“Triple Win” Summer Compensation A Proposal from the Ad Hoc Committee on Summer Compensation for Faculty

Members of the Committee Dr. Cindy MacGregor, Committee Chair, COE W.D. Blackman, COAL Tim Flannery, CHPA Steve Foucart, CFO Julie Masterson, Dean, Graduate College Arbindra Rimal, CoAg Timson, Benjamin, CHHS Huang, Shyang, CNAS Guests: Frank Einhellig and Shawn Wahl

Current System for Summer Faculty Compensation The current system of funding faculty to teach during the summer session is constrained by cost center summer budgets. Additional courses cannot be taught because the summer budgets are capped. Faculty are limited in the number of courses they are allowed to teach during the summer based on what cost centers can “afford.” There is no clear determination of minimum enrollments from which to calculate summer salary for faculty who teach.

Faculty Handbook The Faculty Handbook prescribes faculty are paid at least 2.5% of their base salary per credit hour taught, provided minimum enrollments are met. No other exceptions to the 2.5% are allowed by the Faculty Handbook. Issue: How can “minimum enrollments” be determined while honoring the prescription of 2.5% of base salary per credit hour?

Proposed Summer Compensation Formula [(2.5% of base salary) + (2.5% of base salary x fringe percentage) + University Base Revenue Needed] / tuition rate per credit hour = breakeven number of students Above this breakeven number of students the faculty member would receive their full 2.5% per credit hour taught. Below this breakeven number the faculty member and the university would each receive a percentage of the total revenue, as adjusted by the breakeven value needed.

University Base Revenue Needed Per Credit Hour Offered Budget Goal for Summer Revenue Cost Center Allocations for Summer Faculty Salaries = Summer University Revenue Goal Summer University Revenue Goal / Credit Hours Offered for 2018 = Revenue Goal Per Credit Hour Offered  University Base Revenue Needed Per Credit Hour Offered

University Base Revenue Needed Per Credit Hour Offered $7.5 Million – $3.97 Million = $3.53 Million $3.53 Million / Credit Hours Offered Summer 2018, i.e., 2684 = $1315. (university base revenue per credit hour) Thus, if the same number of credit hours were offered in summer 2019 as in 2018 the university would be guaranteed the base revenue needed, i.e., $3.53 Million

University Base Revenue Converted to Student Enrollment Instead of using $1315 this number could be converted to a number of students based on undergraduate, internet, and graduate tuition rates. Undergraduate tuition is $212. That equates to about 6 students. (1315 / 212 = 6.20) Internet tuition is $295-16 (incentive+fringe) = 279. That equates to about 5 students. (1315 / 279 = 4.71) Graduate tuition is $276. That equates to about 5 students. (1315 / 276 = 4.76)

Undergraduate Example Salary = $70,000; 2.5% of salary = $1750 Fringe = 37.9% of $1750 = $663.25 Total cost of a fully-funded faculty = $1750 + $663.25 = $2413.25 Breakeven number of students to fully-fund faculty salary = $24.13.25 divided by $212 = 11 students (technically 11.38). University Base Revenue Needed for undergraduate course = 6.20 students At a minimum enrollment of 18 students (11.38 + 6.20=17.58) this faculty member receives full 2.5% per undergraduate credit hour taught. (Note: Graduate courses and internet courses would be calculated using the graduate tuition rate thus minimum enrollments would be lower.) For a 3-credit hour course this would be a salary of $1750 x 3 = $5250 for this faculty member (whose annual salary is $70,000).

Internet (and Graduate*) Example Salary = $70,000; 2.5% of salary = $1750 Fringe = 37.9% of $1750 = $663.25 Total cost of a fully-funded faculty = $1750 + $642.25 = $2413.25 Breakeven number of students to fully-fund faculty salary = $2413.25 divided by $279 = 9 students (technically 8.65). University Base Revenue Needed for internet course = 4.71 students At a minimum enrollment of 14 students (8.65 + 4.71 = 13.36) this faculty member receives full 2.5% per undergraduate credit hour taught. (Note: Graduate courses and internet courses would be calculated using the graduate tuition rate thus minimum enrollments would be lower.) For a 3-credit hour course this would be a salary of $1750 x 3 = $5250 for this faculty member (whose annual salary is $70,000). Note. *Calculations are similar for graduate only courses because graduate tuition is the same as the internet tuition less the incentive and fringe.

Faculty Salary Below Enrollment Minimum Faculty compensation would be based on the percentage of student tuition relative to the enrollment minimum tuition. The university would also be making a proportionately smaller amount of revenue using this formula. Actual enrollment / enrollment minimum = the percentage used to calculate the faculty salary. This percentage would then be the proportion of the fully-funded salary amount provided for the faculty member. Thus, if the enrollment minimum to fully-fund the faculty salary and the university target was 18 students and only 15 students were in the course, 15/18 = .83. The faculty member would receive 83% of their fully-funded salary. For a faculty member making $70,000 their fully-funded salary is $1750 per credit hour of instruction; their salary for this course would be $1458 per credit hour (83% of 1750). The university is receiving 83% of $1315.

“Mission Critical” Formula At the discretion of the department head, and with approval by the dean, a limited number of courses could be deemed “mission critical” – the faculty member would receive their fully-funded summer salary for these courses without including the university base revenue needed as a factor in determining the minimum enrollment needed [(2.5% of base salary) + (2.5% of base salary x fringe percentage) / tuition rate per credit hour = breakeven number of students

“Extreme Mission Critical” Formula At the discretion of the department head, and with approval by the dean and the Provost, a very limited number of courses could be deemed “extremely mission critical” – the faculty member would receive their fully-funded summer salary for these courses regardless of enrollment. Thus, the salary would be 2.5% of the annual salary per credit hour of instruction without a breakeven enrollment needed.

Adjunct Faculty Formula Adjunct faculty would be paid the full adjunct rate based on a breakeven number of students as per this formula: [(adjunct rate) + (adjunct rate x fringe percentage) + University Base Revenue Needed] / tuition rate per credit hour = breakeven number of students Undergraduate Example: [($718) + ($718 x 7.65%) /212 + 6.20 = 9.84 students (i.e., breakeven number of undergraduate students)

College Cost Center Incentive For colleges using the breakeven formula, thereby assuring the university is making revenue above costs of instruction, additional funding would be extended on a trial basis to provide salary for courses above the cost center summer allocation. If warranted by increases in the course enrollment generated under this system, an increase in cost center summer allocations could be made permanent.

“Triple Win” Outcomes More potential course options for students, More potential income for faculty (through teaching more courses) while honoring Faculty Handbook, More potential revenue for the university (including departments and colleges) while protecting financial costs.

Other Potential Benefits Removing the cap on summer instruction could be a recruiting tool for new faculty who want to increase their income by doing summer work. The same could be true of seasoned faculty who want to increase their “top three” years of income. An improved summer compensation model could also be applied to intersession improving those offerings.

Plans to Pilot in COAL This system will be piloted in the College of Arts and Letters for summer 2019. In the fall of 2019 the outcomes of the pilot will be examined by a subset of the current committee. Recommendations for the future use of the Triple Win system will be based on the evaluation of the pilot in COAL. A report will be presented to Faculty Senate.