Updated April 4, 2012

Please note items #17 and #18 have been added; and #14 updated.

1.  Where may I find estimates for the charges on the new model?

We will update the content/estimates on a periodic basis; they were last updated April 4, 2012.

Pro forma Billing Estimates for the New Communication Technologies Funding Model, Subsidiary Ledger Accounts

date updated: April 4, 2012

1. Summary Information

The new Communication Technologies rate model is targeted for implementation on July 1, 2012.  The new model divides the funding into core services and optional services.  Core services, principally the data networks, will be funded via a payroll assessment, per pay period, against payroll funding accounts.  Optional Services, principally the telephone systems and off-campus data networks, will be funded on a pay-as-you-go fee-for-service model, with monthly billing cycles.  This page provides summary and details for monthly recurring charges to subsidiary ledger accounts (one-time and ad hoccharges omitted; and charges to entities external to UNC-Chapel Hill excluded).

For summary information on what the old versus new model would charge for fiscal year 2010-2011, please access the file named FY2010_to_2011_by_account_summary.xlsx. The file is available to any active Onyen holder.  This provides a by-account sum of all the monthly recurring charges against subsidiary ledger that would have occurred: it also provides the fund-type information and unit owner for those accounts (per the UNC chart of accounts).  You will see Net Change totals in the right-most column.  Please us it to review the sum, by account, of what the monthly recurring charges would be for all of the core services (old model and new model), along with sums for all the optional services, and what the impact would have been if the model had been implemented in the FY2010-2011.

Summary for year-to-date for fiscal year 2011-2012 is in YTD_2011_to_2012_by_account_summary.xlsx, available to any active Onyen holder.  This file provides an account-by-account sum of what the charges would be as of the update (2/29/2012).   We will update this file as we update the details below.

 

2. Core Services, YTD FY2011-2012

The file named Core_Services_Payroll_Assessment_2011_to_2012.xlsx documents the core services payroll assessment (0.54%). Click the link to access the file, available to any active Onyen holder. The “rollup” tab shows what the sum of payroll assessments would be on the new rate model, by account code, for each pay period of the fiscal year 2011-2012. The “data” tab shows every charge against every account that would have occurred using the new model for fiscal year 2011-2012. We will update this workbook monthly with additional data, per each month’s pay periods.  It is updated through 2/29/2012.

The pay periods are listed as “B01″ for the first biweekly, “B02″ for the second biweekly, “B03″ for the third biweekly, etc. The monthlies are “M01″, “M02″, “M03″, etc., respectively. In the rollup, we have provided the pay-dates to assist your review.

You may use the “Account” drop-down box to specify the accounts you wish to view. You may use the “Pay Period” drop-down box to specify the pay periods you wish to view. The pay period columns are totaled in the bottom-most cells of the column. The account rows are totaled across all pay periods in the right-most cells of the column. Thus, you may view the core services assessments for each and every account, for each and every pay period, and their totals.

PLEASE NOTE. We still await approval from the federal government to direct-charge contract and grant funds. UNC-Chapel Hill expects this approval in the spring of 2012. The pro forma charge estimates include these direct charges in anticipation of approval.

 

3. Optional Services, YTD FY2011-2012

For optional services, we provide separate workbooks for each Communication Technologies monthly against subsidiary ledger accounts, and also the revised optional services rate card. As of February 29, 2012, these files are:

Click the links above, available to any active Onyen holder. As monthly billing cycles proceed, we will provide additional monthly files. The data volume is such that we could not effectively provide them all merged into one workbook. Each monthly file presents an “account view” tab for your use, and a data tab that contains all of the monthly recurring charges to subsidiary ledger.

In the monthly billing workbooks, you may use the “Account” drop-down box to specify the accounts you wish to view. The charges are then displayed, for every account selected, by object-code, with a column of the old charge, and a column for the new charge. You may use these monthly workbooks to view the monthly recurring charges against each and every subsidiary ledger account.

In producing the pro forma monthly recurring charges against subsidiary ledger accounts, we have corrected the Communication Technologies optional rates as follows:

  1. The basic service rate of $48/line/month rate is reduced to $14.50/line/month: per the new recommended rate model (complex service applications beyond basic service, or desktop equipment beyond the basic rate telephone set will incur higher monthly charges).
  2. Applied appropriate overhead assessment: per the new recommended rate model
  3. Applied 8% taxes correctly to taxable items: taxable items had been incorrectly taxed at 6.5%.
  4. AT&T services have been trued to state of North Carolina AT&T contract, per its terms: this means small increases in some cases and small decreases in others
  5. All CableTV customers are getting correct charge of $12.50 per installation: this will be a new charge for some customers who incorrectly were not being assessed.
  6. For pager services, the correct taxes and surcharges have been applied.

Please review Rates_Monthly_Recurring_Charges_Effective_July_2012.pdf for specific details.

PLEASE NOTE. The monthly billing workbooks capture the recurring charges against subsidiary ledger accounts. Thus, the monthly billing workbooks omit one-time and ad hoc charges. They also omit accounts receivable from entities external to UNC-Chapel Hill; they omit direct charge customers under separate Memoranda of Understanding (e.g., UNC Hospitals, Student Residential Housing). The intent/objective is to present a reliable estimate of the monthly recurring charges against the accounts of UNC-Chapel Hill business units.

2.  How is the basic funding model for communications changing here at Carolina?

The old funding model has been based entirely on monthly phone charges – where networking costs were subsidized by the phone charges. That approach no longer makes sense, now that the majority of our communications expense is for the campus network. The new model is designed to guarantee adequate funding for the data network (the data network is the dominant of the “core services” as discussed below). Indeed, phone use and the related charges are considered optional in the new model.

3.  Where is the final report of the Communication Technologies Coordinating Committee?

You may review the final report, Recommendation for a New Network Infrastructure Funding Model, at: https://its.unc.edu/about-us/office-of-the-cio/it-governance/

It is at the bottom of the page. Downloading the report requires Onyen authentication.

4.  Are all the elements in place and determined? Or are there still loose ends or things that need to be finalized?

The overall framework is approved, but there are more details that need to be finalized. There are two very significant pending items. The first involves getting approval from the federal government to allow charges directly against contract and grant funds. The second involves determination of the “personal” versus “academic” portions of the student share.

UNC-Chapel Hill requested permission from the federal government to allow direct charge to contract and grant funds for portions of the assessment; although we anticipate success in securing that approval, we likely will not know until Spring 2012 that we have gotten it. If UNC-Chapel Hill’s request is approved, then we can proceed with providing further instructions on how to represent those charges/impacts in grant proposals. If our request is denied, then we have to review alternative options to make up for that shortfall that otherwise would be funded via direct charge to contract and grant funds.

On the student share, the CommTech Coordinating Committee determined that the total student share is approximately $3.1M. Of this, some percentage use of the network is “personal” and some “academic.” The CommTech Coordinating Committee referred to Student Government the question of exactly what percentage was personal and what percentage academic – though, it did stipulate that the “personal” share should be not less than a third of the total, but not more than a half of the total. The recommendation is that the student technology fee pay for the “personal” share and that central university funds are to pay for the “academic” share. Whether existing student technology fees can be reallocated to cover the entire personal share, or whether additional fees will be required, or a mixture of the two, is an open question as the student fee groups perform their work. This will in turn specify the balance of the student share that is the “academic” portion.

5.  Will the phone line rate still be $48/line/month?

The new phone line rate will drop from $48/line/month to $14.50/line/month. This is for basic phone service, one-line, one-phone number appearing on the line, with voicemail, including domestic long distance.

One of the main objectives of the new funding model is to make it so the telephony service is not overcharged in order to subsidize data network services.

 

6.  Will my department still get a monthly bill?

You will still get a monthly bill. The optional services, which for most departments center around telephone charges (but some have off-campus connectivity charges) and other charges for optional things like pagers, will be billed monthly in exactly the same mechanism by which they are billed today.

7.  How are the “core services,” which principally means the data network, going to be funded?

Those services will be funded by a blend of sources. They are:

      • Faculty/staff departmental funding – total assessment against payroll at .54%
      • Student funding– total assessment against cost to educate at .54%
        • “Personal” use: by student technology fees
        • “Academic” use: by central university sources
      • Residential housing – by direct, year-to-year, memorandum of understanding detailing actual expense projections plus overhead percentage
      • Affiliated entities (e.g., UNC Healthcare, General Administration, UNC Press) – by direct, year-to-year, memorandum of understanding detailing actual expense projections plus overhead percentage
      • Reallocation within ITS of building operating reserve – these funds were commingled in the general ITS budget and are to be reallocated; these were line-items appropriated for this use.

 

With regard to the payroll assessment for departmental funding, it will be implemented exactly as the transit fees are implemented — as a percentage assessment against payroll funding sources, per pay period.

8.  How are the “optional services,” which principally means telephone and off-campus network connectivity, going to be funded?

Optional services will be pay-as-you-go, fee for service. It will be cost plus 17% to cover administrative and other overhead expenses.

9.  How and when will I know the bottom-dollar costs to my department?

The payroll assessments for the “core services” are very straightforward – they are .54% of the total payroll of your department (or unit), distributed exactly across payroll funding sources as payroll is funded. On the optional side, other than the basic phone line service dropping from $48/line/month to $14.50/line/month, the charges will be at cost plus 17% to cover administrative and other overhead expenses.

The estimates are available at https://its.unc.edu/commtechnology/communication-technologies/pro-forma-billing-estimates/.  We will update the content/estimates on a periodic basis; they were last updated February 17, 2012.

10.  When does this go into effect?

The goal is to implement the new model for the 2012-2013 fiscal year, thus: July 1, 2012.

11.  What does “on-campus network” versus “off-campus network” mean?

The key conception here pertains to “last-mile” connectivity and UNC-Chapel Hill’s optical fiber infrastructure. Basically, anything that can be connected via our current “campus-fiber” physical infrastructure is “on-campus network.” What this means is that remote locations – like, say, the Galapagos for the most extreme example, or the North Carolina Institute for Public Health in Southern Village in Chapel Hill, or anyone located in the Bank of America building on Franklin Street, or anyone in the Sheryl Mar buildings in Carrboro, for rather less obvious and less extreme examples – has to pay for connectivity to the internet in some way, shape or form, since we don’t have campus fiber that runs to the Galapagos islands. The same situation applies to less remote locations: e.g., a satellite division of a school in Asheville may very well require arrangements for network connectivity. Other cases exist where the only way we can get network connectivity across an intersection is to set up microwave transport; or, there are cases where there just is not existing ductbank that we own and can run fiber out to a location. So, in a nutshell, “on-campus network” means that a building or department’s connectivity can be physically connected to the UNC-Chapel Hill owned fiber plant without intermediaries.

12.  My department is not on-campus network. Why does my department have to pay separately for off-campus network connectivity if we are also getting an assessment against percentage of payroll?

The payroll assessment pays for the maintenance and upkeep of the “on-campus network” including the staff who do it, the fiber plant, the network electronics, connections to the internet, etc. Even units/departments who are not “on-campus network” still need a campus network to which to connect back to for all kinds of services. It just so happens that those units may have to fund their “last mile” requirements to get to that campus network, or for even more remote cases, traverse the internet through their own network connection to get back to campus network-based services.

Setting that much aside, even, there are two other basic points. First is that Communication Technologies cannot sustain services with extreme cost variability that would be induced by the wild variance of funding “last-mile” and/or “internet connectivity” for whatever units/departments there may be. Second is that Communication Technologies cannot, in effect, indemnify units/departments against sheer bad luck, nor bear the burden of unit/department autonomy. For units/departments that choose to move off of campus fiber, securing last-mile or internet connectivity is a cost of that option. For units/departments that are forced to move off of campus fiber, that too is a cost to move that should be factored into the decision. For units/departments that already are not on campus network, this is an impact best dealt with in your overall budget planning/request process. The general principle of this second point is that Communication Technologies in no way determines whether departments/units are located on campus network or off campus network. Thus, the Communication Technologies funding model cannot be obligated to “smooth out” those differential costs.

13.  What is the capital lifecycle funding for? If that’s never been funded, then how is it that we have a network right now?

The capital lifecycle funding pays for a broad spectrum of expense, including incremental growth and maintenance of the campus fiber plant, the core network backbone, in-building electronics, wireless access points, servers and systems to sustain network monitoring, virtual private networking gear, network border intrusion prevention systems. Much of the campus network infrastructure is seven years or older, which both limits the service we can deliver and puts the network itself at risk of failure.

Thus far, we have funded capital refresh on an emergency-only basis out of any surpluses we had from our overall operations of the telephony and bundled-fee charges. This has ranged from zero dollars in some fiscal years to as much as $1M in some fiscal years – but it has been episodic and “catch as catch can” at best. For major upgrades in the past, we have been successful in requesting one-time funds from the University Budget Committee and have sometimes found campus partners who have offered one-time money to fund purpose-specific electronics or optics upgrades. Given the rather dramatic budget reductions the University has had to absorb, this is unsustainable. Voluntary contributions from willing campus partners who just happen to have funding resources is inadequate to meet the ongoing need. The bottom line is this: UNC-Chapel Hill cannot leave the health and status of its data networks to the vagaries of episodic funding.

14.  Students already pay student technology fees. Why don’t those fees pay for the student share of the network? For that matter, why isn’t the network just funded centrally by the university without any student technology fee component?

In the history of student technology fees, only two networking-related streams were ever approved. $86,125 was approved for wireless networking in Davis library; and $29,175 was approved for modems. These allocations are woefully inadequate based on today’s networking needs and expectations.

It seems inappropriate to expect the state of North Carolina or tuition dollars to fund whatever “personal” use of the campus network there may be by students. So, the salient question is what percentage of time on the campus network is used for personal purposes as opposed to academic purposes. The Communication Technologies Coordinating Committee, which includes student representatives, judged that it was between a third and a half of student usage. To put the matter another way – the question is how much time on the network is sending emails of a non-academic nature, browsing websites for personal things (e.g., postings and browsings of social networking sites), twitter, etc.

For the portion of student usage that is academic, the Communication Technologies Coordinating Committee recommended that central university sources fund that. It seems inappropriate to charge a fee to students for that portion of network utilization that is directly related to student academic requirements/pursuits.

The total present student technology fee comes to approximately $4.6M per year. This funds a variety of student-oriented services, principally helpdesk and labs. To adequately fund the campus network, the Communication Technologies Coordinating Committee judged that the student share should be approximately $3.1M, with between a third and a half of that as “personal” – so that means $1.03M for a third to $1.55M for a half – with the university to make up the rest. It has been referred to Student Government to conduct its student fee process to determine the extent to which existing technology fees might be reallocated, versus additional fees imposed, versus a mixture of both.

Update as of March 16, 2012: preliminary evaluation by student focus groups has yielded a range of estimates, from 24% at the low end to 38% at the high end, with an average of 31% across all groups.  If we assume just for the purposes of example that 31% is the figure, the “personal” portion would come to approximately $992K, and the “academic-use” portion to approximately $2.208M.  At present, the expectation is that the audit of existing student technology fees will complete by June 1, 2012.

14.  How was the student share determined?

The faculty/staff share was due as .54% of the cost to sustain the employee population (measured by the total salary base across the university). The percentage rate was determined by a line-by-line evaluation of the total expenditures by ITS Communication Technologies over a representative fiscal year.

The student share was determined by applying exactly the same .54% rate against the cost to sustain the student population (measured by the total cost to educate the student body). The cost to educate the total student population is the surrogate for salary in the case of students. For the fiscal year ending Jun 30, 2010, the cost to educate a student is $22,563 (as calculated according to the National Association of College and University Business Officers standards for presentation in the university’s Comprehensive Annual Financial Report). With 26,603 FTE, this comes to (22,563 * 26,603): $600M. Thus, .54% of $600M is approximately $3.2M – but was represented in the Communication Technologies Coordinating Committee recommendation at $3.1M.

The total burden both to faculty/staff and to students was reduced equitably by allocating direct costs (plus overhead) to affiliated entities, student residential housing, and offsetting state appropriations reallocated from ITS general funds.

15.  The new funding model involves reallocating $550K of money within ITS (in the 2012 fiscal year, it is projected to be $801K) to in part fund the “core services.” Does this mean other ITS services are going to be cut in 2012?

The current spate of budget reductions in ITS has partially dealt with this reallocation looking forward to fiscal year 2012. So, ITS executive leadership has tried to take this into account in FY2011-2012 reduction plans so as to eliminate need for further substantial state funds cuts. Even so, it is possible that ITS will have to revisit this situation, pending the extent to which the ITS budget varies in other ways, and/or the extent to which we may have difficulties in realizing planned reductions (and thus need to offset).

16.  I am responsible for contracts and grants funds. How do I handle the C&G portion of the payroll assessment in my contracts/grants?

We are discussing this with the Office of Research. We cannot give guidance until the federal government affirms our request for approval to direct-charge contract and grant funds. While we expect this will occur prior to the 2012-2013 fiscal year, it will likely be closer to the start of that fiscal year than we would prefer. We are discussing options to implement the contract and grant portions at some date certain in the future — perhaps January 1, 2013; perhaps July 1, 2013. Until we provide guidance in concert with the Office of Research, these charges should not be included in your proposal budgets as they are not yet approved by the federal government.

17.  What object code will the core services charges appear under?

The fee information is as follows:

    • Fee Name: Communication Technologies Core Fee
    • FRS Object for Department Expense: 3225