Budget update: May 20, 2020
May 20, 2020
— by Dan White, chancellor
In last week’s budget column, I mentioned that UAF has been looking at innovative ways to cut costs, create efficiencies
and increase revenues for some time now. One of the areas I’ve had our teams look
into is our ability to reduce our planned FY21 base budget. Early this year I asked
the Provost and Vice Chancellors to plan for a 15% reduction to their base budget.
As we learn more about FY21 projected expenses and revenues as well as what might
come of the Board of Regents’ request for systemwide “transformation” options, we
are looking at refining the earlier guidance. While not a large shift, we may be able
to move the 15% guidance slightly lower, but there are still lots of moving parts.
In addition to reductions that may occur through inter-university collaborations and
transformation, our innovative thinking has already led to new permanent and one-time
revenue sources. UAF is working with the system office on refinancing and restructuring
of our debt service, yielding an estimated savings of $3 million per year. We anticipate
being able to sell power in FY21, which could generate new revenue and help reduce
Fairbanks campus utilities expenses. UAF will also see one-time COVID-19 support in
the range of $4 million-$5 million, and we are seeking other state and federal funds
to help offset costs associated with the COVID-19 pandemic. All of these funding sources
could bring an additional $8 million-$9 million in new revenues to UAF in FY21, making
it possible to move forward with our well-thought-out plans and reductions that move
UAF to its new base UGF budget level by the end of FY22.
Many other areas are also still being reviewed for cost savings and efficiencies.
Early next week the plan for shared services will go to deans and directors for feedback
prior to implementation in FY21. I recently solicited ideas from the Provost and Vice
Chancellors for investment opportunities that have the potential for a high return
on investment. I also launched a Task Force on Outward-Facing Activities and charged them with compiling an inventory of our outreach activities and looking
at new revenue models, among other things. The task force will complete its charge
by mid-July, with plans to implement feasible recommendations in FY21.
We have much to do in the coming months to ready our university for the fall semester.
There are unknowns ahead, but I am inspired by UAF faculty, staff and student resilience.
UAF units are doing a great job navigating the changes and using the resources we
have today to create a bright future for tomorrow. I applaud all of you for your hard
work and dedication.
Thank you for choosing UAF.