Facing a budget shortfall of $12 million to $14 million, the University of Alaska Fairbanks unveiled its detailed budget plan Monday aiming to close the gap for the new fiscal year.
The state budget approved by the Legislature left UAF with an $8 million reduction to its operating budget for fiscal year 2015, according to a memo sent out by UAF Chancellor Brian Rogers on Monday. Compounding the budget shortfall were decreased tuition revenue and flat research revenue, the memo states. The university was also anticipating an increase in fixed costs of $4 million to $6 million, meaning that it needed to cut its budget by $12 million to $14 million.
UAF's FY15 Budget Overview outlines both across-the-board reductions and targeted reductions in order to close the gap.
For fiscal year 2015, which began July 1, units will face an "across-the-board" revenue reduction of between 3 and 6 percent. That includes the Provost, which covers academic programs, Administrative Services, Research, and the College of Rural & Community Development. That will amount to a $7.1 million budget reduction.
Some programs are exempted from the revenue reductions, such as athletic scholarships, Career Services, and the Alaska Center for Energy and Power, and are outlined in Rogers' memo.
"A reduction of this magnitude will inevitably require a reduction in the UAF workforce," the budget overview states. UAF spokesperson Marmian Grimes said at least some of those reductions will be by attrition -- by reviewing positions as they become vacant, to see if the job's duties can be tied into other positions.
Yet with salaries and benefits making up 55 percent of UAF's expenditures, "you can't find $12 to $14 million without losing positions," Grimes said.
The overview also notes that further budget reductions are likely in the next two fiscal years. "It's been a tough budget climate in our state," Grimes said.
This year the university will be reviewing all of its academic programs to see whether they can be consolidated or eliminated. Those changes would go into effect sometime in the next two years, with an estimated savings of at least $1 million.
Grimes said cutting back academic programs can be a difficult pill to swallow.
"When budgets are tight, it can become very emotional for folks," she said. "People believe in the programs here, as do we."
However, "this plan allows us to be deliberative about that process," Grimes said, allowing the university to "give a holistic review to our programs."
Academic programs are just one aspect of UAF's upcoming reviews. UAF's Summer Sessions, the Arctic Region Supercomputing Center and UAF's marketing program will all be reviewed to identify ways to reduce costs.
A review of Large Animal Research Station and the University's Fairbanks and Palmer farms will likewise take place, to see whether it's possible to reduce facilities, personnel and equipment that may have overlap between the farms.
The university will also discuss whether to increase the availability of full degree programs online, which is expected to increase enrollment and tuition.
"There's a lot of work in front of us," Grimes said.
Other areas being targeted for cost reduction include:
• Mandated by the Legislature, UAF will reduce its travel budget by at least $517,200. All units will see a 20 percent travel budget reduction, except for instructional expenditure categories and intercollegiate athletics, which will see a 5 percent reduction. Savings are estimated at up to $600,000.
• Units can offer employees voluntary 11- or 11.5-month contracts, reduced summer work schedules or alternative work schedules, generating an estimated $100,000 in savings.
• Departments will work to share administrative and support services for duties such as payroll, travel and personnel processing, reducing the number of employees over time and generating an estimated $250,000 in savings annually for the next two years.
• Fairbanks' public radio station, KUAC 89.9 FM, will see a funding cut of $100,000.
• UAF's Printing Services & Copy Pool will be outsourced to private vendors.
• One off-campus shuttle bus will be eliminated, for an estimated savings of $200,000.
• Vacant positions at the senior administrator level will be reviewed to see if they can be eliminated. Potential savings are $250,000.
• Vacant positions will be held open for 90 days, except for faculty positions, creating one-time savings estimated at $2 million.
• Annual leave cash-out option will potentially be removed for employees above a certain pay grade. This option needs to be approved by University of Alaska president Pat Gamble. Savings are estimated at $275,000.
Some of these options will be implemented immediately, while others may take a year or more, the Budget Overview states.
The full detailed budget plan is available online at UAF's Financial Services page.