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For the Week of July 12, 2010

The consultancy UC Berkeley hired to make cost-cutting recommendations may earn more than double its initial payment, according to this Sunday’s print version of the San Francisco Chronicle’s “Matier & Ross” column. Bain & Company -- whose former personnel include former Massachusetts Republican governor Mitt Romney and California GOP gubernatorial candidate Meg Whitman -- received $3 million to advise UC Berkeley management’s so-called “Operational Excellence” initiative, and has recommended wide consolidations of purchasing functions, reducing personnel, eliminating child care services, and centralizing IT services.

But here’s the stunner: the article revealed that Bain & Co. will receive an additional $2.7 million to help implement the reforms, plus $1.8 million in incentive pay if the recommendations on purchasing produce at least $7.2 million in savings. So the bottom line is: Bain stands to gain a total of $7.5 million, or $300,000 more than the current cuts will save taxpayers. (Berkeley’s executives, of course, claim more savings will be realized down the line.)

Meanwhile, as part of the initiative, UC Berkeley is creating a new Human Resources Center with 15 FTEs, including 12 new hires. The administration says “it is still too soon to determine whether the transition will result in layoffs” of about 50 existing HR employees.

Are online degrees coming to UC? This Wednesday, according to the San Francisco Chronicle, the UC regents will consider a privately funded $6 million pilot program, which one UCB doctoral student fears may be "'the beginning of a frightening trajectory that will undoubtedly end in the complete implosion of public higher education'" in California. The Berkeley Faculty Association sees not only the danger of "'degraded education, but centralized academic policy that undermines faculty control of academic standards and curriculum.'"

The Wall Street Journal reports that UC has been awarded $690 million in stimulus grants since early 2009, but at the same time has had “to spend about $69 million that wasn't reimbursed by federal agencies to support the new research projects.”  UC says “indirect” research-related costs amount to about $800 million, and a spokesperson says the university has even discussed turning down some of the federal funds.

With the well running dry on federal stimulus funding and the state's continuing budget shortfall, the Sacramento Bee reports that California will be hard pressed to cover enrollment growth for the UC and CSU systems -- among other things. The state had used stimulus funds to cover enrollment growth in 2008-2008, which enabled it to reduce funding for both systems by $305 million. The economy hasn't yet picked up and this year the stimulus isn't available for higher education.

State senator Leland Yee accuses UC and CSU of “blatant hypocrisy” for wanting “to extend a law letting them share the identities of alumni with vendors,” despite opposing a law because “it might reveal the identities of wealthy donors to the universities.”

Jewish groups have written a letter of protest to UC president Mark Yudof regarding UC’s response to what they call anti-Semitic acts that occurred earlier this year.

Furloughs for state workers are scheduled to end in June 2010, but now those same state workers are at the center of current budget wrangling. Gov. Arnold Schwarzenegger announced a plan to pay them the federal minimum wage (which is 75 cents less than the California minimum wage) until the Legislature agrees to a budget. Some 8,000 state workers demonstrated in Sacramento last week against that plan. State Controller John Chiang, who cuts the paychecks, has said he’ll refuse to comply with the governor’s order, which he says is illegal.
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