Joint Services at UH-Hilo and Hawaii Community College

Joint Services

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Joint Services at UH-Hilo and HawaiiCommunity College

This is a proposal [to the UH System President's Office from UH-Hilo Academic Affairs] for resolving the joint services issue at the Hilo campus. The logic is simple and is based on projecting backwards in time current joint services costs to estimate those at the time of separation. It is assumed that sufficient funding was available to UH-Hilo at the time of separation to support HawCC joint services. It is also assumed that UH-Hilo’s budget has not been adjusted for the HawCC share of joint services after separation. Evidence is provided to support this assumption. Both the current annual shortfall in funding and the cumulative shortfall from preceding years are calculated and a recommendation involving joint responsibility from UH-Hilo, HawCC, and the University of Hawaii System is presented.

Current cost of joint services:

The cost of joint services has been the subject of an extensive study and an allocation has been agreed to by Shirley Daniels and Rose Tseng (see attachments). This study shows that the 2003-04 costs of joint services are allocated between the entities as:

UHH and HCC Combined Expenditures in 1992-93 and 2003-04 from IPEDS data:

Unfortunately a joint cost study was not implemented at the time of separation. Therefore, we impute of the amount of funding that UH-Hilo retained in its budget at the time of separation for supporting HawCC shared services. It is assumed that the cost of shared services has risen at a rate comparable to unshared services in both the physical plant and student related categories.

General Funds and Enrollments from IPEDS

The next table is provided as background information to establish that UH-Hilo general funds have not been augmented in the past decade to support HawCC shared services. HawCC data is provided for comparison.

This table shows general funding for UH-Hilo has not increased during the period since separation. It is true that the University now retains tuition which amounted to $7,746,960 in 2003-04. It is also true, however, that value of the dollar has deflated during this eleven year period (35% by the US CPI) so that the value of 2003-04 appropriation plus tuition is $21,691,903 in 1992-03 dollars. Thus, the total amount available in real dollars has been stagnant. Moreover, UH-Hilo enrollments have increased by 23% during this period so that real funding per student has been reduced dramatically. Given these facts, it seems unreasonable to argue that UH-Hilo has received budgetary increments for supporting HawCC shared services.

It is also true that UHH has been unable to fund ongoing programs because of the budgetary deficit caused by the payment of joint services solely by UH-Hilo. The recent cohort of the MEd. Program was cancelled, hiring of faculty was frozen due to the shortage of funds, and positions such as the Director of Alumni Relations remain unfilled. Moreover, UH-Hilo fails to be in compliance with Title IX requirements and safety issues in the laboratories and with vehicles continue to surface. These are just several of many examples where UH-Hilo has been unable to fulfill its obligations due to budgetary exigencies.

Recommendations

First, it is recommended that the joint services provided to HawCC by UH-Hilo be paid from this point forward by HawCC. A transfer of $1.05 million from UH-Hilo to HawCC and an additional $1.25 million allocation in system funds will facilitate these payments. The $1.05 million from UH-Hilo is the imputed amount in the UH-Hilo budget for HawCC joint services at separation. The $1.25 million is the residual required for HawCC to have sufficient funding for joint services.

Beginning this year, UH-Hilo and HawCC will audit expenditures using the method jointly agreed to and HawCC will be billed for services consumed. Changes in the amount of services as reflected in FTE or square footage and changes in the cost of the services such as utility costs will be reflected in the billing. Payment for services and the transfer of funds from UH-Hilo and the system will be simultaneous so that neither institution is burdened with a delayed transfer of funds. Some adjustment from the figures given may be necessary to accurately reflect 2005-06 costs and usage.

Second, it is assumed that the UH-Hilo funding shortfall has grown from zero at separation to the present amount of $1.25 million annually ($2.3 million less $1.05 million) in a linear manner. The accumulated deficit acquired by UH-Hilo over twelve years is then (12)($1.25 million)(1/2) = $7.5 million. This shortfall is not recurring and should be rectified by a one time transfer of resources to UH-Hilo. If this can not be achieved in one year, an allocation from system funds of $1.25 million to UH-Hilo in this year and each of the ensuing five years following is proposed as a less satisfactory remedy.