Human Resource Services

Hiring Freeze

DDD memo from President Machen (July 2, 2007)

July 2, 2007
MEMORANDUM

TO: Deans, Directors and Department Heads

FROM: J. Bernard Machen, President

SUBJECT: Hiring Freeze and Emerging Budget Management Initiatives

In light of a projected budget deficit of between $20 million and $30 million, a campuswide hiring freeze is being implemented effective immediately. The hiring freeze will apply to all faculty and staff positions; however, exceptions will be considered for those positions that are funded from non-state sources such as contracts and grants and clinical revenue. You will receive instructions for exception considerations within the next week.

The projected budget deficit is the result of Several factors.
During this year's Legislative session, lawmakers used a different formula for funding student credit hours, and state universities will receive no tuition increase for the upcoming year. In addition, a slowing economy is creating a slump in sales tax revenue, which state officials say could lead to a shortfall later this year. On Friday the Governor's Office sent communication to all state agency heads stating that agencies should anticipate a minimum reduction of 4% in recurring General Revenue Fund appropriations during Fiscal Years 2007-2008 and 2008-09. Finally, the future of the property tax situation in Florida remains uncertain.

Within the university we have several unfunded priorities that we are committed to maintaining, including:

In addition to the freeze, the university will implement three other strategies: a cost-reduction and efficiency task force, revenue enhancements, and special budget management initiatives.

Cost Reduction and Efficiency Task Force

The University of Florida will create a cost reduction and efficiency task force, composed of faculty, staff, students and administrators.

I will appoint the task force and charge its members with examining the university's expenditures, identifying and quantifying cost reductions and efficiency, and making recommendations for short-term and long-term implementation.

Examples of reductions and efficiency gains may include:

Revenue Enhancements

In addition to implementing a hiring freeze and exploring ways to reduce costs and operate more efficiently, the university also will evaluate opportunities to increase revenue. If $10 million of the deficit were to be addressed solely with tuition, a 12% increase in tuition would be required this year. Unfortunately, the lack of a tuition increase this year means UF must seek other financial resources for meeting the needs of our faculty and students.

One possible source of additional revenue would be increasing the number of student credit hours undergraduates take each semester. Our extremely bright undergraduates take fewer hours per term than students at our peer institutions around the nation. By taking one more course per semester, students would graduate sooner and move into the work force more quickly.
This means that their degree would cost less and their earning potential over their lifetimes would increase. We will explore ways to encourage this practice.

Another source of revenue could be UF's 26 Direct Support Organizations. These various businesses around campus serve all sorts of communities across the state and the nation.
Additional opportunities for financial contributions from the DSOs will be explored. Some of them, such as the University Athletic Association, already make contributions that benefit the students.

The university provides many services to non-students for which we have historically not been compensated. An example of this is when alumni request transcripts. We provide more than 200,000 transcripts per year and yet UF is the only school in the State University System that does not charge for this service. We will evaluate the services that we provide to determine which ones should remain free and which ones should be paid for by those who benefit from them.

Finally, UF will evaluate its use of fees for services provided for our students such as distance learning, computer network access, and laboratory instruction. There may be opportunities to recover the expenses associated with some of these efforts through the implementation of modest charges.

Emerging Budget Management Initiatives

The University anticipates continued budget challenges in the coming fiscal year. As a consequence, it is even more important to maximize the use of all revenue sources, operate as efficiently as possible, and reduce costs.

Within each unit, Deans, Directors and budget officers will need to carefully reexamine the specific uses of state funds (general revenue, E&G, tuition & fees, and trust funds) and the uses of unrestricted monies from non-state sources.

As a general priority, state funds should be applied to cover salary costs associated with the university's educational programs and essential core mission activities. Flexible, unrestricted, or fungible non-state funds should be used before state funds to cover faculty and staff salary costs for non-sponsored research and service activities (ie, research and service not funded by extramural grants or contracts or specifically funded by county, state, or federal allocations).

Examples would include:

1. Utilizing interest earnings from endowments and other spendable accounts in the University of Florida Foundation, rather than state funds, to fund faculty salaries for unsponsored research, 2. Utilizing unrestricted indirect cost accounts, rather than state funds, to fund faculty salaries for unsponsored research, 3. Utilizing practice plan monies to fund those faculty efforts devoted to clinical service.

Despite our best efforts to plan for the budget shortfall, we still face uncertainty. The full implications of the emerging changes of the property tax assessments on our budget are not yet known. By taking this action now we will be able to address the known deficit and be prepared for potential changes during the year.

As we enter this challenging period we must remain focused on our core missions of teaching, research, and public service and our services to students. These priorities, along with the source of funding for the position, will drive decisions related to exceptions to the hiring freeze.

DDD memo from Kyle Cavanaugh, Sr. VP for Administration (July 3, 2007)

DATE: July 3, 2007

TO: Deans, Directors, and Department Heads

FROM: Kyle J. Cavanaugh, Senior Vice President for Administration

SUBJECT: Updated Information Hiring Freeze

Effective Monday July 2, 2007, President Machen announced a campus-wide hiring freeze. The purpose of this memorandum is to serve as additional guidance related to the hiring freeze and related transactions. As you review the information, it is important to understand that it is expected that requests for hiring exceptions be kept to an absolute minimum in light of current and potential future budgetary constraints.

During the week of July 2, reports will be sent to each Dean and Vice President that will include all:

Each position on the report should be reviewed carefully. All requests for hire or continued posting must have the approval of the Dean, Vice President, and respective Senior Vice President. The reports need to be returned to Human Resource Services by Monday, July 9.

The process for posting a new position will require a completed exception form (located online at http://www.hr.ufl.edu/class_comp/forms/exemption-request-form.pdf) and have it approved by the appropriate Dean, Vice President, and Senior Vice President. All exception forms should be faxed to 846-3058 prior to the initiation of a requisition.

The following titles and categories are exempted from the hiring freeze:

Again, it is expected that requests for exceptions will be kept to an absolute minimum.

Requests from academic units must first have approval of the Dean and then be routed to the respective Senior Vice President for review. Requests from administrative units must first have approval of the Vice President and then be routed to the Senior Vice President for Administration for review. Decisions will be communicated in a timely manner.

Questions regarding the hiring freeze should be directed to Donna Burdge, Associate Director, Recruitment and Staffing, at burdge@ufl.edu or 273-1736.

Hiring Freeze Q&A

Why is there a hiring freeze? The hiring freeze is being implemented as an initial response to a projected deficit that could range from $20 million to $30 million caused by a significant decline in revenue and rising expenses. The deficit is a result of a change in the way the Legislature funds enrollment and no tuition increase this year for state universities. In addition to that, the governor instructed UF and other state agencies to anticipate a minimum reduction of 4 percent in recurring General Revenue Fund appropriations during Fiscal Years 2007-08 and 2008-09.

I thought the governor just approved a tuition increase for UF, FSU and USF, so why do we still have budget problems? Gov. Crist did sign the tuition differential bill into law, but it will not be implemented until next year. That means UF and the other schools still must get through a year without a tuition increase to cover increasing costs. On Friday, the Governor’s Office also sent communication to all state agency heads instructing each agency to submit plans for the potential of reductions for Fiscal Year 2007-08 appropriations totaling at least 4 percent of their recurring General Revenue. Although the approval for the differential tuition program is a positive step, the university will continue to face financial pressures.

Are there any exceptions to the hiring freeze? Exceptions to the hiring freeze will be considered for positions funded from nonstate sources, such as clinical revenue and contracts and grants. UF Human Resource Services will provide additional information during a forum to be held the week of July 2.

What about hirings that are in the process of being carried out? Can those continue? These situations will be handled on a case-by-case basis, but in most instances the hiring will be put on hold.

Will there be layoffs? No layoffs are planned at this point.

The College of Liberal Arts and Sciences is already facing a financial crunch due to past overspending. Won’t this hiring freeze only worsen that situation? The college has already been looking at ways to reduce its expenses while maintaining its ability to serve a large student population. Every college and unit on campus will be asked to implement the freeze.

Why can’t the university use money from the Athletic Association to apply toward the deficit? The University Athletic Association does not receive any state funding for its operations. In fact, UAA does contribute significantly to the university — $37 million since 1990. Unlike 90 percent of the athletic associations in the country, UAA is a revenue-generating operation. But while UAA has a limited amount of discretion in how it spends its funds, the vast majority of the money it receives is designated by donors for specific purposes related to the athletic program. The funds cannot be spent elsewhere.