UC Berkeley

The following list represents some of the larger restructuring initiatives that we are undertaking on the Berkeley campus. In addition, many of the units and departments are engaged in their own analysis for opportunities to streamline their administration and improve their effectiveness. The cost savings shown here represent savings after the restructurings are fully implemented; the time scale for implementation ranges from one to six years depending on the initiative.

Restructuring of Information Technology Services:
Our campus currently spends approximately $140 million annually on information technology services. Opportunities for cost savings include moving the campus to a common reference architecture, partnerships on system wide administrative efforts and multicampus infrastructure initiatives, development of shared research computing clusters, and consolidation and elimination of duplicate IT systems and support functions. These efforts will focus on large central systems and clustering of small departments. These savings also anticipate synergies between UC campuses. Projected savings: $5 million - $6 million annually

Restructuring of Human Resources:
Our campus currently spends at least $13.7 million on staffing a highly decentralized HR services delivery model. This model relies on over 200 positions distributed campuswide down to the department level. Based on HR industry metrics, it may be possible to improve services and efficiency through a more centralized model with 20 percent   fewer staff. This would require clustering services into “regional” centers that could supply more robust, reliable services guided by a campus central office. Projected savings: $1 million - $2 million annually.

Business Services and Auxiliary Enterprises:
Over the past three years we have conducted rigorous analyses of our business services and our auxiliary enterprises to generate more revenue and reduce expenses in these practices. Among the highlights of these efforts:
• Through substantial increases to its revenues, Intercollegiate Athletics has reduced its campus subsidies by $6 million annually;
• University Extension has eliminated its campus subsidy and now produces an operating surplus;
• Our Parking and Transportation department has reduced its staffing by over 33 percent and is evaluating shared transit services with AC Transit and Lawerence Berkeley Lab;
• In Document Services, we are phasing out offset printing and will move solely to digital printing, resulting in a 75 percent reduction in staffing, an 80 percent reduction in space requirements, and an 80 percent reduction in equipment. 

Projected savings: $9 million annually to date; an additional $3 million to $4 million projected annually.

Strategic Energy Partnership
UC Berkeley currently plans to implement around 190 projects as part of the UC Strategic Energy Partnership (SEP). The total cost of these projects will be about $25 million, with the campus receiving approximately $9 million in incentives from our utility. When completed, these projects will save the campus an estimated $4.5 million each year, while requiring just over $1.6 million annually in loan payments. The resulting net savings – almost $3 million – will be in addition to savings from projects which the campus funded this year and last in an earlier partnership program. The resulting carbon emissions reductions will be almost 23,000 tons or almost 40 percent   of the emission reductions needed to meet the campus’ ambitious target (to reduce greenhouse gas emissions to 1990 levels by 2014 or twice as fast as required by state law). Projected savings: over $3 million annually.

Introduction of eProcurement
The eProcurement initiative supports the automation and integration of UC Berkeley’s purchasing systems and procurement processes and creates a “marketplace” of catalogues from which end-users can purchase. The proposed solution will implement a set of software modules and catalogues that facilitates strategic sourcing of materials and services, simplifies the settlement processes and significantly reduces workload, raises campus participation, increases department savings and campus rebates from its substantial purchasing volumes. Projected savings: $1.5 million – $2.0 million annually.

Consolidation of Research Administration
The campus has created a centralized structure – Research Enterprise Services – that provides grant and contracts administration for six of our critical research units across campus. Projected savings: $0.5 million.

Review of Academic Units
The EVCP is analyzing the elimination of a deanship and reducing the size of departments on campus. We have strategically eliminated any campus contribution to three organized research units (ORU’s) tha are externally funded and are consolidating several ORU’s in the social sciences. Projected savings: $1.5 million annually.

Financial Management Initiatives
As a campus, we are undertaking several initiatives to manage our financial assets more effectively. These initiatives include:
• Debt strategies: On projects utilizing considerable fundraising, the campus is raising endowment to support the academic or athletic program, and then issuing tax-exempt debt to build the actual project. Projected savings: $3 million to $4 million for every $100 million of debt issued.
• Asset management: The campus has taken $400 million of our short-term assets and invested them in the Total Return Investment Pool. Although the Pool has started during unprecedented turmoil in the financial markets, in steady state we anticipate that this Pool would earn between 1.5 and 2.0 percent higher than STIP. Projected savings: $6 million to $8 million.
• Real estate initiatives: The campus is actively looking at our real estate strategies and both developing our own administrative office space and buying existing buildings in order to reduce our operating lease costs and increase our control over properties. Projected savings: $6 million to $8 million.

Changes in Model of Philanthropy
The William and Flora Hewlett Foundation made a landmark $110-million challenge gift to endow 100 new faculty chairs at UC Berkeley. In all, the Challenge will bring a total of $220 million to reinforce faculty excellence across the campus. The payout from these faculty chairs will provide approximately $11 million per year to support scholarly allowances for the individual chair-holders ($2.5 million), supplemental resources for competitive faculty salaries ($5.5 million), graduate student support in the chairholder’s department ($2.5 million), and “glue money” to support multi-disciplinary infrastructure and programs at Berkeley ($0.5 million). The Chancellor will extend this model to existing chairs as they roll over or come open. Projected savings: $6.0 million to $8.0 million annually.

UC Davis

The following describes the variety of approaches UC Davis is employing in response to budget constraints of 2008-09 and beyond.

Protected Strategic Areas
Protected strategic priority areas from budget reductions, including:
• Graduate student support;
• Purchased Utilities;
• Student financial aid;
• Teaching assistant positions; and
• Student academic preparation and student mental health programs.

Differential Budget Reductions
Assigned differential and permanent budget reductions to core funds as follows:
• Schools, colleges and divisions – average reduction = 2.4 percent  
• Administration = 7 percent  
• Library = 3 percent 
• Implemented 3 percent assessment (on-going) against revenue generating activities except academic recharges.

Curtailment of Faculty Hiring
• Reduced faculty recruitment by about half.
• Holding 24.5 growth FTE from 2007-08 centrally.
• Re-instituted policy that calls for faculty positions vacated by retirement or death to revert to the Provost FTE Reserve.

Staffing Reductions
• Hiring reduced; recruitment authority elevated to dean, vice chancellor, vice  provost level  
• Staff positions eliminated – approximately 90 vacant positions eliminated and approximately 50 layoffs through January 2009 (all levels)  
• STOP program being used to match layoff candidates with vacancies  
• START program – participation managed at department level
 
Enrollment Management
• Implemented joint Senate and Administration task force to focus on recruitment and retention of transfer students
• Implemented strategies to increase the yield of undergraduate students who pay out-of-state tuition (purchased names from College Board for students that match attributes from recent survey; developed custom web page and marketing materials)
• Implemented on graduate student application system to streamline and standardize enrollment processes

Review of Academic Units
• Evaluate campus support and administrative structure for centers and ORUs
• Extensive analysis of financial, instruction and research data to assigndifferential budget reductions in 2009-10
• Updating campuswide Academic Plan

Changes in Business Practices
• Over 300 ideas submitted by faculty, staff and students through open forums and on-line bulletin board (SmartSite); ideas reviewed and prioritized by Staff Assembly and campus budget committees
• Restrictions on travel and equipment purchases
• Reductions in services in various central areas, such as accounts payable, cashier, payroll, facilities management, and grounds maintenance
• Initiated major administrative unit review in the Office of Research
• Closed multiple units and programs (Police K-9 unit, Business Development unit in Office of Research)
• Major re-organization of facilities and A&E (moved from Administration to Office of Resource Management and Planning)

Energy Savings and Sustainability Goals
• Replaced two chillers to utilize lower priced commodity (change from gas to electricity) and improve efficiency. Annual savings of $3 million total ($1.5 million net of debt service)
• Strategic Energy Plan – aggressive participation with over 175 projects planned. At full implementation, anticipate annual savings/cost avoidance over $3 million annually
• Campuswide program to improve building controls; implemented central system controls to allow easier management of set points and holiday shutdowns.
• Improving coordination for campus sustainability and natural resource stewardship to leverage broad range of investments throughout campus.

Administrative Efficiency Improvements
Launched efforts to identify opportunities for operational savings and efficiencies:
• Consolidating campus administrative processes (currently evaluating UCOP BRC)
• Continuing projects for IT systems to streamline administrative processes and eliminate redundant processes (academic personnel, Integrated Curriculum
Management, SmartSite course management and collaboration tool, electronic
research administration)

UC Irvine

The following describes the variety of approaches UC Irvine is employing in response to budget constraints of 2008-09 and beyond.

Protected Strategic Areas
Protected strategic priority areas from budget reductions, including:
• Graduate student support;
• Newly initiated professional programs (law, nursing, public health, pharmaceutical sciences);
• Student financial aid;
• Student academic preparation programs.

Differential Budget Reductions
Assigned differential budget reductions to campus units to protect the critical areas of instruction, research, student access, and outreach:
• Reductions for units ranged from 0 percent   in some academic units to 5.7 percent in centrally-budgeted support activities in business, administration, and student affairs.

Targeted cuts to administrative functions across campus:
• Approximately $4 million in budget cuts

Increased campus assessments on revenue-generating activities
• This allowed smaller reductions to be assigned to instructional and research units.

Curtailment of Faculty Hiring
• Because no state funds were received for planned enrollment growth, the campus withdrew 34 faculty position authorizations and support commitments associated with this budget reduction.

• Withdrew authorization to hire faculty from approximately half of the remaining recruitments; we continue to authorize positions that are central to our focused excellence program or to critical instructional needs.

Staffing Reductions
Implemented a staff hiring freeze in March 2008 and implemented the UC START program.
• These actions have created considerable vacancy savings and have provided about $6 million in needed flexibility.

Staff layoffs
• Approximately 75 through December 2008

Enrollment Management
• Implemented strategies to increase the yield of undergraduate students who pay out-of-state tuition

Review of Academic Units
• Closure of two academic programs
• Considering overhaul of policies and procedures for ORU’s, including implementing stricter sunset reviews, consolidating administration, and emphasizing smaller units for a defined time period to help provide financial support for research initiatives

Changes in Business Practices
• Conducting an extensive evaluation of all staff human services functions; through this business process re-engineering effort, we plan to achieve better coordination between the campus and the medical center and a more streamlined organization.
• Reviewing redirecting graduate students seeking medical care from a campus general medical clinic to the campus student health center
• Exploration of purchase or campus-funded construction of an office building, which would reduce operating lease costs
• Continued pursuit of energy conservation measures and continued participation in the systemwide strategic energy program
• Restrictions on travel and equipment purchases
• Reductions in services in various central areas, such as accounts payable, cashier, payroll, facilities management, and grounds maintenance

Exploration of Additional Efficiency Measures
Launched efforts to identify opportunities for operational savings and efficiencies
• Consolidating campus IT operations
• Evaluate transition from quarter system to semester system
• Consolidating business services across campus organizations
• Develop strategies and practices for strategic use of space, particularly during off-hours