President Hank Bounds rolled out new administrative structures, policies and processes for employees at the University of Nebraska on Wednesday aimed at reducing expenses by $30 million in the coming years.
Staring down the barrel at a $49 million revenue shortfall in the next biennium, university administrators pledged to enact cuts from NU's $950 million budget funded through state tax dollars and tuition revenue while seeking $19 million in increased costs passed on to students.
NU announced its plans to achieve $24.8 million, or about 80 percent, of the targeted cuts through sharing more services across campuses, trimming operational costs and in some cases positions.
The university expects to cut at least 100 jobs, most through attrition.
The immediate cuts Bounds specified in a news conference Wednesday were recommended by “budget response teams” convened in January to centralize, decentralize, consolidate or do away with certain university services.
The resulting changes in information technology, human resources, facilities and energy, and procurement and purchasing will require consolidation and centralization of individual campus offices into single, university-wide teams.
“The goal at the end of the day is to think differently about how we run the university, to be as efficient as possible so we can continue to serve our students and to serve the state with fewer resources,” Bounds said.
NU began consolidating its IT offices into a centralized office 10 months ago, with the ongoing effort expected to net $6 million in savings once fully implemented, Bounds said.
Mark Askren, NU’s vice president of information technology, is overseeing the system IT office that will rely on specialists on one campus to lend expertise to other campuses.
Mark Miller, the assistant vice chancellor of facilities planning and construction at UNL, will oversee system-wide efforts to reduce costs in facilities and energy by $7 million.
UNL’s Bruce Currin, the assistant vice chancellor for human resources, will look to standardize policies and practices, reducing HR costs by $4 million.
Maggie Witt, UNL’s director of procurement services and strategic sourcing, is now tasked with overseeing the university-wide procurement efforts to save costs on purchases for things such as fuel, vehicles and maintenance to save $6.8 million.
Each area of savings identified is expected to be ongoing over time, reducing NU’s cost of doing business on a permanent basis, Bounds said.
The University of Nebraska Medical Center's Dr. Rodney Markin, the associate vice chancellor for business development, will coordinate the activities of the new university-wide teams created through the consolidations as chief operating officer.
The remaining $5 million in reductions will come from areas including travel, printing and copying, financial operations, public relations and marketing.
NU plans to dramatically slash its mileage reimbursement rate for employees driving their own vehicles for work-related travel — from 53.5 cents per mile set by the state Department of Administrative Services to 25 cents per mile — to save as much as $550,000 per year.
Under state policy, agencies have the flexibility to set their own mileage rate, according to state accounting administrator Jerry Broz. The university said 25 cents per mile represents the costs to operate a university-owned vehicle.
As another cost-saving measure, NU employees will be asked to use on-campus print shops for jobs and to reduce where possible individual printing and copying.
Next month, NU will announce “down in the weeds strategies” on how it plans to achieve savings after faculty, staff and students return to campus, Bounds said.
Marjorie Kostelnik, the former dean of UNL’s College of Education and Human Sciences tasked with implementing the recommendations of the budget cut teams, said the work by those teams will be ongoing.
Before September, the budget response teams will review the recommended cuts for duplication, ways to leverage certain services or if certain cuts should be implemented in a particular sequence, Kostelnik said.
“We really have to think through how we’re going to implement the various proposals that come forward,” she said. “A lot of this involves people having to figure out very intentionally how to do some work very differently.”
Like the IT offices, Kostelnik said NU’s libraries have developed a formal plan to spread expertise and resources out across all four campuses, rather than duplicate efforts at each location.
It's a model that will likely be duplicated across the university system.
“You will see over the next year to two years, I think, a lot of effort being put into this idea of collective effort and collective impact across all of the campuses,” she added.
NU will keep its eyes on state tax receipts in the coming months as it decides how quickly to implement further cuts, or if those cuts will extend into the academic enterprise — a last resort if the state’s financial picture continues to worsen, Bounds said.
After lawmakers reduced NU's state appropriation by $13 million this year to $570 million, university regents approved a series of tuition hikes for the next two years — 5.4 percent and 3.2 percent, respectively.
The university will also dip into its cash reserves for $8 million to $10 million to fund its operations until the cuts are fully implemented.
Sen. Adam Morfeld of Lincoln, who represents UNL and its students in the Legislature, praised the university's leadership in enacting what he called unnecessary cuts resulting from decisions by Gov. Pete Ricketts and other state senators.
"Continuing to cut an institution that is a proven economic driver in both rural and urban Nebraska is short-sighted and dangerous during a statewide economic downturn," Morfeld said in a statement.
While the university and state’s financial future remains precarious, Bounds remains optimistic about NU’s future.
“Times are tough, no question,” he said. “But I think a lot of people have been really smart about how this has been designed and these changes absolutely allow us to keep our momentum.”