Reductions at UC Office of the President could save $56.7 million

The UC regents, meeting March 19 in San Francisco, heard details of a plan to cut annual spending by the UC Office of the President by 20% and trim its work force by 23%.

The reductions proposed for 2008-09 would amount to a cut of 404 full-time-equivalent (FTE) positions and $52 million in spending from multiple fund sources. Additional savings could come from a voluntary employee severance program and from one-time unexpended funds. In total, the plan would save $56.7 million in 2008-09, Wyatt R. Hume, UC provost and executive vice president of academic affairs, told the regents.

The proposal is one part of an aggressive restructuring effort to make the university's central administrative organization, known as UCOP, smaller and more focused in mission. The contribution of savings from UCOP also will help as the university confronts the possibility of significant budget cuts due to the state budget deficit.

“The change that we’re bringing about is, we believe, unprecedented in higher education,” Hume said. “A much leaner, more efficient, more effective Office of the President is not only possible, it’s happening now.”

Roughly half of the savings would be achieved by cutting budgets and positions within UCOP. The other half would be achieved by moving certain academic and public service programs out of UCOP’s organizational structure entirely and onto campuses or other locations where their functions would be more appropriately housed.

For example, UCOP maintains 197 FTE positions to operate the Continuing Education of the Bar program, which serves attorneys. It could be moved to a UC campus that has both a law school and an Extension program, Hume suggested.

Excluding positions reporting to the regents or Academic Senate and those in non-UCOP programs that receive "pass-through" funding through UCOP, the organization has 1,749 (FTE) positions in all. However, only about 20% -- or 350 FTE -- directly support the UC president. The rest support a wide variety of important university services, among them, 100 FTE for the Education Abroad Program based in Santa Barbara and 120 FTE to perform benefits administration activities for UC retirees.

Because of attrition, hiring controls on vacant positions, the voluntary employee separation program and the relocation of certain programs to the campuses or other locations outside of UCOP, the savings thus far are being achieved with fewer than two dozen layoffs. Affected employees will be offered assistance with resume writing, interviewing, career development and other job search activities. While UCOP headquarters are in Oakland, UCOP employees also work in Sacramento; Washington, D.C.; Santa Barbara; and elsewhere around the state as part of the Agriculture and Natural Resources division and other programs.

The restructuring effort is being led by Hume and Executive Vice President Katherine N. Lapp, who have convened a range of work teams to fundamentally re-examine what operations should be housed at UCOP and how they should be grouped in order to achieve maximum efficiency, improved communication and the most effective service to campuses.

"This budget for UCOP is a critical milestone in our effort to completely re-think the organization and functions of the Office of the President," Hume said. "Our work is not yet complete, but the savings proposed in this budget are dramatic, and they put us on an even faster track to achieving a leaner and more effective central administrative organization.”

"The current state budget situation calls upon all public institutions to make the most efficient possible use of taxpayer resources, and this budget for UCOP makes a substantial contribution by downsizing our central administration," said Lapp, executive vice president for business operations. "The budget also provides the university community and the public with a clearer window into the operations of UCOP. The budget is detailed, is transparent and represents a very significant step forward in our effort to streamline the UCOP organization."

The savings proposed in the 2008-09 appropriations request for UCOP include the following: • $26.3 million in savings is from relocating functions that would be more logically housed outside UCOP (225 FTE positions - mostly Continuing Education of the Bar, President's Postdoctoral Fellowship Program and California Council on Science and Technology).

• $25.4 million in savings is from program reductions at UCOP (179 FTE positions).

• $26.3 million in savings is from relocating functions that would be more logically housed outside UCOP (225 FTE positions - mostly Continuing Education of the Bar, President's Postdoctoral Fellowship Program and California Council on Science and Technology).

In addition, two additional forms of savings are expected:

• $1.5 million in savings is conservatively expected from a voluntary employee separation program offered to UCOP employees.

• And another $3.5 million is expected from recapturing one-time unexpended funds.

Provost Hume expects to present the regents with a revised overall organizational structure for UCOP at the board's May meeting.

The full appropriations request for UCOP, as presented to the Board of Regents, is available at www.universityofcalifornia.edu/future/op_budget.html.