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06/06/2017 Communication From University Leadership
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08/02/2017 University of Nebraska announces restructuring, policy changes to manage budget shortfall
University of Nebraska announces restructuring, policy changes to manage budget shortfall

August 2, 2017

University of Nebraska President Hank Bounds was joined today by the NU chancellors in announcing broad changes in structure, policy and process that the university will implement to help manage a recurring $49 million budget shortfall. The changes are necessitated by cuts in state funding during the last legislative session combined with the university’s rising costs.

“Budget cuts are never easy. They are even more painful when they come at the precise time that the University of Nebraska is experiencing remarkable momentum in growing our state’s economy and quality of life,” Bounds said. “Virtually every employee will be impacted in some way by the changes that we will make.

“These changes are the result of diligent, thoughtful work by colleagues who have chosen to view this challenge also as an opportunity – to find creative ways to do more with less so we can continue to serve the state effectively. We have difficult work ahead, but we’re focused on the future and what kind of university we want to be.”

Changes, recommended by teams of subject-matter experts from across and outside the university, include consolidation of NU’s facilities, energy, procurement and human resources functions, areas that previously have been based on each campus with no formal university-wide structure. NU also will continue to integrate its information technology services, a process that began more than a year ago in order to build a less costly, more unified IT system to serve all campuses.

Policy changes include a reduced mileage reimbursement rate for employees, a new software system for submitting travel expense reports that will save staff time and paper usage, and plans to significantly reduce printing and copying costs over time.

More cuts will be announced soon as recommendations of the university’s “Budget Response Teams,” convened in January, undergo continued vetting. In all, NU expects its budget-reduction efforts to yield $30 million in long-term savings, including the loss of at least 100 positions, through attrition where possible, reductions where not.

Together, the long-term savings in facilities/energy ($7 million), procurement ($6.8 million), human resources ($4 million) and IT ($6 million) will make up about 80 percent of the $30 million total. Savings will come from efficiencies from sharing more services and resources across the campuses, reductions in operational costs and position reductions.

The remainder of the reductions to operational costs will come from reductions and efficiencies in other areas including printing and copying, travel, financial operations, and public relations and marketing.

The scale by which NU must permanently reduce its spending means the university must re-think the way it does business in order to best protect its highest priorities of student affordability and academic quality, Bounds said. He noted the university will violate both of those principles in closing its budget gap – and that additional cuts in state funding would have an even more significant impact on tuition and academic programs.

The work of the Budget Response Teams was made more challenging by trends in state funding that have required the university to become leaner over time. For example, NU has the same number of employees funded by tax and tuition dollars today as it did in 2000, even though enrollment and research have grown significantly during that time.

Budget Response Team recommendations were submitted to a university-wide steering committee, chaired by Executive Vice President and Provost Susan Fritz and Chief NU Strategist James Linder, M.D., which then submitted final recommendations to the chancellors and president for approval. Implementation of the teams’ work is being led by Marjorie Kostelnik, past dean of the University of Nebraska-Lincoln’s College of Education and Human Sciences.

Teams in campus safety and parking have been convened to explore opportunities to integrate and save dollars, while teams in research services and institutional research are examining best practices for ways to conduct research more easily across the campuses. A digital education team will continue its work in building a strategy for greater revenue growth for NU’s online programs.

Furthermore, Bounds said the university has an opportunity to capture savings as part of Gov. Pete Ricketts’ call for less red tape in state government. Bounds has directed the chancellors and business, academic, IT and legal leadership teams to bring him ideas to send to the Governor on state regulations that are unnecessarily costly or burdensome for the university.

Following are brief summaries of changes being announced today. More detail is available at

  • The university will continue to integrate information technology services across campuses, under the leadership of Vice President for Information Technology Mark Askren. A university-wide structure will lower costs and serve employees more effectively. For example, some campuses have small individual cyber security teams. Now, campuses will have access to a university-wide security team of 25.
  • NU’s facilities and energy functions will integrate into a university-wide team, creating opportunities for more cohesive and consistent practices across the campuses, like standard project management software that will save dollars. NU’s ongoing energy reduction efforts, already expected to save $1 million, could be expedited and expanded under the newly aligned model. NU’s Mark Miller will lead the university-wide team.
  • A new university-wide procurement function will integrate resources, talent and practices to save costs in supplier management and other areas. For example, to help minimize the impact of the volatile gas market, the procurement team recently teamed with the university’s primary supplier for gases used in research labs to deploy a more cost-effective delivery model to keep prices as low as possible. The new team will be led by NU’s Maggie Witt.
  • Other changes in procurement include centralization of university vehicle purchases and maintenance.
  • A newly consolidated NU human resources team will standardize policies and practices across the university. New practices include a move from monthly basic retirement enrollment to semi-annual enrollment to free up staff time and capture other savings, and reduction of printed benefits materials. NU’s Bruce Currin will lead the new NU team.
  • The human resources team has already worked to standardize NU’s Reduction in Force policy to ensure that employees are treated consistently across NU. The updates, effective Aug. 1, make standard the various protections for office/service and managerial/professional employees who lose their jobs as part of a RIF. For example, employees are now potentially eligible for reinstatement and/or reemployment for up to six months following separation. In addition, the minimum notice for RIF’d employees will be at least 30 days for office/service employees and at least 90 days for managerial/professional employees.
  • Dr. Rodney Markin, associate vice chancellor for business development at UNMC, will coordinate the activities of the new university-wide teams in facilities/energy, procurement and human resources.
  • Effective Sept. 1, NU will reduce the university mileage reimbursement rate for employees using their personal vehicles for university travel from the current IRS rate of 53.5 cents per mile to 25 cents per mile, which represents the cost to operate a university-owned vehicle. The reduction will save up to $550,000 annually.
  • The Board of Regents will consider at its Aug. 11 meeting a contract with Concur to provide a travel expense reimbursement system that will save paperwork and labor. The new system will automate data delivery, smart phone-based reporting and reconciliation for travel expenses across the university.
  • New university-wide policies will be developed to keep more print and copy jobs in-house at on-campus print shop locations, and to reduce individual printing and copying.
01/13/2017 A budget update from President Bounds
A budget update from President Bounds

January 12, 2017

Dear Colleagues:

I’m writing to update you on our budgetary challenges. In his State of the State address today, Governor Ricketts proposed a 2017-19 budget package that includes reductions for a number of state agencies, including the University of Nebraska. Under the Governor’s proposal, our state funding would be reduced by $12 million next year, with half of that amount restored in the second year.

“We have two options: cuts and revenue enhancement. The extent to which we will rely on each depends on the budget that state leaders approve. Tuition, jobs and university services are certain to be impacted.”

Let me explain what that would mean for us. The proposed cuts must be viewed in conjunction with unavoidable cost increases that we will face in the next biennium. Salary and health insurance increases alone will grow our costs by more than $40 million over the next two years.

The bottom line: The Governor’s proposed cuts, combined with rising expenses, mean the University of Nebraska would have a budget gap north of $50 million by summer 2019.

These numbers are not final. The Governor’s proposal now moves to the Appropriations Committee and the full Legislature for consideration. I will do everything I can in the months ahead to make the case that an investment in the University of Nebraska is an investment in the state’s economic vitality and quality of life. I will remind them that the state’s partnership with its public university has helped ensure affordable excellence for nearly 150 years.

And I will remind them that the consequences of any cut are exacerbated by the funding trends of the past several decades, in which the university’s state appropriations have grown at a far smaller rate than other agencies’ and our share of the overall state budget pie has shrunk significantly. Today we spend less per full-time student than we did at the turn of the century, even as our enrollment and research enterprise have grown.

Nonetheless, it has been clear for some time that the state’s fiscal uncertainties would impact us to some degree. I have pledged to the Governor and members of the Legislature that the university will be a partner in navigating this downturn. There is no question that we have difficult choices ahead.

I am working with the chancellors to finalize a university-wide approach for managing budget cuts and will share more with you soon. I will be candid. The scale of the budgetary challenges ahead is well beyond what we could manage with a hiring freeze, travel restrictions or efficiencies alone. Slowing our spending has been a prudent initial step. But we can only go so long without, for example, hiring enough cancer doctors to meet the needs of patients at our medical center. And while we will look for every opportunity to do business even more effectively, budget cuts of the past have forced us to become a lean institution already. If there was low-hanging fruit before, it’s gone.

That leaves us with two options: cuts and revenue enhancement. The extent to which we will rely on each depends on the budget that state leaders ultimately approve. But tuition, jobs and university services are certain to be impacted. This process will affect real people, with real families and livelihoods.

We have already engaged the leadership teams on each campus in discussions on budget reductions. Those conversations will continue and we will involve faculty, staff and students every step of the way. While I don’t yet have all the answers, I do want to hear from you directly. The week of January 30, I will join each chancellor for an on-campus open forum where we will be able to have an in-person dialogue about our budget planning. The dates of the budget forums are as follows, with more details to come:

  • UNMC open forum: Monday, January 30, at 8 a.m.
  • UNL open forums: Tuesday, January 31, at 8 a.m. (staff) and 9:15 a.m. (faculty)
  • UNK open forum: Wednesday, February 1, at 2 p.m.
  • UNO open forum: Friday, February 3, at 1:30 p.m.

Because of your good work, the University of Nebraska is in a strong position today. We will emerge from this downturn a strong institution. Getting there will not be easy. I am hopeful that together with all of you, our partners at the Capitol, and the many university friends and alumni across this state, we will identify responsible solutions that are in the best interests of our university and the people of Nebraska. I will continue to provide frequent updates and invite you to visit our website here for information on our budget planning.

I hope to see you on campus soon. Thank you for all that you do for the University of Nebraska.


Hank M. Bounds, Ph.D.
President, University of Nebraska

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