Remarks of the Faculty President, Travis Doom, to the Board of Trustees, Oct. 6, 2017

This Summer, the Senate focused on increasing our international footprint through the work of a newly-constructed International Education Advisory Committee. Additionally, we collaborated with the students and staff of the Student Success Committee to bring forward plans to significantly reduce the student-borne expense of textbooks. Finally, Senate leadership finalized proposed modifications to the Faculty Constitution to streamline its processes and normalize the oversight of graduate affairs.

This Fall, the University Academic Policies Committee is considering over a dozen academic policies, including those required to assure that instructional Faculty meet HLC guidelines. The University Curriculum Committee will begin using the new Curriculog system launched in August to streamline processing academic courses and programs. The Undergraduate Curriculum Review Committee continues to lead efforts to assure that our General Education (“Core”) Curricula meet their intended student outcomes and satisfy accreditation requirements. The Senate approved a new grading system to more accurately track student participation and to aid in accurate reporting for federal financial aid. In short, Faculty are fully engaged in fulfilling and expanding our
academic and research missions.
President Schrader has only been with us a short time, but she has taken steps to learn our academic programs and to engage with our students though 33 departmental visits prior to the start of the term. Provost Sudkamp continues to earn our confidence in his administration of our academic mission. The general sense of the Faculty Senate is guardedly optimistic with respect to our top leadership.

Trustees, you took some painful, but necessary, steps to cut our budget, provide oversight, and stabilize our budget. Our faculty and staff genuinely desire to support the university in this hour of need, but it is surprisingly difficult to chart a positive path in the present cloud of uncertainty.

There is a growing frustration among our faculty and staff who interact most closely with our students because of uncertainty regarding how each new measure will impact our instructional and research mission. Too many of these decisions are communicated with a focus on expense reduction and without expressed consideration of overall impact on revenue and revenue capacity.

In times of transition and challenge, clear and timely communication are imperative.
Further, we sense that many existing and potential students are becoming apprehensive about the future of the university. This concern is only reinforced by budget cuts removing many small but highly visible support mechanisms for students.

Academic programs have endured significant cuts, both in terms of base budget reduction and in unfilled vacancies as outstanding personnel leave and are not replaced. These additional vacancies are opportunistic, not strategic; thus the losses are not well distributed among units. This approach to budget reduction has stressed some valuable units close to their breaking points and may ultimately lead to a further reduction in revenue.

It is evident that we cannot continue to cut our way out of our fiscal crisis. Additional across-the-board cuts will have a negative impact on revenue and our mission. We need to identify academic units that have the capability and capacity to grow and ensure they are properly resourced. We need to identify valuable programs that are in danger of being starved. We need to properly resource service units that feed our academic pipeline. We need a plan, a timeline, and a process that is clearly communicated to the community for each new initiative. We need to stop making final-hour across-the-board budget cuts and start making reasoned decisions on where we will make targeted cuts, where we will invest, and make guarantees that inspire trust, confidence, and stability.

Faculty, too, are deeply troubled by the stalled negotiations of the Collective Bargaining
Agreement. This inaction contributes to potentially crippling uncertainty. This environment has already caused some of our most productive faculty and staff to look elsewhere; continued uncertainly will undermine our ability to recover. We urge you to immediately move forward on contract negotiations with AAUP-WSU in good-faith and with full effort. Please make every effort to demonstrate the respect that the University has for its valued faculty and staff by not drastically changing their conditions of employment overnight.
The Faculty understand the importance of avoiding Fiscal Watch and are now, if anything, overly expense conscious. Faculty are cooking food at home to bring to student welcome events. Faculty are using personal cell phones to reduce the costs of office phones. Faculty are spending extra hours on recruiting events and raising funds to support student activities. We will continue to contribute at all levels, big and small, to help the University.
We work with you, for the good of our students and the University. President Schrader and Provost Sudkamp have promised to lead us towards a new era of transparency, productive campus conversations, and sincere commitment to shared governance. You can expect that from us, and we will expect that from you.

 

 

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Unabridged Version of Remarks by Jim Vance (Advisor to the AAUP-WSU Executive Committee) to the Wright State University Board of Trustees at the Board’s public meeting of October 6, 2017

Summary:

  • Question for the administration and Board: what kind of relationship do you want to have with the union — that is, with the Bargaining Unit Faculty?
  • One possible answer is a relationship characterized by open lines of communication between the parties, founded on jointly nourished trust and mutual respect. That’s the kind that has prevailed most of the time since collective bargaining began in 1998.
  • But in recent months, the administration and board have repeatedly and unilaterally acted to undermine the parties’ constructive relationship. That’s incredibly unwise. You need to change course right away. There is a BIG iceberg dead ahead.

Due to time constraints imposed by the Board, Dr. Vance’s actual remarks were a considerably abbreviated version of what’s below.

_________________________

What kind of University do the administration and Board of Trustees want Wright State to be?

To put a finer point on it, what kind of relationship between the union – the Bargaining Unit Faculty (BUFMs) – and the administration do you want to have?

That is such a crucial question. After all, the core mission of any real university is to teach students and to push forward the frontiers of knowledge – to undertake research, a.k.a. scholarship. To teach students and to undertake scholarship. That is exactly what BUFMs do.

So, what kind of relationship do you want between the BUFMs and the administration?

One kind of relationship is characterized by open lines of communication between the parties, founded on jointly nourished trust and mutual respect. That happy circumstance did not at all prevail when collective bargaining began in 1998, and change did not occur instantly. But over the years, the union and the administration got it together, established and maintained a constructive relationship, and pulled off a remarkable string of achievements — collaborative achievements — that both parties are rightly proud of.

Those collaborative achievements are far too many to describe or even list. So, let me mention just a few.

There are now written criteria for how faculty must perform to earn merit raises or tenure or promotion. These criteria have provided a revolutionary improvement over the bad old days-–pre-collective bargaining–-when as likely as not, raises and tenure and promotion were awarded on an arbitrary or capricious or discriminatory basis. All these criteria have been agreed to by majority votes of the relevant BUFMs, by the relevant dean, and by a committee of six people, the Faculty Governance Committee, three of whose members are appointed by the administration and three by the union. For nearly twenty years, FGC has been approving bylaws (or sending them back for required improvement), and that body has never had to take a vote. FGC has always arrived at consensus decisions about what these crucial performance criteria should be.

There are oodles of other examples in which one party approached the other with a problem to solve–- maybe an everyday problem, or one that entails big money, or one involving highly sensitive, very delicate personnel matters. Again, one party has approached the other and found in the other party a willingness to communicate honestly, to work together with trust and mutual respect. You can’t believe how many hard problems the parties have resolved in that way, and how many needless headaches have been avoided.

So:  what kind of relationship do you want to prevail between the administration and the BUFMs? One answer is a relationship characterized by open lines of communication, trust, and mutual respect.

Now it takes two to tango. It takes two parties that both want to enjoy open lines of communication, trust, and mutual respect. That’s the way it has been here at WSU a large majority of the time for the better part of two decades.

But in the very recent past, the favorable relationship I have just described has been repeatedly and unilaterally undermined by the administration or Board or both.

A first primary example:  the Board refused to provide a seat on the Presidential Search Committee for the union–-the Bargaining Unit Faculty.

Second:  after negotiations for a new Collective Bargaining Agreement (CBA) between the administration and the union began in January, the parties signed off on written ground rules to govern negotiations, and the parties made concrete progress on more than a few issues on which one party or the other wanted a change to the previous CBA. But all progress stopped cold in late March or early April. Since that time, the administration has outright refused to negotiate. In fact, exactly six months ago tomorrow, the administration reneged on its written promise to exchange proposals with the union about economic articles (that is, articles on salary, benefits, and the like), and there has been no movement whatever to correct that.

Third:  President Schrader has said no to more than a few opportunities to meet union representatives and talk about this, that, or the other important matter. The most recent instance pertains to a matter that arose at a mediation session in Columbus on September 15. The administration stated that it wanted us to listen to its description of certain unspecified but ominous-sounding “global issues” surrounding the present negotiations, and to do so completely off the record. We are quite certain that the administration meant bluntly, “We want to engage in regressive bargaining”–-that’s an unfair labor practice–- “and for AAUP-WSU to give up significant parts of the current CBA, parts that impede administration ‘flexibility’ in managing WSU.” However, we had seen repeatedly that the administration’s negotiating team had no authority to actually negotiate and that its chief negotiator had been disingenuous about that basic fact, even when addressing the mediator directly. So, our team replied that we would be willing to meet about “global issues” provided President Schrader and Board Chair Fecher attended. That was three weeks ago, and we are still waiting for an answer.

Fourth:  the administration has been willfully and regularly uncooperative in the enforcement of the CBA and in providing information to the union needed to negotiate a successor CBA. Rather than getting a reasonably prompt, responsive reply to a request for information, the union is likely to get nothing whatever, or a message from one of the administration’s attorneys excusing the absence of a reply on thus-and-such section of Ohio Revised Code. We can’t even find out how much money the administration has been paying the national law firm one of whose senior attorneys it hired to be its new chief negotiator about six months ago, almost exactly at the same time the administration announced it wasn’t going to hire any more outside consultants!

The overall picture is that for some time now, repeated signals from the administration or Board or both tell the BUFMs that we (the Board-administration) are willing to discard the constructive, collegial relationship that parties have attained and jointly nourished over the better part of twenty years. That’s incredibly unwise. You need to change course right away. There is a BIG iceberg dead ahead.

 

Presentation Given to October 10th 2017 Meeting of the Wright State University Board of Trustees by Geoffrey Owens.

Let me begin with a disclaimer. Except where I say otherwise, all the facts and figures I present today come directly from the administration. So, if you believe any of my data are incorrect, Then FIRST it’s almost certainly because the administration has presented information in an opaque, misleading, or outright inaccurate fashion; and SECOND, we always stand ready to correct any factual mistakes in our statements. Please contact union officers so we can correct any inaccuracies.

Prior to 2013, things were going well. Revenues always exceeded expenses. But then, we drifted from our core mission. We shifted funding away from academics.  Expenses grew and soon exceeded revenues. Despite warnings from the AAUP, the problem only grew. We now still find ourselves in a position where expenses need to be slashed. And the cuts were made in all the wrong places, further weakening the core mission of this university.

We have 71 fewer bargaining unit faculty now than three years ago. And compared to three years ago, the University is spending $4.2 million less annually on bargaining unit faculty alone. Yet, the Dayton Daily News recently reported that the University had 70-80 vacancies, saving the University $3.25 million and that it would have an additional 100 vacancies after this year, saving an additional 4.25 million. How can the University have only 70 vacancies if there are 71 fewer full-time faculty?

Moreover, these data imply that the average compensation for a vacant position is somewhere between $30,000 and $35,000. [If the Board is correct that 100 vacancies save 4.5 million a year, and we take into consideration a 31 percent benefit rate, that is how we come up with the average salary of those vacancies averaging about $34,000 per year].

The average salary of the 68 people hired in 2016 and 2017 as “exceptions” to normal hiring practices, or “named in grant”, was $81,822. With benefits, they would average $107,923 in compensation. In making these calculations, we excluded ‘interns’ making less than$100 [yes, I mean one hundred dollars]. We also endeavored not to count any individuals twice, although on a spreadsheet that was shared with the Faculty Senate many were listed twice because they had been promoted, moved to different positions or given different titles over a period of years. Virtually none of those “special” hires are faculty, and their salaries are far higher than those for the reported vacancies.

There is an obvious conclusion. In your attempts to eliminate positions to balance the budget, you are focusing on low paid faculty and staff positions critical to running a university, and not on the administrative bloat that has brought this institution to its knees. And never mind the fact that this board authorized a budget increase of $1.6 million to subsidize intercollegiate athletics, effectively rewarding athletics for their continuous overspending. This extreme misallocation of precious revenue sends a clear message to the citizens of Ohio that Wright State University values Bonuses over Books, Rebounds over Research, and Free Throws over Free Thinking.

Let’s look at another example: we understand that discussions in University Hall speak of “unexpected losses” in summer school revenue amounting to about $2 million, due to lower summer enrollment [and please note that we had to revise this figure to a 4.8 million dollar loss over the summer, in light of new information brought to our attention this morning]. For faculty, these losses came as no surprise at all, because the administration slashed summer course offerings. But simple arithmetic based on readily available cost and income data show that a class with only 5 students would break even in most cases, meaning that enrollments above that number would essentially generate net revenue.[1][2]

However, when deans were ordered to cut expenses, they tended to cut classes with fewer than 15 students. Fewer classes mean fewer tuition-paying students, resulting in lower revenue for the university. To put it another way, cancelling or otherwise failing to offer all those summer classes allowed deans to meet budget targets, but was both fiscally foolish and a disservice to our students, either by delaying their graduation or by forcing them to look for classes elsewhere. But nobody in University Hall seemed to care.

Unfortunately, in dealing with the budget crisis, the administration seems to have forgotten that there are different kinds of expenses. Some expenses like teaching classes generate revenue and also happen to be central to the university mission. Many millions in other expenses produce less or even no revenue, and quite frankly, lots of that expense just does not support our core mission.

For too long this administration and board have had misplaced priorities, allowing expenses to grow out of control by “investing” in supposed revenue generating schemes that ignore and in fact harm the core mission of this institution.[3] Sadly, most of these schemes have actually lost money for the University. Our biggest fear right now is that the administration and board are so focused on a single number, our Senate Bill 6 score, that you will do anything to avoid fiscal watch even if it means causing additional damage to our students and our community.

If we do not change course, we risk leading Wright State University into a death spiral from which we may never recover. This, ladies and gentlemen, is not rocket science — it is simple math of the kind that each of us uses almost daily to balance our checkbooks.

Thank you!

[1] See “Cracking the Nut,” Part 10 http://www.wright.edu/administration/aaup/Cracking-the-Nut-Part-10.pdf

[2] If the average BUFM makes $85,283 then teaching a 3 hour summer school course on average costs $7,107. Even if you add in the retirement benefit for faculty, the average cost is $8,100. The cost of 3 credit hour course for an in-state undergraduate is $1,183 (@$394 per credit hour), and higher if we include out-of-state and graduate students. If you get $0.37 per dollar of tuition in state subsidy, then the total revenue per in-state undergraduate student is $1,621. This implies the break-even enrollment in an undergraduate class is about 5 students.

 

[3] See “Cracking the Nut,” Part 11 http://www.wright.edu/administration/aaup/Cracking-the-Nut-Part-11.pdf

Update on Contract Negotiations: Mediation Session on Friday, September 15

I wish that we could say that we made progress and negotiated over any contract articles during Friday’s mediation session in Columbus. I wish that we could say our time was productively spent. Unfortunately, none of that happened.

Two facts emerged during Friday’s mediation.

First, the administration/Board is still not willing to negotiate a new CBA. Its negotiating team presented neither proposals of its own nor counters to proposals that we had made. Thus, nearly six months have gone by since it has engaged in any legitimate negotiations.

Second, the administration/board has proposed yet another meeting where instead of negotiating with us, they will present us with a “global discussion” of how the current CBA prevents them from addressing the fiscal crisis of the University. From what little they have been willing to say about what that language actually means, we have concluded that, in essence, they want to “restart” the negotiating process so that they can “cherry-pick” language that they would like to see changed. Since all of the non-economic articles were already on the table before the administration/Board hired an outside labor attorney as their new chief negotiator, such a “restart” would amount to regressive bargaining, or an unfair labor practice.

As if to confirm the conclusions that we drew at our mediation session, at the Board of Trustees Committee meetings on Friday, Board members said that they would like more flexibility in making contingency plans for retrenchment.

We want to emphasize, again, that maintaining job security for all of our members is one of our top priorities, and we suspect that what they will propose will affect both TET and NTE BUFMs.

We have told the administration/Board that we will listen to their “global discussion” before our next mediation session, but only if that presentation is attended by both WSU President Cheryl Schrader and Board of Trustees Chair Doug Fecher.

We also informed them that our attendance at the next mediation session on October 20 will be conditional on their giving us proposals in writing 48 hours in advance–in accordance with the ground rules that both sides signed before beginning the negotiations–so that we can see that they are truly ready to negotiate.

We have made it clear that our team has very little trust in the administration’s new chief negotiator because we feel he has lied to us on several occasions about what he has been prepared to do. We are not even sure that he has actually been given the power to negotiate with us.

We cannot be expected to negotiate a contract in good faith without some degree of trust that the administration is reciprocating. We will reject any loss of real compensation or erosion of job protections for TET or NTE faculty. Job security is a top priority. Faculty didn’t create this financial crisis, and eliminating faculty positions isn’t the way to solve it. We are ready to go to fact-finding and beyond to protect the faculty.

Adrian Corbett

Chief Negotiator, AAUP-WSU

 

 

What Faculty Need to Know About Ohio’s Collective Bargaining Law

Adapted from a 2004 Right Flier article by Rudy Fichtenbaum

Collective Bargaining for public employees in Ohio is governed by Ohio Revised Code (ORC) 4117. This law gives public employees certain rights, but it places certain limitations on them as well. It is important that BUFMs understand the basic features of ORC 4117 as they pertain to CBA negotiations.

It is the stated goal of ORC 4117 to promote “orderly and constructive relationships between all public employers and their employees.”

Collective bargaining means that employers and the employees must meet to negotiate about “wages, hours, terms and conditions of employment and the continuation, modification or deletion of an existing provision of a collective bargaining agreement.” Neither party can be forced to accept the position of the other party; however, they must negotiate with the intent of reaching an agreement.

How does the negotiations process begin? At least 60 days prior to the end of an existing contract, if either party wishes to modify the existing agreement, they need to provide written notice to the other party stating their intention. Once this notice has been served the parties are required to begin negotiating.

(Here at WSU, the parties have traditionally begun triennial negotiations in January to replace a CBA set to expire the following June. That is how negotiations began this year. As we have reported previously, the parties were making progress on non-economic CBA articles and had agreed in writing to exchange proposals on economic articles on April 7. But in late March and subsequently, the administration has been unwilling to exchange economic proposals and has not even been willing to negotiate in any substantial way over non-economic issues. Further, the reasons stated by the administration’s negotiating team for this stoppage have not been at all credible. This intransigence on the part of the administration left AAUP-WSU with no viable choice other than initiating the fact-finding process, the dispute resolution process specified by ORC 4117, about which please continue reading.)

Since neither party is required to accept the position of the other, ORC 4117 has a built-in dispute resolution procedure. ORC 4117 also allows the parties to agree to an alternative dispute resolution procedure. Otherwise, the parties are governed by the dispute resolution procedure contained in ORC 4117.

The dispute resolution procedure contained in ORC 4117 states that if the parties cannot reach an agreement within 50 days before the expiration of a contract, either party can request intervention by Ohio’s State Employee Relations Board (SERB). If SERB determines that both parties have been bargaining in good faith but have reached an impasse or they have not reached an agreement 45 days before the end of an agreement, then SERB can appoint a mediator. The job of the mediator is to try to help the parties reach an agreement on outstanding issues.

(In this case, a mediator has been appointed, and mediation dates of July 21, July 28, and August 4 have been established.)

If the mediator reports to SERB that an impasse exists or that the parties have been unable to reach an agreement 30 days prior to the expiration of the contract, then SERB must appoint a fact finder (or fact finding panel) selected by the parties from a list provided by SERB.

The fact finder(s) may engage in mediation efforts. If these efforts fail then a fact-finding hearing is held. The fact finder(s) must make a recommendation no later than 14 days after his or her (their) appointment by SERB unless both parties agree to extend the deadline.

(In this case, a fact finder has already been appointed, and October 3 and 4 have been selected for fact finding.)

When a fact-finding report is issued it is in the form of a recommendation to the two parties, a recommendation regarding what language to put in the CBA for every unresolved issue. Typically, the report incorporates all CBA language to which the parties had already tentatively agreed. Either party may reject the fact-finding report by a three-fifths vote of its total membership. This means it takes three-fifths of the Board of Trustees or three fifths of the AAUP-WSU membership (RCMs) to reject the fact-finding report. If neither party rejects the report, then it is determined by SERB that both parties have reached an agreement. If either party rejects the fact-finding report, then they can voluntarily agree to resume negotiations, adopt an alternative dispute resolution procedure, or, the union can go on strike after a ten-day written notice to the employer.

It is critical for AAUP-WSU members to understand that unless one of the parties rejects a fact-finding report, we are prohibited from going on strike.

Rejecting a fact-finding report is a necessary condition, according to ORC 4117, to give public employees the right to strike. However, rejecting a fact-finding report does not automatically mean that we must go on strike.

 

Glossary of Financial Terms

Our thanks to Tom Rooney, AAUP-WSU Treasurer, for drafting this glossary.

Affiliated Entity –a legal entity that: (a) is separate from the University; (b) has a bona fide business purpose and is formed or operated to support a public purpose that is consistent with the mission of the University; and (c) is created, controlled, or strongly influenced by the University; receives significant support from the University in the form of funds, staff or other resources; or uses the University’s name. The organizations that the Board of Trustees considers to be actual Affiliated Entities is not clear, or is at best subject to change. As of December 2016, the list of WSU affiliated entities included:

  1. Advanced Technical Intelligence Center for Human Capital Development
  2. Advratech LLC
  3. daytaOhio Holdings, Inc.
  4. Double Bowler Properties Corp.
  5. Fairborn Value Investments I LLC
  6. Fairborn Value Investments II LLC
  7. 506 East Xenia Drive, LLC
  8. Global Impact Stem Academy
  9. Grimes Street LLC
  10. Miami Valley Research Foundation
  11. National Center for Medical Readiness
  12. Regional STEM Collaboration, Inc.
  13. Research Park Capital Corp.
  14. The Wright Brothers Institute, Inc.
  15. Wright State Applied Research Corp. (WSARC)
  16. Wright State Alumni Association
  17. Wright State Physicians, Inc.
  18. Wright State Raider Aquatics, LLC
  19. Wright State University Foundation, Inc.

Budget – a plan based on an assumption of some level of income, and how that income will be allocated or spent. Budgets are plans that reflect institutional priorities, but—and this is important to remember—they do not reflect actual income or actual expenditures. They are only plans regarding what the income or actual expenditures will turn out to be.

The 2017-2018 budget is available at: http://www.wright.edu/business-and-finance/financial-and-business-operations/budget-planning-resource-analysis/current-funds-budget

Budget Cut – reductions in annual allocations to programs, departments, or colleges

Core Mission of the University – activities related to teaching, learning, scholarship, and service

Financial Exigency – In section 17.1 of the current CBAs, it is defined in the following manner. “Financial exigency means that severe financial problems exist which threaten the University’s ability to maintain its academic operations at an acceptable level of quality.” The administration makes the determination of exigency.

However, our CBA negotiating team has proposed strengthened language for the next contract. They proposed the following. “17.1.1 Financial exigency exists when the President can reasonably demonstrate the existence of an imminent financial crisis (exigency) of such severity that it threatens the survival of the institution as a whole and cannot be alleviated without terminating the appointments of TET BUFMs, or terminating the appointments of BUFMs with continuing appointments or terminating fixed term appointments before the end of their term.” This proposal is consistent with the widely-understood meaning, namely that there is an imminent financial crisis that threatens the survival of the institution as a whole.

More information can be found at: https://www.aaup.org/report/financial-exigency-academic-governance-and-related-matters

Financial Statements – unlike a budget, financial statements show actual income and actual spending by the administration, and can be used to assess financial health. The three basic financial statements are (1) the balance sheet, which shows the university’s assets (cash on hand, value of buildings, etc.) and liabilities (debt owed); (2) and profit and loss statement, or income statement, which shows how much revenue and net income is generated; and (3) a cash flow statement, which shows the inflows of cash to and outflows of cash from the University. Financial statements are created each year by the Controller’s Office and must be audited by an outside firm. Recent financial statements are provided here:

http://www.wright.edu/business-and-finance/financial-and-business-operations/controller/financial-reports

Fiscal Watch – When a university’s SB-6 ratio falls below a defined threshold for 2 consecutive years, the state places the university on fiscal watch. The Auditor of State is legally required to intervene in the University’s operation. The Auditor provides oversight, and issues a report outlining the nature of the financial accounting and reporting problems of the college, as well as recommendations for corrective actions.

Overspending – when a university division  or affiliated entity spends more money than was allocated to it

Retrenchment – The current CBAs define retrenchment (section 17.1) as the termination of TET BUFMs, or of NTE BUFMs with continuing appointments, “as a result of any of the following three circumstances: (1) financial exigency; (2) significant reduction in enrollment of a College, Department, or Program, (here and elsewhere, meaning a program offered for credit) continuing over four or more academic semesters (not counting summer) and which is expected to persist; or (3) discontinuation of a College, Department or Program.”

SB-6 Ratio – A quantitative measure of a university’s financial health required by a state law passed in 1997. SB stands for Senate Bill. The law applies to all state colleges and universities. The SB-6 ratio uses values from the annual audited financial statements to monitor individual campus finances. Each institution receives an annual composite score that ranges from 0 (bankrupt) to 5 (financially healthy).  A composite score at or below 1.75 for two consecutive years results in an institution being placed on fiscal watch. More information can be found at: https://www.ohiohighered.org/campus-accountability.

 

“Cracking the Nut,” Part 11

This post might be sub-titled “More on the semi-autonomous units and their relation to the University’s budget fiasco.”

But before I get to that issue, I’d like to address the more superficial matter of the running heading of this series. Several of my regular correspondents have suggested that “Cracking the Nut” is now less apropos since David Hopkins has resigned as President. Early on, he seemed to relish using the phrase when describing the challenges involved in reducing deficit spending. Although I would not place a bet on the cause-effect relationship, I did notice that his fondness for the phrase seemed to decline markedly after I had appropriated it. I should not have to explain to anyone who knows me even casually why I could not resist appropriating it. And, since the budget issues have scarcely been resolved following his resignation as President, and since each new development related to the budget has some of the effect of a kick to the groin, I am going to continue to use the heading for the posts in this series.

With that settled, let’s turn now to some more serious stuff.

The list of the $30 million in budget cuts being made in 2017-2018 does not include any reference whatsoever to the 19 “semi-autonomous units” (see the list immediately following this paragraph) that have accounted for somewhere between 30% and 60% of the reserves expended to cover the University’s negative cash flow over the past four years. The explanation for the non-mention of the 19 “semi-autonomous units” is that from this point forward, they are going to be required to be self-sufficient.

List of Affiliated Entities as of December, 2016

  1. Advanced Technical Intelligence Center for Human Capital Development
  2. Advratech LLC
  3. daytaOhio Holdings, Inc.
  4. Double Bowler Properties Corp.
  5. Fairborn Value Investments I LLC
  6. Fairborn Value Investments II LLC
  7. 506 East Xenia Drive, LLC
  8. Global Impact Stem Academy
  9. Grimes Street LLC
  10. Miami Valley Research Foundation
  11. National Center for Medical Readiness
  12. Regional STEM Collaboration, Inc.
  13. Research Park Capital Corp.
  14. The Wright Brothers Institute, Inc.
  15. Wright State Applied Research Corp. (WSARC)
  16. Wright State Alumni Association
  17. Wright State Physicians, Inc.
  18. Wright State Raider Aquatics, LLC
  19. Wright State University Foundation, Inc.

Self-sufficient?? This proposition is dubious for several reasons. First, we have been assured year after year that these units were not only going to become self-sufficient but that they were going to generate revenue for the University to support and to enhance its core academic mission. Second, it is unclear how most of the 19 units are going to generate any net revenue for the University. Third, the audited financial statements for WSARC make it fairly clear that it will always operate at a loss. And, lastly, it is not only difficult to explain the relationship between WSRI and WSARC, but it very difficult to track much of the expenses incurred by WSRI beyond payroll costs.

This spring, rumor had it that WSRI was going to “come close” to being revenue neutral in 2017-2018. But there are reasons for wondering whether that result is nothing more than a bookkeeping ruse.

You will recall that when the son of the former Chair of the Board of Trustees was hired by WSRI without any formal search being conducted, the rationale for that hiring was that the salary was being paid for by a grant, and positions funded by grants are exempt from the University’s usual hiring policies and procedures. (For background, see the item below.) It turned out, however, that the University was covering most if not all of the WSRI payroll and calling that subsidy a “grant.”

From the Dayton Daily News, January 4, 2017:

The Ohio Ethics Commission publicly reprimanded Michael Bridges, president of the Wright State University Board of Trustees, for his role in the hiring of his son at the University’s research arm. Ethics commission investigators found Bridges emailed his son David’s resume to two administrators and helped set up a meeting between David and Wright State Research Institute Director Dennis Andersh, who later recommended creating a new position for the trustee president’s son after interviewing him in January 2015. Michael Bridges then voted to approve David’s hiring in the same May 2015 meeting where he was voted board chairman.

The situation was further complicated early in the summer of 2016 when the Board seems to have approved a policy change by which employees of the 19 “semi-autonomous units” can be migrated directly onto the university payroll.

We know of at least five highly paid employees of two of those units who have been “transferred” into administrative units of the University proper. The total salary and benefits seems to be between $1.25 and $1.5 million, and four of those five employees were originally with WSRI.

So, the immediate question is whether WSRI is about to “come close” to breaking even simply because a significant portion of its payroll has been shuffled elsewhere within the University.

Someone seems to think that WSRI’s operating in the black is a worthwhile goal in itself. At the risk of pointing out the obvious, I doubt that anyone on the faculty gives a fig about that—except for how it impacts the broader university budget. To give a turn to a cliché, if good money is being thrown after bad, it does not matter if it is being thrown into a single hole or into several different holes—and it does not matter what names are being given to the holes.

Moreover, it is worth reiterating that WSRI has been competing with faculty for some indeterminate percentage of the actual external grants it is receiving: that is, somewhere between a third and two-thirds of those external grants now received by WSRI previously were received by or directed to faculty. So, the grant monies actually being generated by WSRI have been distorted by this circumstance, and it has forced faculty to compete not just with outside applicants, but with a semi-autonomous unit within their own university, for some research funding.

Beyond those issues, there are also some ethical questions that should be obvious with any degree of reflection. First, are the budget reductions, by unit, including the transferred payroll costs? (Do semi-autonomous units that offload employees onto WSU proper receive credit for having cut costs? If so, are the units within WSU proper receiving these employees receiving matching debits? In other words, are the offloaded postions exacerbating Wright State’s overspending problem?) Second, are employees hired according to the established policies and procedures being terminated while those hired under “grants” (a.k.a. subsidies from the University) are being continued? Third, are highly paid positions being preserved by eliminating a much larger number of lower-paying positions? And, lastly, what exactly is the justification for preserving any of the highly paid positions on University payroll if the “semi-autonomous units” were operating at a significant loss under the leadership of those individuals?

Looking at these issues more broadly, how can we be assured that the 19 “semi-autonomous unites” will now be self-supporting when, despite all of the assertions of increased transparency, the various documents released by the administration regarding the current budget-cutting reveal nothing on the current state of the semi-autonomous units’ budgets?

None of us should any longer be especially surprised by any of this, but it seems important to keep in mind how university resources have been misdirected, wasted, and hidden in pursuit of very skewed institutional priorities. As budget cuts continue to be made—and the process threatens to extend over the next several years—it seems very important that we not simply haggle over very specific targets for reductions. Instead, we need to focus on the broader issues of institutional priorities—on the many other priorities related to our core academic mission to which the wasted resources might have been directed, and might still be directed, to much more substantive effect.

 

Marty Kich

President, AAUP-WSU