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Committing to a Culture of Conservation While Exploring New Revenue Sources
delivered by Chancellor Howard Cohen
at the Faculty & Staff University Fall Convocation
August 26, 2009
Welcome back to the 2009-10 academic year at Purdue Calumet.
The beginning of a new year is always a time of optimism for me for many reasons:
- New students – excited to begin a learning process that will prepare them for life (or as we say in our strategic plan, “workforce and citizenry”),
- Returning students – more focused and more savvy about making progress toward graduation,
- Faculty and staff return, hopefully, refreshed and ready for the happy chaos of hallways and classrooms,
- Parking lots filled to capacity,
- Lines in the Oaken Arbor and the bookstore, and
- The legislative session behind us
‘Optimism mixed with realism’
This year, however, is marked by optimism mixed with realism.
- I am disappointed that we were unable to provide salary increases for faculty and staff,
- I am disappointed that we were unable to secure funding for our proposed Emerging Technologies Building, and
- I am disappointed that we needed to reduce our non-instructional budget by about 4%
This disappointment is tempered with understanding. I understand perfectly well that our public officials did the best they could for us during difficult economic times.
Indeed, I know that Indiana has fared well – compared to other states – and I am grateful that I am not standing here today talking about 25% cuts in state appropriations, enrollment reductions and furloughs as many of my counterparts are at their universities across the country. Nevertheless, our losses are real, and we must acknowledge and address them.
Our financial situation is complicated by the fact that we have received “one-time” federal stimulus funds to backfill our state budget reductions. I say “complicated” because we can use these stimulus funds only for specific, fixed-cost projects rather than for ongoing commitments.
As we begin to spend this money, you may hear someone ask: “Why are they remodeling Alumni Hall when we are in need of more staff support?” The answer is: Our budget for remodeling was INCREASED, thanks to stimulus dollars, while our budget for staff was DECREASED, and we cannot mix or substitute these funds. Please help your colleagues understand this.
These stimulus funds are welcome; it is expensive to keep up our facilities. But we also recognize that there are important, ongoing, strategic needs that will go unmet in this financial environment. We will be challenged to find creative ways to address those needs and accomplish what we desire, despite our limited funds.
Many successes during 2008-09
Purdue Calumet enjoyed a significant number of successes and advancements during 2008-09. They include the following:
- Completion of the first year of our Experiential Learning requirement
- This work is critical to our effort to become both a distinctive and distinguished university.
- 1,063 students enrolled in an experiential learning course, of which 91 were developed and approved.
- International student enrollment that increased to more than 450
- The presence of international students provided a major component of cultural interaction for students from our Northwest Indiana area
- We expect international student enrollment to grow to more than 500 this year.
- Expansion of our study abroad
- This is a special challenge for our students, and it takes creative programming to create a meaningful experience that is constrained by time and cost.
- Last year, 68 students participated – a substantial increase over the 24 from the previous year.
- Opening of student housing complex University Village 2
- The facility doubles capacity for student residents on campus to nearly 750.
- It provides a full college experience close to home for local students, including that of nurturing opportunities to learn about and become friends with students from other parts of the world.
- Greater consistency and clarification of Academic Advising responsibilities
- We consider this area a major factor in student persistence and progress toward graduation.
- Introduction of Degree Works will give advisors a tool to help students better understand their progress
- A record year in grants and contracts exceeding $10.9 million
- Funding from grants, contracts and gifts now represents about 10% of our annual budget.
- Last academic year, we attracted nearly $11 million in sponsored programs — a 111% increase over the past four years!
- Continuation of our work with Argonne Labs to help BP reduce contaminants in Lake Michigan
- We successfully completed the first phase of this project and are about to enter the next phase of identifying technologies for pilot testing
- Creation of the Center for Innovation through Visualization and Simulation
- It provides state of the art modeling of industrial processes, with opportunities that are limited only by our imagination
- This Center also offers support for developing a master’s degree in visualization and simulation.
- It has generated almost $5 million in federal funding.
- Introduction of a Mechatronics Engineering Technology baccalaureate degree program
- Partnerships with industry have generated scholarships, internships and new laboratory equipment.
- It also has attracted a National Science Foundation grant for curriculum development and $500,000 in gifts
- Continued success in securing federal funding for applied research that benefits our region –
- Our efforts have resulted in more than $21 million since 2006
- Reorganization of our Information Services area was a big step in integrating access to information with the technologies that support that access.
- Orientation and training for adjunct faculty
- We depend a great deal on “limited term lecturers” for instruction. They teach 23% of our courses across the full range of our departments
- In the past, we have done little to help them understand the university beyond the department where they are employed.
- Dual credit partnership program with Crown Point High School
- The Indiana Commission for Higher Education and state legislature have recognized the value of dual credit courses in reducing the gap between the demands of high school and the demands of university level course work.
- Purdue Calumet has recognized the value of dual credit courses in recruiting college-ready students from our region. Consequently, we have partnered with Crown Point High School to design and offer dual credit courses in math, English, chemistry and Communication. These classes are overseen by our faculty and taught by Crown Point High School faculty.
- Awarding of the charter for the Hammond Academy of Science and Technology
- After several years of very hard work, Hammond is ready to build and operate a truly exceptional charter school for middle and high school students. It will have a project-based curriculum, focus on science and technology, operate under the principles of a “Comer School” and be a laboratory for Purdue Calumet’s teacher education program.
- Through our Center for Science and Technology Education we will design the curriculum, provide student teachers and support teacher professional development.
- Introduction of “Alternative Spring Break”
- More than 30 Purdue Calumet students spent their spring break last March performing outreach service at Haven House (an abused women’s shelter in Hammond), a historical reconstruction site in Fort Wayne and a neighborhood revitalization program in Houston, Texas.
- This is service learning at its best
This is important – strategic – work that we have done together for the benefit of our students and our region. It continues our transformation from being our community’s college, a safety school for the place bound, to being a full service, regional university – a place producing a quality educational experience that attracts excellent students from our region and beyond. Each year, we take another step forward in making Purdue Calumet the truly excellent university it has the capacity to become.
‘Culture of Conservation’
As I said earlier, we as a campus were required to reduce our ongoing state appropriation this year. We planned for this by reducing our non-instructional budgets by 4%. We were able to accomplish this without furloughs and with a small reduction in staff positions.
While none of us has a crystal ball, the best economic minds in our nation are suggesting that the recovery from our economic recession will NOT be quick and easy. Closer to home, our local cities and towns are struggling with reduced tax revenues and reduced budgets. Our steel industry is operating well below capacity because it is dependent on the auto industry and consumer goods – not a rosy picture. Many people in our region are in jeopardy of losing their homes and their jobs. In this environment, the wise course of action for Purdue Calumet is to make a commitment to a culture of conservation.
What does that mean?
- First, it means that the state is not likely to be in a position to restore and improve our general fund appropriation for some time. We will be asked to do more with less. But our real challenge will be to do less with less – deciding on what is essential to improve our quality and strategic positioning.
- Second, it means that we must exercise prudence in raising our tuition. A Purdue education is a great value, and we will be expected to keep it that way. Legislative reaction to this year’s increases was quite critical.
- Third, it means that we must be sure that we are using the dollars we have to their best effect. We must look at our spending and reallocate to accomplish our strategic purposes at every opportunity. Life would be easier if we could count on new resources to do new things, but that is not likely to happen.
The good news is that opportunities to conserve funds are all around us.
We have, for example, established a $1 million revolving energy savings fund to improve the efficiency of our heating, air conditioning and lighting. We will begin with our Gyte Building and Student Union & Library, installing variable speed drives and digital controls, more efficient lamps and occupancy sensors. Investments from this fund will be recovered from reductions in our utilities budget and recycled into new projects that will yield new savings.
Technology allowances. We are supporting cell phone usage for many people on campus. While this is an undeniable convenience, we can conserve funds by reimbursing for business calls where appropriate.
Memberships. Collectively we spend more than $100,000 in memberships in a variety of higher education and professional organizations. Some of these are required (Higher Learning Commission), but others might be dropped without seriously undermining our work.
On-demand printing. We have purchased software that permits us to print high-quality brochures in small quantities, as needed. We estimate that will save about $30,000 a year.
On-line publications and newsletters. The campus spends a relatively significant amount of money on printing and postage. Although some printed pieces are important, much of what we print can be published in house and on-line.
Open source software. The world of software has developed to the point that we now have options other than purchasing proprietary software systems with high costs and high maintenance fees. We have started down this path with WordPress to decentralize the management of our web pages. We will continue to look for open source alternatives in order to help keep our technology costs under control.
Target marketing (vs. general advertising). This conservation practice is especially valuable in student recruitment where, with the help of geodemographic consultants, we have been able to identify specific communities and high schools with students who have similar profiles to successful Purdue Calumet students. This permits us to make the most of our staff and our marketing materials.
Merger of Multicultural Campus Council and School of Education Diversity Center. By combining two entities that have overlapping missions, we are saving space, program costs and graduate aid support.
Conservation through student retention
Our biggest opportunities for conservation, however, are to be found in student retention.
Our fall-to-fall retention rate for first-time, full-time, freshmen is about 62%, about 10% below our aspirational peers. Raising that rate to 72% — a reasonable goal for us — would mean, in practical terms, about 100 more full-time beginning students we would not need to recruit each year to replace those lost by attrition. And I am speaking only of beginning students. If we can retain more of our returning students, transfer students and part-time students, the savings will only be greater.
To make this tangible, for every additional 100 students we retain, there are 32 course sections a year that we could redirect or reallocate. That is equivalent to the average load of five faculty members.
Improving student retention is the most important thing we can do to conserve our resources and redirect them to improve the quality of education at Purdue Calumet.
The search for new sources of revenue
In addition to conservation, Purdue Calumet must develop new sources of revenue to supplement state appropriations. We have been making very good progress in this regard, but we will also need to step up the pace.
- The growth of our international student population has been particularly important. We do not receive state funding for international students since they pay full out-of-state tuition. To the extent that we enroll international students above our budgeted targets, we have additional revenue with which to work. Moreover, when we experience reductions in our state appropriations, we do not lose any portion of the tuition paid by non-resident students.
- Our outreach Centers and Institutes bring in significant funds for projects that support faculty salaries, graduate student stipends and new equipment. Many of our undergraduates also are working and learning in these centers. For example, engineering students are learning to do energy audits and meeting their experiential learning requirement through the Center for Energy Efficiency and Reliability. This center manages about $2 million in projects every year. Our Water Institute is managing a contract of about $3.4 million for work provided to BP in addition to $400,000 to $500,000 a year from the Department of Energy. The Center for Science and Technology Education has attracted more than $500,000 in grants; the Institute for Social Policy and Research, more than $800,000; the Center for Mathematics Teaching & Learning, more than $100,000; and our Indiana Center for Evidence Based Nursing Practice, more than $25,000.
- We have a major opportunity to develop new revenue through the expansion of our distance education offerings. Purdue Calumet is partnering with Higher Ed Holdings (HEH) to develop distance education programs in Nursing, Education and possibly Technology. In this partnership, Purdue Calumet converts existing programs that have the capacity to attract substantial numbers of students when offered via distance learning to a software format that is fully supported by HEH. We are responsible for faculty assignments, course content, grading standards and student admissions; in short, we are responsible for program quality. HEH is responsible for helping us convert our courses to their course management system, for supporting the software and hardware required to offer the program, for marketing the program to partner organizations (school districts, health care organizations, government agencies, and so on), and for hiring coaches to work with small groups of students (like TAs or supplemental instructors). Other universities that have worked with HEH have realized significant increases in enrollment and revenue.
These are some examples of new sources of revenue. We also are looking to increase significantly private giving to Purdue Calumet. I am pleased that Dan Hendricks has joined us as Vice Chancellor for Advancement. Dan will work closely with the Academic Deans to identify opportunities for private support and to help the Schools bring in more gifts to support their work.
‘…a good time to grow’
In financially difficult times, we have two options: We can hunker-down, wait it out and assume things will get better, or we can find new ways to accomplish our strategic goals. I prefer the second course. This is a good time to grow. While other universities are cutting budgets, or sitting still, there will be:
- less competition to hire excellent faculty and staff,
- more vendors who are willing to give us favorable consideration in negotiating contracts, and
- very good students who are more likely to come our way.
Key areas for growth
Over the next few years we should be able to grow in a number of areas that can take advantage of current opportunities.
- I have already mentioned our partnership with HEH. The School of Nursing and School of Education have programs that, with proper marketing and pricing, are capable of attracting large numbers of students. This strategy may also work for the Masters in Technology; we are currently exploring that market with HEH. This path is not available for every program. To be profitable for us and for HEH, program enrollments must be in the high hundreds, at a minimum. If we are successful, these programs will develop alternative sources of funds that will ease the pressure for additional state funds for other programs.
- Hospitality and Tourism Management. As our regional and national economies have evolved, hospitality is becoming a significant growth area for jobs. We are fortunate to have a program of high quality with solid connections to the industry. Two areas of growth opportunities for HTM are 2+2 partnerships with culinary schools to create a path for the bachelor’s degree and professional training programs for people in the industry who need continuing education.
- Engineering is another program that has growth potential for Purdue Calumet. Here, too, there is a societal need for more engineers. We are fortunate to be in a region where traditional manufacturing is evolving into advanced manufacturing, and there is a demand for employees with new engineering skills. Purdue Calumet is preparing to meet this need by developing a master’s degree program in Visualization and Simulation. Our students who are developing these skills are already in demand, and with the establishment of the master’s degree program we have the opportunity to be a national leader in this specialty.
- Our campus growth plan also includes athletics. This may seem to be an unlikely time to expand our athletics programs, but it is actually quite important for our growth strategy. Our goal is to add to our intercollegiate athletics program 10 of the least expensive sports over the next several years. This year, we will prepare to introduce teams in men’s and women’s tennis, men’s golf and women’s volleyball during the 2010-11 year. Assistant Vice Chancellor for Health, Recreation and Sports/Athletics Director Bob Bunnell has created an elegant plan that is within our reach.
Why would we do this? First, if we are to become a full-service regional university, we must look like one. Virtually all universities of our size have robust athletics programs. But take this a step further and ask: ‘Why do universities like us have these programs?’ Here is the short answer: Many of the best students in our region have made athletics part of their lives up to and through high school. They wish to continue to do so in college, where the friendships they cultivate are often with other student-athletes.
These students, other than basketball players, rule us out because they are unable to pursue their extra-curricular interests here. We want these students for what they will bring to the classroom and for what they will bring to the life of the campus. They will help make our “vibrant community” more vibrant.
If we can recruit these students, we also can recruit their friends. We want to attract as many of the brightest students in Northwest Indiana as we can. It will make us a richer campus.
These areas are ready for growth.
- They have a market with clear need.
- They are capable of bringing in new revenue.
- They are important to our transformation into a full-service, regional university.
There are certainly other areas of growth that we have yet to identify. If they can meet these criteria, there is plenty of room at the table. As we approach the coming academic year, and as we look into Purdue Calumet’s future, remember the remark of John W. Gardner: “What we have before us are breathtaking opportunities disguised as insoluble problems.”
So, let us be optimistic and realistic as we begin this academic year. We can grow, we can get better, but we must be more attuned to the opportunities to conserve and redirect our resources as we do.
You have all my best wishes for a spectacular year.