Budget Update and Salary Reduction/Furlough Plan

Financial Stability

Chancellor Block addresses the salary reduction/furlough plan submitted by UC President Mark Yudof.

As I write this, the California state budget has finally been passed, but it makes no change in our fiscal situation or our plans to address the shortfall.

I’m sure many of you have questions about the implementation of the salary reduction/furlough plan submitted by UC President Mark Yudof and approved by the Regents at their July meeting. I am pleased, as I know you are, that President Yudof followed many of the recommendations we submitted to him, including, for example, preference for furloughs, protection of employee benefits, graduated salary cuts, and flexibility for the campuses with medical centers to develop alternative plans in order to avoid unnecessary disruption of health care operations. Those alternative plans are currently under review, and health system employees will be kept informed.

For the rest of the campus, implementation details for the salary reduction/furlough plan are still under development, but I want to tell you about the decisions that have been made. The plan will take effect on September 1, 2009, at which time eligible employees will begin to accrue furlough days as paid time off that is intended to be used during the 12 months of the furlough plan. Please understand that for those employees included in the plan, paychecks, reflecting the cut, will be the same amount for each of the 12 months, starting with September earnings, regardless of when employees use their furlough days.

Under separate cover, you will soon receive notification about UCLA’s plan to extend this year’s Winter Holiday Closure. We will encourage employees to use furlough days as part of this plan, which will provide an extended period of time off during the holiday season. It also will help the campus accrue more energy savings than our previous, shorter closures. However, during all break periods, the UCLA Hospital System and certain essential-service and research facilities may be designated by deans and vice chancellors to remain open.

Beyond campus closure periods, each school and organization will develop plans for how it will implement remaining furlough days for those who accrue them. This approach will allow units to tailor the process to meet their business needs while also providing the flexibility to meet employee needs. I know you still have many questions related to the furlough process. Campus Human Resources is working with departments throughout the campus to provide additional information regarding the furlough plan, and the UC Office of the President will issue additional Q-&-A materials that will help provide answers. Each school and organization will communicate its process for implementing furlough days to its staff and faculty.

For represented employees, the salary reduction/furlough plan is subject to requirements of the Higher Education Employer-Employee Relations Act (HEERA).

I also want to share with you the information that I presented to the UC Regents last week regarding the status of our budget cuts and their impact on UCLA.

As further decisions about the budget are made, we will communicate them to the campus. I have asked Executive Vice Chancellor and Provost Scott Waugh to consult with vice chancellors and deans and provide me with recommendations for achieving a targeted reduction in chancellor’s commitments by September 1, 2009. In addition, a task force is being formed to recommend other targeted cuts; it will report to EVC/P Waugh by October 1, 2009.

I want you to know that I am fully aware that although the cuts will affect all of us, they will be harder on some than others. I am enormously grateful for your dedication and support. UCLA remains an amazing institution. On so many counts — including excellence of students, faculty, and staff; amount of research funding; and honors and distinctions earned across campus — UCLA is extraordinary. I do believe that we will emerge from the current difficulties poised to continue our progress as one of the world’s greatest research universities.