[CED/CD/EAT] FW: SPBAC Special Meeting Notes

Thu Aug 13 13:03:37 MST 2020

Jeffrey C. Silvertooth, Ph.D.
Associate Dean
Director for Extension & Economic Development
Division of Agriculture, Life, & Veterinary Sciences, and Cooperative Extension
Forbes 301, Bldg. #36
University of Arizona
Tucson, AZ       85721-0036
520-621-7205

From: prov_heads_2-request at list.arizona.edu <prov_heads_2-request at list.arizona.edu> On Behalf Of AADV FacultyAffairs
Sent: Thursday, August 13, 2020 12:49 PM
To: heads at list.arizona.edu
Cc: Blakely, Colin Greene - (cblakely) <cblakely at arizona.edu>
Subject: [heads] SPBAC Special Meeting Notes

The following message is sent on behalf of Colin Blakely.
________________________________
Hi Everyone,
Hope preparations for fall semester are going ok. Below are notes from yesterday's special meeting of SPBAC which I attended as Rob's substitute.
Best,
Colin

SPBAC Special Meeting
8-12-20

*         Sabrina Helm (SPBAC Co-Chair) opened the meeting by expressing thanks to the General Faculty Financial Advisory Committee (GFFAC) for the thorough work they did generating their report. The primary purpose of the meeting is to discuss the college and support unit budget allocations recently released by the provost's office.
*         FY21 Budget Allocations. Liesl reviewed the guiding principals for these budget allocation decisions

*         Do no irreparable harm. We hope and assume this budget crisis will have a distinct beginning and end. We want to avoid cuts that will create long-term issues.

*         Buy time for academic and support units to adjust their size and scope. One year re-allocations along with furlough savings provide short-term mitigation of the full budget ramifications. However, units need to be prepared for the expiration of that support.

*         Consider fund balances.  Reserve funds vary from unit to unit. Though reserves are often already committed, their presence to larger or lesser degrees across different units is one indicator of that units ability to absorb short-term budget shortfalls.

*         Support reputation and highly ranked programs
o    Point of clarification - What does reputation and highly ranked program mean? President Robbins responded that it is information that can be looked up. He mentioned Science, Environmental Studies, and Eller. Health Sciences are down right now but have been highly regarded in the past- they need some attention and support. Follow-up question- how do you identify highly ranked colleges? Most rankings are by program, not colleges and all our colleges have highly ranked programs and less strong programs within them. President Robbins indicated that there are indeed college rankings (which are ultimately an amalgam of program rankings).
*         Lisa Rulney reviewed the broad principals of our underlying activity-based budget model
o    Activity units- SCH and majors are the primary measures of activity for our model. When student mix changes and the university collects less net tuition per student, the revenue that goes back to the colleges for each major or student credit hour drops, meaning budget can actually decrease, even if activity remains stable. This is the environment we are in now: Revenue per SCH in FY19 was $300, FY20 was $280, and FY21 is $226.
o    The current change to metrics has been so drastic this year that we needed to move from a lagging activity-based budget to a real time one, ie unit budgets will be determined by this year's activity, and thus budgets might change mid-year if activity doesn't match current predictions.
o    The Executive adjustments included in the model are loans- they are expected to be paid back to those units who received executive reductions by FY24. In addition, these are one-year, one-time adjustments. There were many considerations that went into this, including trying to keep budget cuts below 15% for any given college. Fund balances were also important, as they provide evidence of a colleges ability to bridge the current situation. There was an acknowledgment that some of those funds are already committed, but in at least some instances those commitments can be re-negotiated (delaying faculty start-up packages, etc). There was an open acknowledgment that this is not always easy (and in some cases may be all but impossible), but the situation we are in does not provide easy solutions. Unfortunately, we do not have an institutional-level commitment module to fully understand commitments that have been made at the local level- commitments are currently managed internally at the unit level. Such a university-wide module needs to be part of our future financial management system.
*         Point of clarification- will colleges receiving "subsidies" be explicitly asked to pay back those subsidies? No- they are an institutional commitments to pay back the "borrowed" funds. No individual unit will be held responsible for paying back positive adjustments received this year.
*         Point of clafication: are the weightings still in place for different colleges (0.8, 1.0, 1.2)? Yes, we considered whether to keep them, but decided that with the scope of current changes to the model, changes to the multiplier would only confuse things more.
o    SPBAC expressed a high level of support for the decisions made around the executive adjustments. However, it was pointed out that communication around these decisions is of critical importance. Currently, people are receiving mixed messages. Maybe a communications plan provided to deans for messaging out to units.
*         Lisa acknowledged the importance of messaging that keeps people focused on the overall health of the university. We are in a difficult place right now as an organization. Keeping people focused on institutional health and how they can contribute is important in our current moment.
o    Support Units- these budgets are not determined based on activity metrics
*         Using the same principles as for Responsibility-Centered Units (RCUs), executive decisions were made with respect to re-allocations for support units, though to a lesser extent when compared to the RCUs.
*         Question- Why do support units have fund balances at all? Because they have multi-year commitments just like the activity-based units.
*         How were decision for executive re-allocation approached differently than for activity-based units? There was an analysis done on funding levels for support units compared to peers. Some are woefully underfunded compared to peers (Marketing and Communications was used as an example).
*         FY21 Outlook. How does overall enrollment look for fall semester? It is down overall (~5,000 students) and the number of enrolled units per student is down. That having been said, the current numbers are actually better than anticipated. However, there is real concern about enrollment melt- there are no financial disincentives to students dropping their enrollment prior to August 24. We are in an unprecedented time, and can't be entirely sure how enrollment will progress, but will have a better picture in the coming weeks.

Respectfully submitted by Colin Blakely (substituting for Robert Miller)

[http://art.arizona.edu/wp-content/uploads/sites/2/UA_CFA_RGB_Art_Primary.png]
COLIN BLAKELY  |  Director &
Associate VP for Strategic Initiatives
520.621.7000   |  art.arizona.edu<http://art.arizona.edu/>

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://list.cals.arizona.edu/pipermail/ced/attachments/20200813/3476bcd6/attachment.htm>