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For some time now, you have been hearing about our commitment to transform the way UC does business and pursues its mission, so that we fully support our academic priorities, pay for the physical transformation of the campus that has already occurred, become a responsible partner with our Uptown neighbors, and in this way, fulfill the vision that is UC|21, and take our rightful place as a premier urban research institution of higher education.
This process began in February with the creation of the PBAC, and the very transparent way we set tuition and fees in March – our first step in building the 2007 fiscal year budget.
It continued in April when we faced into our significant budget shortfall, made the commitment to solve that shortfall in a fiscally responsible and open manner and turned to the entire campus with the facts – the good bad and the ugly, seeking input on how best to manage this situation as a university, as opposed to as individual silos.
You heard the results of that process last month. It is a testimony to the intelligence and creativity of our university community that as a university community, we generated $34 million in savings ideas that UC will see over the course of the next three to five years.
It is important to note that these ideas spoke not only in terms of cutting budgets, but of reorganization towards greater efficiency and of actually generating new revenues based upon informed, data-driven decision-making.
But of course, because our budget shortfall is right now, we can’t wait three to five years to solve our problem. What you will be hearing about and voting on today is UC’s plan to address its financial challenges starting with this new fiscal year.
Last month, you heard that our budget shortfall was approximately $22 million. What you will hear today is that because of additional information about health care costs and a deliberate decision to be cautious about revenue projections and energy costs, that figure is now up to $27 million.
We know that of the $34 million dollars worth of savings ideas, we can achieve $11 million in this fiscal year, and after some very difficult discussions involving myself, the PBAC and the three senior vice presidents, we have decided to do the fiscally responsible thing and take the majority of those cuts permanently in this coming fiscal year.
Monica will walk you through the details of this process when we review the actual budget book, but I wanted to give our two provosts an opportunity to share their thoughts with you about this process, and their optimism for making the necessary structural changes that we’ll have to make to meet this challenge.
Before doing so, I just want to acknowledge that for some in the audience and many on campus, this has been a familiar refrain: Just one more budget cut, and we’ll fix this problem once and for all, and we’re going to do business differently from here on out. I get that people are skeptical, but to those who would say that we’ve heard it all before, let me remind you that never has UC experienced such an open, honest and iterative budget-setting process, and that should give you some confidence that it is a new day.
Moreover, I know that we cannot manage a cut of the magnitude that we’re talking about here without some fundamental structural changes, and to that end, I am announcing that by Sept. 1, I will be introducing a significant reorganization of central administration that will result in a more nimble and efficient administrative infrastructure.
Furthermore, beginning next week, the PBAC will start assembling teams tasked with formulating new revenue-generation programs based upon accurate cost data, and new tuition/discount policies that address the now infamous enrollment yield issue head on, as well as a host of other critical issues the resolution of which will help fund our academic priorities.
I know that we have more than our share of challenges ahead of us, with issues that have yet to be resolved. But I also know that facing these challenges head on will reap benefits almost immediately because as we begin to experience savings from the remainder of the $34 million in ideas, from reorganization and from wise and informed policies, we will fund UC’s future. And now I’d like to give Tony and Jane an opportunity add anything.
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