Tag Archives: UO restructuring plan

3/14/2011: From the Chronicle, “Flagships just want to be left alone”:

… “In all cases, the issue is about money, power, and control,” Mr. Lombardi wrote in an e-mail.

“It’s no surprise,” he added, “that the main campuses of many systems now look to leave their systems in the hopes of gaining some fiscal and especially revenue flexibility.”

There are worries that such flexibility will inevitably drive up tuition at public research institutions, but leaders at the University of Oregon suggest that the autonomy plan they are advocating will actually stabilize increases.

Richard W. Lariviere, the president, has said Oregon could keep tuition increases to 4 or 5 percent a year if the state would sign off on a new financing model. Under the proposal, the state would issue $800-million in bonds and agree to provide about $65-million a year, equal to the state’s 2010 appropriations, to cover debt service on the bonds for 30 years. In turn, the university would raise private money to match the bonds and create a $1.6-billion endowment, allowing the earnings to replace state appropriations.

Oregon provided just 10 percent of the university’s total revenues in the 2009 fiscal year, and the state dollars spent directly on students were less than $3,800 per full-time equivalent in the 2008 fiscal year, nearly rock bottom for major public research institutions.

As in Wisconsin, Mr. Lariviere’s suggestion that the University of Oregon should break off from the state system and have its own governing board has been met with resistance. The Oregon State Board of Higher Education is pushing its own legislation to provide greater autonomy for all of the system’s campuses, and the board’s president has suggested that Mr. Lariviere’s proposal undermines that effort. Both the system’s and the university’s proposals are under consideration in the legislature, …

3/5/2011: The editorial board’s endorsement is, unfortunately, anything but unqualified:

The UO plan is an essential acknowledgment that if Oregon is to have any chance of achieving its ambitious higher education goals, it must get more — much more — private support for its public system.

We know the UO proposal isn’t likely to pass in this Legislature. It’s ill-timed, when the Legislature wants to focus on the necessary proposal from its higher education task force to end universities’ status as state agencies and give them vital autonomy.

The UO plan asks for too much, $800 million in future bonding authority from a state that, for the moment, has none to spare. It requires a statewide constitutional vote, a process that would be at best challenging. And it’s too narrowly focused, a life preserver for the UO, a cold splash of uncertainty for the state’s other universities. …

But donors will not give large amounts of money for operational support at any Oregon university as long as it’s possible — or even likely — that the Legislature would respond by withdrawing even more public funding. On this point, the UO is absolutely right: The universities must have the guarantee of dedicated state funding when they go to donors to raise matching funds to strengthen their operations.

Look around: Most of the great public universities in this country have attracted huge private support. Most have a level of independence and are governed by strong local boards. There’s every reason to believe these kinds of reforms would help not only the UO, but OSU, PSU and the others.

1/28/2011: An Op-Ed in the ODE by ASUO Pres Amelie Rousseau and Mario Parker Milligan (OSA) on the new partnership plan:

… President Lariviere is fond of pointing out that tuition has risen an average of 7.5 percent over the past 38 years. What he’s not so fond of pointing out is that if most Oregon public schools had their way, tuition would have increased a lot more than that. In 2009, Oregon’s public universities tried to raise tuition by as much as 15 percent. …

Make no mistake: The New Partnership is an attempt to privatize our state’s largest public university while requiring the public to fund that privatization with $800 million in bonds.

The Oregon Student Association has unanimously opposed the New Partnership.

Do your part to ensure that every Oregonian has access to a quality, affordable education: Say no to the New Partnership and say no to killing the public’s ability to fight for tuition caps.

Frohnmayer used to buy off the student leadership by promising to pull some strings and get them a Rhodes scholarship, or at least write a letter for a decent law school. Apparently that doesn’t work so well anymore.

1/27/2011: Colton Totland in the ODE does a good interview:

PB: I agreed to co-sponsor the proposal because I think it is very important to have this conversation in the legislature. A subject is always open to new information, but at this point I am convinced that the funding proposal is in the best interest of the University and the state of Oregon. If Lariviere can raise the matching amount of money from donations, then the University becomes modestly well-funded and the state doesn’t even have to pay half in the long run because it is a bond measure. Now, the other issue in the proposal, the University’s separate board of directors, is a lot more complicated and will require a lot more conversation. But I think blanket opposition, at this stage, is problematic.

This is the co-sponsor of the legislation talking. The New Partnership is dead, unless Knight makes a public ultimatum to the legislature asking if they really want to explain to the voters how George Pernsteiner and Paul Kelly talked them into walking away from an $800 million gift. And even then it’s iffy.

It’s time for Plan B: toss the deadwood administrators, slow the bloat, redirect what we’ve got to teaching and research, cut the subsidies to the coaches, and just buckle down and concentrate on running a good university.

Campus Town Hall on New Partnership

Unfortunately, neither the bond nor the UO specific board parts of the plan have been getting much support outside UO. This will be a chance for Pres Lariviere to give us an update of where he thinks this plan is going.

January 26, 2011
Time: 4:00 – 6:00 p.m.
Location: EMU Ballroom

Will be available live via online video stream beginning at 4pm.  Watch the event live on the New Partnership main page.

Program:
1. Senate President Nathan Tublitz, welcome, introduction, overview
2. University President Richard Lariviere, New Partnership proposal
3. Senior VP and Provost Jim Bean, why it matters to our academic mission
4. Prof. John Chalmers (LCB, finance), faculty perspective on financing plan, representing UO Senate Budget Committee
5. Jeff Condit, Miller Nash LLP, legislative and constitutional requirements
6. Audience Q and A (to begin at approx. 4:40)

1/19/2011: Tony Van Vliet is a serious guy with a long and distinguished career as a professor at OSU and as a real public servant. And he is pissed.

Van Vliet was state representative from 1975-95, was a Ways and Means Committee member for 17 years and later was a member of the state Board of Higher Education. His Op-Ed in the Gazette Times rips into Larviere’s plan and legitimizes the opposition to it in a way that George Pernsteiner never could. Read the whole thing.

This bad idea repeats history

By Tony Van Vliet 

It seemed hard to get any rational discussion about saving higher education in Oregon while the euphoria of a football team occupied so many column inches. But a recent article by Chairman Norm Brown of the University of Oregon Foundation and Fred Poust of the UO Alumni Association requires a response.

The title “We need bold action to save higher education” is a plan that has been floated by two UO presidents to save their institution — and not any of the other six universities in the system.

The plan is built around the idea that they are starving for funds more than the rest of the system. As campuses have grown — some more than others — the amount of allocated state funds has not kept up. This then leads to a lower percentage of funds received.

They use the terms “bold” and “partnership” as if saying it enough will make legislators buy into the idea.

By having five boards of university regents in 1929, each competing for scarce funds, the Legislature formed the state Board of Higher Education to oversee the campuses.

There is no shortage of boards, advisory groups or commissions on each of our campuses. It is a planned distraction that will allow the UO to legally side-step the state system in requests for dollars. They imply that other quoted systems work better, without admitting they are all in trouble fiscally.

The real crux of all this is they wish to legally lock in $63 million annually (their budget allocation) for paying the debt service on $800 million in state bonds for UO’s endowment. Wouldn’t all the remaining institutions love to lock in their annual allocations? And to add to this sweetheart deal, they want it for 40 years! Well, folks, after that, then what? They want to be free of the system that has built most of their campus since it was established.

Phil Knight may be the only one who has honestly alluded to the dream that the UO should be a private university, maybe modeled after Stanford (a university he also loves). No one can fault the best benefactor any university could want for wishing this.

Let’s not take valuable legislative time end-running the board’s better proposal, hiring a big-gun lobbyist and maybe costing the UO another president, as it did in the 1980s. It’s self-serving and arrogant to treat their fellow university presidents as non-existent and the state board as unworthy of solving their problems.

However, another solution is to make their dream come true.

First, UO President Richard Lariviere can raise another $800 million on the wings of a great football season.

Phil Knight can slowly pick up the annual cost of operations. They would sever themselves from the state entirely. PERS accounts and health payments switched to private enterprise. All state bonds would be changed to private bonds and the people of the state repaid. And, most important, we would not repeat 1995 by giving away all control, use, or sale of state property to a so-called public/private corporation.

A 30-year mortgage on the replaceable or assessed value of their land, buildings (not built with private funds) and equipment would be paid to the people of the state and used as a rainy day fund for Higher Education. The University of Oregon would now become Oregon University.

That becomes a far more straightforward approach than running these hidden agenda ideas as being a bold way to save higher education! It could be done this year.

Thanks to OUS spokesperson Di Saunders for the link. She never posts anything critical of OUS, but this sort of thing makes her cut no problem!

1/19/2011: Not good news. From Stefan Verbano in the Emerald:

The Oregon Student Association board of directors voted unanimously last Saturday to combat the University’s New Partnership, arguing that excluding public officials from the school’s governance process threatens its accountability to the state.

… “There has been no mention of a tuition cap process in (Lariviere’s) plan,” said ASUO President Amelie Rousseau, who was present at the OSA meeting. “Legislators are accountable to voters, and they know students can’t afford tuition increases.”

“Both of these plans (OUS and Haas plans) have a more holistic view of higher education reform,” (ASUO President) Rousseau said. “(The University’s) plan just isn’t going to be in Oregon’s long-term best interests. That is very obvious.”

The infrequently updated OSA website is here. A commentor responds to the news:

Ah, more self-destructive output from the UO community, this time, the students.

Of course there isn’t going to be a tuition cap, whether under the Lariviere plan or any other plan, because costs will keep rising and the state will keep cutting its subsidy.

Perhaps the students think we should have larger classes at UO, or that the overpaid professors should make do with less, or that the facilities are too lavish — look at Columbia 150.

And of course, once the private donors get into the act, the dear faculty will find reason to undermine that.

I’ve often thought, starting back in 1999 with the WRC/Phil Knight fiasco, that UO had a death wish. I sort of thought that had passed, but maybe not.

The faculty hasn’t trusted the administration for a long time. Watch the furlough meeting on youtube if you are puzzled as to why. The student government doesn’t either. Lariviere has had plenty of time to work on both, but he hasn’t taken the problem seriously. Bellotti, parking, moving graduation, mysterious departure of Linton, ORSA screwups, lack of a coherent salary plan, hiring Geller and Denecke, and now the research park Senate meeting. The DPS plan to convert to a sworn and armed police force – with no coherent explanation to the students – was a particular blow. All these were opportunities to build some trust, and all of them have been botched.

1/11/2011: Norm Brown is chairman of the board of trustees for the University of Oregon Foundation. Fred Poust is president of the board of directors for the University of Oregon Alumni Association. From their Op-Ed in the Oregonian on the UO new partnership plan:

… To address declining funding and rising tuition, the new partnership proposal would create public-private endowment opportunities for the UO and other schools. For the UO it would work like this: Freeze current state appropriations (about $63 million a year) and commit those payments to repay an estimated $800 million in state bonds. Each year, the Legislature would decide how much bonding was available for endowments. But there’s a hitch. No state bonds could be authorized by the Legislature until schools had a matching private dollar in hand. For the UO, it would no longer receive anything from the state general fund other than its locked-in $63 million annual debt payment.

A public endowment will provide an incentive for private giving, provide reliable revenue streams to plan budgets and manage tuition costs and will remove the UO from competition with other schools for scarce general fund dollars. With an estimated 9 percent return on investments (realistic based on the University of Oregon Foundation’s history) and 4 percent distribution, a UO endowment would generate $64 million for operations in its first year and after 30 years would reach $263 million — at no additional cost to taxpayers….

I support Lariviere’s proposal, for many of the reason’s mentioned in this Op-Ed.

One problem with it, however, is giving control of the endowment to the UO Foundation which Norm Brown heads. The UO Foundation’s lawyers have – successfully – argued to the Oregon AG that they are not a state agency and are therefore exempt from Oregon’s public records laws.

They have refused to release information on how they spend funds donated for UO. No wonder. In the past they’ve paid their President and CFO (Karen Kreft and Jay Namyet) large bonuses – over $150,000 in the case of Kreft – on top of already high salaries ($296,000 for Kreft, who left without explanation the next year), and they’ve refused to explain why.

Together with the UO Alumni Foundation which Fred Poust heads, they’ve recently used state bond money, and donations diverted from support of UO academics, to build an extraordinarily over-the-top office building for themselves, next to the new Matt Court arena. They are still in debt over this building. Meanwhile UO desperately needs new classroom space to teach our 6000 new undergrads.

What little you can learn about the workings of the UO Foundation comes from its IRS 990 reports. OSU has already filed theirs for 2009, here. The UO Foundation has already delayed by getting one 3 month extension from the IRS, and every past year they have used multiple extensions to delay the release of even this data until the last possible moment. When I first requested the forms from them, they “accidentally” omitted the attachments showing the payments to their executives.

They need to clean up their act with regard to transparency and how they spend money, before they get involved in spending any public funds that might come to them from this proposal. Until they do, their support is not a plus.

12/28/2010: Courtesy of BoJack.org. The poll is here. Presumably the OHSU foundation paid for it. Seems pointless, unless the point is they will waste money to show how badly they want independence. Silly. I hope UO is not going to do something similar. People already think we are wasting money.

Update: Today the RG prints an Op-Ed from Director George Leef of the Pope Center for Higher Ed Policy opposing Lariviere’s plan:

Another part of his plan is that university spending of this revenue stream will be overseen by a publicly appointed board that would guard against waste. The trouble is that such boards almost never have the will to do battle against wasteful university spending. They are toothless tigers.

In contrast, Lariviere and his administration would have a strong reason to cut out needless spending, (he means under the current situation) since they’re worried that politicians might reduce appropriations if they found that some money allocated to the university was being put to poor use.

If I were an Oregon taxpayer, I would rather have full political competition for tax dollars than a guarantee of funding for one use of those dollars — the UO — combined with a promise that an appointed board will prevent waste.

The Pope Center is a libertarian think tank with a usually skeptical angle on government and higher ed. It’s very surprising to see them come out against Lariviere’s proposal, which is all about reducing the role of state government in financing and decisionmaking.

12/26/2010: The full Oregonian editorial is here:

… On that score, about all we’ve heard so far is University of Oregon President Richard Lariviere’s proposal to establish a local board and a large public-private endowment to finance the university into the future. For now, it’s hard to find anyone not dressed in green and yellow who supports his plan. The higher ed board opposes it. None of the other university presidents back it. Gov-elect Kitzhaber is noncommittal.

We’re not prepared to endorse it, either. The UO’s proposal would require amending the state constitution to allow the state to extend its bond authority and rating to a public university endowment fund. More careful analysis is needed to understand how the UO plan, which could eat up as much as $800 million of the state’s bonding authority, would affect other universities.

But at least the UO is offering a serious plan to meet the moment that faces the higher education system. The plan by the legislative task force doesn’t do that. Neither does the State Board of Higher Education, which promises to take up the question of local boards over the next two years. Both are moving too slowly. If the UO is willing to agree to be accountable to a state-level board on educational goals and standards, why not let it form a board with only one task — helping the university succeed? It might very well show the way for other Oregon universities. …

Thanks to the Alex and the Commentator for the link. This is the Oregonian’s third recent editorial on this subject, one from May is here:

…
It is frustrating to hear Senate Majority Leader Richard Devlin, D-Tualatin, respond to Lariviere’s proposal by saying lawmakers will be reluctant to give up their control over access, affordability and quality in the state’s university system. With all due respect to Devlin, who is among the Legislature’s strongest supporters of higher ed, how’s that been working out for the universities?…

 And another, more favorable of Pernsteiner’s plan, is here.

12/21/2010: This is *one sentence* from the Oregonian blog post pushing Paul Kelly and George Pernsteiner’s OUS higher ed plan, written by their spokesperson Di Saunders. Read this and ask if these people should be in charge of higher ed in Oregon:

Creating advantages, efficiencies, and cost control through structural change: changing the OUS status from a state agency to a statewide public university system will provide OUS and Oregonians with many advantages, including assurance that student-paid tuition revenues and related investment earnings will be protected and directed towards their instruction, financial aid, quality programs and student success, and help campuses manage through the anticipated large budget cuts in 2011-2013; adoption of a simplified “block appropriation” budgeting approach which both community colleges and K-12, but not OUS, receive today, and which will be driven by outcomes and accountability, not based on the prior biennial budget plus an automatic increase for inflation, but on what the state needs for students to succeed, thus moving from a compliance focused system to an achievement focused one; and better control over costs and revenues will achieve lower overhead and result in more optimal use of resources. 

My God, where to begin. I don’t have the courage to take on the grammar. Start at the end? I’m no Operations Research professor, but I’m pretty sure “more optimal” is mathematically impossible. Maybe OUS achieved “optimal use of resources” long ago, and so “more optimal” comes next? What will be after that? “Most optimal”?

FWIW, Di Saunders is the same person who couldn’t explain to Oregonian columnist Steve Duin how much her boss, OUS Chancellor Pernsteiner is paid. Hint: too much, and apparently he’s not the only one over there.

12/15/2010: Excerpting from Bill Graves in the Oregonian:

SALEM – A bipartisan legislative task force Wednesday approved a plan that would give Oregon public universities more autonomy while bringing them under the authority of a new Higher Education Coordinating Commission.

The proposed Higher Education Coordinating Commission would set goals and accountability measures for universities, evaluate and approve their missions and degrees, and develop a finance model for them. It would take over the job of administering student financial aid from the Oregon Student Assistance Commission, which would be abolished.

The new 15-member commission, appointed by the governor, also would coordinate the policies and operations of the state’s seven public universities and 17 community colleges with the aim of creating more cohesion for the state’s higher education system. …

The legislation includes nearly all of the provisions in a bill the State Board of Higher Education intends to introduce in the House next month. “I’m encouraged,” said George Pernsteiner, chancellor of the Oregon University System. …

The task force plan, however, does not give the state board the authority it wants to establish governing boards at one or more of the universities if it so chooses. 

Sounds like good news for state bureaucrats, bad news for UO.