UC Office of the President

Transcription

1 UC Office of the President Transform: CFO/COO Realignment and Carbon Neutrality Initiative ABOG Annual Conference Rachael Nava Executive Vice President, Chief Operating Officer April 13 th, 2015

2 AGENDA Initial impressions of UC operations Overview of UCOP CFO/COO Realignment President s Strategic Initiatives: Becoming carbon neutral Operating Efficiency

3 I. Initial Impressions of UC Operations

4 First, a little bit about me Started Feb 9 th, 2015 Alumna of UCSC Operations executive Background is in healthcare Public, non-profit health plan $1B budget, 320K members Other experience: community clinics, non-profits, biotech Motivated by complex problem solving

5 My first few weeks drinking from the firehose

6 What am I focused on? Goal 1: Learning/understanding as much as I can Building relationships Campus visits Assessing processes and structures Implementing final phases of CFO/COO Realignment

7 What am I learning? Strong commitment to mission across the system Shared governance is important, but not always easy System and campus cultures can be different Leverage existing programs for efficiency Working Smarter Campus-based efficiency programs UCOP-specific programs: Efficiency Review and Strategic Operations Review Opportunities to partner for more scalable, flexible operations

8 I. CFO/COO Realignment

9 CFO/COO Realignment background With CFO transition in 2014, opportunity to look at org design we will undertake a full review of Business Operations and the Office of the Chief Financial Officer to determine the best structure for both divisions to ensure maximum effectiveness, efficiency, and support for the goals of the Office of the President. -President Napolitano OP staff and campus representatives participated in review process

10 CFO/COO Alignment Schedule PHASE ALIGNMENT COMPONENTS TIMEFRAME 1 Alignment Review April June, Transition/Communication Plan July - August Alignment Implementation August 14 March 15 4 Optimization Post Implementation 10

11 Key Realignment Decisions Two divisions: COO & CFO Consolidate Financial units under CFO A one-stop service model Budget moved under CFO Opportunities to streamline Capital Markets Finance and Capital processes Resources Management merged Consolidate Operational units under under CFO COO Realign and consolidate some Realign Local OP services to focus functions for synergies on needs of UCOP-based clients Central Travel moved to Energy & Sustainability merged and Procurement; elevated Banking & Treasury Services moved UCPath Center moves to COO to OCIO Program Management Office created 11

12 Realignment for Organizational Optimization CFO Nathan Brostrom COO Rachael Nava CFO Immediate Office Zoanne Nelson Cathy O Sullivan UC Path PMO Mark Cianca COO Immediate Office Cathy O Sullivan (Interim) Financial Accounting (Controller) Peggy Arrivas Risk Services Cheryl Lloyd UCOP Administrative Services Vacant Energy & Sustainability D. Obley (Interim) Budget Analysis & Planning (Operating Budget) Debbie Obley Capital Asset Strategies & Finance Sandra Kim Human Resources Dwaine Duckett IT Services Tom Andriola Procurement Services Bill Cooper Program Management Office Z. Nelson (Interim) UC Path Center Jim Leedy Office of the Chief Investment Officer Jagdeep Bachher Financial Services & Controls Dan Sampson Red box denotes unit that is new or was moved or significantly reorganized. 12

13 We are committed to a long-term fiscal plan which supports our core mission Focusing renewed effort on: Long-term Financial Stability Long-term Budget Model The University is committed to developing a multi-year, sustainable financial plan which addresses long-term needs and priorities Reducing our Cost Structure Made significant strides in reducing our cost structure through Working Smarter and other efficiency efforts, like UC Care Revenue Generation Renewed systemwide effort to generate new long-term sources of revenue, such as through new online strategies and technology commercialization Tuition Policy Committed to developing a tuition model which offers students stable and predictable tuition increases Optimization of Day-to-Day Operations Efficiency Review A grassroots effort to encourage UCOP staff to identify opportunities to reduce costs, streamline processes, eliminate duplication, increase transparency and improve the quality of services. Campuses are also being encouraged to conduct similar efficiency projects 13

14 II. Presidential Initiatives: Becoming Carbon Neutral

15 Through Presidential Initiatives, UC is actively demonstrating its public value The University has introduced a series of initiatives that reinforce its mission and commitment to honoring its social contract. These initiatives generate financial and social returns, conveying UC s public value in a highly visible way. Presidential Initiatives Summary A. Sustainability Carbon Neutrality Global Food B. Global Impact Mexico President s Challenge Grant Technology Commercialization C. Tuition Policy Tuition Stability D. Academic Pipeline Graduate Students President s Post-doctoral Fellowship Program E. Equity Undocumented Students F. Transfer Students Community College Pipeline 15

16 The Carbon Neutrality Initiative seeks to make UC the first carbon-neutral major research university Carbon Neutral by 2025 On-Campus Energy Efficiency and Renewables Develop Biomethane Transition from natural gas to biomethane to fuel UC s efficient electrical plant facilities Reduce On- Campus Demand Invest in energy efficiency and renewable generation to reduce campus load Add Off-Campus Electrical Supply Enter the wholesale electrical market to control our supply 16

17 Carbon Neutrality Initiative Highlights Launched wholesale electricity program Procured largest solar installation by any university in the country Convened Global Climate Leadership Council Established student fellowship program Organized carbon neutrality research workshop 17

18 Cost Avoidance through Energy Efficiency 18

19 Onsite Renewable Energy March

20 Cumulative LEED Certifications March

21 Food Global Food Initiative launched 5 campuses and 3 medical centers exceeded 2020 goal to purchase 20% sustainable food March

22 Transportation Davis is one of the only two Bicycle Friendly University Platinum-rated campuses in the country UCSF recognized as best university in the country for commuters Nearly 200 electric vehicle charging stations systemwide 22

23 Waste Reduction UC Irvine diverts 93% of waste from landfill This amounts to only 100 pounds of waste per capita annually Zero Waste Sporting Events UC Berkeley #1 in RecycleMania Game Day competition 23

24 IV. Operating Efficiency

25 UC is actively employing diverse operational and financial strategies To address financial challenges, UC is implementing both short and long-term reforms that will cut costs and generate new revenues Operational Reforms and Financial Strategies Balance Sheet Business and Financial Enrollment, Tuition, and Financial Aid Working Capital/Liquidity Strategies generated over $300 MM in additional income and distributions during FY The University moved an additional $2 B from STIP into TRIP (for a total of $4.5 B) in FY TRIP earned a 14.63% * annual rate of return STIP annual rate of return was 1.58% * Procurement P200 Strategic Procurement is designed to save $200 MM each year Health and Welfare Benefit Savings New medical plan structure saves an estimated $92 MM (CY2014); UC Care agreement projected to save $12 MM in first year and potentially more in future Captive Insurance Fiat Lux Enrollment Additional non-resident students Financial Aid Opportunities to minimize future return-toaid costs: Middle-class scholarship program * As of June 30,

26 The Working Smarter Initiative has achieved over $660 MM in financial gain in just 4 years * The initiative, which was designed to streamline operations and develop a more sustainable financial model is well on its way to exceed its goal of $500 MM in 5 years Working Smarter is a portfolio of over 30 projects aiming to reduce administrative costs, improve operational efficiency, and find new sources of revenue across the University The most significant cost savings opportunity is having common, integrated systems which will replace individual campus systems such as those in fund accounting and procurement, and other larger scale administrative systems $426 MM Cost Savings $237 MM Revenue Genera/on $663.7 MM Fiscal Impact * Source: Working Smarter website: h@p://workingsmarter.universityofcalifornia.edu/ 26

27 P200 seeks to redirect $200 MM to teaching, research, and public service P200 Program will recapture $200 MM annually currently lost through sub-optimal purchasing contracts and practices through innovate procurement practices Results and Projected Benefits $200 $100 $120 $128 $140 $165 $ MM FY12-13 (baseline) FY13-14 (est. & actual) FY14-15 (est.) FY15-16 (est.) FY16-17 (est.) Actual Estimated Benefits FY FY FY FY FY System-Wide $60 $75 $97 $111 $130 Local Campus $40 $53 $43 $54 $70 Total Benefits $100 $128 $140 $165 $200 All numbers in $ MM 27

28 Concluding Remarks UC continues to play a vital role as the nation s, and arguably the world s, leading public research university system Under the leadership President Napolitano, UC has introduced a series of initiatives that demonstrate the value that it offers the nation, not only for the populace it educates, but also through transformative elements of public education and research that ultimately serve the public good. The University continues to strive to meet its pillars of excellence Quality, Access, and Affordability UC is committed to a long-term fiscal plan that supports our core mission, while simultaneously addressing continuing challenges related to post-retirement benefits, federal research funding, and healthcare reform 28

29 Thank You Rachael Nava Executive Vice President, Chief Operating Officer University of California Office of the President