Frequently Asked Questions
General
Q: What are the roles of labor unions at Oakland University?
A: About 1,200 members of OU’s 3,500 total workforce is represented by five different labor unions. The unions collectively bargain on behalf of a particular group of employees on issues ranging from wages to conditions of employment.
Q: Who does OU-AAUP represent?
A: The Oakland University Chapter of the American Association of University Professors (OU-AAUP) represents more than 800 full-time and regular part-time faculty members across the university.
Bargaining process
Q: What is the timeline for their current and next contract?
A: The current contract between the administration and OU-AAUP was agreed to in September 2021 and expires in August 2024. Negotiations between the administration’s bargaining team and union’s bargaining team are ongoing.
Q: How does the bargaining process work?
A: The respective bargaining teams are holding meetings to discuss all issues surrounding the expiring contract. It is the legal responsibility of both teams to negotiate in good faith, working toward an agreement that both accept.
Q: What is the administration’s outlook for negotiations?
A: The administration recognizes the importance of providing faculty members with the resources and tools they need to perform their work, as well as compensating them fairly for their efforts in advancing the University’s educational and research missions. Our goal is to create an inclusive learning environment where all our faculty, students and staff can succeed.
Q: Do the administration and union agree on all issues?
A: Of course not. But despite differing viewpoints on specific topics and past events, we are committed to approaching this process with respect. We are eager to engage in negotiations with a forward-looking perspective, focusing on productive discussions.
Financial
Q: Is OU operating with a budget surplus this year?
A: The administration recognizes its financial situation has improved since the last round of negotiations with OU-AAUP, and that is reflected in the fair and generous economic proposal presented to the faculty union, which includes a salary increase of 13.75% over the proposed five-year contract, including a 4% raise for the 2024-2025 academic year. With our one-time surplus of $5.6 million, a direct result of our Strive for 45 advocacy efforts, our guiding principles remain the same: taking care of our employees, stay affordable for the students it serves and ensure long-term fiscal viability.
Q: Where does OU get most of its revenue to fund its budget?
A: OU relies primarily on two sources for revenue: tuition dollars and state funding. While state funding is expected to remain modest over the next five years, with projected increases of only 1-2%, the number of high school graduates in the state will decrease dramatically in the coming years.
Q: What is the Strive for 45 campaign?
A: OU’s Strive for 45 campaign, launched in 2020 with vital support from faculty, local legislators, peer schools and the broader community, has been successful in changing the minimum amount of higher education funding Michigan’s 15 public universities receive. This advocacy effort has led to a $15.4 million increase in state funding for the university over the past two years, much of what was used to prevent even deeper budget cuts the past several years. Despite that advocacy effort, OU remains 12th among the state’s 15 public universities when funding is broken down per enrolled student.
Q: What other economic headwinds are OU facing as it budgets long term?
A: In addition to the impending enrollment cliff, OU must be mindful of the impacts of the state’s free community college, which experts say may pull students from the state’s regional four-year schools. Additionally, as we have seen over the past three years, inflationary pressures and a volatile stock market can amplify financial hurdles for all institutions.
Q: Why is OU projecting smaller tuition increases than is permitted by the state budgeting process?
A: One of our primary goals is to ensure affordability for our students. Particularly with competing programs such as the free community college initiative, it is imperative that OU plan tuition increases at a modest level to ensure we remain a viable path for our potential students. To balance the budget with the union’s current offer, OU would have to increase tuition 15.7% higher above budgeted increases, pricing out many of our students.
Q: What are the budget impacts of the economic proposals from OU and OU-AAUP?
A: OU’s current contract proposal to the faculty union – a salary increase of 13.75% over the proposed five-year contract, including a 4% raise for the 2024-2025 academic year – would have a manageable budget impact of $11 million over five years. OU-AAUP’s current offer – which includes a one-time lump sum $8,500 base salary increase in the first year of the contract, plus 4% raises for each of the three years of the proposed contract, plus a total of $3.5 million in market adjustments second and third years – would instead have come at a cost of $26 million over the next three years.
Q: Doesn’t OU have $202 million in reserves?
A: The University’s unrestricted reserves were just more than $200 million as of Fiscal Year 2023. Our reserves have grown over time in concert with the growth of the University. This has been accomplished through prudent fiscal management, favorable market performance, and spending restraint. It is important to note that only about $53 million of reserves is not already designated for another use.
Q: Why can’t OU simply use it reserves to increase faculty salaries?
A: There are many reasons why it is essential to maintain sufficient reserves, not the least of which is to be able to fund operations during times of economic uncertainty. Committing to permanent and ongoing budget allocations (such as salary increases) where the funding source is one-time money (such as reserves) would be fiscally irresponsible and could put OU in the precarious position of having to make further budget cuts considering economic headwinds. OU also could face a rating agency downgrade, making it more expensive to borrow money.
Q: Then what does OU use its reserves for? If the funds are “unrestricted” reserves, why can’t it spend that money any way it wants?
A: In addition to funding operations during times of economic uncertainty, maintaining OU's credit rating and outlook is also key to maintaining appropriate reserve balances. And though OU’ reserves are considered “unrestricted,” only about $53 million is not already designated for another use (for example, some donor gifts have directed uses, some of our reserves are invested to fund deferred maintenance and other portions are divisional designated funds that while not “restricted” are earmarked by the department or unit in which they exist). Additionally, the National Association of College and University Business Officers recommends institutions have reserves sufficient to cover 90-180 days’ worth of operating expenses. Using the $53 million figure, the University could cover only about 45 days of its operating expenses if unforeseen circumstances arise.
Q: What are examples of how divisions use some of their designated reserves?
A: One example is increasing the size of startup packages for faculty when hired; one department has more than tripled that amount using designated reserve funds. Another is using those funds to pay for travel costs for faculty and students to attend conferences, as well as scholarships and research grants.
Next steps
Q: How can I stay informed about the progress of the negotiations?
A: The administration will periodically post News and Updates on this website, informing the campus community of developments and progress made, as well as providing information key to the institution’s overall success.
Q: Will the OU administration post details from the bargaining meetings?
A: To be transparent and keep the campus community updated, OU will provide an overview of what is being discussed and progress made throughout the negotiations. However, we will avoid some specifics as we firmly believe the best place to have discussions regarding the faculty union contract is at the bargaining table, and not in media or social media. The faculty union and the administration both have dedicated teams of individuals diligently working to represent their interests and reach an equitable contract. They deserve to be allowed to do that important work.