Posts Tagged: budget
The Legislature is still working out the details of the state budget, which is due June 15, but UC is poised to get a major funding boost that will help enroll thousands of additional state students and eliminate the need for tuition increases in the coming school year. Despite the additional funding for the university, ANR will still take a budget cut. At this point, we still do not know how much our actual cuts will be, but anticipate we will have to cover approximately $5 million in unfunded obligations.
We are managing these cuts in three ways:
- We are slowing down hiring of UC Cooperative Extension advisors and specialists throughout the state.
- Statewide programs are developing additional cuts to already reduced budgets.
- UC ANR Research and Extension Centers are reducing the subsidy that has been provided for research projects at the RECs.
ANR leadership will share additional updates when they find out more.
In addition, a video response to the audit report for UC employees has been issued by Board of Regents Chair Monica Lozano and may be viewed here.
For updated information and UC responses to the audit, please visit the UCOP news page./span>
On April 10, VP Glenda Humiston released the following statement to the UC ANR community.
As we move forward with the implementation of our new Strategic Plan, I want to take this opportunity to share some exciting plans for recapitalizing and modernizing our research infrastructure and facilities. This investment is a key strategy within our larger efforts to “rebuild the UCCE footprint” and increase the number of academics throughout the system.
The Strategic Plan proposes a total investment of more than $40 million for UC ANR research facilities, with well over half of that designated for the Research and Extension Center System (RECs). This historic investment will be funded by a combination of debt issuance, judicious deployment of reserves, revisiting recharge rates (cost recovery) and a robust capital campaign. The good news is, in the current financial market, interest rates are still relatively affordable, making it a very good time to borrow money and expedite construction.
The RECs are a unique and critical part of the research capacity of UC ANR, as well as a vital resource for California's agricultural sector. Unfortunately, they have not been adequately supported for a number of years, resulting in 21st century research being conducted in facilities that are 50 to 60 years old. We must look to the future and invest in these facilities now to serve the researchers and scholars that bring their projects to the RECs – both current and future. Going forward, we must also ensure financial stability and plan for ongoing upgrades to keep our facilities up-to-date and in demand.
UC ANR central funds currently cover expenses at the RECs ranging from 70% to 90% of all costs; the RECs, in turn, use those funds to support, on average, over 80% of the costs to conduct research. This significant support has been given to all researchers, regardless of need or priority, and doesn't allow ANR the flexibility to target our research support dollars where they are most needed. Furthermore, much of the work conducted at the RECs for projects awarded to UC campuses provide no Indirect Cost (IDC) to the RECs to cover utilities, infrastructure and other support costs generally covered by IDC.
Lisa Fischer has been working with the REC directors to develop a vision for the RECs, including prioritizing the improvements to be funded and identifying options to enhance administrative and financial management. Several options are currently under discussion, including liquidating assets and/or pursuing land lease options, increasing crop income, seeking endowment opportunities and resetting recharge rates either as a system or by individual RECs.
As part of these options, we need to develop recharge rates that more accurately reflect true costs and assist with recovery of the division's outlays. This move will enable those funds to be available to help improve operations and maintenance as well as augment three research funds that we are developing: one to provide extra support for early-career ANR academics, another to be available for emergency needs such as Asian citrus psyllid, and the third to provide matching funds when required for certain grants.
I know you share my enthusiasm about the potential of our REC System to become the elite and productive research infrastructure that California is depending on to provide solutions to the many issues facing the state. We are discussing and evaluating all available options to reduce the RECs' dependence on central funds and develop strategies to improve their administrative and financial management. I anticipate receiving a proposal from REC leadership in late April.
Rising costs, coupled with budget forecasts from our traditional state and federal sources that appear flat for the foreseeable future, mean that all of UC ANR, not just the RECs, must look for ways to manage ongoing programs with less reliance on central funding. Concurrently, we are also greatly enhancing our funds development capacity to assist with program needs and expanding our academic footprint. I will be providing more updates on that, as well as other aspects of the Strategic Plan implementation effort, as plans are finalized and milestones are met.
Some of you may recall the discussions that have taken place over the past year with ANR's leadership, the AES campuses, and UC's Office of the President involving revenue flow, the administration and allocation of ANR funds and resources, and the overall funding model for our division.
Following a lengthy and detailed review and analysis by an independent resource, as well as analysis by a committee appointed by President Napolitano, a decision has now been made by the President's office on how we're to move forward.
The bottom line, I believe, is that we now have a budget model that reduces uncertainty and allows us to more effectively plan and forecast into the future. I anticipate more clarity with each budget cycle, and (with the MOUs we're currently developing) less need for new rounds of negotiation every year with our AES campus partners.
Below, please see an email from the President's chief of staff regarding the new budget model.
From: Jenne Vargas-Maes On Behalf Of Seth Grossman
Sent: Monday, May 09, 2016 3:39 PM
Subject: Agriculture and Natural Resources (ANR) - Financial and Business Operations Update
The purpose of this email is to share with you President Napolitano's decisions regarding financial and business operations issues raised last year by the Division of Agriculture and Natural Resources (ANR) and the campus locations. These decisions were made with the input of the task force convened by the President and led by CFO Nathan Brostrom, and are summarized as follows:
1. Starting in FY17-18, the UCOP portion of the ANR budget will be calculated using the “UCSF Corridor” model, and the source of funds will continue to be the campus assessment. This model assumes that in years where the University receives increased funding from the State, ANR would receive its “normal share” of the first 2% increase and then one-half of its normal share above 2%. In years in which the University receives budget reductions from the State, ANR would receive a reduction equivalent to its normal share of the first 1% and then 25% of its normal share above 1%. “Normal share” is based on the percentage increase being allocated to the campuses for their base budget adjustment.
2. UC ANR will develop a comprehensive MOU with each of the three AES campuses (Berkeley, Davis and Riverside). An MOU is already in place between ANR and UC Merced.
3. Indirect Cost Recovery (ICR) will remain with the location where the Specialist resides and the support activities take place. In many cases this will be at the campus, although there are situations where the Specialist resides at an ANR facility.
4. The distribution of patent revenues, net of costs, will be negotiated by ANR and each of the campuses as part of the MOU. Negotiations should clarify administrative costs of the patent, and the allocation of patent revenue (net of cost) between the campus and ANR with the expectation that net revenues will be shared equitably.
Over the next few months, VP Humiston will lead the effort of creating the MOUs with the expectation that they will be reviewed every three years. The President and CFO Brostrom will review the negotiated MOUs prior to signing.
All the best,
Patrick Lenz, UC’s vice president for budget and capital resources, issued the following statement today, Jan. 9, 2014, after Gov. Jerry Brown proposed a state budget for 2014–15:
“The leadership of the University of California appreciates Gov. Brown's commitment to full funding for the second year of his multi-year budget plan for the university. The governor is proposing an additional $142.2 million from the state general fund, representing a 5 percent increase in state funding for UC over the previous year. The governor also proposes $50 million for Innovation Awards to increase the number of baccalaureate degrees, reduce the time to degree and ease the transfer process for California Community College students. This is a competitive grant program open to UC, California State University and the community college systems. UC already exceeds its national comparison institutions in time to degree; however, we welcome any funding that would increase the number of baccalaureate degrees awarded and create greater transparency for community college transfers.
“The governor’s proposed increase in state general funds and UC’s continuing efforts to achieve savings through administrative efficiencies will preclude any tuition increase in the 2014–15 academic year. In addition, UC students will benefit from the state's new Middle Class Scholarship Program to be implemented in the fall of 2014. This program will provide a 40 percent reduction in tuition and fees for families with incomes up to $150,000. While only 30 percent of UC students pay full tuition and fees, the Middle Class Scholarship Program will provide greater assistance to students who may not qualify for financial aid or may qualify only for partial aid.
"The University of California will continue working with the governor and the Legislature to recognize funding priorities for enrolling more California first-time freshmen and community college transfers as well as the critical need to reinvest in the academic quality that allows more faculty hiring, graduate student support, and funding for instructional equipment, technology and UC libraries."