Delivered September 11, 2012
Harvey Perlman, Chancellor
We have over the last decade made undergraduate education and research our priority. We have increased enrollment, increased the academic credentials of our entering class, raised our retention and graduation rates, and have experienced the faster rate of growth in research awards than most of our peers. We joined the Big Ten Conference and the CIC and we have discovered that a university's reputation is enhanced when it can tout its real accomplishments, not its membership in the AAU. Those of us who were here in the year 2000 know that we have a different feel, a different stature, and a different sense of ourselves.
Last year I proposed we set our sights on a university of 30,000 students, a $300 million level of research expenditures, a 70 percent 6-year graduation rate, and a significant increase both in the number and recognition of tenured faculty. Some of you might have thought we would take a year or two off and consolidate our gains, or at least enjoy the fruits of our labors. We are entitled to bask but not to pause in our new sense of place. The things that come to those who wait will be the things left behind by those who get their first.
We are well positioned to move toward our research goals. Our $25 million food safety grant was the largest grant yet received from USDA. Our new interdisciplinary initiative in the social and behavioral sciences and the establishment of the National Strategic Research Initiative at the system level both provide enormous possibilities for continued research growth.
In what time remains, let me suggest an almost singular focus for the year ahead - one I believe is necessary for our long-term success. We need to grow enrollment. We need to relentlessly pursue every Nebraska high school graduate to demonstrate that this university is the only one where they can get the breadth of opportunity, the richness of experience, and the life-time value of a Big Ten degree at resident tuition rates. We need to grow this university to 30,000 students.
We experienced a small decline in enrollment this year. We believe we understand the reasons for the decline. We are pleased that the entering class continues our four-year trend with the highest average ACT in history and the most diversity. It contains four students with perfect ACT scores. I am not in any way discouraged about reaching our goal of 30,000 students. I'm reminded of the comment of General Douglas MacArthur: "We are not retreating - we are advancing in another direction."
Because of the enrollment decline and an increase in other fixed costs, we have a deficit of approximately $6 million. A portion of that deficit we have covered by withholding a small part of the salary increase authorized by the Regents. I am confident that with focus we have the will and the means to significantly increase enrollment for next year, beginning in the Fall of 2013. This would turn this deficit from being a permanent structural demand for funds into a cash flow issue of one-year dimension. Thus the Vice Chancellors and I have determined not to initiate our budget reduction process but rather to spread the deficit across all units by imposing a temporary reduction. Units may use one-time funds to cover the deficit this year with the expectation that enhanced enrollment next year would avoid making these reductions permanent. So I will be asking each Vice Chancellor Division to reduce its expenditures by one-half of 1 percent. While I am generally opposed to across-the-board reductions, I want to emphasize that with regard to the enrollment goal, we are in this together.
The combination of the unspent salary funds and the distributed reductions account for approximately $4 of the $6 million deficit. The remainder will be covered at the campus level, reducing our ability temporarily to respond to important opportunities. Once we fund this deficit out of future enrollment growth, we intend to set aside a percentage of any increased revenue from enrollment to make targeted investments in our highest priority programs and in those units that have contributed to our growth goals.
Enrollment increases is the only sure source of resources to fund our priorities. An increase in the tenured or tenured track faculty is dependent on these resources and this, in turn, is necessary for us to meet our research goals. We can, and will, make some investments as we proceed but sustained success depends on our enrollment growth.
Why should we promote growth when almost all of our peers are at steady state or retrenching?
Size matters. For our undergraduate program, enhancing the size of the student body and the faculty provide greater opportunities for students to find their niche, to locate a mentor who can direct them to their passion, to explore a wider set of opportunities than they can imagine when they graduate from high school. Many of us can look back over our career and acknowledge the almost random way in which we discovered our own internal passions and the path to outward expression of them.
We can serve our students better if we grow in size. I am aware that there are some Nebraska families who worry that UNL may be already too large or too ambitious for their son or daughter. I would urge them to reconsider and to focus rather on what it will take for their son or daughter to be successful in their adult lives. The world is a big place and whether they return to a small Nebraska town or a larger venue, they will have to engage with the larger world beyond. Each of these students represents a story yet untold and each of these students will be the author of their own story. Wherever they locate, to be successful they will have to think big-to think beyond the restraints of their current imagination, beyond their current city limits, and beyond the boundaries of their current circumstances. UNL may not be the right place for every student but those who avoid us because they think we are too big, run the risk of a lifetime of thinking too small.
Size also matters for Nebraska. We prioritized undergraduate education because it reflected Nebraska's need for attracting more talented young people to the State. We know that we can be the magnet that will initially attract them and our research can generate the jobs necessary to keep them. To fulfill this purpose we have to recruit more non-residents and we need to retain and graduate all of our students. Under the direction of Amy Goodburn in the Senior Vice Chancellor's office and Alan Cerveny and the Enrollment Management Council, we are implementing an intensive effort to increase our retention and graduation rates. Retention will assist in increased enrollment and shortened graduation time will make the talent available to Nebraska at a lower cost.
In a fully rational world, we would build the capacities of the university, including more faculty, before we invited more students to come. Unfortunately we do not have that luxury. The additional resources from increased enrollment are the resources needed to expand our capacity. Growth of students and faculty must occur strategically and in parallel. We have and will continue to make immediate investments in recruiting and admissions and in some specialized facilities. We will ask the Board of Regents to approve renovating Brace Hall into a core teaching facility with badly needed introductory life science laboratories, additional large classrooms, an expanded testing center, and a collaboration center to assist faculty to further incorporate information technology into their classrooms. Our recent enrollment growth has in some fields stretched our capacity. The recent reduction of hours for graduation to 120 should, if properly managed, free some teaching capacity. What we are asking of each of you is to focus -- without compromising quality -- on ways in which we can work gradually toward the growth goals we have established. The Vice Chancellors and I are aware that alternative revenues would accelerate the achievement of our ambitions. We must continue to reexamine our own activities for unrealized efficiencies and we should be vigilant for revenue opportunities. We must focus on our core missions of teaching, research, and extension. We must focus on advancing our priorities of undergraduate education and research. We must focus on achieving our growth goals. Anything else is a distraction that consumes both human and financial resources.
Ohio State recently sold its parking facilities to a private vendor and endowed the proceeds for use in the academic budget. We have explored this possibility but for now it does not appear to have the same potential for us. But there may be other opportunities.
The recent move by the university system of our email to the cloud produced savings in maintenance and service of our email servers. There may be other information technology functions that can be outsourced to a vendor, freeing our information service professionals to focus on how we can employ information technology to match our strategic objectives. I continue to believe there remain efficiencies in how we provide information technology services and Mark Askren and his staff continue to pursue them.
We were planning a new parking garage at 18th and R streets to accommodate the new university dormitories in that area. The private apartments on top of the new city parking garage on Q street suggested that the airspace above our new parking garage might accommodate housing without requiring additional university land. We were not prepared to build this housing ourselves. We have received favorable responses to our request for proposals from private developers to construct the housing while providing a modest stream of income to the university. We will ask the Board of Regents to approve this project.
This week we will issue another RFP to determine if an outside vendor would be interested in constructing a modern student health facility and assuming responsibility for its operation. The increasing complexity of medical practice suggests that connecting our health center to a larger health care organization could take advantage of scale in purchasing, electronic medical records, regulation compliance, and might facilitate our students' access to a broader range of medical services. While this may not produce revenue for us, it may contain the costs of medical care to students, as well as avoid increasing student fees to pay to replace our outdated facility.
Our focus on enrollment growth explains several other initiatives. Over the last year, we have examined the organizational structure and activities related to both securing and managing enrollment growth and we have made significant changes. Key functional offices such as Registration and Records, Student Financial Aid, and Admissions now report to Academic Affairs with the hope of aligning them more directly with the academic units they serve. The Division of Student Affairs has been repositioned to focus on the non-curricular activities of the university that can influence both our initial attractiveness and our ability to retain students. The Division is focused on a range of issues, from attending to the special needs of international students, non-resident students, and veterans, as well as creating engaging programs in service learning and civic engagement that are especially sought by current and prospective students.
Prospective students and their families expect us to be, in part, a laboratory for undergraduates to explore and prepare for the diverse range of career opportunities available to them. Within academic departments, considerable career advice is given. I am certain a central office of Career Services has an important role to play but I remain uncertain what that should look like going forward. Accordingly, we have deferred hiring a new director and intend to spend the year exploring not only best practices but innovations that make sense for our context.
It is, of course, increasingly difficult for some of us to look at our campus through the eyes of a 17- or 18- year-old. In reviewing our recruiting materials and promotional activities we asked for help from Archrival, a local firm of largely UNL alumni who specialize in advertising to this age group. You will begin to see the results of their efforts, and before you rebel in disbelief, remember, we're not recruiting you! We have thus far resisted inviting Tommy Lee back for graduate work.
The physical environment of the campus impacts our attractiveness to students as well as influences our own satisfaction as a work place. We initiated last spring a master planning effort, involving both the physical facilities and landscape environment. Saskai, a nationally recognized master planning firm, one which has had significant Big Ten experience, is our consultant. They have been gathering information over the summer and they will be holding open houses on City and East campuses on Wednesday and Thursday of this week. We hope you will all be fully engaged in providing the framework for growth of this campus for the next ten years. In addition to a Steering Committee representing the broad interests on campus and Working Committees of more specialized scope, we seek all of your participation through a website and a series of open meetings. Driving this planning effort should be the growth goals we have adopted.