Joint Services
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Joint Services at UH-Hilo and Hawaii Community College
This is a proposal [to the UH System President's Office from UH-Hilo Academic Affairs] for
resolving the joint services issue at the Hilo campus. The logic is simple and is based on
projecting backwards in time current joint services costs to estimate those at the time of
separation. It is assumed that sufficient funding was available to UH-Hilo at the time of
separation to support HawCC joint services. It is also assumed that UH-Hilo’s budget has not
been adjusted for the HawCC share of joint services after separation. Evidence is provided to
support this assumption. Both the current annual shortfall in funding and the cumulative
shortfall from preceding years are calculated and a recommendation involving joint
responsibility from UH-Hilo, HawCC, and the University of Hawaii System is presented.
Current cost of joint services:
The cost of joint services has been the subject of an extensive study and an allocation has been
agreed to by Shirley Daniels and Rose Tseng (see attachments). This study shows that the 200304 costs of joint services are allocated between the entities as:
Facilities
Instruction/Student Support
Total
UHH
HawCC
$3,200,853 $1,621,392
$1,462,391
$651,258
$4,663,244 $2,272,650
UHH and HCC Combined Expenditures in 1992-93 and 2003-04 from IPEDS data:
Unfortunately a joint cost study was not implemented at the time of separation. Therefore, we
impute of the amount of funding that UH-Hilo retained in its budget at the time of separation for
supporting HawCC shared services. It is assumed that the cost of shared services has risen at a
rate comparable to unshared services in both the physical plant and student related categories.
1992 as
HawCC
HawCC
% of
Audited 2004 Imputed
1991-92
2003-04
2003
Share
1992 Share
Plant and Institutional Support
$5,471,144 $13,071,445
41.9% $1,621,392
$678,645
Student and Academic Support
$6,171,755 $10,743,114
57.4%
$651,258
$374,138
Imputed 1992 UH-Hilo Budget for HawCC Joint Services
$1,052,783
General Funds and Enrollments from IPEDS
The next table is provided as background information to establish that UH-Hilo general funds
have not been augmented in the past decade to support HawCC shared services. HawCC data is
provided for comparison.
1992-93
2003-04
General Appropriations
UH-Hilo $21,558,807 $21,537,110
HCC
$6,717,839
$7,537,273
Headcount Enrollment
UH-Hilo
2,681
3,300
HCC
1,847
2,346
Change
-0.1%
12.2%
23.1%
27.0%
Joint Services
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This table shows general funding for UH-Hilo has not increased during the period since
separation. It is true that the University now retains tuition which amounted to $7,746,960 in
2003-04. It is also true, however, that value of the dollar has deflated during this eleven year
period (35% by the US CPI) so that the value of 2003-04 appropriation plus tuition is
$21,691,903 in 1992-03 dollars. Thus, the total amount available in real dollars has been
stagnant. Moreover, UH-Hilo enrollments have increased by 23% during this period so that real
funding per student has been reduced dramatically. Given these facts, it seems unreasonable to
argue that UH-Hilo has received budgetary increments for supporting HawCC shared services.
It is also true that UHH has been unable to fund ongoing programs because of the budgetary
deficit caused by the payment of joint services solely by UH-Hilo. The recent cohort of the
MEd. Program was cancelled, hiring of faculty was frozen due to the shortage of funds, and
positions such as the Director of Alumni Relations remain unfilled. Moreover, UH-Hilo fails to
be in compliance with Title IX requirements and safety issues in the laboratories and with
vehicles continue to surface. These are just several of many examples where UH-Hilo has been
unable to fulfill its obligations due to budgetary exigencies.
Recommendations
First, it is recommended that the joint services provided to HawCC by UH-Hilo be paid from this
point forward by HawCC. A transfer of $1.05 million from UH-Hilo to HawCC and an
additional $1.25 million allocation in system funds will facilitate these payments. The $1.05
million from UH-Hilo is the imputed amount in the UH-Hilo budget for HawCC joint services at
separation. The $1.25 million is the residual required for HawCC to have sufficient funding for
joint services.
Beginning this year, UH-Hilo and HawCC will audit expenditures using the method jointly
agreed to and HawCC will be billed for services consumed. Changes in the amount of services
as reflected in FTE or square footage and changes in the cost of the services such as utility costs
will be reflected in the billing. Payment for services and the transfer of funds from UH-Hilo and
the system will be simultaneous so that neither institution is burdened with a delayed transfer of
funds. Some adjustment from the figures given may be necessary to accurately reflect 2005-06
costs and usage.
Second, it is assumed that the UH-Hilo funding shortfall has grown from zero at separation to the
present amount of $1.25 million annually ($2.3 million less $1.05 million) in a linear manner.
The accumulated deficit acquired by UH-Hilo over twelve years is then (12)($1.25 million)(1/2)
= $7.5 million. This shortfall is not recurring and should be rectified by a one time transfer of
resources to UH-Hilo. If this can not be achieved in one year, an allocation from system funds of
$1.25 million to UH-Hilo in this year and each of the ensuing five years following is proposed as
a less satisfactory remedy.