Chancellor's Report, March 8, 2006
Chancellor Erroll B. Davis Jr.
Board of Regents Meeting
Thank you, Mr. Chairman. I completed one month on the job on Monday of this week. I still seem to be enjoying a lot of good will. However, I fully appreciate that this will change as soon as I make a decision, but it also may change if I don't make a decision. So, I'm still looking for that inflection point, and I'll draw it out as long as I can.
I'd like today to talk about a number of areas today. I want to offer some general observations after the first month as well as talk about what is going on in the legislative session, particularly with respect to the budget, which is changing as I speak. I have had some campus visits. I want to give you some feedback on that as well as some observations on this meeting and what is coming up.
After the first month, I have learned nothing to suggest that my original assessment of this being a very strong System with many talented and dedicated people is incorrect. That remains the case. We do a good job of highlighting what we do in this System, because we do a lot of great things. However, I believe that we tend to do it from our perspective, and we tend to focus on those things that are important to us. As we start to shape future communications strategies, we will focus on highlighting what we do in terms of the needs of our customers. I use that commercially crass word customers guardedly here, but I do use it as such. One of the things that we are going to move forward on is a communications survey of our customers, constituents, stakeholders – whatever term you would like to use. We want to use that to get a baseline of understanding of how we are viewed in this state, our strong points, our weak points, etc. We believe that we can pull this survey off with minimal cost, and it will give us a good baseline as we start to focus our communications strategies going forward.
I also suggest that there are opportunities to shift our focus from processes to action-oriented results, and I look forward to doing that. I have met with a number of metro-area business leaders. The Governor, as you are aware, has started a customer service initiative that is near and dear to my heart. We will be active participants in that program. The Special Assistant to the Chief Information Officer, Jim Flowers, is coordinating the University System effort. I thank him for his efforts to date, and I would also welcome any comments from any of you about the Governor's program. Mr. Flowers is going to be involved in developing metrics to help us assess how well we serve our customers, and there certainly are many of them. There are students, communities, legislators, local elected officials, members of the K-12 system, the business community, the agricultural community, the healthcare community, and on and on. We touch every aspect of life in this state, and we have to understand how we can do better and how we are perceived in doing what we are doing today. We are committed to the Governor's goal that every state agency will change its organizational culture regarding customer service attitudes and practices. That is easy to say but difficult to pull off, particularly in a large and complex organization such as the University System, but we will prevail.
The legislature, as you are well aware, is in session. The Senior Vice Chancellor for External Activities and Facilities, Thomas E. Daniel, and his team with the support of others from various System institutions are working very hard. There are a number of issues and bills this session that affect the System. I want to highlight very quickly a number of those and the policy implications to us of those bills. The first is the budget. There is a note from me in your notebooks concerning action that was taken in the House on our budget. The Governor was very supportive in his budget recommendations. He recommended full formula funding for us. The House reduced that modestly by $2.5 million targeted in the healthcare area out of an $8.5 million base. Clearly, that is a productivity signal from the House. One thing that did cause us some concern in the House version of the budget was the reduction by $12 million of our major repair and renovation ("MRR") recommendation of $68.2 million. This reduction is on top of a $14 million reduction in the last session. In this regard, we may be challenged. Some things were added. Dollars were added for Fort Valley State University's land grant mission, and there were six minors projects that were funded. The policy implication is a movement away from full funding of our formula for enrollment growth. There is a bill also under consideration to revisit the formula itself. That has not passed, and neither has the budget. This is a long process, and there are a lot of things yet to be done in the budget process.
I also want to mention Senate Bill 562 regarding the establishment of the Georgia Higher Education Facilities Authority ("GHEFA"). The Vice Chancellor for Facilities, Linda M. Daniels, updated you on this yesterday, so I am not going to go into any great detail. The Senate Finance Committee gave a "pass" recommendation, and we certainly thank Senator Daniel J. Weber for his support on that. The policy implication of this bill passing is that it will give us a new funding stream to complement existing General Obligation bonding and public-private ventures. The bottom line is that if this passes, it will strengthen our ability to meet facilities needs.
Senate Bill 473 is known euphemistically as the "10% bill." This bill would guarantee admission to a University System of Georgia institution to the top 10% of every Georgia high school graduating class. This bill has been introduced in both the House and the Senate. The Senate has held two hearings, and the author intends to appoint a study committee. In the House, the bill is still in committee. The policy implications of this bill are quite profound. Institutions like the Georgia Institute of Technology ("GIT") and the University of Georgia ("UGA") could be negatively impacted by a large influx of students. The issue here is the ability to serve these new students and to ensure that the students are in fact prepared to meet the standards of the institution whether they graduated in the top 10% or not. Of course, there are resource allocation issues associated with this. I think it's instructive, however, to look past this bill and start to ask why such a piece of legislation was introduced. It may be the frustration that the legislature is experiencing because its constituents are complaining that their children cannot get into the System's flagship institutions. This is true. Those institutions have a fixed and limited capacity. But it may also relate to the fact that we have not done the job we should in profiling the excellence and quality of other institutions in the System. There are some fabulous institutions in our System other than GIT and UGA. So, we need to do some work in this area, and we will talk with the authors of the bill to understand what motivated them to introduce this legislation.
Senate Bill 506 was introduced to repair a technical need to ensure that student fees for new Georgia Gwinnett College ("GGC") would be covered under the HOPE Scholarship. You acted on the mandatory student fees for GGC at this meeting, which was a necessary step in conjunction with legislation.
Another small but important piece of legislation is House Bill 1294, a funds carry-forward piece of legislation. This would allow the System to carry forward funds. We are doing that now from one fiscal year to the next under present legislation, but that legislation had a sunset of June 2006. This legislation would extend the sunset of legislation from June 2006 to June 2008.
House Bill 1305 relates to seed tech funds. This legislation would add $5 million to an existing $8 million investment that seeds efforts to bring intellectual property out of the laboratory and into the marketplace. The policy implication of that is it would allow us to fulfill our economic development mission more robustly by giving us additional capital to do that. This will also help us encourage more entrepreneurship.
With respect to the fiscal year 2006 amended budget, the legislature tagged our top three capital projects for funding (Georgia College & State University, University of West Georgia, and North Georgia College & State University). The policy implication of that is that the legislature was affirming the Board's priority process for capital outlay in fiscal year 2006. It is not clear whether that will be reaffirmed in the fiscal year 2007 budget. I have had extensive meetings over the last month with the Governor and members of the legislature, and on the whole, they are very supportive of higher education. But, we clearly also have both an opportunity and a real need to strengthen our relationships and to ensure that legislators understand our needs and priorities and to show that we understand that they have an extremely difficult job of trying to balance not only our priorities but the priorities of every other agency and constituency group in this state. Next month, if the process eventuates as it is supposed to, we will approve budgets and address tuition recommendations. We began discussion of the process in yesterday's budget workshop.
I have visited five campuses, and I will complete visits of all 35 institutions by mid-June. These visits have been enjoyable experiences for me. I am seeing a lot of excellence on our campuses. These visits have given me the opportunity to speak not only with presidents, but also their leadership teams, faculty, students, and community leaders. I have had some good private time with presidents. My reactions to date, of course, can only be anecdotal, since I've only visited five institutions thus far. The presidents I have met have been generally upbeat, as were their direct reports. The students are generally happy, but the one theme that has come up a number of times is the quality of advising they are getting. That also has engendered debate about the responsibilities of students to chart their own futures versus being dependent upon others to do it for them. Faculty, predictably, have some very real concerns about institutional missions, compensation, and recruitment.
Let me return to this meeting because what we want to accomplish is to start an evolutionary process to identify how well we serve your needs. You will note from the last presentation that we spent less time trying to dazzle you with what we have accomplished versus teeing up issues upon which you're going to have to make judgments as we go forward in the future. After this meeting, you will receive a very brief survey asking you some questions about your reactions to changes in format and what we were trying to accomplish and whether we did accomplish that. You will receive that survey via email.
What's next? As mentioned, next month is critical as the fiscal year 2007 budget will be made final in the legislature, and we will be meeting with institutions on their allocations. In April, we will bring you fiscal year 2007 budget, tuition, and fee recommendations. I will continue campus visits somewhat more in earnest in anticipation of the legislative session winding down. So, I will be on the road quite a bit more in the coming month. We will also continue our work on two issues that I pulled from this month's agenda – the communications plan and retention, progression, and graduation ("RPG") initiative. I think we need to do some work before we return those initiatives for your review and action, as appropriate. Particularly with the RPG initiative, our goal is to understand what truly moves the needle on retention rates. In general, I don't like blanket programs to send out to every institution because they go out like unfunded mandates. We react badly to unfunded mandates when we receive them here, and I'm sure the presidents would also react negatively, though they might not express it. We need to apply our limited resources where we can get the most impact on retention rates. That may mean focusing on a limited number of institutions and applying more of our managerial interest there instead of sending out blanket programs and blanket requests for data. We also will be conducting presidential evaluations over next month.
The final comment I would like to make is that we are delivering a quality education at an affordable price that makes college very accessible thanks in large part to strong state support. This is a very good thing to be able to deliver a quality product at a low cost to the public. We should be quite proud of this, but it is not a reason to raise tuition. We will be coming to you next month to discuss tuition. Different institutions have differing needs, and we will try to balance the need to provide the requisite amount of resources to our institutions versus the need to keep education accessible. We will need help from our funding partners in that regard, and we will continue to make that point during this legislative session. We are going to sharpen our focus and work to provide the appropriate context within which our presidents can perform. As always, we will strive to maintain open and ethical communications.