FY04 Status Report

[posted July 2, 2003]

Dear Colleagues,

The fiscal circumstances of the Commonwealth and the political conversations of the legislature and governor continue to challenge our schedule for delivering a stable budget for this fiscal year. Nonetheless, while many details, some of which are of considerable significance for UMass Amherst, remain unresolved, we can report to you on the current circumstances of the budget reduction process.

Thanks to an extraordinary effort by everyone involved in this process, the campus has identified and has firm budget plans to implement most of the $21.5 million in reductions accumulated over the Categories I, II, and IIIa processes. The tables that accompany this note provide a general summary of the results. While most units have provided a plan to implement the required reductions, we have not fully evaluated these plans to ensure that they are realistic and that we can support the bridging requirements. Some significant reductions from the IIIa process will require more time for an effective plan, as will the additional Category I and II reductions to the Fine Arts Center and Extension. In addition, because of the Governor’s veto message, we do not have a firm number for the budget reductions, and so we cannot yet close this process.

We have also made a number of administrative changes, reductions, and consolidations of various kinds, in part to achieve savings and in part to reflect changes in mission and function. Some of these are relatively minor and involve the combination of service units and the reassignment of functions to other units. Others are more significant. For example, I have decided to remove the position and title of Deputy Chancellor. This position has been filled temporarily by the current campus CIO, John Dubach, during the past two years, and in our current circumstances I do not believe we need to refill this position. I have distributed some of the function of that office to other more appropriate locations, keeping the offices of Equal Opportunity & Diversity, Government and Community Relations, and the Ombudsperson reporting directly to the Chancellor as they do at most institutions. For the purposes of coordinating the activities that flow through the Chancellor’s office and other similar tasks, I have asked Dr. Dubach to assume the role of Special Assistant to the Chancellor in addition to his duties as CIO. Although this functional change does not save new money, we realize some future savings by not filling a separate Deputy Chancellor position.

The two offices of the Vice Chancellors for Research and Outreach are also under review. In the case of Research, the various budget reductions and a revision of our research funding model, which will place increasing responsibility and authority in the colleges, prompt a review of the Research Office’s functions. In the meantime, Vice Chancellor Fred Byron has agreed to stay on in a post-retirement position during the transition. In the case of the Outreach Office, the consequences of the budget reductions and the expanding role of continuing education and summer programs may change the scope of this office. This review may take some time. Meanwhile, I have included the cost of the Vice Chancellor for Outreach’s position in the budget reduction and transferred this expense to external funds.

Within the Provost’s area the two colleges of Nursing and Public Health will, subject to review, share the same dean, reducing the cost of one administrative appointment and carrying other economies of management and administration. In addition, the College of Natural Resources and the Environment has two departments considering a merger, and within the College of Humanities and Fine Arts the various modern language departments have constructed a common departmental organization. Other similar consolidations or mergers are under discussion in other colleges. All these changes in academic organization will require review and discussion through the Faculty Senate process in the fall and as a result cannot be considered final until that consultation concludes. Nonetheless, these moves all have as their goal lower administrative costs, more effective administration, enhanced collaboration among related programs, and the reduction of any inefficiency that might come from operating very small academic units.

I have chosen to consider postponing some capital projects in order to sustain the core operation of our academic program and essential services. Most significant is the student recreation center initiative. This project, for which we were about to begin a design study, would address the serious deficit in our campus’ support of student recreation. However, by postponing this project we could recover $5 million in annual anticipated debt service. This would allow us to keep the student fee increase lower than might otherwise be required and sustain the academic programs that must take priority. Before recommending this action, however, I will meet with students to discuss this possible postponement.

Cumulatively, the many individual reductions and reorganizations will change the operations of this campus significantly. Most dramatic, and most painful, are the layoffs that these reductions require. A university is essentially an organization of human capital, composed of individuals of talent and commitment in every function and office of the institution. The people we can no longer sustain in our offices, programs, and activities are the greatest loss from a budget reduction of this unprecedented severity. Although we have limited the number of layoffs by taking full advantage of closing vacant positions, the number of current employees affected is nonetheless substantial. The layoffs will begin on Wednesday, July 2nd, and when completed we expect to lose approximately 110 of our employees in this fashion. The exact number depends on retirement issues and other considerations, so not all these departures will involve formal layoffs. Nonetheless, when these people depart, the loss to the campus remains considerable and the impact on the lives and families of these friends and colleagues will be dramatic. When we engage in the required budget reductions and talk about the mechanical elements of dollars saved and programs affected, we can never forget that the greatest impact of the legislature’s and the governor’s decisions is on individuals. In addition to the staff lost by layoff, we will permanently close approximately 50 unfilled positions and move another 50 or so staff to other funding sources, leaving the campus with more than 200 fewer State-funded positions.

The President’s Council has agreed to carry the recommendation from all the UMass campus Chancellors for a $750 per semester student fee increase (beginning in Spring 2004) to the appropriate trustee committee and then with their recommendation to the full Board of Trustees. This added revenue still does not fully resolve the budget cuts approved by the legislature, and certainly will not accommodate the added reductions from the Governor’s veto message. After the legislature considers and acts on the Governor’s recommendations, which have the effect of reducing our budget by an additional $4.5 million, we will recalculate the final reductions and take any necessary steps required. Until we know this final budget, we cannot completely rule out the need to consider reductions in Category IIIb.

Although I had hoped this report would conclude the formal process of budget reduction with only the detailed and difficult process of implementation to follow, the Governor’s action clearly delays closure. It is my hope that within a few weeks we will have a final state budget and can conclude this painful process and turn our full attention to the continuing improvement of UMass Amherst that has remained ongoing even through these times.

With thanks for your continued involvement and advice throughout this process,

Sincerely yours,

John V. Lombardi
Chancellor

Summary of FY04 Budget Planning Actions (PDF)

Status of FY04 General Operations Budget (PDF)




FY07 Budget Update Amherst 250 Plan: Step One, An Interim Report Amherst 250 Plan Financial Master Plan Budget Document Archive Home	FY04 Status Report [posted July 2, 2003] Dear Colleagues, The fiscal circumstances of the Commonwealth and the political conversations of the legislature and governor continue to challenge our schedule for delivering a stable budget for this fiscal year. Nonetheless, while many details, some of which are of considerable significance for UMass Amherst, remain unresolved, we can report to you on the current circumstances of the budget reduction process. Thanks to an extraordinary effort by everyone involved in this process, the campus has identified and has firm budget plans to implement most of the $21.5 million in reductions accumulated over the Categories I, II, and IIIa processes. The tables that accompany this note provide a general summary of the results. While most units have provided a plan to implement the required reductions, we have not fully evaluated these plans to ensure that they are realistic and that we can support the bridging requirements. Some significant reductions from the IIIa process will require more time for an effective plan, as will the additional Category I and II reductions to the Fine Arts Center and Extension. In addition, because of the Governor’s veto message, we do not have a firm number for the budget reductions, and so we cannot yet close this process. We have also made a number of administrative changes, reductions, and consolidations of various kinds, in part to achieve savings and in part to reflect changes in mission and function. Some of these are relatively minor and involve the combination of service units and the reassignment of functions to other units. Others are more significant. For example, I have decided to remove the position and title of Deputy Chancellor. This position has been filled temporarily by the current campus CIO, John Dubach, during the past two years, and in our current circumstances I do not believe we need to refill this position. I have distributed some of the function of that office to other more appropriate locations, keeping the offices of Equal Opportunity & Diversity, Government and Community Relations, and the Ombudsperson reporting directly to the Chancellor as they do at most institutions. For the purposes of coordinating the activities that flow through the Chancellor’s office and other similar tasks, I have asked Dr. Dubach to assume the role of Special Assistant to the Chancellor in addition to his duties as CIO. Although this functional change does not save new money, we realize some future savings by not filling a separate Deputy Chancellor position. The two offices of the Vice Chancellors for Research and Outreach are also under review. In the case of Research, the various budget reductions and a revision of our research funding model, which will place increasing responsibility and authority in the colleges, prompt a review of the Research Office’s functions. In the meantime, Vice Chancellor Fred Byron has agreed to stay on in a post-retirement position during the transition. In the case of the Outreach Office, the consequences of the budget reductions and the expanding role of continuing education and summer programs may change the scope of this office. This review may take some time. Meanwhile, I have included the cost of the Vice Chancellor for Outreach’s position in the budget reduction and transferred this expense to external funds. Within the Provost’s area the two colleges of Nursing and Public Health will, subject to review, share the same dean, reducing the cost of one administrative appointment and carrying other economies of management and administration. In addition, the College of Natural Resources and the Environment has two departments considering a merger, and within the College of Humanities and Fine Arts the various modern language departments have constructed a common departmental organization. Other similar consolidations or mergers are under discussion in other colleges. All these changes in academic organization will require review and discussion through the Faculty Senate process in the fall and as a result cannot be considered final until that consultation concludes. Nonetheless, these moves all have as their goal lower administrative costs, more effective administration, enhanced collaboration among related programs, and the reduction of any inefficiency that might come from operating very small academic units. I have chosen to consider postponing some capital projects in order to sustain the core operation of our academic program and essential services. Most significant is the student recreation center initiative. This project, for which we were about to begin a design study, would address the serious deficit in our campus’ support of student recreation. However, by postponing this project we could recover $5 million in annual anticipated debt service. This would allow us to keep the student fee increase lower than might otherwise be required and sustain the academic programs that must take priority. Before recommending this action, however, I will meet with students to discuss this possible postponement. Cumulatively, the many individual reductions and reorganizations will change the operations of this campus significantly. Most dramatic, and most painful, are the layoffs that these reductions require. A university is essentially an organization of human capital, composed of individuals of talent and commitment in every function and office of the institution. The people we can no longer sustain in our offices, programs, and activities are the greatest loss from a budget reduction of this unprecedented severity. Although we have limited the number of layoffs by taking full advantage of closing vacant positions, the number of current employees affected is nonetheless substantial. The layoffs will begin on Wednesday, July 2nd, and when completed we expect to lose approximately 110 of our employees in this fashion. The exact number depends on retirement issues and other considerations, so not all these departures will involve formal layoffs. Nonetheless, when these people depart, the loss to the campus remains considerable and the impact on the lives and families of these friends and colleagues will be dramatic. When we engage in the required budget reductions and talk about the mechanical elements of dollars saved and programs affected, we can never forget that the greatest impact of the legislature’s and the governor’s decisions is on individuals. In addition to the staff lost by layoff, we will permanently close approximately 50 unfilled positions and move another 50 or so staff to other funding sources, leaving the campus with more than 200 fewer State-funded positions. The President’s Council has agreed to carry the recommendation from all the UMass campus Chancellors for a $750 per semester student fee increase (beginning in Spring 2004) to the appropriate trustee committee and then with their recommendation to the full Board of Trustees. This added revenue still does not fully resolve the budget cuts approved by the legislature, and certainly will not accommodate the added reductions from the Governor’s veto message. After the legislature considers and acts on the Governor’s recommendations, which have the effect of reducing our budget by an additional $4.5 million, we will recalculate the final reductions and take any necessary steps required. Until we know this final budget, we cannot completely rule out the need to consider reductions in Category IIIb. Although I had hoped this report would conclude the formal process of budget reduction with only the detailed and difficult process of implementation to follow, the Governor’s action clearly delays closure. It is my hope that within a few weeks we will have a final state budget and can conclude this painful process and turn our full attention to the continuing improvement of UMass Amherst that has remained ongoing even through these times. With thanks for your continued involvement and advice throughout this process, Sincerely yours, John V. Lombardi Chancellor	Summary of FY04 Budget Planning Actions (PDF) Status of FY04 General Operations Budget (PDF)


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