President Schill lays out bold new vision for UO’s future

Just kidding, he’s decided to bet UO’s future on the same failed policies that got us to this point. Today’s Open Mike:

Dear University of Oregon colleagues,

Conversations I regularly have with students, faculty, staff, donors, and community members often go one of two very different ways. The vast majority of conversations are incredibly positive and optimistic. They are about the excitement of opening the Phil and Penny Knight Campus for Accelerating Scientific Impact, hiring new faculty and academic advisors, opening new buildings and residence halls, celebrating the football team’s Rose Bowl win, or making programmatic investments in prevention science, environmental humanities, data analytics, and more. They focus on this transformational time for the university and its bright future.

But I have other conversations with some who are rightfully concerned about budget cuts made over the last few years, rising PERS costs, the annual drumbeat of rising tuition, and how we can best make the case to state lawmakers to boost state funding for the university, which currently receives the second lowest state assistance per student of any of our 64 AAU peers despite several years of state funding increases.

So, which is it? Is the UO a financially challenged school that struggles to balance the budget, keep tuition low, offer fair compensation to our employees, and provide strong student support services? Or, are we a school with sufficient resources to construct new buildings, hire more professors, and invest in new, cutting edge research and teaching programs? The answer is that we are both.

I want to use this Open Mike to talk through the factors that contribute to what sometimes feels like a tale of two universities. I believe the positive things happening at the UO and investments we are making will begin to address some of those persistent challenges. Bear with me, though, because these are complicated issues to explain, and solving many of our challenges is something that will take patience, determination, discipline, and a stiff spine.

Let’s start with the education and general budget, sometimes called the E&G budget, which is overwhelmingly comprised of tuition and state funds. This year it is estimated to be around $554 million. We also have separate auxiliary budgets for parts of the university that must generate and live within their own revenue sources to fund operations—areas such as housing, food services, the health center, and athletics. The goal is to have each of these auxiliary budgets break even so that they are not drawing on precious tuition or state dollars. The E&G budget funds most of the educational costs of the university as well as most financial aid. It covers everything from faculty and staff salaries to heat and water for academic buildings. This budget is continually under pressure because the primary sources of revenue (state funding and tuition) are often insufficient to fully fund increases in compensation or inflation.

Now, there are three other important funding streams: sponsored research, donations from alumni and friends of the university, and borrowing for capital expenditures. Sponsored research—which in fiscal year 2019 equated to $126 million in grants, contracts, and competitive awards—is restricted by contracts or grant agreements to pay for specific projects or research activities. Each year, the university raises approximately $200 million in philanthropic donations. Almost all of this money is also restricted by contracts (known as gift agreements) to purposes the donor specifies. When it comes to buildings, sometimes those restricted donations are matched with state-paid bonds (Knight Campus) and sometimes donor funds, state bonds, and/or our own borrowing are used to construct the building (Tykeson Hall, Pacific and Klamath hall renovations). On occasion, student fees support capital projects (the EMU, Health Center expansion) and once in a while we borrow 100 percent of the capital costs ourselves (Bean Hall and Walton Hall renovations).

If the E&G budget is starved for revenue, then why can’t we just take some money from the donations and borrow that to fund the construction of these new buildings? Money is money, isn’t it?

Alas, the answer is no. None of these one-time sources of revenue (restricted donations, state-funded bonds, our own borrowing) can be used to pay on-going operating expenses or to reduce tuition. If I were to authorize the use of state-allocated construction dollars for employee compensation, it would break the law. If I were to take restricted donations and use them for another purpose, then the university could be sued by the donor for breach of contract.

Surely, though, couldn’t I convince the donors who make restricted capital gifts to instead give money to keep our lights on and pay our employees? It turns out that this is every president’s dream—a big gift that is entirely unrestricted. But, with some notable exceptions, it is almost always a dream. Donors give to the UO because they love our university. Major donors also want to use their giving as a way to help the university get better and, in some cases, transform itself. It is the rare donor who responds to a request from a president to help him tread water or avoid sinking.

That isn’t to say that donors don’t care about the high cost of college or the importance of faculty research. Many, many donors give to scholarships. In our current campaign, we have received over $373 million in gifts for scholarships, student support, and student success initiatives. Of that, $245 million is for scholarships. Similarly, we often receive gifts to support faculty research and teaching in the form of endowed chairs. These gifts do not usually cover the salary of faculty members, but instead support summer compensation, research expenses, and graduate students. The gift of Penny and Phil Knight to create the Knight Campus was an unusual and wonderful gift; its endowment yield (along with federal contracts) will pay for faculty start-up costs, salaries, as well as the new campus’ facilities and operations. Over the long term, as we near completion of our $3 billion campaign goal and our institutional endowment continues to grow, I believe the returns generated by the endowment can play a role in helping stabilize the funding challenges we face from tuition limitations and cost increases not covered by state funding.

A related concern I have heard was that even if new buildings on campus are not funded out of the E&G fund and thereby don’t affect tuition or salaries, their maintenance would. It takes money to heat and cool buildings; we need to pay staff to keep them clean and in good working order. For a number of new capital projects—such as the Knight Campus, Hayward Field, and new residence halls—operation and maintenance costs will either be charged to the gift or to the auxiliary that built them. They will not burden the E&G fund. But it is true that we will need to fund a portion of the day-to-day expenses of Tykeson, Pacific, and Klamath halls out of tuition or state funds, which is completely appropriate.

The UO needs to invest in the future. Indeed, one of the reasons we needed to invest in renovating our science laboratories over the past five years is that most hadn’t been touched since they were built. To be a great research university—to attract and retain top faculty members, to provide world-class education to undergraduates, and to train graduate students—we must provide facilities and equipment that allow the people inside them to produce knowledge. And to fulfill our commitment to students that if they come here they will graduate in a timely fashion, we must provide them with a place to get advising. If the maintenance of these facilities or some of the debt service hits our E&G budget, that is a good investment that benefits our students and faculty.

Let me finally turn to the place some members of our community have suggested could relieve the pressure on the E&G budget—athletics. I would like to start by clearing up a misconception—that the athletics department doesn’t already pitch in to relieve pressure on our educational budget. It does. Many of our peer institutions waive tuition for student-athletes. We don’t do that at the UO; athletics pays full tuition for the resident and nonresident athletes, which equates to about $12 million annually that flows back to the E&G budget. They also contribute over $3 million in administrative overhead each year. In recognition of the unusual schedules and time constraints that student-athletes encounter, the UO provides about $2 million per year out of the E&G budget for academic support services. The vast majority of universities in the United States subsidize, sometimes deeply, their athletics departments. We are one of the lucky few—the only public institution in Oregon—that has a self-sufficient athletics department.

Taking money from athletics could come with side effects, particularly if it were to have a negative impact on the playing fields or courts. Prior to my time here at the UO, I might have said that would be okay. But, as president of the UO, I see day after day what athletics means to our university. Not only does it enrich our student experience and provide a rallying point for our alumni and community, but it also provides us with a powerful front porch to the rest of the nation. Those benefits were driven home quite poignantly by our recent win at the Rose Bowl, which drove measurable increases in traffic to our recruitment and admissions websites. Although the UO is increasingly recognized for all of the wonderful faculty and research going on in Eugene, athletics remains one of the principal ways prospective students first hear about the UO. And those students, especially those drawn to the UO from outside Oregon, serve as the central lifeblood of our operating budget. A strong athletics program is synergistic with our academic program and, through its impact on enrollment, actually benefits our efforts to keep tuition low and fund decent wage increases for our faculty and staff.

If you have stayed with me thus far, you can see there is no silver bullet for our fragile operating budget. It isn’t lost on me that the UO can appear to be two universities—one in which new, gleaming buildings and ambitious programs grow and another where tuition goes up and expenditures need to be reduced or at least controlled.

Ultimately, it is vital that we make sure that the investments we are making pay off, because these are the programs, people, and initiatives that will set the UO up over the long term to solve our budget and operational challenges. The research and teaching that will take place in these buildings will enhance the reputation of our school, add new and innovative curricula, and fuel enrollment growth in what promises to be an evermore competitive environment. The focus and attention given to student advising and career counseling in Tykeson Hall will enable us to achieve our mission of student success with similar reputational advantages. These changes may not happen next year or even in the next five years, but I believe the steps we are taking now and the excellence we are building will position the UO to move into a new era of financial stability in the future.

My hope in writing this Open Mike is to be as transparent as possible about this challenging issue. On that topic, we have recently launched a new transparency website to provide our community with easier access to all of our financial, student, employment, and other data. We also try in the FAQs to answer similar questions such as the one posed in this Open Mike, albeit more briefly.

In closing, I have great hopes and aspirations for our university. I am excited about working with those of you who, like me, see the endless possibilities of our university as we get better and better. The effort will require hard work, not silver bullets. But it is achievable.

Michael H. Schill
President and Professor of Law

Are enrollment plans realistic, or just admins padding their resumes with student money?

Ryan Nguyen has a good report in the Daily Emerald, here:

But the plan to build new residence halls does not entirely square with the findings of a residence hall feasibility study from September 2011. The report, meant to inform UO’s future housing projects, states that the university should “not demolish its existing debt-free housing, but rather maintain it and renovate it.” That conclusion is based off of the costs of adding additional housing and the subsequent changes to room rates.

“We are experiencing a significant student demand for a greater percentage/mix of larger rooms and rooms with in-room private bathrooms,” Housing Director Michael Griffel said in a statement when asked about the feasibility study. “There is also demand for lower cost, smaller double style rooms and triple occupancy rooms. The combination of legacy residence halls (Justice Bean, Earl, Carson, Riley) and new residence halls with some triple room occupancy spaces, currently meets and is projected to meet future student demand.”

The word in Johnson Hall is that these new dorms and renovations are being done now because they’ll form the core of the “Athletic Village” for the 2021 IAFF championship – paid for by higher housing costs for a generation of UO undergrads. The state’s Higher Education Coordinating Commission is skeptical as well. Their thorough October 2019 analysis of future enrollment is here. It’s not good news.

As Nguyen’s story goes on to report, the administration’s latest silver bullet to increase enrollment – now that we’ve seen millions in subsidies for the Ducks don’t deliver new students – is guaranteed tuition. This has been tried at many universities, with varying success. Several have since abandoned it. If it works, it will be only a short-run boost, as other universities will copy it.

But that’s all the JH leadership needs – a few promising looking initiatives so they can pad their resumes for the next job.

Bargaining live blog MMXX-I: Parking, Duck bonuses, Raises

Recap: With the latest data showing average US wages increasing at 3% a year, and Oregon  having moved into the top half of the US income distribution by state, the union’s proposal for 3% COLA/ATB raises is a baseline. The proposed 5% for Excellence raises, and 2% for internal equity over the 3-year contract fit with the administration’s stated priorities. Cecil calls this the 3-9-4 plan.

The administration’s lead negotiator Missy Matella was receptive to the union’s proposal to tax the athletic department and use the money for student scholarships, seemingly agreeing that the university could not continue allowing AD Mullens to use the Duck money bucket as his safe space.

The union’s new TRP buyout plan also got a warm reception from the admin side. On the other hand, they seemed a bit skeptical of the proposal to tie faculty salary floors to a percentage of top admin salaries (15% or so).

See below for the parking and childcare proposals.

Expect lots of questions from the administration at the next round, same time and place next Thursday.

12PM, EMU Crater Lake Room. Usual disclaimer: My opinion and interpretation of what the bargainers are saying, thinking, or should be saying or thinking. Nothing is a quote unless in quotes. In the interests of transparency the union has posted the articles they will be presenting to the administration here: http://uauoregon.org/bargaining1920/ and more info is here. UAUO is also live-blogging here (Go down to the live blogging post, it’s in the comments.)

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Faculty union bargaining starts noon Jan 9, Crater Lake Room

This will be the third contract UAUO has bargained with the UO administration, or as they prefer to be called, “The University”. The Union bargaining team has 11 faculty (5 TTF, 6 Career) and 2 staff members, with a total of 196 years of UO experience. Dave Cecil will again be the Union’s lead negotiator:

Whilst the Administration’s team will be led by Missy Matella:

And presumably Brad Shelton will again be entrusted with “running the numbers”:

The Union has posted a handy informational page at http://uauoregon.org/bargaining/ with links to basic info on bargaining, bio-sketches of the Union bargaining team, and the current contract clauses. Proposals will be posted as bargaining progresses. Per agreement between the Union and the Administration, bargaining is open to the public. No video or audio recording is allowed and the audience is expected to behave respectfully – meaning no goat bleats on your phone, Ben.

As in past years I’ll live-blog most sessions with a mix of fact, opinion, and interpretation of what the bargainers are saying, thinking, or should be saying or thinking at http://uomatters.com/tag/faculty-union-united-academics-of-uo. Since the Union doesn’t really trust me, they will also have a facebook page with live updates, and will send out regular email updates. I assume the Administration’s well-paid PR flacks will also disseminate their own spin on bargaining, perhaps including the odd ad hominem attack like this one from the 2013 bargaining session.

In past bargaining the Union has won improvements in Career faculty job security, and increases in TTF salary relative to the AAU public university averages. Full professor pay is now up from 82 to 87% of the average, with similar increases for Assistants and even better for Associates, thanks to the “Excellence Raises”:

Presumably the Administration will again tell faculty that “the well is dry” when it comes to pay and benefits, while lobbying the Legislature for $40M in subsidies for the 2021 IAAF championships, giving fat raises and bonuses to administrators, hiring lawyers and consultants, and refusing to use the profits from Duck football for anything but AD salaries and subsidizing special-interest sports like golf, tennis, and beach volleyball.

 

UO Senate Agenda for Wed Jan 8

In other shared governance news the faculty union starts bargaining with the administration this Th, 12-3PM, also in the EMU Crater Lake room, also open to the public.

The Daily Emerald’s Jack Forrest has a story on the Senate here:

… Skowron also said she hopes the Senate will be able to pass a new set of guidelines for hiring academic administrators, like deans, by the end of winter term. These new guidelines would include stipulations that require search committees to be made up of majority faculty members. Some university faculty, like former Senate President Bill Harbaugh, have criticized university administrators for consolidating hiring decisions without faculty input. The absence of a deal for hiring new academic administrators between the senate and administration is problematic “both in terms of shared governance and affirmative action compliance,” Harbaugh said.

“We all think that coming to agreement on the basic parameters of such a policy is really feasible,” Skowron said. “We’ve had several meetings with the provost and president to hash out some of the particulars and are meeting with them again this month to hash out some of the other particulars.” …

Senate Meeting Agenda – January 8, 2020
Location: EMU 145 & 146 (Crater Lake rooms)
3:00 – 5:00 P.M.

3:00 P.M.   Call to Order

  • Introductory Remarks; Senate President Elizabeth Skowron
  • Land Acknowledgment; Sam Norgaard-Stroich

3:05 P.M.  Approval of the Minutes

3:10 P.M.   State of the University

  • President Schill
  • Bob Guldberg, VP and Exec Dir Knight Campus

3:40 P.M.   New Business

4:30 P.M.    Open Discussion
4:35 P.M.   Reports

  • Legislative Agenda; Hans Bernard (Asst VP for State Affairs) & Libby Batlan (Assoc VP State & Comm Affairs)

4:55 P.M.   Notice(s) of Motion
4:57 P.M.   Other Business
5:00 P.M.   Adjourn

Pres calls for athletic department to pay 25% of TV revenues to academic side

That would be OSU’s new President F. King Alexander, reflecting on his successes and failures at LSU, here:

… Another area where Alexander wishes he could have been more effective was convincing the leadership of other SEC institutions to join him in a pact that would have required 25% of revenues generated by the SEC Network, which premiered in 2014, to go to academics.

Alexander says he and the president of the University of Georgia were pushing the idea during negotiations with the upstart network six years ago. But smaller schools were unwilling to go along, not wanting to be told how they should allocate the revenues they receive.

As a result, the $42 million a year per university the network generates goes to athletics.

“If that vote had gone our way we would have gotten nearly $11 million or so every year for academics,” he says. “That would have been a significant amount of money.” …

As it happens UO Pres Mike Schill will be leading the Pac-12 this year, perhaps Alexander can push him to accept a similar proposal.