University of Alaska President Jim Johnsen makes a presentation to the university’s Board of Regents at the UAS Recreation Center on Sept. 15, 2016. A declaration of financial exigency that would have allowed University of Alaska to make drastic cuts was rescinded Tuesday. (Michael Penn | Juneau Empire File)

University of Alaska President Jim Johnsen makes a presentation to the university’s Board of Regents at the UAS Recreation Center on Sept. 15, 2016. A declaration of financial exigency that would have allowed University of Alaska to make drastic cuts was rescinded Tuesday. (Michael Penn | Juneau Empire File)

University of Alaska rescinds emergency financial declaration

Regents note financial picture still isn’t rosy

The University of Alaska Board of Regents canceled its earlier declaration of financial exigency, though regents said there’s still major financial concerns ahead.

The decision to rescind a declaration of exigency, which was made last month, came by a unanimous vote of the University of Alaska Board of Regents in an emergency meeting held Tuesday in the Butrovich Building at University of Alaska Fairbanks.

The declaration would have allowed the university to make drastic cuts to address a more than $130 million cut to university funding that was included in Gov. Mike Dunleavy’s budget vetoes unveiled in late June. It also damaged the university’s credit rating, according to Moody’s Investor Service.

[Dunleavy signs step-down compact]

Since then, Dunleavy has agreed to a smaller $70 million cut spread out over three years with $25 million coming this year, which set the stage for Tuesday’s meeting.

By canceling exigency, union employees will go back to receiving a contract-stipulated one-year notice of termination rather than 60 days. Exempted employees will go back to 12 weeks of notice rather than eight weeks, said Robbie Graham, associate vice president public affairs for University of Alaska.

While financial exigency is no longer a certainty, it’s not totally off the table in the opinion of Regent Dale Anderson, who objected to a motion to rescind the declaration in order to voice concerns.

“I’m going to raise an objection to the motion. Only for the opportunity to speak to the use of exigency in the future,” Anderson said. “It is a $70 million reduction. I don’t want us to be lulled into an assumption that all is well because this year’s cut is only $25 million.”

Regent Karen Perdue also called for caution and said a rigorous approach will need to be taken when envisioning a new status quo for the university.

“We don’t have the luxury of time, even though it might seem as though we do,” Perdue said.”But we will treat our employees fairly, and we will honor our contracts.”

Regent Lisa Parker asked University of Alaska President Jim Johnsen what changes had already been made since the board’s now-canceled declaration of exigency.

[Dunleavy signs off on $1,600 PFD, anticipates for third special session]

Johnsen said no changes were specifically made through exigency, but there have been some steps taken to reduce spending. He said some adjunct faculty weren’t rehired, some department consolidations are being considered and freezes were placed on hiring and travel and procurement was limited.

He said he is starting to relax some of those limitations in what he called a “thaw.”

The exigency cancellation was welcomed by Regent Lisa Parker.

“It is important to take this cloud off of us that has a great impact on us, on our students, on our staff and on our faculty,” Parker said.

• Contact reporter Ben Hohenstatt at (907)523-2243 or Follow him on Twitter at @BenHohenstatt.

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