UAF facing wrenching changes this year with $14M deficit
University of Alaska Fairbanks, where the state’s university was founded in 1917, is undergoing wrenching financial changes. UAF officials are struggling with how to cover a gaping $14 million budget gap this year.
Anyone in the market for reindeer? Or a musk ox? Cows?
Belts are being tightened at the university’s agricultural experiment stations in Fairbanks and Palmer.
A number of immediate budget-cutting steps are being taken to deal with this year’s $14 million gap. None of them are pleasant.
State funds appropriated to UAF total about $180 million this year. The total budget is about $433 million with federal research funds, grants, student tuition, gifts and other revenue included. UAF had an enrollment of 10,214 last year in all of its programs and campuses.
The effects on this year’s cuts on UAF’s academic and other programs will be known this fall when department heads report on how they will absorb unallocated cuts and increased overhead.
A long-range planning team is also working on next year and the years after, a recognition that UAF’s core funding, appropriated by the Legislature, might not change, at least for the near term.
“We’re planning on continuation of FY 2015 funding levels but we have a lot of ideas on how to grow revenues, and we hope to convince the Legislature we can do it,” said Pat Pitney, UAF Vice Chancellor for Administrative Services.
As examples, the arrival of a new oceanographic research vessel to be operated by UAF’s school of fisheries will open new opportunities for research. Also, UAF was just awarded a new $16 million grant to lead on biomedicine development for all parts of the university system.
“We’re going to be submitting a pretty robust series of recommendations,” to the Legislature, Pitney said.
Within the University of Alaska system, UAF is in the strongest position to leverage federal funds and grants because of its historic strong role in research, with facilities like the internationally famous Geophysical Institute.
This year’s budget gap is a combination of an $8 million reduction in UAF’s annual funding from the Legislature combined with increases in “fixed” costs of $4 million to $6 million.
Fixed costs include energy costs and maintenance and increases in personnel costs. Those include, this year, negotiated bargaining-unit agreements with 800 UAF employees that amount to about 2 percent, Pitney said.
The bulk of the university’s 2,200 workers eligible for benefits are not members of unions and receive a 1 percent annual increase on their anniversary of employment, she said.
Under a plan released June 30 by UAF’s chancellor, Brian Rogers, all departments and programs will face a 4 percent to 6 percent reduction in funding this year. In addition, each unit will have to absorb its share of the fixed-cost increases. These are expected to save $7.1 million, according to the plan.
UAF’s Planning and Budget Committee has recommended additional targeted reductions, which are expected to achieve savings of $600,000 this year. Travel restrictions are being imposed, and these are forecast to save $520,000.
In addition, UAF’s programs will have to absorb $4 million to $6 million in the fixed costs cuts.
“Undesignated” reductions vary with top-level administrative offices. Five percent is the norm across UAF’s programs but larger 6 percent cuts are assigned to the Chancellor’s office and Provost office, vice chancellor for administrative services, the vice chancellor for research operations and personnel associated with the International Arctic Research Center, although other units of the IARC are spared cuts.
Two research units being spared include the Animal Resources Center, which manages all the animals in UAF’s care, and where there are compliance obligations with the U.S. Department of Agriculture, as well as the Idea Network for Biomedical Research Excellence, where there are also complicance conditions with grants.
The new $17 million award just received by UAF for biomedicine goes to this group.
A new unit, the Office of Intellectual Property Commercialization, is also spared because this group is focused on generating new revenues for the university through patents for inventions by faculty and students.
On the academic side, the 5 percent reductions generally apply but there are exceptions for certain priority or new programs, such as indigenous studies and film studies in UAF’s College of Liberal Arts; academic advising, which helps students remain in college; and the honors program, where free tuition is granted for top high school graduates choosing UAF.
UAF’s enrollment has been flat to declining for various reasons including a robust state economy that has diverted some young Alaskans into jobs instead of college. The honors program helps stem that and UAF has new recruitment initiatives being planned, too.
The College of Engineering and Mines will absorb a lower 4 percent cut, but funding is being maintained for the Alaska Center for Energy and Power, a new UAF initiative. The School of Fisheries and Ocean Sciences will be cut only 3 percent so the school can develop new funding opportunities with the arrival of the R/V Sikuliaq research vessel.
A number of program management changes are being implemented, and others are being studied. One is a plan to share business support services among programs including the big research institutes. A second is to extend a policy from last year that keeps vacant positions open for at least 90 days.
The university’s print shop will also be closed with printing needs to be contracted out to local vendors.
Studies are also underway on initiatives to form nonprofits to provide certain support services for students, such as dining services, operation of the campus-wide bus system and residence support staff at student dormitories. The bus system itself may also be pared, and students may have to walk more to classes in different parts of the campus, an unpopular prospect during frigid winter days.
More for the future, UAF is taking the lead on changes in payroll management, labor relations and “e-commerce” procurement that could be implemented across the University of Alaska system.
Other recommendations from the program and budget committee are on hold, however, such as one to extend UAF’s winter break.
Another set of cost-saving changes relate to faculty contracts and work schedules. UAF departments will be able to offer 11-month contracts, reduced summer work schedules or alternative work schedules to employees who are interested.
However, UAF must keep an eye on faculty and staff compensation in relation to that offered by out-of-state public universities of the same size, in order to retain staff.
Oklahoma State University does an annual compensation survey of 100 state-supported systems and in that survey UAF usually ranks in the middle of the pack. However, this does not account for cost-of-living differences, and Fairbanks is an expensive place to live.
One area where UAF will pay special attention is maintaining an extensive network of satellite campuses and facilities in Interior, Western and Southwestern Alaska rural communities.
University campuses in Kotzebue, Nome, Bethel, Dillingham as well as facilities in Aleutians communities and Interior Alaska, such as Fort Yukon, are operated by UAF.
These service many two-year Associate Degree and occupational certificate programs in a variety of fields and act as “feeders” for traditional four-year programs at the university’s large urban campuses.
The rural network has been a fixture for years, and while it will have to shoulder its share of reductions, maintaining it is a priority, Pitney said.
“We’ll always have to look at the mixture of programs we can provide, but our commitment is made. We will be there,” in rural communities, she said.