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Wednesday, September 19, 2012

Wednesday, September 19, 2012

Progress at the UC Regents' Retreat

The most important statement of the morning session of the UC Regents’ retreat came from President Mark Yudof, who for the first time that I have heard put the decline of UC academic quality at the top of the Regents' agenda.   He kicked things off (around 0:24 on the UC FA Blog's recording; Yudof Facebook version) by saying that the University of California is experiencing a “quiet but steady erosion of our academic quality at almost every level.”  He noted that people often express outrage at rising tuition, pension cuts, and various other UC policies. But where, he asked, is the outrage at the erosion of academic quality? He said that the board, in trying to cope with funding problems, had taken a series of passive decisions that damaged quality.
There were no board votes approving faculty salaries that are not competitive with peer institutions, . . .yet we are 10-20% behind in faculty compensation. There were no board votes approving a freeze on faculty hiring, but effectively that is what we’ve had over the last few years. There were no board votes approving a steady rise in our student-faculty ratio over the last decade, but in fact our numbers show a decline over the decade of 50% -- that is, we have 50% more students per faculty member than we did in previous decades. And in the past six years we have 30,000 more students without adding any new faculty at all, other than replacing existing faculty. You didn’t vote on any of that, but that is the consequence of the situation in which we find ourselves.   
The University of California with its legacy of trailblazing academic quality deserves better.  It is up to those of us at this table to reaffirm an active, immutable commitment to academic quality at UC, starting now.

This was music to my ears. The idea of fighting educational decline is not new, of course—the faculty senate committee for planning and budget (UCPB) started arguing in 2002 that threats to quality quality was the key argument against budget cuts, stated this directly to the Regents in 2007, and then the press began to cover quality problems during the fiscal crisis in 2009. What is new is the statement that declining academic quality is the university’s number one problem, or the declaration of a kind of educational quality emergency.  There is hope that rebuilding quality will finally get our undivided attention.

The retreat then turned immediately to balance-sheet and business strategies, led by Nathan Bostrom and Peter Taylor, at the head of business and finance respectively.

The Regents love these guys, and they are indeed both very articulate and also good at encasing budget strategies in a language of educational goals.  But the morning passed in a parade of previously rehearsed small-time revenue measures.  The second piece of good news was that the Regents seem finally to be tiring of the mismatch between the revenue problems and these business-process solutions.

The scheme that brought out some frustration was “parking securitization.”  The actual ownership structure remains undecided and unclear, but the basic idea is to bundle most of the parking spaces at all the campuses and transfer the concession, valued at maybe $1 billion, to the UC Retirement Program, which would then feed UC systemwide parking revenues into the pension fund.  The relevant slide (10) suggests selling bundled systemwide parking to a 3rd party, which made many people immediately think of the disastrous sale of Chicago’s parking meters to a company that has screwed everything up.  Mr. Taylor insisted no 3rd party would be involved, but this did not quell the uprising.

For example, Regent Schilling commented, “I assume the campuses rely on this revenue?” Mr. Taylor said well yes, but the revenues they rely on for maintenance and operations would stay on the campuses and another portion would go to UCRP – you “can slice and dice this any number of ways.”  Regent Schilling said that she'd asked because, “I just want to be careful that we don’t screw the campuses.” Not screwing the campuses quickly made the plan more confusing and also chopped away a any likely returns.

Raising another core issue, another regent said it’s strange that this is the exact opposite of the Luskin hotel and conference center we just voted at UCLA.  There, he noted, we are trying to build new assets for the future when we could get the same thing—hotel rooms—for a lot cheaper right now by going down the road.  With parking, you’re proposing that we get rid of assets we already have. How do these opposite strategies fit together?  Regent Blum chimed in by saying that as much as he admires UCOP's creative financial team,  parking securitization is a very bad idea.  The real problem, he said, is we haven’t paid into the pension fund for twenty years, but that doesn’t mean we should transfer assets.  Overall, parking securitization went nowhere.  Since the campuses do indeed skim parking for all sorts of local operational needs, this scheme will encounter massive resistance and is very unlikely to happen.

Most of the other business ideas have been around for a while—a controversial kind of bond restructuring ($50 million in annual savings, slide 8); moving of short-term funds from lower- to higher-interest instruments ($30-$50 million, or $40 million on slide 9); the taking by UCOP of accumulated interest from thousands of campus “funds functioning as endowment” (FFE) (a one-time $20 million, slide 7); the use of standardized systemwide vendor contracts ($50 million annually at the medical centers, with another $50 million estimated for the campuses); and finally, cuts to unfunded state-mandated programs. About two hours for all revenue increases that don’t involve further cuts to faculty, students, and staff.

No one who spoke in the meeting  believed that you can add up these savings and get something like $200 million in new money that could be put into instruction and research.  Regent Blum pointed out with some exasperation that the umbrella contracts were proposed by a previous consultant five years earlier, and that a now-retired UCOP official had worked full-time on savings that never materialized.   Say with great effort that $100 milion were saved. That would amount to about 5% of the cuts plus mandatory cost increases UC has suffered since 2008.

So following Mr. Yudof's great kick-off, the discussion got sidetracked from the issue of reversing educational decline by getting UC out of structural deficit mode and into a full budget.   The obvious first problem with these business strategies is that the scale is too small by an order of magnitude.  The second problem is that UCOP keeps circling like a moth to the flame around ideas that involve a reach-in on campus resources, in the campus's worse financial period since the Great Depression. Mr. Taylor joked several times that for what he is about to propose he will need to hire bodyguards.  So why keep making this kind of proposal?

This gets us to the third problem, which is a flawed managerial epistemology.  It says in effect that management expertise bring with it a higher-order wisdom that creates new value by overriding local practice.  UCOP's plans always link efficiency to centralization. In reality, centralization is as likely to cost money as it is to save it, since coordination requires time and more money while at the same time suppresing tacit knowledge, concrete relationships, accumulated know-how, on-site experience--the whole craft practice involved in particular administrative jobs in specific communities that address distinct needs.  The centralization override is not only painful and frustrating for the affected employees, but is destructive of the knowledge that resides in them.  CFO Peter Taylor is eloquent on the beauty of standardized contracts that leverage size and scope—I have never heard better speeches on the virtues of vendor consolidation. But finance people aren’t often great students of humanistic management theory, which does grasp both the ethics and the value-added of freeing up employees to structure their own work and make their own decisions in horizontal collaboration with each other. Under questioning, Mr Bostrom and Mr Taylor did concede that campuses and departments may sometimes be right to say that they know what they’re doing.  Once this truth is admitted, many of the expected financial savings disappear.

The fact is that educational quality comes from the campuses, will be fixed there, and will be fixed from the bottom-up.    Possible administrative savings of $100 million via better vendor contracts and interest rates should be seen as financial officers doing their jobs, not as pathbreaking reforms.  The latter will count only when the affect the quality of a UC education. 


EF said...

"He noted that people often express outrage at rising tuition, pension cuts, and various other UC policies. But where, he asked, is the outrage at the erosion of academic quality?"

I don't understand how this is anything to celebrate. Yudof: "Stop protesting individual policies, let's instead focus and talk about the vacuous concept of 'quality.'"

In Bill Readings' stellar "The University in Ruins," the rising prominence of "excellence" as a qualifier for higher education (and the empty nature of that qualifier) is traced over the increasing neoliberalization of our public institutions of education. Struggling against the various expressions of this tendency IS fighting for academic quality.

As to your point about centralization, let's also not forget that part of the Regents' schemes to ostensibly "save" the UC money is to allow for tiered tuition scales -- giving more schools flexibility with regards to what they can charge their students. The issue isn't centralization vs localization. There's a deliberate dismantling of the public institution and when perceived "quality" of that institution begins to slip, this is identified as the problem which must be addressed -- all raised by the same individuals responsible for the slippage in the first place.

RT said...

I get the points that (a) Yudof's remarks about declining quality were at odds with the rest of the meeting and (b) acknowledging decline is necessary, over and against previous accounts by the Regents that denied the existence of it. But as long as publicity itself, the extension of as many resources to as many students as possible, isn't included among the measures of quality, "quality" is played off against publicity. It can even become identified euphemistically with faculty and administrator salaries. So, in an op-ed from 2010 Erwin Chemerinsky called "limiting tuition and fees" and "freezing executive and faculty salaries" "a recipe for ruining a great public university system" because "the quality of faculty teaching and research will diminish"--as if the value of this teaching and research would not diminish, or not as much, if it became inaccessible instead. So maybe quality is an important term to defend, but always in such a way that, e.g., Sherry Lansing couldn't imagine herself to be arguing for having one "quality" film studies program on only one campus in the system (also an example from the retreat, right?) instead of film studies for all students on each campus.

hello and thanks,

Rei T.

xicano said...

Chris outlines the need for local knowledge as a tool to achieve educational quality and Rei rightly unpacks the inherent dangers in the term 'quality' itself, especially when it is used by those whose policies have worked to destroy educational quality as many of us understand it. My point has to do with the centralization/localization issue. Although I agree with Chris that campuses and faculties ought to determine the best ways to salvage the educational project and all that it entails, there are other issues that individual campuses and Senates simply will not address without pressure from below and above. I am thinking in particular of equity and diversity issues. For example, APM 210, which was designed to reward faculty engaged in diversity work, has yet to be implemented fully at many campuses because local Senate committees have practiced a kind of nullification by concocting excuses as to why they cannot or will not comply. Recent history shows us that on issues of climate and underrepresentation, campuses cannot be trusted to do the right thing. On matters of gender and racial equity in general, campuses have practiced a kind of states' rights privilege that demands some form of centralized intervention.

Chris Newfield said...

I agree with these comments. I just like "cuts hurt educational quality" much better than "cuts are bad, but we are protecting educational quality," which was the pervasive UC position during the 2 previous cuts cycles and through most of this one. Once this first of 12 steps is achieved, the next one is to define "quality" via faculty, staff, and students experience and knowledge. Quality is not = no caps on tuition increases and admin salaries (RT), quality is not = one star MOOC professor per subtopic for the system (RT), quality is not = to colorblind bibliometric promotion evaluation (xicano), quality is not = tiered campuses and tuition (EF), quality is not = campus autonomy from public standards that have historically flowed from UCOP (xicano, EF, RT . . ). These are important points. The hope I was expressing is that there's now more room to say what quality IS via educational and research needs as perceived on the front lines. For example, Mark Yudof's aggressive deployment of a time-honored Regental metric of quality, student-faculty ratios, dovetails with faculty and student knowledge of the importance of individual student attention, of upper-division research experience, etc. We need to be more vocal and systematic than we have previously been in these debates, in full knowledge that many people have indeed not been listening.

Anonymous said...

How dumb things happen at smart universities. The public’s UC Berkeley harvests family savings, Alumni donations, supporter’s money and taxes. Cal. ranked #1 public university total academic cost (resident) as a result of the Provost’s, Chancellor’s ‘charge resident’s higher tuition’. UCB tuition is rising faster than other universities.

Cal ranked # 2 in faculty earning potential. Spending on salaries increased 29% in last six years. Believe it: Harvard College less costly.

University of California negates promise of equality of opportunity: access, affordability. Self-absorbed Provost Breslauer Chancellor Birgeneau are outspoken on ‘charging residents much higher’ tuition.

Birgeneau ($450,000) Breslauer ($306,000) like to blame the politicians, since they stopped giving them their entitled funding. The ‘charge instate students higher tuition’ skyrocketed fees by an average 14% per year from 2006 to 2011 academic years. If they had allowed fees to rise at the same rate of inflation over past 10 years fees would still be in reach of middle income students. Breslauer Birgeneau increase disparities in higher education, defeat the promise of equality of opportunity, and create a less-educated work force.

Additional state tax funding must sunset. The sluggish economy, 10% unemployment devastates family savings. Simply asking for more taxes (Prop 30, 32, 38) to spend on self-absorbed Cal. leadership, inefficient higher education practices, over-the-top salaries, bonuses, is not the answer.

UCB is to maximize access to the widest number of residence at a reasonable cost. Birgeneau Breslauer’s ‘charge Californians higher tuition’ denies middle income families the transformative value of Cal.

The California dream: keep it alive and well. Fire hapless Provost George W Breslauer. Clueless Chancellor Birgeneau resigned. Cal. leadership must accept responsibility for failing Californians.

Opinions? UC Board of Regents marsha.kelman@ucop.edu Calif. State Senators, Assembly members.

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