Response to Questions of APC - FY 2003-04 & 2004-05 Budget Reduction Process


Memorandum
Responses to Questions of the Academic Planning Committee, April 2003
APRIL 22, 2003

Office of the Chancellor
University of Nebraska-Lincoln

Could business centers and/or laboratory management of several departments be combined?

There is no doubt that business centers would provide the campus with a higher level of proficiency in managing administrative and business affairs. The adoption of a business team model can provide the required foundation to meet the future financial and administrative needs of campus departments. This model allows multiple departments and units to collaborate and consolidate their individual support staff into a joint Business Office serving these multiple units. By working together in teams, and reaching a critical mass of processed activities that will allow specialization, the goal is to raise the overall level of business expertise and skill of these team members in order to provide better administrative support.

However, this model in the short term may result in an increase in dollars spent on administrative support, even though it improves the quality of work, streamlines processing time, reduces risk resulting from turnover, provides financial reporting capabilities, and frees up management’s time to use this information to guide their units more effectively and efficiently. Over the long term, the consolidation of work into business teams will result in reductions in administrative costs.

Several areas have reorganized business functions into teams. These include IANR, Teachers College, Nebraska Unions, Vice Chancellor for Student Affairs, Career Services, Facilities, Campus Police, VCBF’s University Services self-support operations, Housing, and Athletics. We have received anecdotal complaints from faculty where business centers have been formed. We are currently working on a program to make this an option for more academic units, with a particular focus on areas which have the potential for the greatest savings.

With regard to combining management of laboratories, departments in the College of Arts and Sciences, in particular, Chemistry, Physics and Astronomy and Biological Sciences, have already combined several such functions. Under the leadership of the Office of Academic Affairs, the feasibility of enhanced share management and its financial benefits are underway. In the future, similar conversations will be held with other colleges as well.

While these ideas have potential for efficiencies and savings in the long run, there is not likely to be immediate short-term savings that can be applied to the budget reduction.


What is the effect of asking departments for small horizontal contributions of 1.5 to 2%?

Some horizontal reductions were necessary this year to meet cash flow problems from the reductions announced last year and some horizontal cuts may be necessary this year. However, horizontal cuts reduce departmental flexibility and quality.


How were questions of diversity and equity considered in the cuts? If so, please explain how they were considered.

The University’s AA/EEO officer reviews every set of cuts to assure there are no disproportionate impacts on minorities or women or other protected classes. Because this campus has been relatively successful in attracting women and minorities to the faculty in recent years, any horizontal reduction plan could disproportionately impact women and minorities. For example, 59% of the full time O/S staff are women and 45% of the M/P are women. Horizontal reductions impact these classes of employees. For faculty, 38% of non-tenure track faculty are women but only 25.9% of known tenure-track faculty are women. Of tenure-track faculty, 41.3% of Assistant Professors are women but only 18% of Full Professors are women.


What is the cost-out on the MS in Museum Studies and the Museum Research Division?

Museum Studies Masters Program:
The direct cost* of running the Museum Studies
program in FY2003 is $135,938 per year:

  State Funding: $25,526
  Temporary Funding: $40,000
  Prof. Genoways in-load: $46,755
  Myers in-load: $23,657
  Total $135, 938

(*Indirect costs, including facilities, utilities, library, etc. are not included.)

Revenue in FY2003:

  Fall Semester 2002 tuition: $85,532
  Spring Semester 2003 tuition: $79,351
  Tuition subtotal $164,883

However, it must be noted that as a result of budget reductions to other academic programs (e.g. UNSM and Sr. VCAA), all but $25,526 of the costs of running the program would no longer be available. A recent proposal from the University of Nebraska State Museum and the Museum Studies Faculty requested $150,000 in continuing support to maintain the program. Thus, even if the $25,526 in continuing funding for the program were continued, an additional $125,000 in continuing, new monies would need to be identified.

It is also the case that the program does not have an academic home, and, with Professor Genoways’ resignation as Director, there is not faculty leadership to oversee the program.


What revenue enhancements have been considered other than tuition?

Two major student fees will be proposed at the next Board of Regents meeting. The first, a $2.00/credit hour fee, will be devoted to the library, and will, we anticipate, raise in excess of $950,000 a year. In addition, a fee of $10/credit hour will be imposed on each course offered in the College of Engineering and Technology. Our estimate is that this will raise $500,000. In both cases, the fees will offset reductions to the Library and College of E & T budgets. Application fees were increased last year and will be increased again next year so that undergraduate fees will move from $40 to $45 and graduate from $40 to $50.

We are also considering moving to a school as lender model of financial aid that may generate $500,000/year. We are also looking at the potential for an exclusive credit card for UNL students.

In addition, we recently instituted an admission fee at the University of Nebraska State Museum.


Has an analysis of the cost/benefit of recycling been done? If so, can it be provided?

The direct approach to analysis of the cost of recycling is to consider that elimination of the position of Recycling Manager saves about $50,000 in position costs. If we took all formerly recycled material to City landfill (about 1,000 tons), we would pay additional tipping fees of about $20,000 at current rates. The net savings to UNL would be about $30,000.

In addition, assuming no increase in operating costs, we MAY be able to increase that savings as much as an additional $10,000 by continuing to take mixed office paper and cardboard (perhaps 500 tons under voluntary recycling efforts) to Midland Recycling rather than the City landfill. Eliminating the position and NOT increasing operational costs in other ways is the key to the savings.


Were savings from all operational and administrative reductions considered before academic programs were cut? If so, please list and provide anticipated outcome.

(See answer to “Why aren’t administrative reductions made proportional to reductions in programs?”)


What attempts have been made to restructure administrative organizations to increase efficiencies and save money? Please list and provide anticipated outcomes.

The merging of Teachers College and the College of Human Resources and Family Sciences will save approximately $300,000.

The extended education functions of DCS were moved to the Office of Extended Education. Savings were $842,858.

The position of Dean of Graduate Studies was combined with that of VCR, resulting in the avoidance of increased costs.

The Dean of International Affairs was changed to a Director’s position and that office was combined with International Programs resulting in savings of $52,517.

The Office of Academic Affairs eliminated one Assoc. VC position and one half-time P/M employee. These saving were transferred to the Dean of Undergraduate Studies.

In addition, the following mergers or restructurings have or are in the process of being implemented: (1) The Nebraska Forest Service and Statewide Arboretum (now scheduled for elimination); (2) Conservation and Survey with School of Natural Resources (eliminating a director’s office); (3) Director of Integrated Marketing with Director of University Communications (eliminating a director’s office); (4) Elimination of the Assistant to the Chancellor for Fine Arts; (5) Eliminating the branch libraries in Chemistry, Physics, and Biological Sciences (resulting in long-term savings); (6) Elimination of South Central Research and Extension Center (in addition to other savings, allowed filling of an Associate Vice Chancellor’s position with a tenured faculty impacted by the elimination of the Center); (7) consolidating veterinary diagnostic laboratories into one primary laboratory in Lincoln; (8) eliminating the 4-H Director and assigning those duties to the Associate Dean of Agriculture.


Why have we hired a Dean of Undergraduate Studies? Is the position really justified under present budgetary constraints?

Undergraduate education is a priority program. As a result of the Noel-Levitz consultation, it became clear that UNL had to focus its efforts in the area of retention. A key tactic in that strategy was seen to be the identification of an administrator whose sole responsibility would be to focus on the undergraduate program, particularly in the first two years of students’ time on campus. College deans appropriately are focused on the variety of missions their college is charged to meet.

This position also plays a key role in coordinating enrollment management efforts with academic programs, a need highlighted by the Noel Levitz consultation.

Finally, it should be remembered that, in a very real sense this is not a new position. As noted above, one Associate VCAA position and a partial M/P line were used to fund this position. Many of the duties of the Dean of Undergraduate Studies (e.g. Honors Program, University Foundations, General Studies) were formerly assumed by the former Associate VCAA position.


What is the source of the money for four student assistantships in Student Affairs? Are there similar student positions that should be examined? Why should such appointments be continued?

Like most University departments, Student Affairs units make good use of graduate student labor. GA's generally perform at a very professional level, and cost considerably less per FTE than full-time professional staff. In 1994-95 the Vice Chancellor for Student Affairs (a tenured Professor of Educational Administration) worked with his colleagues in Educational Administration to develop a specialization in Student Affairs administration at the M.A / M.E.D. level. This program assured a good flow of high-quality graduate assistants to fill a core number of established positions. Five new students are admitted each year to a two-year program. Other GA's are often hired in various SA units, but the M.A. / M.E.D. program assures the division a core group of ten each year. The funding of these positions vary from year-to-year, but over time the ratio has been approximately seven GA positions funded by auxiliary departments, and three GA positions funded by state-aided departments. In the latter category, there is always a demand for one GA to help cover the workload in the VCSA office, and another GA to help cover the workload in Student Judicial Affairs. The remaining state-aided position is typically in admissions, although at times we have shifted this third position to help cover short-term needs.


Why aren’t administrative reductions made proportional to reductions in programs?

To answer this question, a comparison of the Round #1 - #4 reductions taken by UNL since July 1, 2001 examined reductions in academic, administrative and service functions across all vice chancellor areas. In this analysis, cuts that directly impacted faculty (e.g. reductions in a departmental secretary or other support staff) were treated as academic reductions, all cuts at the dean or director level (e.g. elimination of four deans) were included as administrative reductions, while programs serving Nebraskans, but not academic programs (e.g. the elimination of the Veterinary Diagnostic Labs at Scottsbluff and North Platte and the Bureau of Business Research) were included as service cuts.

As shown in the attached spreadsheet, 49% of the total budget reductions came in administrative costs, 26% in academic programs, and 25% in service programs.


What has been the history of the budget of the Vice Chancellor for Student Affairs in the past seven years (state-aided and other sources)?

See attached spreadsheet.


Why are we cutting the successful Museum, a program of international stature, when priority programs not yet established nor of equivalent reputation continue to receive new funds?

By reorganizing the Museum and focusing on leveraging faculty strengths from academic departments, we hope to maintain and strengthen, if possible, the museum collections with the highest international stature and/or significance to Nebraska. Priority programs are ones this University will need in the future; they are not necessarily ones that are currently strong or well-organized.


To what extent can paid positions be replaced by volunteers in Admissions and Records?

The office of Admissions relies upon a core staff of professional and office/service employees, augmented by paid student workers and university employees from academic departments, college offices, and other Student Affairs units. In sum, the recruitment of quality students is a critical function that requires support from the entire campus community. Volunteers also play a role in student recruitment. About 100 volunteer students assist with campus visits: conducting tours, coordinating transportation, and providing information. Alumni constitute another major source of volunteer effort for the recruitment of students, frequently staffing booths at college fairs in distant cities, contacting prospective students by telephone, and occasionally hosting events. While volunteers are an essential part of the overall recruitment effort, they cannot replace the functions that are performed by the paid employees.

The Registration and Records office cannot really utilize volunteers, as the functions performed require specific knowledge and training. There is also a high degree of confidentiality and accountability required of all workers, and it would be very difficult to rely upon volunteers for such work.


To what extent could self-supporting programs generate additional income for the “greater good”? For example, has a surcharge on athletic tickets been considered?

While not called a “surcharge,” UNL has in effect been charging approximately $3/ticket for each home football game. This has been realized through the $1.5 million assessment placed on the Department of Intercollegiate Athletics in support of academic programs.

All other programs supported by so-called revolving accounts already pay a 5% surcharge (for Residence Halls this will be over $1.15 million) that are paid into the state-aided budget. In addition, the Residence Halls contribute over $660,000 a year in Residence Hall Funds to support academic and other Student Affairs (e.g. Admissions, academic programs housed residence halls, the Honors Program, JD Edwards Program, diversity programs and Learning Communities among others).


Could money be saved by outsourcing printing services?

UNL’s Printing and Copy Services receives no state funds; rather, it is fully dependent upon the revenue it generates. A recent comparison (2002) of external and internal printing costs shows that, for most printing requirements of the campus, the UNL Printing and Copy Services pricing is between 17% and 27% less. Since there are certain peaks in printing during the year, and jobs that current equipment is not designed to efficiently produce, our Printing management routinely outsources work (>$100,000 each year). This allows for a reasonable estimate of differences in pricing between external providers and the university.

While all campus departments are free to send their printing jobs off campus, most departments utilize UNL’s Printing & Copy Services due to lower prices, customer service, and/or ability to meet deadlines.


What could be saved by closing down the campus during spring break, adjusting the summer and fall schedules to close for two weeks in August, and having four-day work weeks during the summer?

Unless the campus declares a “closed campus” and no activities are scheduled during these identified time periods, utility savings will be minimal. Currently, Facilities Management receives regular requests to “keep the utilities on” to accommodate events that are scheduled when classes are not in session or accommodate faculty and staff who wish to work in their offices/labs over the break periods.


Have full-time benefits for part-time workers, or choices on a cafeteria plan of benefits for part-time workers, been considered?

Currently university fringe benefits are provided to full-time employees on 12-month and academic-year appointments. UNL has proposed providing full healthcare benefits to 0.75 - .99 FTE, 12-month positions. In order to fund these increased benefits costs, additional full-time positions must be reduced to 0.75 FTE. This proposal is on the Board of Regents’ April agenda.

Have qualified administrators teach a class every two years.

At present a large number of administrators already do teach, in some cases more than one course per semester. Further, for this tactic to save money, it would require a reduction of faculty positions. The schedules of some administrative positions do not accommodate teaching responsibilities easily. For example, the Chancellor teaches a class at the law school in the Spring that meets one day/week. He has been unable to meet the class 6 of 13 scheduled meetings. Thus, he has to co-teach with another faculty member.

Investigate the possibility of funding some units or programs (i.e. the Museum and scholarships) from private sources instead of state funds.

The Museum has a number of private funds in the University of Nebraska Foundation and continues to seek corporate and individual financial support for its activities (including Encounter Center, Mueller Planetarium, etc.) It is very difficult to generate private support for ongoing expenses such as salary or operating funds. An endowment of more than $21 million would be required to permanently replace this proposed loss of state funding.

The Friends of the UNL Gardens and Maxwell Arboretum have provided private funding for UNL’s botanical gardens and Arboretum for the past decade.

Approximately $12 million of annual funding for scholarships is currently provided by the University of Nebraska Foundation. This current level of private funding only allows us to be mildly competitive in our efforts to recruit high-quality students to UNL. Many of our competitors provide better aid packages than we are able to offer. Thus, more private funding is needed, but to augment - not replace - other scholarship funding sources. Furthermore, the only other major source of scholarship funding is tuition remissions and cutting in that area would not directly produce funds that could be allocated to the expenditure budget.

The problem is compounded by the fact that the Foundation has announced a reduction in the pay-out on endowed funds from 5% to 4.6%.

Finally, for some of the same reasons that we are facing the budgetary challenges we are, major fund raising is proving increasingly difficult at this time.

Consolidate units as much as possible, including the Life Sciences Task Force restructuring recommendations that would require IANR/Academic Affairs consolidation.

IANR was established by state statute, 85-1,104, as a separate administrative entity at the University of Nebraska-Lincoln. By statute the IANR Vice Chancellor has university-wide responsibilities and serves as a Vice President of the NU system. IANR is a prominent component of UNL's land-grant university mission, with a complex statewide mission. Good coordination and cooperation exists between the two academic components at UNL, representative of its AAU and Land-Grant missions, which in most states are represented by two separate state-supported universities. Accordingly, the two entities have moved much closer and share programs in International Affairs, Environmental Studies, Agribusiness, School of Natural Resource Sciences, Statistics, and other areas.

The focus that IANR provides to Nebraska’s most important economic sector is one of the strengths of the UNL administrative structure. Recent efforts have significantly reduced any unnecessary duplication of administrative functions. It is also unlikely that significant savings could be achieved. The current staffing of the SrVCAA’s office is barely sufficient to administer its current responsibilities. Adding the complex responsibilities of managing cooperative extension, the agriculture research division, and the various outstate facilities without significant increase in personnel would be irresponsible.

Combine business and administrative activities across East and City campuses.

International Programs and International Affairs were combined for a net savings of $52,000.

Further, UNL and IANR jointly explored additional ramifications of this suggestion this fall. After considering the recent staff reductions in both areas (5.0 FTE and 3.0 FTE in Fiscal Affairs and IANR Finance & Personnel, respectively), the costs of consolidation, the comparative level of service provided to business units, and the differences in the functions provided by these offices, it was evident that personnel or budgetary savings from a combination would be small, if any, and the resulting service diminution would likely not be acceptable to either campus.

A duplication of business and administrative effort across East and City campuses does not exist. Close coordination and cooperation exists between business operations on East Campus with UNL functional offices. UNL-wide functional business activities are centered in the City Campus functional offices and serve both campus locations. While City Campus functional office positions and some positions within IANR may share similar titles, the work done by the respective units and individuals within is very different in scope and responsibility.

The central support office on East Campus, as a business team, primarily provides direct support services to the IANR Vice Chancellor's office, IANR Dean's and Director's Offices, and NCTA, and coordinates the day-to-day activities of eight business centers. Three business centers, Beadle, Human Resources and Family Sciences, and Natural Resources, currently provide business support to both East and City campus customers. As additional integrated units are created and further integrated activities occur, the level of this type of shared support will increase.

In addition, due to the nature of the extension and research mission, organization and activities, there exist many unique support challenges not present anywhere else in the university. IANR units and clientele are spread across the entire state. IANR administrative and business support is provided to the entire Institute through a single central support team and a network of specialized business centers.


Will elimination of frequent flyer miles generate significant income? Can lower travel rates be negotiated?

Currently, none of the carriers are negotiating contracts without frequent flyer earning capabilities of the individual flyer. It is not in their best interests to exclude the frequent flyer program, because frequent flyer miles purchase unused seats or upgrades to first class unused seats. The only way to "win" in the frequent flyer arena would be to have University travelers redeem their personal frequent flyer miles for business travel. Would this produce savings or would the employees just travel more? Would we have to hire someone to monitor the frequent flyer miles?

Travel and Transport does work with a handful of accounts that do require personal frequent flyer miles be redeemed for business travel. A summary regarding frequent flyer miles, put together by Travel and Transport, is available. APC may wish to review that document before proceeding down this path. It is not our recommendation to pursue this path.

In regards to the lower travel rates, Travel and Transport is continually looking for savings opportunities for the University. The types of airfare that are purchased by University employees, for the most part, is being excluded from any type of discounts from airline carriers. We currently get a 5% discount on Northwest Airlines that is inclusive of all fare types. While United and American do offer fare discounts to be taken at the point of sale, United also supports the University with a volume threshold backend rebate. In addition, Travel and Transport currently researches international consolidator tickets that are in many cases a great deal lower than published airfares. Also, in regards to group travel, Travel and Transport takes each individual group sale to a bid process to ensure that the group secures the best fare/best routing to meet the group’s needs.


How much is SAP costing the University, and what future expenses for SAP can be anticipated?

The current annual budget for SAP Administration (University-wide) is approximately $2.1 million. (These costs are paid by Central Administration, not from UNL funds.) This supports a project manager and one specialist in each of the major functional areas of SAP (Purchasing, Financial, Grants, Payroll and HR), plus the annual maintenance cost of the software license. Each campus provides their own designated campus coordinator who typically has numerous other responsibilities in addition to their role of assisting and training users on the system.

The only additional costs anticipated would relate to consultation services when major system upgrades or new functionality is adopted. The expected cost of this year’s system upgrade (the first since initial implementation) is around $525,000.


How many of the recent administrative hirings have been a result of SAP? What has been the cost?

Looking back, we are unable to identify any added administrative positions to the UNL campus resulting from SAP. UNL needed to appoint a coordinator (managerial/ professional) so that departmental access, inquiries and training could be handled in a timely manner. We also added 1.0 FTE office/service position to Data Entry to enable the timely processing of one-time or recurring payment personnel actions (assuring that fringe benefits would be appropriately charged to cost centers) and to enhance our ability to produce and train in the HR database reporting arena. On the other hand, we have reduced UNL’s Purchasing office and Accounts Payable by 4.0 FTE and 2.0 FTE respectively through efficiencies partially created by SAP.

In the central offices, we have reengineered a number of our professional and clerical position competencies with existing staff. This has made it possible to weather the implementation of an enterprise management system with a net decrease in staff.