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Provost and Executive Vice Chancellor Ralph J. Hexter this week ordered midyear budget adjustments of $10.1 million to help solve a structural deficit, while protecting strategic priorities that emphasize student success.

Hexter

“Even with the passage of Proposition 30 and the modest reinvestments that Gov. Brown proposed in his January budget, we continue to face challenges in our core state and tuition funds,” Hexter wrote in a Feb. 11 to the deans and vice chancellors and the university librarian.

“Further it is yet unclear what consequences we might face should federal sequestration proceed,” he wrote, referring to previously approved, drastic reductions in federal spending if Congress and the president remain at odds on modifying the cuts.

Postdoctoral researcher Lucas Arzola speaks out against the possible cutoff of federal funds.

Further," the impact of federal and state health care reform creates substantial uncertainty," Hexter wrote.

Therefore, he directed almost every academic and administrative unit to rebalance their expenditures to shift them away from state and tuition dollars.

“You should identify ongoing opportunities to fund a portion of senior executive salaries, travel and entertainment, and other operating costs using an all-funds approach — that is, you should look for opportunities to shift a proportional share of these expenses from state and tuition dollars to other appropriate funds,” he wrote.

The state and tuition funds that are freed up will then be used to partially offset the structural gap in the campus budget.

Hexter excluded certain categories that reflect strategic priorities. Among the exemptions: financial aid (including graduate student support and fee remission); the general library; and restricted funds such as extramural research, and restricted gifts and endowments.

More selected investments

The provost also cited strategic priorities in opening discussion on his budget plan for 2013-14: “We will again consider a mix of actions that reduce our reliance on state funds and simultaneously make selected investments to further our with an emphasis on student success.”

He outlined a number of initiatives, starting with a pool of approximately $3 million to $4 million “for investments we must make to advance priorities, improve quality and address critical gaps even as we continue to face constraints elsewhere in our budgets.”

He summarized six areas in which he is seeking proposals for operating budget investments largely in the schools, colleges and divisions:

• Graduate student support — Hexter said the provost’s Fellowships in the Arts, Humanities and Social Sciences, begun in 2012-13, will continue in the next academic year. More teaching positions are also important, he said, for training and support of graduate students, and as part of the foundation of undergraduate instruction.

• Student advising — Hexter noted the feedback he had received as a result of this year’s investment of $500,000, and how it has led to improvements in advising. “Of course, I am aware of the need to invest further to ensure student success and progress towards timely graduation.”

• Services for international students — Carolyn de la Pena, interim vice provost of Undergraduate Education, is leading an effort with Adela de la Torre, interim vice chancellor of Student Affairs, and other faculty as well as staff to identify the most immediate investment needs.

• Classrooms — Hexter said he will set aside $500,000 this year as part of a multiyear funding plan to improve student access to classrooms. The campus recently initiated a formal planning process to evaluate and determine classroom facility priorities, and continues to identify strategies and opportunities to improve existing classrooms, leverage space, and improve facilities and scheduling where possible.

• Student employment — “Our students have long provided an important part of the general administration on campus,” Hexter wrote. “Unfortunately, budget challenges over the last five years have resulted in reductions of some student positions.” He is asking for proposals to add student assistant employment opportunities in core academic and administrative support units.

• Online education — Hexter said he is working closely with Professor Bruno Nachtergaele, chair of the Davis Division of the Academic Senate, to identity opportunities to invest in infrastructure and provide incentives to faculty to expand and enhance online education, particularly with hybrid courses.

Hexter also highlighted support for emerging instructional needs, by way of a continuing appropriation of $1.9 million to the Office of Undergraduate Education, which makes one-time allocations to the colleges and divisions to ensure that students have access to courses critical to timely degree completion.

On faculty recruitment, the provost that �ٺ���Ƶ never implemented a hiring freeze but had scaled back to keep hiring at a modest level. “Moving forward, the budget reduction targets from 2010-11 have been met, and we will soon describe a 2020 vision that will involve some level of growth,” he wrote.

He said annual budget meetings will continue, and, within each school, college and division, the chair of the faculty executive committee will again be asked to participate.

New this year, Hexter said, he and Chancellor Linda P.B. Katehi will invite the senate chair to participate in the meetings for major administrative and academic support units.

Closing the gap

“I began the planning process for 2012-13 expressing the hope that we would not have to implement any new base budget adjustments,” Hexter wrote.

“However, as we have discussed throughout this year, the state and tuition portions of our budget have a structural deficit of approximately $40 million. Therefore, we must assign base budget adjustments now to ensure that we end the year with a balanced budget and make progress towards closing the structural gap.”

With the $10 million rebalancing of expenditures, to be implemented by the end of February, the structural deficit falls to $31.8 million, to be covered by �ٺ���Ƶ’ central reserve (leaving $6.5 million in reserve funds).

“The list of challenges is long,” Hexter acknowledged. “However, I remain optimistic.”

He cited the conversations and planning around the , saying they are “revealing some unifying themes that can immediately help guide resource decisions even before we report on the outcome of the consultation process later this month.”

He praised the academic and administrative units for their efforts over the last several years to ensure the efficient use of funds and to generate new revenues — calling these efforts “critical to the campus’s continuing success.”