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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Dear ALVSCE Colleagues,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Last fiscal year, ALVSCE was a leader on campus in the effort to reduce spending to address the institution’s financial challenges. Our plan avoided the most painful measures
that could have been taken – layoffs. As you know, not being able to hire has wrought its own kind of pain that I don’t want to undersell. FY25 will be a year of change but hopefully with light on the horizon. As Senior Vice President John Arnold and Interim
Provost Ron Marx told campus on June 26<sup>th</sup>, “we are making significant progress to strengthen our financial position and anticipate closing the deficit in FY 2026.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Change in Budgeting<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Colleges this fiscal year will
<i>not</i> be funded based on their teaching and research activity and growth. Instead, spending limits have been set by university leadership, called
<b>Spending Authority<i> </i></b>on unrestricted funds. This is a significant change from the growth-oriented budget systems that we’ve operated under since FY15, but it doesn’t mean we give up on our mission to the families and communities of Arizona. John
Arnold and Provost Glover expressed interest in creating a growth-oriented incentive for FY26. If growth incentives are implemented in FY26, our metrics this year will be the basis for our Spending Authority next year.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Unrestricted vs. Restricted<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Spending Authority applies only to unrestricted funds such as state appropriations, summer session, indirect cost revenues, auxiliary, sales and services, fixed price complete,
and so forth. Restricted funds are primarily sponsored projects and gifts and are
<i>not</i> limited by Spending Authority. <a href="https://www.colorado.edu/controller/policies/guide/ch-4-fund-revenue-accounting/unrestricted-vs-restricted">
CU Boulder</a> provides additional explanation of these accounting terms, and I shared further information in our
<a href="https://arizona.app.box.com/v/alvsce-business-retreats">May 7<sup>th</sup> retreat</a>. Vice President Shane Burgess and Associate Vice President Ed Martin continue to convince university leadership that the state line item for Cooperative Extension
should also be <i>treated</i> as a restricted fund.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Our FY25 Spending Authority<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Our current assigned FY25 unrestricted Spending Authority is as follows.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p>
<table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" width="489" style="width:366.95pt;border-collapse:collapse">
<tbody>
<tr style="height:14.6pt">
<td width="258" nowrap="" valign="bottom" style="width:193.5pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
</td>
<td width="66" nowrap="" valign="bottom" style="width:49.35pt;background:#DAE9F7;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Calibri",sans-serif;color:black">FY25</span></b><b><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p></o:p></span></b></p>
</td>
<td width="96" nowrap="" valign="bottom" style="width:72.3pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">FY24<o:p></o:p></span></b></p>
</td>
<td width="69" nowrap="" valign="bottom" style="width:51.8pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Change<o:p></o:p></span></b></p>
</td>
</tr>
<tr style="height:14.6pt">
<td width="258" nowrap="" valign="bottom" style="width:193.5pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">CALES<o:p></o:p></span></p>
</td>
<td width="66" nowrap="" valign="bottom" style="width:49.35pt;background:#DAE9F7;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif;color:black">$62,388,100
</span><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="bottom" style="width:72.3pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">$70,285,800
<o:p></o:p></span></p>
</td>
<td width="69" nowrap="" valign="bottom" style="width:51.8pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">-11.2%<o:p></o:p></span></p>
</td>
</tr>
<tr style="height:18.45pt">
<td width="258" nowrap="" valign="bottom" style="width:193.5pt;padding:0in 5.4pt 0in 5.4pt;height:18.45pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Cooperative Extension (CES)<sup>1</sup><o:p></o:p></span></p>
</td>
<td width="66" nowrap="" valign="bottom" style="width:49.35pt;background:#DAE9F7;padding:0in 5.4pt 0in 5.4pt;height:18.45pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif;color:black">$32,003,400
</span><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="bottom" style="width:72.3pt;padding:0in 5.4pt 0in 5.4pt;height:18.45pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">$23,985,600
<o:p></o:p></span></p>
</td>
<td width="69" nowrap="" valign="bottom" style="width:51.8pt;padding:0in 5.4pt 0in 5.4pt;height:18.45pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">33.4%<o:p></o:p></span></p>
</td>
</tr>
<tr style="height:14.6pt">
<td width="258" nowrap="" valign="bottom" style="width:193.5pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Experiment Station (AES)<o:p></o:p></span></p>
</td>
<td width="66" nowrap="" valign="bottom" style="width:49.35pt;border:none;border-bottom:solid windowtext 1.0pt;background:#DAE9F7;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif;color:black">$10,609,129
</span><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="bottom" style="width:72.3pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">$12,390,029
<o:p></o:p></span></p>
</td>
<td width="69" nowrap="" valign="bottom" style="width:51.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">-14.4%<o:p></o:p></span></p>
</td>
</tr>
<tr style="height:14.6pt">
<td width="258" nowrap="" valign="bottom" style="width:193.5pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">ALVSCE<o:p></o:p></span></p>
</td>
<td width="66" nowrap="" valign="bottom" style="width:49.35pt;background:#DAE9F7;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif;color:black">$105,000,629
</span><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p></o:p></span></p>
</td>
<td width="96" nowrap="" valign="bottom" style="width:72.3pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">$106,661,429
<o:p></o:p></span></p>
</td>
<td width="69" nowrap="" valign="bottom" style="width:51.8pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">-1.6%<o:p></o:p></span></p>
</td>
</tr>
<tr style="height:14.6pt">
<td width="258" nowrap="" valign="bottom" style="width:193.5pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
</td>
<td width="66" nowrap="" valign="bottom" style="width:49.35pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
</td>
<td width="96" nowrap="" valign="bottom" style="width:72.3pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
</td>
<td width="69" nowrap="" valign="bottom" style="width:51.8pt;padding:0in 5.4pt 0in 5.4pt;height:14.6pt">
</td>
</tr>
<tr style="height:47.6pt">
<td width="489" colspan="4" valign="top" style="width:366.95pt;padding:0in 5.4pt 0in 5.4pt;height:47.6pt">
<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Calibri",sans-serif">Note 1. CES increased by $9.037 million due to the water efficiency grant for this last year of funding. These are not operating funds. Remove this grant and CES lost ($1.019m)
in Spending Authority.</span><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p></o:p></span></p>
</td>
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</tbody>
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<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Reducing Our Spending<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Our ALVSCE plan to meet the spending reductions has not changed since Shane Burgess and I presented the plan to division leaders at the May 7<sup>th</sup>
<a href="https://arizona.app.box.com/v/alvsce-business-retreats">business retreat</a>. We will rely primarily on attrition without replacement. This plan was designed to meet Shane’s directive to avoid across-the-board layoffs. University leadership has
replaced the FY24 hiring and compensation freeze with something called a <b>Staffing Plan</b>. For all intents and purposes, they operate similarly and will continue to restrict hiring and compensation adjustments in FY25. In ALVSCE, our Staffing Plan is
bare bones and units should not assume vacancies will be filled. The Provost and CFO will fund faculty promotion increases.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Unit Spending Authority & Carry Forward<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Business officers have been developing unit budgets with Janis Rutherford (CALES), Carolyne Greeno (CES), and Amanda Stevens (AES). Unit budgets are being discussed with unit
heads. Units must operate within these budgets, even if they earn more self-generated revenue than budgeted.
<b>This means that faculty can spend only the amount of unrestricted funds that their unit head assigns them to spend, regardless of prior carry forward.</b> University leadership did not add carry forward balances to our FY25 Spending Authority. This has
caused a lot of questions, the biggest of which is if carry forward funds will be eventually returned to those who generated them. Answers are still evolving from university leaders and I will share more when it becomes clear.<i>
</i><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Financial Reports<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">Currently, there are no financial reports at the university that track our Spending Authority using the new rules for this fiscal year. Historically, our financial reports
do not align with this new way of budgeting, causing misinformation about carry forward balances. Therefore,
<b>I ask that you check with your unit leader and business officer on a regular basis to confirm that your spending remains within the assigned Spending Authority.</b> The ALVSCE Data Solutions Team under the leadership of Tara Mysak is creating ad hoc reports
for our use as quickly as possible. <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">This is a transition year; I’m asking all of you for flexibility and patience. Our business officers are committed to getting accurate, timely, and useful information to aid
decision making. We’re working towards the same goal in an ambiguous environment.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Calibri",sans-serif">You will certainly have questions. Please speak with your unit head or business officer first. I will share more information as soon as I have it.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt"> </span><span style="mso-ligatures:none"><o:p></o:p></span></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt"><b><span style="font-size:14.0pt;color:#0C234B">Jeff Ratje</span></b><span style="font-size:10.0pt;color:#767676"><br>
</span>Sr. Associate Vice President, Finance Admin Operations<br>
Agriculture, Life and Vet Sciences & Cooperative Extension <br>
(<i>pronounced alv-see…we’re more than CALES</i>)<br>
THE UNIVERSITY OF ARIZONA<span style="font-size:10.0pt;color:#767676"><br>
<br>
Forbes, 314c<br>
PO Box 210036 | Tucson, AZ 85721<br>
Office: 520-621-1468</span><span style="font-size:9.0pt;color:#767676"><br>
</span><a href="mailto:jmratje@arizona.edu"><span style="color:#0563C1">jmratje@arizona.edu</span></a><br>
<a href="https://www.compass.arizona.edu/"><b><span style="color:#8B0015">www.compass.arizona.edu</span></b></a><o:p></o:p></p>
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