EVP Nathan Brostrom to hold April 12 Brown Bag on UCOP budget
Save Tuesday, April 12, 1 to 2 p.m., for a Brown Bag Lunch with Nathan Brostrom, executive vice president for Business Operations, who will address UCOP’s 2011–12 budget. The event will be held in the new Franklin Lobby 1 conference room.
Brostrom will discuss OP’s plan to cut roughly $50 million from its annual operating costs and return oversight of some programs to the campuses, as part of a larger effort to give UC chancellors as much budget flexibility as possible.
UC expects to have a budget shortfall in fiscal 2011–12 of nearly $900 million. That amount includes a proposed $500 million cut in state support and rising costs for utilities, retirement plan contributions and health insurance.
For its part, UCOP will reduce its annual budget by about $50 million, or roughly 17 percent. In addition, President Mark G. Yudof has proposed returning management and oversight of about $22 million in programs and activities to the campuses.
“That will allow chancellors to make on-the-ground decisions, to measure (programs) against competing priorities for scarce dollars,” Yudof told the Board of Regents earlier this month. “What campuses need most from UCOP in this fiscal crisis is maximum flexibility in decision making.”
The Office of the President began restructuring its operations in fiscal year 2007–08. Since then, it has carved roughly $55 million from its annual budget and reduced staff by about 30 percent.
Given the depth of that reorganization, UCOP is working to avoid additional cuts to personnel, said EVP Brostrom.
“We’re extremely concerned that to cut personnel much deeper would jeopardize our ability to perform the functions that the campuses and regents require from us,” Brostrom said, noting that the fluid budget situation makes it impossible to promise that there won’t be further layoffs.
He and other senior administrators hope to achieve most of the $50 million in savings through targeted cuts to programs that are duplicative of work being done on campuses, or which are “legacy” programs that made sense when they were started, but may no longer be necessary. UCOP will also squeeze savings from reductions in travel, equipment purchases, consulting services and technology upgrades, Brostrom said.
No decisions have been made yet about which programs to cut. President Yudof may present that detail to the Board of Regents in May as part of an overall budget plan.
Yudof has also proposed a fundamental shift in how UCOP and the campuses are funded. Although the change stems from UC’s financial woes, Yudof told Regents that the realignment was “long overdue,” and that it would improve budget transparency and give campuses more say over centralized programs and services.
UCOP would continue to provide functions and services that benefit from centralization and economies of scale — such as payroll, treasury and the digital library — or that campuses agree provide value across the system. Campuses would keep any revenue they generate, and a small portion of that revenue would go to UCOP to pay for its services.
The new funding model, which has been favorably received by UC chancellors, will be a significant improvement over the budget process that has been used in the past, Brostrom said.
Until now, campuses funneled revenues to UCOP, where monies were budgeted and redistributed through a complex formula. The main source of funds for UCOP has been the State general fund allocation and a series of taxes on various campus revenues, also derived by complex formulae.
In some ways, the change is the culmination of UCOP’s restructuring, Brostrom said, because it puts the emphasis on providing core services and responsibilities. The central office has primary responsibility for finance, human resources, admissions and other university-wide services, and that isn’t going to change.
“We hope to enhance high-quality centralized services in a direct and transparent process,” Brostrom said.
Note that the Brown Bag Lunch will take place at 1 p.m., rather than the customary 12 p.m., due to scheduling needs.
UCOP Communications is exploring options for remote access for anyone unable to attend in person. More information on this will be available in future updates.