Instructional Leadership, emphasis: K-12 School Leadership (MEd)
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Increases to compensation and NAU’s financial health

Dear Lumberjacks,

As we approach the conclusion of an exceptional fall semester, highlighted by a record-setting class of Lumberjacks, the launch of NAU Health, and our recommitted focus to fueling academic momentum and providing an environment of relentless welcome, I write to share news about increases to employee compensation, as well as the state of NAU’s overall financial health.

UBAB recommendations and 2024 compensation increases

On November 15, the University Budget Advisory Board (UBAB) submitted their annual memo of recommendations for my consideration, consistent with their founding charge to review the university’s financial position and develop strategies and recommendations for increasing compensation.

I am pleased to accept the following three recommendations associated with student, faculty, and staff compensation:

  • A broad-based merit adjustment of 3 percent for benefit-eligible faculty and staff, effective April 2024.
  • An increase in the minimum hourly full-time wage for employees to $18.50/hour, effective April 2024.
  • An increase to the lowest hourly wage tier for student workers to $15.50/hour, effective July 2024.

Furthermore, I support their recommendation that Academic Affairs engage in an analysis of the university’s investment in graduate assistants, which could then be reviewed and considered by UBAB in conjunction with the overall investments in our people.

Thanks to the work of UBAB, along with the exceptional leadership in divisions across the university who are tending to our university’s financial health day-in and day-out, we have increased eligible faculty and staff compensation by 7.5 percent in the two years since I first charged our leadership to pursue a sustainable path to 10 percent increases in compensation over the next three years

Clearly, the banner achievements registered in these last two years across our university speak to the value of this investment in the people who dedicate so much to elevate the excellence of NAU.

For information about these compensation increases, please refer to the NAU Human Resources website.

The context surrounding 2024 compensation investments

Some of you may question the timing of this cycle of compensation increases for April 2024, rather than January, as was the case last year. To better understand the strategic context that informed this decision—which limits this fiscal year’s impact of increases to $2.2 million, compared to the ongoing impact of $10 million per fiscal year moving forward—I encourage all members of our university community to review in detail the UBAB memo.

Below are several key considerations excerpted from the memo:

  • Enrollment levels and enrollment mix of new and continuing students play an integral role in the ability to continue the investments in salaries and tie directly into the recent message of relentless welcome combined with goals for retention and graduation rates.
  • The university’s fall enrollment mix—the proportion of resident versus non-resident students—did not align with the projections set in the spring. Specifically, the strength in resident student enrollment did not compensate, revenue-wise, for non-resident and international enrollments not meeting their projections.
  • Current progress toward the 10 percent increase for all employees is significant and reflected in the fact that 53.5 percent of current employees who were employed in April 2022 have salaries that are more than 10 percent greater than their salaries in April 2022.

Ultimately, the timing of increases and their amounts are carefully calibrated against our university’s overall financial health, and our financial health is, in turn, inextricably tied to our success in enrolling, educating, retaining, and graduating students. In messages and forums throughout my time at NAU, I have stressed the critical linkage of finances, enrollment, and mission. As we aim to be the nation’s preeminent engine of opportunity, we must broaden access and ensure our students derive value from their experiences. When we do this, we bolster our financial health and enable investments like today’s back into our talented, mission-driven faculty and staff.

As this semester and calendar year comes to a close, I encourage you all to see yourselves in the vital work ahead of delivering on our mission and redouble your efforts that contribute to the recruitment, enrollment, retention, and graduation of all students that seek opportunity and entrust their educational futures to NAU.

On NAU’s overall financial health

There has been much news recently in Arizona and across the country around the financial health of public universities. Continued inflationary pressures, an increasingly competitive talent market for employees, demographic shifts among students, and operating efficiencies, financial governance, and institutional controls have all been topics of heightened focus.

At NAU, our financial position is strong. Across all metrics of financial health that the Arizona Board of Regents (ABOR) tracks, NAU is well within acceptable ranges. This is highlighted by our institutional Days Cash on Hand metric, which sits at a projected 175 days for fiscal year 2024, up from 149 in fiscal year 2020 and well within ABOR’s approved liquidity range of 143-239 days. In addition, our revenues from auxiliary operations, sponsored project activity, and philanthropic giving have all reached record levels.

This is not by accident. We have strong financial controls in place across the university. While at times they can seem onerous, in managing an operation of our scope and with our ambitious mission, keeping a close eye on personnel expenditures, cash investment plans, cabinet area budget reports, regular reviews of revenues and expenditures, and providing appropriate checks and balances for high-cost transaction approvals, to name a few, are essential University Budget Office activities that safeguard our financial position. It is because we have effectively stewarded our resources, enhanced revenues, contained costs, and aligned time, money, and effort with our mission that we have been successful and are able to invest back in our Lumberjack employees.

In closing, I want to share my appreciation for all that you do to advance the fortunes of our students and elevate the excellence of NAU. In recognition of the contributions of our employees, I am pleased to announce this cycle of compensation increases and do so with the knowledge that our finances are well-positioned to sustain these in the long-term.

That said, we must also recognize the fragility of our strategic context and elevate our efforts in every arena to sustain our mission and build a brighter future. This includes continuing our excellent work in securing private philanthropic support, effectively articulating our value proposition to the state of Arizona to secure the much-needed state investment, and recruiting and enrolling a mix of students that advances our mission and generates sustainable revenue—and such a mix not only considers Arizona, out-of-state, and international, but also on-campus residents, who experience an added level of rich in-person interactions with faculty, staff, and other students that benefits them and in turn, has a tremendous impact on auxiliary revenues. In the end, as individuals dedicated to this community, doing our utmost each day to recruit, enroll, retain, and graduate all students that NAU seeks to serve—engaging them with the relentless welcome and culture of care that distinguishes NAU.

I wish you all the best in the holiday season ahead and look forward to redoubling our efforts in 2024 to meet our full potential here at NAU.

In partnership,

José Luis Cruz Rivera's signature.

José Luis Cruz Rivera