FROM: Interim President Joseph S. Wood
October 1, 2007
Dear Colleagues:
I sense that we’re beginning to make progress toward reducing administrative overhead and creating new synergies. More important, as difficult as this process will be, I also sense that more of us are coming to the realization that we have to move in this direction if we are to achieve long-term fiscal stability.
Specifically, we now have a better understanding of budget numbers; we continue to receive excellent ideas for savings or new revenues; your feedback at last week’s series of town meetings has helped me clarify my own thinking on how USM should move forward; and we are much closer to sharing specific ideas for reorganization. In fact, I’ll be sharing additional information later this week. Relevant links on these matters are listed below.
Here are the budget figures I shared at the town meetings last week—thanks to those of you who were able to be there:
We had budget deficits of $3.1 million in 2005-2006 and $4.5 million in 2006-2007. We project a deficit of $3.6 million in the current fiscal year which ends on June 30, 2008. Our debt to the University System will reach $10 million, unless we reduce our spending significantly. This is why we have imposed the strict hiring freeze as well as freezes on other discretionary spending, and why we need to reduce administrative overhead costs now.
The point about reducing administrative costs is crucial to understand. Yes, we do need to become more competitive in an increasingly competitive higher education environment. Indeed, we are taking the right steps to do that through investments in retention, including with general education, as well as marketing and recruitment. Lots of creative folks are working on this effort, and I will share more on these investments in future Moving Forward reports.
But focusing exclusively on enrollment growth revenue enhancement as THE solution to our fiscal problem alone is also a part of how we got in this pickle. Yes, we must stop spending, and have taken the steps to do so through the hiring freeze, etc. But if we retain the same structure and same budget allocation to do the same work, we are just prolonging the agony, and we are setting the next president up for certain disappointment.
In contrast, I am arguing that we need real adaptive change: to re-conceptualize and focus our work by evaluating it against our mission, and to reorganize our structure and align our budget to support the work we do. If we don't do this work, we simply will have more enrollments with the same old administrative structures on the same old budget structure, but even fewer resources. That’s a sure recipe, I believe, for still more sustained fiscal instability.
I have considerable optimism that we can accomplish the work in front of us and make USM a much more effective institution, one that is capable of fully supporting the quality programs we have developed.
The goal here is to focus our financial and human resources on what we do best: highly engaged, transformative teaching and learning. I really appreciate how much all of you have begun to take seriously the work we are doing.
Thank you.
Sincerely,
Joe
For more information, please click on http://www.usm.maine.edu/mcr/update This site includes the breakfast speech; the latest digest of ideas e-mailed to movingforward@usm.maine.edu; our work plan; and notes from the recent series of town meetings.
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