Budget update: June 5

June 5, 2019

Tori Tragis

— by Dan White, chancellor

Tomorrow, June 6, the Board of Regents will meet in Fairbanks in Butrovich Building Room 109. As your schedule allows, I encourage you to listen to the session online or stop by in person. Except when the BOR goes into executive session, it is a public meeting. The meetings provide insight into the BOR’s perspective on the university budget and the systemwide FY20 budget plan.

During tomorrow’s meeting, the BOR will discuss UA’s budget plan (PDF). The legislative conference committee has tentatively agreed to a budget of $322 million in unrestricted general funding, or UGF, for the UA system. This represents a $5 million UGF reduction from the current year.

The BOR will discuss the areas that each university will need to reallocate money to fund the conference committee budget “case.” Since each university will be reallocating, a systemwide funding reallocation pool will be established and then redistributed to the BOR’s priorities. For UAF, the current expected funding reallocation will go to the following:

  • Title IX ($663,000)

  • Strategic initiatives ($3.4 million)

  • Compensation ($3.7 million)

  • Fixed costs ($4.7 million)

A new strategic initiative for Educators Rising was introduced by the legislative finance committee and is requiring a reallocation of $825,000. The budget is further complicated due to a new dual appropriation structure. How funding will be managed between the “main campus” and the community campuses and Community and Technical College will need to be clarified.

Outside of strategic initiatives, the BOR will also discuss areas in progress or under consideration at the universities to meet the $29 million deficit and reallocation. These include:

  • Administrative cost reductions/process improvements

    • HR redesign

    • Reduction of facilities footprint

    • Additional administration consolidation

    • Personnel reductions

    • Increased position vacancy periods

  • Instructional cost reductions

    • Increased ratio between full-time students and full-time faculty

    • Reduced adjunct and term faculty positions

    • Increased instructional component of faculty workload

    • Exceptional program reviews in preparation for possible reduction or discontinuation of academic programs

    • Transformation or redesign of high-enrollment classes

    • Optimization of online course and program offerings

As vice chancellors work with their units and plan for reductions, we have made some vertical repositions. Some of the vertical reductions have included reducing UAF’s footprint. Savings from footprint reductions affect both the unit and our central campus funding allocations. For example, the removal of several small houses on the Fairbanks campus will lead to a savings of $50,000 per year in operations and maintenance plus an avoided cost of $1.3 million.

Per President Johnsen’s https://www.alaska.edu/files/pres/2019-Budget-Impasse.pdf, the Alaska State Office of Management and Budget has asked that UA provide a request for reduced funding under a no-budget scenario if the state does not have a budget agreement by July 1. In 2017, UA responded to a similar request when there was a similar stalemate. That proposal included a tiered structure for what functions would need to continue in the absence of an approved budget and a request for advanced funding to bridge operations until the stalemate was resolved. UA will submit a similar request for the FY20 budget. In the no-budget scenario, UAF would continue operations of critical functions such as those affecting life and safety, animal care, and uninterruptible research functions (e.g., the Alaska Earthquake Center).

Also just released are the newly negotiated facility and administrative cost rates, or F&A, from the Office of Naval Research. Earlier this spring, UA statewide projected that F&A rates could increase 15 percentage points, an increase that could have affected competitiveness of UAF grant proposals. The FY19-FY22 rate was released at 55% for our standard on-campus organized research, 4.5 percentage points higher than the previous rate of 50.5%. Proposals that were submitted or awarded prior to this announcement can be kept at the 50.5% rate they included when submitted. The updated agreement is on UA’s cost analysis webpage.

We still have much work ahead. Thank you all for your continued commitment to UAF.