U. savings in fy '96 total $11 mil.

The University saved approximately $11 million in fiscal year 1996, thanks to new energy-saving technologies and a change in purchasing policies for goods and services, according to University President Judith Rodin. That sum is the first step in Penn's strategic effort to reduce administrative costs by $50 million over the next five years, as outlined in the Agenda for Excellence drafted by Rodin and Provost Stanley Chodorow last year. Rodin said she thinks the University should easily be able to fulfill the $50 million goal, which she deemed conservative. The funds are being reinvested into the capital budget, supporting various University projects and programs, she added. "We have to make the money because we've already accounted to spend it out over the next five years," Rodin said. She called previous purchasing methods inefficient, because they allowed employees to buy whatever they needed from any manufacturer. "By bringing our buying power together and leveraging it, millions and millions of dollars can be saved," Rodin said. The University spends $640 million on goods and services each year, according to Executive Vice President John Fry. Through negotiations with local suppliers of goods and services, the University hopes to save $15 million over the next five years, Vice President for Finance Stephen Golding told University Trustees at the Budget and Finance Committee meeting last Friday. "We are moving away from a transaction processing goal to one where we are negotiating with vendors and we are managing vendors in terms of how they interact with the University," Golding told the Trustees. There are also plans to make purchasing forms available over the World Wide Web for University employees, Golding added. A December 1995 Coopers and Lybrand report identified areas of opportunity that had savings potential and included purchasing and technology in its analysis. According to last year's report, travel services have a $24 million annual budget and a savings potential of $1.2 million. Publication services also have a large savings potential -- $3 million of its $13 million budget. Temporary employment, office equipment and copier paper have a combined savings potential of $1.5 million of their $11.3 million budget, the report said. During the meeting, the Trustees also passed a resolution to move forward with the Lighting Energy Reduction Program. The initiative calls for the installation of energy-saving light fixtures and ballast in all interior campus lights. Although the program will have an estimated cost of $7.5 million dollars, it is expected to yield an annual energy savings of $3.5 million. "Technology has just presented such great opportunities to save money on energy," Rodin said. The University spends approximately $35 million on energy annually, according to Vice President of Facilities Management Art Gravina. By the year 2001, the University should save about $42 million in reduced facilities costs, Gravina said.

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