Dear colleagues,
Congratulations on wrapping up our 10th academic year last week! Final exams were administered, papers read, projects evaluated and grades assigned. Much behind-the-scenes work was also completed to ensure the year ended on a high note.
As I watched more than 1,100 graduates walk across the stage this weekend at commencement, I marveled at how far we’ve come as a campus in a short decade – from stellar research and academic programs to an array of athletics and student life options and much, much more.
Commencement is always followed by Staff Appreciation Week, and many of the people who volunteer to staff our graduation ceremonies also plan and produce Staff Appreciation Week festivities. I am deeply appreciative of everyone who has put in the extra effort and hard work to make both year-end events so successful.
It’s been several months since I last provided you with a general campus update, and I want to take some time today to cover a few items that might interest you, including the campus and state budgets, progress on our workforce planning initiative, the compensation strategy for non-represented staff, space challenges and the planned Downtown Center.
CAMPUS BUDGET
As you may recall, this year was first of several in which reduced enrollment growth due to space limitations meant a corresponding reduction in new revenue coming to the campus.
Consequently, we’ve held the purse strings tight this year, and while every division has seen some new hires, units have been asked to manage within their existing operating budgets. Most of the flexible dollars available to us were reserved for the first round of non-represented staff equity adjustments, which will go into effect near the end of this fiscal year and are retroactive to Jan. 1, 2015.
These flexible dollars also have been used to stabilize and invest in our information technology infrastructure, fund expert financial and legal advisors for Project 2020, invest in the Downtown Center and other short-term commitments.
For the upcoming year, commitments of new dollars, thus far, have only been made for 15 faculty positions, the second phase of the staff compensation plan, faculty and staff salary increases, IT infrastructure and some mandatory cost increases such as the UCOP campus assessment and UC Path.
Some of you have asked me why managers haven’t received a budget call for next year. As you may recall, we are attempting to move away from annual budget calls, which produce a laundry list of needs that far exceed our ability to fund them, toward a multi-year funding plan that will be aligned with our available financial resources. We are not quite there yet but hopefully will be by the end of summer.
Our most important task with respect to the budget right now is to ensure that units have accurate budgets in place by the beginning of the fiscal year. Although there was an attempt to do that last year, it was not entirely successful. With new leadership in the Budget Office, significant progress is being made in disentangling the budget.
But challenges remain.
Due to historical campus practices and lack of appropriately integrated data bases, the Budget Office has had to correct problems as they were discovered. Examples of the problems uncovered include, but are not limited to, the following:
- FTEs shown in the budgets for some areas have never had dollars appropriated for them;
- Some current personnel do not appear in the budget at all;
- New positions have been created and hires made without appropriate authorization or encumbering of funds; and
- Temporary positions have been converted to permanent positions — with significant additional financial commitments — without authorization and budget encumbrance.
As a result, the budget for this year may have been overspent. This has happened to the campus in prior years, resulting in the need to borrow from the Office of the President, thus increasing expenses in the form of loan payback in subsequent years.
We must do better.
The Budget Office is working hard, in collaboration with Human Resources and Accounting Services, to clear up remaining problems and to put systems in place to prevent them from happening in the future. But until that task is completed, we will not have a clear picture of the fiscal resources available for new allocations in the coming year. Meanwhile, I’ve asked the provost and vice chancellors to be aware of pending or open recruitments in their areas to ensure they align with the current version of their workforce plans and are both critical and time-sensitive. Otherwise, I’ve asked them to defer staff recruitments until the end of the summer.
STATE BUDGET
There is better news about the budget at the state level. As you probably heard already, Gov. Jerry Brown released his revised budget plan last week. Thanks to the efforts of President Janet Napolitano, Brown’s plan reflects an agreement that provides UC with significant new revenue while capping resident tuition at its current level for the next two years.
Specifically, the agreement provides for:
- A 4 percent base budget increase for each of the next four years.
- A one-time infusion of $436 million over three years for UC’s pension obligation from funds set aside under Proposition 2.
- Allocations in 2015–16 of $25 million for deferred maintenance and $25 million in funds from the state’s cap-and-trade program to support energy efficiency.
- Regents to authorize the university to increase nonresident supplemental tuition up to 8 percent annually.
Although the governor’s budget plan does not include money for enrollment growth, there is a possibility that these funds will be included in the budget produced by the state Legislature. We will continue to work toward that end, as enrollment-growth funding is critical to our campus.
WORKFORCE PLANNING
The workforce planning process continues, with the first phase now completed. That phase consisted of a collective review by the vice chancellors and provost of submitted plans to determine administrative areas where we can reduce overlap and redundancy, gain efficiencies and improve collaborations.
For instance, vice chancellors Reese and Feitelberg and I have agreed to create an expanded Administrative Coordination Team (ACT) — to launch by Aug. 1 — that will consist of a centralized hub of administrative specialists who will lend assistance to our offices for tasks such as travel coordination, purchasing, events planning and budget maintenance.
ACT is a voluntary organization — other units will not be forced to join it, although we hope the automated processes the team puts in place will be a significant incentive for doing so over time.
ACT has been and will continue to be staffed by transferring FTE from participating units, including the Office of the Chancellor. The vice chancellors of participating divisions will serve as the governing board for ACT and will help ensure it is maximally responsive to clients’ needs in their divisions.
ACT will also have a management committee consisting of staff representatives from its member divisions who will make management recommendations to the governing board. This governance model makes ACT unlike other “shared services” models, some of which have been tried here before and remain quite unpopular because of their insular nature and lack of customer-service orientation.
Workforce planning has already triggered some organizational realignment such as Sheryl Ireland’s move from Business and Financial Services to the Office of Campus Culture and Compliance. This particular realignment allows Sheryl to work more closely and in a coordinated fashion with other areas of the university that are focused on risk and compliance issues.
Leadership meets every other week as part of a rigorous process of reviewing plans and seeking opportunities for more efficiencies. Once a preliminary plan is in place, we will share it with the campus community for feedback and input.
SPACE CHALLENGES
While Project 2020 will bring significant new space for growth on our campus, we need to continue finding space efficiencies now and in the future. Just as fiscal reality requires us to look for efficiencies on the operational side of the house, the same is true for space.
For example, the cost of our buildings and improvements was $16.1 million in the last fiscal year. With approximately 895,000 assignable square feet of space on campus, this means the average office space costs the university more than $2,000 every year. Due to construction-cost inflation over the past several years, we expect new space to be even more expensive. If we can make more efficient use of our space, then some of these dollars can be used to meet other critical campus needs.
For example, I am downsizing by moving to a smaller office and making additional hotel and conference room space available on the third floor of the library.
As we began the design process for our Downtown Center — which will be self-funded by the campus —identifying cost-effective and affordable space solutions was a top priority of the campus’ Space Advisory Committee. This committee worked with outside design professionals to conduct interviews, focus groups and surveys to inform our workplace space strategy. This work has informed recommendations to improve our ability to work in teams, in an environment that supports our values and campus culture, while providing privacy, flexibility and mobility.
This sort of activity-based programming is also at the heart of our approach to the 2020 Project: We seek to create space that is flexible, in that it can be used for more than one purpose, and adaptable, in that it can be easily and relatively inexpensively converted to new — as yet unidentified — uses in the future.
In addition, we are also evaluating opportunities to use existing spaces to their full potential. By doing so, we can plan for growth in our graduate-student population before buildings come online through the 2020 Project.
In addition, we plan to evaluate simple things we can do to further activate existing space, such as putting tables and chairs in plazas between buildings on campus and furnishing interior common areas to create gathering areas that can foster interdisciplinary interaction and informal learning, and enhance the campus climate.
DOWNTOWN CENTER
Preliminary planning continues for our Downtown Center. In March, the UC Board of Regents approved funding for preliminary plans to build the facility, which will serve as a pillar for our Downtown Campus, currently comprising the recently leased Parcade facility and Mondo Building.
By establishing a substantial presence in downtown Merced, we can continue to foster and create programmatic opportunities and partnerships with the community while providing an economic boost to local shops and restaurants. In addition to office space, the Downtown Center will include a few classrooms for extended education and places for students to congregate and study.
The three-story building will include both multi-use space designed to be used by staff, faculty and students alike, as well as open-floor plans that will better reflect the realities of current work needs. Space will be organized not by hierarchy but by function, and will be designed to provide flexibility, encourage greater collaboration and reflect workers’ increasing mobility. Open-floor plans are not without controversy — for example, greater collaboration means less privacy — and research has found both favorable and unfavorable aspects of the concept. Staff members from our Design and Construction Office are working hard to minimize the unfavorable aspects.
For further information, please view the webinar I recently conducted on plans for the Downtown Campus. Also, some recent research of these spaces can be found here.
COMPENSATION PLAN
We are nearing completion of the first phase of our non-represented staff compensation initiative, launched earlier this year, to remedy the finding that approximately 40 percent of our non-represented staff members are paid at or below the 25th percentile of their salary ranges.
After a thorough analysis of campus salary and market data by an independent consultant, Human Resources has provided me with a list of staff members whose salaries are furthest below both the internal and external market and, hence, are at greatest risk of leaving the university for higher-paying jobs. Subject to final verification, Human Resources will soon notify those staff members who will receive first-phase market equity increases, retroactive to Jan. 1, 2015.
Through this first phase, the campus will increase the average percentile of salary range from 32 percent to nearly 40 percent — a significant step in the right direction in our three-year strategy to begin to achieve greater equity in our compensation practices at UC Merced.
With the summer months upon us, I know many of you will be off campus from time to time for research and family vacations. I wish the best for each of you with your summer plans and look forward to our continued work together in the months ahead.
Building UC Merced has never been easy. We’ve made significant progress under difficult circumstances, and I remain confident that we can continue to do so because of your ingenuity, flexibility, commitment and perseverance.
Thank you for everything you do for our campus.
Sincerely,
Dorothy Leland
Chancellor
