UC San Diego

UC San Diego Balanced Multi-Year Approach to Budget Reductions  Significant budgetary challenges face UCSD in the current 2008/09 year, as well as the upcoming years due to a  number of converging factors. Among others, this includes reduced state general fund budgets; growing unfunded mandatory costs for health benefits, utilities, building maintenance; reinstatement of contributions to the UC Retirement Plan; declining endowment values and operating payouts; slowing federal research funding, etc.

UCSD remains focused on protecting our core academic enterprise, classroom teaching and research laboratories. Therefore, a balanced multi-year approach is critical to the campus’ ability to emerge from these challenges and forge a stronger position over the upcoming decades. Included in that approach is the establishment of several ‘Tiger Teams’ that broadly focus on:
• Identifying and implementing immediate, mid, and longer-term tangible cost containment and reduction
measures;
• Identifying and pursuing options for program(s) consolidation & department(s) restructuring that, over time, results in reduced personnel;
• Identifying opportunities and pursuing alternative revenue strategies.

Reduce Operating Budgets
UCSD is undergoing a comprehensive assessment in each vice chancellor area to prune non-salary costs. Actions taken to date and continuing:
• Curtailment of non-essential travel;
• Reduction of entertainment and meeting costs;
• Limited use of consulting contracts and temporary staff;
• Deferment of equipment purchases not critical to instruction program;
• Reduction of energy consumption;
• Elimination of non-essential activities.

Projected savings of $24.5 million through FY 2009/10.

Personnel Costs
Human capital is our largest cost with compensation comprising 78 percent of our core budget at approximately $453 million. It is also our most valuable resource and UCSD remains committed to retention of existing faculty and staff by implementing the following cost-savings measures: a soft hiring freeze; encouraging the use of the START program; redistribution of workload of vacant positions and reducing staff provisions; indefinite postponement of faculty recruitments equivalent to 48 state-funded ladder-rank faculty FTE.

Projected savings of $9.5 million through FY 2009/10.  

Energy Costs
UCSD's strategic approach to energy management has resulted in significant savings. Completed energy projects since 2001 with a $38.2 million investment resulting in estimated savings of $7.4 million; an additional $30 million investment in projects under construction are expected to result in estimated savings of $3.2 million. In the next  few years the campus plans to invests $70 million, on over 200 energy projects, through participation in the 2009-11 Statewide Energy Partnership with the State's investor-owned utilities.

Upon completion, this investmest is estimated to result in savings estimated at $2.5 annually, net of debt service obligations.  

Academic Enrichment Programs
Many academic enrichment programs supplementing instruction will be suspended to preserve the core mission of  instruction. These include support of faculty grant proposals, faculty fellows, and faculty stipends for senior  seminars.

Projected savings of $0.5 million through FY 2009/10.  

Health Sciences Program Consolidation
There are a number of programs that have been, or are being consolidated, with the Health Sciences programs:
• Consolidation of Medical Group Financial Reporting with the VC Business Affairs Controller's Office;
• Consolidation of Communications and Marketing;
• Consolidation of Health Sciences Planning with Capital Planning & Space Management;
• Consolidation of Human Resources for Medical Center and the Professional Schools; 
• Consolidation of staff Administration and Academic Administration;
• Reorganization of Decision Support and Business Application Development.

Quantifyable savings are not yet available.  

Auxiliaries and Self-Supporting Enterprise
UCSD has numerous auxiliary and self-supporting activities on campus which encompass sales to outside users. A review of these activities will ensure that the costs recovered are in alignment with revenues received, and that the  campus is not subsidizing these activities. A tiger team has been established to explore options for increasing  administrative assessment on Auxiliaries and Self Supporting Activities to expand contribution to campus core  mission.

Quantifiable impact not yet available.  

Campus IT Services
Information technology has been identified as an area of high cost and potential redundancies. A tiger team has  been established to identify and pursue options for consolidating and restructuring IT services with the goal of  increasing campuswide efficiency that will, over time, result in a reduced campus workforce, and thus allow for reallocation of campus resources.

Quantifyable savings are not yet available.  

Campus Budget Communications
Understanding the enormous stress and sacrifice confronted by our faculty, students, and staff in this period of  budgetary turmoil, the Chancellor has taken steps to keep the UC San Diego community informed and involved in  the difficult decisions that lie ahead. A tiger team for campus budget communications was charged to develop and  implement a basic campus communications plan that informs and engages campus constituents. A new website, "BudgetLine," was created that, in addition to hosting the most recent budget news, contains avenues to pose both questions and cost-savings suggestions.

Savings resulting from suggestions implemented will be reported in future  documents.  

UC San Francisco

Program Consolidation, Reductions and Closures:
• Nursing MS program on complementary alternative therapies discontinued
• Doctor of Nursing program not initiated
• Adult Denti-Cal program eliminated
• 2-year Dental Hygiene program eliminated
• Regional consolidation of common human resources and administrative functions at satellite locations is being studied for implementation (like UCOP
BRIC model)
• Non-core activities being identified for further consolidation/closure analysis

Deferral of Expensive  New Initiatives or  Projects  
• Information technology infrastructure replacement project
• Campuswide research database development
• Pre-award research administration system
• Web portal
• Child care expansion
• Faculty and staff housing growth
• Demolition of seismically deficient buildings (Old UCH, Rad Lab)
• Parnassus major deferred maintenance program, phase 2
• Defer expanding Pharmacy class size

Cost-saving Measures
• On-line application and credit card system for graduate division
• Paperless system for admission and progression
• Online financial journal system
• E-commerce purchasing & payables system (P2P)
• Energy efficiency projects through UC Strategic Energy Partnership -- $3.3 million invested to-date
• Data center/server consolidation at one location
• Automated time and attendance reporting system
• New research cores management & processing model
• On-line chemical inventory & registry system
• Elimination of mailing costs in industry contract negotiations
• Central electronic medical records capability
• Elimination of subsidies for mailing division and shuttle system
• Reductions-in-force and selective hiring freezes
• Reduce maintenance services (custodial, window washing, trash handling, floor polishing, etc)
• Energy efficiency program at UCSF sites
• UCSF/UCOP HR consolidation

Innovation & Revenue Measures
• Increase non-operating income through active/aggressive cash management and accounts receivable clearing and collection program
• Increase direct cost reimbursement for administrative costs from private sponsors
• Increase “margin management” of whole portfolio of patient services
• Implement patient pay at time of service program to increase revenue timeline
• Negotiate discounts with delivery services (Fedex, UPS) by creating a central pick-up drop-off point for UCSF deliveries at all major sites
• Expand full-fee degree programs (bio-entrepreneurship, DDS/MBA, etc)
• Institute campuswide recharge to pay for recapitalizing information technology infrastructure.

UC Santa Barbara

Actions Taken to Reduce Costs
In the current year (FY 2008-09) campus departments have handled budget cuts through  one-time actions. These include using salary savings from unfilled positions, START  savings, reduced travel and professional development, reductions in overtime expenses, deferral of equipment expenses, and elimination of memberships and subscriptions. These one-time actions have allowed campus departments additional to plan for  permanent budget reductions. These plans are currently being finalized by campus  control points and will be reviewed by the campus community in March and April. The following initiatives represent the initial list of initiatives and actions taken, or to be  taken, by UC Santa Barbara to reduction costs. Some of these initiatives result in  immediate budgetary savings, while others provide opportunities to reduce costs in the  future. As control point plans are finalized and implemented the list will be greatly  expanded.  

Off-Campus Leases
Three units (Extended Learning, Development, and Purchasing) will move back into on-campus  space in the next four to six months. The moves are possible due to the  availability of release space associated with the completion of new buildings, reconfiguration of existing space, and reduction in program related staff due to  reorganization. The elimination of these off-campus leases will reduce costs by approximately $800,000 per year.  

Energy Conservation
UC Santa Barbara currently plans to implement around 100 projects as part of the UC  Statewide Energy Partnership (SEP). The total cost of these projects will be about $17.1 million, with the campus receiving approximately $4.7 million in incentives from the  investor owned utilities. When completed, these projects will save the campus an  estimated $2.3 million annually, while requiring just under $1 million annually in loan  payments. The resulting net savings – $1.3 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 9,600 tons, a 16 percent reduction from current greenhouse gas emission levels.  

Business Processes
Planning is underway that will result in consolidation of business processing currently handled at a departmental level into central business centers. The central business centers would be responsible for activities such as payroll, purchasing, budgeting, and  travel for groups of departments within an organizational cluster (i.e., administrative  services, student affairs, or perhaps a college). The central business centers will allow for  key administrative services to be supported with fewer staff.  

Information Technology
Divisions are also exploring centralized information technology services. This includes  desktop support, website maintenance and systems development. This model has been  successfully implemented within Student Affairs and now other areas are taking the  initial step to centralizing these services.  

Reductions in Staff
Permanent reductions will result in a substantial reduction in staff. The campus planning  principles indicate that efforts should be made to avoid layoffs by taking advantage of  normal attrition, planned retirements, and voluntary reductions in time. Approximately  $1.5 million through June, 2010. Initial estimated indicated that staff FTE would be  reduced by approximately 135 positions through retirement and normal attrition. This  number may be higher as departmental plans are finalized.    

UC Santa Cruz

The following summary represents initiatives and actions undertaken by the UC Santa Cruz campus to reduce costs. Some of these initiatives will provide immediate budgetary savings; others provide opportunities to reduce costs in the future.  

Restructured Information Technology Services
In 2005-06 the UCSC campus began a major restructuring and reorganizing of IT services across  campus. Departmental IT staff were consolidated within a central IT unit to create a more  effective organization that was responsible for managing IT costs while improving the  consistency and predictability of IT services across campus. This proved particularly challenging  because campus investments in IT were unable to keep pace with increasing demand and user  expectations. With the consolidation of IT accomplished, the campus is renewing its review of  IT, and expects to reduce costs by up to $1.5 million.

Restructured Business and Human Resources
At the same time IT services were consolidated, UCSC initiated a separate major reorganization  effort to centralize most business and human resource functions. This required the physical  relocation and reassignment of departmental financial and human resource assistants to new  central organizations. The campus invested in technology to automate labor and paper intensive  activities. A new recruitment management system allows the campus to advertise job openings  and to receive applicant materials via the web, reducing advertising costs and the need for paper  application forms. An electronic time and attendance system allows on-line reporting and  automates the tracking of vacation and sick leave. Once the time and attendance system is fully  integrated with the payroll system later this year, UCSC expects to reduce staff time that was  previously required to manually enter data into the old system. The estimated savings achieved by consolidating these activities is $1.1 million annually.  

E-Procurement and Strategic Sourcing
UCSC worked with the Office of the President and other campuses to develop contracts with  vendors for commonly purchased goods. This has resulted in better prices, delivery, and  services. At the same time, implementation of an e-procurement system provided the online  technology for a more efficient purchasing process and online access to strategically sourced  contracts. Together, the E-procurement and strategic sourcing initiatives provided an efficient  mechanism for finding the best price and best terms for many goods and services. UCSC  reorganized its central purchasing unit to maximize the benefits afforded by e-procurement and  strategic sourcing. Purchasing staff from across the campus were consolidated into one central  office. Processes were streamlined, reducing staff time and paper. The savings are difficult to  quantify, but are likely substantial and will help mitigate the impact of budget reductions.  

Energy and Water Conservation
UCSC currently plans to implement 55 projects in 19 buildings as part of the UC Strategic Energy Partnership (SEP). The total cost of the projects is about $6 million, with the campus  receiving approximately $1.3 million in incentives from investor-owned utilities and the  participating publicly-owned utilities. When completed, these projects will save the campus an  estimated $700,000 each year while requiring about $450K in loan repayments. This effort comes  on top of the campus’s longstanding practice of reducing energy costs by relamping, using  occupancy sensors, upgrading to Energy Star appliances, not cooling for comfort (only cooling in  lab/computer spaces), an aggressive preventative maintenance program on HVAC equipment,  and by promoting energy awareness to faculty, staff, and students.  

UCSC completed a water efficiency survey in 2007 to identify projects that would reduce water  consumption. The survey identified 19 high-priority conservation projects that would reduce  water consumption from current levels by approximately 15 percent. The projects encompass statefunded,  housing, and student fee-funded space and include replacement of high flow toilets and urinals in “high use” areas, replacing showerheads, kitchen spray valves, faucet aerators, and adding sub meters in large un-metered irrigation areas.

The campus is investing between $1 million and $1.5 million in one-time funds and anticipates savings within the first three years that are greater  than the cost of the projects. The savings will be applied to future rate increases and/or to reduce  the campus’s purchased utility deficit.  

Data Warehouse and Budget System
Over the several years, UCSC has successfully built a robust data warehouse that provides ready  access to a wide range of data including financial, budget, payroll/personnel, institutional  research, student and enrollment information, facilities inventory, space occupancy, workers compensation, and graduate student support. The data warehouse now serves as the primary  source of consolidated data for reporting and analysis; with over 120 certified corporate reports, and more than 1,200 users. The data warehouse is a critical element of the campus’s  infrastructure and has significantly benefited the campus through better access to information  for decision-making and business process improvement that was previously unavailable or very  time-consuming to compile and analyze. Work is underway to upgrade the system and expand the universe of data.  

UCSC successfully implemented on online budget system to replace the old corporate budget  and staffing list system. The online system, which will be upgraded, reduced work in the Payroll Office and units across campus, eliminated the need for central IT support, and allowed IT to  retire an old server.

Elimination and Merger of Programs
UCSC eliminated the Institute on Science for Global Policy in 2008 for an estimated annual  savings of $400,000, and merged the management of off-site facilities at MBEST into the newly formed real estate office for comprehensive oversight of off-campus leased and university-owned  properties.

The campus has significantly downscaled the UCSC Arts & Lectures program reflecting a reduction in a campus subsidy of $100,000 annually.

Extension, a self-supporting  program, is eliminating the English Language and International Program and the Science Illustration Program and is reducing the number of leased facilities to consolidate its offerings in  one primary location in Cupertino. This will reduce UCSC Extension costs for facilities and staff personnel.  

Focused work groups
UCSC has formed eight work groups to identify opportunities to improve organizational structures,  service delivery, and enhance effectiveness in the following areas: student advising, instruction,  curriculum, and learning support activities, academic personnel operations, institutional  support, student life programs, and auxiliary enterprises (student housing and transportation).  The workgroups have been asked to provide a fresh perspective on issues specific to each area  and to suggest ways to better align our programs and services with the campus mission within  the context of significantly fewer state resources.

One-time actions to conserve cash  
The campus has undertaken a number of actions to conserve cash and has encouraged  participation in START and other systemwide initiatives. Actions taken include:
• START – 61 UCSC employees have enrolled in the START program, for an estimated savings in 2008/09 of over $535,000.
• Delay/defer faculty recruitments – Of the 41 recruitments authorized in 2008-09, 14 have been withdraw due to budgetary concerns. The savings associated with the deferred recruitments include $1.2M in salary savings and $3.9 million in start-up costs.
• Staff Vacancies – As of January 2009, UCSC had 168 staff FTE open, for an estimated annual savings of $8 million across all fund sources. Many units have elected to hold positions open in anticipation of budget cuts. Even in the case of critically needed positions, recruitments have been delayed to generate one-time salary savings.
• Shakespeare Santa Cruz – This professional repertory theatre company operating in cooperation with the Theater Arts Department within the Arts Division at UCSC issued a public fundraising challenge to raise a reserve contingency fund before going forward with the 2009 summer season. The challenge was enthusiastically met by patrons, whose contributions will obviate the potential need for a campus subsidy this season.