American Association of University Professors
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2018-10-19 BoT–Noeleen McIlvenna’s Remarks [PDF]
Video Link: https://m.youtube.com/watch?feature=youtu.be&v=Crn7SUboOME.
Trustees, President Schrader,
We have gathered today to reason with you to do what’s right for Wright State. Which is to remove the articles that undermine the academic mission off the negotiating table so that we can settle a fair contract quickly and allow us all to focus on building a better WSU.
There was never any need for this tension. This was YOUR choice, to break with a system that worked well, to hire an attorney to fight us, to attack the fundamentals within our working conditions and the students learning conditions. Faculty teaching students built the 130 million dollar reserve fund— Administration and Board were responsible for its destruction. Administration and Board then decided to take advantage of the crisis bad management created to attack the full-time faculty.
YOU can end this— today. And you should. Because you will not win a fight you pick with us.
Let’s consider where we stand. Mr. Fecher reminded us that y’all were smart. But we knew that. It was you who underestimated us. You have several smart guys, from the world of tech, right? We have a whole college full of smart tech men and women. (Let’s hear it for the faculty of Engineering and Computer Science! )
You have several smart businessmen. We have a whole college of Business, filled with very smart men and women, who know how to interpret 990s and audits. We could perhaps have a member from the Accountancy Department analyze the latest audit fiasco at WSARC. Some people really NEED watching, fiscally speaking. And that college also includes OUR Marketing Department.t (Let’s hear it for the faculty in the College of Business.)
You have a communication team. We have a whole Department of Communication, plus great writers galore, and artists, plus filmmakers, so excellent that they are endorsed by union member and most popular man in the world, Tom Hanks. (Let the Trustees hear it for Arts and Humanities at Wright State).
We have 560 experts in every field of human endeavor. And we have their partners— hundreds of men and women working in Raider Country—on our campus, in local hospitals and schools and businesses, Delivering our message outward.
We have 14,000 students. in our classrooms. They come and they pay to be taught by us. They have relationships with us, because we work with them each day, helping and encouraging them. Faculty have always had a Growth Mindset, President, we want our students to grow their minds, not to be molded as if they were lumps of clay for Mr. Langos’s business interests. (Let them hear how we will fight for our students.)
We have allies. Let me introduce you to a few of them:
(Let’s hear it for our allies)
This community of people—faculty, spouses, retirees, students, alumni, politicians, union brethren—join us in our Fight for Wright. You will not win this fight. So stop it. Do not inflict any additional damage to this University. Get the power-grabbing articles off the table. It’s okay to admit you don’t know anything about higher education, and to back off. One thing faculty learn from their years on the job is that to be good at one thing, like colonial American History, does not mean you’re good at everything. The person in the office next door is an expert on something we know little about, let alone someone in a different college. We recognize the limits on our expertise. So you know a lot about running a credit union. But you have demonstrated how little you know about running a University, and that’s okay. That’s why shared governance exists.
On one thing, let us all be transparent. It is the current administration and Board who were and are the cause of our problems—including current Trustee Mr. Bridges, who was Chair of the Board through the overspending catastrophe. Mr. Bridges decided to make David Hopkins one of the top ten best paid public university presidents in the U.S. Mr. Bridges, as the Ohio Ethics Commission pointed out, was paying close enough attention to ensure there was a lucrative job for his son at WSRI, in the years it was being bailed out by millions of student tuition dollars. Mr. Fecher served as Chair of the Board’s Finance Committee.
And it was the current admin who decided to put tenure and workload on the table, so that they can lay-off even more faculty to make fewer and bigger classes for students. These decisions didn’t happen on Hopkins’ watch. These decisions belong to President Cheryl Schrader.
So we urge you all to talk today to each other about what you intend to do, while we talk to the gathered press. Surely the Double Boondoggle story is enough; please for the sake of this community, do not embarrass us—nor the governor who appointed you—any further. More bad press about mismanagement is really not what we want. Don’t continue this uncivil war for a day longer than it needs.
Because—We have United to fight for Wright—
And we will win.
Thank you
I added—LET THE RECORD SHOW THAT MR. FECHER TRIED TO SILENCE DR. NO AND THAT NEVERTHELESS SHE PERSISTED.
2018-10-19 BoT–Sirisha Naidu’s Remarks [PDF]
Video Link: https://youtu.be/TPbTr_JIOEU.
Good Morning,
I am Sirisha Naidu, Faculty in the Department of Economics, College of Business.
I would have addressed you as Respected Members of the Board and President Schrader. However, respect has to be earned. And you, as decision-makers, have not earned my respect.
We Faculty, as members of the Wright State community, are here yet again, to express grave concerns about your decisions. We have been attending every BoT meeting since the disclosure of financial mismanagement by the University’s central administration under the oversight of the Board of Trustees, some of whom continue in the current Board.
The University’s Central Administration has accused the faculty of creating hysteria on campus. Let me highlight some of what has occurred in the past couple of years.
But the current administration and Board are not blameless either.
Bad decisions, however, are not restricted to personnel, management, media and financial matters either. The Board now appears to be engaged in direct attempts to undermine the academic mission of the university.
On an August 17th meeting, various board members dismissed the importance of humanities and the arts to this university. One Board Member even promoted associates degrees. Board Members, please note: WSU is a 4-year degree granting public university not a community college. It does a fine job of serving Raider Country and beyond.
As the current leadership not only have you, the Board Members and central Administration, failed to increase enrollments and control high costs of a top heavy administration, but you have jeopardized the ability of this university to recruit and retain the very best professors in the country by attempting to negotiate on tenure.
Your extreme proposals on tenure, healthcare and job security are among the worst in the state and the country. It will prevent us from retaining and hiring good faculty for a very long time. We have already lost 90 faculty since Spring 2016. This undermines the academic mission of the university.
Not having sufficient faculty to teach classes and programs, not having sufficient department and college staff to keep programs running, and not having sufficient custodial staff and ground workers to maintain safety and cleanliness undermines the ability of students to graduate and faculty to do their jobs.
Last Spring President Schrader used the analogy of pruning a garden to justify the cuts that she had made to staff. While the previous Board may have let the garden overgrow, or to use a phrase Mr. Fecher used last semester, it fell asleep at the wheel, I urge you not to overcompensate. Too much pruning severely distresses the tree beyond recovery.
You have at various times suggested that everyone except faculty have rolled up their sleeves.
But staff did not voluntarily agree to reduce their severance or to relinquish bumping rights when they have been subjected to “culling.” Nor did they agree to the inequitable health care costs. You have simply imposed the worst health care plan at all public universities in Ohio despite our having very comparable health care costs. But it is not bad for everyone. Under this plan, highly paid administrators even those making $250,000 and greater are paying the same premiums as those making $75,000. Now you want to impose this inequitable policy on faculty.
You and your predecessors, who are responsible for our current situation, have characterized our legal right to bargain over our working conditions as if it is somehow selfish and unfair. Yet every concession thus far has been made by our union. On a number of the unresolved articles, your proposals reflect your desire to dictate to us, rather than to bargain in good faith. You rebuffed the faculty union’s recent attempts to offer substantial concessions to break the impasse.
Board Members, President Schrader, I hope you realize that Wright State works because We, the Faculty and Staff, work. And you can be assured that we will roll up our sleeves to preserve tenure, the right to bargain, the academic mission, and the long-term viability of this university.
Because We are Fighting for Wright!
2018-10-19 BoT–Travis Doom’s Faculy Senate Report [PDF]
The Faculty Senate is relatively inactive in the summer. Most Faculty are on nine-month contracts and are not necessarily involved with University business during the summer term. Instead, most pursue practice of their professional disciplines. Thus, the tradition at the start of recent academic years has been for the Faculty Senate to report only briefly on summer Senate activity and instead use this opportunity to comment on the state of the Faculty. Right now, there is a lot to say.
You may recall that the primary theme of my 2017 October address was Guarded Optimism. At that time, President Schrader’s administration had just begun. In retrospect, and with one major exception, that Guarded Optimism appears to have been justified. Your chosen administration led us through a year in which spending was cut by over $53 million. Units were held accountable to their budgets. We ended the year with a $10 million dollar operating surplus, well above the Board’s goal net operating surplus set to avoid fiscal watch. You have overseen a significant change in our short-term fiscal situation over the past year.
Impressively, this financial challenge has generally been managed in ways that have not significantly diminished our ability to educate students. Our programs and students continue to be highly regarded by our accreditation bodies, community, and the employers of our students. However, our capacity is stressed. Accrediting agencies have already noted budget and staffing issues as areas to watch in future visits.
In my October address last year, I voiced Faculty concern over a perceived lack of effort to engage in good faith negotiation on the CBA and Faculty concern over the impact of not quickly addressing that uncertainty. That impact has now arrived. ODHE reports that 15-day headcount enrollment at public 4-year institutions is down a state-wide average of 1%. OHDE reports that WSU’s 15-day headcount enrollment is down 9.8%. WSU is the state leader in public university enrollment loss this year.
This is NOT due to a reduction in quality of the University’s academic offerings. A large portion of this loss is no doubt due to public perception of our stability. Given that this is a critical time of the year for the recruitment of new students, it would be foolish to think that an unresolved CBA, allowing for even the potential of a strike, will not earn us the same ignoble distinction for the 19-20 academic year.
Over the last year we have seen nearly double the number of voluntary tenure-track resignations compared to recent years. This year is likely to be worse. We have lost some very, very good people and it will be many years before they are effectively replaced.
The challenge that we deliver today is focused on a concern over a year old. How are we still in a position where there is a very real possibility of a Faculty Strike? The Faculty Senate is generally very careful to focus on curricular matters and, as much as is possible, expects AAUP-WSU to address matters pertaining to terms and conditions of employment. However, there are times that those domains overlap, and remaining silent now on the implications of a Faculty Strike to the institution’s very character, and its ability to deliver a high-quality curriculum would be inexcusable.
Today’s message is endorsed by the Faculty Senate Executive Committee representing elected Faculty Leadership from across the institution. We hope that you appreciate the care with which we treat our role as the guardians of the curriculum and that you understand that it is precisely our perception of the gravity of the current situation that makes it imperative that we tell you, publicly, the following:
The next few weeks are a critical time for the University. Our focus must remain on healing institutional trust, maintaining fiscal discipline, maintaining quality programs, and repairing reputational damage. It will be difficult, but with that focus, Faculty are confident that our programs will remain healthy. However, for this to occur, we cannot allow the confidence of potential students and community members to be shaken by unnecessary conflicts over issues that are not urgent and immediate.
Decades of collegial relations between the Faculty union and WSU administration have been an institutional strength that supported an environment which was able to build our previous $100M+ reserve. These collegial relations are now strained.
The Faculty, as a whole, understand that a legal brief provided in an adversarial legal system might take an extreme point of view for the benefit of tactical negotiation. But, even accounting for purpose and rhetoric, the vast majority of the Faculty finds most of the positions and tone espoused in the administration’s fact-finder’s brief to be absurd. The changes to the CBA proposed in the brief (publicly released last week) do NOT address urgent and immediate problems. On the contrary, in our assessment, most of these proposals will likely create both immediate and long-term institutional damage.
The Faculty Senate speaks for all Faculty, both those in the Bargaining Unit and those not in the Bargaining Unit. This has included some with extreme points of view and a majority who generally hold moderate positions. It brings us no pleasure to tell you that, after reading the administration’s fact-finding brief last week, there are very few moderates left.
The position and tone espoused by your legal agent in the released brief will not heal the University. If we continue on this path, it could severely compromise our ability to deliver a high-quality curriculum. Any potential long-term good that changes proposed by the administration might possibly one day affect are overwhelmed by both the short and long-term harm of pursuing the current course.
We find it difficult to fathom this breakdown of our years of productive collegiality. This is not a time to have anyone fear that the University might close its doors, even for a second, over issues which do not have necessary and immediate impact on our mission or safety. The urgency of the challenges before us is dire.
Therefore, Faculty Senate leadership would like to:
—challenge us all to work on healing the University now. This will require good faith negotiations involving short-term compromise by both sides. Postpone the negotiation of any new mechanisms designed to give flexibility in dealing with potential future fiscal crises. Those discussions should wait for future CBA negotiations.
—challenge the faculty union to work as partners in enabling the University to effectively negotiate rising total compensation costs in the short-term, without undercutting its right to bargain over any compensation issue or total compensation in the future
—challenge you, Trustees, to not lead the University into a situation where the Bargaining Unit Faculty will be forced to strike.
We issue these challenges, after much careful deliberation, to express the urgency to move beyond this plague of uncertainty, so that the University can heal and thrive.
2018-10-19 BoT–Namisha Patel’s Remarks [PDF]
Video Link: https://youtu.be/u7G9pQbuJdc.
Good morning, I’m Dr. Nimisha Patel, Professor and Chair of the Teacher Education Department.
Trustees Langos, Fecher, Fitzpatrick, your prior comments related to the Strategic Plan make it clear that you lack an inherent understanding of the purpose of higher education. Rather than focusing on what is best for students, your comments suggest:
—that your goal for WSU is to align its mission and purpose with what is best for you and your respective companies, and
—that you care more about employees meeting your goals rather than facilitating students’ ability to create their own goals to meet.
What you fail to understand is that the goal of higher education is not to singularly create a workforce for you. We are not here to create a structure that focuses on your specific needs. We are not here to ensure students become your employees; we are not here to do your bidding; nor to develop individuals who will be subsumed by your company culture, as you hope.
You see, everyone who works with students at WSU, including: staff, faculty, graduate student instructors, undergraduate learning assistants, and tutors and everyone else — we all have a different purpose than you. We are here to cultivate minds; to provide students with knowledge and to develop their critical thinking skills, to teach students how to question – to question their beliefs, to question their perspectives, to question policies, to question leadership, to question corporate cultures, including those promoting unethical behaviors and those that disenfranchise employees and communities.
We are here to serve as life-long mentors to students, to guide them through their struggles and celebrate their successes; to teach them how to make thoughtful decisions in a world of contradiction, to inspire a passion not so easily extinguished; to leave with them lessons that will guide them in the presence of obstacles, lessons that will remind them of their greatness, lessons that will empower them.
We are not naïve. We absolutely know that students seek a 4-year degree to make themselves more marketable, to develop high need skills, and earn higher wages and better benefits. It is with this is mind, that we are here to help students attain the ability to successfully negotiate an ever-changing world, to transform work cultures not get caught in the fold of them. We are here to ensure students have a plethora of choices and opportunities, to be their voice when needed and to help them strengthen their own. We are to help students stand for social changes that create a more just, democratic society.
The Board’s comments and actions make it clear that it does not share these same goals. The inherent nature of higher education focuses on accountability: accreditation, state approvals, faculty governance, shared governance – IHEs thrive under mutual accountability at all levels.
The Board’s past and continued process of using a corporate lens to lead this institution is at the core of our problems. It’s the corporate lack of accountability for multi-million dollar losses over the course of numerous years that has put us where we are now. It’s the corporate mentality that allows those at fault for our situation to stay in power, while others lose their jobs. It’s the corporate approach that focuses on top-down management and works under the assumption that those at the top ‘know better’ than all others. Your strategic focus on “premium return on investments” further evidences how much you want us to be a company and how little you choose to understand about higher education.
I won’t pretend that we were in perfect shape prior to the financial crisis; however, we had a plan to focus on what needed improvement. We were working on improving programs, on generating and implementing innovative ideas that required both human and financial resources – projects that align with our mission. Unfortunately, much of that work had to be either put on hold or largely scaled back–not because we stopped caring and we were no longer invested in them. Rather, the mess you created forced us to redirect our time, effort, and resources to other priorities–your priorities, rather ours and our students.
I have five requests for members of the Board:
—Have any of you stood up and apologized to every individual who has been laid off due to your lack of responsibility? You owe them that, at the very least.
—For those who truly want to understand and abide by the principles of higher education, learn from those who live by them.
—Meet with students to truly understand what they want and need from our institution.
—Talk with the staff who help students with everything from registering for courses to getting financial aid
—Meet with faculty, chairs, and deans to understand academic and professional goals; to understand how your policies impact the work that gets done; AND to determine what departmental and college academic structures are in place – NOT the President.
While not an easy process, it is a worthy process. And, if you need it, my department offers an “education in a democracy” course, taught by amazing full-time faculty democracy – think of it as professional development to improve your effectiveness as a trustee.
If we are to survive and thrive, it is essential that trustees appreciate, respect, and invest in the unique culture of higher education and our goals, rather than attempting to corporatize it. Any trustee who is not willing to support us this endeavor should reconsider your place on the board – perhaps your contributions to the community would be better suited elsewhere
Thank you.
President Cheryl Schrader
Wright State University
3640 Colonel Glenn Hwy.
260 University Hall
Dayton, OH 45435
President Schrader and Members of the Board of Trustees:
I have long supported Wright State University because you are a vital institution in this community, and in our state. Wright State is critical to the economic and cultural health of the Dayton region and beyond. As such, r join many in the comm unity in their concern over the well-being of this anchor institution amid the ongoing contract negotiations.
Having met with the different sides during many negotiations between employers and workers during my time in office, r recognize that it is a tense, often frustrating process. I urge you to reconsider your
approach to these negotiations, specifically the hard line you have taken with the Wright State faculty. As teachers and researchers, the faculty members are instrumental to serving Ohio students and building and sustaining WSU’s reputation across the region and the country. They develop and maintain relationships with students and community partners alike, and I encourage both sides to stay at the table until an acceptable contract is reached for all parties involved.
1 hope the impasse can end and that all sides will engage in good-faith negotiations to prevent a faculty strike, which would adversely thousands of students and others throughout the region. Please do not hesitate to reach out if there is an appropriate way that my office can be helpful as you go forward.
Respectfully,
Sherrod Brown
United States Senate
The truism that our colleges and universities need to be managed as businesses has lost whatever credibility it once might have had–largely because it has become very clear that academics are the only part of our institutions to which the truism is actually applied. It is not applied to the ballooning bloat in administrative compensation (though, arguably, the bloat in executive compensation has now become an entrenched part of the business practice) or to the ever-expanding number of administrative positions and of staff hired to serve the needs of those administrators. It does not apply to the endless erection of new buildings. Nor does it apply to the urgency with which each new campus amenity must be provided—even though no studies exist to show that a new climbing wall has had any impact whatsoever on enrollment. Why would it, when every campus was rushing almost simultaneously to install one where some of the ping-pong tables used to be? The truism certainly is not applied to intercollegiate athletics, where no more than three or four dozen universities actually have programs that generate net revenue and a few dozen more are actually self-supporting. And, perhaps most ironically, it is not applied to the endless administrative pursuit of new ways to economize–a pursuit typically dependent on hiring an endless succession of extremely expensive external consultants.
All of these non-academic expenditures are typically characterized as “investments,” whereas academic spending is typically characterized as a regrettable drain on resources. No matter that, at most colleges and universities, academic programs and research produce almost all of the revenue—and certainly any net revenue. No matter that our institutions encourage everyone else, from students and parents to legislators and wealthy donors, to “invest” in higher education. Our institutional leaders regard spending on academics in the same grudging way that most individuals calculate the need for home and auto repairs, trying to separate those that can probably be put off to a later time from those that absolutely need to be done now.
The recent, almost simultaneous announcement by the administration and Board of Trustees at the University of Akron that 20% of the university’s degree programs and degree tracks are being eliminated while the university is “investing” in a new e-sports facility is an extreme illustration of the almost daily evidence of increasingly skewed institutional priorities.
At Wright State, we are trying to work our way out of a largely self-created financial crisis: our administration, with Board approval, ran through about $130 million in reserves in four years, “investing” in non-academic initiatives that they promised would produce new revenue streams but that, instead, drained us dry. At our university, the truism has had two corollary assertions. The first is that the reckless spending has stopped. The second is that there is nothing left to cut but academics.
Much of the non-academic overspending has been funneled through “semi-autonomous entities” that have allowed the university to skirt the fiscal constraints on public institutions intended to prevent reckless spending. One of these semi-autonomous entities is DoubleBowler–named for the Wright Brothers’ bowler hats, memorialized in a prominent public sculpture on campus, in which the hats sit together at the end of a bench. DoubleBowler is essentially a real estate firm and property management business. Although its website asserts that its purpose is to enhance the academic mission of the university (specifically, “To expand the educational opportunities available to the students, faculty and staff of Wright State University by developing, operating, and maintaining facilities for the benefit of the University”), one would be hard-pressed to identify anything academic that has occurred in any of the buildings that the university has purchased through DoubleBowler. Indeed, most of the buildings have stood largely empty for most if not all of the period in which the university has owned them. One does house the university’s Human Resources Department, but that department used to occupy the large suite of offices to the left of our AAUP office, and that suite has been empty since HR relocated.
As our former president explained publicly, the point of creating DoubleBowler was ostensibly so that properties could be purchased without all of the delays caused by the constraints placed on major expenditures by public institutions. Over about three years, we have calculated from Greene County, Ohio, property records, that DoubleBowler purchased $21,196,400 in off-campus properties. We are aware of additional properties in Montgomery County that were purchased as well, but they were relatively inexpensive. As we contend with what, again, has been a largely self-created budget crisis, we have been told that although those properties are losing money, they cannot be sold now because everyone is aware of the university’s financial issues, and therefore, no one is willing to pay market prices for the properties. That sounds like a rational position, but it isn’t one.
The most recently purchased properties were acquired by DoubleBowler for the university about two years ago; so let’s use that as a baseline. According to its most recently available annual IRS 990 (for 2016), DoubleBowler had revenues of $2 million for the year: $1.3 million was money from Wright State to DoubleBowler to pay for leases on space in the buildings (yes, we are leasing space in buildings on which we are paying the mortgages); $300,000 from Wright State as a direct contribution to DoubleBowler; and $400,000 raised from leases to other entities. It also reports expenses of $1.8 million. Despite the fact that 80% of its revenue comes from Wright State, DoubleBowler claims to have produced a profit of $200,000, rather than a loss of $1.6 million. It is worth noting here that these calculations do not include the $250,000 salary of the CEO of DoubleBowler, which has been off-loaded directly onto the payroll of the university within which he has been given rather broad new responsibilities.
So, doing the basic arithmetic, at a minimum, at the end of 2018-2019, the properties purchased and managed through DoubleBowler will have cost the university about $4.8 million. In another three years, assuming that nothing changes dramatically (and there is no reason to think that it will), the cost to the university will have doubled to $9.6 million—or approaching half of the original purchase costs. The university spends another $630,000 per year on mortgage payments on the properties, but even supposing that 100% of those mortgage payments were being applied to the principal and not, as they most likely have been, to interest, three years from now the university will have paid $3,780,000 on the mortgages and would still be responsible for almost $17.5 million in mortgage payments—on properties that have already cost them $9.6 million. So, for the university to break even on the sale of these properties after the worst of its financial crisis has been resolved and “forgotten,” the commercial real estate prices in Dayton will have to have experienced at least an 8%-10% annual growth rate over the six years—and that has not come close to occurring over the first three of those six years.
And, worse, I believe that it is fair to say that what I have just described is a “best case” scenario. As my calculations here should suggest, I am anything but an expert on financial calculations, never mind the complexities of real estate transactions. But a colleague who has much more expertise in both areas has pointed out to me that If one were to use a metric commonly used to value real estate investment trusts (funds from operations = net income + depreciation – amortization + gains on sales of property – losses on sales of property), the financing of DoubleBowler and its property acquisitions would very likely look considerably worse.
I am absolutely certain that the university administration and Board will challenge most if not all of these calculations and even the total value of the properties purchased through DoubleBowler—the $21,196,400 indicated in the Greene county records and reported here–because although almost none of the numbers that they have reported, at least until very recently, have held up to any scrutiny, they have a persistent and profound skepticism about our calculations–which we have often made using data that we have requested from them. But, at the risk of seeming terribly casual about the numbers, the truth is that whether the total for the properties purchased is higher or lower that the $21+ million, the implications are likely as bad or worse for the university–and I don’t think that I am simply being cute with my reasoning. For if the total is lower, it will be even harder for the university to break even after each successive year in which it owns the properties, and if the total is higher, it brings into question even more emphatically why there is any need to hold onto these properties when, as the university keeps emphasizing, our enrollment has been declining.
I’d like to emphasize that much of our recent enrollment declines have been related to losses of international students from two nations who were concentrated in less than a handful of programs. Beyond that being another illustration of dubious strategies and economizing on recruitment of students, it is not the sort of thing that would raise any major alarms if we had any substantial reserves left. But, to the extent to which the assertion of declines in enrollment, aside from international enrollment, is true, I think that one can argue credibly that our enrollment has been declining largely because reducing expenditures in the core revenue-producing areas–in this case, academics–is a self-defeating business strategy.
But, returning to DoubleBowler, the very least that can be said is that the constraints that were skirted by the creation of “semi-autonomous entities” such as DoubleBowler had obviously been put in place for very good reasons. And foremost among those reasons is that a public university or college is not a business with corporate officers, a corporate board, and shareholders, all of whom may be too narrowly focused on short-term profitability but all of whom are also acutely aware of any risks to profitability.
And just so that no one passes all of this off as par for the course, consider this very recent news report from Iowa. What follows is an excerpt from an article written by Kathy Bolton for the Des Moines Register, published in mid-July:
Nearly two years ago, the University of Iowa launched an effort to offer undergraduate programs at the former AIB College of Business campus.
It was an opportunity, UI officials said, to provide new and expanded educational options for central Iowa students, particularly those who were older and who worked in the capital city.
But the opportunity never panned out.
Last week, university officials announced they would close the campus by year’s end and sell its 17-acre tract and seven buildings that were gifted by the former business college to UI.
“It just wasn’t the right piece of property,” said Tom Rice, academic director of the University of Iowa’s Des Moines programs. “It gave us too big of a footprint in Des Moines; it had too many buildings.”
To put this decision in perspective, the University of Iowa has a much larger enrollment (33,300) and budget and a much larger endowment ($1.37 billion) than Wright State has. But, like Wright State, UI is facing some reduction in enrollment (in its case, apparently planned, in order to increase completion rates) and some reduction in state funding. So it is cutting its losses on a property on which it has been losing $1.2 million per year—or about $100,000 less per year than Wright State pays DoubleBowler to lease space in buildings on which Wright State is responsible for paying the mortgages.
Now, one might object that it is easier for the University of Iowa to decide to unload this property because it was donated to the university and they do not have to pay a mortgage on it. But, given the costs to Wright State of the DoubleBowler properties, as well as the very different financial positions of the two universities, I would argue that there is more reason for Wright State to unload those properties, even at a substantial loss, than for the University of Iowa to unload the former campus of the AIB College of Business, which was donated to UI. (By the way, I am not sure about the sale of this property, but I am aware that some of the other cuts announced by the university of Iowa have been controversial.)
In the end the answer to the question “What kind of business is run like this?” should be obvious: a failed business.
But our university is a public institution consisting of public buildings and spaces valued at many hundreds of millions of dollars and contributing almost a billion and a half dollars a year to the economy of the Dayton, Ohio, metro area. So, it cannot be dismantled like a failed business because it is not a business. And instead of claiming to run it like a business, our Board of Trustees should insure that it is run responsibly as a public university ought to be run—with a renewed emphasis on direct spending on academics.
And if a “renewed emphasis on direct spending on academics” seems like an idealistic or a delusional over-reach, it’s a very sad indication of how things have devolved. For, at the risk of stating the obvious, academics are the only actual reason for a university to exist.
ADDENDA:
This article is based on information available in the 2016 and previous audited financial statements. The 2017 statement, which has just been released, includes some different numbers. Most notably it indicates a total property valuation of $14 million, rather than $21 million. The university clearly has not sold a third of the properties purchased through Double Bowler. Several years ago, when we were closely reviewing WSARC’s audited financial statements, we noted that properties were being transferred through other “affiliated entities” or “semi-autonomous units” to and through WSARC, with some of the property valuations being decreased with each transfer. Likewise, up until this past year, most of the “affiliated entities” were not even breaking even, never mind producing any net revenue. So, although I don’t wish to suggest that any of this is clearly irregular, I think that it is clear that whatever entity officially holds the deeds to some of the properties bought through DoubleBowler, the university is ultimately responsible for the mortgages and that the bulk of the mortgages are still outstanding. Of course, if one or more of the “affiliated entities” suddenly becomes very profitable, or if the demand for commercial office space in Dayton suddenly increases dramatically, the university’s liabilities on these properties might also change.
Lastly, here is an excerpt from “Wright State Monthly Financial Performance Reports–Financial Highlights FY2019 through August 31, 2018, Expenses and Transfers http://www.wright.edu/sites/www.wright.edu/files/uploads/2018/Sep/meeting/Wright%20State%20Monthly%20Financial%20Performance%20Reports_%20overview.pdf:
Maintenance & Repairs and Utilities – Actual results exceed the budget estimate by $417K. Contributing factors were changes to the contract with Ellucian for the Banner enterprise software. Only nine months was paid in 2018 and the full fiscal year for FY2019 was paid in August. Payments to Double Bowler of $430K also contributed to the budget shortfall to date. )
This sounds like a substantial unexpected expense, but who knows.
It really is worth listening to: https://hearthis.at/rupwwsu/raider-up-wwsu-s3-e5-aaup-union-and-student-government/.
American Association of University Professors