As we look back on the last year of great struggle and upheaval, the occasion of this university assembly is a good time to assess the state of the university and to identify our priorities in moving forward.
As I was preparing my remarks for today, I thought that a good alternative title to State of the University Address would be “Love in the Time of COVID-19”. Much like the characters in the Garcia Marquez novel, we now have the opportunity to reflect on what is truly important—to sort out the transitory from the eternal, and to focus on what is lasting. I would submit to you that the singular lasting value that we must hold dear is the transformational value of education. As an institution, we are called upon to find a path to sustainability so that value is not lost to our community and the students we serve.
Corollary values that we must also champion as a responsible member of our community are the values of good citizenship and environmental harmony. We must help promote the strength and health of central Arkansas through our educational, research, and public service programs, and that includes supporting our underserved populations and championing racial equality. We must also strive to create a clean and sustainable urban environment, finding ways to integrate form and function with our natural resources.
I believe that UA Little Rock and its constituents are best served when we strengthen our institutional focus and build our infrastructure and planning activities around that focus. So let’s start by taking a look at where we fit in Arkansas’s educational landscape—otherwise known as our role and scope.
If you look at our role and scope statements approved by ADHE and our Board of Trustees, they describe, over several paragraphs, what our purpose is among the various higher education institutions. I’ve taken the liberty of writing an abbreviated version in a single paragraph as a means to sharpen our focus as we go forward:
UA Little Rock is a comprehensive metropolitan university that serves a diverse student body and assumes a special role in addressing the needs of central Arkansas in its academic, research, and public service programs. While maintaining a strong liberal arts core education, UA Little Rock offers undergraduate and graduate degrees that meet the demand for professional and advanced level preparation in areas of critical need for local, state, and regional development. UA Little Rock is committed to a research and public service portfolio that applies its expertise and resources to public concerns and community wellbeing. Partnerships play a key role in enabling the university to extend its reach and increase its effectiveness. [Adapted from the UA Little Rock Role and Scope Statement of the UA Board of Trustees]
From this statement of purpose, we can readily identify our most appropriate institutional priorities. I’ve mentioned these priorities in previous statements, but I want to reiterate them here.
Based on our fundamental purpose to provide educational opportunity to a wide variety of mostly urban students, priority number one is enhancing access to higher education and enhancing student success. We enhance access through financial assistance, better outreach across different populations, and by creating a more welcoming and inclusive learning environment where our employment profile reflects the diversity of our community. We enhance student success by ensuring the high quality of our instruction, and by building a sustainable student support infrastructure that is timely, responsive, and effective.
Based on our obligation to provide educational programs that fulfill our role as a comprehensive institution and that meet the needs of our community and state, priority number two is to develop, maintain, and strengthen the right mix of liberal arts and pre- professional undergraduate and graduate programs that will prepare our students for viable career paths or career enhancements. We do this by maintaining a solid liberal arts core as the basis of our general education and by making sure that our academic programs have demand, both from prospective students and prospective employers. Whether it is a liberal arts program or a pre-professional program, we must be able to demonstrate the value of the credentials we offer.
Based on our role as an urban research 2 institution that is dedicated to addressing public concerns, priority number three is to develop, maintain, and strengthen a research and creative work portfolio appropriate to our Carnegie status and one that applies our talent and expertise to real life issues. We do this by supporting grants and contracts through our sponsored research office, but also by providing opportunities for professional development, incentives for pilot projects, and alternative funding sources for unsponsored research.
And finally, based on our public service mission, priority number four is to promote community engagement through our educational programs, our research and public service projects and programs, and through Trojan Athletics. By maintaining focus on this aspect of our role and scope, UA Little Rock ensures that we maintain a strong connection to our community and that the value of having an institution like UA Little Rock in Central Arkansas is readily apparent to all.
Now, some of you might be asking yourselves, what about the budget and resources? What about enrollment? Aren’t these important institutional priorities as well? I would argue that these objectives are very important, but they are a means to an end, not the end in itself. Yes, increasing enrollment is a vital institutional objective, but not because a larger enrollment by itself is a social good, but because it represents increased educational opportunity and attainment, and those things are social goods. Larger enrollment also represents an increase in resources. That increase in resources is not the social good, but what it makes possible—student success, stronger programs, professional development, more community partnerships—those things are social goods that are part of our mission and our role and scope. So yes, balancing the budget, increasing enrollment, securing additional resources—all of those are necessary and important because they make it possible for us to fulfill our purpose as an institution of higher education.
Our commitment to more eternal values, helps us bring everything else we do into sharper focus. As we move forward, our assessment, our recruitment, our planning, our budgeting, our fundraising, will all be shaped by our institutional priorities. We will build up our student support infrastructure and we will do it with intentionality, knowing who our students are and what challenges they face. We will strengthen support for faculty and staff so that you have the means to teach well, create well, and engage your community with confidence. We will build up our strong programs and develop less strong programs that are in high need. We will build our capacity and reputation for meaningful research, creative activity, and public service. And we will do all of this with an eye towards sustainability so that future generations can concentrate on their opportunities without having to worry about funding for the bare necessities of fulfilling our mission.
Let me now turn to the state of our university as I see it.
The external conditions that we were facing a year ago, and indeed for several years now, haven’t changed considerably. We are still looking at a national demographic decline in college- age students. Fortunately for us, we are not wholly dependent on the traditional market, so we have opportunities to expand non-traditional enrollment in the coming years. We are still looking at flat State funding, at best, for higher education and COVID-19 has lowered that funding level for this year at least. This puts greater emphasis on increasing revenue from other sources, and a continuing emphasis on lowering costs. We are still seeing the effects of a cultural shift on the value of higher education. This year, 51% of our applicants chose to go nowhere for college. While some of that is undoubtedly COVID-related, we were seeing that trend already emerging last year. This highlights the importance of helping students and their families connect the dots between what they will do in college and where that will take them after graduating. We can’t assume they see the same value proposition that we do. Arkansas continues to have one of the highest poverty rates in the nation and we have to understand the full impact of that fact on educational attainment and do what we can to mitigate it. It also means that we have to get involved earlier in the process and help our community lift up those with the most need. The emergence, this year, of a global pandemic, has made life harder for all of us, but in a real sense, in mainly exacerbates conditions we were already dealing with, and will continue to face.
Internally, the conditions we faced a year ago, and in the years leading up to that point, have changed in very substantial ways.
In the two years leading up to our HLC accreditation review, we developed an institutional understanding of the importance of strategic planning and of tying that planning to institutional priorities. By the time of our visit last February, we had begun building the infrastructure to do this planning, in particular, by creating the Institutional Effectiveness Committee, but we still struggled with our focus and in identifying our institutional priorities. For many years, our institutional priority was largely defined as increasing enrollment. But for reasons that I have already described, this inverted the equation so that it was difficult for us to articulate our true institutional priorities as defined by our role and scope. An institutional priority based on a means to an end, meant that we really didn’t know or agree on those ends and that translated to our inability articulate those ends to others. It also meant that we focused too narrowly on a single means, namely recruitment, to accomplish anything we might have wanted to do. Budget cuts were across the board and indiscriminate. Until last year, we did not consider other means of balancing the budget. We have now applied structural reorganization in both academic and non-academic units to reduce administrative costs, and have used academic planning retrenchment to right-size our academic enterprise. These were much, much more difficult strategies than cutting across the board, but ultimately more strategic and less damaging overall.
I submit to you that we are now properly focused on our institutional priorities. We will continue to discuss and debate the best methods and the right mix, but we know that educational access and student success is our primary goal. We know that serving the needs of our community and state is also a primary goal. And we know that the means to these goals involve responsible resource management and strategic, data-informed decision-making.
Another internal condition that has changed includes the complete transformation of our recruitment, admissions, and financial aid operations. Since starting his new job a year ago summer, Vice Chancellor Cody Decker and his team have increased their effectiveness and reduced time to admission and scholarship from several months to just about 24 hours. We had record increases in new student applications, admissions, and scholarship applications. We still have work to do in the onboarding handoff between student and academic affairs, but the state of this operation is considerably improved. Vice Chancellor Decker will share with you more details on enrollment later in this program. We also responded to the IEC top recommendation to develop a comprehensive enrollment management plan, which we did last December and which now guides our recruitment and retention efforts. I was able to use that plan as a basis for acquiring external funding for both recruitment and retention for this year.
As you all know, the internal condition that was most pressing when I became Chancellor last September, was the rapidly growing loss in net position. I am pleased to report that we are making good progress on rectifying this problem. At the start of fiscal year 20, we had a net position loss of around $11 million. Half of that was carried over from the previous year and half was generated by a 9% decline in enrollment when we had only budgeted for a 1% decline.
Then, with COVID-19 related losses and costs, we added another $6 million to that bringing the total to more like $17 million. Then, in planning for 10.5% FY21 enrollment decline, we added another $6 million to that potential loss. So, if we had done nothing at all and had sustained all of the losses we planned for, we would have been looking at a net position loss of around $23 million for this year. Happily, it didn’t turn out that way. Through 3 rounds of general budget cuts, restructuring, retrenchment, spending restrictions, a good year in fund-raising, and by beating our SSCH projection by over 5%–when all the dust settles, we should be looking at a potential net position loss of only $6.5 million. Our goal, obviously is to get that to zero, but we’re moving in the right direction.
Some of you may have heard that we ended fiscal year 20 with a significant positive balance. That is true, so let me explain. The positive balance is based on our actual expenditures compared to our actual revenue. We did a very good job of spending less than we made and saving the difference in our reserves. A lot of that was due to the fact that we implemented a spending reduction when COVID hit and the State decreased our appropriations and then gave it back to us at the end of the year. We also had quite a few open positions at various times during the year and held off on filling them which gave us a lot of salary savings. However, it is important to understand, that those positions and those expenditures were all still in the budget and had we spent everything that was budgeted last year, we would have not only spent more than we brought in, but would have had to spend down our reserves by at least the $11 million loss we started with. The $6.5 million net position loss I am telling you we have now is based on our budgeted expenditures for this year. If we spend everything that is in our fiscal year 21 budget, and our revenue projections do not change, we will have to draw that $6.5 million out of our reserves to cover the expenses. We virtually never spend more than is budgeted (which keep in mind is not the same as revenue) and usually end the year under budget, so I am confident that we will not need to draw the full amount from reserves especially with COVID depressing travel and event expenditures. For fiscal year 22, our goal will be to make additional reductions to our budget and increases to revenue to eventually get to a net zero change position. We can accomplish this in part by budgeting more closely to our actual expenditures. We currently have over $60 million in unrestricted reserves; so we’re going to be OK even if we have to draw on reserves for a few years.
Let me conclude my remarks by highlighting some other changes we have made and outlining our next steps.
sing funds from the Foundation, we are building up our infrastructure for student success. We have a fully endowed student retention office with an intervention team and various coaches and mentors. We are using additional funds from the Donaghey Foundation to reinvest in the Student Affairs success initiatives, the Multicultural Center and other diversity initiatives, as well as the Chancellor’s Leadership Corps. We are also using Donaghey Funds to initiate a new Career Center starting this January.
As you have probably heard, we are launching several diversity initiatives with the intention of improving our learning and working environment. I just announced the members of two new committees: the Racial Barriers Committee and the Chancellor’s Race and Ethnicity Advisory Committee. These committees are designed to uncover unintended barriers to access and inclusion and to help us find ways to improve our environment for all people of color. We have also launched a campus read project for faculty, staff and students to participate in book discussion groups and to keep the conversation about racial equity front and center. This year we are also launching a faculty salary equity study to be followed by a similar study for staff. I’m pleased to report that Chief Carter and our Public Safety Office have enthusiastically embraced my recommendation to start meeting with students informally in a positive setting to talk through any issues they may have and to collaborate on campus-wide initiatives. They have already met with the SGA Executive Council and will next meet with students in an open forum this fall. I will hold my next open forums on race and ethnicity on November 11 and 12, so stay tuned for further details on that.
Community outreach has been an important theme over the last year. In addition to the many wonderful community-oriented projects you have initiated, we have partnered with Fifty for the Future, the Chamber of Commerce and the area school districts to support the Ford Next Generation Learning model to help students better prepare for post-secondary success. We are also partnering with Little Rock Mayor Frank Scott to reimagine the Asher Ave. corridor and we hope to launch a P3 project RFP for the Plaza property within the year.
We had an excellent year in fundraising last year raising over $45 million. We have reorganized and recalibrated both the Development Office and the Office of Communication and Marketing to better align with our institutional priorities. I’m putting an emphasis on endowed scholarships, endowed professorships, program support, including research support, and sustainable capital improvements. For the first time this year you are going to see a Holiday Wish List campaign that allows academic departments to identify specific items for donor support. This will bring in a lot of new donors and help departments connect with them in a more intimate way. In marketing you will see more emphasis on supporting specific programs rather than generic institutional branding. We want the community to connect with individuals and their experiences at UA Little Rock, so our strategy there now reflects that.
Moving forward it will be important for us to continue turning the ship towards a more intentional planning and budgeting process that is transparent and participatory. I look forward to working with the IEC and the campus community to re-evaluate our historical allocations and move towards a zero-based budget model where alignment to institutional priorities are clear. In the next few weeks, I intend to have a budget process for fiscal year 22 outlined and we will begin that process in November.
Moving forward it will also be important to continue to refine and improve our student outreach and support processes. We’ve got a great start on this transformation, but there is more work to do, and we have to carefully analyze our successes and failures and learn from them with a commitment to continuous improvement.
Likewise, we must continue the process of rigorous program assessment and accountability to ensure that we are not taking anything for granted or resting on outdated assumptions. We cannot expect students and community members to invest in us if we cannot verify our effectiveness and relevance. We must be vigilant in this.
Next year (fiscal year 22), we will rewrite our institutional strategic plan to more clearly delineate means and ends and to more clearly identify measurable gains. The Strategic Planning Committee did a very good job with our current plan, but they were limited to revising an existing plan and ultimately, the plan did not have the authority of committing resources to goals. We will change that. The ultimate measure of our success will be that we have programs that students want to enroll in, and that we have graduates who contribute to their communities and that employers want to hire. The measure of our success will be a reputation for excellence and vital relevance to the community.
I have said before that I am very optimistic on the future of UA Little Rock. We have great talent, great commitment, and a great deal of potential ahead of us. We have already demonstrated our capacity to address our internal challenges and respond creatively to external conditions. We have demonstrated a capacity for hard work, collaboration, and ingenuity and as long as we have that, we can continue to do amazing things together.
The state of UA Little Rock in 2020 is good and getting better. We have clear course ahead of us and I look forward to making that journey with you.