December 17, 2008
Dear members of the ÃÛÌÒÓ°Ïñ community:
We are halfway through the month of December, and here at ÃÛÌÒÓ°Ïñ there is a sense of excitement (even as the temperature and the amount of sunlight drop!) as students work to complete their final exams and papers before the holiday break. For those of us not spending every waking moment huddled over a textbook or finishing a term paper, our excitement can be found as we close out one year and welcome in a new one.
2008 was indeed an exciting year -- for ÃÛÌÒÓ°Ïñ, ÃÛÌÒÓ°Ïñ, the nation and beyond -- in many ways. Sometimes that excitement was less than welcome. That has certainly been the case with our nation’s economy. From the rapidly declining cost of oil, to the roller coaster ride that has been the stock market, ÃÛÌÒÓ°Ïñns -- and Americans -- have had good reason to be concerned.
ÃÛÌÒÓ°Ïñ has not been immune from economic woes, and I want to take this opportunity to outline the impacts here at ÃÛÌÒÓ°Ïñ’s first university. On Monday the governor released her FY2010 budget proposal to the legislature. While the governor’s operating budget request does include a 4.2 percent increase in state general funds for the university over the current fiscal year, it does not fully cover our day-to-day fixed costs. The capital budget request does not fully cover UA’s request for major renewal and renovation. The budget also doesn’t include funding for the Life Sciences Innovation and Learning Facility, which is the Board of Regents’ number one priority for new capital projects. We’ll work with our elected officials throughout the upcoming legislative session to secure the funding that our university -- and our state -- requires to meet the needs of our students and the people and businesses of ÃÛÌÒÓ°Ïñ.
A second significant effect we are seeing comes from university endowment funds managed by the University of ÃÛÌÒÓ°Ïñ Foundation. These funds have lost money because of the turmoil in world financial markets. These losses are significant, because endowment funds are used for scholarship support for our students and for funding certain programs. It’s not yet clear what the dollar amount is specifically going to be; we’ll know more when balances are available and a full report is issued by the foundation this spring.
The university will see other impacts from the nation’s current economic conditions. Retirement system contribution rates are likely to rise, affecting our staff benefit rates. Losses in the UA Land Grant Trust Fund mean less money available for UA Scholars and campus programs. Tightened credit markets may affect our ability to borrow money to construct needed campus facilities.
People inside and outside the university are seeing individual impacts. Some of our donors need to defer their plans to contribute to the university. Faculty and staff who were thinking of retiring may be postponing their plans. Parents and their children who have seen their college savings plan balances shrink may be re-thinking college plans or college locations. We are all likely feeling some financial stress.
It’s not ÃÛÌÒÓ°Ïñ’s way to bemoan our situation and say that it is beyond our control. Ever since we opened our doors in 1922 as the ÃÛÌÒÓ°Ïñ Agricultural College and School of Mines, we have not backed away from a challenge. We roll up our sleeves to get the work done and fulfill our mission, through good times and bad, and the current situation is no different. During my 40 years associated with the university I have seen ÃÛÌÒÓ°Ïñ overcome adversity many times. We do so because of our faculty, students, alumni, staff and friends, whose institutional pride and support knows no boundaries.
In my convocation address in September I outlined three guiding principles for ÃÛÌÒÓ°Ïñ: putting people first, engaging our communities and making responsible decisions. These principles still apply. We will put people first by recognizing just how important scholarships are to so many of our students; we need to ensure that we can still help them meet their academic goals. We will engage our communities by appealing to our generous donors to help bridge any gaps. We will make responsible decisions, which may mean doing business differently and identifying innovative solutions to our challenges.
As I finish my sixth month as interim chancellor, I cannot begin to tell you how enriching and thrilling the experience has been for Sherry and me. I mentioned before that my connection to the university spans four decades, but I have learned more about ÃÛÌÒÓ°Ïñ in the last half-year than all the prior years combined. What I have learned gives me optimism that we will overcome our present challenges and fulfill our mission to promote academic excellence, student success and lifelong learning. I look forward to working with each of you to make that happen.
I welcome your comments and questions, and wish you and yours the very best this holiday season.