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CALS 8/21/14 Shane Burgess, Vice Provost & Dean Slide 2 State of CALS State of AZ Never Settle/RCM Leadership goals for semester Slide 3 State of CALS State of AZ Never Settle/RCM Leadership goals for semester Slide 4 Slide 5 College BUDGETED TEMPORARY FUNDS Slide 6 College-level temporary commitments Temporary commitments are temporary. Temporary funds are temporary. We cant expect to solve permanent issues with temporary fundswe need to find permanent funds to do so or solve the problem another way. 6 January 7, 2013 Slide 7 Slide 8 Slide 9 0 50 100 150 200 250 300 0001020304051011121314 T/C track faculty and other Appointed Professionals T/C track Other APs Slide 10 State of CALS State of AZ Never Settle/RCM Leadership goals for semester Slide 11 http://www.azleg.gov/jlbc.htm Slide 12 State Balance Sheet Impact FY 2015 Conclusion of the Dept of Child Safety Special Session: projected FY 2015 General Fund ending balance of $130M, based on Januarys Finance Advisory Committee (FAC) forecast. However, General Fund revenue collections are below $55M below January forecast. FY 2015 projected ending balance is $96M. If July 11 Superior Court K-12 Litigation base level reset ruling stands, the FY 2015 balance would become as low as $(220)M. If the Court ultimately to concurs with the plaintiffs K-12 Litigation - Reset and Back Payments the FY 2015 balance would become as low as $(473)M. FY 2016 Even without the K-12 litigation, the FY 2016 budget was already projected to have a shortfall. At the end of the Special Session, this was low as $(295)M. The second year of reset could take this to $(932)M. A second year of back payments would then take the budget balance to $(1.4)B. Budget Stabilization Fund The ending balance estimates do not include the projected $459 million in the Budget Stabilization Fund http://www.azleg.gov/jlbc/K-12InflationFundingLawsuitUpdateR.pdf Slide 13 Slide 14 State of CALS State of AZ Never Settle/RCM Leadership goals for semester Slide 15 Slide 16 Growth without additional state investment UA administrators will now have to take a new approachrecruit more out-of-state studentsfocus on entrepreneurship Along with seeking other revenue sources, efficiency will be key.. administrators, faculty and staff will constantly have to reevaluate where they can improve in saving money to increase the amount of money that goes into the core mission Its a new day.were constantly going to be surveying ways to redirect resources to our education and research mission Slide 17 UA Business Cost Savings & Efficiency FY15--$5.5M permanent savings: Facilities Management: $1.0M reduction in temporary employee expenses $0.2M reduction in employee overtime expenditures $1.05M reduction in utilities costs due to: Aggressive insulation of steam pipes ($0.5M) Raising the chilled water temperature ($0.3M) Replacing air handler filters ($0.25M) Credit Card Services Fee: $3.2M from implementation of credit card service feemakes UA consistent with ASU & NAU existing practices Savings from prior years: utilities gas contract renegotiationannual savings estimated for FY14 and future years @ $1.3M multiple refinance & refunding of system revenue bonds during the last 3 years which will result in ~$15M University debt service savings over the next 20 years. Slide 18 CALS Cost savings will be a continual goal and these savings will be diverted into the critical TR and CES missions Slide 19 Slide 20 Slide 21 There are Revenue Responsibility Center Units (RCUs) and Cost RCUs. CALS is the RCU; CALS units are not. CALS is a Revenue RCU Budget Cuts will happen to RCUs RCM is T&R ONLY. The vast majority of revenue is from teaching. The CES is not part of RCM The CES is a tub-on-its-own-bottom and must pay its costs i.e. new space, activities, increases to base costs. Slide 22 How CALS allocates funds internally is its own business We can do very well under RCM RCM rewards entrepreneurs: CALS is already entrepreneurial in many places. CALS future internal budgeting system is to be defined this semester and this will be a shared governance process. CALS internal budgeting system will be activity-based but not RCM Slide 23 Cost centers must have a continual drive to greater efficiency and effectiveness. All costs must accounted for. Absolute and relative budget cuts will happen to some units as early as FY16. This money will move to other units. Budgets will be aligned with mission-critical revenue generation and the best opportunities. Opportunity costs must be accounted. Investments/disinvestments will be based on equity and not equality. Slide 24 -$150,000.00-$100,000.00-$50,000.00$0.00$50,000.00$100,000.00$150,000.00$200,000.00$250,000.00 SPS SNRE VSc&M FCS NS ENT AS SWES AREC ABE AgED NET to CALS 5 positive = $595,266 6 negative = $(456,989) $138,276 CALS 2010-2011 undergrad RCM outcome Slide 25 CALS Cost savings will be a continual goal and these savings must be diverted into the TR and CES missions Investees will be accountable for positive RCM outcomes and Never Settle targets. Slide 26 We are busy professionals who focus on the real world and its problems and have little appetite or desire for administrative obstacles. Peter Ellsworth, CALS Slide 27 Never send a human to do a robot's job. Gentry Lee, Chief Engineer, Interplanetary Flight, Jet Propulsion Labs Slide 28 College-level temporary commitments Temporary commitments are temporary. Temporary funds are temporary. We cant expect to solve permanent issues with temporary fundswe need to find permanent funds to do so or solve the problem another way. 28 A. Replacing the Temporary Commitment List with: 1.a Subvention Fund 2.a Strategic Investment Fund B. Changing carry-forward policy January 7, 2013 Slide 29 $0 $20M $40M $60M $80M $100M $120M $140M $160M '9'10'11'12'13'14'15'16'17'18'19'20'21'22'23 Research expenditures, all accts Research expenditures, all accts: Higher productivity only Target prior to Never Settle FY CALS research targets Slide 30 CALS ABOR METRICS TARGETS (Page 6 of CALS21) SUM OF FIRST ITERATION OF UNITS ABOR METRICS TARGETS Slide 31 FY2015 Hiring planning, June 2014 Must be compliant with AZs shared governance statutes and the UAs and CALS' shared governance mores. The rationale for all hiring decisions must include how these fit into Never Settle and will help us meet our ABOR metrics. Because we simply do not have the resources to fund every request, implicit in this hiring plan is the continued need for unit heads to implement the structural changes in their units in both business and academic areas. Hiring must also take account of critical college-level needs in advocacy, branding, communications, compliance, legislative affairs, management, marketing, philanthropy. Slide 32 Shared Governance FCG Committee Hiring Criteria, June 18, 2013 Hiring to meet strategic planning needs, and meet ABORs performance- based funding metrics. Based on 1. Need, 2. Impact and 3. Synergy all of equal importance. Fit into the strategic plans and our land grant mission. Units must estimate the potential impact of a new hire in regard to revenue generation and helping CALS improve in ABORs performance- based funding metrics. Slide 33 State Perm Salary Investment Guiding Principles 1.Existing contractual commitments made by the previous CALS administration. 2.Retention negotiations. 3.Consistent with the units clear vision and consistent with CALS and the UAs strategic directions and so will help CALS improve in ABORs performance-based funding metrics. 4.Infrastructure needs especially wrt compliance. 5.Positions that have specific support (e.g. start-up funding) from sources other than college level temporary commitment funds. 6.Positions that support revenue generation including cost recovery. 7.Units that are managing faculty work load distributions optimally, equitably and transparently. 8.Support cross cutting activities. 2014 Guidelines used by EC Slide 34 Strategic Faculty Hiring Plans, Provost memo May 13, 2014....plans and collaborations on hiring will be guided by the priorities set out in our Never Settle strategic plan....considering some limited strategic investments in interdisciplinary strategic priority areas (small cluster hire)....hiring plan demonstrates a clear and strong alignment between the strategic plan of the relevant department/school, your college strategic plan and Never Settle....plan considers carefully the balance between meeting the day-to-day operations of your units with the significant opportunities in the strategic plan. Slide 35 Provost memo continued. Guiding Questions: How will the proposed hire contribute to engaging students? o How will your hire help develop innovative and inclusive online, experiential, and other research-based learning initiatives? o How will the faculty member contribute to engaging and graduating a diverse student body in critical high demand fields? How will the proposed hire contribute to innovating research? o How will the faculty member help increase research awards, develop alternative sources of funding, and build on areas where we have established or emerging strengths, including nationally-ranked graduate programs? o How will the hire contribute to interdisciplinary strengths in areas that have been prioritized for investment? How will the proposed hire help us expand partnering with community and business groups? o How will the faculty member contribute to tech transfer, business start-ups, and strategic collaborations that address local issues and global challenges? How will the proposed hire contribute to fostering interdisciplinary synergies across colleges and units? o How will your hire add to our distinctive strengths in diversity, including interdisciplinarity, as a cross-cutting catalyst to spark innovation and increase our competitive advantage across the University? Slide 36 ACBS FCS NS SWES AREC SNRE AGED PS ABE CALS Fall Majors Bachelor Enrollment 0 200 400 600 800 1000 1200 ENT '07'08'09'10'11'12 '13 '14 Slide 37 But outputs are relative to inputs Slide 38 ACBS ABE AREC Ag Ed ENTO FCS NS SPS SNRE SWES 0% 5% 10% 15% 20% 25% 30% 35% 0%5%10%15%20% Instructional Budget vs CALS Undergraduate Enrollment Proportion of CALS Instructional budget Proportion of CALS Undergraduate Enrolment NS2.5 FCS1.7 ACBS1.7 AREC1.1 SWES0.6 Ag Ed0.5 SNRE0.3 ABE0.3 SPS0.2 ENTO0.0 Slide 39 ACBS ABE AREC Ag Ed ENTO FCS NS SPS SNRE SWES 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 0%5%10%15%20%25% AREC2.86 SNRE2.54 SWES1.85 ABE0.73 ACBS0.57 NS0.54 Ag Ed0.42 SPS0.39 FCS0.14 ENTO0.00 Instructional Budget vs CALS Masters Enrollment Proportion of CALS Instructional budget Proportion of CALS Masters Enrolment Slide 40 ABE AREC AgEd ACBS Ento FCS NSC PS SNRE SWES 0% 5% 10% 15% 20% 25% 30% 0%5%10%15%20%25%30% Share of Total Res Perm $ MTDC Expenditures Direct research expenditures (MTDC) vs Res $ Unit Res/inves tment FCs 3.0 AGED 2.5 NSc 1.6 SNRE 1.3 PS 1.1 ENTO 0.8 SWES 0.8 ACBS 0.6 ABE 0.2 AREC 0.2 Slide 41 ACBS ABE AREC Ag Ed ENTO FCS NS SPS SNRE SWES 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 0.0%5.0%10.0%15.0%20.0%25.0% Research Budget vs CALS PhD Enrollment Proportion of CALS Res $ Proportion of CALS PhD Enrolment FCS5.12 Ag Ed5.09 SWES1.85 SNRE1.13 ABE1.01 SPS0.56 NS0.47 ACBS0.44 ENTO0.26 AREC0.00 Slide 42 IDC Return per Research FTE--to UA (Blue) and to CALS (Red) Jan-March 2014 Slide 43 ABE ACBS AREC AGED ENTO FCS NSc SNRE PS SWES 0% 5% 10% 15% 20% 25% 30% 0%5%10%15%20%25%30% IDC return vs Res FTE Unit IDC /FTE ACBS1.69 SNRE1.61 ENTO1.29 FCs1.20 NSc1.08 PS0.93 SWES0.84 AGED0.65 ABE0.49 AREC0.03 Share of Total Perm Research Base (state & fed-formula funds) FY12-14 proportion of CALS IDC Slide 44 ACBS ABE AREC Ag Ed ENTO FCS NS SPS SNRE SWES 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 0.0%5.0%10.0%15.0%20.0%25.0% CA$H I$ KING: Total Budget vs Soft $ NS2.74 FCS2.07 Ag Ed2.01 SWES1.99 SNRE0.98 ACBS0.85 ENTO0.76 SPS0.13 ABE0.12 AREC0.04 Share of Total Perm Research Base (state & fed-formula funds) Proportion of soft money in unit Slide 45 Philanthropic Potential Unit Head commitment and ability Slide 46 Development Slide 47 State of CALS State of AZ Never Settle/RCM Leadership goals for semester Slide 48 Leadership goals to be completed by end of fall 14 semester 1.All unit business centers to be operating optimally. Ratje, Unit Heads 2.Finalize unit targets and begin measuring outcomes from investments. Unit heads, Associate Deans 3.Recommend activity-based business model for operating the college. Academic unit heads and Faculty Council separately. 4.AZ Experiment Station (ES) strategic plan and ES unit plans. Burgess, Silvertooth, ES unit heads. 5.Update strategic plans. All administrative unit heads. 6.CALS component of legislative plan. Burgess and UA central administration. 7.Find administrative cost savings and performance increases with positive revenue balance. Deans, unit heads and Faculty Council. Slide 49 We are busy professionals who focus on the real world and its problems and have little appetite or desire for administrative obstacles. Peter Ellsworth, CALS http://www.azcentral.com/story/life/food/2014/06/27/gmo-debate-injects-emotion-food-science/11570903/ Slide 50 CALS Business Services: A Synergistic Vision to Enable Engagement, Innovation & Partnering August 21, 2014 Slide 51 Guiding Principles of Change Change is constant and rapid. Business is a touch point for all activities. Business Services must transform or it will stifle the growth of CALS. Change is constant and rapid. Business is a touch point for all activities. Business Services must transform or it will stifle the growth of CALS. Business Services embraces, values, and nurtures: stewardship of the public trust; professionalism, planning, and management; efficiency and effectiveness; technical competence, lifelong learning, and accountability; a culture of ut prosim (selfless service); a culture of continuous improvement and innovation in the business operations of the college; the diversity of units and their geographic locations across the state; connection to and integration of the land grant missions; and transparency in financial information and decision-making. 51 Slide 52 Macro Environmental Change 52 Competition in Higher Education Global Marketplace Growth of Private Universities Driving Lower Cost Education Options Changing Demographics of Students Non-traditional Students Career Readiness, Applied Education Financing of Public Education Public vs. Private Good: Privatizing Public Education? Healthcare Squeezes Out Other Budget Items Slide 53 Source: State Higher Education Finance: FY 2013, SHEEO Slide 54 Court orders to fund pension and healthcare plans accounts for some of the increases in IL, ND, and WY Slide 55 The major market for UA non-resident students is losing enrollment due to high tuition prices - CA Slide 56 CALS Budget Slide 57 CALS Sources FY2014 - $122,749,161 57 Slide 58 We Have Choices Will we be the victims of these financial realities? Business as usual is a recipe for mediocrity at best The given resources must yield greater value Innovation is required (Ideas + Implementation = Innovation) 58 Slide 59 The Business Culture Nothing is less productive than to make more efficient what should not be done at all. - Peter Drucker, Management Consultant and Author Administrative Review of ALL College Business Procedures and Policies get rid of those that yield little or no value Working with Unit Heads; Shared Business Centers Created Family Consumer Sciences, Ag Resource Economics, and Ag Education Nutritional Sciences and Ag Biosystems Engineering Regional Extension Business Offices: Yavapai, Mohave, Coconino & Yuma, YAC, La Paz & Cochise, Greenlee Dotted Line Reporting Relationship to All Academic Business Officers Professional development and training for business staff college- wide Accountability for ALL to Meet High Expectations 59 Slide 60 Linking Performance to Expectations Quarterly Allfunds Budgets Every unit prepares quarterly budgets Enables meaningful financial conversations between unit leaders, faculty, and business officers Develops financial literacy and accountability Projects and avoids deficits Deepens the concept of tradeoffs and improves decision making when resources are limited Integrates programmatic and financial planning Transparency of Data Allows All of Us to be Owners 60 Slide 61 Allfunds Budgets, June 2014 61 FY15 forward is a projection Slide 62 Responsibility Centered Management (RCM) UA budget model that links College productivity and efficiency to the budget it receives Revenues: SCH, Majors, Degrees, Research IDC Expenses: Administration, Space, Support Offices Subvention & Investments: Historical Subsidies and UA-Controlled Strategic Investment Pool 62 Slide 63 Colleges are the Revenue or Responsibility Centers (RCUs) Volatility requires RCUs hold reserves ~$1.8 million, 3-5% RCUs must meet revenue projections, repay prior deficits, and live within its means Each RCU must develop its own internal allocation process with units Facilities and central administrative offices are Cost Centers paid for by taxing the RCUs ERE must be managed locally and increases planned for Compact: Ownership of revenues in exchange for financial responsibility for costs Responsibility Centered Management (RCM) 63 Slide 64 RCM Why & Impacts? Incentivizes entrepreneurship Drives efficiency of operations Improved decision making due to linkage between decision and financial outcome Increases transparency Elevates the primary importance of data quality and reliability Leadership stakes and expectations are higher at the College and Unit Levels! 64 Slide 65 Slide 66 Strategic Vision Will CALS be relevant and: Instruction: A primary choice for students? Research: A leading partner for sponsors and innovation? Extension: Of mutual interest with and impactful for stakeholders and the public? Development: Worthy of investment from donors? UA Partners: Worthy of investment from our UA Partners? Entrepreneurship/RCM is Optimism. Every employee in CALS contributes to answering these questions. These questions will shape the College into the future. 66 Slide 67 If you do not change direction, you may end up where you are heading. -Lau Tzu, Chinese Philosopher and Poet 67 Slide 68 Agricultural and Life Sciences Research: A Path to the Future Parker Antin CALS Associate Dean for Research August 22, 2014 68 Slide 69 Agricultural and Life Sciences Research: A Path to the Future 69 Research and the Land Grant Mission Public Support for Research and Education CALS Research Overview Research Vision and Strategic Plan Slide 70 History of the Land Grant Mission 70 1862---Morrill Act Established the Land Grant Colleges to focus on teaching of practical agriculture, science and engineering and military arts... 1887Hatch Act Established the Experiment Stations to promote scientific investigation and experiments respecting the principles and applications of agricultural sciencebearing directly on the agricultural industry of the U.S.... 1914Smith-Lever Act Established Cooperative Extension Services In order to aid in diffusing among the people of the United States useful and practical information on subjects relating to agriculture, home economics, and rural energy, and to encourage the application of the same... Slide 71 71 1890 to World War II Slide 72 -1950 to 2003- 72 Appropriations to the National Institutes of Health Unprecedented Growth in Federal and State Support for Education and Research Slide 73 2003-2014 Eroding Public Support for Research Appropriations to the National Institutes of Health Slide 74 74 Eroding Public Support for Education http://www.cbpp.org/cms/?fa=view&id=3927 Slide 75 75 CALS Permanent Base Budget 1989-2014 >30% Reducti on Slide 76 76 96.25 115.5 Slide 77 77 CALS Sponsored Projects Activity (Grants and Contracts Expenditures) 2000-2014 $46M $23M $39.7M 2000-2014 45% Inflation Adjusted Increase in Expenditures 17% Decrease in Research FTE -13.7% Slide 78 78 We are in an era of diminishing public support for education and research. CALS significantly expanded research from 2000 to 2014; the most financially challenging period since the 1930s. Two Realities: Challenges Opportunities Slide 79 Faculty are Talented and Diverse Natural Centers of Excellence We are Lean! CALS Administration Embraces Positive Transformation A Future Focused and Developing Infrastructure 79 CALS Strengths Slide 80 80 3 5 2 Strategic Plans 4 CALS Research 2014-2024 Slide 81 81 Vision CALS Research 2014-2024 To be the most important driver in Arizona's economy and the world's top college in 21st century agriculture, life sciences, and commerce. -------------------- Anywhere .pound for pound Slide 82 82 OVERALL CALS RESEARCH EXCELLENCE GOAL: DOUBLE RESEARCH BY 2020 ON CURRENT RESOURCE BASE Strategic Plan Slide 83 Six Focus Areas of CALS 1. Environment, Energy and Natural Resources: ABE, SWES, SNRE, PLS 2. Plant, Insect and Microbial Systems: ENT, SPS, ACBS, SWES 3. Health and Food Safety: ACBS, NSC, PLS, SWES 4. Families and Communities: FCS, SWES 5. Animal Systems: ACBS 6. Commerce: AREC, ABE, AGE, FCS 83 STRATEGIC GOAL ONE: BUILD ON EXISTING RESEARCH STRENGTHS Accomplished through: Strategic Hires, Strategic Investment, Building Infrastructure to Conduct Large/Complex Research Projects. Slide 84 Slide 85 85 STRATEGIC GOAL TWO: IDENTIFY AND INVEST IN CALS RESEARCH INFRASTRUCTURE NEEDS Slide 86 SPS and ORCA Grants and Contracts Pre Award Regulatory Support Complex Proposal Support CALS Research Administration Services Training/Workshops Web Portal UA Research Development Office Commercialization Tech Launch AZ Bio5 VPR University Liase/ Knowledgebase Slide 87 Sangita Pawar, PhD, MBA 87 Assistant Dean for Research Administration Hire was Revenue Neutral Slide 88 CALS Research Administration Services SPS and ORCA Grants and Contracts Pre Award Regulatory Support Complex Proposal Support Training/Workshops Web Portal UA Research Development Office Commercialization Tech Launch AZ Bio5 VPR University Integration/ Knowledgebase Mission: to maximize research productivity reduce the friction identify your pain points Slide 89 89 Pilot Research Workshop---TOMORROW (August 22) CALS Poster Session---November 10 CALS Research Forum---Spring Term 2015 Research Essentials Series---Begins September 5 Some of the Events Planned to Date: Slide 90 90 Cyberinfrastructure STRATEGIC GOAL TWO: IDENTIFY AND INVEST IN CALS RESEARCH INFRASTRUCTURE NEEDS ....the most cyber-savvy CALS in the US Slide 91 91 The iPlant Collaborative Community Cyberinfrastructure for Science Slide 92 92 Research Administration Services Office Staff Lorinda Mills Bruce Schumaker Glenda Thompson Renee Ammonds Renae Nelson Sangita Pawar Zaida Zalbidea Jennifer Smith Alma Enciso Randy Ryan