Feb 17, 2023
Dear colleagues,
I write to provide an update on the campus financial plan. In the fall 2022 campus financial update, deans, vice chancellors, and similar unit leaders were asked to develop multi-year plans to address a $90 million structural deficit in core campus support funds*. I want to thank the faculty and staff who contributed to developing these plans and the Campus Budget Workgroup for identifying campuswide cost savings opportunities.
*Core Campus Support includes tuition and fees, state appropriation, and other unrestricted resources such as indirect cost recovery, investment income, and ground lease revenues.
Financial Stability Plan
The Financial Stability Plan is a phased approach to close most of the budget deficit over two academic years. Implementation and progress will be tracked in two phases. The plan also includes a hiring freeze for staff positions on core funds. In this process, the top priority is to protect the academic mission.
Phase 1 (implemented)
- $30 million in budget reductions have been applied to all units over fiscal years 2021-22 and 2022-23.
- 2% budget reduction in 2021-22; faculty salaries were excluded from school calculations to help support academic activities.
- 3% across-the-board budget reduction for all units in 2022-23.
Phase 2 (starting winter 2023)
- $25 million in additional budget reductions are planned for fiscal year 2023-24.
- Reductions to schools/academic units may range from 0-3.5%. Reductions to administrative units may range from 4-5%. On average, the impact to academic units will be half that of administrative units.
- $20 million in strategic campuswide cost savings and revenue increases.
- These will include reductions in space costs (e.g., reducing off-campus lease costs), operational and administrative efficiencies (e.g., reducing or eliminating redundancies, redefining priorities to focus on core objectives, revising service levels), and development of new revenues (e.g., increasing gifts and sponsorships, and leveraging self-supporting programs).
- $15 million to be determined after impacts of the above actions have been assessed.
While some of these items will be implemented quickly, other actions may take time before savings are realized. In the meantime, campus and unit reserves will help support the continuation of campus operations. Reserves are from end-of-year carryforward fund balances that have accumulated over time and are available to address short-term or one-time needs. To ensure that reserves remain at appropriate levels (see Guidelines for Fund Balances), the planning timeframe to achieve most savings and revenue targets is over the next two academic years (2023-24 and 2024-25).
Hiring Freeze for Staff Positions
A hiring freeze will be put into effect for staff positions on core funds as of February 28, 2023. Faculty and staff salary and benefit expenditures from core campus funding make up 70-95% of most unit budgets. Therefore, vacancies and future attrition can help units achieve projected savings goals and preserve existing jobs. The hiring freeze also presents an opportunity to consider operational efficiencies such as pooling resources, streamlining processes, etc. Exceptions to the hiring freeze will require approval from the Position Management Review Committee (PMRC). Active searches will continue through the end of March. More information is forthcoming from Human Resources.
Recruitment controls for faculty positions will be managed through the annual faculty recruitment planning process.
Community Input
Your input is valuable as the campus implements the Financial Stability Plan. Please submit questions or comments using this form. Ideas for cost savings, operational efficiencies or new revenues are encouraged. You can also visit the Financial Stability Plan website for more information. Updates will be provided as more information is available.
Despite the challenges ahead, we are confident these actions will stabilize the budget and position the campus to continue to make important strategic investments that advance our mission. UCI is committed to expanding our research and health enterprise, fostering excellence in teaching and learning, and supporting interdisciplinary efforts to address society’s most pressing challenges. Thank you for your partnership and contributions toward these important goals.
Sincerely,
Hal Stern
Provost and Executive Vice Chancellor
Chancellor’s Professor, Department of Statistics