Memo: “Information needed by the Budget Planning Task Force” (April 2, 2015)

MEMORANDUM

FROM: Johannes Britz, Provost & Vice Chancellor for Academic Affairs
Robin Van Harpen, Vice Chancellor for Finance & Administrative Affairs

TO: Chancellor Mark Mone Vice Chancellors

RE: Information needed by the Budget Planning Task Force

DATE: April 2, 2015

We are writing on behalf of the Budget Planning Task Force (“BPTF”), to update you on the work of the BPTF and to make several key changes in the information being requested by the BPTF.

Background

The charge of the BPTF is to recommend strategy for managing the 2015-17 budget cut in a way that achieves net positive operating income for UWM within a defined number of years, with sustainable growth thereafter, in support of the mission of UWM.

The BPTF is working under the following core principles:

  1. Protect our core mission and values: students, research, engagement, culture/climate, and brand/visibility/image.
  • Operate strategically and consider our essential strengths: most critical programs, services, departments, and centers—and the talent to move us ahead and forward in this time.
  • Look internally in ways that we have not considered before: consolidations, mergers, reductions in non-essential services, ways to serve students and other key audiences in more efficient ways, and new sources of revenue.
  • Consider items that must be or can be put on hold for now—triaging for the needed hands-on priorities.
  • Identify content and venues for communicating, sharing information and also identifying ways in which interested community members (internal and external to UWM) can promote our value and advocate on our behalf.
  • Recognize that the campus operations and critical education and research activities must go on. While the proposed budget cut is massive and will be difficult, the larger enterprise goes on and requires even better decision-making and clear leadership.
  • Move forward together, boldly, as a campus united around the same goals.

The BPTF is also proceeding with its planning, for the time, based on the Governor’s proposal for both the $150 million base cut and additional expenses associated with his proposal, that create a $24 million net negative impact on UWM’s revenues in the first year. The BPTF is hoping that this is the worst case scenario, and that the actual cut will be less than what we are planning for.

On February 10, 2015, the Chancellor announced the following cost containment measures, which remain in effect at this time:

  1. A hold on the hiring of all non-essential positions, except those extramurally funded through grants and contracts.
  2. A hold on non-essential, out-of-state travel except out-of-state travel funded by gift or grant funds and not including out-of-state travel directly related to research or academic activities.
  3. A hold on non-essential and discretionary salary adjustments.

Managing the Budget Cut for FY 2016

The first task of the BPTF is to develop and present to the Chancellor a recommendation as to how to implement or “pay for” the budget cut in FY 2016.

After seeking input from the Budget Planning Task Force Support Team and the Academic Planning and Budget Committee, the BPTF is now considering recommending that the entire FY 2016 cut be taken as a one-time “lapse,” and deferring allocation of the permanent cut until FY 2017. Proceeding in this phased way allows UWM to defer decision-making on the allocation of permanent budget reductions for a few months, until we have a better sense of both the magnitude of the actual cut and our best strategy for maintaining our critical programs and services.

The one-time funds needed for the FY 2016 lapse could be derived from anticipated savings created through cost containment measures such as delayed hires, salary increases, and travel, or permanent cuts already instituted by the unit. While existing balances may be used as well, they should not be wholly used, and the expectation is that units will reduce spending now and into FY 2016 in order to cover the budget cut.

We would note that the BPTF has discussed at some length the impact of using furloughs as a way to generate temporary cash savings to help bridge the time it takes to implement the full permanent cut. While furloughs may delay lay-offs or other undesirable responses to the budget cut, at the same time, the BPTF has concluded that furloughs are not ideal because they shift the burden of the cut to our employees and temporarily mask the true impact of the permanent cut. Thus, the BPTF would like to forestall furloughs as long as we can manage the cut in other ways. Whether UWM can find sufficient means to manage the cut in other ways has not yet been determined.

To this end, we are seeking your help. We would like to assess the impact on all units of using one-time funds or temporary savings, other than furloughs, for a FY 2016 lapse. We are therefore asking that the head of each of the areas listed below submit to the Task Force a priority list of ways that the area could generate one-time funds to cover a lapse for 2016, with a description of the impact of using those funds for that purpose rather than the current intended purposes.

We are asking each area to provide a prioritized list of ways that it could contribute one-time funds up to (a maximum of) the following amounts:

General Education Administration (GEA) $700,000
Academic Affairs $13,000,000

Student Affairs $5,000,000

Finance & Administrative Affairs $4,000,000
Unit-Wide (Centrally Maintained Balances) $3,300,000
Total $26,000,000

The BPTF realizes these numbers are very large. They represent the maximum amount that each area could be asked to contribute as a one-time lapse. We are planning for the maximum possible budget cut and hope that the final budget cut will be much less than as originally proposed. We are also intentionally asking units to over-plan for possible contributions to the lapse so that relief may be provided where the lapse would cause the most serious harm to the campus core mission.

Attached to this memo is a template to be completed that will allow the BPTF to review information in a common format. The BPTF will make a final recommendation as to both the use of one-time funds and each area’s share of the lapse after reviewing the completed documents and assessing the impact of using one-time funds for this purpose.

We are seeking completion of the template and return to Support Team Co-Chairs Jerry Tarrer and Tim Smunt, no later than April 18, 2015. Please contact Jerry or Tim with any questions about completion of the template.

Allocation of Permanent Cut

On or around March 12, all units were asked to develop five and ten percent scenarios for purposes of planning allocation of the permanent base cut. The BPTF still needs that information, but is delaying the deadline for production of that information to May 8, 2015, to allow more time to focus on the above request for use of one-time funds.

The BPTF’s second task will be to develop recommendations for allocations of the permanent cut (which may consist of all or a portion of the total permanent cut) before July 1, 2015, so that decisions can be made at least 12 months in advance of the start of the 2016-17 academic year.

Other Items of Note

The BPTF is working on development of a voluntary separation incentive benefit program that is intended to assist units in generating some funds needed for both the temporary and permanent cuts. More news on this program will be provided very soon.

 

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