A day after receiving an email from the University’s senior administrators regarding Yale’s budget woes, leaders of different units across the University are beginning to chart paths toward reduced costs.
Monday’s update from University President Peter Salovey and Provost Benjamin Polak said the University’s effort to close its $39 million deficit will require a new round of budget cuts focused on administrative departments. Despite the prospect of reduced funding, leaders of the University’s 40 units — which include Yale College, each of the graduate and professional schools, each of Yale’s galleries and museums as well as several large administrative units like Facilities and Human Resources — said attempting to further tighten their budgets will not signal a significant shift in their way of doing business. Though Salovey and Polak have begun to collect suggestions for cost-cutting measures from faculty and staff, the new target budgets for each unit, which will apply to the 2015 fiscal year, have yet to be released.
“It is not yet fully clear how the budget situation will impact the different units at Yale,” Peter Crane, dean of the School of Forestry and Environmental Studies, said in a Tuesday email. “This is not a one size fits all situation, and in F&ES we will have to evaluate what the best response is, once we have more details and once we get more deeply into the budget process in the coming months.”
Paul Genecin, director of Yale University Health Services and associate clinical professor of internal medicine at the Yale School of Medicine, said he has found that budgetary pressures continuously evolve during the year. As a result, Genecin said Yale Health is constantly looking for opportunities to contain costs in the short term and long term.
Vice President for Finance and Business Operations Shauna King will soon provide budget targets for each unit across the University for 2014-’15, according to the memo. Though the targets are distributed annually, the new targets will emphasize cutting administrative costs.
The primary responsibility for determining the specifics of the cuts will fall to unit leaders.
Still, senior administrators said they would work to encourage collaboration between units in deciding where to enforce cuts.
“While the approach may be local, we also have to be talking to each other,” King said.
Salovey, Polak and King told the News that cuts in personnel costs — which account for 60 percent of Yale’s expenditures — will be vital in reducing the deficit with the goal of eventually creating a yearly surplus. However, they said their first strategy for reducing expenses will be to leave vacant administrative positions unfilled.
Michael Peel, vice president for Human Resources and Administration, said extensive discussions have occurred with both Salovey and Polak about the need to eliminate the deficit and “build greater financial flexibility.” Peel said that his department has been reallocating its budget resources over the past five years to increase efficiency.
“I believe that the gradual approach that has been adopted should allow leaders the time to determine activities that we can stop doing, do less frequently, or do in an entirely different and less resources-intensive manner,” Peel said.
While reducing redundancies in administrative tasks will be central to Yale’s strategy for lowering costs, Polak said the University “shouldn’t fall into the waste myth.” Buying into this myth, in which administrative tasks are considered unnecessary, can actually reduce cost efficiency for faculty and staff, he said.
Genecin said Yale Health already operates on a “lean administrative cost structure,” in which less than 10 percent of the department’s expenditures are administrative.
In the Monday memo, Salovey and Polak invited faculty and staff to share any ideas by responding to the email. Though Alison Coleman, Polak’s special assistant, said there have been responses to the email, she added that it is too early for Polak to comment on their nature.
Frank Douglass — a Yale Facilities employee who also serves as Community Vice President for Local 35, Yale’s service and maintenance labor union — said though emails are a relatively effective way to solicit feedback on this issue, many Yale employees do not read the University-wide emails sent by Salovey.
Despite the looming cuts in administrative spending, many of Yale’s workers have no reason for concern. Service and maintenance employees at Yale in the Local 35 union are party to a labor contract that prevents the University from implementing layoffs until at least 2016.
“If they’re talking about any cuts, it would be in management,” Douglass said, adding that he thinks Yale currently employs too many managers. “We’re top heavy.”
Members of the Local 34 union, which includes many of Yale’s non-managerial administrative workers such as office assistants, do not have a no-layoff guarantee in their contract.
Douglass said the no-layoff clause will be central to Local 35’s next labor contract negotiation with the University in 2016, adding that the union is “not going to give that up.”
Correction: Nov. 20
A previous version of this article incorrectly identified Alison Coleman as an administrative assistant to the provost. She is in fact a special assistant.