Update to Freeze (Dated: November 1, 2021)

November 1, 2021

TO: UH Officers
FROM: David Lassner, President
SUBJECT: Update to Freeze

Mahalo for all you and your teams have been doing and continue to do to support our students, our employees and our state during this unprecedented crisis. You are amazing public servants.

Unfortunately, Hawaiʻi’s economic conditions remain challenging. While our financial performance last year was exemplary given the challenging fiscal conditions, for which I thank you all, legislative action has resulted in a significant reduction in our general fund appropriations. The immediate impact is a reduction of funding to support existing positions and services. Based on history, we should not expect that general fund appropriations will return to pre-pandemic levels for at least a number of years to come.  Furthermore, if history is a guide, much of any restoration will be dedicated to fund future collective bargaining agreements. Increases in general fund support have not been as readily available to meet rising inflation or increased costs of existing services.

At this point it appears that our federal relief funding will be necessary to address the actual costs of operating under pandemic conditions, especially for some of our COVID related revenue shortfalls, and disbursements to students in need.

Our reserve balances are strong. But we will need to rely on them to help carry us through these next years as we rebalance annual operating expenses and revenues into structural alignment. As a result, we still need to preserve our resources to ensure we can meet current and ongoing operating budget requirements.

On March 24, April 8 and July 23 of 2020 I issued memoranda first implementing and then amending budgetary freezes on permanent hires with appropriated funds, on faculty Special Salary Adjustments (SSAs) and staff Special Compensation Adjustments (SCAs), on out-of state travel and on certain major purchases.

This memorandum now replaces and modifies the freeze conditions for University of Hawaiʻi (UH) and replaces all prior UH and governorʻs freezes in effect for the UH system. Effective immediately and until further notice, the following are in effect:

1. A freeze on all new UH hires into regular (permanent or temporary) positions other than using extramural funds or Research and Training Revolving Funds (RTRF). This includes UH General Funds (GF), Tuition and Fee Special Funds (TFSF) and other special and revolving funds. Hiring of Graduate Assistants is exempt from this freeze but must be part of hiring plans approved by a UH Officer.  Only the UH President can approve exceptions to this freeze.
2. Postponement of all faculty Special Salary Adjustments (SSAs) and APT Special Compensation Adjustments (SCAs) for equity and performance. Only the UH President can approve exceptions to this freeze.
3. A freeze on all out-of-state travel. UH Officers can approve exceptions to this freeze and may delegate further for different sources of funding.
4. A freeze on inter-island travel with GF or TFSF funds. Only a UH Officer can approve exceptions to this freeze. This freeze is also intended to ensure UH can comply with any changes in Hawaiʻi’s dynamic COVID-related travel requirements.
5. A freeze on equipment purchases over $25,000, purchase orders over $25,000,and all vehicle purchases with non-extramural funds. Only the UH President can approve exceptions to this freeze.
6. A freeze on all new contracts over $25,000 with non-extramural funds. Contract renewals are not frozen but should be carefully scrutinized to determine if they are absolutely necessary. Only the UH President can approve exceptions to this freeze.

Expenditures with extramural funds are largely exempt, as UH extramural funds are a welcomed and significant source of economic stimulus for Hawaiʻi injected from outside sources. Expenditures with extramural funds must be consistent with applicable contracts, grants and guidelines. Further, extramural program managers should be cognizant of the context and fiscal constraints under which the entire university and state will be operating.

You should continue to take any measures feasible to defer non-essential recurring and non-recurring expenditures. The strength of our fund balances and reserves will be a critical component essential to allow our rebalancing strategy through the difficult period ahead.

Even as we operate under these freeze conditions, we must continue our planning and action for more strategic changes that will preserve our ability to meet the most important needs of the state with a lower level of state appropriations.

I trust that each of you will exercise with great discretion your authority to request exceptions. Thank you once again for all you are doing each and every day for the University of Hawaʻi, our students, our employees, and the people of Hawaiʻi.

c:
Board of Regents Chair Randy Moore
The Honorable Governor David Ige

Link to PDF Version of Memo