Though the overall need to reduce and monitor expenses remains crucial as UC Merced navigates the effects of the coronavirus pandemic, Chancellor Juan Sánchez Muñoz has decided not to implement a salary and time reduction program within the 2020-21 fiscal year.
In a Dec. 14 message to campus , the Chancellor emphasized that the university’ revenue sources do not align with expenditures. While this requires a much broader financial strategy and better budgeting practices, salary and time savings always should be a last resort, Muñoz said.
If the university is not successful in reaching cost-reduction goals by the end of spring semester, leadership will revisit the salary and time reduction model selected via survey by the campus community. The fiscal year ends June 30, 2021
Financial Responsibility Survey
The survey, released following a Financial Responsibility town hall on Dec. 4, presented three possible models for salary and time reduction. There are 671 responses, and 54% supported Model 3 , which offers the largest protection for lower-income earners.
Steps Taken So Far
Interim Chief Financial Officer Kurt Schnier, in a Dec. 14 message to campus , noted that the university has held vacant positions, critically evaluated the renewal of contracts, reviewed high-level expenditures, and developed budget reduction targets of 5% for the current fiscal year to address a structural deficit of approximately $33 million, a result of prior financial decisions, as well as an estimated $58 million loss in auxiliary revenues resulting from the pandemic.
Schnier noted that the 5% target is not commensurate with the cost savings the university needs to alleviate a structural deficit and support the future debt burden. Continuing efforts to reduce expenditures will be needed.
Financial Responsibility Communications
- Voluntary Separation Program Launched (Jan. 7)
- Chancellor: No Salary or Time Reduction Will Be Implemented in Fiscal Year 2020-21 (Dec. 14)
- Interim CFO: Efforts to Reduce Expenses Will Continue (Dec. 14)
- Early Childhood Education Center to Resume Operations (Dec. 11)
- Fiscal Responsibility Town Hall video (Dec. 4)
- Consultation Begins on Possible UC Systemwide Curtailment Program (Oct. 28)
- UC President Drake Begins Consultation on Possible Curtailment Expansion (Oct. 12)
- Cost-Saving Measures That Prioritize Spending (June 29)
- Measures to Take for Campus Sustainability (June 8)
- Position Control and Fiscal Responsibility Guidelines (April 9)
Questions and Answers
Some answers to the many questions asked at the Financial Responsibility Town Hall on Dec. 4.