UU strategic financial choices

Memo from Director Loren J. Rullman to Division of Student Affairs

June 11, 2003

Dear DSA Colleague:

The purpose of this letter is to share with you information about decisions of University Unions (UU) leadership that lie at the intersection of strategic choices and budget challenges. As you know, the budget challenges facing the state of Michigan, the University and—by extension—University Unions, have been significant. We make these decisions articulated in this letter to protect mission-critical (and especially student-serving) areas of the organization. Because of the combination of mandated budget cuts and a decline in business revenues, we have been forced to make budget cuts totaling almost $700,000 for FY04 while attempting to better meet our mission. As you might guess, this has been an extraordinarily painful process for UU staff.

Most significantly, UU will eliminate two operating units: Student Wood Shop and Major Events Office; and will no longer manage another which is currently operated by UU under an agreement with Arbor Lakes management: Arbor Lakes food service. Unfortunately, a couple positions are subject to Reduction-In-Force (RIF) decisions:

The other two positions in MEO will be retained in the existing programming area to produce student organization events. A similar currently vacant UU food service manager position will be open for transfer by the Arbor Lakes Manager who is affected, and AFSCME employees in Arbor Lakes will be affected, and/or transferred to open food service positions, commensurate with terms of the AFSCME contract.

The decision to eliminate these areas was arrived at carefully by keeping in mind the primary focus of the Division of Student Affairs—services, facilities and programs for students. In recent years the percentage of student users of SWS offerings and MEO presentations has been less than the percentage who are non-students. Moreover, Arbor Lakes is not a mission-critical food service business for UU (and serves no students) and has lost money during the only two years of UU’s management (as it did also before UU managed the operation). For these reasons, we made the decision to focus on core aspects of our organization that serve students. When fully phased in, we anticipate these changes will result in a positive change of about $150,000 annually.

Moreover, these decisions were only made after cutting over one-half million dollars in general operating areas, and no more could be cut without significant impact on core mission-critical areas. It is important I convey that we envision no further reductions-in-force or elimination of other organizational areas. As an auxiliary enterprise (auxiliaries must generate their own operating monies) we must, however, continue to be vigilant in maximizing our operational efficiencies to reduce pressure to make further financial modifications.

Although this is a difficult time of tough decisions, I am confident that the choices we now make will lead us to a stronger, healthier, and more strategically positioned organization. Our task is largely one of shifting our resources to the areas of greatest mission priority, allowing us to clearly demonstrate our values through the programs and services of UU. This is clearly a painful time for those leaving our organization after many years of fine contributions, and a painful time for the rest of us who continue on with the legacy of good work that they also offered. Their direct supervisors can be helpful if you have further questions, or wish to know how to best acknowledge their departure. They are good people whom we will sorely miss.

If you have any questions, don’t hesitate to contact any member of the UU Leadership Team or me (lrullman@umich.edu or 6-0869). Thank you for your support of UU staff during a very difficult time.