The Student Union Memorial Center at the University of Arizona.
The University of Arizona’s financial reserves remain low but have "stabilized" over a year after its fiscal crisis was announced.
Chief Financial Officer and Chief Operating Officer John Arnold told the Arizona Board of Regents on Thursday that UA is projecting 76 days cash on hand for fiscal year 2025. Now, they’re examining ways to increase cash reserves at a quicker pace.
“We'll continue to need to exercise fiscal discipline to ensure that we're allocating new a portion of our new cash revenues into cash reserves,” Arnold said Thursday. “But it's not sufficient. That would take us a decade plus at the rate we're going to restore cash reserves to the board's minimum standard.”
However, new UA President Suresh Garimella wants to take a cautious approach.
“We don’t want to put perverse things in place,” Garimella said. “The board has a very reasonable set of numbers… but we don't want to somehow sort of hit that number in unhealthy ways.”
When the crisis was announced in November last year, the university reached 110 days cash on hand for fiscal year 2023–falling 30 days short of the minimum and 46 days short of the initially forecasted number. At that same meeting, it was predicted that UA’s finances would continue falling to a predicted 97 days cash on hand by the end of FY 2024. That number fell even more as FY24 ended at 86 days.
While numbers continue to see a downward drop, this fiscal year’s current calculations are an improvement from budgeted predictions made this summer, where Arnold predicted 67 cash on hand. However, even with the change, UA still remains well below the minimum that the board asks. Arizona’s public universities need to stay within the board's target range, which is between 143 to 239 days. Last year, the minimum was 140 days. Currently, Arizona State University sits at an estimated 160 days for FY 25 and Northern Arizona University at 170 days.
As UA examines retaining some of the new financial habits created during the crisis, some faculty told the regents that they are feeling the cuts within their classrooms.
“This is my third year teaching here, and this semester I have the heaviest teaching role, four courses with two of them having both in-person and online sessions, 100 courses in total,” one faculty member said. “No increase in my salary today.”
The university put a pause on its salary increase program for FY 2025 as a way to slow down UA’s fiscal crisis. But as that pause remains, Arnold received a $160,000 payment for meeting certain goals set by the Board of Regents.
First reported by the Arizona Daily Star, the compensation was for his previous role as Board Executive Director. Arnold told AZPM the income was not a bonus.
“They didn't pay me everything,” Arnold said. “I lost some of that compensation. So from my perspective, it wasn't so much a bonus as that was an at-risk portion of my compensation package.”
Former UA President Robert Robbins also received $40,000 for meeting some goals set by the regents for 2023 to 2024. Robbins is on sabbatical after stepping down earlier this year following the university’s financial woes.
Faculty Senate Chair Leila Hudson called the compensation to Robbins an “insult to injury.”
“It creates temporary disturbances in already low morale,” Hudson said. “But I remain hopeful that, in fact, we are turning the corner, and you saw that in the form of these gestures and little shout-outs to the faculty in the meeting.”
Garimella recognized the strain that UA is facing when it comes to faculty retention in a competitive market.
“This is not fun. It's happened for two years,” the university president said. “I've asked the team, I'm going to try my best. We're going to try our best to have a raise for next year put in place.”
Other concerns include future growth for the university as some faculty, like Hudson, believe the
“What we have lacked, and what we hope to find in the new administration is a vision for growing things, for expanding things, for seeing not just the need to cut, but the need to grow. And how to…reinvest in the people.”
Arnold holds that has not stopped.
“We continued to add students through this whole process, and we've continued to invest dollars in high-growth programs and high-priority programs to meet that demand and we're going to have to continue to do that.”
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