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
AGENDA § Initial impressions of UC operations § Overview of UCOP CFO/COO Realignment § President’s Strategic Initiatives: Becoming carbon neutral § Operating Efficiency
I. Initial Impressions of UC Operations
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
My first few weeks … drinking from the firehose
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
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
I. CFO/COO Realignment
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
CFO/COO Alignment Schedule PHASE ALIGNMENT COMPONENTS TIMEFRAME 1 Alignment Review April – June, 2014 2 Transition/Communication Plan July - August 2014 3 Alignment Implementation August ‘14 – March ‘15 4 Optimization Post Implementation 10 ¡
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 under CFO § Consolidate Operational units under COO § Realign and consolidate some functions for synergies § Realign Local OP services to focus on needs of UCOP-based clients § Central Travel moved to Procurement; § Energy & Sustainability merged and elevated § Banking & Treasury Services moved to OCIO § UCPath Center moves to COO § Program Management Office created 11 ¡
Realignment for Organizational Optimization CFO COO ¡Nathan ¡Brostrom Rachael ¡Nava CFO ¡Immediate ¡ COO ¡Immediate ¡ UC ¡Path ¡PMO Office Office ¡ Mark ¡Cianca Zoanne ¡Nelson Cathy ¡O’Sullivan ¡(Interim) Cathy ¡O’Sullivan ¡ Financial ¡ Energy ¡& ¡ UCOP ¡Administrative ¡ Risk ¡Services Accounting Sustainability Services (Controller) Cheryl ¡Lloyd D. ¡Obley ¡(Interim) Vacant ¡Peggy ¡Arrivas ¡ Budget ¡Analysis ¡ Capital ¡Asset ¡ Human ¡Resources IT ¡Services & ¡Planning Strategies ¡& ¡Finance ¡ ¡ Dwaine ¡Duckett Tom ¡Andriola (Operating ¡Budget) ¡ Sandra ¡Kim Debbie ¡Obley Procurement ¡ Program ¡ UC ¡Path ¡Center Services Management ¡Office Jim ¡Leedy ¡Bill ¡Cooper Z. ¡Nelson ¡(Interim) Financial ¡Services ¡ Office ¡of ¡the ¡Chief ¡ Investment ¡Officer ¡ & ¡Controls Red ¡box ¡denotes ¡unit ¡that ¡is ¡new ¡or ¡was ¡ Dan ¡Sampson moved ¡or ¡significantly ¡reorganized. ¡Jagdeep ¡Bachher ¡ 12 ¡
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 ¡
II. Presidential Initiatives: Becoming Carbon Neutral
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 • Graduate Students Pipeline • President’s Post-doctoral Fellowship Program E. Equity • Undocumented Students F. Transfer Students • Community College Pipeline 15 ¡
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 Reduce On- Add Off-Campus Biomethane Campus Demand Electrical Supply Transition from natural Invest in energy efficiency Enter the wholesale gas to biomethane to fuel and renewable electrical market to UC’s efficient electrical generation to reduce control our supply plant facilities campus load 16 ¡
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
Cost Avoidance through Energy Efficiency 18
Onsite Renewable Energy March ¡2015 ¡ 19
Cumulative LEED Certifications March ¡2015 ¡ 20
Food § Global Food Initiative launched § 5 campuses and 3 medical centers exceeded 2020 goal to purchase 20% sustainable food March ¡ 21 2015 ¡
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
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
IV. Operating Efficiency
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 Enrollment, Tuition, and Financial Business and Financial Balance Sheet Aid • Enrollment • Working Capital/Liquidity • Procurement Strategies generated over $300 MM in additional income – Additional non-resident – P200 Strategic Procurement students and distributions during FY is designed to save $200 MM 2013-14 each year • Financial Aid ¡ – The University moved an • Health and Welfare Benefit Savings – Opportunities to additional $2 B from STIP ¡ minimize future return-to- into TRIP (for a total of $4.5 aid costs: Middle-class B) in FY 2013-14 – New medical plan structure scholarship program saves an estimated $92 MM (CY2014); UC Care § TRIP earned a 14.63% * agreement projected to save annual rate of return $12 MM in first year and potentially more in future § STIP annual rate of return was 1.58% * • Captive Insurance Fiat Lux * As of June 30, 2014 25 ¡
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