April 19, 2006
Summary
Effective July 1, 2006, the TIF will no longer be calculated on a per phone line basis, but rather on a per full-time employee (FTE) basis.
Background
Until recently, campus departments/units paid for both voice (phone) services and the suite of Information Technology (IT) infrastructure services through a single, combined charge based on the number of phone lines, instrument charges, and usage. Over the past five years, campus usage patterns have changed dramatically as information technology has evolved. Data traffic on our networks now far exceeds voice traffic. In addition, voice services are transitioning from traditional phone line services to cell, wireless, and networked-based services. Today we find that virtually every faculty member, staff employee, and student uses IT infrastructure services.
This fiscal year, voice and IT service costs were separated, resulting in the creation of the TIF as a separate charge for IT services. The TIF is not a new charge. Rather, it is a rethinking of the basis on which “common good” technology infrastructure services are calculated. Although separate from voice service infrastructure, the TIF had continued to be calculated on a per phone line basis.
While phone lines and usage continue to be an appropriate model for traditional voice services, they are no longer a good measurement for funding our IT infrastructure. A wide-range of TIF funding models were studied within our IT governance process, including individual service, usage-based, FTE, headcount, and knowledge worker models. In addition, these models were reviewed for regulatory compliance with contracts and grants, since technology costs are often charged to grants on a per phone line basis. While there are pros and cons to all of the models, the FTE model emerged as the best measurement for technology usage that also met grant and administrative implementation conditions.
The New TIF
Effective July 1, 2006, the TIF will no longer be calculated on a per phone line basis, but rather on a per FTE basis. Voice service charges will remain on a per phone line basis.
The existing suite of infrastructure services and approximate percentage of charge includes:
- Campus network, backbone, and connection to the Internet (28%)
- Infrastructure cabling/Contract project management (24%)
- A full package of email, messaging, and calendaring services (21%)
- Campus systems (5%)
- 800mhz system for campus emergency services (4%)
- Campus wireless in common areas (2%)
- Network for general assignment classrooms (GACNet) (< 1 %)
The remaining 16% is a longstanding charge for campus network infrastructure that is now applied to the Repositioning IT Initiative.
These common good campus services, plus the infrastructure charge, will be provided on a funding base of $12,960,000 for FY 06/07. As the campus transitions to the new FTE basis, the IT service categories, the infrastructure charge, and the funding base remain unchanged except for a 3.7% increase in the funding base to accommodate the projected salary, benefit, and S&E increase per the budget guidelines. This directed increase is to be reviewed and approved by the Policy Committee on Sales and Service Activities and Service Enterprises (POSSSE).
How It Will Work
The FTE-based TIF will work as follows:
- The projected FTE base for a given fiscal year will be determined by historical monthly payroll totals for current FTE, including partial and full-time FTE for faculty, staff, and students in the campus payroll system at a point in time. For FY 06/07, the projected FTE base is 27,700 (according to data from the Office of Academic Planning and Budget).
- The per FTE charge will be determined prior to each fiscal year by dividing total costs by the FTE count. For FY 06/07, $12,960,000 has been divided by the FTE count of 27,700 resulting in a monthly charge of $39.
- Each Financial Accounting Unit (FAU) will be charged $39 per month based on the partial and full-time FTE associated with the unit.
- Changes in FTE (due to employees being hired or leaving, and grants starting and ending) will be calculated monthly for each FAU. While the TIF rate will not change in a given fiscal year, monthly charges to an FAU will reflect changes in the FTE total.
Impact of Costs at the Department/Unit Level
Implementation of the new TIF model will cause some shifts in cost allocations. There is no doubt that these cost changes will create a temporary sense of winners and losers. However, please consider that very few people are not using information technology services in some way.
I do understand that it will take some work and a change in thinking for the campus to transition to this new funding model. The implementation of the TIF was a strategic move that separates IT service costs from voice service costs so that charges are clearly differentiated and visible to the campus. The revised TIF is also a strategic decision that has freed the campus to move forward with two funding models that will more closely reflect how voice and network-based service technologies are deployed and used. In the end, I believe it will benefit the entire campus and in doing so will help distinguish UCLA in its primary mission of academic excellence.
As deans you have been kept abreast of the development, and now the implementation, of TIF, and it is important now that you inform the department chairs, faculty, and the heads of each FAU under your purview. It is particularly important that you communicate the details of the new fee structure to researchers who are able to accommodate the new fee in future grant proposals.
Thank you for your attention to this matter.
Executive Vice Chancellor and Provost