UC President Yudof: A Year in Review (Full Version)

Mark Yudof is the current president of the University of California system and is completing his first academic year as president after having begun his term on June 16, 2008. The following interview took place on April 16, and any references made to recent events should be taken from that perspective.

New University: You recently completed budget consultations with the chancellor and the senior fiscal team for each University of California campus to address the budget. What, if any, unique approaches to the budget reduction have been taken at the UC Irvine campus that you are aware of and have been discussed about the UCI campus?

Mark Yudof: My recollection is that some new programs were slowed down and that the number of new faculty searches had been limited. There’s nothing secret about it; it is all stuff we’re willing to share, but those are the two I recollect.

I have dealt with all the campuses; I would say Irvine is one of the very best run campuses. It is very efficient. I was very pleased with my interactions. Chancellor [Michael] Drake and Provost [Michael] Gottfredson, they always have a plan and they take these matters seriously, so I came out of a couple hours-[long] meeting feeling pretty good. It is not a great situation, but that the leadership on campus had done their consultations and was addressing the critical financial issues.

New U: You mentioned the 10 campuses. The UC system is of course made up of these campuses, whose budgets are not identical. In dealing with budget reductions, have any of the campuses proven to be particularly effective in protecting their monetary resources?

Yudof: Every campus in its own way is different. Obviously, the most different is something like UC San Francisco, which is entirely a medical enterprise. At Irvine, UCLA and Davis they [all] have general academic programs and medical programs and then we have some campuses with just general academics. Is the question what kind of steps being taken on other campuses, is that what you are thinking about?

New U: Yes, that’s it.

Yudof: There are a lot of different approaches. Berkeley has announced that it has a voluntary severance program. People can step down. If they are willing to step down, they will get a modest severance and they will get to keep the severance so long as any UC institution does not re-employ them over three years. There are campuses like UCLA that have slowed down the search for replacement faculty or new faculty that they intended to add. There are campuses that have — the energy costs vary considerably by campus — and there are a number of campuses that have figured out ways to pare their energy costs, so that’s a factor. There are campuses where people in administrative positions have been laid off, so there is just a whole variety of things.

We had over $200 million of real cuts to deal with in the last roughly year and a half, and we had another $250 million of expenses: paying for raises for those union contracts, enrolling 11,000 students for whom we received no state funding, inflationary increases and things like library books and so forth. These are pretty significant cuts and the right denominator is the $3 billion in state funds because at a place like Irvine we can’t take the hospital revenues and just give them to the English department because we have to pay the X-ray technicians and we have to pay the physicians and run the operating rooms and the emergency rooms and all the rest of it.

So, it was a pretty big hit, but each campus — there’s certain continuities like looking for administrative savings first and slowing down faculty searches and canceling programs, slowing down new programs — but in other ways the campuses each address the problem in their particular context.

New U: Regarding different ways that different campuses have approached the issue — for instance at UCI hiring freezes have been used since March 2008, primarily with non-academic staff, though measures have been taken to slow down the process of hiring academic staff as well — have hiring freezes been effective at all on other campuses and if so how?

Yudof: Functionally yes. Whether they have a formal freeze in every case, I don’t know, but even in institutions that will have a formal freeze, often the provost will communicate with the deans and the dean with the department chair and so forth and say, ‘you’re going to have a heavy burden of justification if you want to replace someone who’s retired or left for another institution.’

So, I would say on the ground, maybe not a formal freeze — and some of them have formal freezes — but functionally the idea is in general, where it does not compromise student services and the academic program, you have a very rough road to replace someone who has stepped down or retired.

New U: Specifically relating to the Office of the President, you recently proposed a reduction in Office of the President expenditures for the 2009-2010 academic year?

Yudof: Yes, we have proposed some additional reductions here. The total reduction over the last two years, including what is coming up is about — we’ve reduced expenditures [by] $67 million, that’s our number — and we’ve reduced the number of employees by 628, so give or take a little we are about at 1,400 employees and our operating budget is somewhere around $400 million.

Now a lot that is passed through … we administer multi-campus research grants for example, we have set aside money for breast cancer research for agricultural and natural resources, we passed through to run the experiment stations. So, this is not just administrators, these are program delivery people. But we are down very significantly, we have cut travel budgets by a third and we are continuing down that course because it depends on one pot of money, but in general if it’s an unrestricted budget, a dollar we do not spend in Oakland means a dollar that is available to the campuses. So, it is real important to the students that we be as lean as we can be in Oakland.

New U: Regarding the budget reduction, what other obstacles does that create for the Office of the President?

Yudof: The biggest things are that while you’re veering back some enterprises, there are actually others that are understaffed, so that is a problem. Because at the end of the day we have to save money, but it is real important that we have enough people to do the budget process, that we be represented in Sacramento well, that we have a federal relations office in Washington, [D.C.] and so forth.

So, one dilemma is, it’s not only a question of veering back, but you don’t want to do it across the board. Some offices may not need to exist at all and can be veered back and other offices are short-handed. For example, we’ve added a couple of people in institutional studies. It is very important that we know for the accountability report and the like, how well our students are doing, what the graduation rates are, what the retention rates are between freshman and sophomore year [and] how we are doing on research grants. So, what you will see is it gets difficult.

It is simultaneous; on the whole, we are cutting back substantially, but in some areas, we were understaffed and we have to deal with that issue, so that is a dilemma. There is the human problem; we have people who have worked here a long time, it is really very difficult, it may not be their fault, it may be we cannot afford them, it may be we do not think the function needs to be carried out.

A third thing that happens here: Part of the reductions in budget is not real in the sense that people are laid off, but for example we had a continuing legal education program and we decided that it was better to have it on a campus with a law school and a continuing education apparatus than to try to run it out of Oakland, and so those people were transferred off of our payroll and now it is up to UCLA, in this case to decide who stays and who leaves.

In other areas, like the digital library, the University of California Press, [and] support for [California Institutes for Science and Innovation are] the technical institutes that Governor [Gray] Davis helped to create. We feel that these expenditures benefit all the campuses and so we’ve continued with those, but there is a real, genuine human problem and of course we try to find, if we can, other positions for people and to alleviate the hardship as best we can.

New U: Beyond the Office of the President, the UC Regents recently endorsed Proposition 1A. How did the regents decide to endorse the proposition and how will students, if the proposition passes, be affected?

Yudof: The way it works under state law, regents in an open session can endorse a statewide ballot measure. I cannot [do this] as a state employee, and we cannot spend any money on promoting a ballot measure or opposing it. I can [do so] in my private capacity, but not as a public official. The pros are that Proposition 1A would extend some taxes by a couple of years, so there would be more money in the state budget and if it did not pass, there would be an additional $8 billion shortfall, and we are very fearful that higher education would have to absorb a significant part of that, so there would be more cutbacks on campus.

Those who are opposed to 1A — and there are significant interests opposed — there is another provision in there that in the long run would provide some fairly flexible but nonetheless caps on state spending in various areas, and some groups are opposed to that. So that is sort of the pros and cons. In the university’s perspective the biggest pro is that it may avoid some additional budget cuts, but on the negative side there may be some caps on expenditures for various things that would be in the [state] constitution [and] in the long run might diminish funding for social services, for K-12 education, higher education and the like.

New U: Within your first year as president of the UC system, what do you feel has been most significant achievement that you have been able to accomplish?

Yudof: I think it has been a good year. I would say the number-one accomplishment is [that] I now feel like day by day I have a stronger and stronger team. I think the management structure in my judgment had to be rebuilt. So, we are getting much better people in place for various high-level positions. Although when I arrived there were some very good people. I do not want to be too hard about that.

You cannot win with a B team. So, the number one thing a president can do is put the A team, smart people, who are sensitive to campus concerns and put them in charge and make sure they consult with the faculty and the staff and so forth. I would say the Blue and Gold Program [is one achievement that] we are very proud of. We now have an official policy that if you are in a family with an income below $60,000, all is not necessarily well, but if you were admitted, you would not pay any education fees or registration fees for four years. I am very proud of the new admissions policy, which I think is less mechanical, more holistic — looks at the whole file — [and] opens the doors to more applicants to get their files read by admissions committees. I think it is a fairer system and that does not go into affect until 2011, but we basically passed it with only one dissenting vote on the board of regents, which is almost impossible with so many people. It was like 20-1 or something like that. Those are three things.

I think we have gotten our arms around the budget and the budget process and we are more transparent with the public, with the board of regents. I think that is very important. I think we have reconfigured public affairs; our message is beginning to seep out, that the future of the state [and] the quality of life for everyone depends on our capacity to educate the students and do path-breaking research. That task never ends, but I think the message is out there that we are in a crossroads in America and we have to invest in human capital if we are going to have a recovery in the economy, if we are going to be repetitive and the tens of thousands of students who graduate every year are the best thing we can for the California economy and we need to make sure that they have access. That is the Blue and Gold Program. That they have good financial aid [is] another part of it; we will be talking about that at the regents meeting.

If you have time in May we are going to present our first full accountability report. Everything you wanted to know about UC [will be discussed]: how well we are doing, how we compare to others, how our students are doing, how the faculty is doing, how we are doing in technology transfer [and] how we are doing in patient care. I’m a big believer in accountability. I think your parents and you deserve an answer to ‘How good are these campuses? What sort of an education are you getting?’ And it should not be just a feel-good answer; it should be backed up by data. So, we have spent a good deal of time on that accountability report. So, that would be pretty much the highlight.

I also am very proud [of] the relationship of the board of regents; [it] is on as sound a footing as it has ever been, where the board is making the policy decisions and I am the chief executive and I get to carry out those decisions. I think the governance has improved; I think the relationship with the Academic Senate is very strong [and] I have been very pleased with my meetings with student leaders.

I think some of the governance problems, which arose in tough times at UC, I do not say they are gone entirely, but I think the governance picture has been much improved.

New U: Regarding your first year as president of the UC system as well, what have you been unable to accomplish in the first year that you hope to accomplish within your tenure as UC president?

Yudof: They are all in some stage. Obviously, the UC retirement plan — long-run, not tomorrow morning — is not sustainable on its current trajectory, so I would say — and we have a task force that is looking at it — I have not accomplished that yet. It involves a lot of consultation and some deep thought. So, I would say that is a big item on my agenda, which is it is sort [of] like social security, to fix it so everyone can feel secure about their benefits and we can afford it, so that is pending.

I am a deep believer in the wisdom of increasing the number of transfer students from community colleges. They do well at the university, if we do it right; they are more diverse students, [and] we are not hanging them by their numbers necessarily. If they do well at community college, we can admit them regardless of their SAT scores or high school [grade point average]. It is closer to home, community college, and it is cheaper for families in the state to have two years of community college, and we increased the target by 500 for this year. That is a long-winded way of saying, I have Dean [Christopher] Edley, the dean of the Berkeley Law School, in charge of a committee with representatives from all three segments — Cal State, community colleges [and] UC — to devise better ways of attracting top-notch community college students to UC campuses. That is a work in progress. It is not done. It is something I feel passionately about that we need to get done. So, that is important.

There are other things along the way. The medical school at [UC] Riverside I think is very important and so far we have not secured state funding for that. A lot of our building projects, capital projects, are currently being held up; we have people working on that [and] we are hoping that the state will release funds so that as many buildings can be completed in a timely fashion.

Those are the major things that are undone. If I thought about it [for] 20 minutes I would probably come up with five more, but those are the ones that occur to me.

New U: You mentioned earlier that one of the most important things in your position has been putting together a team to work with. What have been the challenges in putting together this team?

Yudof: There are a lot of challenges. I can name a few of them. No matter how bad the economy is, the best people always have job alternatives and we are trying to get really strong people, and they have jobs by and large. So, one challenge is just to convince them to come here, and we are not located on a campus; a lot of people who work in higher education, for reasons I fully understand, would prefer to work on the Irvine campus or the Davis campus and not to be in downtown Oakland. So, there is a recruitment issue of getting really great people.

We also live in an environment where every time you report a decent salary or a high salary in some eyes, there is critical media coverage, but the fact is there are different markets for people. It is just a reality of life. You have to pay more for a lawyer that you are hiring or maybe for an engineering professor than you do maybe for people holding other types of positions. So, it is an environment where people are very concerned about public expenditures and salaries, so that sometimes has been difficult.

Third, I am trying to build a diverse team. Diversity is very important in a team and so you have to work very hard at that. So that is a challenge to not only get the best people, but to make sure that you have some level of diversity trying to reflect the population of the very diverse state in which we live.

I think we have been successful, [but] it also takes some time on academic positions; particularly, we usually have extensive search advisory committees and things so sometimes it is not as quick as I would like. So, timeliness is probably a fourth factor.

New U: Regarding your first year in general, what have you found to be most unique or most unexpected about your office?

Yudof: The University of California is very unique. I have been the head of two other systems and I am familiar with others. The New York system and the Florida system, [and] I was the head of the system as president of the main campus of Minnesota and head of the University of Texas system. It is very special, I would say — I do not know if it is just the Office of the President — but we have more of a role in the admissions process than most systems’ offices do. So, let us start there.

We have more of a role in distributing state funds to the campuses than most state systems do. Often, in state systems the appropriations for the legislature go directly to the campus; here there is a pass through, through the Office of the President.

We run our own retirement plan, which is very unusual. In most states, it’s defined contribution plan; you sign up with [Teachers Insurance and Annuity Association, College Retirement Equities Fund] or Fidelity or Vanguard or somebody and the employer contributes so much and the employee distributes so much and those decisions are largely on the employers about which plans to adopt. Here, we run the retirement system, [and] it is a defined benefit plan. That is very unusual in a state system.

I could go on. We have a much stronger presence of faculty governance at the system level. I think it works well. The senates on campuses are called divisional campuses, but the system-wide academic senate meets here, about once a month, here in Oakland. That has been very helpful, but that is an unusual ray. In Texas, I had an advisory committee of faculty, but really the main action was always on the campuses. That is where there was a faculty senate that took on the major issues.

The composition of the board is different; the board is larger than most boards I am accustomed to. Student representatives are increasingly common around the country. All three systems I have been involved in had student regents. In two of the three they were voting members and in Texas, they were just advisory [and] could not vote. But I do not recall having staff representatives, which I think is a good thing. [There are] staff advisors, and we are happy to have them. That is very useful.

So, the structure of UC, the mix of central functions and decentralized functions is very different in California than it is in most states. In general, the center has more authority here, I would say, than it did in Texas. For example, I have more authority in reviewing certain types of salaries than I ever had at Texas. That was pretty much a campus matter, and if we paid too little or too much that was a question for the campus leader to deal with; it was not my issue, whereas here it does tend to end up on my desk.

New U: One of the things you mentioned was just handling salaries. The relationship between service workers and their UC employers has been one issue that has been pretty popular within the last year. How do you feel relations between service workers and their employers have changed during your presidency?

Yudof: It has not changed enough. It needs to improve a lot and we put out a facts and myths memo on [the] financing of the university because there are many myths out there.

The [American Federation of State, County and Municipal Employees] leadership described the settlement as historic and generous in their press release, and it is. There will be 4-percent across-the-board raises this year. There will be no other group of employees who will get across-the-board raises. They have a five-year contract, and in years two through five there will be 3-percent across-the-board raises. For the first time in the history of the service workers, they will have step increases, meaning that for time that you serve in a particular position, you can get a raise for that. We pay 97 percent of the cost of their health insurance and many of them are paying just a few dollars a month for what in the general population is very, very expensive.

I can go on and on. They participate in the UC retirement plan, which is the most generous of any university in the country. The recent friction that you have heard about is that we were so generous in raising the entry-level salaries because we feel we have a moral obligation that our least well-off workers — we cannot bring them immediately into the upper-echelons of the middle class, but they should be treated fairly — there is some squeezing between the entry-level salaries, the minimums are so high and some of the employees who have been there for a much longer period of time. Their salaries are getting crunched together. We are discussing that with AFSCME and I think we will be able to resolve it. We have until October to resolve it.

We all understood we needed to resolve it, but this rhetoric about; ‘there has been a breach of contract’ is wrong [and] some of the outlandish behavior of the unions is wrong. [But] my hope is that things will settle down and we will get on a more even keel. We are negotiating with other groups, but we have to look at America today. People are being laid off [and] there are salary reductions. There may be salary reductions and furloughs here; I have not ruled that out [though] we have not done it.

In this world a significant across-the-board raise really counts, and [this is] one of the reasons we did [it]; and this does not apply to all employees … because I felt we needed to do something for the people who were at the lower end of the wage distribution.

The other thing I wanted to say is people get confused about these issues. We had a deputy director of federal relations in Washington — we appointed him director. Well, when people change jobs with more responsibilities they tend to get raises. That is the way it is. So, there is a big different between promoting someone who is an assistant dean and making them dean and simply giving them a gift of money, which is unnecessary. We have frozen salaries, we have eliminated bonuses, [and] so we have done a great deal. The other thing you have to understand is that we have all sorts of employees and industries in the university. It is very common in both the public and private sector that physicians are paid their base salary and then they are paid incentive or performance money in addition to that according to the amount of patients that they see, and that is the way the whole medical world is organized. If we do not have that system, then our doctors leave Irvine and go to other hospitals.