Office of the President
All-Faculty Reorganization Remarks
February 27, 2009
Thank you for joining me today for this faculty meeting of the whole.
Welcome back for the spring semester. I am pleased that we will have this time today to talk about how USM continues to improve and strengthen its fiscal health. As conditions evolve, I think it would be tremendously helpful for us to have periodic faculty meetings like this to keep our focus on the urgent need to ensure this university’s sustainability and to discuss new ways to fulfill our mission, serve our students, and sustain the quality of our academic life.
I wanted to have a chance to talk with you because I am deeply concerned about our resource base. You play the single most important role in this university, and as such I want to be able to work with you as we navigate this uncertain terrain. As the numbers indicate, USM is spending more than its resources allow. I’ll explain those numbers in a moment, but first I want to make a case for the importance of reconsidering every aspect of our work and every part of our current organizational structure. Reorganization is hard work. It can be exciting, intellectually interesting, and even inspirational. It can also be divisive, but I’m confident that we can work together in the best interests of the University.
I know you have heard this before—restructuring is necessary. I also know that it hasn’t materialized. Instead of looking at the abortive models from the past, I want to look at the models that might help us achieve an academic organization that we can afford. For example, the University of Southern Oregon engaged department chairs and deans to do its necessary restructuring. At Arizona State, the provost developed a proposal for the president who consulted with the University Senate. At Tulane, the president and provost reached out to an advisory panel of national educational leaders for counsel and new ideas. At Truman State University in Missouri the president formed an Ad Hoc Committee on Academic Reorganization to do the work.
Today I want to talk to you about developing a sustainable university that, at a minimum, satisfies the following principles:
- Changes must make academic sense.
- Student success must be at the center of our work.
- Changes must save money.
As we think about reorganization at USM, we will continue refining our draft strategic plan, incorporating any reorganizational ideas that emerge as a way of guiding our long-range decisions over the next five years.
To help stimulate discussion, I have charged a group of deans, led by Dean John Wright and supported by Assistant Vice President for Academic Affairs Susan Campbell, with developing a number of different scenarios for reorganization that will aid the early stages of this process. I have asked them to be a resource for me and to produce those scenarios to serve as conversation starters for the community. I asked this group to do some research and to engage in creative thinking. Let me stress that this is not a decision-making group.
I have asked this group
- to think deeply and creatively about organizational change at USM
- to take off their territorial hats and look at the whole university, and ultimately
- to develop high-level scenarios that can form the basis for community discussion.
This deans group will submit a first draft of its report containing these scenarios in early March. We will send the draft to every academic department and unit of USM for feedback during March. Meanwhile, we will cost out the changes in light of the budgets we anticipate in FYs 2010-2012. After taking into account that feedback, I will then distribute a second draft of the report to the community as a basis for further discussion. By the opening breakfast in August, I hope to be able to announce the final plan for reorganization and provide an implementation schedule for the academic year. Our new strategic plan must also take into account this plan in order to provide a dependable roadmap for the next five years. By fall 2010 the reorganization should be complete. I anticipate that the final product will result in fewer colleges.
I’ve also formed a new Budgetary Advisory Committee to help a broad range of faculty, staff, and students better understand USM’s budget and fiscal challenges and to serve as community resources on the deepening structural deficits that USM faces.
Although I am discussing the fiscal situation facing USM in detail at the town meetings—which I urge you to attend so that you can hear about this critical matter in greater detail—let me give you a quick overview today. The bottom line is that USM needs to change so that its costs are covered by its revenues.
In FY 2010 our total operating expenditures will exceed our total operating revenues by $3.3 million, a gap that is projected to grow in each succeeding year unless we figure out how to live within our means. In FY 2010 we must also cover at least $1 million in the System’s lost investment income that has been used to cover the cost of centrally provided services, an amount that is also expected to grow so long as the market declines or fails to rally. This means that we begin FY2010 with a deficit of $4.3 million. The Governor’s budget called for a 2.7% reduction in UM System funding for FY 2010, and we don’t know yet whether the Legislature may increase that or whether mid way through the year, we may face another unexpected curtailment. While the Governor called for a flat budget for UMS in FY 2011 that effectively means a further cut since energy, debt service, financial aid costs increase.
The new Stimulus Bill offers hope of some modest short-term, one-shot help. However, the System and the State are still figuring out the specifics of the Bill, so it remains unclear just how much assistance will be available and under what conditions. In any case, that cannot divert us from the urgent need to put USM’s fiscal house in order and to reorganize this university for future sustainability.
Given the depth of the unfolding recession, we cannot hope for significant short-term relief. Indeed, we must begin right now to address our structural deficits and make the necessary changes to bring USM’s expenditures in line with our revenues. We have to ensure that we have the money we need to sustain ourselves long term and build a vital future for USM.
That’s why we focused on constraining adjunct and overload expenses this year. That work has begun to bear fruit, and we are realizing savings of at least $119,000 this spring.
[Credit hours and tuition slide]
All of us at USM are proud of our important and distinctive graduate programs. Indeed, we must preserve and further strengthen them. But it’s incredibly important to recognize that we count on undergraduate enrollment to pay the lion’s share of our bills as a university. More than 84% of the credit hours generated at USM this academic year come from our undergraduates, producing over 76 % of our tuition revenue. This is not an anomaly. Every year more of USM’s revenue comes from undergraduate enrollment than from any other source of income, including the State Appropriation. Consequently, any decline in undergraduate enrollment has a substantial impact on USM’s fiscal condition. If you want a rough formula to keep this proportion in mind, a 1% decline in overall enrollment equals about $700,000 in lost revenue. As important as our graduate programs are, USM’s financial health relies on maintaining our undergraduate enrollment, including not only the recruitment of new students but also the retention and graduation of those already enrolled.
Our goal must not only be to meet the next reduction imposed on us, but also to ensure that USM has enough money to begin to build and invest in its future. We simply can’t do that unless we make profound and lasting changes to the way we do business as an academic community.
Consequently, we must consider what USM, as a distinctive 21st-century regional comprehensive university, needs to offer in academic programs. Which programs can we shed because of low enrollment, lack of resources, or non-centrality to this University’s distinction?
Presently, USM is too diffuse, with more programs than it can support, starving our best programs of resources essential to their continued quality and future distinction and denying the necessary investments in new programs that are essential if USM is to remain viable in attracting new students.
I will receive the first draft of the deans group report in early March, and after soliciting your feedback on it, we must begin a conversation about how best to reorganize this university and at the same time save us money.
A university thrives on:
- Hiring new faculty
- Nurturing non-tenured faculty toward tenure and promotion
- Creating new degrees and certificates that respond to student and market needs
- Supporting faculty so that they can participate in national and international conferences
- Maintaining a physical plant that supports it teaching and learning activities
- Developing rich co-curricular opportunities for its students
- Buying new books and electronic subscriptions for the library.
In order to satisfy your academic and professional aspirations, we have to right-size this university in all of its dimensions.
This is going to require very hard work and creative thinking. Although there are many things that I can do as your president to find the funds necessary for sustaining this University’s academic life, I ask you to help me by playing a critical role in moving USM toward sustainability. This will maintain the academic soul of our university. Together we can find a solution to our current challenges, and I look forward to benefiting from your wisdom and insight as we apply our best efforts in the months ahead.
Change is at hand at USM. Either we will sink beneath round after round of cuts that will quickly undermine the quality of everything that we do, or we will become a leaner, more effective university whose institutional health reflects the creativity and spirit of innovation in its faculty. This is an opportunity to demonstrate that we are a place determined to prosper as a result of our hard work and intellectual capital.
I am also heartened by my weekly transition conversations with our incoming provost Kate Forhan. As I discuss the many wonderful things about USM—as well as the fiscal realities facing us—it is clear that Kate is already thinking about the need for change here. She is going to be a tremendous academic leader, and I look forward to working in close partnership with her as she takes on the responsibility for leading academic affairs at USM.
I have deep faith in our ability to do what is necessary in the months ahead, and I am humbled by the responsibility for leading you through a time of rapid, yet urgent institutional change. As we move forward, I want you to know that I care deeply about you and this university. I share your passion for USM’s mission, and I look forward to working with you as partners in our future as a university.
Let’s begin the discussion. I’m sure that you have many questions.
Thank you so much for your passionate concerns about USM’s academic wellbeing that you have voiced today. As I listened to your responses today, I was once again reminded of something that I cite at every opportunity. That is, there is no great university that is not founded on a deeply committed and engaged faculty.
Each of you faces the challenges of the classroom every day, rising to them because of your commitment to USM’s mission and to the futures of your students. Whenever we feel that the fiscal realities confronting USM are too dire, we remember that our goal is to deliver on the promise of public higher education to transform the lives of students and their families. We respond in the only way that we know how: we face the challenges presented to us and we apply our intellectual capital.
What we do is too important to our students’ futures for us to accept defeat. Our work together in their service will sustain us in the months ahead. We have the talent and wisdom to come out of this period a stronger, more vital institution. It is my great honor to help you work through these challenges. Thank you!
