Efficiency/Cost Savings

Ohio's public campuses have taken several steps in the past and particularly in the last decade to become more efficient. Just a few of the existing cost-cutting initiatives are:

• Administrative and Academic Related Cost Savings
• Statewide Shared Purchasing Consortium
• Statewide Collaborations
• Efficiency-Oriented Distribution Formulas

• As part of their critically important contributions to this effort, state colleges and universities undertook a wide range of actions to make their own operations more efficient, including:
• identifying key priorities at each college and university campus
• developing strategic planning activities
• undertaking cost containment initiatives, and
• implementing best practices
• As a result of campus-specific efforts, campuses saved in excess of $190 million – primarily from FY 2001 through FY 2004. Campuses saved in excess of $91 million by undertaking academic cost-savings initiatives – primarily from FY 2003 through FY 2005. Details concerning these cost-savings are found in the Ohio Board of Regents Higher Education Productivity Report.
• These efforts have brought dividends – first-time bar passage rates rose sharply in July 2001 to 82% from 75% the previous year. Much of this improvement is attributable to tough decisions made by the deans to decrease the size of entering classes, improve the quality of programs, and avoid increases in state outlays for legal education.

• The Inter-University Council (IUC) is the state association of the thirteen four-year universities and two medical colleges. The IUC has for decades managed several very successful cooperative purchasing programs that reduce costs at state-supported universities and colleges. Two-year campuses have similar cost-saving arrangements. These joint purchasing activities include:
  • Group purchasing agreements to take advantage of high-volume purchases
  • Pooled joint risk pool for lower-cost property and casualty insurance
  • A large volume statewide enterprise agreement with Microsoft
  • Joint prescription drug purchasing arrangements
• These programs help Ohio's campuses save millions of dollars per year.

• The Board of Regents supports a number of innovative cost-efficient statewide collaborations. Two of these, in the area of information management and library operations, have received national recognition:
  • OhioLINK is the state's premier electronic library system that enables statewide sharing of all college and university library resources. OhioLINK helps minimize duplication in the purchase of library resources and enables the state to take advantage of economies of scale in the purchase of resource databases.
  • The state's five Regional Library Depositories enable public campuses to store infrequently used documents in low-cost, high-density, environmentally sound facilities, freeing up more expensive library space on campus for instructional or other use. The construction of these depositories has helped the state avoid having to build expensive new libraries, all the while ensuring that important documents are stored in a safe manner and are easily retrievable.
• Most recently, many campuses are investigating the merits of collaborative arrangements in information technology and more generally, administrative computing.

• It's not well-known that the primary state operating and capital formulas are designed to reward efficiency and hold down costs. For example, allocations of the state operating formula (called the State Share of Instruction) are based on statewide average costs. The use of statewide average costs rewards efficiency: campuses with lower-than-average costs benefit and those with higher-than-average costs do not.
• In the capital formula, campuses earn capital resources through a formula based on enrollments and the age of their facilities. By establishing a ‘price' for state capital appropriations and a reward for moderate requests, the formula discourages campuses from over-investing in capital resources.
• Other changes in state subsidy policy give campuses an incentive in renovating and rehabilitating existing facilities instead of building new buildings. Higher education is committed to quality and efficiency. The vignettes provided above provide just a glimpse of the depth and breadth of this commitment, which has helped save hundreds of millions of dollars in the recent past.

• The Ohio Board of Regents, a partner in the Rebuild America program, promotes energy conservation through efficient design practices and facilities management best practices. Rebuild America is a network of community-driven voluntary partnerships that foster energy efficiency and renewable energy in commercial, government, K-12 schools, higher education, and public housing buildings. Ohio's public institutions join the Rebuild America partnership by participating as a partner in the Regents Rebuild initiative.
• The Regents Rebuild partnership sponsors continuing education and training for facility managers and provides resources to promote effective facility management, smart building design, and the use of alternative fuels and clean power. The Office of Energy Efficiency at the Ohio Department of Development is an important resource to Regents partners.
• Examples of campus energy efficiency efforts include:
  • Cuyahoga Community College designed a program that would maximize energy savings and improve their campuses' conservation of energy with no net cost. The program involved over 30 buildings on four campuses throughout the county, encompassing over 2 million square feet of building space. The energy savings realized in the first auditing period totaled almost $700,000 for all campuses.
  • Kent State University has sponsored energy efficiency projects on many of their campuses since the early 1970's. As a result of their past efforts, the university established a revolving energy efficiency fund that invests in efficiency projects yielding attractive returns. Typical returns on energy efficiency investments can average 25% per year. Over time, the fund is replenished from the return on investment in efficiency projects.
  • The University of Cincinnati is a recognized, national leader in the implementation of the Leadership in Energy and Environmental Design, or LEED, program. The university has documented at least $6 million in capital savings since implementing LEED standards and projected savings in capital of up to $50 million for projects currently under construction.