Update: 5/14/2009 : Provost Bean’s claims on Bend have morphed from “we are slightly in the black” when asking the faculty for furlough contributions to “we’ve lost millions but we will almost break even next year – if no one notices we are keeping everything possible including Moseley’s salary off the books.” Uh, but he’s the Director, Jim. And what about Leahy and Seitz? You are going to lose your last shreds of credibility over this. Everyone including the CAS Dean knows you haven’t been telling the truth and still aren’t. Sunk costs are sunk – as it don’t use them to justify digging a deeper hole. You are paid enough to do hard things, this one is easy.
At the 4/14 furlough meeting Provost Been told us that UO’s administrative expense ratio was 38% of peers. See his reply to the question at 50:20 in the video. The 38% number is simply a fiction as the post here demonstrates, and the administration apparently just has no idea what the actual ratio is.
So what about the claim Bend makes money? See 32:18 into the video above, where Provost Bean says “A slight profit, very slight, but in the black”. It turns out that this is not true either. I recently was forwarded the email below from a UO administrator to Provost Bean who was not happy that the true cost of Bend had not been presented accurately to the faculty. The gist is that Bend has only 15 graduates per year and the program is losing about $1 million a year. The subtext is the rumor that Frohnmayer is planning on retiring to Bend and administering the UO Program there, or perhaps the entire OSU – Cascades effort. He already owns a $1.05 million dollar home there.
So that’s two false statements so far. What’s left? The claims that Portland is not costing Eugene money and that athletics is self-supporting (48:50). Regarding the first, I’ve already heard from someone that the money for the White Stag sign was not an earmarked donation but will come out of general foundation funds – i.e. funds which could have instead be used to plug the budget gap. Thanks for that, but we really need the documentation, so keep those emails coming to email@example.com!
Text of original email:
I have been asked by a number of persons in xxx and elsewhere about the Bend campus. Since part of my job is xxx I thought I should look into the questions myself. Ultimately, this pointed me to the need to have a budget summit, which I will explain below.
The costs on the books for running Bend as you know are around $1 million dollars. This is an underestimate, of course, because many costs of running the campus are borne directly by the Eugene campus. For example, the AV tech at the library who helps beam courses to Bend is not counted towards Bend and it looks like some of the TRP (tenure reduction program) monies for faculty is also not included as costs. The revenue generated by the campus is also hard to figure exactly. However, at its maximum, Bend enrolls 100 students and graduates 15 annually. A significant portion of those students are part-time, nearly all are in-state, and there is very little auxiliary income from these students. Even if they were full time, however, the revenue generated from those students would fall approximately $500,000 short of the known costs of operating the campus. Thus, unless there are significant sources of revenue that are not related to students, the Bend campus is significantly in the red.
However, this really does not express the full cost of the campus, because there are opportunity costs associated with running the campus in the sense that it directs resources away from Eugene that could be used more efficiently on the main campus. For example, the TRP faculty teaching in Bend could teach more students in Eugene than they could in Bend where the average class size in 9. In a time where student demand is exceedingly high and we short of instructional faculty, this cost is substantial. There are many other places you could make this type of opportunity cost argument that make Bend a really poor investment.
Finally, there is a lot about the Bend campus that just does not “feel right”. For example, while no one really wants to put find a point on it, the fact that John Mosley is collecting a six figure salary while being retired in Bend (even if it is legit) does not look right and perceptions are important – particularly in economic hard times when you are asking faculty to give back.
Thus, the resistance you are getting from the numerate persons on campus for Bend, etc. is not misplaced and ultimately I hope you are willing to listen to their very sound advice on Bend and other similar types of expenditures. While I understand that there were other (e.g., political) reasons why having a presence in Bend was important, the recession provides us the opportunity to allocate resources based on sounder economic principles and we should not waste this opportunity.
This exercise points more generally to a need for a deeper and broader consideration of “how we spend our money”. I am on board with the voluntary salary reduction plan this time because I do believe that we did not have sufficient time to respond to the ever changing financial picture. However, in the next biennium, we will have time to plan and we should begin now with a budget summit that includes all the leadership. The essential component to such a summit is the presence of detailed data for all the academic and central units on campus (and off – e.g., Bend and Portland). Before I would agree to take another voluntary cut in pay myself and before I would ever recommend that other faculty participate in such a pay reduction, I think we need to understand what the tradeoffs are and I believe we have an obligation to be more creative with our finances than we were able to be at the end of this biennium. In order for me to understand such tradeoffs and to be able “with a straight face” ask my faculty to pitch in, I am really going to need to understand where the money is going and not take it on faith that, for example, “Bend is breaking even” and “Portland is not costing the main campus anything”.
Thus, I think it is time to start considering some serious tradeoffs between a number of “sacred” elements on campus which include “salaries”. Let me give an example that does not involve Bend – library serials and OIED program grants are both things we value on campus even to the point of being “sacred”. However, we are letting one sacred cow be gored without possibly considering a reallocation of funds from other sacred cows being held harmless. I think we need to be prepared (not afraid) to ask this tough question “Are the current allocations appropriate and consistent with our “Academic Plan”. Careful consideration could involving taking funds from OIED program grants in order to help fund the library. Obviously, there are other places we can go to examine tradeoffs – I picked these two because they are something our campus has shown commitment to and represent choices that people would find hard.
In the end, I think we owe faculty, staff, and students more over the next biennium in terms of a careful consideration of how to address the economic crisis. xxx We are at a critical time where we have the opportunity to examine our priorities and the campus will be willing to listen because of the economic crisis. Thus, we do have an opportunity in this crisis.
I would love to talk more about this idea of a budget summit.