Creating a University for the 21st Century,
FINANCIAL SUSTAINABILITY | ROADSHOW
EXPANDED LEADERSHIP TEAM| MARCH 2015
DAVE LAWLOR
VICE CHANCELLOR & CHIEF FINANCIAL OFFICER
1
Agenda
Framing
Economic Model
Capital Plans
Priorities
Structure
VC-CFO Initiatives
2
Framing
3
st
21
UC Davis of the
century, in order to
accomplish its core mission, must be
run as well as the best global
enterprises.
4
Why?
UC Davis of the 21st Century,
Why?
in order to accomplish its core mission,
To attract & invest in faculty, research,
academic programs, & support
infrastructure we must be wise stewards
of all resources, and have sufficient
resources to be competitive on important
dimensions.
must be run as well as the best global
enterprises.
There are more pressures on families
than ever before to afford a quality
university education.
We must become an irresistible
investment opportunity for federal, state,
and corporate investments in our core
mission and in new partnership
opportunities.
5
Guiding Principles
• Financial stability enables the core
mission
• We take a One UC Davis
perspective in all that we do
• Financial sustainability means that
we take a comprehensive,
balanced, long-term view
• We engage in sophisticated yet
digestible conversations
• Key decisions are viewed through
the economic lens also
• We need a deeper understanding
of institutional data in order to
make better decisions
6
Financial Sustainability Action Plan:
Invest Half a Billion
60.0
New Investments in UC Davis
Sources
Uses
Faculty
50.0
40.0
30.0
New Revenues
Student Services
Cost Efficiencies
Research
20.0
10.0
$500M on a
cumulative Basis
-
Increased Research
Student Success
Fundraising
Staff
Infrastructure
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
• At maturity generate $50M of annual
recurring funds per year to be spent on key
academic initiatives1.
1
This excludes tuition & fee price increases and other associated base
compensation growth.
7
Financial Sustainability Action Plan
FSAP Tranparency Report
Financial Sustainability Action Plan
Base Year FY12, Goal Year FY21
DRAFT
We have identified $200M of new sources
of funnel which we are presently pursuing.
Of these funnel items, in FY14 we have
generated $34M+ of incremental Net
Revenue available for investment. $34M
was generated from the 2020 Initiative;
$XM from Administrative Efficiencies, $YM
from ICR growth, and $ZM in new Payout on
new gifts to our endowment.
250
200
150
100
$xM has been invested in recurring items.
50
0
Sources Funnel
Available for Investment
Invested
Not shown on the recurring chart: $cM of
one time sources have been harvested, and
$dM of which has been invested in one
time uses.
8
The Economic Model
9
A Future Profile - Operating
•
•
•
•
Revenue Growth
Research Growth
Efficiencies: Working Smarter
Payout on New Gifts to the
Endowment
•
Things to Fix:
• Recharge Philosophy &
Methodology
• Deferred Maintenance
• Others?
11
How things fit together…
Iterations to
reconcile
during budget
setting
process
Division of Mathematical and Physical Sciences
Sources & Uses All Funds, Excluding Contracts & Grants and Agency Accounts
(Dollars in thousands)
2013-14 Actual
See Instructions for Definitions of Fund Types
line
1
2
PRIOR YEAR CARRYFORWARD:
Total
Change from Prior Year
SOURCES OF ANNUAL OPERATING FUNDS
(net of depreciation, improvements reserves, and distributions out of org)
State Funds
& Tuition
$3,652
3
4
5
6
7
8
State Funds and Tuition
Indirect Cost Return
Course Material Fees
Summer Sessions
COSMOS Program
All Other Funds
$45,982
9
ANNUAL OPERATING SOURCES
$46,447
10
11
12
EMPLOYEE COMPENSATION:
Faculty
Regular Faculty (ACAD, SB01, SUB0)
Academic Administrators (SB05)
Other Academics (SB06, SB03, ACAX, ACGA)
All Student
Fees
ICR
$1,852
$836
2014-15 Budget Estimate
All Other
Funds
State Funds
& Tuition
All Student
Fees
ICR
$5,227
$11,567
$5,821
$2,169
$45,982
$3,110
$895
$419
$1,166
$3,378
$49,712
$701
$3,378
$1,314
$4,079
$54,950
$50,179
$3,937
$78
$37
$21,854
$39
$301
$12
$0
$0
$3,110
$895
$419
$465
$3,110
Total
$1,337
-$515
$901
$64
All Other
Funds
Total
$4,598
-$629
$12,657
$1,089
$826
$2,423
$49,712
$3,937
$660
$1,753
$1,293
$2,423
$2,414
$3,249
$59,778
$321
$0
$91
$13
$5
$0
$22,200
$43
$393
$3,937
$660
$1,753
$467
USES OF ANNUAL OPERATING FUNDS
$103
$20,576
$41
$316
13
Teaching & Research Assistants, House Staff (SB02, SB07, SB04)
$6,058
$62
$22
$6,141
$6,828
$0
$402
$70
14
Staff Salaries (STFO, SUBS, SUBG, SUBX, STFB)
$5,477
$969
$185
$1,375
$8,006
$6,161
$914
$270
$1,435
$8,780
$9,514
$41,751
$325
$1,294
$101
$438
$531
$2,068
$10,471
$45,551
$10,876
$46,059
$255
$1,181
$177
$1,262
$567
$2,090
$11,875
$50,591
$1,911
$243
$2,154
$1,153
$843
$1,996
$694
$10
$704
$1,964
$89
$2,053
$5,722
$1,184
$6,907
$1,672
$979
$2,652
$971
$385
$1,356
$758
$91
$849
$2,598
$45
$2,643
$6,000
$1,500
$7,500
$124
$283
$108
$386
$901
$231
$190
$86
$455
$962
15 Employee Benefits (SUB6, SB28, SB67)
16 Total Employee Compensation
OPERATING EXPENSES AND EQUIPMENT
17 Supplies & Expense (SUB3)
18 Equipment & Facilities (SB34, SUB4)
19 Total Operating Expenses and Equipment
20 TRAVEL (SUB5)
21 FINANCIAL AID (SCHL)
$20,461
$41
$201
$12
23 TOTAL EXPENDITURES
$111
24 ANNUAL NET OPERATING POSITION [Surplus (+)/Deficit (-)]
$412
$93
$93
Bottoms Up
Budgeting
(NBM)
Period review of Actuals to
Budget & Review of
Forecasts for balance of
the year
$7,301
$249
$52
$0
$163
$105
$105
$0
$0
$69
$69
$44,278
$3,625
$1,250
$4,723
$53,876
$49,034
$2,820
$2,198
$5,419
$59,471
$2,169
-$515
$64
-$644
$1,075
$1,145
$1,117
$216
-$2,170
$308
22 OTHER UNALLOCATED (SUB8, SUB7, SBMC)
Top Down
Guidance
$349
Explanatory Notes:
Regular faculty category includes temporary instructors ($2.3M in 13-14). 13-14 income and 14-15 carryforward has been reduced by $1.0M for COSMOS on-line tuition payments that were transferred to other UC campuses
in July 2014. MPS had $7.0M in COBL obligations at YE13-14 primarily for faculty startup and retention funding commitments. Projected $2.0M deficit in 14-15 Other Funds operating position reflects the utilization of
carryforward balances.
Quarterly
Monitoring &
Reforecasting
Meet monthly with
Assistant VCs and Assistant
Deans
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Comparison Institutions
UC DAVIS
UC Berkeley
UCLA
UC San Diego
University of Michigan
University of Illinois at Urbana-Champaign
University of Wisconsin - Madison
University of Virginia
Cornell University
University of Southern California
We are envisioning what the university of the 21st
century looks like and we will be using that vision as
our guide
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Capital
14
A Future Profile - Capital
• Operating strength enables
capital strength
• Affordability dimensions: build,
operate, & maintain
• Long range financial planning &
short term implementations
• Systematically solving the
deferred maintenance problem
• Leverage multiple funding
sources
15
Capital
2014-24 Capital Financial Plan - $2.9B
Type of Project
Priorities:
Regulatory (Seismic)
Critical Infrastructure
Capacity (e.g. 2020)
…etc…
Project Goal
$45,000
$40,723
$362,667
$303,660
$457,558
$867,750
$605,613
$1,634,137
$1,370,664
Determine appropriate
proportions
$190,067
Deferred maintenance
handled parallel
New Construction and Renovation
Infrastructure
Regulatory
Student Success
New Construction
Renovation
Research/Initiatives
Support and Stewardship
Deferred Maintenance Program
Student Experience
Capital
Capital
•
•
Capital and Space Planning - February 2015
Note:
2020 total seat goal = 12,000.
Growth provides 14,490 seats for
2020. If ADA and fire code upgrades
are made to existing classrooms,
anticipate 2,103 seat loss. Result is
12,387 seats following upgrades.
The number of classrooms in Haring
Hall phases is yet to be determined.
Deferred Maintenance Composition
Deferred Maintenance Needs - $1.3B
• Institute new policies whereby deferred maintenance doesn’t get
worse with new projects (FFEs for DM required).
• Develop a prioritized list of items over a 20 year time frame
• Resolve via: Replacement, Discontinued Use, Remediation
Maintenance/Repair - $351M
$4,130
Electrical
$16,862
Electrical
$141,222
$68,062
Blank Slice
$67,998
$97,062
Roofing
Blank Slice
Mechanical
Electrical
$110,131
$396,272
Plumbing/Steam
Structural
Roofing
Modernization/Renewal - $985M
Mechanical
$39,248
Plumbing/Steam
Structural
$8,119
$34,590
Mechanical
$4,686
$8,127
Facilities Immediate Needs - $42M
$190,984
Plumbing/Steam
Structural
$190,804
Roofing
Blank Slice
Multi-pronged approach to DM reduction
• The core deferred maintenance
balance will be mitigated by a
combination of items:
New
Construction
$X
•
•
•
•
•
Replacement Facilities
Renovations
Discontinuance
Acceptable State Continuance
DM investments
Stop
Using
Total Deferred
Maintenance
$1.3B
$W
$Y
$Z
Renovations
Good
Enough
Priorities
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Priorities
Resource
Stewardship
Planning &
Execution
Delight Our
Customers
Develop & Inspire
Our Team
We will use our scarce
resources in a thoughtful,
optimal manner, being
ever aware of scarcity of
resources and the need to
be financially healthy.
Thoughtful planning and
relentless execution
becomes our reputational
core.
We must delight our
customers in every aspect
of what we do.
Together we will reach
the next level of
performance while
supporting, developing, &
Caring for our teammates.
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A Key HR Focus:
Develop & Inspire
Our Team
Together we will reach
the next level of
performance while
supporting, developing, &
Caring for our teammates.
 Performance management
 Stay the course on PfR rollout, educate & assist supervisors, set clear cascaded
goals, focus on results.
 Manage expectations. Get to qualified “Yes”.
 Change management:
 Are we doing a good job of defining the burning platform
 Support
 What are the greatest needs of the organization? Are we prepared to train and
equip our leaders and team members?
 Be sensitive to workload, capacity, backlog. Create capacity and help people find
smart ways to stop doing things without compromising customer service.
 Development
 Providing the tools, training, creating time, etc.
 Encourage and support a continual learning environment.
 Care (winning their hearts)
 How we go about engaging our workforce. Characteristics such as: transparency,
clarity in expectations, excellence in communication, Community Principles. Even
when it’s a tough message.
 See and care for the person.
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Structure
VC-CFO Senior
Leadership Team
VC-CFO Expanded
Leadership Team (~100)
(Comprised of Direct Reports)
(Included Department Heads)
VC-CFO Council
(Compilation of key leaders both
inside and outside the VC-CFO)
Assistant Vice
Chancellors & Assistant
Deans
(Dotted Line Reports to the VC-CFO)
Leads the VC-CFO function on
strategic and operational (Job
#1) topics.
Ambassadors for creating and
cascading a vision, key
priorities, and operational
excellence.
Focused on key priorities—The
imperatives which will allow us
to move to the next level.
Liaisons to the Schools/Colleges
and Administrative Units.
The linkage with Executive
Leadership (At UCD and UCOP).
We will invest time and energy
to mentor and develop this
group of people—the core
leadership team of VC-CFO
This is the group of our most
talented senior leaders, those
with great potential, people
who have a reputation for
getting it done in the right
way—change agents.
Those close to the heart-beat of
the Schools/Colleges/Units.
Able to influence Deans,
Department Chairs, Faculty,
Vice Chancellors.
Accountable for attaining
excellence across VC-CFO.
Eyes and ears to report back on
how things are going, monitors
of progress, morale, successes,
cautions, opportunists.
The accountability drivers
across the university—a critical
mechanism to attain financial
health.
26
VC-CFO Administrative Initiatives
• Business Management and Analysis Group
• Telecommuting
• Employee Performance Management (EPAR)
• CFO Internship program
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Business Management and Analysis Group
Business Management & Analysis
Group (BMAG) is the internal
support group that provides
consistent high level services to
support both VC-CFO and campus
initiatives.
Arriving soon:
http://bmag.ucdavis.edu
New Services• Project Management
• Tools, Training and Services
Rebranded Services –
• Human Resources consulting
• IT desktop support and system
administration
• Targeted financial administration &
analytical support
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Telecommuting Initiative
Creating an environment within VC-CFO that robustly adopts and
supports telecommuting for increased employee engagement.
• Building on campus tools & piloting new focus for campus
• Creating a 2015 spring / summer cohort goal of 24 employees
• Supervisors supported with monthly meetings
• 6 month trial period
• Long term this initiative creates capacity for additional staff workstations by
having shared workspace for employees
• VC-CFO program specifics coming soon.
29
Employee Performance Management
VC-CFO will be providing unit wide guidelines by March 25th
• Rating distributions / calibration
• Structure of the Departmental Approval Chain
• Development and quarterly review of employee goals
•
•
•
•
•
Specific
Measureable
Attainable
Results oriented
Time framed
30
CFO Internship Program
Creates a highly competitive opportunity for administrative &
business minded students to work on meaningful high-level
projects while receiving 1:1 mentoring from campus leaders.
• Generated student excitement at the Spring 2015 internship fair
• Program launched for spring quarter 2015 with ~ 5 positions
• Fall 2015 recruitment will occur during spring quarter that will grow
program cohort.
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