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Savings Targets

Campus units must meet individual savings targets

Beginning in fiscal year 2020—21, and phased in over a five year period, each campus unit will be assigned a target for ongoing core fund savings. Savings can be achieved through net revenue generation, realigning costs to other appropriate fund sources, targeted program reductions, streamlining and efficiencies

Units will develop plans to meet their assigned targets. One-time bridging and limited term cost containment strategies will likely be necessary; however, savings ultimately need to be ongoing and cumulative. Plans will be assessed by the provost with input from the Budget Framework Advisory Committee for alignment with the principles and will be approved and monitored as part of the annual budget process. The process will be iterative to reflect changing circumstances and emerging opportunities. 


Phased approach to core fund savings targets

Core fund savings targets will be assigned in two phases. Phase I begins in 2020 and will assign $9 million to units in 2020-21 growing to approximately $45 million by 2024-25.

Currently, academic units are supported by approximately 72 percent of core funds and administrative units have 28 percent. In recognition of our primary teaching and research mission and strategic priorities, unit targets are disproportionately allocated to administrative activities, with academic units asked to achieve 58 percent and administrative units 42 percent over the five-year period. 

Unit leaders must strategically evaluate their activities for efficiency and efficacy, keeping in mind potential service impacts to clients. Units with recharge activities must strive to maintain recharge rates at current levels through efficiencies in how services are provided. Only in critical cases should rates be increased, subject to the review of the existing campus Service Activities Advisory Group (recharge committee). 

Phase I targets, while not strictly formulaic, take into account multiple factors, including core fund base budgets, all fund expenditures, space utilization, unit net operating margin trends, and metrics such as staff and student to faculty ratios. To arrive at the final rebalancing target, a measure of judgment was applied on top of the various measures described above.

The targets reflect a change in the campus approach to funding staff salary and benefit increases on core funds. In recent years, the campus has provided 100 percent of the salary and benefit cost increases for staff paid on core funds based on university salary programs and negotiated agreements. For the next five years, the campus will only allocate approximately half of these cost increases for units to manage centrally. 


The target should be taken as a whole and all aspects of operations evaluated holistically.

Core fund savings achieved through reallocating staff salaries to other sources where appropriate, reducing non-salary expenses, implementing operational efficiencies, and other cost containment measures can mitigate the need to reduce staffing. 

Please note: This action will in no way impact any individual employee’s compensation level. The funding and compensation levels are based on distinct, separate processes and decisions. Furthermore, this action will not impact allocations for faculty merits, ranges, and associated benefit increases; and it is important to keep in mind that administrative units will bear a larger share of this component of the overall target. Unit leaders will be expected to strategically allocate the limited increases provided and ensure that critical services are maintained. It is not expected that this component of the target be met only through staff reductions nor that the change be allocated across-the-board within a unit. It is our hope that reductions in staff will primarily be achieved through attrition; as a standard practice, each vacancy should be regarded as an opportunity to consider whether there are solutions other than replacement.

If you have any questions, please contact your BIA analyst.

Resources


Savings target planning and review process

process diagram for budget framework target planning

download icon   Download Graphic (PDF)

Campus supports this process through:

  • Providing data, information and benchmarking to support unit planning.
  • Adjusting campus policies, guidelines and expectations to support efforts.
  • Sharing successes.
  • Developing programs and providing access to support, such as:
    • Lean Six Sigma training
    • Change management
    • Program evaluation