Opening Breakfast Speech

August 31, 2007

“Moving Forward”
Interim President Joseph S. Wood

Budgets -- yes, budgets -- have been recurring themes at our opening breakfasts for many years -- right? 

Well, I am tired of hearing about budgets, and I know you are, too.

We need new ways to approach our real and growing fiscal problems. We need a different and more fundamental approach that will result in a smaller, stronger, better, indeed a transformed USM.

And that’s what I want to talk to you about this morning -- about moving this university forward by transforming it.

Now, transforming lives and communities is our mission -- recall what our Outstanding Senior from 2006, Emily Wood, told us: "The most important thing I took from my experience at the university is that I can make a difference in this world."

We don’t expect students to experience such qualitatively rich transformation with technical fixes…what Stanford historian David Tyack would call “tinkering toward utopia.”  

We expect our students to work hard -- to make something of themselves -- to be the agents of their own transformation.  And we should expect nothing less from ourselves.

I hold dear the transformative mission of this institution, and because of my loyalty to that mission, I feel compelled today to share with you what we all need to do to protect that mission and to move it into the future -- to be about our own institutional transformation.

Let me be clear: Under Rich Pattenaude’s leadership, the physical, programmatic, and reputational growth of this university during the last 15 years has been nothing short of remarkable. We financed that growth through a combination of reallocations and enrollment growth, along with private fundraising.

Look at the most recent U.S. News and World Report rankings: Once more, we have the highest academic rating in our regional tier, a rating that would place us in the top half of the tier above ours, if that were the only criterion.

And the 2008 Princeton Review cites USM as a “wellspring of educational opportunity,” and adds, "USM's price tag would be much higher if dollars equated with the faculty's dedication to the students."

And we continue to move forward.

General Education reform is attracting national attention and will result in a more coherent curriculum.

The physical transformation of our three campuses continues. 

There is a remarkable increase in private support that has funded much of our physical expansion, and, in the future, will be directed toward supporting teaching and learning.

The continuing implementation of MaineStreet, formerly known as PeopleSoft, will improve our record keeping and the quality and accessibility of the information we need to best serve our students. 

Allow me to thank the many staff members who are working so hard to make that implementation a reality.

These and many other initiatives are built on the steadfast efforts of faculty and staff.  You have accomplished great things, but the environment in which we work is changing, and we must change with it.

That is why last year, we outlined seven action steps to control costs. 

We met with some success. We completed the capital campaign;

we beefed up admissions; we are implementing an integrated marketing program; we moved to improve retention; we have more online courses and a greater array of programs; and we have survived a hiring freeze without sacrificing quality. 

For all of that, you deserve to give yourself a round of applause.

But moving forward, strategies of the past can no longer sustain this university. 

We can no longer tinker toward utopia. 

Instead of talking about budgets, we need to begin making structural changes to ensure the long-term sustainability and transformative quality of this university.

The strategies of the past no longer work, in part, because our planning has been based on establishing an enrollment of 11,000 students.

We have been moving toward a significant change in our enrollment profile to the point where we now enroll many more full-time than part-time students, and an increased number of transfer and graduate students.  That is one reason we have had record graduating classes in the last two years. 

Yet our overall enrollment, which peaked at 11,382 in 2002, will be below 10,500 this fall for the second consecutive year.

Indeed, our enrollment will stay close to 10,000 in the years ahead.

The enrollment "blip," as we described it last year, has become a trend, attributable to a lack of significant progress in student retention and the new realities of the higher education landscape.

We now must set achievable and realistic enrollment goals that respond to educational needs and match our resource base.  Such goals should also enhance our ability to recruit strong, well-prepared students.

One of those realities of the higher education landscape -- demographic trends -- does not bode well for growing new student enrollment. High school graduates in Maine, New Hampshire and Vermont will decrease from 14 to 19% through 2018.

The higher education market also has become increasingly competitive for these students, which, of course, is why all of us will need to play a role in helping to attract students.

At the same time, growth of Maine's Community Colleges continues at a record pace, offering a low-cost alternative to many prospective university students seeking access to higher education. But the number of transfer students from the associate degree programs at the Community Colleges to our baccalaureate programs has been much lower than anticipated.

In the past, we achieved enrollment goals while making minimal investments in recruitment, retention, and marketing, a decision that carries serious consequences in an environment where more institutions are vying for fewer students.  We now have begun to give our colleagues in Admissions and in Marketing the tools they need. 

But that is not enough. We fail to retain many of those students we enroll. Our retention rates continue to lag behind those of peer institutions, and low retention simply requires us to recruit still more students. Coupled with the demographic realities facing us for new students, low retention could have a catastrophic impact on our overall enrollment and on our financial well being.

Yes, we are making progress on retention.  We're implementing early alert and student mentoring programs; new on-campus living options; and through SmartStop, we are consolidating student services.  General Education, with its emphasis on a coherent curriculum and student success, will also contribute to retention.

But it is not enough. 

We must all, every one of us, faculty member and staff member alike, help students succeed. Let me repeat that: We must all, every one of us, faculty member and staff member alike, help students succeed.

Our students come to us with a range of experiences, identities, and perspectives. We have a responsibility to create connections with each of them, so that they can succeed at USM.

Can every one of us say that we do that?

We all share some degree of responsibility for recruiting students and for making sure we retain them -- that they become a part of our educational community.

Retention is not our only problem, of course. 

Costs of energy, operating for physical plant expansion, health care, and compensation continue to outpace revenues, compounding our fiscal challenges. 

Coupled with enrollment declines, we can no longer grow ourselves out of our fiscal problems. 

We have only one option:  We must spend less. 

To spend less, we must prioritize our work to fund those things that are most critical to our mission. Only then will we be able to continue to improve quality in areas of excellence and import. Only then will we be able to move forward.

Here is the fiscal challenge in front of us: If we do not act differently than we have in the past, if we do not stop spending, we will face a continuing, projected deficit of several million dollars in the fiscal year ending June 30, 2008. 

We also have long-term debt created by year-end shortfalls, which have been accumulating since 2004. The University System understands this fiscal challenge, and based on the planning we have done this summer, the System is helping us begin to pay off our accumulated debt over the next several years.

I want to stress that we have not engaged in profligate spending. We are a pretty bare bones institution to start with.  We're spending as much as we do because we're doing more than we should be doing.

That is understandable given USM's growth. More often than not, our growth has been in response to meeting the public's ever-increasing expectations of many costly programs that many believe ought to be available from a public university.

These programs are worthy, but is every one central to our core mission?

And if we cannot grow ourselves out of our fiscal problems, we must face them by re-examining the nature of the institution in the context of this core mission. 

How are we going to do this? 

Allow me to preface this by saying how we will NOT do this. We will not place blame.  We don't have time for blame games. We are a much better university than we were 15 years ago, and each of us, throughout the institution, shares some degree of responsibility for our successes, but also for this budget problem.

We will work together to solve it and move forward. We will begin to move forward by making our budget management and projections more open, transparent, and understandable.

I have also established a University Council. This working group, consisting of the President’s Senior Staff, Deans, Associate Provosts, and other members of the Provost's Staff, has begun meeting to align spending with revenues.

We will do this work as much as possible through a transparent, team approach, and by reporting back to the community.  Of course we will ask leadership from our senates and unions. 

We will soon bring together middle-level managers across the institution -- these are the people who everyday make USM work well. 

And I have also scheduled town meetings on each campus for later in September. At all of these gatherings I want to hear from you how you think we can move forward.

We also have begun a budget review whereby each dean and division manager meets with the CFO and a Senior Staff member to review the unit's budget situation and work to rebuild budgets that make sense.  These reviews will help us model an annual review process, something we have not had before.

In the short term, we have put in place a number of strategies to generate immediate savings.

The hiring freeze will continue. Indeed it will be tougher.  Last year, we left 30 positions unfilled, and most of them have now been eliminated.  By June 30 of 2008, we will increase the number of positions eliminated.

We will also put in place new policies on equipment purchases and travel, with details finalized shortly. 

I also want to report to you that I have taken steps to obtain approval to place Portland Hall on the market. I cite this as an example of a hard, but necessary, decision. The hall served our needs but it no longer does so in a cost-efficient manner. 

I said earlier that I'm tired of talking about budgets. But those of us here this morning, and those who will succeed us, will have to continue to talk about budgets if we continue to rely only on short-term, technical fixes such as hiring, equipment and travel freezes, and sale of assets.

These are NOT permanent solutions.  We can no longer tinker toward utopia. 

I cannot state this often enough: We no longer have the flexibility to capture savings, reallocate, and grow our way out of fiscal problems. We simply do not have, nor will we have, the revenues to do so.

Consequently, to realize long-term spending cuts, we must become, over the next several years, a university with a much sharper focus.

The days when we could afford to do more with less, and be all things to all people, have ended. Again, the days when we could afford to do more with less, and be all things to all people, have ended. 

We must, instead, focus on those things that are central to our core mission -- those things that protect and build the quality of this university -- and we must do them better. 

To transform USM, to bring focus to it, we must significantly reduce the scale and scope of what we do.  Yes, as a regional, public university we indeed have a responsibility to bring our intellectual resources to bear on the challenges and problems of a growing, diverse and vibrant region.

But we cannot lose sight of the fact that teaching and learning is our primary mission, and that our research, scholarship, creative activity, and public service must flow from our core academic competencies. 

To achieve such focus, we have begun to review spending patterns with an eye toward reduction or elimination of programs or units with the least centrality to the mission.

We need your help to determine the criteria by which we do this.

I will not prejudge the outcome of inclusive, vigorous, campus-based discussions by engaging in public speculations about which schools, colleges and administrative units should be considered for merger, reduction or elimination, or how we can bring new synergies and administrative savings to our organizational structure.  

I need your help to do that. 

At your table is the e-mail address at which you can send me, in confidence, your ideas about how we might shape this future -- movingforward@usm.maine.edu. 

I need to hear your thoughts.  Be creative.

Does a university with a sharper focus  -- one where each and every program is aligned with a refined mission -- mean that we will be eliminating positions? Given that 80 percent of our budget is in personnel, the short answer, most assuredly, is yes.

Now, this situation in which we find ourselves is a stressful one, and under such stress, it is not uncommon to lose the civility and collegiality that should be hallmarks of our work with one another.

We cannot afford to do that.

Next week, the Board of Trustees is scheduled to endorse the recently ratified AFUM contract.  Indeed, allow me to thank everyone who has worked so hard to get us to the point where all our contracts are close to ratification. 

Language in the AFUM contract refers to, and I quote, "the shared expectation that all members of the campus community will work to develop and maintain professional relationships that reflect courtesy and mutual respect." 

Our campus community must continue to reflect such civility, and we must also continue to respect academic freedom, the topic of this year's Gloria Duclos Convocation.

There will be no quick fixes to our budget challenges. This process will take several years.  How we get through this really depends on all of us, and on our willingness to face facts and make hard decisions.

We cannot lose sight of why we must refocus this university, and put it back on a sustainable fiscal footing so that we can achieve our potential. 

Again, our Outstanding Senior from 2006, Emily Wood, told us, “The most important thing I took from my experience at the university is that I can make a difference in this world." 

And just last May, our 2007 Student Commencement Speaker, Lori Royer, said,  "Being immersed in an environment of highly motivated people with diverse histories and dreams has helped me to embrace my own."

Emily and Lori's stories, and thousands more like them, speak volumes as to why our mission remains so relevant and so important.

These stories also underscore that the University is not a business. We serve a larger public purpose.

In their book, "Remaking the American University," authors Robert Zemsky, Gregory Wegner, and William Massy note that colleges and universities too often have "become dispensers of degrees and certificates, rather than communities of educators who originate, debate, and promulgate important ideas."

We cannot allow that -- to become only another dispenser of degrees and certificates. We must continue to encourage a "community of educators.” It is, after all, that community which allows our students to embrace their dreams.

Would members of the University Council  -- our Deans, members of the Provost's Staff, and my strong Senior Staff -- stand and remain standing. Your leadership is key to our success as we move forward.

Would members of the Classified, Professional and Faculty Senates, and the members of our union leadership at all levels, please also stand and remain standing. We need your help as we move forward.

Finally, I ask all faculty and staff represented by these groups -- all other faculty, staff, students and guests here today -- to please stand. 

Without your help, USM will not move forward.

Our community of educators must make difficult decisions, and we must focus on our own compelling, core business: “Engaged learning that transforms lives and communities.”

I'm willing to make the difficult decisions over the next 10 months, but I need your help.    Thank you.