In a recent 2001-02 salary communications summary, Associate Vice Chancellor for Human Resources Dennis Shimek addressed a variety of concerns to UC campus employees.
While the 2001-02 budget was disappointing for salary increases, he said, the university will continue to impress upon state leaders the importance of full partnership funding for salaries. The Partnership Agreement with Gov. Davis specifies a 4 percent annual increase for funding that includes salary money. Because of this year’s reduced state revenues, UC received only 2 percent.
On a more positive fiscal note, Shimek said investment earnings from the late 1990s have enabled the university to offer the Capital Accumulation Provision to retirement plan members. "The provision will help boost this year’s modest salary increases by allowing the university to take the equivalent of 3 percent of an employee’s annual salary from the retirement plan’s earnings and put them in a separate employee account within the retirement plan." CAP funds then earn a specified interest rate – currently expected to be 7.5 percent.
Other questions Shimek addressed include:
Q: I keep hearing some unions say that UC has $2 billion beyond Partnership money that is available for salaries. Is this true?
A: No. Although the university’s financial statements look to include approximately $1.9 billion in unrestricted reserves, this is misleading. The university has three categories of income:
•Restricted funds, including private, federal and state gifts, grants, and contracts, come from third parties for specific purposes. Accordingly, these funds can only be spent for the programs specified by the funding agency.
•Self-supporting enterprises are operations within the university, such as hospitals, parking and dining facilities, which generate their own income. Users pay fees, which are dedicated to operations and maintenance of the programs that generated them.
•General purpose funds, including state general funds and student fees, are all allocated to core programs – in-struction, research and public service – and supporting activities like administration. Each year general purpose funds are 100 percent committed; however, some commitments span more than one year. When funds are carried over, financial records show year-end cash balances, but such funds are not available for reallocation. The bottom line is that the university does not have unrestricted income available to fund additional salary increases.
Q: While most UC staff employees are receiving a 2 percent salary increase, clerical workers are claiming they are only receiving 1 percent. Why?
A: Clerical employees are being offered the same general 2 percent increase; it just looks a little different because of the current contract with the union that represents them, CUE. According to the current contract (negotiated last year), CUE agreed to receive a 1 percent increase in September with the understanding it would come out of the 2001-02 salary program/budget.
Given this year’s 2 percent funding for salary increases, this left a remaining 1 percent to be negotiated this year, which is what they are currently being offered.
Q: Why did the regents recently give 25 percent raises to UC executives while the majority of employees only got 2 percent raises?
A: This isn’t quite accurate. In November, the regents approved potential salary increases beyond the 2 percent merit raises for a limited number (49) of senior administrators. The range starts at 3 percent and extends to above 20 percent for a few individuals. These increases do not apply to President Atkinson or any of the 10 chancellors – they will receive only 2 percent raises – and the increases were not automatic. President Atkinson will determine what increases will be implemented, taking into account current economic conditions and budgetary considerations. For a full comparison report on UC executive compensation, see: http://www.cpec.ca.gov/ HigherEdUpdates/Update2001/UP01-04.pdf.
Q: It seems UC is receiving plenty of money for things like new buildings and new programs. Does the university consider new buildings and new programs more important than employees?
A: Absolutely not. A complication is that the university must continue to grow in order to continue to successfully fulfill its mandate. We don’t want to trade one critical priority for another. While this year’s funding for salary increases was disappointing, it does not, in any way, reflect on the regard the university has for your contributions.