Letter to the Community

February 1, 2000
TO: The University Community
FROM: Philip E. Austin

As we begin a new semester let me welcome everyone back after what I hope was a happy and productive semester break. The University of Connecticut, like most of the rest of the world, weathered the Y2K transition with no significant difficulties, and I would like to thank UConn's Y2K team for their leadership and hard work in helping us meet this challenge.

I want to discuss here a number of other challenges that face the University this year, update you on our progress in meeting them, and outline what I think are the tasks that lie ahead. At the risk of oversimplification, let me say that while the issues discussed below are diverse there are two common denominators. One is that they are in large part a byproduct of our recent advances and, vexing though they might be, they represent the kinds of problems universities want to have. The second is that many of the challenges before us, especially at the University of Connecticut Health Center, result from external economic pressures that confront all major institutions and from which universities are not immune.

I. The University Health Center

The University of Connecticut Health Center is an extraordinary asset not only of the University of Connecticut, but of the State as a whole. Testifying before the General Assembly Committee on Public Health in November, I outlined a few data points that illustrate the scope of the Health Center's contribution:

• More than 700 School of Medicine graduates are practicing in Connecticut, in virtually every city and town in the State, and our graduates serve on the medical staff of every Connecticut hospital. About 55% of dentists now practicing in Connecticut graduated from our School of Dental Medicine.
• Physicians practicing at the Health Center through the University Medical Group see more than 60,000 patients every year.
• In the area of research, scholarship and contribution to economic development, the Health Center's federal research grants (more than $35 million in 1998-99 and significantly higher this year) represent a significant proportion of federal research and development funds that come to the State of Connecticut. The Health Center annually generates another $14.5 million in foundation and other research funding.

I reiterated many of those points before the General Assembly's Education Committee on January 26. The quality of research, instruction and patient care at the Health Center and its primary clinical facility, John Dempsey Hospital, are beyond dispute.

Like academic health centers and hospitals across the nation, however, our Health Center and specifically the Hospital are facing severe financial challenges that must be met if we are to assure the continued excellence of our program. The reasons are technical and complex, but essentially stem from policy decisions made at the national level to reduce expenditures for health care in the United States. Reductions in federal reimbursement for treatment of patients covered by Medicare, combined with the ongoing incursion of managed care into Connecticut, led to severe financial shortfalls, totaling approximately $21 million this year. It is cold comfort to report that our own deficit is dwarfed by shortfalls at other academic health centers: for example, the University of Pennsylvania's health center lost more than $100 million last year. I want to make it clear that our problems do not stem from inefficiency or waste: last year John Dempsey Hospital was recognized by the Connecticut Office of Health Care Access as the most cost- effective hospital in the State of Connecticut.

In the past, surpluses generated by the Hospital and the faculty practice at the Health Center contributed financially to the academic enterprise. Under the current situation, those contributions can no longer be made, placing the teaching and research enterprise in jeopardy.

The leadership at the Health Center is responding to this challenge in a prudent, responsible, but forceful manner, guided by an overriding commitment to maintain the integrity of our teaching, research and clinical programs. This fall we began to implement reductions in force, salary curtailments, operational efficiencies and revenue enhancements that will cut into the deficit by over $12 million in this fiscal year. We are looking closely at options for focusing our clinical services on specific areas and exploring other measures to enhance revenues. To meet needs for the current year we have put forward a request for an additional $12.4 million in State support for operations, as well as continued support for our Research Strategic Plan. We believe this request to be justified on the basis of the Health Center's vital contribution to the health, education and economic development of the State of Connecticut.

Over the past several months the University has made every effort to work with the Governor and his administration to develop a clear plan of action for the future of John Dempsey Hospital. We are absolutely and irrevocably committed to keeping the Hospital open. Within that constraint, the Health Center is willing to pursue a range of organizational options that will work to the benefit of the State as a whole and the greater Hartford area in particular. We had hoped that the State, and particularly OHCA, would help in the development of a program that would meet our key objectives. To that end we participated in a process of discussion and analysis that we expected would lay the foundation for a workable proposal.

I must tell you that we have been extremely disappointed with the outcome of this process. Commissioner Raymond Gorman produced a report filled with unsubstantiated allegations and devoid of real analysis; evidence we presented that clearly documents the Hospital's vital role in the education process was virtually ignored. Preempting the University from engaging in discussions with other area hospitals that would lead to an alliance of providers, OHCA has positioned itself as an obstacle rather than an impartial convener and seems to be operating from a predetermined commitment to John Dempsey Hospital's ultimate closure. OHCA even conveyed the conclusions of its highly negative draft report to the Hartford Courant several days before we were to have provided our comments. Not surprisingly, given the complexity of the issues involved, the resulting newspaper stories created a false impression of a hospital in deep distress. We are working vigorously to reverse that impression. The irony that a facility like John Dempsey Hospital, one of Connecticut's jewels, finds itself under attack from a State agency (particularly the agency that last year declared it the most cost-effective hospital in the State) is not lost on any of us.

We have been greatly heartened in recent days by statements of support from the Governor and the leadership and key committees of the General Assembly. I am optimistic that we will secure funding to meet our immediate needs as we continue to implement internal steps geared to bringing our budget into balance by 2001-2002.

It is equally important that there be no ambiguity as to the State's commitment to John Dempsey Hospital's long-term future. That commitment is vital to our ability to maintain our patient base and to continue to attract and retain outstanding faculty and students and I am confident that it will be forthcoming. I appreciate the dedication of our professional and support staff in this difficult period, and I expect that as we convey our message to a wider public and legislative audience we will continue to meet with a favorable response.

II. Meeting Enrollment Challenges

Over the past two years the University has experienced a 32% increase in the size of the freshman class, coupled with an increase in academic strength (as measured by SAT scores and other indicators) and diversity. This is probably the best single indicator of our overall success. (It is, in fact, a more accurate indicator than the climb in our U.S. News and World Report ranking, though I must say that the higher we rise in U.S. News - to our current status as the top-ranked public university in New England - the more I see the wisdom of their methodology.) What is particularly heartening is not just the rise in applications from strong students of diverse backgrounds, but a significant increase in the proportion of students we accept who then opt to come to UConn in preference to other schools which offered them admission. We are well on our way to becoming Connecticut's school of choice for its most achievement-oriented young people.

The ultimate result this fall was a freshman class of more than 2,900 students in Storrs and 3,600 University-wide. These numbers, coupled with the need to renovate several residence halls, created serious stress in our housing operation and imposed challenges in terms of class scheduling. Working hard and fast we met housing demand through a variety of acceptable though suboptimal mechanisms, including conversion of study lounge space into student rooms and some tripling of students in rooms meant for two. We also worked creatively to meet the need to offer sufficient class sections.

Enrollment growth is an important objective academically, economically, and politically. In July 1998 I outlined for the Board of Trustees an enrollment projection of 18,000 students in Storrs by 2003, a figure I believe is necessary to support a curriculum range appropriate to a Research I university. It will promote efficient utilization of resources, help us enhance diversity, and enable us to meet our commitments to the State of Connecticut. The Storrs enrollment should not grow larger than about 18,000; were it to do so, the impersonality found at some of the major public universities in the United States would become a fact of life here. But we can and should grow beyond the current 15,000-16,000 Storrs undergraduate and graduate population range.

If we are going to meet this goal we need to build more student housing and make the quality of what we have competitive with other universities. Unlike many other college towns Storrs has a minimal private student-housing market, and as a result 69% of our undergraduates live in University facilities. If we do not build more housing, potential students will simply choose to go elsewhere.

UCONN 2000 is helping us enormously improve both the quality and, ultimately, the quantity of student housing. Renovations in Northwest are scheduled for completion by Fall 2000, and our plan is to reopen that facility as a predominantly freshman area with intensive first-year experience programming. Towers and North are next on the list for extensive renovation. The new South Campus complex is one of the finest student housing facilities in the country and will help us at tract excellent students. But there was a tradeoff involved in building South Campus: the dilapidated units that were torn down housed 1,482 students and the new complex has room for approximately 675.

In the next few months we expect to begin construction of two new residence hall buildings in the Hilltop area, scheduled for completion by Fall 2001, which will house 400-450 undergraduates in 2-bedroom, 4-person suites. But an additional challenge, driven by the student market, is to offer other housing options that offer positive living and learning environments and that meet the desire for juniors, seniors and graduate students to live in independent/apartment style housing.

A key step will be the construction of apartments for up to 1,000 students in the vicinity of the Hilltop area and the University's athletic fields. This is a desirable location because it is close enough to the center of campus for students to walk to class and retain a strong linkage to the UConn community. Our plans call for the apartments to be constructed and managed by a private developer (Capstone Development Company, one of the nation's major builders of student housing) on land belonging to UConn. Students living in the apartments will fall under all relevant University policies and requirements, including the Student Code of Conduct, and management will be regulated by the terms of an agreement negotiated between the developer and the University.

In the past six months we have completed design work, conducted environmental assessments and obtained required State approval, and held several meetings with Mansfield officials and local residents to address concerns related to traffic, lighting, and other issues. I was gratified that our outreach efforts met with a favorable response, including a resolution of appreciation from the Mansfield Town Council.

In the most optimistic scenario, we hoped to complete construction of the first phase of the project, housing 434 students, primarily juniors and seniors, by September 2000. Complications related to financing an effort that is new in concept to New England (though not to much of the rest of the nation) led us to set the projected opening date at the beginning of the following academic year. We now expect the full, 900-1,000 student project to be on-line by September 2001.

We had already decided to hold September 2000 freshman enrollment in Storrs at the same level as September 1999, though as the freshman cohorts of 1999 and 1998 work their way through the system, aggregate undergraduate enrollment will grow. To some extent this will alleviate in the short term the difficulty of assuring that all students, and particularly all freshmen, can register for a full and appropriate schedule of classes. Nevertheless, we need to look very closely at scheduling and other curricular issues as we prepare to accommodate a larger student population, and will proceed to do so in conjunction with the University Senate.

III. A New Hotel and a New Football Stadium

The common element in UConn's transformation continues to be movement toward the front ranks of public higher education in the United States. While the key elements naturally focus on our academic and research program, progress in other areas is also vital to our success. Two new projects fit into this context: building a hotel in Storrs, and construction of a stadium that will allow UConn to play Division I-A football.

The need for a hotel/conference center is clear. Without such a facility we cannot adequately serve alumni, parents, and visitors from out of state or even from significant distances within Connecticut, and it is difficult to host speakers, visiting faculty, or candidates for faculty and staff positions. Moreover, the absence of adequate facilities stands as a major obstacle to hosting large academic conferences, and this limits our ability to raise the University's profile in national circles. I believe that we are the only major university in the country that does not have a hotel/conference center on or adjacent to campus. This is not among the distinctions I cherish.

About two years ago we commissioned the Landauer Hospitality Group to do a feasibility study, which documented a market for a hotel/conference center and recommended a site near the Commons at South Campus, which itself offers large and attractive meeting rooms. We have entered into an agreement with Robert B. Friedman, in partnership with MeriStar Hotels & Resorts, Inc., to construct and manage a 110-bed facility, and on January 11 the Board of Trustees authorized the University to enter into a land lease. Construction will begin shortly on a 2-acre site adjacent to the Commons, and our anticipated opening date is December 2001. The hotel/conference center will be operated as a public-private partnership between the University and the developer-managers.

The advance of UConn's football program to Division I-A has been a longstanding goal not only for the University, but also for the State of Connecticut. The University of Connecticut's stature depends on the quality of its teaching and scholarship, the ability to attract good students and recruit outstanding faculty, and its capacity to conduct excellent applied and basic research. The contribution of a strong athletics program to the attainment of our academic objectives is indirect but indisputable. As other major universities have long realized, and as we learned at UConn through the 1990s'as women's and men's basketball put the University of Connecticut on the pages of every newspaper in the country - a strong presence at the top levels of intercollegiate sports helps immeasurably in raising private donations and State support, increases application rates, and creates a climate for success in the academic program. That holds as true for foot ball as it does for basketball.

The State legislature has repeatedly approved funds for the construction of a new stadium, which would enable us to join the Big East Football Conference and compete at Division I-A level. This issue has taken a complex course. With the Governor's recent decision that the stadium site be moved from Hartford to East Hartford, the legislature will now need to modify the existing legislation to permit construction of an open-air stadium on the East Hartford site. We expect that the General Assembly will follow up on their commitment in this year's session, allowing us to begin stadium construction shortly and complete work in time for the Fall 2003 season. The location of the stadium is an issue of less importance than the fact of its construction. The typical model is for a football stadium to be built on campus, but the Governor's recommendation for an East Hartford location meets our football program's needs and has our support.

As I have since the football issue first arose, I want to emphasize that my support for an upgrade to Division I-A status carries with it the commitment that the upgrade does not entail a diversion of funds from the University's academic program. Resources will be provided from other sources; last month we announced Robert Burton's $1 million gift for football scholarships and other support will be forthcoming. Indeed, our athletics program as a whole is rapidly moving to self-supporting status and I believe that over time a successful Division I-A football program will ultimately help to strengthen the University's overall funding base. In the shorter term, Division I-A football will help the University in the equally important but less tangible areas of enhancing public visibility and Statewide interest and support.

IV. Expanding our Technology Infrastructure

By the time this letter reaches the University community, we will have connected every student in every Storrs residence hall to UConn's educational television system. This is an important step forward for our academic program and moves us closer to our goal of being one of the nation's leaders in educational technology. The development and implementation of our integrated voice, video and data network has been guided by a commitment to provide residential students with the highest quality educational technology at the lowest possible price.

The move was a long time coming and we have encountered some difficulties along the way. On June 25, 1999, with strong support from students, the Board of Trustees approved a $125 per semester residence hall fee increase to take effect in September 2000. Revenues generated by that fee will support the delivery of an integrated voice, video and data network to all residence halls, enabling the University to use state-of-the art technology to integrate academic programs with residential life by bringing educational information and services to students in their rooms through computer as well as video programming. This is a national trend and will be the norm at residential colleges and universities throughout the United States. To assure a smooth transition, we decided to offer a full range of services this year (although the fee will not be assessed until September 2000), including telephone and computer access along with our own "HUSKYvision" video delivery system.

We connected residence halls in the core of campus and began offering HUSKYvision there in September. Delivering HUSKYvision to the 2,000 rooms located in residence halls across North Eagleville Road and Route 195 presented complex legal and regulatory obstacles. Charter Communications, the commercial provider that had been the exclusive provider of cable service for the Storrs campus, initiated a legal challenge before the Department of Public Utility Control to the University's plan to provide HUSKYvision service to our students. While we contend that this challenge is without legal merit, we nevertheless entered into negotiations with Charter aimed at achieving a mutually acceptable agreement through which Charter would sell some programming to the University but recognize our right to determine how video programming is delivered to students over the University's network.

During the semester break the University utilized available technology to connect all residence halls to our cable system through legally appropriate alternative means. We were not, however, able to meet several of Charter's demands. Negotiations came to an end shortly after New Year's Day and Charter filed suit against the University seeking to enjoin us from continuing to operate the HUSKYvision system.

Charter's suit is without merit. Attorney General Richard Blumenthal's office will defend the University in litigation; as the Attorney General said in a statement issued on January 14: "This lawsuit is clearly unfounded, and we will vigorously oppose it. Charter Communications is a private cable franchise with absolutely no right to control public property that belongs rightfully to the State and its University. The lawsuit is a blatant attempt by Charter to enrich itself at the expense of public education and the University of Connecticut's students." I will keep you informed of subsequent developments.

V. Key Budget and Program Issues: Storrs and the Regional Campuses

The current operating budget for all units of the University of Connecticut exclusive of the Health Center is $514.5 million. Over the past three years that budget has grown from approximately $432 million, and our State resources are of course supplemented by grant and contract revenues and an increasing level of private support. The budget is certainly not sufficient to meet all our aspirations, but it does allow the University to continue on a generally positive trajectory.

As most faculty and staff are aware, the University encountered a set of operational difficulties this year that required a reallocation of about $2 million to ensure a balanced budget this year and to avoid a potential problem of approximately $4 million next year. The funds in question totaled less than 1% of our total operating budget. The reallocation produced difficulties of which I am fully aware. It is important to understand how these difficulties arose and what we are doing to prevent their recurrence.

UConn's transformation is largely the product of a set of strategic initiatives, many of which were developed as part of an exhaustive planning process in which many faculty and students were involved. Some have been completed; others are in various stages of planning and implementation. Last spring we committed funds to several initiatives, in part in an overly-optimistic anticipation of State funding and in part based on the assumption of a more rapid reallocation of existing resources than was in fact undertaken. The upshot was an imbalance of $4 million on an annualized basis.

Interim Chancellor Fred Maryanski developed an effective short- and medium-term plan to deal with the situation:

• We delayed refilling vacant positions, looking closely at each opening, determining which ones relate to our strategic objectives and operating needs.
• The Chancellor solicited recommendations from faculty, staff and others for cost savings and revenue enhancements. These were collated and referred to focus groups for evaluation in terms of merit and to administrative and budget staff for assessment in terms of actual funds saved or generated. In addition, we continued to look closely at the recommendations included in the PricewaterhouseCoopers analysis undertaken a year ago.
• We continue to enhance external fundraising, with significant success.

The University's Storrs-based programs did not, do not, and will not have an operating budget deficit. Had we not taken the actions outlined here we would have had one. The steps we took and those that will be implemented in the coming months will enable us to keep the budget in balance.

Nevertheless, this year's difficulties indicated a need to modify our administrative structure. My goal is to assure more effective coordination of all aspects of the budget and to promote closer linkages between the fiscal operations of the Storrs-based programs and the University of Connecticut Health Center. Accordingly, in September I proposed to the Board of Trustees that we redesignate the position of Vice President for Business Affairs and Finance as the Vice President for Financial Planning and Management. Working closely with the Chancellors in Storrs and at the Health Center, this Vice President will have clear authority for operating and capital budget development and implementation.

Following Wilbur Jones' retirement last month, Lorraine Aronson assumed the vice presidency. An attorney, Ms. Aronson came to the University in 1995, serving as Special Assistant to the Chancellor for three years and then as Associate Vice President for Institutional Advancement. Among her many assignments, she has played a leadership role in UCONN 2000 and Master Plan implementation and in budget development and oversight. Prior to her service at the University, Ms. Aronson served in Connecticut State government as Deputy Commissioner of Education, Commissioner of the Department of Income Maintenance, and Deputy Secretary in the Office of Policy and Management in two gubernatorial administrations. I am delighted that the University will have the benefit of Lori Aronson's guidance as we work to meet budgetary challenges both in the Storrs-based programs and at the Health Center.

Let me turn briefly to another area of concern. The regional campuses continue to be an important part of the University and our progress in building new facilities at Stamford and more recently Avery Point is a key element in our overall progress. In the past several months much attention has focused on Waterbury, where the local business and political leadership has advocated forcefully for a new downtown campus and for the implementation of undergraduate programs in business. I naturally welcome the support for the University implicit in this campaign, and I share their view that UConn has a strong role to play in economic development across the State.

We have made it clear that we cannot divert UCONN 2000 funds to construct a new Waterbury campus. If the State provides additional, non-UCONN 2000 capital dollars, however, we will move to a new Waterbury location and, with additional State operating funds, we are prepared to offer expanded academic programs there. We have long accepted the value of curricular enhancement at Waterbury; the primary obstacle has been delay stemming from the Connecticut Department of Higher Education's protracted discussion of this issue. Responding to our ongoing requests, DHE has now agreed to act favorably on UConn proposals to implement various bachelor's and master's degree programs in Waterbury, including undergraduate business programs. We will continue to work closely with the University Senate and other key internal constituencies, along with the Waterbury leadership, in implementing a building and curricular program that clearly reflects our academic goals and economic resources.

Final Thoughts

I am now in the middle of my fourth year at the University of Connecticut. While I am pleased with our continuing progress, I must say that this is a challenging period. Transition in any large institution can be a difficult process. Here in the "land of steady habits" change seems to come particularly hard, and each major advance brings with it a full complement of short-term obstacles.

Nevertheless it is important to remember that so many positive developments that were thought impossible just a few years ago have become realities virtually before our eyes. By now the South Campus complex, the Chemistry Building, and the downtown Stamford campus are old news. The long-awaited Agriculture-Biotechnology building is near completion, and new buildings for the Schools of Business and Pharmacy are underway. Our achievements go far beyond the construction of new facilities. To cite just a few highlights:

• Last year's $23 million gift from Ray and Carole Neag, the largest to any public university in New England, is helping propel our School of Education to national leadership and is making an important contribution to the Health Center.
• The multi-faceted and long-term partnership between UConn and the African National Congress broadens our capacity to serve as an intellectual center for the study of human rights and enhances the University's commitment to international programs.
• The work of UConn scientists in cloning technology, led by Professor Jerry Yang, has attracted attention from around the world.
• Our endowment, just $50 million in 1995, now exceeds $200 million.

Indeed, last year's NCAA men's basketball championship, a triumph on its own terms, serves as a metaphor for what the University as a whole is capable of achieving.

We are, of course, building on a foundation created over many decades. In recent weeks the UConn community had cause to reflect on the strength of that foundation as we mourned the passing of two outstanding scholars, each of whom played a critical role in building the University of Connecticut's national reputation. Everett Carll Ladd, Jr., one of the foremost political scientists in the United States and an internationally recognized leader in public opinion research, was on the faculty of the Political Science Department since 1964, was the founding director of the Institute of Social Inquiry here at the University, and served for many years as Executive Director of the Roper Center, the world's largest archive of public opinion voting data. His last published work identified and extolled the extent to which the American public voluntarily contributes its time and money for good causes; following his death in December, the Wall Street Journal noted how fitting it was that "one of his very last gifts (was) a celebration of the American spirit of generosity," in keeping with the great intellectual generosity he displayed over the course of his career.

Professor of Psychology Emeritus Alvin M. Liberman, who passed away earlier this month, was similarly an internationally recognized scholar who brought great distinction to his department and to the University as a whole. A member of our faculty since 1949, Dr. Liberman made seminal contributions to research on speech and reading and the psychology of language; his empirical theoretical work has had wide-ranging practical applications. He was for many years the sole University of Connecticut faculty member honored by membership in the National Academy of Sciences; his many other distinctions included an honorary doctorate from Universite Libre de Bruxellex, a Distinguished Research Award and a Distinguished Alumni Professorship from the University of Connecticut. In 1997 the Trustees presented him with an honorary doctorate. He will be deeply missed by his intellectual colleagues across the nation, and by his many colleagues and friends here at UConn.

These two outstanding members of our faculty were, and are, emblematic of the men and women who built one of the nation's great universities over the course of many decades. We are continuing that work. However difficult the process may be, it is worth remembering that we are striving to fulfill the vital mission of teaching, scholarship, and service that has characterized the University of Connecticut for more than a century. Signs of our continuing progress are all around us, and I am eager to work with each of you as we continue UConn's movement to the front ranks of public higher education in the United States.

cc: Board of Trustees