Brown identifies ways to eliminate operating deficit

RICHARD M. LOCKE, provost at Brown University, discussed in a letter to members of the Brown community the steps that the university is taking to close an operating deficit.  / COURTESY BROWN UNIVERSITY
RICHARD M. LOCKE, provost at Brown University, discussed in a letter to members of the Brown community the steps that the university is taking to close an operating deficit. / COURTESY BROWN UNIVERSITY

PROVIDENCE – Brown University leaders have identified actions, along with steps to manage costs, that will help the university eliminate a $10 million-a-year operating deficit in three years.
In an emailed letter to “members of the Brown Community,” Provost Richard M. Locke cites a focus by the deficit reduction working group on the largest sources of spending, which include faculty and benefits, computing and information services, facilities and utilities, libraries, purchasing and the budget of the dean of faculty. The letter also is signed by Barbara Chernow, executive vice president for finance and administration at Brown.
The working group submitted recommendations in April privately to the Brown community, and university leadership received “substantial community feedback” that has led to the proposed actions, Locke wrote.
“While the university’s overall finances are strong, to move forward and achieve the aspirations outlined in our strategic plan, ‘Building on Distinction,’ we must ensure that we have a sustainable budget model in place that is both responsible and responsive,” he stated. “[The changes can be implemented] while maintaining our commitment to the quality of our teaching, research and campus services, and reaffirming our position as an employer of choice, offering desirable and fair benefits for our faculty and staff.”
The actions and associated savings Locke cites, which could accrue over the next several years, include:

  • Adjustments to health insurance copays, adopting a new pharmacy benefit manager, Optum Rx, and eliminating the health insurance buyout program, effective Jan. 1, for a savings of $1.3 million over two years;
  • Reducing a portion of the Dean of the Faculty budget that is allocated to temporary teaching, saving $1 million over two to three years;
  • Aligning or consolidating IT services across the university and reducing some IT positions through attrition, saving $1 million over three to five years;
  • Increasing facilities energy efficiency to reduce utility costs, reorganizing staff and “leveraging strategic sourcing” to generate $1.35 million in savings while maintaining the quality of services, over three to five years.

Other steps taken over the next three to five years include:

  • Developing a “more strategic approach” to purchasing or renegotiating contracts with outside vendors, saving $500,000;
  • Modifying library services and hours of operation, such as during summers and holidays, saving $400,000;
  • Adjusting the price of visiting scholar housing and promoting long-term leases, saving $250,000.

Locke said a voluntary staff retirement incentive program, offered in 2010, won’t be repeated because analysis shows that most of the eligible staff would need to be replaced. The suggestion had come from the community, not the working group, he said. The university also will not freeze the tuition aid program, he said.
Other recommended actions are still being explored, Locke said.

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