means the difference must be made up in the next budget cycle. However, we won’t know whether the reserves are being depleted until the close of each fiscal year.

For the past dozen years, as the following chart shows, PEBP has often generated excess reserves because actual claims have come in lower than projected, especially after benefit cuts. Excess reserves are cash balances above the mandatory reserves set by the actuary, and have ranged up to tens of millions of dollars. Although excess reserves declined in FY2023 and FY2024, because they partially restored benefits cut during the pandemic, these reserves have never gone negative. However, the excess reserves have helped the governor and legislature justify lower budgets for PEBP.  The result is that PEBP’s actuaries predict shortfalls, inducing PEBP to raise employee premiums or cut benefits. This perversely leads to the generation of more excess reserves. 

NFA Positions

Given the realities of PEBP funding, these more moderate premium increases approved by the PEBP Board are about the best that can be done at this time. Therefore, NFA supported the 50% mitigation plan over the alternatives of higher charges to employees. We appreciate that PEBP Executive Officer Celestena Glover proposed the mitigations after the initial plan for higher employee premium increases was announced. 

However, the NFA believes that the state should pay 100% of single-employee premiums in the basic plan, as most local governments in Nevada do this for their employees. Benefits have been cut or employee premiums have been raised every time there has been a budget shortfall or projected shortfall. PEBP should use its ample reserves instead of making employees pay for fluctuations in claims that are typical of any self-funded insurance plan. The State should be responsible for funding stable benefits for its employees.

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The Nevada Faculty Alliance has strongly advocated for faculty and other state employees with the Public Employees Benefits Program since the PEBP Board was established in 1999 and before that with the state Committee on Benefits. It is a constant battle to maintain benefits and keep employee costs in check. Currently, Kent Ervin and Doug Unger represent NFA members at every PEBP Board meeting and meet regularly with PEBP staff along with our public employee advocate partners. To support these efforts on your behalf, join NFA now if you are not already a member.

NFA would like to hear members’ concerns about PEBP. Contact kent.ervin@nevadafacultyalliance.org or doug.unger@nevadafacutlyalliance.org. You may also contact the NSHE representatives on the PEBP Board, Michelle Kelley (mkelley@nshe.nevada.edu) or Jennifer McClendon (jmcclendon@unr.edu).

Following the NFA's call for Patrick Boylan to resign from the Board of Regents after his hostile response (7:53:16) to a student leader's public comments (7:52:00) hoping Boylan would "expand and change [his] paradigm" regarding LGBTQIA+ individuals, the Nevada State Student Alliance issued a powerful statement denouncing multiple regents for inserting ideological, geopolitical, and regional rhetoric into Board deliberations. 

"We are learning from our regents that many are controlled by singular issues that do not promote progress within institutions. Some board members, like Regent Brooks, fixate on geopolitical matters, some, like Regent Arrascada, focus on perpetuating regionalist and irrational ideologies between the north and south of our state, and some, like Regents Boylan and Goodman, regurgitate extreme ideologies that manifest in racist and transphobic remarks. These dogmas have no place in the realm of higher education." - NSSA statement

 The State Board of the Nevada Faculty Alliance applauds the NSSA for their courage to speak truth to power, and we echo their observations. Too frequently, substantive and legitimate deliberations about the oversight of NSHE are derailed when a Regent raises a divisive and irrelevant issue instead discussing the substance of athletic reports and deliberating on the budgetary challenges confronting our programs that will lead tolong-term deficits. As the students of the NSSA pointed out, "[t]hey are not fulfilling their responsibilities to the students and citizens of Nevada."

Worse still are some of the reactions of these Regents toward their constituents who are bold enough to publicly disagree or challenge them. This was on full display on March 1 in Regent Boylan's response to NSSA President Kevin Osorio Hernandez exercising his right through Public Comment to share his perspective on the language used earlier in the meeting and to challenge Boylan to do better. NSHE Chief General Counsel James Martines had toinform Boylan (7:53:08) that he could not engage in back-and-forth debate with Mr. Hernandez during the Public Comment period, so Boylan insisted on making a public comment himself (another disturbing trend among Regents). 

The irony is probably lost on Regent Boylan, but by refusing to walk up to the podium where everyone else makes comments, and remaining in his seat at the Regents' table to decry that his First Amendment rights were being violated, he used a literal position of authority to denounce the criticism. As the NSSA students recommend, the Regent should become a student again and review the First Amendment, which prohibits those in power from suppressing the speech of others, not the other way around.

During a congressional hearing several years ago, former chair of the U.S. Federal Reserve Bank, Alan Greenspan, likened statistics to skimpy swimwear. "What they reveal is interesting," Greenspan said, "but what they conceal is critical." In the case of the annual employee buyouts report presented to the Board of Regents earlier this month, NSHE delivered the documentary equivalence of a bell diver suit, revealing almost nothing. While the Board of Regents set transparency and accountability as a strategic goal, the staff of the System Administration appear intent on moving in the opposite direction.

The annual reports are the result of a policy passed by the Regents in early 2019. It requires NSHE to share information regarding employee buyouts and settlements following the revelation in November 2018 that approximately $8.8 million had been spent by NSHE institutions in the previous biennium on employee-related buyouts. As previously reported in Missing Buyouts in NSHE Buyouts Report, the Regents received the first detailed report in March 2020, another in March 2021, and a third in March 2022. Those multi-page reports, however, gave way to a single page report with virtually no details in March 2023, and again this year.

NSHE institutions frequently use settlement buyouts and termination agreements to avoid negative publicity about its employment practices. The detailed reports provided a much-needed glimpse into the extent of these practices. 

A review of the early reports reveals that individual institutions interpreted the policy language differently from one another, resulting in some inconsistent reporting. The drastic change in the March 2023 report, however, did not result from a change of policy. Instead, we can attribute the change in reporting to a new general counsel at NSHE, James Martines, and his interpretation of the policy language.

The briefing paper prepared by Martines for the 2022 report indicated that only payments directly associated with terminations and notices of non-reappointment are included. Amounts paid out to settle actual or anticipated litigation are no longer reported, and apparently, any payment made to an employee who agrees to resign to avoid termination is omitted as well. NFA is aware of at least one such case where a substantial payout under these terms was not reported.

Unfortunately, no Regents appeared to have noticed this dramatic change in the reports. It is clear from the minutes of the November 16, 2018 Board meeting that Regents at that time did intend for the report to include settlements.

NFA urges the Board of Regents to correct Chief Counsel Martines' misinterpretation of this policy and provide a full accounting of all independent payments made to employees associated with their separation from employment with any NSHE institution.

Read Missing Buyouts in NSHE Buyouts Report >>

The Nevada Faculty Alliance strongly condemns discriminatory, harassing or otherwise unacceptable behavior by any members of the Nevada System of Higher Education (NSHE) community. As such, we are deeply angered by repeated anti-transgender comments made by Regent Patrick Boylan during the quarterly Board of Regents meeting on Friday, March 1st. We are especially appalled by his aggressive response to a student leader who gave public comment decrying remarks made earlier in the meeting. In the March 1 meeting, Regent Boylan also questioned the qualifications of students from underrepresented minority groups. These are not isolated incidents. Regent Boylan has a history of racist and discriminatory remarks that have been condemned by a number of NSHE students, including the Senate of the Associated Students of the University of Nevada.

This behavior is not only offensive, it violates the NSHE Board of Regents Anti-Discrimination Resolution, which states that “the Board recognizes its resounding responsibility to the NSHE community, the State of Nevada, and its higher education families throughout the nation to denounce any words or actions with discriminatory intent or effect, and such efforts are exemplified by the leadership and representations of its Regents.”

Because Regent Boylan’s comments have directly attacked thousands of members of the NSHE community and are in direct violation of the Regents’ own anti-discrimination resolution, the State Board of the Nevada Faculty Alliance calls for his immediate resignation.

The State Board of the Nevada Faculty Alliance

Jim New, President and TMCC-NFA Chapter President
Shantal Marshall, Vice President
Joey Ray, Secretary
Cheryl Cardoza, Treasurer
Ted Chodock, CSN-NFA Chapter President
Pete Martini, NSU-NFA Chapter President
Doug Unger, UNLV-NFA Chapter President
Todd Ruecker, UNR-NFA Chapter President
Heather Reardon, WNC-NFA Chapter President
Kent Ervin, Past President
Staci Walters, Collective Bargaining Committee Chair

NSHE Buyout/Settlement Reports Omit Buyouts

Since 2019, the Board of Regents has required that NSHE institutions annually report their contract buyouts and settlements for transparency in the use of public funds and for holding institutions accountable for employment practices. However, while Regents have set transparency and accountability as a strategic goal, NSHE has recently allowed for the omission of several types of buyouts and settlements from the institutional reports to the Regents.

The proponents of Question 1 (to remove the Board of Regents from the Nevada Constitution) have attacked NSHE for a lack of transparency and accountability. To counter those arguments, the Regents should take prompt action to correct the NSHE General Counsel’s new interpretation of the buyout reporting policy. Without this action, institutions can hide their settlement and buyout activity.

Omission of Cases

The Regents’ briefing paper for the 2022 buyout report partly signaled the change in the implementation of the buyout reports:

"Due to the form currently used for institutions and units to report employee contract buyouts, the amounts reported include sums that are not directly associated with the contract buyout amount, such as required payouts of accumulated annual leave and amounts that may settle actual or anticipated litigation. Accordingly, the Chief General Counsel will update the reporting form to allow more accurate reporting in the future."

This implies that buyouts and settlements related to litigation or even the possibility of litigation are now excluded from the reports. In addition, buyouts and settlements are apparently not being reported in cases where no Notice of Non-Renewal is issued, such as agreements resulting in termination following disciplinary proceedings or other voluntary separation agreements. It is also not readily apparent which categories of NSHE employees are included in the reports. Starting in 2022, the annual reports were retitled from “Employee Buyouts/Settlements”  to “Employee Contract Buyouts.” As a result of the change in the interpretation of Title 4 Chapter 3 Section 49 of the NSHE Handbook, the reports are obscuring the number and magnitude of contract buyouts, which in some cases have been used to remove employees who have brought complaints against the institution and to establish non-disclosure agreements.

Buyout Report Summaries, 2019–23

Tables 1 & 2 summarize the buyout reports for 2019, 2020, 2021, 2022, and 2023. Looking at the NSHE report for 2023, it would appear that the number and amounts of buyouts have declined. Although such a scenario would be welcome, the definition of reportable buyouts has been narrowed into meaninglessness. 

For example, the University of Nevada, Reno, reported zero buyouts in 2023. However, NFA is aware that a former employee agreed to resign from their UNR position in 2023 in exchange for a large settlement payout. In addition, the buyout reports for 2022 do not include the well-publicized $27,000 per month paid to former UNR Athletic Director Doug Knuth after he was fired in April 2022 nor the roughly $100,000 per month due to former UNLV football coach Marcus Arroyo after he was fired in November 2022. (Update 3/1/2024: According to public compensation records for 2023, Arroyo was paid $1.16 million in 2023 after his termination in 2022.  The UNR employee received a six-figure payout in 2023. )

(Update 3/1/2024. NSHE Chief General Counsel reported to the Board of Regents that the buyouts listed in the 2023 report "saved" $95,000 compared with the standard notice periods for Notices of Non-Renewal.  However any putative savings are almost certainly surpassed by settlement amounts that are not being reported.)

Table 1. NSHE Reported Buyouts/Settlements - Total Amounts

Calendar Year	2019	2020	2021	2022	2023
UNLV	$347,406	$90,409	$0	$0	$58,087
UNR	$91,201	$53,144	$38,479	$40,310	$0
NSU	$0	$0	$0	$0	$13,767
CSN	$77,295	$0	$63,314	$0	$0
GBC	$25,000	$184,001	$0	$0	$0
TMCC	$71,988	$543,992	$403,097	$46,881	$75,235
WNC	$0	$196,327	$122,583	$356,645	$55,192
DRI	$40,000	$7,308	$0	$0	$0
System	$60,741	$27,102	$154,158	$869,564	$15,533
Total	$713,631	$1,102,283	$781,631	$1,313,400	$217,814

 Table 2. NSHE Reported Buyouts/Settlements - Number

Calendar Year	2019	2020	2021	2022	2023
UNLV	6	2	0	0	1
UNR	4	2	1	2	0
NSU	0	0	0	0	1
CSN	3	0	1	0	0
GBC	1	3	0	0	0
TMCC	2	13	12	1	2
WNC	0	4	3	6	1
DRI	1	1	0	0	0
System	1	1	3	5	1
Total	18	26	20	14	6

Full Transparency and Accountability

As stewards of public funds, the Board of Regents should clarify the reporting policy to encompass ALL compensation that is not earned through service, for all classes of employees and former employees. This includes but is not limited to:

Transparent reporting of these items would not require the identification of individuals or release of confidential information, only the aggregate numbers and monetary amounts by institution and type of payout. Payments for attorney fees and expenses as part of a settlement or termination agreement should also be reported. Note that the former NSHE General Counsel told the Board of Regents that settlement agreements are not confidential per Nevada Revised Statutes:

"NRS provides that any agreement to settle a claim or action brought against an employee must not provide any terms of the agreement be confidential. NRS also provides that the settlement must include a number for attorney’s fees and costs to be paid pursuant to the agreement and that any settlement is public record."

The omission of relevant data in reports to the Board allows NSHE institutions to obfuscate the use of public funds and to avoid accountability for employment practices. 

As always, faculty members with an employment-related issue should feel free to contact the NFA for guidance. 

***

Data and interpretations are based on the cited reports and other Board materials. Corrections from authoritative sources are welcome (Contact: kent.ervin@nevadafacultyalliance.org).