Narrative Summary Proposed Budget Reductions and Structural Changes - FY 2002 & 2003 Budget Reduction Process

Narrative Summary
Proposed Budget Reductions and Structural Changes

SEPTEMBER 10, 2002

University of Nebraska-Lincoln

I. Anticipated budget status

UNL’s share of the total budget reduction imposed by the special session of the Legislature during August 2002, is $7,513,953. This is the third reduction that impacts the budget for fiscal year 2002-2003. Earlier reductions have amounted to almost $9.8 million. This amounts to a total reduction from the base budget beginning this biennium of almost 6 percent.

II. The budget reduction process

UNL by-laws, approved by the Board of Regents, establish the “Procedures to be Invoked for Significant Budget Reallocations and Reductions.” Those procedures are being followed, including broad consultation with the University community. After consultation with the Academic Planning Committee, the Chancellor issued a General Budget Framework Document on September 1, 2002, that establishes the time frame for engaging the reduction process and the principles that govern these recommendations.
The prospect for a major reduction was apparent early in the summer of 2002. In preparation, the campus administration asked the Deans and unit managers to present scenarios that reflected a 5 percent and a 10 percent reduction in their base budgets. It was ultimately decided not to engage in across the board reductions. The recommendations here were made after consultation with the Deans and other unit managers.

III. Priorities and Structural Changes

The Board of Regents has directed that budget reductions should not adversely impact the priority programs that evolved from the prioritization process. None of the 15 priority programs have incurred budget reductions. In addition, the campus administration sought to preserve the core academic mission of the University. Thus every effort was made first to reduce administration and support functions over impacting academic and service programs. Approximately 50 percent of the proposed reductions are in administration and support units. Thereafter, we followed the priorities, established by the Legislature, which accords highest priority to undergraduate education, followed by research and graduate education, and service. Attention was directed to those programs that are in some ways duplicative of other programs or are peripheral to the core mission of the University. While some of the reductions take advantage of selected opportunities where vacancies existed, for the most part, the reductions are focused, vertical reductions.

In the course of preparing for these reductions, several structural changes were explored to determine whether administrative efficiencies or enhanced services could be provided. The following structural changes are recommended, although some will produce no immediate budget savings:

  1. Merger of School of Natural Resource Sciences and Conservation and Survey Division.

During round two of the budget reductions, the Conservation and Survey Division (CSD) and the School of Natural Resource Sciences (SNRS) were requested to consider merging into a combined unit with a single director, saving the salary of one director. The faculty and staff committees of the two units have agreed to the merger, and currently are working out details, including the proposed name of the combined unit. The purpose of integrating CSD and SNRS is to strengthen the natural resources mission of the university.

  2. Merger of Nebraska Forest Service and Nebraska Statewide Arboretum.

These two service programs have a commonality in mission. The merger will result in the potential for increased synergy and services to Nebraskans. Administrative savings are achieved.

  3. Elimination of Division of Continuing Studies and reassignment of its functions.

The Division contained a number of different and independent functions and administered the Clifford Hardin Nebraska Center for Continuing Education. Distance education programs will be reassigned to the Office of Extended Education, an existing unit headed by an Associate Vice Chancellor for Academic Affairs. This will continue the effort to create closer linkages between academic units who provide the content for distance education and the supporting infrastructure necessary for these programs to exist. Evening and weekend programs will be returned to the academic units with monitoring from Academic Affairs. Units that are peripheral but important to the University’s mission, such as the Independent Study High School and Conferences and Professional Development, will be expected to become self-supporting. These latter units will be headed by a transition team and reassessed as to their profitability in 18 months. The hotel function will cease.

  4. Exploration of the merger of Teachers College and the College of Human Resources and Family Sciences.

This proposed restructuring was surfaced by the deans of the two colleges as an effort to achieve greater synergies between units involved with schools, families, and communities. The proposal is not a result of the threatened budget reductions but is being pursued because of the opportunities such a merger creates for bringing distinction to both units. Nonetheless, these proposed reductions take account of projected administrative savings that would be achieved if this merger is successful.

  5. Elimination of the branch libraries for Biology, Physics, and Chemistry.

This proposal is described in greater detail in a separate document. In summary, by utilizing funds currently expended to maintain these branch libraries and to lease commercial space for storing the overflow of the collection from Love Library, it is possible to construct an on-campus library storage facility for the overflow, releasing space in Love Library for these branch libraries, and achieving a savings over a 20-year period of close to $9 million.

IV. Summary of recommended budget reductions

  A. Impact on Personnel

    The recommended reductions include the following reductions in staffing:

•  No tenured faculty member’s position with the University is recommended for elimination.
•  A total of 164.9 FTE across the University would be eliminated.
•  12.6 tenure-track, or probationary, faculty FTE would be eliminated.
•  Two probationary faculty would lose their current positions but have been offered alternative employment with the University.
•  13.7 other faculty FTE would be eliminated, including 5.2 filled positions and 8.5 vacant positions.
•  54.35 managerial/professional positions are recommended for elimination, including 46.8 filled positions and 7.5 vacant positions.
•  69.9 office/service FTE are recommended for elimination, including 46.3 filled positions and 23.5 vacant positions.
•  14.3 administrative FTE are recommended for elimination, including 9.6 FTE filled positions.
•  A total of 110.14 FTE currently working for the University would be laid off. It is hoped that some will find alternative employment with the University.

  B. Academic Affairs

    College of Architecture: $144,027

Two faculty lines in the Department of Community and Regional Planning, recently vacated as a result of the departure of two faculty members over the summer, are proposed for elimination. Programming in this area will be studied, as possible connections with other programs on campus (e.g, at IANR) and the long-term profile of the program are reviewed.

College of Arts and Sciences, Humanities Center: $96,652

Funding for the University of Nebraska Humanities Center is proposed for elimination. This center was established under the reallocation process in 1996, after initially having been proposed by Chancellor Graham Spanier in 1992 or 1993. The Director of the Center recently left for another university. The resources made available to humanities scholars are clearly helpful, but their loss will in part be compensated for by the programs of the Office of Research. In particular, Vice Chancellor Prem Paul announced a new three-year pilot program called the Arts and Humanities Enhancement Fund intended to “to foster research, scholarship and creative activity in the arts and humanities to increase our competitiveness for external grants.”

College of Business Administration, Council on Economic Education: $178,303

State funding for the Council on Economic Education will be eliminated. This program is part of a statewide initiative to enhance economics education at the high school level. For the program to continue, the Council will need to raise private funds or secure other sources of support (e.g., from the high schools or the state Department of Education).

College of Law: $300,000

A $300,000 reduction in funds available for hiring faculty (including visiting faculty) is proposed. The College has recently experienced a clustering of senior faculty departures (for retirement and an administrative post), so that this will not reduce the overall number of faculty currently on staff. Support for the law library will also be reduced. It is expected that a fee increase will partially make up the loss.

College of Human Resources and Family Sciences and Teachers College: $300,000

As a result of the proposed merger, it is expected that approximately $300,000 will be saved in reduced administrative costs, primarily as a consequence of having one dean (and dean’s office) rather than two. This saving is currently allocated as $55,000 in HRFS and $245,000 in TC, although if the proposal is implemented, further savings may be found and some redistribution of the savings within the new college may occur.

Nebraska Educational Telecommunications: $171,000

The reductions from the NET Closed Circuit Television budget reflect savings achieved through automating three distance education classrooms, thereby reducing the need for the on-site technician support required in the older classrooms. Future “on-call” technical support services for these automated classrooms will be provided by Information Services, a service they currently provide to technology enriched general purpose classrooms on campus. Operating funds for CCTV capital equipment replacement and upgrade purchases have also been reduced.

Division of ContinuingStudies: $896,824

This proposal would eliminate the Division of Continuing Studies. Assistant Vice Chancellor James Main and Associate Vice Chancellor Arnold Bateman are developing a transition plan for this restructuring. It essentially divides the various units in the existing Division into three separate categories.

Office of Extended Education:

This existing office, headed by an Associate Vice Chancellor for Academic Affairs, will assume responsibility for distance education as well as the Instructional Design and Development team that provides support for distance education programming. Also included are the Independent Study College program and the Fire Protection program in Omaha. The reasons for elimination of University support for Learning Centers in Grand Island, North Platte, and Lincoln are discussed in an appendix. Support for Learning Centers in Scottsbluff and Norfolk will continue.

Academic Affairs will manage the evening and weekend program, the Offutt MBA program and the Czech Language program.

A special transition team under the Assistant Vice Chancellor for Business and Finance will manage the Independent Study High School and Conferences and Professional Development with an effort to make both units self-sustaining. Progress toward this end will be assessed in 18 months. The hotel and conference facilities at the existing Hardin Center will be closed as soon as the University’s contractual obligations are satisfied.

The infrastructure support services currently provided within DCS (Business Operations, Marketing, and Information Systems Administration) will be transitioned from their current structure into the self-sustaining units or to broader units, such as Business and Finance or University Communications; services currently available from these units may be available to the self-financing units through a charge-back mechanism reflecting full cost.

Summer Sessions: $1,000,000

This proposal recommends a permanent reduction in the budget of Summer Sessions of $1 million. This significant reduction will result in reduced offerings and a narrower focus to Summer Sessions programming; care will be taken in administration to minimize adverse impact on tuition revenue and summer offerings required for normal progress to graduation. Summer Sessions programming will be reduced for support for non-curricular summer programming, and certain curriculum offerings will be more carefully managed and limited. Non-curricular summer programming currently supported by Summer Sessions will need to be funded through the sponsoring academic unit(s) or other sources. Some of the Summer Sessions administrative costs and support for curriculum delivery provided to colleges and departments in prior years will be discontinued. The change will also require more stringent summer class schedule management and some increase in average summer school class size, particularly through effective implementation of enrollment management practices.

Office of Academic Affairs: $48,380

Funds available through the Vice Chancellor’s office to assist colleges and departments (e.g., to purchase equipment) will be reduced.

  C. Institute of Agriculture and Natural Resources

South Central Research and Extension Center: $661,707

Closing the South Central Research and Extension Center at Clay Center is recommended. It has the smallest number of faculty and is the most recently established of the off-campus research and extension centers in our state. Located on land leased from the U.S. Meat Animal Research Center, South Central is a productive center, but one with less personnel, infrastructure, and program breadth compared to the other centers. With the state’s financial circumstances dictating universitywide downsizing, IANR no longer can afford as many research and extension center locations across the state, and we must consolidate our resources to maintain the critical mass necessary to conduct the quality programs expected of us.

No tenured faculty will lose their positions--moves to another research and extension center or to East Campus are being considered as the best match of expertise and the needs of the university and the state are considered. The current South Central Research Farm will be maintained as a field laboratory which will allow us to continue much of the ongoing agronomic research which is of benefit to area producers. While the center is being closed, the University of Nebraska Cooperative Extension county offices in that district will be reassigned to the remaining extension districts during the next few months. The University of Nebraska Great Plains Veterinary Educational Center, located at the South Central Research and Extension Center, will not be cut in this round of budget reductions.

IANR Administration: $505,737

Recommended cuts to IANR administration exceed $500,000, and include directors and department heads through the offices of deans and the vice chancellor. Over the years, the Institute has consciously reduced its administration in favor of diverting dollars to IANR programs, faculty, and staff, and that continues in this round of cuts.

Included in these administrative reductions are: (1) The position of the Director of the South Central Research and Extension Center, because it is proposed that this center close; (2) the vacant position of Director of the School of Natural Resource Sciences because the School and the Conservation and Survey Division are planning to become a combined unit with a single director; (3) a vacant .25 FTE Associate Dean position in the College of Agricultural Sciences and Natural Resources, which will not be refilled; and (4) the vacant IANR Facilities Coordinator. The architectural and facilities duties of this position are proposed to be distributed among existing employees.
The vacant position of State 4-H Director is proposed to be eliminated, and the Associate Dean of the Cooperative Extension Division will assume the additional duties of State 4-H Program Administrators

West Central Research and Extension Center Diagnostic Laboratory: $211,370

This round of reduction proposals includes the closure of the West Central Research and Extension Center Diagnostic Laboratory in North Platte. Nebraska has been especially fortunate in the past to have a Nebraska Veterinary Diagnostic Laboratory System with satellite laboratories in Scottsbluff and North Platte, and the main laboratory in Lincoln. Virtually all the states surrounding Nebraska have only one such laboratory.

The laboratories outside Lincoln traditionally have offered a limited scope of services, with more sophisticated testing referred to the full-service Veterinary Diagnostic Laboratory in Lincoln. Because laboratory services are available at the laboratory in Lincoln, in these extremely difficult financial times, the convenience of satellite services can no longer be justified; therefore, it is proposed that the West Central Veterinary Diagnostic Laboratory be closed. The state’s veterinary diagnostic laboratory needs will continue to be met through the primary laboratory in Lincoln. Because of the importance of the livestock industry in Nebraska, there is a need for research, education, and extension education programs to benefit the livestock producers of our state and, therefore, to benefit Nebraska. Those needs can continue to met in many ways.

Communications and Information Technology: $67,191

Proposed cuts of $67,191 to the Communications and Information Technology unit are proposed. State funding for the equivalent of 1.59 FTE positions will be eliminated. In the computer training area, other options to provide this service will be pursued.

Family Life: $110,000

The elimination of two vacant family life specialist positions, one at the West Central Research and Extension Center and the other at the Northeast Research and Extension Center, is proposed in order to save $110,000.

Projected Retirements: $100,000

Some faculty may be interested in the retirement incentive program recently adopted by the Board of Regents for an estimated savings of $100,000.

Nebraska Forest Service: $175,307

Nebraska Statewide Arboretum: $25,375

It is proposed that the Nebraska Forest Service and the Nebraska Statewide Arboretum will merge into a single unit. Through this merger, savings through efficiencies and sharing of resources will occur. These two service programs have a commonality in mission which, through merger, will result in the potential for increased synergy and service to Nebraskans. Administrative savings will be achieved including the elimination of the vacant position of Assistant State Forester.

Veterinary Student Contract Program: $67,217

This program reduction is proposed to take effect July 1, 2003, and we expect approximately four student slots will be affected by the $67,217 cut. As the IANR budget is cut back by 3.6 percent, we also must cut the funds that support the Veterinary Student Contract Program proportionally, or we must disproportionately cut academic programs. Almost $1.8 million remains in the program to support students from Nebraska studying at the Kansas State College of Veterinary Medicine with which we have an agreement for an average of 25 students per year. This will cause us to have to renegotiate our agreement with Kansas State.

Learning Centers: $78,877

The Institute of Agriculture and Natural Resources has been a partner with the Division of Continuing Studies and the University of Nebraska at Kearney in funding the Learning Centers at College Park in Grand Island and at North Platte. The justification for the elimination of this support is contained in an appendix.

  D. Business and Finance: $1,000,000

The Division of Business and Finance reviewed the Academic Planning Committee's guidelines as they related to administrative units. These guidelines specified that administrative reductions reflect:

•  Opportunity for significant cost reduction for essential services through substitution of services that meet university needs, but at lower cost.
•  Services are redundant with those provided by other units or levels within UNL or state government.
•  Services are determined to be less essential for the performance and strength of academic programs.

The following areas within Business & Finance were protected from the Division's budget reductions.

•  University Police
•  Environmental Health and Safety
•  Maintenance support for Fire/Life Safety Systems and Maintaining Building “Envelopes”

To comply with the APC planning principles and hoping to minimize its reductions on academic colleges/departments, the Division of Business & Finance has identified the following $1 million in proposed reductions.

The proposed budget reduction plan transfers $491,405 project management of UNL’s capital projects from a state-supported activity to requiring that construction projects pay for project management out of individual capital project budgets. The impact of this transfer is that the full cost of capital construction will be borne by the project budgets. This eliminates 22.0 FTE from state funding (21.0 FTE Architectural Services, 1.0 FTE Landscape Services).

Once-a-week collection of paper recycling in individual campus offices by UNL’s custodial staff is proposed for eliminated. Under the revised program, large receptacles will be placed near each building’s loading dock for faculty, students, and staff to place their paper recyclables. The procedural change will save the campus $185,000 in staffing costs (9.0 FTE).

The proposed plan eliminates 2.0 FTE state-funded painters, a savings of $78,000. The 50 percent reduction in the campus’s painting staff lengthens the painting schedules for public spaces.

In addition to general grounds maintenance, Landscape Services is responsible for maintaining the University’s designation as a Botanical Garden/Arboretum. Under the proposed $73,250 budget reduction (3.0 FTE), UNL will retain its maintenance program for its Botanical Garden/Arboretum, endowed and named gardens, but many of the smaller planting beds that are not major points of interest on the campus will be phased out.

The proposed plan eliminates $64,310 of state funding for maintenance and utilities for Transportation Services and Printing Services. This plan ends all remaining state funding for these two business support entities.
One general maintenance item being recommended for elimination is repair of the individual cooling units within each drinking foundation, an annual savings of $6,000. The drinking fountains will continue to operate with room temperature water as the individual fountain’s cooling unit quits.

With further budget reductions anticipated last spring, Fiscal Affairs restructured its workload within Student Accounts and Accounts Payable to achieve a reduction additional staffing savings of $53,060 (2.0 FTE). These savings were possible due to a reduction in the use of the student short-term loan program by UNL students and continued processing efficiencies implemented within Accounts Payable.

Following reorganization of web-support within the Division of Business and Finance, Human Resources will discontinue its focused technology support for its website, thereby eliminating 1.0 FTE for $43,975 in savings.

Operations Analysis proposes to eliminate 100 percent of its student salary line, a savings of $5,000. This eliminates all clerical assistance to this office.

  E. Student Affairs: $900,000

I. Direct Reductions to the State-Aided Budget

$71,562 will be cut from the Office of the Vice Chancellor by eliminating 1.50 staff positions, and trimming the salary adjustments pool by $10,651. The remaining 0.50 FTE of the Ombudsperson position will be cut (0.50 FTE was cut in Round I of the 2002-03 cuts), and the responsibilities that previously went to the Ombudsperson will be shared by the 1.50 FTE Assistant Vice Chancellors and the full-time Assistant to the Vice Chancellor. The Graduate Assistant working in the office also will be available to help assist students desiring services that previously were handled by the Ombudsperson. The recently vacated accounting position in the office will also be eliminated. The Nebraska Unions business office will provide the business and accounting support services required by the Vice Chancellor’s office. This arrangement has been in effect on a temporary basis since the prior incumbent departed in June, and although not as convenient as in-house support, has worked well enough to permit making this arrangement permanent. The $10,651 reduction in the salary adjustments pool line will make it harder to keep pace with marketplace demands as positions in the Division of Student Affairs turn over.

Career Services will absorb $50,000 in reductions by cutting 1.61 FTE staff positions, and reducing the funding available for undergraduate and graduate student employees. This will be accomplished by closing the Career Resource Library during the summer months, eliminating the credentials service utilized primarily by Teachers College students and alumni, and eliminating the verification of all UNL student employment Personnel Action Forms (PAFs) by that office.
The Admissions Office will reduce one Assistant Director position by 0.26 FTE, eliminate a graduate assistant position, eliminate one international recruitment trip, and reduce the frequency of the (previously annual) Principal/Counselor Conferences on campus. These reductions will free $31,947 from the State-aided budget. It is hoped that the flow of new international students can be maintained via other approaches that are less costly, and that the remaining staff can absorb the work previously assigned to the Assistant Director and graduate assistant. The reduction in frequency of the Principal/Counselor Conference will be partially offset by the regional meetings that were established a few years ago.

$49,872 will be cut from the Office of Registration and Records by transferring 0.44 FTE of support for the Alumni Records Director to the NU Alumni Association, eliminating a 0.50 FTE Clerical Assistant II position (currently vacant), and ceasing to mail final grade reports to students. Over time, the Office will force students to rely upon Internet services to obtain their final grades each semester, and students will have to come to the Canfield Administration Building to obtain official documentation of their coursework and grades if needed for employer or other agency reimbursement. The Clerical Assistant cut will cause processing at peak times to be delayed, and result in somewhat diminished responsiveness to student requests for service.

The Office of Scholarships and Financial Aid will eliminate a Clerical Assistant II position and cease mailing financial aid disbursement letters to students as a means of absorbing a $28,119 budget reduction. As in Registration and Records, the cut of one staff position will reduce processing capacity at peak periods and cause a diminished degree of responsiveness to student requests. It is hoped that the elimination of the disbursement letters can be offset by e-mail notification and web site information.

$43,500 is being cut from the Office of Multicultural Affairs by shifting partial funding for the Director and three Educational Specialists to federal grants. The partial salary shift for the Director will not have a major impact on the office or the grants, but the shift of .17 FTE for each of the Educational Specialists will eliminate the services that they previously provided during the Summer Term.

The University Health Center will incur approximately $127,000 of expenses that were previously in the State-aided budget. To offset these new expenses, charges for all services were reviewed and compared to community rates. Those charges that were substantially below the 50th percentile for the community were adjusted upward. The greatest increases were in counseling and psychological services, the pharmacy, and the medical laboratory. A considerable portion of the additional income generated by these fee increases will be covered by insurance companies.

The Nebraska Unions share of the transferred expenses is approximately $81,000, and to allow for these expenses several budget reductions are required. A planned new night manager position (1.0 FTE) will be eliminated, student employment hours will be reduced, additional energy conservation measures will be put into place, and the maintenance budget for buildings will be reduced.

II. Selected Expense Transfers from the State-Aided Budget to Auxiliary Budgets

In the past, the Student Affairs auxiliary units were not assessed the indirect cost fee on their University Program and Facilities Fees (UPFF) income. They paid this fee on all cash income received, but student fee income was considered exempt. In the future, these units will absorb expenses that previously were covered in the State-aided budget -- to the extent required to equal 4.0 percent of their UPFF income. Since these units were already absorbing State-aided budget expenses equal to approximately 1.0 percent of their UPFF income, the net effect will be a 3.0 percent reduction in the income available to them for program operations. In total, these expense shifts will free $300,000 from the State-aided budget.

The Campus Recreation budget will have to absorb approximately $92,000 in additional expenses from the State-aided budget, and this will require the elimination of one Project Assistant in the Outdoor Recreation program, the elimination of a Clerical Assistant III position in the Business Office, and the reduction of a Staff Secretary III from 1.0 FTE to 0.83 FTE. Additionally, the operating hours for facilities will be cut over holiday periods, child care service hours will be reduced, intramural entry and awards fees will increase, the number of outdoor adventure trips will be decreased, and hours of staffing for the injury prevention and care center will be decreased. Two graduate assistant positions will be reduced from 12 months to 10 months, and student employment will be cut back as a result of the reduced operating hours in various areas.

Because the Nebraska Unions is still in the process of extricating the expenses associated with the merger of catering services with the University Housing Food Service (into a new University Dining Service), the exact manner in which approximately $78,000 of State-aided expenses will be absorbed is uncertain at this time. One position in the budget office that was recently vacated has been held open, and other reductions in Unions staffing may become necessary. General operating budgets will definitely be reduced, and it remains to be seen if these cuts can be managed without reducing hours of operation and/or services to students.

III. Increases in Student Fees

Increasing selected student fees will raise approximately $325,000. The admissions application fee was increased from $25 to $40 for both graduate and undergraduate applications effective in September of this year. This will generate approximately $80,000 of additional revenues during the current fiscal year, and about $100,000 during the 2003-04 fiscal year. For the 2003-04 academic year, the Registration Fee will be increased from $15 per term to $20 per term. This will generate approximately $200,000 of additional income, after allowing for an increase in the Student Information System budget to cover anticipated deficits resulting from increases in computer software and services costs. Additionally, the Course Audit Fee will be increased from 50 percent of resident tuition to 100 percent of resident tuition for the 2003-2004 academic year. The higher fees for course auditing will produce approximately $25,000 of additional revenues in 2003-04.

  F. Chancellor’s Office and Miscellaneous: $450,000

Operating dollars used to provide emergency assistance will be reduced. Also support for important University affiliates such as the Faculty Women’s Club, the Emeriti Association, and the Innocents Society will be eliminated.

We are assuming that we will save $400,000 on the city campus through tenured faculty retiring under the early retirement program adopted by the Board of Regents.