Campus Meeting - March 30, 2009
President’s Opening Remarks
Bromeley Family Theater
Good afternoon. Thank you for attending the meeting today.
There is a lot that I want to share with you today. But I also suspect that you have questions you want to ask and thoughts you want to share. So, I’d like this meeting to be open. I want each of you to feel free to speak your mind and ask anything you’d like. I may not have answers to all of your questions, but I will try to provide you with answers this afternoon or later.
The format for our meeting will be as follows: I will provide a brief update on the fiscal state of our campus and provide my perspective on our short-term and long-term outlook. I will tip my hand by stating up front that I intend to paint an optimistic picture; and I’ll provide the reasons for my optimism.
I will then ask members of the Cabinet to provide brief updates on important developments in their respective administrative areas. As we approach the end of the academic year, I’d like everyone to be as fully informed as possible about where we are and where we’re headed as a campus.
I don’t have to tell you that this has been a very difficult year for us, and for colleges and universities throughout the country. Surrounding communities in our region have been hit very hard by the recession, as have communities around the state and around the country.
There are now as many as 12.5 million people nationwide on record as being unemployed. The unemployment rate in Pennsylvania is now at 6.7% (483,000 unemployed).
The banking industry has lost in excess of $2.3 trillion in capital. Lending has slowed and credit is not even available in some parts of the country. Colleges and universities throughout the country have placed capital projects on hold because of limited credit, potential risk to bond ratings, and uncertainty about their ability to cover debt service on capital projects.
College and university endowments have reported losses ranging anywhere from 20% to 60%. Our endowment lost over 25% of its value during the last year. The University of Pittsburgh is reporting a loss of 22% in the value of its endowment.
At a time when we were riding a wave of positive momentum, and were on the verge of making a giant leap forward, we were stopped dead in our tracks by the weakened economy.
Rather than going forward with our plans for a net increase in our faculty for the first time in over ten years, we’ve had to scale back and limit our faculty searches to four. Our original plans were to recruit eight new faculty members.
Rather than going forward with our plans to add several new staff positions, we’ve had to put these much needed positions on hold.
Rather than continuing to make major upward adjustments in our faculty and staff salaries as we had planned, we must freeze salaries at the current levels, at least for the next fiscal year.
The University of Pittsburgh has placed all capital construction projects on hold; and among the casualties of that action are the following:
- Fisher Hall Science lab renovations
- Electrical upgrade for the campus
- Construction of new residence hall
- Potentially the Chapel Construction Project
All of these capital projects are major priority items for us.
Ordinarily, I would go on the offensive and make the strongest case possible in Oakland for moving these projects forward. But these are not ordinary times. Last week, I heard one national higher education official say things will never be as they were—meaning, of course, that institutions of higher education will have to face an uncertain future with fewer resources and no likelihood of recapturing what has been lost.
I will take my arguments to Oakland on these projects. I will be more aggressive on some than I will be on others. But I have to also acknowledge that we’re in a recession and I have to be reasonable in making demands for more resources or in making a case for capital construction when securing credit for construction is harder or comes at great risk to the overall University Bond rating. All campuses are expected to share the burden that comes with this recession.
Budget Reductions – During the course of the year, I’ve reported as openly as possible about directives from the University that all units reduce their budgets. Everyone should know by now that our budget for the current fiscal year has been reduced by a total of $343,420 ($190,000 of that total is E & G; $53,420 is in Rural Outreach Line Item).
You should also know that the operating budget going forward to next fiscal year will be permanently reduced by 5% or $620,178. We will not know the level of Fiscal Year 2010 funding for the Rural Education Outreach line item or for Science-in-Motion until budget deliberations in Harrisburg conclude this summer.
Optimism – In spite of all the very bad news, I continue to be optimistic about our ability to get through the economic crisis we’re facing without a reduction in force. I readily admit that no one knows what lies ahead for us this year and next. However, I feel good about our prospects for a number of reasons:
- Our ability to absorb the budget reductions, as difficult as that is, without having to lay off any of our personnel. We’re in this position because we’ve managed our resources wisely and made prudent decisions during the last few years. We’ll continue to be wise stewards of our limited resources, holding some funds in reserve to enable us to respond to emergencies without crippling our operations.
- The expectation that we will receive over $400,000 in tuition incentive funds during this fiscal year. This will help to partially offset the budget reductions, address critical priorities, and protect our current workforce.
- Continued positive trends in enrollments.
- The continued strong support of our donors. Karen Buchheit will report the results of giving to our campus during the current fiscal year. What I want to say about that is that the reason people give is not because of me or Karen. It’s because of you. You are our very best fundraisers because you produce a product people want to invest in. People give because they believe in a cause and want to associate with that cause. The cause is alive because each and every one of you keeps it alive day in and day out. I believe this. Karen believes it. Howard Fesenmyer and other members of the Advisory Board believe it as well. So thank you for helping us gain the support of so many donors.
- Our new strategic plan, which engaged the entire campus community and which is bold and ambitious and defines exciting new directions for our campus as we approach our 50th anniversary in 2013. Thank you for proposing over 100 strategic initiatives. The Strategic Plan Steering Committee is currently vetting the proposed initiatives. The initiatives will eventually be prioritized into HIGH, MEDIUM, or LOW categories.
Finally, as I’ve acknowledged in past communications about our fiscal state of affairs, I know that many of you came to this institution with long-term plans for a productive career and you worry about the security of your jobs. I must admit that I’ve had many worrisome days and nights as well during the last few months. I’m not prepared to say that there is no longer cause for worry and anxiety. I, for one, will continue to worry until we have a final budget this summer. However, as I’ve stated, there are more reasons for optimism today than there were a few months ago. I’m convinced that we will get through this economic crisis without compromising the integrity of our institution. What I believe will carry us through are the following:
- Our willingness to stick together as a campus family through the bad times and good times. This includes demonstrating mutual support across all units of our campus, both academic and non-academic, and cheering for colleagues and other offices to succeed.
- All members of our campus family rowing in the same direction. This includes committing ourselves to achieving a shared vision, newly articulated in our strategic plan, and successfully implementing a collaboratively developed strategic plan. This also includes continuing to reflect our Brand Promise both in our on-campus and off-campus activities.
- Accepting the reality that we will have to manage a growing population of students with even fewer resources than we had available to us in the past.
This may not be the rosiest of pictures, but it’s the best I can do at this time.
Thank you very much for your attention.
I’d now like to address any questions you may have before moving on to the brief reports from the Cabinet officers.