Gov. Ted Kulongoski hammered University of Oregon President Richard Lariviere last week for creating a pay system at the school that flouts budget cuts hitting other state employees.
The politically charged dispute between the outgoing governor and the new UO president surfaced in documents WW obtained via public records request.
Those documents show that rather than instructing UO staffers to take furlough days like other state employees, Lariviere approved a setup that allowed as many as 1,000 of those UO employees to replace state-mandated furlough hours with overtime hours. So, while other public employees took pay cuts due to furloughs, some university employees got paid the same amount—for doing less work.
"We were concerned to learn of the use of overtime to offset the furloughs for classified employees at the University of Oregon," Tim Nesbitt, Kulongoski's chief of staff, wrote in an Oct. 1 letter to Lariviere. (About 8 percent of the university's 20,000 full-time employees are "classified" SEIU Local 503 union workers who perform various clerical and support functions.)
"The private sector is shedding jobs, households are cutting back and tax burdens can feel heavier to bear," Nesbitt wrote. "That is why the principle of shared sacrifice has an importance beyond its contribution to any agency's budget saving and why, in times like these, policies that appear to evade our commitment to shared sacrifice for any group of employees can be damaging to all of us."
The conflict between the governor's office and the president of the state's highest-profile university is important on at least two levels.
At one level, there is the state's dismal financial picture, which led to initial furloughs for thousands of state employees in 2009 and more this year. Twice in 2010 Kulongoski has invoked his "allotment" authority to trim budgets by nearly another $1 billion.
"Given the personnel cost savings that were assumed for agencies funded through the General Fund budget but not achieved at the University of Oregon, you run the risk of budget writers in both the legislative and executive branches questioning your compliance with their directives," Nesbitt warned Lariviere.
Patricia Snopkowski, the Oregon University System's auditor, did a preliminary review of overtime expenditures at all seven OUS campuses for the fiscal year that ended June 30, 2010. She found that, rather than declining, overtime costs at UO increased 30 percent, from $593,000 to $772,000.
She also found that Oregon State and Portland State cut overtime costs while U of O did not. "At UO the increase in overtime appears to be systemic across the campus," Snopkowski wrote in a Sept. 30 memo.
UO's overtime increase is small in the context of the $53 million UO expects to get from the state in 2010-11 (about 7 percent of its budget). But memos show Larivere ordered his top administrators to deliberately circumvent state directives to cut costs.
"The President said he wanted to 'make staff whole' from the [Service Employees International Union] contracted furloughs," UO title Registrar Sue Eveland wrote in a May 7, 2010, internal memo. "We will allow each staffer enough OT hours to return the lost pay due to their furlough amount. Thus a person who had 4 days of furlough (32 hours) will be allowed to work 21.4 hours of 'time and a half' to make up the lost 32 hours of pay."
And there's a second level to the dispute: The less-work-for-the-same-pay edict coincides with the university's push to reduce state oversight.
Since Lariviere arrived in Eugene in July 2009, the university has amped up former President Dave Frohnmayer's drive for greater independence. The clearest manifestation is Larivere's request earlier this year that the Legislature float $800 million worth of bonds, which the university would then match to create an endowment.
Lariviere hopes an endowment would yield a larger, more stable contribution than state support, which has dwindled to less than 10 percent of the university's budget.
But Nesbitt warned Lariviere that his approach to employee overtime could have larger ramifications.
"This is more than a compliance issue," Nesbitt wrote. "It is a policy issue, and a politically charged one at that."
In response to WW's questions, Lariviere said in a statement: "The university has adhered to the requirements of the collective bargaining agreement related to furloughs and overtime compensation. Last year, SEIU-represented employees at the UO took 56,000 hours of furlough time."
The university's projected 2010-11 budget is $726 million. It gets far less state support than comparable state universities. Support this year will be less than it was in 1990-91, when lawmakers appropriated $63.3 million.