Rain out
Q. Who’s On First? A. Yes
I was so confused when I finished reading President Tilghman’s latest exposition of the university’s financial problems (“New Normal” in PAW, June 10) that I went back and read “Who’s On First” to clear my mind. Here’s what confused me about “New Normal”:
1. In it Pres. Tilghman says that “Andrew Golden...advised us that we should be planning for a 30% decrease in the value of the endowment...at the end of our fiscal year...” The Dow Jones Industrial Average for that period will be down less than 30%. If Mr. Golden can’t outperform the Dow why is he still employed?
2. How can Mr. Golden even place a value on the endowment, when more than 40% of it is illiquid and unmarketable (see “Mudville” §4, February, 2008, post)?
3. What, if anything, is being done to reevaluate the degree of risk and illiquidity in the endowment portfolio?
4. In “New Normal” Pres. Tilghman says that there will be a “total reduction in our operating budget of $170 million by academic year 2010-11” and that the university is “aiming to save” $88 million in 2009-10. If these things are done how much will the university actually spend in 2010-11? In 2007-08 the university spent either $1,242,000,000 or $1,050,000,000. The Priorities Committee claims the former amount and the auditors (Deloitte) claim the latter. To compound the confusion, the Priorities Committee and the auditors use different categories of expense in reaching their conflicting totals. In January, 2009, the Priorities Committee projected that actual expenditures in 2008-09 would turn out to be $1,327,000,000, and they proposed a budget for 2009-10 of $1,338,000,000. From which of these amounts does Pres. Tilghman plan to cut $170,000,000? Using the lowest starting point ($1,050,000,000) the university will spend $880,000,000 in 2010-11. Using the highest starting point ($1,338,000,000) the university will spend $1,168,000,000. If it is the former, the plan is meaningful (average annual reductions of 8%). If it is the latter, the plan is pathetic (average annual increases of 5.5%). Is it too much to ask that someone in the administration simply say, straight out: “In 2010-11 the university will spend the following amount” (and fill in the blank)?
5. Pres. Tilghman says that “many” have proposed savings ideas, such as canceling a staff picnic, eliminating paper copies of faculty minutes, etc. This is juvenile. The job needs a sharp knife and a heavy hand, not a suggestion box.
6. Pres. Tilghman says that the university’s “entrepreneurial scientists and engineers” (a term too comical for comment) are “aggressively pursuing federal stimulus funds.” This is an irresponsible cop-out. The university needs to put our house in order, by itself. It should be decreasing, not increasing, its already massive dependence on the federal government.
7. Pres. Tilghman says that the university has a “multi-faceted energy strategy” that will save $8.5 million per year. What is it? Just colder dorm rooms, or are there capital costs? If so, how much is it going to cost?
For 14 years university officials told me that tuition could not be eliminated because the endowment had to be saved for a rainy day. Then it began to rain. Despite clear warning (again, “Mudville” §4), Mr. Golden, the President, and the trustees refused to put the tarp on the field, and the endowment was washed away. During those 14 years many families endured hardships to pay tuition that wasn’t needed—all their sacrifice washed away in an instantaneous marnerian retribution. And the picnic is canceled.
I was so confused when I finished reading President Tilghman’s latest exposition of the university’s financial problems (“New Normal” in PAW, June 10) that I went back and read “Who’s On First” to clear my mind. Here’s what confused me about “New Normal”:
1. In it Pres. Tilghman says that “Andrew Golden...advised us that we should be planning for a 30% decrease in the value of the endowment...at the end of our fiscal year...” The Dow Jones Industrial Average for that period will be down less than 30%. If Mr. Golden can’t outperform the Dow why is he still employed?
2. How can Mr. Golden even place a value on the endowment, when more than 40% of it is illiquid and unmarketable (see “Mudville” §4, February, 2008, post)?
3. What, if anything, is being done to reevaluate the degree of risk and illiquidity in the endowment portfolio?
4. In “New Normal” Pres. Tilghman says that there will be a “total reduction in our operating budget of $170 million by academic year 2010-11” and that the university is “aiming to save” $88 million in 2009-10. If these things are done how much will the university actually spend in 2010-11? In 2007-08 the university spent either $1,242,000,000 or $1,050,000,000. The Priorities Committee claims the former amount and the auditors (Deloitte) claim the latter. To compound the confusion, the Priorities Committee and the auditors use different categories of expense in reaching their conflicting totals. In January, 2009, the Priorities Committee projected that actual expenditures in 2008-09 would turn out to be $1,327,000,000, and they proposed a budget for 2009-10 of $1,338,000,000. From which of these amounts does Pres. Tilghman plan to cut $170,000,000? Using the lowest starting point ($1,050,000,000) the university will spend $880,000,000 in 2010-11. Using the highest starting point ($1,338,000,000) the university will spend $1,168,000,000. If it is the former, the plan is meaningful (average annual reductions of 8%). If it is the latter, the plan is pathetic (average annual increases of 5.5%). Is it too much to ask that someone in the administration simply say, straight out: “In 2010-11 the university will spend the following amount” (and fill in the blank)?
5. Pres. Tilghman says that “many” have proposed savings ideas, such as canceling a staff picnic, eliminating paper copies of faculty minutes, etc. This is juvenile. The job needs a sharp knife and a heavy hand, not a suggestion box.
6. Pres. Tilghman says that the university’s “entrepreneurial scientists and engineers” (a term too comical for comment) are “aggressively pursuing federal stimulus funds.” This is an irresponsible cop-out. The university needs to put our house in order, by itself. It should be decreasing, not increasing, its already massive dependence on the federal government.
7. Pres. Tilghman says that the university has a “multi-faceted energy strategy” that will save $8.5 million per year. What is it? Just colder dorm rooms, or are there capital costs? If so, how much is it going to cost?
For 14 years university officials told me that tuition could not be eliminated because the endowment had to be saved for a rainy day. Then it began to rain. Despite clear warning (again, “Mudville” §4), Mr. Golden, the President, and the trustees refused to put the tarp on the field, and the endowment was washed away. During those 14 years many families endured hardships to pay tuition that wasn’t needed—all their sacrifice washed away in an instantaneous marnerian retribution. And the picnic is canceled.
posted by mcd at 8:43 AM
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