BUDGET IDEAS: A starting point for campus discussion
January 31, 2011
How can we generate more revenue? What can we do to be more efficient? Where can we cut costs?
Here are some possibilities for the long term, plus a couple of possibilities for short-term savings. The IDEAS are from faculty, staff, students and the administration, and have been gathered in a variety of ways: from the email@example.com e-mail address, from feedback derived from budget presentations around the campus, and from the Council of Deans and Vice Chancellors.
This IDEAS list is only a starting point, to spur discussion in the campus community. Campus leaders are asking you to comment on the IDEAS you see and to offer up your own suggestions and recommendations for this discussion. Send your comments to firstname.lastname@example.org.
As you review the IDEAS list, keep in mind what Chancellor Linda P.B. Katehi and Provost and Executive Vice Chancellor Ralph J. Hexter said in their Jan. 21 budget planning letter: "We can no longer build our budgets on the budgets of prior years. We require a new paradigm that maintains our mission of teaching, research and public service in this new, more turbulent fiscal environment."
The letter included a set of budget planning principles and implementation strategies to guide the budget process.
POSSIBLE OPTIONS FOR GENERATING REVENUE OR COST SAVINGS
1. Increase the number of undergraduate nonresident (domestic and international) students. For each 50 additional undergraduate nonresident students, the campus would generate an additional $1.4 million in net tuition revenue.
2. Recruit international graduate professional degree program students. For each 50 additional international graduate professional degree students, the campus would generate an additional $0.9 million in net tuition revenue.
3. Recruit international graduate students for masters programs. For each 50 additional international graduate academic masters students, the campus would generate an additional $1.0 million in net tuition revenue.
4. Increase summer sessions enrollment; expand course offerings to address unmet demand for gateway courses. A 20 percent increase in summer enrollment would generate an additional $3.8 million in net revenue.
5. Add or increase incidental fees (e.g., transcript copy); charge for events (e.g., Picnic Day, commencements, intramurals). Revenue gain varies. Individual units are evaluating a wide variety of options.
6. Expand and leverage nondegree executive education and certificate programs; leverage UC Davis Extension partnerships and infrastructure. Revenue gain varies. Individual units are evaluating a wide variety of options.
7. Consider a technology fee for all students to preserve critical technology services; improve and expand technology infrastructure for students. For each $50 of a technology fee charged to all students, the campus would generate $1.5 million in total revenue.
8. Expand commercial activities and sponsorships; explore business agreements outside the campus (e.g., bookstore in an alternate location). Revenue gain varies. Individual units are evaluating a wide variety of options.
9. Eliminate voluntary cost sharing; increase salary cost recovery with compensation-plan incentives for the general campus. Analysis in progress. As context, voluntary cost sharing totaled more than $8 million (direct and indirect) in 2005-06.
10. Explore discipline-specific fees and new self-supporting degree programs. Each fee proposal would include a full analysis of revenues and costs.
11. Establish an internal campus tax on all non-general fund and nontuition expenditures. Each 0.5 percent tax on these expenditures would yield $10 million.
12. Redirect a portion of the payroll set-aside for staff development and training to offset the budget shortfall. The assessment generates about $2 million per year; therefore, redirecting 50 percent of this assessment would yield $1 million.
13. Increase annual fund donations; expand alumni programs to build connections; launch a venture philanthropy initiative. Doubling annual fund donations would yield about $1.2 million in revenue, although costs would climb.
14. Build endowment of $220 million to $225 million for faculty and staff support. An endowment of this size would provide an annual payout of roughly $10 million.
1. Accelerate the Strategic Energy Program; aggressively evaluate set points for building temperatures; employ more regular utility shutdowns (e.g., Sundays, holidays). This academic year (2010-11) is the second year of a multiyear effort to improve building-wide energy use. The program leverages incentive funds from utility companies. The savings to date exceed $1.5 million.
2. Comprehensive restructuring of the academic personnel process; streamline reviews and approvals; delegate authority; leverage automation (My InfoVault). The current process requires significant time investment from the Academic Senate, faculty, staff and administration.
3. Consolidate services provided by multiple organizations (e.g., health, employment, disability, custodial, ticketing, conference/events, storehouse, medical billing, etc.). The savings would largely result from consolidating administrative structures, lower costs from economies of scale, and new, lower cost approaches to providing services.
4. Further consolidate leases; implement a space formula; charge a fee for on-campus space (along the lines of Michigan, Stanford, others). Lease savings to date total more than $1.1 million; actions to save $0.5 million are planned. More aggressive incentives to consolidate space could provide additional savings.
5. Consolidate or outsource services that are not unique or core to UC Davis on the Davis or Sacramento campuses (e.g., landfill, fire, other municipal services). Similar to Nos. 3 and 4.
6. Identify opportunities to flatten organization models and reduce management positions where possible. Analysis in progress.
7. Implement a campuswide approach to shared services for IT, HR/payroll and accounting. Reduce staff positions over time. The Davis campus has one shared service center project in the works, to serve five administrative units: Administrative and Resource Management, the Offices of the Chancellor and Provost, Information and Educational Technology, Student Affairs and University Relations. From this project alone, the campus estimates savings of up to $10 million annually after full implementation.
8. Increase the use of the California Digital Library; consolidate collections if possible. A UC-wide task force and a UC Davis Academic Senate-administration committee are exploring options.
9. Outsource nonmandated services; seek lower per unit cost and incentive payments from vendors; increase the use of strategic sourcing contracts; improve and expand relationships with local entrepreneurs. The savings would include overhead costs (e.g., management outside of unit, utilities, space opportunity cost, HR and accounting services provided to the unit, etc.). The revenue would most likely be in the form of incentive payments from outside vendors.
10. Reduce vice chancellor-vice provost positions; reduce academic administrators; reduce middle management; consolidate leadership between the Davis and Sacramento campuses. Analysis in progress.
1. Close, merge or consolidate academic programs; develop options as part of the academic review process. Cost reduction varies. Detailed evaluation by category of expenditure is needed.
2. Replace research support from state operating funds by new sources of revenue. Each 10 percent replacement of funds would yield about $6 million.
3. Consider seasonal appointments where possible (appointments of less than 100 percent, but with the salaries paid over 12 months). Cost reduction varies. Individual units are evaluating a wide variety of options.
4. Lower employer contributions to benefits; incentivize employees to use spouse/partner plans (within or outside UC). Each 10 percent savings in state/tuition-supported benefits would yield about $4.5 million.
5. Redefine service levels; reduce services (e.g., custodial, nonmandatory maintenance, etc.). Cost reduction varies. Individual units are evaluating a wide variety of options.
6. Reduce undergraduate University Student Aid Program (USAP) support. A 5 percent cut in undergraduate USAP funding would yield roughly $3 million.
7. Consider lower return-to-aid set-aside for future fee increases. The savings would be dependent on the size of the fee increases and the financial aid set-asides.
8. Reduce support for Student Academic Preparation and Educational Partnership (SAPEP) programs. Each 10 percent reduction in SAPEP support would yield about $0.5 million in savings.
SHORT-TERM SAVINGS FOR TRANSITION OR BRIDGING
1. Sell (or lease) university land or other assets. Each property or asset would require a separate valuation analysis.
2. Increase the endowment payout rate (regental policy). Under the existing policy, the university uses a five-year rolling average between 4.35 percent and 4.75 percent. Each 0.25 percent increase in the payout rate would yield about $2,500 for each $1 million of endowed funds.
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