CFO: U of A must cut $200M in spending, rethink mission, accept layoffs

The University of Arizona must cut about $200 million in spending this fiscal year and should seek to "narrow the scope of the mission" as it right-sizes, its interim CFO told faculty, who reacted with alarm. 

Also revealed at a Faculty Senate meeting Monday after a financial plan was released to deal with a $177 million deficit the UA is currently operating under, which includes probable cuts between 5% and 15% for budget units:

— Faculty and staff who make less than $60,000 to $70,000 will most likely be protected, as the first layoffs will be to senior administrators, according to Gary Rhoades, chair of the faculty's financial recalibration committee, who has worked with UA President Robert C. Robbins and Interim CFO John Arnold on the plan.

— The layoffs can't be avoided, Arnold said. "I walk around my office, and I meet people and they come up and introduce themselves and in the back of my head (I know) that person's probably going to lose their jobs. I hate it, but that's the heartful reality of the situation that we're facing."

— Robbins said UA departments should also be thinking about which majors and minors they offer, implying that perhaps there should be cuts.

— Faculty are actively considering calling a symbolic "vote of no confidence" against the Arizona Board of Regents, the governing body that oversees the state's public universities.

Rethinking the mission

Andrew Schulz, vice president for the arts at the UA, asked specifically about the mission of the university amidst these proposed cuts.

Arnold, in response, stated that he worries the UA was "trying to do too many things," citing its roles as a flagship university with strong research and medical education. He added that because of the university's "geographic isolation in Southern Arizona," it is difficult to do everything it tries to.

"I think it's part of the conversation we're going to have to have: Are we going to be all of these things?" he pondered aloud. "It can't really be successful at all of these things."

"I think these are the kinds of discussions we all need to have together," Robbins said.

Arnold's comments were troubling to Carol Brochin, a professor in the College of Education.

It was "really disrespectful and out of touch" that Arnold said the university is geographically isolated, Brochin said to the Arizona Daily Star on Tuesday.  

Arnold's comment also drew a reaction from Faculty Senate Chair Leila Hudson.

"I was quite taken aback by that statement," Hudson told the Star in an interview Tuesday. "I'm sure as John Arnold spends more time here, he'll come to appreciate our regional excellence and stop thinking in terms of a Phoenix-centered world."

Arnold is executive director of the Phoenix-based Board of Regents in addition to his interim UA roles.

Brochin said Tuesday, "Which of the missions are going to go? The fact that we're a Hispanic serving institution, the fact that we're land grant, the fact that we're Native serving? Those are really important pieces of the identity of this institution."

She added that these missions are why the university has been able to recruit "really stellar faculty and staff and students."

At Monday's meeting, Brochin expressed concerns about layoffs.

"What do you think administrative restructuring and consolidation means?" Arnold asked her. "That means people are going to lose their jobs. That's just the reality of it."

That's when Rhoades told Brochin the first layoffs will be to senior administrators.

Brochin told the Star she is concerned for support staff and adjunct professors in the colleges who may be impacted by the layoffs.

"I worry about working families and people who depend on our university," she said. "We know who gets cut when cuts come. There's a disproportionate impact on communities of color and working-class families, so I don't buy any of it."

Confidence issues

Hudson, the Faculty Senate chair, told senators Monday that she received a formal request for a "vote of no confidence" against the Arizona Board of Regents. She said she has submitted the request to the UA's Committee of Eleven, which will review and decide whether to approve the vote.

Established in 1947, the Committee of Eleven is the oldest form of shared governance at the university.

Hudson said she is cautiously against taking votes of no confidence against ABOR or Robbins, though she acknowledged that the meter — the sentiment she's hearing — to do so against Robbins is "off the charts."

"It takes time, energy, skill and teamwork to turn a big flagship around," Hudson said of her reasoning against taking such votes. "I've been telling people for weeks, 'buckle up.' The anger, fear and anxiety are palpable. The lack of confidence can be cut with a knife."

She added that the financial crisis has revealed "daily mismanagement, neglected oversight and a culture that has entrenched so many perverse incentives and underperforming administrators." 

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Despite this, she said it is clear to her that "President Robbins and ABOR are learning, and they are learning fast."

Protecting academic units

In her speech before Robbins and Arnold began answering questions, Hudson emphasized the importance of the academic units.

"Do not blame the academic units," she said. "Do not treat them like other parts of the university."

The first question she asked Robbins and Arnold was if they could commit to doing just that.

"I've said repeatedly in the process that every unit will be evaluated on their own," Robbins responded.

Katie Zeiders, a faculty member in the College of Agriculture, Life and Environmental Sciences, said she thinks Arnold and Robbins did not prioritize academic units, pointing to the fact that though departments and colleges are dealing with a hiring freeze, the university hired a new head football coach just three days after Coach Jedd Fisch announced his departure.

"I feel like this whole conversation is almost as out of it as your supporters talking about your accessibility on the golf course," said Zeiders, referencing Robbins' boosters telling the Arizona Daily Star last week that they often spent time with him golfing and talking about the university.

Arnold responded, "Over the next three, six months, we have to take approximately $200 million of spending out of this university, and that's on the surface. We know that faculty and staff are stressed and that's why we need to understand exactly what all the costs are, so we can go attack it and figure this out."

Governor's concerns 

Samantha Harris, a professor of cellular and molecular medicine, asked Arnold about the potential conflict of interest that Gov. Katie Hobbs cited in a letter she sent Thursday to ABOR. 

Hobbs wrote she is concerned because Arnold, as executive director of ABOR, is now serving as interim CFO of the university whose financial mismanagement, according to her, seemed to go under ABOR's radar for a long time.

"Why is this not a conflict of interest?" Harris asked. "Can you comment on when you will get a CFO that's acting truly on the behalf of the University of Arizona?"

Arnold said he was "not going to respond to the question."

Ted Downing, a longtime research professor, said in the meeting that he is "uncomfortable" with the potential conflict of interest.

"The Board of Regents had a very active role in what happened here," Downing said. "The governor has asked for, and this is very important, she didn't just ask for an audit, she asked for an independent audit. And that included not only the UA, but also the Board of Regents, an unelected group (serving) for eight years."

Arnold, visibly agitated, responded that he was saying "for the twelfth time" that ABOR is contracting with  outside consultants.

Downing began to protest, as the consultants, he said, are still hired by ABOR directly, but he was cut off by Faculty Senate leadership so the meeting could continue in an orderly fashion.

UAGC

Faculty remained skeptical about the acquisition of the UA Global Campus project, despite Arnold's presentation stating that UAGC barely impacted the financial issues on campus.

The interim CFO said it was "fundamentally not true" that the university was funding UAGC without the global campus making any revenue. He added that the consultant firm that will be hired by ABOR later this year will help make UAGC more efficient, as well.

Some members of the Faculty Senate, including Johann Rafelski, didn't buy the explanation, however. 

"Who provides the $100 million of reserves required to operate UAGC?" he asked Arnold.

UAGC didn't require $100 million of reserves, Arnold responded, and the program provided $47 million in cash to the university when it was first acquired.

Robbins questioned "where it was coming from" that the university needed to use its reserves to fund the Global Campus.

"We have to have a long, much better conversation about cash," Arnold told Rafelski, before moving onto different topics.