Let me begin by saying thank you for all of your warm wishes and expressions of support. I am truly humbled by your faith in me and ever more determined to serve this institution to the best of my ability.
I want to begin also by saying that I am very aware that members of this campus community–faculty, staff and students—are concerned about our financial challenges and eager to know what we are going to do about it. I don’t have a complete answer for you today—at the end of my first week as your chancellor, but I do have a sense of direction and I have concrete plans for the next 60 days. Before I get to that, let me provide a bit of context for the problem-solving tasks we have ahead of us.
Last spring, I delivered a speech to the Assembly that outlined what I believe are the challenges we, along with many other institutions of higher education, face in the current environment. I took as my theme the title of Immanuel Wallerstein’s 1999 publication, The End of the World as We Know It. The idea behind it was that the patterns and assumptions that have served us well in the past are no longer viable in the present, and are certainly not going to serve us well in the future. If you missed that speech or don’t remember the details, I encourage you to read it online on the Provost’s web site. But for now, let me recap a few of the most significant environmental shifts.
First and foremost, the financial structures that use to support higher education predictably and comfortably are now unreliable and insufficient. Second, enrollment patterns that used to be predictable and slow to change are now highly complex, quick to change, and much more difficult to predict. Where we use to be able to look at high school graduation rates as our primary predictor, now we must look at dozens of demographic factors and their broader contexts. Those changing demographics also mean that we are under pressure to unbundle and customize our educational offerings to meet the needs of a more diverse market for higher education. Third, the competitive environment is very different than in the past. Instead of having a quasi-monopoly for the region, we now have, much like the communications industry, everyone in every market. We can no longer assume that we have a privileged place in our own regional market. And finally, we are encountering a troubling doubt in the value of higher education itself. In the last few weeks, I have been happy to see the Little Rock Community rally around our university as a true value for the community, but too many prospective students are opting out of higher education because the return on investment is simply not apparent to them.
So what are the outcomes of these environmental shifts at UA Little Rock?
We have seen the effects in declining enrollment of both new and returning students. This is not only because of declines in college going populations in general; but because of increased competition (all Arkansas higher education institutions are recruiting in Little Rock and some are offering courses here), and because of concerns about the cost and the value of higher ed.
We are also seeing significant budget pressures due to those declining enrollments primarily, but also stagnant state appropriations, and limits to raising tuition—we’ve maxed out our price point and cannot go any higher than what the market will bear; in fact, we probably need to start moving in the opposite direction. It is also the case that our physical plant, which was built for a larger population, is not sustainable in its current form. We are quite literally spread too thin.
Because of the changing market, we are seeing less demand for traditional educational programs. Pre-professional programs are on the rise and the liberal arts are struggling. And we are struggling to reinvent our curriculum to both retain the essential elements of a university education and to respond to the needs of our constituents.
What do we do about these changing conditions? As I said last spring, there are five general strategies we must adopt: 1) We need to understand the dynamics of our new landscape and understand the difference between what has true value and what is merely comfortable; 2) We need to get up to speed in understanding our markets and develop compelling products and appeals for these markets; 3) We need to ensure that we have high quality across the board, not just in certain areas. We need to meet the public expectations of accountability through assessment and peer review. And that’s not just our academic programs, but all operational units; 4) As educators we need to be integrators and pathfinders for our students who, in a world of fragmented information, cannot always see the connections and the way forward. And 5) We must create a collaborative ecosystem where we work together to solve problems, internally and externally, instead of in competition and in silos. Partnerships will be a key theme going forward.
I believe we are making good progress on these broad strategies. I have been very impressed with the collaborative spirit on this campus and the spring of new ideas to enhance our university. I am very confident that we are up to the challenge.
So now let me get down to specifics and speak to what I think are the most immediate priorities.
There are dozens of things that need attention at UA Little Rock, but we must be focused on the highest priorities and figure out the correct sequence of problem solving. Today, I will highlight three priority areas that we are working on now and will be our primary focus in the coming days.
First is to secure essential leadership appointments. I will be appointing a new provost in the next couple of weeks. It is my intention to offer an appointment similar to my own and for the same reasons, with a two-year term and not as an interim. Other leadership decisions will follow quickly so we can concentrate on the pressing tasks at hand.
Planning and Budget
Clearly the most critical priority we have is to come up with a plan to balance the budget, and that has several components.
1. We need to produce realistic enrollment and revenue projections for the next two years and update analytic metrics. We will be working on this over the next month or so in preparation for the budget cycle.
2. Put into place a comprehensive planning and budgeting process that operates year-round, and specifically starts no later than November of each year. Along with that, we need to organize the advisory and feedback mechanisms to inform the budget model. Our new Executive Director of Budgeting and Financial Analysis, Linda Teater will be working with the IEC and others to help us draft that process plan in the coming weeks. We intend to start the budgeting process this November rather than in the spring as we have done in the past.
3. Next, and this is the hard part, we need construct a plan to balance the budget over a two-year period. This will be a combination of strategic cuts and revenue enhancement. We will rely on everyone to contribute to this plan, but particularly the IEC, the formal governance bodies, the academic leadership team, and the Cabinet.
4. In addition, we must start making budget adjustments now even while we are working on the plan because we know that we already have a revenue shortfall for this year based on lower than expected enrollment levels. Therefore, we will continue the soft hiring freeze (meaning that all vacant positions will be reviewed for critical need) until we have a budget plan in place.
Improving our enrollment management system is a co-equal top priority and the flip side of managing the budget. Although we must adjust to the enrollment trends of the day, that does not mean that we give up on enrollment. We have huge opportunities in this area. Over the last 5-7 years we have allowed many of our most important relationships to atrophy from neglect. In just the last five months, however, we have begun to turn this around through the efforts of Assistant Vice Chancellor of Enrollment, Edie Stewart and her team, and more recently through the efforts of our new Vice Chancellor for Student Affairs, Cody Decker who will elaborate on his efforts in his remarks today. Yesterday I met with e-Stem CEO John Bacon to hit the reset button and begin rebuilding that relationship to the benefit of both institutions. It was a very positive meeting, so you’ll be hearing more about that in the days to come. We will also begin regular meetings with our community college partners, starting with PTC later this semester. Recruitment and onboarding are front and center to our enrollment management goals and Vice Chancellor Decker is already implementing important changes that we believe will produce positive outcomes next fall.
1. We are (finally) going to develop a comprehensive enrollment management plan; we have a good template to work from and a plan for development—we should have this completed before the end of fall semester
2. We are going to optimize the organization of admissions and financial aid—we are in the process of making key hires in those units and reorganizing responsibilities.
3. As I’ve already mentioned, we are in the process of rebuilding and optimizing relationships with high schools and community colleges in our area
4. We are ramping up Retention Initiatives. We have put in place a new director of student retention initiatives, Heather Reed, and she will be working with the colleges, the support units, and the Retention Committee to move the needle on our retention rates.
Other priorities for this fall include preparing for our HLC visit in February, and preparing to launch Workday in June. These are two very big initiatives that have to be integrated into our other priority efforts. We’re in good shape on HLC preparation thanks to the able leadership of Erin Finzer and Brian Berry. Workday preparation has proved to be more of a challenge, but we working with the System Office to find feasible solutions and we are going to get there.
Another top priority, although I would probably call it a medium-term priority because it takes a little time, is to develop new revenue streams beyond tuition and state appropriations. I believe our Extended Education operation has significant potential to expand as we meet the needs of the “just-in-time” unbundled educational market. We are also thinking very seriously about public-private development projects, particularly with respect to the University Plaza. In addition, we will look at potential energy projects and cost-sharing ideas, among others.
On the subject of revenue enhancement, I want to give a shout out to our folks in Development. Our Development Office has done a phenomenal job of bringing in gifts at record levels in the last few years and I expect this year to be even better as we ramp up what will now be our centennial campaign. We have taken the advice of our campaign steering committee to fold our current campaign into one that coincides with our centennial in 2027. So stay tuned for more good news on that front.
As we make our way through the budget planning process and adjust to the new normal, it is vitally important that we not lose sight of the need to invest in our strengths. As your Chancellor, I make this commitment to you that I will keep that goal front and center. As a modest token of my commitment, I am pleased to announce that I’ve started an endowment fund for the Academy of Teaching and Learning Excellence in the amount of $25,000. I expect that endowment to be completed by next year. So Michael, Amar, and Laura, you’ll be able to start investing that money in our faculty very soon.
On November 21st and 22nd, the Board of Trustees will hold their next meeting on the UA Little Rock Campus. As the host institution, we will make a presentation highlighting our strengths and recent accomplishments. It will be held in Stella Boyle and is open to the public. I invite you to attend as your schedule allows and show your support for our institution. This will be an important meeting for us as we must demonstrate that we are up to the task of creating a sustainable future.
At the Faculty-Staff Convocation this fall, I said that we are capable of doing amazing things; and I believe that. So, I will end my comments today by saying I am absolutely confident that we will do amazing things together in the days ahead.
And by the way, although battered, and traumatized, and somewhat worse for wear, the butterfly bush is still alive and well on the campus of UA Little Rock.
Thank you and I will be happy to take questions.