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Sunday, October 17, 2021

UC plans to save by cutting administrative waste

At the UC Board of Regents meeting last Wednesday, UC officials presented a plan for administrative and organizational savings to tackle the system’s continuing budget shortfall.

Nathan Brostrom, UC’s executive vice president for business operations, and Peter Taylor, chief financial officer, outlined an initiative to reduce administrative costs and increase systemwide efficiencies. The plan would save an estimated $500 million over five years.

The plan also addresses the remaining $237 million budget gap left over after recent student fee increases and Gov. Arnold Schwarzenegger’s revised budget proposal, which only restores $370 million in funding to UC, Brostrom said.

“Through this initiative we aim to both maintain and strengthen the core values of the university,” Brostrom said. “And we do that by using the savings we’re going to generate from administrative cost to redirect to the academic and research, the teaching and learning missions of the university.”

The plan would centralize organizational streamlining that is occurring on UC campuses on both a regional and systemwide basis. Citing UC Berkeley’s human resource system and its shared use with UC San Francisco, Taylor said this coordination would allow for systemwide efficiency.

“That’s something we would like to leverage with other campuses so they’re not reinventing the wheel and just creating new systems on top of existing systems,” Taylor said.

The officials also expect to save money by pooling the resources of the 10-campus system.

Though noting that these changes would require substantial investment, Taylor said the UC would make no-interest loans, payable for three to seven years. The lack of interest loans would front the cost for campuses engaged in collaborative administrative efficiency initiatives.

The system will also launch an internal capital leasing equipment program that Taylor hopes will save campuses money by allowing them to lease equipment at reduced borrowing costs.

Although the Board of Regents welcomed the plan, some were surprised that progress was not announced sooner.

“I have to say I’m actually shocked because I thought some of the stuff had already been implemented,” said Regent Leslie Schilling. “It’s been talked about for so long. There’s a lot of talking around here without very much action.”

Brostrom and Taylor assured Shilling that much of the initiative has been done and that they will bring specific reports on campus initiatives.

But students following the regents meeting expressed disappointment that targeting inefficiency was not brought up earlier.

“The fact they raised tuition 32 percent or talked about raising tuition even more next year and they haven’t even touched the basic administrative cost is mind boggling really,” said Brian Sparks, a senior international relations major.

While in mixed agreement with regents on the cost cutting plan, Sparks said this meeting does not address more controversial decisions expected to be made in July. The regents expect to review and approve several student fee increase proposals recommended by the UC Commission on the Future workgroups.

Speaking about a recommendation to raise fees with rates ranging from 5 to 15 percent, Sparks believes the regents will avoid the scrutiny they faced with their previous fee increase.

“Had they done that right now,” Sparks said, “there would have been a huge reaction to it, but because it’s not happening until the summer it will likely go unnoticed. Students won’t really have a chance to react to the news.”

LESLIE TSAN can be reached at campus@theaggie.org.

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