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UT System Academic Institutions Tuition Proposals for Academic Years 2008-2009 and 2009-2010: Cost Saving Initiatives

 

UT Arlington

Specific cost savings and operational efficiencies have been implemented on several fronts:

 

Energy Performance Contract:  This $18 million project will be completed in FY 2008 and will result in utility savings of more than $2.1 million annually.

 

Electricity Load Aggregation:  UT Arlington teamed up with seven other UT System institutions to purchase electricity through load aggregation — resulting in a fixed-rate contract for five years at $0.07/Kwh.  This represents a savings of approximately $0.03/Kwh.  The University consumed 80,951,538 Kwhs last year that resulted in a cost savings of more than $2.4 million.

 

Purchasing Natural Gas:  The University purchased natural gas using a balanced approach between index pricing and fixed pricing to take advantage of market fluctuations.  The fixed rate was negotiated at $0.15/MMbtu less than the Houston Ship Channel Index.  Overall, this approach has saved the University approximately $436,120 annually.

 

Ongoing Measures:  The University is engaged in ongoing efforts to limit expenditures and gain operational efficiencies.  Following is just a sampling of these activities:

  • The University’s aggressive recycling program reduces landfill charges by approximately $30,000 to $40,000 each year.
  • The University’s Police Department is installing in-car computer systems that will allow police officers to stay on campus (increased security presence) and at the same time will allow them to assemble their reports in the field, an annual savings of more than 2,600 hours, or $52,600.  The Police Department also will begin providing online offense/incident reporting that will save more than $18,000 annually in police officer salaries.
  • The Division of Enterprise Development is saving $40,000 annually through changes in catalogue production and mailing.  New environmental service product lines and new safety service product lines have been introduced, enhancing annual revenue by $200,000 and $500,000, respectively.
  • The Department of Telecommunications has four in-house technicians that save the University more than $200,000 annually when compared to technician rates of an external provider.
  • The Office of Facilities Management continually adjusts equipment run times and temperature settings that result in utility savings of approximately $300,000 annually.  Facilities Management also uses temporary employees in Custodial Services and Ground Maintenance to supplement current staff, which has resulted in wage savings of between $100,000 and $200,000 annually.

In addition, UT Arlington’s 15-year campus master plan emphasizes a firm commitment to sustainable development and the “greening” of the campus.  This commitment is already translating into a more resource-conscious culture on campus.  One example of the University’s recent advances in this area is the new Sustainability Committee, formed in fall 2007.  This committee, which comprises a broad and diverse representation of faculty, students, staff, and members of the community, is working diligently to develop green initiatives and conservation measures, many of which will favorably impact the University’s bottom line.

 

UT Austin

UT Austin is continually engaged in initiatives to realize cost savings and keep expenses and tuition as low as possible. In recent years, initiatives that have resulted in institutional savings of millions of dollars include centralization of office supply purchasing, changes in credit card acceptance policies, and limited outsourcing of selected services. The university continues to invest in technology and technology software that increases the levels of service to the university and community while decreasing recurring operational costs. In addition, over the past several years the university has systematically upgraded its utility infrastructure to deliver chilled water, steam, and distilled water to buildings in the most efficient manner possible and at a lower price than can be purchased from external entities. These efforts have earned an award from the Environmental protection Agency and the Department of Energy. Because energy prices (especially natural gas) have risen dramatically, these initiatives have special significance in the university’s efforts to reduce costs.

 

UT Brownsville

Over the last six years, UTB/TSC has systematically reallocated resources in the amount of approximately $1,203,325. These resources have been used to fund campus needs and have allowed us to minimize tuition increases in the past. To further identify potential savings, the university has reviewed and recently re-bid the custodial contract for the university. Recently, information technology departments have been consolidated under the new chief information officer to develop efficiencies in the operations of campus technologies. The university reviewed maintenance and operation, utilities, and telecommunications costs to identify any available cost saving measures to fund unmet needs and further minimize the impact on tuition and fee increases.

 

UT Dallas

In accordance with the UT Dallas Strategic Plan (Imperative 8:  Reduce Costs), the university continually assesses operations with regards to efficiency, cost reduction, cost avoidance and revenue generation opportunities.

 

Ongoing initiatives include:

  • UT System shared services initiatives:
    • Shared student system (Oracle/PeopleSoft) with UT Dallas, UT Tyler and UT Arlington
    • Shared administrative data center (utilize Arlington data center for student system infrastructure and database administrator services)
  • Employee W-2’s issued via the Web resulting in cost reduction due to reduced printing and postage costs as well as efficiencies from reduction in staff processing time.
  • Utilize student patrol to staff the Information Center and reassign guards to other duties resulting in cost avoidance (reduce need to hire additional guards)
  • Implement Intellecheck software with capability of emailing accounts payable direct deposit payment advices, resulting in reduced printing costs and reduced staff processing time.
  • Implementation of revised budget process of collapsed budget pools, resulting in a 45% reduction in the number of budget adjustments processed each year and reduced staff processing time.
  • Implemented Bursar Office auto-dial system to generate automated phone calls to students advising them of final payment dates, resulting in reduced number of students dropped for non-payment, improved efficiency by not having to reregister students, and improved customer service.
  • Implemented Symposium phone software which allows phone calls to be routed to all available employees in the Bursar Office, resulting in improved efficiency and customer service.
  • Implemented electronic submission of checks for deposit resulting in faster deposits to the bank and increased interest revenue
  • Sealing multiple building envelopes (windows, joints and roofs) resulting in energy cost savings.
  • Implemented shutdown of non-laboratory air handlers in Natural Science and Engineering Laboratory during off usage hours, resulting in energy cost savings.
  • Increased recycling efforts, resulting in reduced trash collection contract costs.
  • Gradual replacement of 20+ year old vehicles with smaller and more gas efficient vehicles and/or carts.
  • Continuing program to increase efficiencies in class scheduling.
  • Review of cell phone policy and use.
  • Gradual transition of telephones to voice over IP.
  • Negotiate for increase in indirect cost rate with Federal government, resulting in increased revenue.
  • Hired fire and life safety specialist with expertise that enables the university to handle small scale fire alarm, sprinkler and gas suppression system projects in-house, resulting in savings on outside contracts.

New initiatives include:

  • Formation of a university-wide committee to generate and review cost savings and operational efficiency initiatives.
  • Implementation of T2 parking software that will end manual entries and reconciliations currently performed by two employees (50% of their time) resulting in more efficient use of staff time and improved customer service.
  • Revise police department shift scheduling procedures resulting in reduction in overtime pay.
  • Create office size and furniture standards, resulting in reduced costs and more efficient use of space.
  • Standardize carpet, paint, trash receptacles, etc., resulting in reduced costs.
  • Selection and implementation of new finance, human resource, payroll and budget systems with electronic workflow and approval capability to improve efficiencies and reduce staff processing time.

Other possible initiatives include:

  • Reduce level of service by issuing accounts payable checks 1 or 2 times per week instead of daily.
  • Mandate use of the purchasing card program for all purchases under $1,000.
  • Reduce number of desktop printers and copiers and transition to area network combination printer/copier/scanners) resulting in reduced costs.
  • Mandate the use of eShipGlobal for priority shipping needs.
  • Mandate the use of StaplesLink for office supply purchases.
  • Review treasury/cash management procedures to increase interest revenue.
    • Implement lock box service for check payments
    • Consolidate university credit card payments to TouchNet Market Place software
    • Implement just-in-time AP payments.
  • Improve the timeliness of collections of sponsored program revenues by assessing interest on late payments.
  • Review service center policy with regard to recovering laboratory support costs from contract and grant sponsors.

UT El Paso

The University continues to implement strategies that will increase economic efficiency by either reducing costs (cost saving) or increasing the benefit received from existing resources (cost avoidance). Over the past few years, these programs have generated aggregate savings in excess of $10 million and include significant efforts in HVAC operations and management, energy conservation, outsourcing efforts, and other institution-wide initiatives. In 2006-2007 alone, UTEP added $758,965 in additional savings through the following cost saving measures:

 

  • Academic computing labs – centralized print management initiative ($125,000)
  • Centralized computer replacement programs ($120,000)
  • Climate control management for campus buildings ($105,000)
  • Reduction in developmental course sections resulting from Enhanced New Student 
  • Orientation and the College Readiness Initiative ($96,600)
  • University recycling programs ($40,800)
  • Water conservation efforts ($21,340)
  • Police fleet management and bike patrol ($8,659)
  • Miner Village – residential waste recycling program ($8,000)
  • Other cost savings measures ($233,566)

 

The University will continue its efforts to identify and implement additional cost savings/avoidance initiatives to ensure that future tuition increases are mitigated. We understand that our student and community profile is such that these efforts are a critical part of our overall management philosophy.

 

 

UT Pan American

Several initiatives are currently being pursued in order to cur energy costs. These include optimization of building automation systems, adding more meters to improve measurement of consumption, and updating cooling plant equipment. An energy conservation program currently under development will include a utilities awareness publicity campaign. In order to monitor and evaluate savings, an energy conservation Web page has been established where consumption patterns for selected buildings will be posted. Finally, plans are being made to install energy efficient lighting on campus, a project which, according to one proposal, will pay for itself through energy savings in less than six years.

 

UT Pan American also is working to reduce workers compensation costs through a pre-placement physical program, increased involvement in injury management, and an incentive-based safety program. The department is also working to minimize hazardous waste costs by evaluating alternative disposal methods and by segregating waste streams onto bulk lots.

 

Finally, funding of the ongoing implementation of and refinement of the university’s administrative software systems (the Oracle and Banner projects) continues to be a challenge. In the coming years, however, as these new systems mature and stabilize, the institution will benefit with improved planning and with improved measurement of processes. Eventual cost savings achieved through better planning, tracking, and management will be critical to operating successfully in an environment where public support is not keeping pace with the needs of higher education.

 

UT Permian Basin

One of UTPB’s biggest variable expenses is energy. UTPB has ongoing efforts to reduce the costs for energy through conservation and through efficiency.   One example of conservation activities is that campus classrooms and meeting rooms have recently been equipped with motion detection devices that automatically turn off lights when no activity is detected in the room, resulting in reduction of energy costs.  A targeted renovation of the central plant and participation in a purchasing consortium has resulted in costs saving over the last few years. 

 

Salaries are another large portion of the budget and positions are carefully monitored through the hiring process.  Vacant positions are evaluated by the Vice Presidents and Presidents to determine if the positions are really needed and at what point hiring should take place.  When possible, salary savings from non-essential vacant positions has increased the cost savings for UTPB.  A careful examination of any new positions has been implemented to determine that the hiring of the position will be supportive of the goals and objective of the University and to ensure positions are essential.

 

Travel is another area of variable expense and Vice Presidential review of all travel has resulted in the reduction of non essential travel over the past few years.   Where possible, some faculty travel has been funded through faculty development grant monies and a campus wide effort to reduce non-essential travel has been implemented. 

 

UTPB is located in a vast geographical area so some efforts have been made to reduce commuting costs to out of town students.  Through the offering of six majors on the Midland College campus teaching site, UTPB has greatly reduced the costs of commuting to those living in and around Midland.   The Andrews Business and Technology Center teaching site in Andrews, Texas gives residents in that area access to UTPB courses without the added burden of commuting.  Over the past two years, through a Department of Education grant, a new distance education room at Howard College has made more courses available without a required commute for students in the Big Spring area.  UTPB also participates heavily in the UT Telecampus and other Web-based offerings in order to serve its students in remote areas. 

 

UT San Antonio

Rapid growth means that UTSA must ‘do more with less’ by consolidating resources,  examining business practices and implementing process efficiencies that result in a more effective application of available funds and reduction of waste. The following are examples of efficiency gains and cost savings that help stretch UTSA’s limited resources:

 

Use of Technology:

  • Online 24/7 access to student financial aid information.  Email notification and elimination of paper award letters has resulted in a savings of approximately $12,000.
  • Transfer of I-9 files from paper to electronic.
  • Use of bar code technology to scan HR documents.
  • Implementation of an electronic document management system to track all contracts and documentation including correspondence with legal offices.
  • Use of email versus mail to contact students is an option being used by practically every department and college.
  • Implementation of e-Bills Student Billing Process to reduce costs and delivery time through the discontinuation of mailing of paper bills to students and replacing them with e-Bills (e-mail reminders). 
  • In 2006, UTSA mailed out ~30,000 bills (2 billings each for Fall & Spring and 1 for Summer.)  Postage exceeded $11,000 plus the cost of a contracted service to process the mailing; paper/envelopes; staff time from computer operations, fiscal services, etc. totaled about $20K.   After programming e-Bills, one person can control the job and the effort is minimal in comparison.  Those funds are now available to meet other workload demands.
  • Other tangible benefits include: no returns for bad addresses or the inability to send bills to international students who did not establish a (valid) US address; we virtually eliminate the “I didn’t get my bill” excuse.  We gain the ability to send additional ‘late’ notices at ‘no cost’ and we can suppress sending bills to students with a balance under $20. 

Partnerships/Consortia:

  • Block booking of events and entertainers for Student Activities results in significant savings allows more for less.
  • Pooling of limited faculty start-up funds allowed the purchase of a cell sorter to be used by more than one researcher versus purchasing duplicative pieces of equipment that are not utilized 24/7.

Recycling/Reuse/Energy Savings:

  • HVAC Schedule adjustments have saved approximately $48K annually. Installation of programmable thermostats pre-set to a limited range, at student housing complexes will save about $12K per year in electrical costs. 
  • Key closures of facilities, such as the University and Recreation Centers, which will not be used by students during holidays – Winter Break and Thanksgiving, results in significant utility and hourly employee wage savings (approximately $60K+).
  • Operation of a natural gas engine to provide electricity to chillers eliminated an electrical peak penalty in 07 winter months saving over $26K.
  • Window tinting to lower energy costs in the library, but to also protect the collections from potential UV damage.
  • Installation of variable frequency drives to provide better chilled water distribution resulting in energy savings yet to be quantified.
  • Piloting a recycling program at Chaparral Village residences (3) with the hope to expand the program to all students housing.  Pilot project is expected to save over $4K / year.
  • Utilization of concentrated biodegradable cleaning products.  Conversion to battery operated recycled water carpet extractor.
  • Maintenance of our status as a small quantity hazardous waste generator.

Process Efficiencies:

  • Hiring proposals and job postings have increased by 46% over the past three years without a subsequent increase in Human Resources’ staff to handle the workload.   This has been accomplished through use of software and training of departmental staff that must interact with the online system.  
  • Converted to extended life HVAC filters saving 350 labor hours, resulting in a savings of almost $13K annually.
  • Utilization of a procurement exemptions list to eliminate the need for seeking duplicative sole source approvals.
  • Electronic development for grant and contract proposals saves paper, as well as the time and effort of faculty and administrative staff.  Hundreds of proposals for research programs are prepared by UTSA and sent to different funding agencies each year. The costly and time consuming paper-based proposal development and routing system is being replaced by a software package which has two significant benefits. First, the time required to prepare and route a proposal is cut to a mere fraction of what was previously required. Second, the software validates that the proposal meets all administrative requirements of the funding agency. This eliminates costly resubmissions to correct administrative details.
  • The Advancement office will implement PaperSave – a centralized archiving system that will eliminate the need to manually copy, route and file each donation. The system provides a complete and secure electronic storage system for source documents without the inherent inefficiencies and risk of loss associated with traditional paper filing systems. 

Rate Adjustments/Vendor Negotiations/Outsourcing:

  • Identified meters qualifying for a more favorable CPS energy rate saving over $40,000 annually.  Another negotiated agreement has reduced the cost of natural gas to large volume meters by approximately $177,000.
  • Establishment of a vendor-run on-campus chemical storeroom.
  • Seeking additional competition in the contracting-out 1098-T Hope Scholarship tax documents continues to save UTSA as student enrollment increases and more forms must be produced and mailed.  We are able to use the same allocation provided when this unfunded federal mandate came into place several years ago.
  • Increased use of bulk mailing for various campus external distributions has resulted in significant cost savings and time stuffing envelopes.
  • Aggregate purchases of software licenses have saved approximately $150,000 annually.
  • Various examples of vendor maintenance contracts being renegotiated for modest to considerable savings, especially within our Information Technology area where PBX maintenance was outsourced for a net savings of $80,000.
  • Outsourcing of the student email system to Google will free up internal resources.  Email access to students will be international and the mailbox size will be increased plus the student can use that email address for life making it easier for us to stay in contact with students/alumni.

UT Tyler

The concern for UT Tyler is that allowing tuition increases to lag behind and not fully replace declining state support is adversely affecting its ability to meet its mission and strategy. Some level of funding pressure is acceptable, even advantageous, as it forces the institution to become more efficient in delivering educational services. But at some point, the quality of service delivery deteriorates, and it is clear that UTT are at that point.

 

Cost-saving efforts are unfortunately having direct impact in the classroom. Average class size has grown dramatically – from an FTE student to FTE faculty ratio of 15.2 in 2000 21.0 in 2006, a deterioration of 38%; the use of tenured and tenure-track faculty has dropped from 73% in 1995 to 47% in 2005; and, UTT has deferred salary treatment for faculty and staff of the university for six months this year. None of these actions are preferred, but labor is the most significant driver of cost at the university.

 

The other significant cost driver is facilities. Total number of square feet required is driven by enrollment and UTT’s growth has caused total dollars spent on facilities to increase. But the university has been exceptionally effective at managing that growth. UT Tyler’s efficiency as to utility usage ranks us as second most efficient of public higher education institutions in Texas on a KWH per square footage measure. In addition, UTT joined in with a consortium of UT System institutions to procure a significant price reduction from our electricity provider, TXU, a savings of over 50% of their normal rates.

 

UTT carefully manages all support service contracts, such as custodial and groundskeeping, while working to keep up a quality campus environment. Other efforts to reduce cost are evident in the absence of growth of the university’s travel budget at less than $1 million. Similarly, the budget for Intercollegiate Athletics remains constrained – only $1.5 million in 2008.