Chancellors Office Review Working Group 2 June 2004

These notes are not normative in any sense. Official minutes of the meeting are available from OUS.

Geri Richmond, Howard Stone, Don Blair, Jay Singer, Henri, Geri Richmond, Bridget Burns, MardiLynn Saadhof, Neil Bryant.

Meeting begins at 1704. Chancellors Office Working Group. Apologize for calling meeting at such a last moment. Some things just came together this morning. That is the reason for being so late. Chancellors office review group has been working very hard. Have been looking at all options. I would like to report to committee on where I am and we can decide as a group about ideas. Have been keen on finding recurring fund savings - came up with savings in academic affairs of 1.1 million. Reference Chart.

Chancellor's Office Review Working Group
Chancellor's Office Budget Opportunities for Reduction
Unit Annual Reduction

• Academic Affairs $1,100,000
• Finance/Administration: Savings 400,000 This is 9%
• Information Technology: Savings 500,000 This is 15%
• OCATE: Savings 1,000,000
• Total: $3,000,000

Kurt. What I did in consultation - called a proposed consultant want to use to look at merged operations. What typically they obtain is 10-15% logical range. May need to make investments to capture long term basis. If move to consolidated data center are new technologies - investment would save us money in long term. Having a stretch goal or target. Consult has n ot done work - using industry rule of thumb - one we feel comfortable in. Come back and report on quarterly basis on progress making toward target.

Kurt and I (Geri) use fund balances to do up front costs that would give us long term savings - what kind of numbers are necessary - in looking at fund balances - that all sounded reasonable.

Kurt this is Don. I want to talk about 15%. This is industry benchmark but not related to specific assessment. That is where level of anxiety - have not dug in and looked at what opportunities are. What is your level of confidence? Ans. When I met with Max today - looked at lower end. If we take 15% and take target and is a strategic estimate - if some liberty to come back and do better. Max and I know are opportunities for standardization and economies of scale. We know there is something there but don't know exact number yet. Might take more than a year to get it. We know we will have savings from this - environments are very similar in some regards. Standardization - will be resisted by regional universities that have a standard environment. Geri may need to reserve fund balance going into second year.

Mardi. Will be a one time charge to get to annual reductions. Do we have that as a separate document. Geri. That will be at board meeting. That will show up in discussion of fund balances. Henry. One time charge - that is appropriate way to get to look at it. These are achievable long term reductions that can't be achieved in first year or so. Fund balance to get to reach long term reduction.

Assuming this is related to measure 30 reductions and streamline costs? How would envision playing this out visa vie the campuses. Our target as system is 7.5 for biennium. This suggests savings would 6 over biennium?

John Yunker: Basically this is a result of reorganization of 3 mil available to board to do other things this biennium. Out of this 3 million figure, you have already decided to spend 1 mil in 7.5 reduction plan. Already took action on that. You have already decided to put aside 500 aside for salary fighting fund. That leaves 1.5 left resource moved out of resource for board to decide on its priorities on what to put it towards. For example MBF or something else. That is there for board to decided in reallocating that money from general administrative expenses. Doesn't have to go into 7.5 million. Could go to affordability or access. That is the board's decision, completely open.

Remainder is 1.5 million os uncommitted. This is 1.5 for this biennium. Is 3 for future.

Of 3 million some has been committed.

Third area is realign OCATE shift from system oversight to integration with Portland State. Saves us 1 million. Tom Andres. Couple of months ago was in discussion with Geri about possibilities of OCATE and how to integrate it somewhere on a campus. Look at some other options. Decided after discussion with PSU went through some possible proposals and last week offered a final proposal regarding 1 million and some fund balances as well. Still some details regarding use of capitol center. Q. This is a net savings of 1 million per year.

Henry - any questions. No. Geri that gets us to total of 3 million that we decide if we are ready to go to board for approval on Friday. Will there be specifics in terms of short term bridge on fund balances? Ans. Yes. Discuss issues that would arise with regarding to against fund balances. Talk about IPS - other transitions related to personnel - timing or gaps after July 1. Identify those on Friday.

Only concern is with regard to IT just to reiterate that these are very tentative in terms of magnitude of savings - will require good faith on both parts to realize savings but may take longer - make OSU whole. With regard to IT - this will require some additional support to small Universities who are using Chancellor's office if we are moving to standardized data base - may need some additional system to more regional universities in terms of training and other systems. With that caveat I am in support. We need to earmark some of funds in fund balances to that type of activity. We have identified some resources for that transition. We are identifying some resources for regional universities and for cost of whole evaluation process. See that in fund balance numbers. How much of 400,000 in finance/administration. Tom have identified approximately 70%. Still looking at some options. Everyone has gone through a process of identifying. You feel confident you can find 400,000? Yes.

Do we need to move approval. Passes.