Dear Alumni and Friends,
Over the past decade we have worked hard to promote a culture of innovation and efficiency at the university, and we’ve have made great progress. The results show in a variety of ways that are often dramatic. For example, in the past three years, our efficiency efforts have resulted in about $112 million in cost savings and cost avoidance. In prior years, we saved millions more.
Efficiencies help our students, our campuses and our employees. Our goal is to keep our costs in check so the cost of a CU education remains reasonable for our students. It also means not spending money we don’t have to. We’re a complex, $4.5 billion annual operation, and there is plenty of room for finding savings in such a large enterprise. The key is having a mindset of efficiency that permeates the organization.
And while we tend to focus on the big-ticket items that save millions or tens of millions of dollars, the mindset is as important as the result. A couple of weeks ago, I had a great example of that. Each year, our Office of University Controller sponsors the CU Innovation and Efficiency Awards. We ask our employees to come up with ideas that can save us money or improve our operations. We offer cash prizes of $1,000 to $1,500 as incentive. I am continually amazed by the creative thinking and innovative solutions that emerge.
For instance, this year’s winner, from our Boulder campus, emerged from a significant calamity. The floods that struck parts of campus in 2013 caused a steam vault to overflow, killing surrounding vegetation. Darren Willett, turf manager for Housing and Dining Services, noticed this and a light bulb went off. He wondered if steam could be harnessed for weed control. He and facilities manager David Lawson explored the concept and found an Australian company with proven technology. Its use led to fewer weeds, less herbicide and our grounds crew covering a 63 percent greater area per hour. They shared the idea with the other three CU campuses, as well as other colleges in Colorado and the City of Boulder.
One of my favorites came a few years back, when Jori Leszczynski at the CU Anschutz Medical Campus led a team that looked to the restaurant industry and devised a system allowing for more efficient mopping of the floors at the campus animal-care facility. It ended up saving about 3,900 labor hours (at a savings of $108,000), 620 fewer gallons of chemicals and 40,000 fewer gallons of water, saving an additional $8,300. And it substantially reduced bacteria in the facility.
Many other great ideas – ranging from more efficient student advising to reducing the number of plastic water bottles – have emerged from the contest. Its goal is to save time and money, streamline procedures, create efficiencies and perhaps most important, share ideas with other departments and campuses.
Along with that, we certainly focus on big-ticket items. We conducted an audit of our employee insurance plans in 2012 that resulted in nearly $3 million in annual savings. Related, we instituted self-insurance in 2011, which saves $3 million to $4 million annually.
We have worked closely with legislators over the past decade to secure legislation that allows us to operate more efficiently. They passed nearly 20 bills that help us increase efficiencies – everything from streamlining the construction approval process to instituting better procurement processes – that save tens of millions annually.
The efficiency mindset resonates beyond the university as well. Moody’s credit rating arm recently upgraded CU’s bond rating to Aa1, which allows us to save millions in bond transactions. We refinanced some $450 million in bonds, saving about $50 million. We also issued our first commercial paper sale (accompanied by Moody’s and Fitch’s highest ratings), which will eventually save millions.
Efficiencies save us, and our students, money. But the mindset that accompanies it also makes us a better place to work and it places a premium on employee creativity and innovation. It has become second nature now at CU, and I expect it will lead to many more efficiencies to come.
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