IT CENTRAL SERVICES
BUDGET REDUCTIONS

• Expenditures
• Staffing

Memo to ITCS staff regarding reduction in expenditures

April 10, 2003

Colleagues,

I’d like to give you an update on the FY04 budget and what we are planning to do to make savings necessitated by reductions in state funding to UM. We had our budget conference with the Provost on April 3. It went quite well and the Provost and James Hilton, the Associate Provost to whom we report, were pleased by our progress this year and felt that our plan for contending with budget reductions for next year was sound.

As you know, we were asked to self-fund a salary program and to model reductions of 4% and 6.5% on top of that. This was true for general fund and auxiliary units. A reduction to fund a 2% salary program for the general fund is $204,217; the 6.5% reduction for the general fund is $967,408. A reduction to fund a 2% salary program for auxiliary units is $548.698; the 6.5% reduction for auxiliary units is $2,409,888. In addition, we asked general fund units to model an additional 2% reduction in order to create a reallocation pool. This allowed us to restore some proposed reductions in some areas, and to fund several new projects. The directors and I worked hard to present a budget proposal to the Provost that would have the least impact on services to the University community and the least impact on staffing. We believe that we will have to contain costs for some time.

We have several very important jobs for the next year: 1) continuing to operate and enhance services provided to the UM community; 2) implementing our share of the IT Commons work associated with those services and participating fully in formal and informal IT Commons work; and 3) working on taking cost out of the system—not just reducing budgets, but looking for ways to reduce the amount of work being done. This can take many forms, including improving interfaces to services so they don’t require as much support, or creating systems that allow service set-up to be more automated. This work will benefit us now and in future years.

The ITCS lead team has identified a number of areas for savings and I’d like to describe these. I’d like to thank all of you who suggested savings opportunities; many of the below suggestions come from you.

Personnel-Related Reductions

1. Overtime, On-Call: We have reduced overtime and on-call budgets where we could. Some reductions in overtime may result in longer response to problems, although we are committed to keeping the impact on our users as small as possible. Consolidating on-call so one on-call person can cover more services is part of this reduction.
2. Keeping Open Positions Unfilled: We have identified a number of currently empty or soon to be empty positions that we will not fill. We have identified 2 manager positions that will not be filled (these are in Administration); 1 manager position that is being changed to a technologist position (UMCE); and one manager position that is being reduced from full-time to part-time (User Services). In addition, we will not fill 1 clerical position (Administration), 1 technologist position that becomes empty due to a retirement (UMCE), and a half-time technologist position (User Services). We may post additional positions in the course of this year and next, and we will continue to be cautious about when and how we fill positions, especially from outside of ITCS.

General Expenses

1. Overhead: We have reviewed all overhead expenses and will be reducing expenses in supplies, staffing, and space.
2. Training & Travel: All areas are reducing unnecessary training and travel to different degrees. We were fairly conservative in defining what necessary training and travel expenses are. We have not cut all training and travel because I think it critical for us to have funds to help us learn to do new things. But, clearly, we will be doing much less of this next year.
3. Supplies: All of our overhead supplies expenses become part of our rates we charge our users. We have targeted a reduction of 10% in our overhead supplies budget. I believe this to be easily manageable by careful selection of supplies and by considering the appropriateness of some purchases. Any funds spent on unnecessary supplies are unavailable for other uses. I have asked Donna Chambers to work with a small group of purchasing staff and others to propose supplies reductions to the ITCS lead team. The lead team will then decide what level of spending (and on what supplies) is reasonable. For now, I want to ask all of you to ask yourselves before ordering something if it is appropriate for the University to purchase this, and do you really need it.
4. Telephones: We have reviewed and will continue to review charges for desktop telephone service, cell phone service, and pagers. We have already changed the type of telephone set for many staff and this has reduced cost without reducing functionality. We will continue to do this swap of telephones. Therefore, we are expecting to spend less next year on regular telephone service than we spent this year, and this year’s expenses are lower than last year’s. Managers are reviewing cell phone and pager costs for units to make sure the people who need service have it and those who don’t, don’t. These technologies make it easier for many of our staff to do their work and to be responsive to users; they are, however, not an entitlement.
5. Hardware: In many areas, we have extended the replacement cycle for hardware by one year. This affects desktop and server equipment. This reduces expenses by spreading a replacement cost over a longer period of time; it has the risk of extending the cycle too far. So, it is do-able for a year and probably not beyond that. There is effort underway in the UMCE groups to evaluate Linux as an OS that could replace Solaris. This would reduce our hardware and software expenses in the future if it turns out to be viable. We should also be looking for opportunities to use existing hardware that has outlived its original purpose, for other uses.
6. Vehicles & Parking Permits: We have reviewed the vehicles we lease and we are consolidating them. This will require more communication among the staff using those vehicles to coordinate their use. I expect this reduction will not impact service to our users. Units will also be reviewing their expenses for parking permits and reducing them to the extent that the reductions don’t have a large impact on our users.
7. Hosting: As we do now, we will continue to watch hosting expenses carefully and to require pre-approval for reimbursement for hosting. It is our expectation that when regular meetings are held, especially when the participants are all UM employees, there will be no reimbursement for food.

Services

1. Campus Computing Sites: We will be slightly reducing the hours at one of our campus computing sites. Through use of the reallocation pool, we have been able to maintain the hours at all other sites.
2. Dial-In: As use of the dial-in service goes down, we continue to reduce the number of dial-in modems as use. We expect to see our expenses decrease by $135,000 for this service.
3. REQ: We will stop supporting REQ, after working with users to complete the transition that is already under way from REQ to another service.

There will be Reductions in Force (RIFs) in ITCS for FY04. The next message you receive from me will explain the RIFs, and will answer some questions you may have about the budget impact on staff.

Kitty Bridges
Executive Director
Information Technology Central Services

Memo to ITCS staff regarding reduction in staffing

April 10, 2003

Colleagues,

Eliminating positions is the most painful of all budget reduction measures. The ITCS lead team has identified 5 people whose positions (equaling 3.85 FTEs) must be eliminated as reductions in force (RIFs). The staff in these positions have been told today that they are being laid off. It is extremely difficult to “be RIF’d” and it is also very hard to be a colleague of someone who has been RIF’d. We all need to be as sensitive as we can be to their feelings. This will be a rough time for everyone and I encourage you to seek support from your workgroup, your manager, FASAP or other sources as you may need. I am also available to talk with any of you.

I want to give you an idea of the kind of services they are being offered:

• All five people are being given 90 days as their RIF period, during which their jobs will be to find another position.
• ITCS Human Resources staff and managers in the areas affected will be working with the staff whose positions are being eliminated, to help them with the effects of the decision. This includes providing them training, assisting them with a job search, and following up on placement opportunities.
• UM Human Resources group provides assistance in a number of areas. RIFd staff have been given the information about all of these resources. UM Employment, FASAP, and Benefits staff will be at Arbor Lakes tomorrow to counsel these staff.

You probably have a lot of questions; below are the answers to several key questions. Additional questions and answers will be available on the ITCS Backstage website shortly.

Q: Will there be more RIFs?
A: This is probably the end of RIFs on the General Fund for FY04. We do not expect additional general fund staff reductions unless the University or ITCS’ budget is cut further than the planned amount. However, for all auxiliary services, we don’t yet know if we need to make additional reductions. This will depend on our ability to attract users for the auxiliary services or new work for auxiliary units. The auxiliary units include: ITCom, Education Services, Contract Services, and, most of WATS.

Q: Will staff who have been put on RIF status continue to work while they look for a job?
A: It is the first priority of RIF’d staff to find a new job—that is their job now. We will make space and resources available to them should they wish to do their job search from Arbor Lakes. They will not, unless separately negotiated, continue to do their current work.

Q: Were any managers RIF’d?
A: No. Two unfilled managerial positions will not be filled; one currently unfilled managerial position will be converted to a technologist position; and an unfilled managerial position will be changed from full-time to part-time. No managers have been placed on RIF status.

This is a rough time for all of us. Please support your colleagues and let me or others know if you need to talk. ITCS will come through this and we will continue to serve the community’s IT needs with energy and enthusiasm.

Kitty Bridges
Executive Director
Information Technology Central Services