Budget update: May 7, 2020

May 7, 2020

Tori Tragis

— by Dan White, chancellor

The budget picture took a bit of a change early last week with new guidance around unrestricted fund balances (UFB) and management of our debt reserves. I discussed these impacts in last week’s budget column

Pursuant to these budget changes and as follow-up to the April 14 Board of Regents (BOR) audit committee meeting, President Johnsen requested a higher level of detail on budget reductions being considered for the next two years at UAF. I asked that all of our vice chancellors get projections for these cuts from unit leaders where many of the reductions will be made. At this point, these are expected reductions, but much could still change as we learn more about possible changes in revenues and expenses (up or down). The memo containing all of the unit recommendations is posted here. These changes will be published with some possible changes from the UA System Office in time for next week’s BOR meeting.

One of the ways that we want to bend the budget curve is to reduce our reliance on across the board reductions. We have so far, mostly, relied on them. Why? My philosophy is that the people closest to the work have the best information about how the work gets done and where the opportunities exist. 

As a director (not too many years ago), my request was to have decision-making capacity at my level so that I could affect our future. As Chancellor, I have been asked by deans, directors, and my direct reports to make vertical cuts where feasible but to the extent practical, to push the decision-making as deep into the organization as possible. This means where to make reductions is made in the most informed way. To a large degree I have passed percentage cuts to the VCs with no expectation that they be passed evenly across their units, but are applied as they see fit from their position. At the same time, I am always looking across the university at specific decisions that I can make to make reductions or generate revenue that fall into the category of actions that need to be made at the top.

One thing that I can do is look for collaborations across the system (the subject of my column last week) as well as to look at processes and practices across UAF that are candidates for improvement. As I look at our last several decades of operation, we have expanded the products and services we provide to Alaska. That is great. Outreach is a key part of our mission, meeting public requests and community needs, and promoting education in Alaska.

While outreach is part of our mission, the question I get frequently is how much outreach is the right amount, and who pays for it? These questions are good ones in this climate and there are many models for outreach across the University, as each has evolved to meet a specific need. However, as we look forward, it will be important for us to understand how our various outreach functions operate, which are needed when, and how they are supported by those who consume the services.

Provost Prakash has put together a task force to look at these areas and provide a comprehensive review of the activities and services being offered all across UAF. As the task force begins their work to inventory and describe the activities, I will be seeking additional input on questions related to ways outreach activities are paid for and where there is not adequate external support, what services we cannot afford to continue offering under the budget compact. While I don’t know that our clientele expect less, I think an important question is, what is the right business model for some of our services? 

In coordination with Provost Prakash’s task force on identifying all of our outreach activities, I will be asking a second group to work with key stakeholders. Their role will be to develop some proposed business models centered on user fees or fee-for-service structures to consider as part of keeping our great outreach efforts sustainable going forward. It is my hope that this will be one strategy we can implement across UAF that will reduce the across the board reductions.

Thank you for choosing UAF.