Chancellor Larry Vanderhoef's testimony before UC Regents

Campus faculty, staff and students are highly engaged in budget planning.
2008-09: $38 million in permanent reductions (state cuts, fixed costs, utilities)
2009-10: Estimating additional shortfall of $113 million (state cuts, fixed costs included UCRS)

Campus planning initiated this winter assumed $39 million, so we are not able to articulate all consequences of the higher cut targets at this time. Plans are being developed quickly.

In January, we appointed faculty, staff and students to identify savings opportunities in five areas: I&R, administration, student services, self-supporting activities and capital and space.
Reports being submitted now and ideas will be pursued this summer and fall.

IMPACTS - Many examples to share and many more expected in response to the much larger cuts.

STUDENTS

• Our students are paying higher fees and still bearing a significant burden.  Class sizes will increase and there will be fewer sections. As one example, we estimate reduction of at least 35 sections of language and composition classes affecting up to 1,000 students.
• Fewer teaching assistants (TAs) - about 60 positions (10 percent) - will reduce training and employment for graduate students and support fewer course sections for undergraduates.
• Almost 400 part-time student jobs will be lost (14 percent of the approximately 2,800 students employed) because campus departments no longer have the funds to hire them. 
• This can create financial problems for the students, undermine community building between students and staff, and negatively impact retention. The largest employers include various units of Student Affairs, the Library, Information and Educational Technology, and the School of Veterinary Medicine. Students perform important functions including staffing the Library registration desk, computer support, animal care, office functions, or working for a student run organization such as the Bike Shop or Coffee House.  

ADMINISTRATIVE DOWNSIZING 

39 senior management positions eliminated (or planned through 09-10). At least half are the result of administrative downsizing:

• We are combining the Offices of Administration and Resource Management and Planning. Initial efforts include elimination of one vice chancellor position, one associate vice chancellor and five senior management positions. More downsizing is planned.
• 
   Student Affairs is consolidating (1) Advising Services; and (2) Student Programs and Activities with other units, thereby eliminating four management positions.  
•  
  Other management positions are being eliminated by consolidating academic departments and combining administrative portfolios. As one example, the School of Veterinary Medicine is restructuring from six to four departments.  

SIGNIFICANT CHALLENGES IN HEALTH SCIENCES
 

• Substantial increases in charity care (70 percent increase since 2006-07; $95 million to $163 million) and bad debts have increased more than 50 percent ($38 million to $55 million). More increases expected in 2009-10.
• 
  Sacramento County has stopped payments for indigent care ($90 million billed in 2008-09 and only $34 million paid). 
• 
  Contributions to the retirement system will add $30 million to $40 million in costs over the next two years [note: range depends if cost stays at 4 percent ($30 million) or if cost goes to 6 percent ($40 million).]
• Veterinary Medicine is reducing the number of residents from 100 to 70 over a three-year period. Fewer residents trained mean less support for clinicians and causing a negative impact on student training and patient care.
• Vet Med is also ending the Veterinary Graduate Academic Program that trains veterinarians to be academics. The program was established to mitigate the shortage of veterinary academics, which continues to be a national problem. The VGAP trained 10 students per year for academic careers (including many of our own faculty) and cost $500, 000 a year. These students had a major teaching component to their program that faculty will be asked to backfill.

STAFF AND FACULTY

Fewer staff results in increased workload for remaining faculty and staff.

• We have (or will) eliminate over 700 staff positions on campus. In 2008-09 there were 157 layoffs and another 175 vacant positions eliminated. Our deans and vice chancellors advise that these numbers will increase next year.
• Staff reductions are happening quickly and units are grappling with how to adjust to fewer staff.
• Remaining staff being asked to do more at the same time we are asking them to take reduced pay or furlough. 
• Faculty will do more administrative support activities and there will be less staff support for senate committees.
• More than 200 faculty positions normally filled will be held vacant to offset budget reductions in the short term, meaning additional teaching and lab management workload for faculty.

CAPITAL PROGRAM SLOWED
Several projects suspended indefinitely:

• State funds: Music Building, Vet Med 3B
• Campus funds: Engineering IV
• Other projects likely to be slowed or delayed in coming months

OTHER NOTES AND BACKGROUND DATA

ENROLLMENT REDUCTION (NOT INCLUDED ABOVE BECAUSE REGENTS HAVE DISCUSSED PREVIOUSLY)

• 400 fewer freshmen (from 5,000 to 4,600)
• 12 fewer MD students (reducing MD to continue to grow PRIME programs) Total MD enrollment is 400.
• PRIME: 1st cohort of 12 in 2007-08 was funded; 2nd cohort in 2008-09 funded with temporary funds redirected by UCOP; 3rd cohort 2009-10 funded by decreasing MD enrollments.

SELECT BACKGROUND DATA

EMPLOYEES
Campus Staff                    9,000
Health System Staff           7,000
Undergraduate students    28,000
Ladder faculty                    1,300



LAYOFFS (Campus and Health System)
    2006-07 "normal year"        57 layoffs
    2007-08                             85 layoffs
    2008-09                           157 layoffs (88 seasonal layoffs; Sodexho dining staff; typical)
    Most layoffs in: Vet Med = 42, Research = 20, CA&ES = 33
           
Note: Each year layoffs are cancelled (other jobs are found or funding restored).
20 layoffs were cancelled in 2006-07 and 2007-08 and 30 were cancelled in 2008-09.


TEMPORARY TIME REDUCTION (START) PROGRAM
(Campus only; health system does not use the program)
    2008-09     285 participants; over $1.5M salary savings