Faculty Senate minutes - June 1, 2006 meeting
At its meeting on Thursday, June 1, 2006, the Thirty-eighth Senate of the Academic Council heard reports and took the following actions:
The Thirty-eighth Senate, by unanimous voice vote, approved the recommendation from the Committee on Graduate Studies to authorize the Master of Science degree in Human Genetics without limit of time..
EDWARD D. HARRISAcademic Secretary to the UniversityMinutes, JUNE 1I. Call to OrderSenD#5856
Chairman Roberts, looking presidential, gaveled the group to order. "I'd like to call to order this penultimate meeting for this Senate. There's just the one left. It's getting exciting to be down to the wire. But the down side of that is that all the spring quarter busyness is, I'm sure, keeping all of us busy and perhaps some of our colleagues away.
II. Approval of Minutes of April 20, 2006 (SenD#5850)No additions or corrections were suggested, and these were approved unanimously.
III. Action CalendarThis was empty today
IV. Standing ReportsA. Memorial Statement - George B. Dantzig (1914-2005) SenD#5851 The Chair introduced this. "The first standing report is a memorial statement for George Dantzig. I'd like to welcome Dick Cottle, Professor of Operations Research, to give his statement on George B. Dantzig, the C.A. Criley Professor of Transportation Science and Professor of Operations Research and Computer Science, emeritus. The full text of the resolution was included in the Senate packets and will be published in the Stanford Report in its June 7th issue.
Professor Cottle began. George Bernard Dantzig, the C.A. Criley professor of transportation sciences and professor of operations research and of computer science, emeritus, died at his home on May 13, 2005, at age 90. Long known as the father of linear programming and inventor of the simplex method, George Dantzig came to Stanford in 1966, having spent the preceding six years at U.C. Berkeley. At Stanford, he devoted himself to teaching and a broad program of research in optimization, of which linear programming is a part. In 1973, he spearheaded the founding of the Systems Optimization Laboratory. Retiring in 1985, he was recalled to duty for many years and remained active until 1996. George Dantzig's many honors include membership in the National Academy of Sciences, the National Academy of Engineering, the American Academy of Arts and Sciences, eight honorary doctorates, and the National Medal of Science. He supervised the dissertation of more than 40 doctoral students at Stanford. George Dantzig was greatly admired by students and colleagues around the world as a brilliant researcher and a warm and generous disposition.
Mr. Chairman, I have the honor on behalf of a committee consisting of B. Curtis Eaves, Michael A. Saunders, and myself, to lay before the Senate of the Academic Council a resolution in memory of the late George Bernard Dantzig, the C.A. Criley professor of transportation sciences and professor of operations research and of computer science, emeritus, in the School of Engineering.
Chairman Roberts thanked Professor Cottle, and the Senate stood for the traditional moment of silence.
B. Steering Committee
Because of an increased number of small items coming to the Steering Committee, Roberts announced that there would be an Administrative Session on June 15th at which the Steering Committee can vote up or vote down the presented items. All of the Senate is invited to these; rarely do any appear.
"That,"said chairman Roberts, "is also our final meeting. And at the regular session, we'll be hearing from the Emeriti Council, a report given by David Abernethy, and he'll talk about the emeriti. We also have on the docket a Committee on Graduates Studies recommendation on graduate student diversity within the university. We've also changed the agenda from what was reported last time because of a suggestion and discussion that I had with the President following the last meeting. The President has now asked whether there could be a short Executive Session after our agenda, which, as I told you, we're keeping quite light. John Hennessy will, at that Executive Session, give a report on the Capital Campaign, partly because if we wait until the fall, most of those ideas and the components of that plan will be set in concrete. We can have a back and forth dialogue while there's still some flexibility.
"It's also the case that at that meeting we will have members of both this Senate and the incoming Senate 39. It will be a wonderful opportunity to give the new senators a chance to see some of those high-level issues within the University. So I hope that everyone can attend that meeting.
"That will also be a relatively short executive session, and we will adjourn to go over to the annual reception for both Senates at the Gold Room at the Faculty Club. It will also be attended by the Board of Trustees."
C. Committee on Committees
Sheri Sheppard, chair of CoC and the incoming chair of Senate 39 said that she had "two quick items. The CoC for next year's Senate 39 has been chosen and will be announced to the Senate 38 before the next meeting. We had our final meeting on Tuesday, our tastiest meeting yet. Ted is a great breakfast cook. So thank you, Ted!"The Academic Secretary accepted a virtual standing ovation, particularly for his attempt at a cheese grits soufflé.
D. Provost and President
President Hennessy had no report and no questions were asked of him. Provost Etchemendy, saving his breath for his budget report, had no report. When the Senate was asked for questions and comments, there was silence. The Provost
broke the quiet with the statement, "No one asked why I am in this seat?"He was referring to his change of location, several seats away from his alphabetically determined place."No one had an answer, although the Academic Secretary knew what it was. The Provost finally said what the truth was not. "So I can keep my eye on Bruce Wooley!"Bruce promised to stay awake during the budget presentation.
V. Other ReportsA. Committee on Graduate Studies: Recommendation for a new degree program in Human Genetics - (SenD#5840)
Chairman Roberts said, "We have first, from the Committee on Graduate Studies, a proposal for a new degree program in human genetics. I'd like to welcome Professor Sylvia Yanagisako, who's chair of the Committee on Graduate Studies. She will present her committee's recommendation for degree-nominating authority for a new master's program in Human Genetics without limit of time. The documents for this item were included in your packets and they are SenD#5840. There are a number of other guests here for the report. We have the director of the program, Louanne Hudgins, Professor of Pediatrics and Genetics, and Ellen Porzig, dean of Graduate Education in the medical school, Dean Pizzo of the School of Medicine."
Professor Yanigasako, who has presented to the Senate often this year, began. "On behalf of the Committee on Graduate Studies, I'm pleased to recommend the creation of a masters degree program in Human Genetics in the School of Medicine. This will be housed in the Department of Genetics. Although it's a departmental degree program, it will draw on faculty from a range of other departments in the School of Medicine, including Pediatrics and Pathology.
"C-GS is enthusiastic in its support of this program that will fulfill the need for genetic counselors, particularly in Northern California, where there are currently no degree-granting programs that are accredited by the American Board of Genetic Counseling. I might add by way of a brief explanation that genetic counselors are health professionals who work as members of health care teams to provide information and support to families who have members with defects or genetic disorders, and to families who may be at risk for a variety of inherited conditions.
"The graduates in this program will receive an M.S. in human genetics. However, after they pass the exam of the American Board of Genetic Counseling, they will be certified genetic counselors.
"The anticipated enrollment in this program is six students per year. And since only one additional faculty member will need to be recruited, the program will not have a significant impact on the University's growth. So, the Committee on Graduate Studies recommends the approval of the degree program in Human Genetics effective September 1, 2006, to exist without limit of time within the Department of Genetics in the School of Medicine, and with the authority to nominate candidates for the Master of Science degree in Human Genetics."
Professor Hudgins, the director, had nothing to add. Professor Porzig said, … "I will only add to that by thanking Ellen Porzig for her help as well. And this was really a very collaborative process. And we are very appreciative to the committee for this decision and recommendation."Dean Pizzo added a bouquet of thanks for Professor Porzig.
Chairman Roberts reflected upon the comments and the request. "It was so interesting, I should say, when we heard about this before the Steering Committee, I learned about new fields that I did know existed. I hadn't thought much about genetic counseling or how it differs from other forms of counseling. One of the things that came up in our discussion was …""You don't lie down for this!"said Dean Pizzo. Roberts, trying to make his point, continued. "But also, it's not an ongoing counseling relationship for most cases, because it's not the sort of thing that changes over time. These are not often more than one time consultations. That's one of the great things about being on the Steering Committee or other University committees. We hear about all these different intellectual questions that come up in different parts of the University."
There were no questions or comments about this recommendation, and it was a unanimous approval by the Senate that "The Senate approves the recommendation from the Committee on Graduate Studies to authorize the Master of Science degree in Human Genetics without limit of time."There was no opposition and the recommendation was approved.
B. Provost's Budget Report for 2006-2007 (SenD#5731)
Chairman Roberts moved on to serve the main course of this Senate meeting. "We now move to the annual presentation by the Provost of the budget. As most of you have heard me say in the past, this is one of the most exciting events. It is good to hear John read the budget book! But, of course, if he were reading the phone book to us it would be exciting as well. I walk away from these meetings knowing that I understand something much more in-depth about the budget than I would have otherwise."
Provost Etchemendy demurred. "I hate people saying nice things at the beginning, because you set expectations way too high."He had little reason to apologize this year, however. "This year,"he began, "was a pretty good year. And consequently, in some ways, it's relatively boring. We did not have a huge number of challenges, although we did have the usual ones, such as the one that I detailed at a recent Senate meeting: the imbalance in the rates of growth of restricted and designated funds and the growth in the General Funds that must support the infrastructure to maintain those activities funded by restricted funds. A second challenge I'll get to is a general worry about research funding at the University. And a third challenge, always present, is that we had twice as many requests as we had General Funds to satisfy them. This is a healthy challenge because it shows that the schools are being creative and active, and want to do more.
"I will talk about the three main sections of the budget book. The consolidated budget, is the budget of the whole University, other than the hospitals, which are separate corporations. It includes all of the operating revenue that comes in and all of the operating expenses that go out. The general funds budget is the budget that we set centrally and is the only part of the budget over which we have central control. The capital plan and budget includes the capital plan which is our three-year outlook for building projects, and the capital budget is the cost of those projects in the coming year.
Consolidated Budget
"Consolidated budget revenues are expected to grow by 7.2% over the 2005/06 projected actual results, driven principally by growth in investment income and health care services provided by our colleagues in the medical school. In contrast, research growth has been slowing. Exclusive of SLAC research, the "on campus"research budget has actually decreased by 3% in the last 12 months. This is a very unusual situation. The consolidated budget has a surplus of $63 million, which is very good. But remember, it represents only 2% of the total $3.2 billion budget, and most of the surplus is in restricted funds."
The Provost then summarized components of the consolidated budget and their implications, working from these data:
See table under Related InformationStudent income…and financial aid
"We are anticipating $544 million in student revenue, which includes tuition, room and board. And that's an increase of about 5%, but it is partially offset by financial aid. Financial aid is growing faster (6.8%) than the income line, so the net revenue increase is somewhat less than 5%.
Sponsored Research
"This is one of the main worries that we currently face. We are expecting a 4.2% overall increase in sponsored research next year, but this is entirely because of the 17.1% growth in the research income at SLAC. That growth is almost entirely because of the construction of the LCLS, the Linac Coherent Light Source, which is going to be a wonderful instrument, a terrific asset for the whole University. The worrisome part is that the research volume for the rest of the University is projected to decline by 2% in '07. But let me dig down and tell you what's going on here. Over the last number of years we've had consistent growth in research volume, from 10% to18%. Since about mid-fiscal year '05, we've started to see actual decreases in the research volume leading to a 0.5%, half a percent, decrease in the last year and a half. Some of that is due to some large projects that have come to conclusion or near conclusion that have very large subcontracts. For example we have two large NASA satellite projects coming to conclusion. One actually was launched, Gravity Probe B. The other hasn't been launched yet, but it's been shipped off. So the subcontracts involved in these projects are finished. If you exclude subcontracts and look at the numbers, we have in the last year and a half a 2% growth in volume, which is probably a little bit less than inflation. These numbers, by the way, are nominal numbers, and so it's still, perhaps, somewhat of a decline. But at least it's not in the negative column.
Health Care Services
"These dollars are the revenue that flows into the Medical School from the hospital for the clinical services provided by our faculty in the Medical School. Over the last five years this income has consistently risen, and this past year is no exception."
Gifts
The Provost showed an impressive slide demonstrating the increase in the sum of different classifications of gifts from about $469 million in 2001 to more than $600 million in 2005. Expendable gifts in 2005 totaled $144 million, and the net assets released from restrictions [i.e., payments made on expendable gift pledges] were $71 million. Non-government grants [i.e., gifts from foundations] were $128 million, but the Provost pointed out that these appear in the sponsored projects line. Gifts to endowment ($236 million) and gifts to facilities ($22 million) do not appear in the consolidated budget at all.
Investment Income
"Investment income,"continued the Provost, appearing pleased as he turned another page on his Keynote presentation, "is by far the brightest light in the budget. In the coming year we are projecting an increase of 15.5% to $707 million. This line is a combination of endowment income ($586 million - increase of 12%) and other investment income ($121 million - increase of 37.5%). Investments, overall, have increased 10% per year for the past five years. The Stanford Management Company and the Development Office are both extraordinarily competent folks who help support all that we do. Thank them whenever you see them!"
Our investment management has not always been this remarkable at Stanford. The Provost recalled that in the 1976-1985 and 1986-1995 decades, the endowment grew at roughly the same rate as did a conservative mix of broad-based stock and bond funds. But in the last ten years investment strategies and policies have become much more sophisticated. These approaches have, said the Provost, "…outperformed what we could have generated in a more plain vanilla type of investment. Indeed, if you senators have compared our endowment returns to your own retirement funds…you no doubt appreciate how different they are."What a pity that the Stanford Management Company cannot legally take on faculty retirement investments!
The other investment income is, for the most part, the investment income received from the expendable funds pool. The expendable funds pool is money that is sitting in reserve accounts and which could be spent at any time. But in the meantime, we have the Stanford Management Company investing it for us. The return pays out principally to General Funds to help pay for our salaries and infrastructure. There are two recent policy changes related to this portion of the investment income that the Provost explained. "In 1994, to avoid the wide swings in return from investments designated for General Funds, we imposed a smoothing rule much like we use for the endowment payout. It's a rule that buffers the payout so that swings don't hit the budget too radically, or potentially, disastrously. Up until now, the target payout rate used for these funds 4.5%. However, the Trustees at the last meeting agreed to change that to a 5.5% target payout as a further attempt to address the imbalance between General Funds and Restricted and Designated funds that I emphasized at the earlier meeting. So now we have two changes in policy to help that problem. One is the infrastructure charge increase from 6% to 8% and the other is this increase in the target payout rate."
Dissecting the Consolidated Budget by fund type shows the following (in $millions):
See table under Related Information
General Funds are the University's flexible funds, Designated and Restricted funds are, for various reasons, controlled by departments, faculty, and schools. They are either legally (in the case of restricted funds) or practically speaking (in the case of designated funds) out of the control of the central administration.
Grants and Contracts are controlled by the faculty PIs. Auxiliaries are the units that are self-supporting, such as Residential and Dining enterprises and the Department of Athletics; these bring in their own money and spend their own money.
Pointing at the slides, the Provost said, "…if you look at the budget by type of funds, you'll notice the thing that really jumps out is that a huge amount of money is accumulating in both Restricted and Designated funds. These are the funds that are sitting out in departments, in schools, and in faculty research accounts. Currently about $1.5 billion is sitting in these funds."
After subtracting projected expenses from total revenues for the 06-07 budget, the Provost showed that we are projecting a balance of $716.9 million in Designated Funds and $721.1 million in Restricted Funds. "When I am asked,"said the Provost, while smiling ironically, "why isn't the University funding this or that better? … it is because these funds are sitting out there under the control of those very faculty who, often, are the very ones complaining to me."
Professor Etchemendy returned, again, to his gnawing major concern. "What's going to happen to research volume in future years? It's not very encouraging when surveying what's going to happen to NIH and other federal research agencies. Consequently, we will have to compete for research funding in much tighter spheres."
The Administration is wisely looking at striking a balance on the financial resources available to current generations of students and faculty and staff and what will be available for future generations. Translated to fiscal terms, how much of the endowment income do we pay out to fund current operations? The Provost expanded on this philosophic and yet very real problem. "What we try to do is to make sure that the current generation benefits from the endowment, but not at the expense of future generations, so that future generations also benefit from the endowment in roughly the same way. Thus, ideally, we want the endowment payout to grow at the rate of inflation. Now, to achieve intergenerational equity we also don't want future generations "cheating"the current generation, which is what will happen if the payout rate is too low. Therefore, we're looking very hard at whether or not the payout rate is at the right level.
General Funds Budget
"The General Funds budget is put together by one of the hardest working committees on campus, the Budget Group,"noted the Provost. "This is the committee: Artie Bienenstock, Patty Gumport, Stephen Hinton, Rosemary Knight, Channing Robertson, Bob Simoni, Buzz Thompson…and staff members, Randy Livingston, Karen Nagy, Dana Shelley, and Tim Warner. They work very, very hard for many months, sitting through many meetings, and they provide me with wonderful advice to help me put together a budget.
"I want to remind you that General Funds represents about a quarter of the Consolidated Budget, some of which is provided directly to the Formula units, the School of Medicine, the School of Business, and a few other small formula units, which receive a certain amount of money automatically.
"The largest source of General Funds is tuition (55%). About a fifth comes from Indirect Cost recovery, and about a fifth comes from investment income, both from the endowment payout on unrestricted endowment, and from other investment income, which is the investment income on the expendable funds pool. A little bit comes from 'Other Sources',"he said, mysteriously, leaving Senators to fantasize on what those sources might be.
General Funds Allocation
"This year's budget priorities,"continued Etchemendy, "included lots of important high-price-tag items. At the top of the list was maintaining competitive compensation for both faculty and staff. Now, the competitiveness of our salaries varies a lot from school to school, from department to department, and in the case of staff, from job classification to job classification. So in order to maintain our excellence, we obviously have to remain competitive in what is a very difficult environment nationwide, but particularly difficult in the Bay Area considering the cost of living and housing."
Moving on to Infrastructure and Facilities support, the Provost emphasized that the University must make sure that it is not building up a lot of deferred maintenance. A very extensive study two years ago showed that although Stanford needed to do more in this area, we were not falling as short as were many other universities. About $7 million had to be added to the budget for maintenance. This is being done in "chunks"year by year, by adding about a million or a million and a half to that budget.
Moving to a bothersome topic of expense, the Provost said, "Compliance costs are killing us. More and more, we are getting additional compliance requirements being imposed on us by the government. And as research volume grows, we obviously need to increase the number of research compliance staff, and other costs. These have led to increased costs in a big way. Although large amounts of those costs are related to research and figure into the indirect cost rate, the problem is that the portion of the indirect cost rate that it figures into is the capped portion. Remember that the indirect cost rate has two portions. One is for depreciation and operations and maintenance of buildings, which is not capped. Then there are administrative costs, which include all the compliance costs, and which is capped at 26% by law. Because we're over 26% already, any incremental compliance costs that hit us we have to pay for ourselves without any compensating increase in indirect cost recovery.
"As for Undergraduate Financial Aid, we had fallen behind Harvard, Yale, and Princeton in the packages that we're offering to undergraduates. We constantly try to increase the amount of aid available to students. This year we made a major investment in a new and improved financial aid program and announced that families whose income is under $45,000 would not have to pay any tuition, and families whose income was between $45,000 and $60,000 would receive a major cut in the amount of tuition that they would have to pay. That is a wonderful program, and we felt that we could, in fact, afford to do that this year. This has cost us $3.1 million.
"Then there is Development…to get money we must spend money. As you know, we're on the verge of launching a new capital campaign. We must increase our staff in order for that campaign to be successful. That's an investment that will pay dividends.
"Finally, there are many interesting school-based initiatives that we tried to fund to the extent possible.
"We allocated about $60 million this year in incremental General Funds. As for sources of this incremental money, the big growth this year was in the expendable funds pool because of the change in policy that was mentioned above, as well as some growth from the infrastructure charge policy change. These two changes added up to about $22 million of the incremental General Funds that we expect going into '07. This year tuition accounts for only $19 million of the increase. Indirect cost, a tiny increment, is at $2 million.
"On a school-by-school basis, the total allocation increase was about 10%, on average. Earth Sciences, H & S, and the Dean of Research had the largest percentage allocation, with H & S receiving the largest dollar allocation (about a $13 million increase). The increase to the Dean of Research budget of about $4.9 million was largely driven by incremental investment in compliance-related issues such environmental health and safety, and human subjects. Investment has also been made in the new institutes, notably the Institute for the Environment, which report to the Dean of Research."
The average increases for Administrative Units will be 8.6%, with major investments going to Public Affairs, Information Technology (IT) and the Office of Development. IT allocations will maintain and improve the business systems, both their security and their usability. The Provost noted, "We heard quite strongly the dissatisfaction people had using those in their initial versions, and we slowly but surely have invested to try to improve them…I think with some success.
Provost Etchemendy relaxed a little to look back. "This is a retrospective of the last six years of incremental General Funds allocations made by the Budget Group. In my first year of putting together a budget I naively spent every incremental dollar that we had to spend. We were then hit by the budget downturn, and slammed by it. The following year, other than keeping up with inflation, providing a salary program and the extra cost of benefits, we had no money to fund new programs. In fact, we had to make some cuts to balance the budget. The following year was the year when we had a salary freeze because, although the incremental funds were not that different from the preceding year, we were hit by very, very large increases in benefits costs. That ate up what we would have used for the salary pool.
"Thus, for the current year and for the budget year '07 we have planned surpluses of $12 million in both years. These are cushions to assure that we don't get hit by a downturn and have no money to pay for a salary increase. And in addition, this year we have added another $10 million to what's called the 'University reserve,' bringing that reserve to about $20 million.
"The critical issues that have me worried moving forward include the one I talked about a month ago, the imbalance in the growth of Designated and the Restricted funds compared to the growth in General Funds. Also, increasing costs of faculty recruitment and retention is a terrible problem that we have to continually struggle against, particularly since we have such high housing costs, and particularly in those areas where we're seeing extreme salary compensations. Certain universities are willing to pay an awful lot of money to attract our outstanding faculty. And we have to try to prevent that. I worry, as I said, about the future of federal research funding and the need to continually enhance financial aid in order to remain competitive for students."
Capital Plan and Budget
"The Capital Plan is put together by another hard-working group, including Maureen McNichols, Bob Tatum, Mark Zoback and me as faculty, and staff members, Megan Davis, Margaret Dyer-Chamberlain, Stephanie Kalfayan, Sandy Louie, Bob Reidy, Craig Tanaka, and Tim Warner. This group also meets frequently to consider requested changes to the Capital Plan.
"The capital plan is a three-year window of projects in the context of a 10 year forecast. The Capital Plan includes the full project costs for any projects that overlap within the three-year window beginning in fiscal year '07. The capital budget is the costs that are incurred for those projects in the next year, those costs that will actually hit the books in the '07 fiscal year. The total forecast costs of projects in the Capital Plan this year are $2.2 billion. In nominal dollars, this is Stanford's largest Capital Plan ever, I believe. This reflects a long, long planning process that actually started five or six years ago when we started the needs assessment, and it has been refined through the campaign planning process.
"Some of what is being planned for the campaign are new buildings and new needs for replacing and renovating buildings. Most of those projects are actually in this Capital Plan. As always, there's a lot of uncertainty in the funding for these and that injects uncertainty into the plan. Some of the projects will not happen when we think they will. They will be delayed, because fund-raising will not provide the funds required to actually build the buildings. The capital budget for next year is $352 million. And it reflects less uncertainty just because it's closer in time."
Capital Plan funding of $2.2 billion includes Debt ($714 million) and Gifts to be Raised ($862 million), with smaller additions from Current Funds ($357 million), Gifts Pledged ($239 million) and other sources ($53 million). The Provost emphasized the "…fairly stunning $852 million in gifts to be raised. That is extremely ambitious."
Capital Plan Construction Projects that have been presented previously to Senate 37 include:
THIRD TABLE GOES HERE
Approximately one-seventh of the total project costs will be in the '06-'07 Capital Budget.
The GSB project will be located basically across from Maples, where the Serra buildings are. As for the Redwood City campus redevelopment, the Provost explained, "We purchased the Midpoint Research Park in Redwood City. That's basically a four-block area that includes the Excite@Home buildings that have been empty for a number of years. The hospital purchased those buildings, and the University purchased the other three adjacent blocks. Our hope is that we will be able to redevelop that and use it as a North Campus, largely for administrative offices, so that we can preserve our General Use Permit, our very scarce GUP square footage on campus, for activities that actually have to happen on campus, including education and research. We're hopeful that we can make this campus extremely nice, attractive and desirable, so that the people who are located there will not feel like they've been banished, but will, perhaps, maybe even prefer it for the free parking!
"A Performing Arts Center has appeared on the Capital Plan on and off. It is very much dependent on our ability to find just the right interested donors to help us fund it. It is a high priority, because we do not have any good large performing spaces for music and theater on campus.
"The Panama Mall renovations consist of extensive renovations along Panama Mall of the engineering buildings that will be required in order to house many of the departments that are moving out of Terman when we have to tear that building down. The Undergraduate Housing Initiative is one that we've actually talked about before. John Bravman last year gave a wonderful description of the initially planning for that initiative."
Using aerial maps of the campus, and architects' initial drawings, the Provost described some specific plans for these buildings. They cannot be reproduced in these prose minutes, and those who want details are encouraged to go to the Provost's office in Building 10 to see some detailed renderings. He also mentioned that the Capital Plan Infrastructure Projects has now been included in the Capital Plan and adds $93 million in new costs. Another addition is the Building Energy retrofit program that has identified the top ten "energy hogs"on campus. The Provost explained, "They're lab buildings, as one would expect. We have looked at them carefully and figured out how we can retrofit them with more modern, more efficient equipment that will allow us to radically reduce the energy consumption and utility costs in those buildings. Thanks to some financial help from Maureen McNichols, who figured out exactly how we can fund this and share the costs of that between the indirect-cost rate and the University, we have come up with a budget for these projects."
"The timing of construction projects in the Capital Plan is going to depend upon very ambitious fund-raising efforts, and in some cases, the buildings will be delayed because we will not be able to raise the funds at the rate we would like to raise them. But when we complete this plan, the result will be an unparalleled campus infrastructure that will support, of course, what we have, which is an unequaled research and academic program!"
With this appropriately optimistic comment, the Provost finished, and received enthusiastic applause from the Senate and guests.
Questions and Discussion
Professor Bender said, "John, I have two questions. One is short and one's a little longer. The first one is, are we 'GUP'ed out if this all is done?"The Provost answered that the completion of all these over the upcoming decade or more would put us close to one million square feet of the two million total allowed by the GUP. However, before we can begin building the second million square feet, we must have an approved "sustainability study,"and it is not clear how difficult that will be.
Professor Bender came back for his other question. "This is about salary programs. In the areas in the university I'm familiar with, there is a very 'bifurcated' faculty salary program in which you have a few very high salaries, where the competition for these people is strong, but you have a lot of lower salaries where other competitive issues are in play, such as keeping associate professors here. Of course, if we want to drive on the track with Ferraris, metaphorically speaking, we have to do the expensive part. But I think that the much bigger problem is the other sector. We're already in a situation where senior staff really don't have to be all that high in the hierarchy before they're making more than an associate professor in Humanities & Science. And do you worry about that kind of issue as well as the other more obvious ones? Or do you just treat these as completely separate activities?"
The Provost answered by saying that he has already asked the Schools to come up with plans to address lower salaries at the associate professor level. He added, "…H & S has a very good plan under which a significant amount of the raise pool is being allocated specifically to boost the salaries of assistant professors and associate professors, because we're seeing incredible competition. Over and over again one of our faculty who is either on the verge of getting tenure or has just gotten tenure gets wonderful offers from another university. Although in many cases they would prefer to stay here, often financially, the advantage to them would be to go. Therefore, we want to increase those salaries to a level where we're more competitive.
"On the other hand, there's the housing problem which is not going to be solved, frankly, by salaries, particularly at the assistant or associate professor level. The housing costs and the housing differential is just too large to solve purely with salary. And so we have our housing programs, which are quite effective. And I will be announcing at the next Senate meeting, a new housing program targeted at exactly that group."
Professor Osheroff had a question along the same line. "As someone who's been a chair twice and had to worry about setting salaries, this is more largely a University problem. There are no structural raises that look at junior faculty as being different. This is very different from what it was like at Bell Laboratory, where we recognized that the only way you're going to take these people from starting salaries to distinguishing salaries is, in fact, to put them on a trajectory to higher salaries."
Provost Etchemendy pointed out that, "First of all, the structure of the salary programs varies a lot from school to school. Engineering has always put a disproportionate amount into salaries at the assistant and associate professor level. That has not been, traditionally, a policy within H & S, although when I was a chair I shaved from the more senior faculty in order to boost the junior faculty salaries. This year, H & S has done a couple of things. Structural raises, giving significant increases at the promotion milestones, have been increased. Now, one thing I want to say is that to do this, you have to reduce the pool available for the more senior full professors. But in this context there is one fact that people tend to overlook. We all have in our minds that cost of living increases about three and a half percent each year, so if you're getting less than three and a half percent, you feel you're not keeping up with the cost of living. That's false. If you look at the CPI for the last several years, the cost of living has been increasing on the order of 2-2.5%. So, in fact, that's the cost of living increase that you would give if you were just trying to keep your faculty up with inflation.
"Now, that's particularly true in this area when you factor out housing because most senior faculty are already in housing. And when you factor that out, our cost of living increases in this area have not been exorbitantly high."
President Hennessy interjected a comment at this point. "I think there is something happening in faculty salaries which, unfortunately, being part of the market, we will not be able to avoid. It is that the standard distribution across faculty salaries is going up precipitously, driven not primarily by the top institutions, but by the institutions right below our level who are looking to build in certain areas and certain departments. The value of recruiting a Stanford faculty member to their school is incredible, absolutely incredible! It can double the reputational standing in that department by adding only one person in some cases. What that is going to do, because we are part of that marketplace, is to increase our standard deviation and our distribution of salaries. Salary distributions are inevitably going to become less collegial-driven and more merit-driven. And there's probably nothing we can do about it."
Provost Etchemendy agreed. "I'm sure that you read in the New York Times about universities saying they are going to 'buy' an economics department or 'buy' a Poli Sci department and to do that by paying lots of money to Stanford faculty if they can get them, or Harvard faculty, or other key academics. This really does affect us disproportionately, because we're not just competing with Harvard, Princeton, and Yale. We're joining them to compete against the next tier down who are trying in targeted ways to raid our faculty."
After a pause, the Provost couldn't resist coming back to a previous point. "If you want us to keep our salary competitiveness, you should all be cheering on the infrastructure charge increase!"
Professor Peskin changed the subject. He worried that on the slides showing General Funds allocations by academic units, "…it's very striking that the lowest percentage change is for the libraries. And this surprised me, because I thought libraries are a kind of overhead today, including new collections, new books, new journals. Do you understand and accept the large growth in other areas and the much smaller growth in the library?"
Provost Etchemendy agreed. "I worry about the library. I worry about what exactly we should be doing with the materials budget. The materials budget is what pays for the journals and the monographs and books and so forth and so on. The inflation in that industry has been, as you all know, just extraordinary. Now, one has to hope that there are new strategies that will eventually, because of technology, shake out in that area, and we will be able to approach the library infrastructure differently. A lot of short term initiatives in the libraries are funded by grant funds. Some are funded by income from HighWire Press. HighWire Press has been quite successful, and the income there is going, of course, directly to the library. And you should remember that the General Funds allocation is not the total budget for the libraries, but only represents about half of their revenue. Yes, I'm worried about the budget for the library and maintaining it. But, you know, there's only so much money to go around."
Chairman Roberts then recognized Professor Steve Fortmann who had a comment and two questions. "The comment is based on the fact that in 1989, my office was in old Anatomy building, so I'm well aware that that building became detached from the museum in 1906. And I'm glad to hear you're replacing that building.""Detached rather suddenly!"pointed out Etchemendy.
Fortmann continued. "I have two questions. One is also about housing. A couple of years ago, the maximum MAP loan was cut from 600,000 to 500,000. And I know from my personal experience that houses around here in any proximity to the campus, including on campus, are well over one and a half million dollars in value. Is there any consideration to increasing the limit on MAP again?"
Provost Etchemendy responded that "We've already increased MAP to $650,000 and did that a month or so ago. And there will be other enhancements to the housing program that I haven't yet announced but I will announce later."
"The other question I have,"added Fortmann, is maybe a little specific, but I can't help it. Is the business school moving entirely to this new campus or staying in its old buildings?"The Provost responded that, "One hundred percent will be moving into the new campus. The old GSB building. the old south building, will be demolished. And the two newer GSB buildings, Littlefield and Knight, will remain. They'll be turned back over to the rest of the University, and we will 'repurpose' them."
VI. - VII. New, Old Business and adjournmentThere were no items of new or old business, and the meeting was adjourned at 4:45 pm.
Respectfully submitted Edward D. Harris, Jr. M.D. Academic Secretary to the University