University of Arkansas Cost Containment Initiative Yields Millions in Savings

FAYETTEVILLE, Ark. – Since the beginning of the economic crisis in 2008, the University of Arkansas has been taking steps, large and small, to cut costs and operate more efficiently. These steps range from switching to energy efficient light bulbs to reorganizing the academic affairs division.

This cost containment initiative is part of an overall commitment to transparency and accountability by the university administration, but it is practical as well as philosophical: The university can point to $11.5 million in real and potential savings as a result of these efforts.

These savings were a major factor in the university’s ability to hold the line on tuition for the 2009-10 term. In light of state funding cuts in the past four months, these savings are now especially crucial.

“The Commission on Affordability and Cost Containment, led by Don Pederson, vice chancellor for finance and administration, has more than done its job in the past year,” said Chancellor G. David Gearhart. “The purpose of this task force is to identify ways for the university to operate more efficiently, to save money without hurting the quality of the education we provide our students. We want to be able to show the people of Arkansas that their money – whether tax or tuition dollars – is being spent wisely, efficiently and carefully.”

There are many examples of the changes made under the cost containment initiative. One, which will have huge long-term results, is the RazorsEDGE program, which will make 56 buildings on campus more energy efficient. The changes begin with better light bulbs, but include everything from improvements to the heating and cooling systems on campus to construction of a solar-powered water heater for the pool at the Health Physical Education and Recreation Building. Future savings from RazorsEDGE are projected to be $6 million a year.

Less dramatic but important savings can be found in the increased use of bicycle patrols by the University of Arkansas Police Department. In one year, this saved the department nearly 5,000 gallons of fuel, in addition to the reduced maintenance costs on police vehicles.

A more efficient way of handling credit card transactions may sound like a simple thing, but it saved the university nearly a quarter of a million dollars in bank fees.

The university human resource office developed its own RazorTemps service. This meant that when a department needed to hire a temporary worker it didn’t have to go to an outside agency. RazorTemps provides the worker at a lower fee, and the money stays within the university.

Instead of buying a new computer server for the university’s Integrated Student Information System – ISIS – the staff improved and enhanced the existing software, saving close to a million dollars.

The administration also restructured the Division of Academic Affairs to include student affairs. The change reduced administrative overhead by eliminating a vice chancellor position, five administrative units and their staff. Two assistants to the chancellor positions also have been eliminated.

“In the past year every family in Arkansas has become more aware of their budgets, the money they spend, where it goes and where it is really needed,” said Gearhart. “The University of Arkansas is doing the same thing. It usually feels good to find ways to save money, but sometimes the cuts are painful. We don’t make them lightly. Still, they are necessary, for us, as for any family.”

The latest round of state budget cuts amount to $3.2 million for the University of Arkansas. This includes cuts to the Educational Excellence Trust Fund. The university administration is currently assessing how to deal with the state budget cuts and has held a series of meetings seeking input from faculty, staff, students and deans.

“After assessing the situation and talking with our stakeholders, we see layoffs and furloughs as the absolute last way we would deal with this cut,” said Gearhart. “I cannot say that furloughs will never happen, but we do not plan on implementing them at this time. The university expects to announce how it will ultimately deal with the cuts within a week after studying all available options.”