Budget Town Hall transcript

Staff Assembly sponsored a Budget Town Hall on June 24 at Pauley Pavilion. Making remarks and responding to questions were Chancellor Gene Block, Vice Chancellor Steve Olsen, and Associate Vice Chancellor Lubbe Levin. Following is a transcript. Read UCLA Today's full story, or read a summary story and view a video here.

 

Maureen Wadleigh: My name is Maureen Wadleigh and I’m the new Staff Assembly president. Staff Assembly is pleased to facilitate this important conversation on the budget crisis and its impact on UCLA employees. I’d like to begin by introducing Chancellor Block. As we all know, he is no longer a new chancellor. He is in his second year here. Despite his very busy calendar of meetings, speaking engagements, teaching, overseeing his lab and attending student events, he has always made time to get better acquainted with UCLA staff and what our needs and priorities are. We are especially grateful today that he is meeting with us to tell us the status of our budget situation as he sees it, and to listen to our questions and concerns.

 

Joining Chancellor Block are Vice Chancellor of Finance, Budget, and Capital Programs Steve Olsen, and Associate Vice Chancellor of Campus Human Resources Lubbe Levin. We will start with opening remarks from Chancellor Block, followed by brief comments from Steve Olsen and Lubbe Levin. Chancellor Block will then speak briefly and open the floor to questions.

 

When asking a question, there are a few guidelines to follow. To ask your question, please go to one of the two microphones, one available on the floor and the other just in the upper area. I will alternate questions between the two microphones and will also ask questions submitted through the Staff Assembly website. As we have a limited amount of time and a significant number of staff, if you wish to ask a question, questions will be limited to one minute. Each person may ask only one question, and we ask that your questions pertain to the budget and salary reductions options as outlined by the office of the president. This is an important opportunity for staff to engage campus leadership and hear the most up-to-date information. Please be respectful of your colleagues by following these guidelines. This Town Hall is being video recorded and will be posted to the Newsroom Budget News website at newsroom.ucla.edu and is available to the general public and the press. Now please join me in welcoming Chancellor Gene Block, Vice Chancellor Steve Olsen and Associate Vice Chancellor Lubbe Levin.

 

Chancellor Gene Block: Thank you. I will try to be short, because we are really here today to try to tell you what we know and what we don’t know about the current situation. I want to keep my comments fairly brief. All of us recognize, reading the newspaper, what we’ve seen in Los Angeles, what we’ve seen in the whole nation, is that that we’re going through a profoundly deep recession which, I heard Larry Summers speak about it two nights ago, it’s the deepest recession certainly since the Great Depression. This is a very challenging time for the U.S. and a very challenging time for California, which is being severely impacted by the recession. That, of course, is impacting the university. And the University of California at present is facing an $800 million deficit, a decrease in funding that is going to be extremely difficult for us to deal with. The component of that that UCLA is responsible for, our cut, that’s certainly the largest cut we’ve ever dealt with in terms of total funding. And this will have impact. And that’s why we’re here. I recognize your concerns and it’s my concern with this institution, that we all personally get through this and that this institution remain strong. But there’s no doubt this is going to have impact on our salaries, it’s going to have impact on our programs and students, and that concerns me greatly. We’re here to listen, to take your suggestions. The president has given you some options that we want to hear your response to. We have received a lot of e-mail, and we’re deeply appreciative of that. That is very helpful. At this time, I’d like to turn this over to Lubbe and Steve to give you a few more details, and then we’ll open this up for questions.

 

Vice Chancellor Steve Olsen: Thanks, Gene. I think all of you have been following newscasts about the budget debate in Sacramento. Clearly it’s a very serious situation, and it seems like every year there’s some sort of budget battle in Sacramento. But this year it’s really different. The state has been operating on borrowed money for the better part of two years, and it appears now that regardless of whether elected officials are coming from the Republican standpoint or Democratic standpoint, there is a consensus developing that some very deep reductions in state services need to be implemented across a broad array of public services. And this certainly includes higher education. All three segments of California higher education are currently being targeted for very deep reductions. And as the chancellor mentioned, for the University of California this means about an $800 million reduction, of which we’ve already seen about $175 million this year, and the balance, in excess of $600 million, proposed for next year. There’s a very high level of certainty that these cuts are actually going to happen.

 

The regents of the university have increased fees both this year and proposed for next year by about 20%, but these new revenues will cover only about a quarter of the cutback in state funds. This means that we’re going to have to substantially reduce services at the university level. At UCLA, we’re planning right now for a reduction of around $114 million, it represents about 15% of our general fund budget. UCLA has faced budget cuts before but never have we faced cuts of that magnitude in a single fiscal year. This is going to mean for us, ultimately, fewer courses, fewer faculty, fewer majors for students, and, ultimately, a reduced number of operating departments on the academic level. And it’s going to require us to become much more efficient on the administrative level.

 

From a planning standpoint, here’s how we’re approaching our task of reducing the budget by $114 million: the proposed reductions in compensation, whether it’s in the form of reduced salary or furloughs or some combination of those two, we estimate will produce at most around $40 million in savings for our general fund. That will mean that the remainder will have to come programmatic cuts. We’ve been planning all along for reductions of around $33 million on the general fund side, but it’s clear on the basis of the most recent information coming out of Sacramento and from the Office of the President that our plans to reduce spending by $33 million will not cover the level of cuts that we have to implement. Ultimately, it’s going to be significantly higher than that. We’re in the early stages now of planning for an additional $40 million in reductions. This is going to impact our academic programming, it’s going to impact our core administrative program. It’s not going to be easy to achieve these reductions, and I think it’s ultimately going to place our overall education and research mission at risk. We’re going to do this in a way that minimizes the impact on our basic mission and minimizes the impact on employees, but I think that everybody here needs to understand that this is very serious and it’s going to have an impact on our lives in the way we do business.

 

Associate Vice Chancellor Lubbe Levin: Thank you, Steve. First let me thank everyone for being here. We really appreciate your interest in this issue and your willingness to meet with us to discuss some key questions. Since my e-mail was used for all the employee comments to the proposals under review, I want to let you know that I feel like I know many of you very well. You shared your personal stories with me to some extent, and I want to say how impressed I am with the suggestions that so many of you have made. Those comments are very moving in connection with family circumstances, how a paycheck or a furlough will affect you individually. However, they also show your dedication to the university and your willingness to address the kind of sacrifices that are being proposed. So I really want to thank all of you for your professionalism, your dedication and your service to the university.

Having been someone who was here at UC during the early 90s when we had to implement the cut CAP plan, which many of you are nodding about and will remember — I think the university will survive this. It’s an outstanding institution, there’s no question. However, there are a lot of questions about how we can address the budget targets in a way that will be most effective and least intrusive for our employees.

 

Let me mention just a couple of the themes that are reflected in the proposal from the Office of the President.

 

One major theme is equity, and although there are many questions associated with the programs we have and the differences across the fund sources on which employees are paid, the proposal is intended to spread the burden, not only faculty and staff but the situation of student at the university today is also very much in need of being addressed in terms of higher fees and their access to education. So the concept is really to spread the burden across the entire university, thereby making it easier for everyone to move forward.

 

Another major theme is the protection of benefits. I know you’ve had many questions in this area. The Office of the President is doing its best to develop measures that can be considered by the Board of Regents when they discuss these options, to ensure to the extent possible that retirement benefits as well as health care and other issues are protected.

 

I’ve been very pleased that this process allows very widespread consultation, and to the extent that we’re able to get comments from you, hopefully I will have a chance to acknowledge your notes if I haven’t already done so in the last several days, and that input is very valuable to us.

 

Finally, I just want to mention that the majority of employees that have commented thus far are in favor of the furlough option, for obvious reasons in terms of impact on people, their ability to take some quality time off, to have more time with their families, address their personal needs or, if necessary, to find other employment on a part-time basis. I’ve also heard from many of you who have actually calculated the impact of not needing to commute from your home to the campus on certain days, and one person even indicated that’s about equivalent to 8%. So again, we’re interested in hearing from you today and I want to assure you that our campus leadership as well as the systemwide leadership will do its best to mitigate the impact of these proposals.

 

Block: I just want to second Lubbe’s comment about your comments. The ones I’ve had a chance to read, I appreciate your thoughtful comments, and they’re very candid about what you’re going to face and we face as an institution, and I recognize this as I read them. This is very serious, and you understand that.

I should say before we go into questions that there’s much to be proud of at UCLA — even if this is a stressful time — and a lot of that is because of your efforts. When we look at graduation surveys of our student satisfaction, it’s remarkable how our students feel about this institution, and in so many cases that’s your efforts that make the difference. If you look at our medical center and you look at the satisfaction level of patients in the hospital, which I think at the extraordinary 96% satisfaction, again, that’s your efforts. If you look at federal research funding, which again, the result of your efforts to keep the research mission going, again, UCLA has done extraordinarily well. So we’re in this unusual situation of having so much to be proud of as a community, so much accomplished. For a university that has just remarkable students, staff and faculty to be facing such a challenge is especially disheartening to us. But we’ll get through it and I believe we’ll end up as strong an institution as we are now. But there will be some challenging times ahead, and we certainly appreciate your concerns.

 

At this point, we should really open this up to questions.

 

Wadleigh: I’d like to start off the question-and-answer series with a question e-mailed to Staff Assembly. For Chancellor Block: Has the decision regarding the three options already been made? It seems like only Option 1 can be implemented by the August 1 deadline. When will you know what option will be implemented?

 

Block: There was a chancellor’s phone meeting today with the president, and we discussed all three of these options. In fact, what we are UCLA mentioned was that our survey from your responses was that we were overwhelmingly the people responding in favor of furloughs. As I understand it, no decision has been made. In fact, the final decision will be made on July 16 at the regents meeting when the plan is approved. So this is really a time for consultation, so keep sending your comments, those of you who haven’t responded, because this is an open issue.

 

Wadleigh: The next question is for Lubbe: Is consideration being given to a more layered tier system? 8% for employees making $47,000 up to those making high six figures does not seem equitable or fair.

 

Levin: I think this is an excellent question. We are very fortunate here at UCLA in that quite a few employees commented on exactly this point, not only pointing why a single cut-off point is not the most equitable way to proceed, but some individuals, and I’m hoping some might even be in the audience here, have actually proposed a very specific sliding scale or progressive approach similar to the way income taxes work. So what we are planning to do is send to the Office of the President a writeup about these proposals, hopefully in time for them to consider the approach. I think if we can handle the potential for salary reductions in that fashion, I think people will be able to understand them much better and also see the fairness and equity involved in the process.

 

Wadleigh: Next question is for Steve: when the budget crisis is over, will faculty and staff get their 4% or 8% back?

 

Olsen: (Joking): I must have put the check somewhere. The proposal that will be put before the regents is for one year. It would operate from August 1 of this year through July 31 of the following year. Having said that, I think it’s realistic to expect that the state of California is going to be in financial trouble for a long time. That means that all of us have work to do. Paying competitive wages and providing competitive benefits for employees is vital for our long-term mission and for our strategic position. We really have to figure out a way of making that happen over a period of time. That will mean work. We have to make substantial changes if the state isn’t going to be able to provide us with the revenue. We will have to work together to try to figure out now to generate additional revenues or identify cost savings in order to provide a compensation program for employees. As to whether the state will ever get out of a budget crisis? I don’t know.

 

Wadleigh: I’d like to open up the questions to the floor. Upper-level mike.

 

Question: I’m Bob Samuels from UCLA Writing Programs. If you calculate the amount of money that would be saved with the 8%/4%, it’s closer to $700 million, and so when the president says it’s $194 million, one question is, where does that other money go? So, two little caveats, or follow up, is, say if I’m a medical professor and my base salary is $500,000, and my gross salary is $1 million, am I going to lose 8% of a million? And likewise, if I am a researcher and I’m totally funded on a federal grant and my grant is for $100,000, am I going to lose 8% of that, and if I am, where is that money going to go?

 

Olsen: That’s a great question. It’s one that was asked by quite a number of folks. It’s actually several questions put together, so I’ll try to answer them sequentially. The first question was, if you calculate the salary savings it adds up to far more money than is needed for the budgetary savings, and that’s correct. the reason is that the University of California is very financially diverse organization that has lots of different funding sources, of which only a portion represents the general fund, which is the state part of it. so the savings that are need for the budget are around $195 million. The reason that these savings are actually greater than that is…what Lubbe mentioned, which is the equity principle. The proposals that have been put forward would apply this reduction in compensation, whether in salary or furloughs, to all university employees. And hence, when their salaries would reduced there would be savings across a broad array of funding sources.

 

The second question is, where do these savings if they don’t go to general fund savings? They would be retained by the organizations that manage them, is the answer. So for example, if there are savings that are generated within the medical center, the medical center would keep those savings. If there is a researcher who has a research grant and salaries are reduced in that are, the principle investigator would retain those savings and those savings could be rebudgeted to provide for additional time against that particular grant.

 

Question from Staff Assembly website: I’m concerned about how this will affect my retirement, as I may want to retire soon and the monthly retirement check is based on your highest 36 months salary. If my salary is decreased and I retire before this temporary decrease ends, it doesn’t seem fair that my retirement will be based on the lower 36-month average due to these cutbacks.

 

Levin: This is obviously a very important matter and a concern to many of us in this room. The Office of the President is right now working on an analysis, including an actuarial analysis, of whether it would be possible to protect the HAPC from the impact of a pay cut. What they are looking at is the question of using the pre-cut salary as a continuing basis to calculate to the HAPC, which is the highest average compensation plan number. They are also looking at the furlough issue, and that involves a small diminution potentially of service credit. What I’ve learned is that there is a mechanism, which is like a rounding mechanism, that can be used in order to reset that number, and again, if the regents and the Office of the President are able to bring forward and have the regents approve the mechanism that would allow protection of those two numbers, I think we will not have a concern about this matter. Apparently, the state’s retirement plan, CERS, already uses a rounding mechanism for the service credit issue. The issue related to the calculation of the HAPC is more complex and the regents will need to consider the impact on UCRP in the future as well as the impact of any of these measures on employees. So we will know more about this after the July regents meeting.

 

Question: My name is Eleanor Moon from the faculty practice group. My question actually has been answered, but in the interest of emphasis and because people have asked me to say this, I just want to say that the $46,000 cut-off is rather gratuitous, and people who make $47,000 and are a single-income earner are basically not going to be able to maintain their lifestyle. I will be evicted for certain with an 8% pay cut. However, I would like to propose as it’s been done the sliding scale, because I think it’s greatly unfair for us to carry the burdens of the higher-paid salaries. The higher-paid salaries will not be visited with eviction, with unable to pay their utility bills, with normal, everyday things that we need to do, which we will not be able to do with an 8% cut. Thank you.

 

Levin: Thank you, and again, I think we all share that concern, and the stories I mentioned I have received make that point very strongly and it’s a very emotional issue I know for many of our employees. I think that the benefit of a graduated scale is that it does not involve an arbitrary single cut resulting in a situation where someone earning $46,000 vs. $47,000 end up with a very different impact. So that clearly needs to be addressed. In terms of the higher-paid individiuals at the university, there are not enough of them, even if you implemented a 20% cut, to reach the target savings that’s required. It’s a question of analyzing the numbers, and I think, it’s clear to me that there is certainly every intention to cushion the impact on lower-paid employees. So these different methodologies will some additional, very careful review.

 

Question from Staff Assembly website: Does there have to be one-size-fits-all options like those proposed by President Yudof? What about one option for the hospital, one for faculty and one for staff, maybe even overlapping options?

 

Block: Again, I can say this is a consulting period when your views are important to us. In fact, in our discussion today among the chancellors, there was a discussion about whether campuses can have flexibility to meet the needs. Each of these campuses is quite different. We’re just going to have to see what happens, but certainly that’s been expressed.

 

Question: I’m Mike (Last name?) from English. I just wasn’t clear on something, maybe I just missed it. It was asked that proposed percentages would result in a greater savings than is needed, and it seemed the answer was the reason the greater savings were needed was … across the board? I didn’t understand the answer.

 

Olsen: Okay, I’ll give it another shot. The proposal is that the salary and/or furlough reductions would apply to all university employees, and university employees are paid from a wide range of funding sources. In the English Department it’s largely general funds, but in the medical center, for example, there’s almost no general funds, it’s patient revenue. But the proposal is to apply it to all funding sources. All funding sources would achieve savings, and savings that are to the general fund will solve the general fund budget shortfall and the savings that occur in all the other funding sources would be kept locally by those funding sources and would be redirected.

 

The question, if I could restate that, is could you do it at a lower percentage to make it work out. The difficulty is that the funds in the other funding sources are restricted. So we don’t have, legally, the ability to use Medicare payments for patients, for example, to cover reductions in the English Department. It’s not permitted under federal law. We have research grants where the grantees are paid from a very specific research fund and we can’t redirect those monies elsewhere.

 

Question: There’s been a lot of talk about equity. The thing I haven’t heard is this applied to all departments, including athletics and revenue-generating sports? Will they also be receiving an 8% cut?

 

Levin: Yes. That’s the only answer I can give you.

 

Question from Staff Assembly website: How will the cut affect those who are currently participating in the START program? Will we need to take an additional reduction? Will vacation and sick time still accrue at the current rate or will that be reduced as well?

 

Levin: All of the campuses have been asking the Office of the President to help us answer that question. We don’t have an answer yet. In my view, if someone has volunteered to reduce their time at least at the same level if not beyond the potential pay cut, they should be exempted. We will have to see how the Office of the President determines that situation. My impression is that if that approach were taken, we would be likely to have a lot of people sign up for START, which, from my perspective, would not be a big problem because if we can gain the salary savings through voluntary measures, that would be much preferred. And I do want to thank those who are already participating in START. I’ve heard very good things about it, and departments have been able to cope with the necessary flexibility in scheduling time and so forth. So my hope is, but I do not have an answer at this point, that the START participants will be taken into account if there are further reductions.

 

Question: Chris (Last name?), Department of Neurology. My question is whether or not union members will be receiving an increase in their salary, that’s what the rumor is out there, and whether or not they’re subject to furloughs and reduction in salaries like the rest of us who are unrepresented.

 

Levin: All of those matters for represented employees are subject to collective bargaining with their union representatives. The Office of the President will be the primary lead on those issues. As most of you know, the collective bargaining units are systemwide, and therefore it’s necessary to work with the Office of the President with the unions in that regard.

 

Question: My name is Steven (Last name?), I’m a postdoctoral researcher in the Brain Research Institute, and I think you touched on this just a little bit but I just want to be completely clear about what’s going on with my 8% salary cut. Am I correct in understanding that you are taking my money, this salary, and it’s going to go directly to the general fund? And if not, how does this pay cut correct the budget problem?

 

Block: There has been discussion about post-docs, specifically today. In my view is that a post-doctoral position is largely an educational position much like an advanced graduate student and should be spared in any reduction. The nature of it is it’s really a student position, a post-graduate student position, so we’ll have to see what the outcome is on this, but I think there’s sympathy actually that this would be an excluded group, because they are just young Ph.D.s who are in training. I’ll go further to say that for those with research grants for which there are salary cuts, the money would go back into the research grant, it wouldn’t be moved into the general fund. It would be used by the principle investigator.

 

Question from Staff Assembly website: I’m a 50% time career employee. My question is, if the administration decides to implement furloughs, will I lose my 50% time status and therefore my health insurance?

 

Levin: The answer to that should be no. No loss of health insurance. And I’m basing that not on any immediate answer that we’ve received from the Office of the President, but the plan that was put into effect in the early 90s. we do not want to see anyone lose their health insurance. Additionally, for someone whose been working at 50% time, if they’ve already become career and are currently members of the retirement plan, they would remain members of the retirement plan. the only caveat is that if they take a break in service, that would change. But if that is not the case, simply on the basis of the measures we’re reviewing right now, they would not be negatively affected. They would, of course, be subject to the same, probably proportional salary reduction that full-time employees would be.

 

Question: (Name?) from Facilities Management. Since the expected salary decrease, can we then expect a decrease in our parking fees and our vanpool fees?

 

Levin: (Joking): I’m going to see who wants to answer that question. Well, let me just say, every year our parking services group does a very careful analysis of what the parking rates should be. For those of you who have worked either with other employers or at other campuses, and I’m not saying that the UCLA rates are not on the high side, but we are not as high as many other employers who have employees in a metropolitan area like Westwood. I’m sure the conditions for the coming year will be taken into account in setting pay rates. However, this is a self-supporting area and there are issues that require analysis review for the benefit of the campus as a whole. So I don’t know the exact answer to your question but I’m sure it will get careful attention.

 

Question: My name is Emily (Last name?), I’m from the Office of Intellectual Property. My question has been touched on a little bit, but has there been consideration of a rather than one-size-fits-all program, a two-tier or at the employee’s election, a choice of, say, taking a smaller pay cut, or a furlough at a higher percent. So say offering, say, 5% pay cut and you can continue working, or you take a 10-12% furlough so that it might average out so that people who value the time more than the money get the time, and the people where the money is more important would have a smaller pay cut.

 

Levin: I think that’s an excellent suggestion. This will depend on how much flexibility is built into the plan that’s eventually adopted. Obviously the option, #3, considered that kind of combination of approaches, perhaps not exactly the one that you mentioned, but I think that these kinds of suggestions, everything is under review, and we’re happy to take forward other alternatives. I do want to come back to the parking rate increase. My colleagues have advised me that there will be no increase coming up this fiscal year.

 

Question: Can I add one more part to my question? If you get a straw poll in advance of how many people might take advantage if you rolled out the START program again, did a straw poll of how many people really would take advantage of a START-like program, you might find that there were enough people that that, the pay cut for those who didn’t want to take a pay cut would be lower, and that seems more equitable.

 

Levin: I agree with you. That’s why it seems to me that if the approach is taken to protect or exempt START program participants from an additional pay cut, I think a lot of people will sign up for START.

 

Question from the Staff Assembly website: Do the salary reductions apply to part-time, limited employees? Is the calculation on an annualized salary or on the amount they actually earn?

 

Levin: As I mentioned a moment ago, we have not received specific answers to those types of detailed questions. However, part-time employees certainly would be subject to a proportional cut. It’s most like that the base for that would be the annualized salary and then reduced by the percentage of time.

 

Question: I’m Jeff Goldman from a research center in the engineering school. I’m asking this on behalf of the staff that I’ve spoken with from the center. Everyone there agrees with the concept of the shared sacrifice, the principle. As we understand it, the savings from the salary cuts are not going to help the budget cuts. They’re going to take money out of the economy and hurt any kind of recovery, and they’re going to defer the collection of overhead in the short-term when that’s most needed. So we’re wondering how that translates into equitability.

 

Olsen: I’ll be completely honest with you. We struggle with that same issue as well. You’re not alone in that. The proposal that we have seen has introduced this broad concept of equity which translates into equal treatment for all employees. And I think what we’re seeing in our discussion with our colleagues here on campus, that there are very different circumstances that apply. UCLA is a large, diverse place. It is the largest and most complex of any of the UC campuses, and we’re very concerned about the way that this proposal is affecting different areas of the campus, especially in areas where the savings that would generate from this proposal don’t actually benefit the general fund. We’ve expressed those concerns to the Office of the President. We’re not the only campus that has expressed those concerns. Ultimately, the president and the regents are going to have to take all this into consideration and do what’s right for the entire universitiy. But you’re right, it’s a major issue.

 

Question: Scott (Carolin?), UCLA engineering. Chancellor Block, I did pose this question on your Facebook website as well, I look forward to your personal response. I did put it on Mark Yudoff’s Facebook site, but it was deleted somehow. We did some math: in 2007 we saw that 3,000 UC employees are earning over $200,000-plus annually, not to mention the average salaries for the UC chancellors is over $300,000, it’s more logical to pull money from someone making over $200,000 than from someone making $46,000. In fact, people making $46,000 should be protected from a reduction in pay. Also taking a cost-of-living cut from last October, not mentioned we could be facing some inflation down the road. Staff members are less likely to have the additional monetary resources to fall upon during economic hardship. I’m sure the UC chancellors sure won’t feel much of a pinch if they took a 20% pay cut for one year, that means $120 million. This is really a comment, not a question. Thank you.

 

Block: I recognize that certainly the burden is less on highly salaries, and I do anticipate that my cut will be larger that anyone else’s. I understand.

 

Question: Tom (Last name?), I work in the medical center. I’ve been here for a long time and I’ve seen a lot of different avenues to cut budgets. This is the first time I’ve seen an across-the-board 8%. And I was wondering why UC hasn’t given the campuses discretion to make the 8% cuts rather than just giving a wholehearted 8%. They haven’t looked at alternatives like early retirement, freezing positions, things like that.

 

Olsen: I think you’ve raised a question that’s a variation on the last question. We’re very concerned about this. In the interest of applying principles of equity, this is being applied in an equal manner to all areas of the campus without regard to the local conditions are, and we’re concerned about that and have expressed those concerns to the Office of the President.

 

Question from the Staff Assembly website: Regarding NIH grants. Since many employees have their salaries paid entirely through NIH grants, is the vision that those salary dollars that are cut would simply be returned to NIH rather than used for their awarded purpose? Since those dollars could not be used to address the state budget crisis, how does this help with the budget?

 

Block: Again, this gets back to the same issue that we struggle with, this is again an equity argument. Those funds would be returned to the grant, they could be used for a grant extension, they could be used actually to employ additional people, they could be used in a number of ways but specifically for that grant. Again, we get back to this issue of equity, and it’s a difficult issue, which people disagree on, I might add, when you read the e-mail people do disagree on this. There’s honest debate going on.

 

Question: (Name?), I’m with Facilities. I wanted to ask you a question about equality. You guys keep saying equality, equality, equality. The interesting point that comes up for me is a touch esoteric, and that is, the leadership, ergo, the Office of the President, the regent, the chancellors, and down the line, are you guys going to lead and get out in front of what you’re asking us to do and go big? Or are you going to wait and do it to us and see how you can figure that out?

Block: We did move ahead. The chancellors and the president’s office moved ahead with a preliminary cut last month of 5% just as a beginning cut. So we did try to get out ahead. We didn’t recognize how serious this was going to become, and we certainly anticipate additional cuts, obviously the cuts will be as large or larger than anyone else.

 

Question: Mary (Last name?) Department of Urology. If we’re being furloughed, how are we able to provide the treatments we provide to our patients? We won’t have the staff to do it. Are we supposed to say to a cancer patient, I’m sorry, I’m furloughed today?

 

Levin: This is an example of the problem with the proposals, frankly. They are, as Steve has described, more of the one-size-fits-all approach than taking into account specific operations. I think obviously patient care is an area if there’s any area that deserves to be exempted that would be one example. On the other hand, I am hearing from the medical center that if any of these options are necessary, they would probably prefer the pay reductions, not the furlough, and that’s based on managing operations and is related to your question. So we will have to see the end result, and my hope is that there will be strong consideration for making the plan flexible enough so that the university’s quality can be maintained and so that the minimal impact on employees can be taken into account.

 

Question: Brook Anderson, School of Engineering. There’s talk of this August 1 deadline, you’re getting lots of great ideas from people here through your website and various campuses. Since this affects a lot of us, all of us here at UC not just at UCLA, I just want to make sure that we’re not rushing to implement a plan that is easy to implement on your end just to meet this August deadline. Can we have some agreement that we’re going to come up with something that is equitable, when all of these questions are answered, like money being returned to places that aren’t necessarily going to the general fund? Can we have some agreement that we’re not going to rush into something simply on the basis of the fact that it’s something easy to implement, and not necessarily because it’s fair or equitable?

 

Olsen: That’s a really good question and I think we’re seeing from the discussions that are going on all throughout the university that there are a lot of questions that are not yet answered about these proposals and how they would be implemented. If we were in an ideal situation … well, if we were in an ideal situation we wouldn’t do this at all … but the issue regarding time is one of a basic tradeoff. Which is if we take more time in order to figure out how to do this, the amount of savings derived from whatever we wind up doing will be less, and that will mean we will have to cut deeper into some other part of the budget. So that’s the tradeoff, and I think ultimately the president and the regents are going to have to figure out how they feel about that tradeoff.

 

Question: My name is Mary Levin and I work in the medical center in the labs. You’ve answered some of my questions, but just to reiterate my concern about patient care, we’ve been told by Dr. Feinberg that we’re running at more than 100% capacity, we’re one of the few remaining trauma centers in the city, a lot of our labs, we’ve been running very lean for a long time in very crowded conditions. Will we be able to replace positions if people resign or retire? What about open positions that we have now? And what about the general patient care for the population of the city of Los Angeles?

 

Olsen: I think your question again is a variation on a general theme, which is how is this going to affect a particular area of the campus that actually isn’t going to be contributing to the general fund solution? It’s a really difficult problem. I know that Dr. Feinberg has been working with his counterparts at other UC medical centers and the Office of the President to determine whether there is an alternative that might apply in a way within the medical center environment that will make less of an impact on patient care. I can assure that this issue is being looked at very carefully and that the university administration is going to try to do everything it can to protect patients.

 

Question: I’m a social worker, my name is Virginia, I’m a social worker at the med center in the department of care coordination. We’re responsible for through-put, for getting patients into the medical center and out as quickly as possible because of that 100% bed rate. Obviously, we would love to have furloughs because that would be helpful to us. We work 9 to 10 hours on salary, we don’t get paid extra for it, but every single day, because our jobs are so, we’re so overloaded and our responsibilities are so great because we’re taking care of so many people. What I thought I heard you say is that the medical centers can have a different plan from the campus, because, for instance, if the campus goes with furloughs and the medical centers don’t want that, and of course we figure they don’t want that because they wouldn’t have us to get them through to help doctors take care of their patients. Any comment on that?

 

Olsen: First of all, I want to say that for those of you who work in the medical center, you’re all to be congratulated for an absolutely spectacular performance this year. The opening of the Reagan hospital has been a success that has exceeded our wildest expectations, not only in terms of the numbers of patients that have been served but also the incredible quality of care and patient satisfaction. So again … you raise a very good issue. I can’t say for certain that there is going to be a local variation that’s going to be allowed, but we are having this discussion with the Office of the President about ways in which that might be done that would make more sense for a clinical setting than the general university approach.

 

Question: My name is Alan Toy, I work for the Center for Neighborhood in the School of Public Affairs, and it’s a little ironic to me because I have a son going into a UC where the fees are going up by 9% at the same time I’m taking a 8 or 9% cut, but I’m already in the START program so I’ve already been given that. However, my concern is that during Chancellor Carnesale’s time, he raised a significant amount of money for the trust fund of the university, and I keep reading in the papers that people are out busily raising what they say will be under $200 million but will probably be closer to $300 million for this building (Pauley Pavilion) to be redone, and I’m wondering if we can’t either tap into some of that energy for development and fundraising to protect the integrity of the entire university, rather than focusing on a building or a capital improvement program. And if any energies are being directed toward that kind of fundraising and maybe the university can meet us all halfway in what we give and in what we get back.

 

Block: I should mention that last year we did raise an extraordinary amount of money, I think around $480 million, which made us, I think, the first public university in the country in terms of fundraising, so I think it continues very strongly. In addition to this Pauley project, obviously there are many, many projects that are being funded, including fellowships for students, both undergraduates and graduates. Fundraising is very broadly based, so the Pauley project is one project that money is being raised for, but there are many other projects as well. In fundraising we remain strong, and even this year I think it’s going to exceed $300 million, and this is a difficult year in which to be raising money. So we have not let off the accelerator in attempting to raise private funds for this university, and we will continue doing that wholeheartedly and hopefully successfully.

 

How does that impact us? It impacts us in a number of ways, because in fact the money we raise for graduate students and undergraduates provides financial support for our students, and that’s important as fees go up, so that immediately impacts students. Funds we raise for laboratories, for faculty, to help pay salaries, to help set up programs impacts all of us, our employment, so it impacts the university in a large number of positive ways.

 

Question: My name is Jeannie (?Garrara), I work in the UCLA Library. I’d like to make a point that addresses two things that were mentioned earlier on the impact on our basic mission of education and research, and also equity in spreading the burden. This was actually just mentioned in the last question, and that it that many of us are supporting students in the UC system, and this year there will be a 9.3% increase in tuitions and fees and many of us will be asked to support that while we’re being hit with an 8% reduction in pay. So I’m asking, can our proposal include consideration for that?

 

Olsen: That’s the first time I’ve heard that particular question. I’m not surprised that it’s an issue for many of our employees. We can certainly discuss that with the Office of the President.

 

Levin: My only comment, and this is not a satisfactory answer, is that this is one of the reasons why the decision was made not to increase student fees further. The 8% cut is not anything that the university’s leadership would have wanted to propose but it was an element among all the measures that needed to be taken to meet the budget shortfall. So it certainly was taken into account. For those of you who are employees as well as parents, certainly we understand very much why that would have a significant impact.

 

Question: Katrina from interventional radiology. We talk about the UC salaries of the executives and how they’re making over $200,000, but no one said anything about the bonuses. There’s a website that shows all the salaries and we see quite few executives that make more than $200,000 salary but they also $400,000 upwards in bonuses that they are given in addition. Nothing’s been said about what’s going to happen with their bonuses.

 

Levin: The only bonuses that are of any significant amount are part of the performance-based compensation system that medical center executives participate in. If they do not achieve the goals that are established each year in terms of performance, both patient care, financial viability, managerial effectiveness, other factors, then those bonuses are not received. I am sure the Office of the president is going to be thinking about those bonus plans very seriously for the coming year because certainly your concerns are very well taken. But with those plans having been established as part of the employment contract, one cannot really come in after the fact and say we’re going to eliminate it. but again, I think that will be seriously considered.

 

Questioner: We’ve come in at an established salary and you’re cutting us also.

 

Levin: It’s an excellent point.

 

Question: Lawrence (Last name?) from engineering shops. I believe in the second option that was furloughs, can we use accrued vacation time for those times for those days, I believe it’s 21 days?

 

Levin: Vacation is paid time off, so unfortunately, that could not be used as a way to meet the furlough target.

 

Question: Stacy from mechanical engineering. I understand that START would be a great idea, and I totally support that idea. My concern is that projects and grants that have been given to UCLA for work to be done at 100% that would now be not completed at 100% might be at risk and jobs might be lost because of it, because they can pull it. How will you address that?

 

Olsen: I don’t think we know the answer to that question. That’s one of the issue’s that’s come up in our discussions. You’re talking about a situation in which a contract is fully loaded …. So I don’t know the answer to that question.

 

Question: My name is Suzanne, department of pharmacology. Since we’ve been talking here about the budget cut, we’ve only been hearing about reduction of salary. But we didn’t hear anything about reducing UC’s or UCLA’s expense — buildings, entertainment, travel. And also looking into the vendors that we purchase from. For example, if I go and buy a computer for my house, I would get a Dell computer for less, $400-$500. But because we’re buying it for UC, we have to go to PST and pay more. Why is that?

 

Levin: I’ll mention that many of those ideas, and they are excellent ones, have been reviewed by the budget toolbox committees that have made recommendations, and I think Steve as well as Sam Morabito and Scott Waugh have headed up the committees that are looking into improved efficiencies, changes in the infrastructure, simplification, consolidation of services, and relations with vendor contracts. All of those issues will also help a great deal in terms of meeting our budget targets.

 

Olsen: We received literally hundreds of suggestions from UCLA employees about ways to save money, and many of those were incorporated in recommendations the committee made. And you can take a look at that report if you like at the executive vice chancellor’s website. They’re all posted there for you to take a look at.

 

Wadleigh: I’d like to announce that a video of this Town Hall will be posted at www.newsroom.ucla.edu and will also be linked to the Staff Assembly website.

 

Question: I’m Julia from the Hammer Museum. I have two questions have been asked but I’m still confused about the answers. One of which was, in the very beginning. I understand that the last time employees received pay cuts, they were actually reimbursed once all the funding had been worked out. So can it be written into this agreement that we will be guaranteed to receive this money back that’s being take out?

 

Levin: Back in the 90s, the salary cuts were restored, clearly. The current measures are being viewed as temporary. I think the key is what Steve described earlier: No one can guarantee the circumstances in the future for the state of California. But the intent, clearly, of these proposals, is that they be temporary.

 

Block: But I think the question was actually whether the loss of income was then replenished.

 

Levin: Were you referring to the retirement plan CAP program?

 

Questioner: Yes. Someone said that they were reimbursed for all the funding that was taken out.

 

Levin: Okay, there was no reimbursement on the salary side. However, everyone did receive an equivalent CAP contribution, Capital Accumulation Plan, that was then in the retirement plan for each individual. And that money has accumulated over the years. The reason we are not able to do that kind of approach this time around is the financial circumstance of the retirement plan itself. With the economic situation what it is and also the plan next to April to reinstate retirement contributions, the plan simply is not in a financial situation where it’s possible to have either a CAP program or an early retirement plan, because back in the 90s the university was also able to offer retirement incentives, and many people took advantage of that. So the financial circumstances are very different this time around.

 

Question: And also, with our amazing fundraising efforts, I really felt like that was a good question about why can’t we sort of redirect our fundraising efforts to benefit the employees here, put some of these other things on hold while everybody’s going through an incredibly hard time. Trying to redirect the fundraising.

 

Olsen: We will take a look at how to redirect fundraising generally. But as a general matter, we have a broad base of very generous donors and for the most part, while they are extremely loyal to the institution, they are looking for opportunities to donate for very specific programs, with some exceptions, like student support and in some cases faculty chairs. The general view of donors is that they view the general operation of the university as a state responsibility. And so, I can’t say it can’t be done but it’s a great challenge to try to redirect fundraising efforts in a way that allows us to continue supporting faculty and supporting the staff operation and the general operation. We have a lot of work to do, but it’s not something that can happen overnight.

 

Question: My name is Christine, from plastics. I wanted to know if some of our salaries come directly from the doctors themselves, we’re in a unique position, does that money get returned to them. Because when we wanted to do the START program, six of us, we were told no, we couldn’t because of staffing. And now all of a sudden, when push comes to shove, you’re going to kind of shove us out and say, yes, you can do it. Would you take that into consideration, maybe educating more of the department heads to offer the START program?

 

Levin: Certainly educating managers about the START program and the benefits of it is a really key issue, so I appreciate that suggestion a lot. There are certain operations where it may not be feasible to have people working less than full time. But I’ll certainly take that issue under advisement and discuss it further with our hospital colleagues. Thank you.

 

Block: I’d like to make a few final comments. Your questions are extremely good, and I think you recognize we don’t have all the answers. The issues you raise are issues we’re struggling with, so keep commenting, keep sending us mail, because we’re passing along your views to the Office of the President, and you’re bringing up issues that really are vexing issues that we’re struggling with. So thank you, we appreciate your input and we’ll do the best we can to protect this institution.

 

Wadleigh: Thank you for coming.