State of the University, 2009
Dear Colleagues,
Now that we have completed the activities that mark the beginning of the new academic year, I would like to update you on a number of important issues and recent developments that are shaping Boston University. Although there is no doubt that the financial crisis and recession caused the last academic year to be one of the most trying in recent history, the University navigated these difficulties well and has entered the new year in good financial health, with a sustained emphasis on the quality of our programs, faculty and students, and a sense of optimism for the future.
Although the quality of the university is certainly not measured solely by our financial health, our ability to balance budgets and allocate funding for our highest priorities is essential to the quality of our faculty and programs and to our future. Accordingly, I will start with a summary of our financial state. As I described in my message to you on May 7, 2009, the steps the University took beginning in September 2008 positioned us reasonably well for the financial adjustments we needed to take to buffer the University against the pressures at the beginning of the recession. By freezing staff hiring and capital spending, we were able to throttle back expenditures and preserve financial liquidity during a time of great uncertainty. In parallel, our plan for increasing need-based financial aid for our undergraduate students and the needed adjustments in other expenditures positioned us both to attract a high-quality freshman class and to retain current students whose families are experiencing significant financial difficulties. We have launched the new fiscal year, FY 2010, in good shape, after completing FY 2009 with good results.
This success was made possible by the efforts of our faculty and staff who managed to carry out their jobs with fewer supporting staff, due to the frozen staff positions that accumulated during the year. I owe all of you my gratitude for your efforts during this difficult period.
The implication of last year’s excellent financial performance is that, within the context of dealing with the worst economic downturn in over half a century, we have been able to continue to commit resources to the critical elements that directly affect the quality of the University: new faculty positions were funded in accordance with our Strategic Plan; resources were allocated to important academic initiatives and to improving student services; and salary increases were provided for all but the most senior management of the University. My goal for this communication is to give you a perspective on the state of the University, as well as to discuss issues and opportunities we will face in the coming year. More detailed financial information is included below.
Undergraduate Recruitment
Once again we have been joined by a very talented freshman class, with approximately 4,140 students who were selected from the almost 38,000 applicants to the University. The class is exceptionally diverse with the largest group of under-represented minority students in recent memory and with almost 11% of the class coming from outside the United States.
I specifically would like to point out the success of our expansion of financial aid support for graduates of the Boston Public Schools. You may recall that last year we announced that we would expand the Boston Scholars Program to include the support of full financial need, without loans, for all graduates of the Boston Public Schools who gain admission to the University. Our freshman class has 72 students who are graduates of the Boston Public Schools in our new Boston High Community Service Awards program, in addition to 19 Boston Scholars. As Boston University grows in stature and depth, with an ever-expanding global reach, we should not overlook our home city and the opportunities we can provide to the diverse, talented and highly motivated graduates from local high schools. I am grateful to the faculty and staff who have agreed to serve as mentors to these students.
The recession had a significant impact on our recruitment of the freshman class, with the percentage of the class receiving financial aid from Boston University rising from 49% for the class admitted in September 2008 to 52% for this fall. The average financial aid award also rose over 6.5% to $22,625. The increase of our financial aid budget was necessary to address this additional need.
Faculty Development
Our strategy of continuing faculty hiring during the financial turmoil of the last year has brought many new colleagues to our schools and colleges this fall. We hired 67 new faculty members on the Charles River Campus: 57 assistant professors, six associate professors and four professors. Of these, 10 are filling new faculty positions that have been allocated as part of our Strategic Plan to increase the size of the faculty, especially in the College of Arts and Sciences. There also was considerable hiring on the medical campus over the past year with a total of 100 new faculty recruits at the rank of assistant professor and above. Our department chairs, deans and provosts worked to make these recruitments while dealing with the budgetary constraints caused by our freezes. We owe them our thanks for helping to secure the future quality of the University’s faculty.
The University was able to maintain its commitment to increasing faculty compensation as part of our long-term strategy to bring our salaries more into line with those of our peers. Median salaries for faculty on the Charles River Campus rose to approximately $140,100 for professors and $83,500 for assistant professors. These increases represent real progress toward our goal of addressing faculty salaries and were given in the context of more modest increases for staff with salaries under $150,000 annually and salary freezes for staff with salaries over this amount and for the entire senior leadership.
This year also has seen several critical leadership transitions both through hiring from outside and promotion within the University:
Mary Elizabeth Moore joined us in January as Dean of the School of Theology. A noted scholar who served as Director of the Candler School of Theology at Emory University and an ordained deacon in the United Methodist Church, she will be installed formally in the deanship of our founding school on October 14.
Tracy Schroeder joined us this summer as our new Vice President for Information Services and Technology, coming to us from the University of San Francisco, where she was Vice President for Information Technology and Chief Information Officer. Her appointment comes at a critical time as we work to transform our administrative systems and improve our classroom technology. Her experience leading a service-oriented university information technology organization and implementing an enterprise resource planning system will be enormously helpful.
Julie Sandell, a Professor in the School of Medicine’s Department of Anatomy and Physiology and former Chair of the Faculty Council, has been appointed to the new position of Associate Provost for Faculty Development. This position was created based on the recommendation of the Council on Faculty Diversity and Inclusion as a means of encouraging professional development, support, and diversity on campus. Among her responsibilities, Dr. Sandell will serve as a key advisor to Provost Campbell and me on faculty and academic administrative appointments and on the issue of faculty salary equity and she will work to develop mentoring programs and leadership training for chairs of departments and search committees.
Linda Hyman was appointed Associate Provost for the Division of Graduate Medical Sciences on the Medical Campus, where she also is a Professor of Microbiology. She has served as Vice Provost for the Division of Health Sciences at Montana State University and Assistant Dean at the University of Washington’s School of Medicine.
Ronald Corley, who has served as Professor and Chair of Microbiology at the School of Medicine, has been named Associate Provost for Research on the Medical Campus. He will oversee the planning, development, and evaluation of research on that campus and will work to increase the BUMC research program.
This year will see several important transitions in our academic leadership. First, Dean Louis Lataif of the School of Management will step down at the end of the academic year after 19 years in this position. The School has risen dramatically under his leadership and we are launching a national search to identify the successor to this critical position. James Stamas, Dean of the School of Hospitality Administration, also has announced that he will retire at the end of the year after 15 years in this position and a nationwide search is underway for his replacement. Finally, a search also is being launched for the next Dean of the College of Fine Arts, where Walt Meissner has served admirably as Dean ad interim for the last nine years.
Faculty Awards
This year we inaugurated the William F. Warren Distinguished Professors Program, which was developed on the recommendation of an ad hoc committee of the Faculty Council as a way to honor a limited number of our most distinguished faculty for their exceptional research, scholarship, teaching, and service. The first Warren Professors are George J. Annas, of the School of Public Health and the School of Law; James J. Collins, of the College of Engineering; and Nancy J. Kopell (Department of Mathematics and Statistics), Laurence J. Kotlikoff (Department of Economics), and James A. Winn (Department of English), all of the College of Arts and Sciences. They are eminent scholars and I am very pleased to have such an outstanding group of individuals as the inaugural holders of the Warren Professorship.
Several other faculty members have received special recognition. Professor of Organizational Behavior Kathy Kram was named the first holder of the Shipley Chair of Management in the School of Management last spring. This chair is named in honor of Trustee Richard C. Shipley, an alumnus of SMG, who endowed the chair with a major gift last fall. Three new Peter Paul Career Development Professors were announced in September. They are Margaret Litvin, an Assistant Professor of Arabic and Comparative Literature in CAS; Abigail Moncrieff, an Associate Professor of Law; and Catharine Wang, an Assistant Professor in the Department of Community Health Sciences at SPH. The Peter Paul Awards were created in 2006 by Trustee Peter T. Paul, a GSM alumnus, to support three-year term professorships for promising young faculty members; to date, 13 junior faculty have held these positions.
At graduation last May, we presented two Metcalf Cup and Prize awards. CAS Biology Professor Thomas Gilmore and CFA Viola Professor Michelle LaCourse each received the University’s highest recognition for teaching excellence. Peter Busher, a CGS Professor and Chair of Natural Science, received a Metcalf Award.
There also has been outstanding external recognition of our faculty. Most notably, Christopher Ricks, our William M. and Sara B. Warren Professor of the Humanities and outgoing Professor of Poetry at the University of Oxford, will be knighted by Queen Elizabeth for his services to scholarship. Other faculty members receiving awards from external organizations include Anatoli Polkovnikov, from Physics, who was awarded a Sloan Research Fellowship; Sam Kauffmann, from COM, who won a Guggenheim Fellowship; Sarah Campbell, a Lecturer in the CAS Writing Program, who won a Fulbright to study medieval and early-modern Welsh literature in Cardiff; and Ward Farnsworth, of LAW, who was named our 2009 United Methodist Church Scholar/Teacher of the Year. Congratulations to each of these faculty and others who have brought distinction to Boston University.
Research and Scholarship
Research and scholarship continues to flourish all across our campus. Research funding that was awarded for last year was $342.5 million compared to $336.3 million a year ago. These figures don’t portray the large increase in grant proposal activity in response to federal stimulus funding. Our faculty are beginning to reap the benefits of the funding made available through the American Recovery and Reinvestment Act (ARRA); as of September 20, we have received 104 grants totaling $36 million.
A very significant development in our research programs was announced in September with the launch of the all-University Center for Global Health and Development, with Professor Jonathon Simon of the School of Public Health as the Director. This center is the follow-on from the Global Health Initiative begun under the leadership of Professor Jerry Keusch. From the BU Today article, and the national media coverage around the announcement of the Center, you can appreciate the tremendous strength Boston University has in programs, faculty, and student interest in global health and development. Our new Center is well positioned to gather and build on this strength and to increase our impact and visibility.
Whether we are speaking about library resources, laboratory environments, computational resources, or administrative support, world-class research and scholarship requires institutional support. The University will continue to dedicate resources to support the efforts of our faculty. Boston University was announced as a founding member of a state/university/industry partnership, along with MIT and the University of Massachusetts, to form a Green High Performance Computing Center in Holyoke, Massachusetts. The center will use hydroelectric power from the Connecticut River to supply the significant energy resources needed to operate large clusters of machines from our campuses. We also hope to use the center to test concepts in shared, virtual computing at a scale that no single university could attempt independently. We anticipate this association will help our Center for Computational Science to continue its national leadership in scientific computing.
As the University continues to expand its sponsored research programs and as collaboration becomes evermore common, it is critical that we have a common set of policies and procedures for governing and managing sponsored research, and improved service for our faculty members. To effect the needed changes, I announced on July 31 a reorganization of research administration to better align these functions with the goal of enhancing service to the faculty and staff, while standardizing our procedures. The new structure aligns oversight of laboratory research compliance and of the offices of Sponsored Programs on both the Medical and Charles River campuses under the direction of Dr. Ara Tahmassian, Associate Vice President for Research Compliance, who reports to the University Provost and the Provost of the Medical Campus, as well as to me.
Academic Initiatives
As I communicated to you last month, the Trustees voted to approve the establishment of the University Honors College, which has heretofore been called “New College.” After many months of planning and discussion, we have determined that this will be a four-year, cohort-based program leading to partial completion of liberal arts and science requirements for undergraduates in all schools and colleges, with an emphasis on providing opportunities for multidisciplinary work for our best students. This year, we are offering freshman seminars to a limited number of students on an experimental basis, and we will admit a small cohort of students next year. Our goal in creating this college is to provide greater accessibility for students, particularly from the professional schools and science and engineering majors, to a truly multidisciplinary honors program. This new college will not grant degrees; students will receive their degrees through their school or college of admission, and University Honors College will be designated on their diplomas. Professor Charles Dellheim will serve as founding director.
A number of the commitments in our Strategic Plan focus on undergraduate education, including strengthening our academic programs, the residential experience, and student services. Last spring, the College of Arts and Sciences released a report from its Task Force on the First-Year Experience, which included a number of excellent recommendations that could be adopted across the University. These recommendations would serve to facilitate the transition of our entering students to university life and to the level and intensity of the work expected of them. Among the goals of a proposed First-Year Experience Program, the task force called for efforts to foster intellectual engagement, a sense of social and community involvement, and personal development.
Meanwhile, Victor Coelho, Associate Provost for Undergraduate Education, has been leading a “One BU” task force over the past year that was charged to devise ways for us to integrate more effectively the undergraduate educational experience across the University. In particular, the task force was asked to define the principles of a BU undergraduate education for all students, independent of program or college; develop an integrated view of undergraduate education and a distinct view of the BU experience; bring cohesion to the undergraduate experience, merging the curricular and co-curricular; and identify how we can eliminate barriers that block curricular paths between the schools and colleges. The report of this task force will be released this fall.
The work of these two task forces and their recommendations are important and highly valuable. Over the coming months we will need to consider how the concepts and ideas stemming from their work might be implemented, balancing the budgetary implications of new programs and staff against the fiscal constraints we face.
We are also committed to improving student services and the quality of student life on campus through our proposed East Campus Student Center, which will be located at 100 Bay State Road. This new building will house expanded student resources, including the Educational Resource Center, Career Services, a major new dining facility, and, potentially, housing on the upper levels of the building. Bringing these student services together under one roof will allow for a greater level of cooperation and integration of services, in support of the ideas articulated in our Strategic Plan and the work of the task forces convened to improve the undergraduate experience.
Endowment Performance
As you have read throughout the year, university endowments have been hard hit by the fall in the capital markets and, although there was a modest recovery late in the fiscal year, we expect that many schools will record their worst endowment performance since the depression. Although poor on an absolute basis, the performance of our endowment has been good relative to the overall poor market conditions, as measured by all of the much-used indices. As of accounting through September 30, 2009, our endowment investment return for the year ending June 30, 2009 was down -21.7%, which is measured in the context of an S&P 500 that was down -26.2% for the same period, the largest loss for the index since 1932.
Because the income to academic units from the endowment is computed using a long-term trailing average, the income from the endowment actually grew for this year by 4.8%, compared to the distribution in FY 2009. The impact of the endowment decline will have a more adverse impact over the next several years as the decline weighs more heavily in the calculation of the distribution; however, because endowment income is such a small fraction of our annual budget, this impact is not a major driver of our financial planning.
Investment returns alone do not begin to tell the story of the impact of the financial crisis on private universities. Constraints on liquidity, resulting from financial institution failures, market declines and institution-specific commitments, varied markedly across colleges and universities, and impacted institutions’ operating flexibility to varying degrees and in many cases significantly. Because of careful planning by our Investment Office, led by Pamela Peedin, our Chief Investment Officer, and the stewardship of our financial assets by the Treasury, led by Martin Howard, Treasurer and Vice President for Financial Affairs, we have avoided major liquidity challenges. Going forward we will continue our diligence in managing through the recession to ensure the financial strength of the University.
Financing and Budgeting
As I indicated in my letter of May 7, 2009, because of the work of many staff and faculty, and because we moderated spending early in the year by freezing staff hiring and capital expenditures, the University closed Fiscal Year 2009 (on June 30, 2009) in a position of financial strength. From a total budget of $1.914 billion, we ended the year with a positive balance of $113.4 million. Of these funds, approximately $33.3 million were transferred directly back to academic units according to pre-existing revenue sharing formulae, and another $35.5 million were allocated directly to the benefit of our academic enterprise. These include funds to create operating reserves supporting several key purposes, including:
- Faculty hiring and retention ($6.5 million)
- Renovation and renewal ($15.5 million), including the renovations just completed to create the Commons@Mugar, as well as funding for the renovations of the first-floor classrooms in the Metcalf Science Center, which will take place next summer. (Several other major capital projects that are underway are described below.)
- Funding for specific academic initiatives ($7.5 million)
The additional reserves were set aside for major capital projects including the new Student Center mentioned above.
We are entering Fiscal Year 2010 with a balanced budget of $1.965 billion, representing an increase of only 2.7% from the prior year. The budget includes funds for additional undergraduate financial aid, salary pools for modest raises for faculty and staff, and funding for new academic initiatives, including the additional faculty members discussed above. This budget was built around a 3.75% increase in our base undergraduate tuition rate, which, although it was the lowest percentage increase in 37 years, still created a hardship for many of our students and their families who will not see this percentage rise in their incomes this year.
The economic conditions make it more important than usual that we do careful planning, adhere strictly to budgets, and work to reduce our costs. We expect that there will be continued demand for additional need-based financial aid in order to attract high-quality undergraduate students and that other expenses, such as debt service, health care, and energy, will rise. These factors will make it a challenge to maintain our momentum into the coming year.
Administration Initiatives
To improve the efficiency of administrative services and to control costs, we are moving forward with several of the initiatives we started in January 2009, including the redesign of desktop support services for academic and administrative units, and new, clustered models for supplying administrative and financial support for our units. More information about these initiatives will be forthcoming in the months ahead.
The “BUworks” program has entered its next phase with the selection of SAP as our new enterprise-wide software partner, as reported in BU Today. Completion of the implementation process design is expected by the end of the semester; work to begin implementation will start in January 2010. The BUworks team continues to work with the University community to identify processes and work-flow changes required for an efficient implementation of the enterprise system. This task is critically important to modernizing our systems and to optimizing the costs of financial and human resource services. For further information about BUworks, please visit their web site.
Campus Sustainability
We are committed to decreasing our environmental footprint. Last year we created a Sustainability Committee, led by Gary Nicksa, Vice President for Operations, and Professor Cutler Cleveland, a member of the Geography and Environment Department and Director of the Center for Energy and Environmental Studies. The committee has three working groups charged with identifying opportunities for meaningful changes in our operations and practices in the areas of energy conservation, recycling and waste management, and sustainable building and facility operations, and a fourth group is working to encourage changes in individual behaviors.
We are completing a greenhouse gas inventory this fall and we are developing a climate action plan to reduce the University’s carbon emissions, energy use, and cost of operations. A first step has been converting to cleaner fuels for heating our buildings and the implementation of a number of energy conservation projects on campus, including Mugar, FitRec, Agganis, and in our parking structures. These projects are projected to save millions of kilowatt hours of electricity, hundreds of thousands of dollars, and eliminate thousands of metric tons of CO2 from being released into the atmosphere. The Mugar project alone is already saving annually about two million kWh of electricity, $300,000, and 1,200 metric tons of CO2.
We are also greening our buildings and operations. For example, 670 Albany Street received LEED certification; 33 Harry Agganis Way and 888 Commonwealth Avenue were built using many sustainable design strategies such as harnessing geothermal energy; and the Makechnie Study Center in Sargent received LEED Silver certification in May.
This is a year for planning and right-sizing our waste system by improving the recycling infrastructure. Our waste reduction program includes food waste, implementing print quotas, paperless payroll, and other strategies to reduce resource consumption and waste production. At move-out last spring we donated 6.75 tons of clothing to a local charity and at move-in last month we recycled over 35 tons of waste, including 16 tons of cardboard.
Finally, a new web site will be launched this semester that will feature information on progress we are making in this area and steps each of us can follow to lessen our environmental impact.
Our Physical Campus
Our suspension of much capital spending last year is reflected in the few major projects of renovation and new construction that remain underway on campus. Let me describe several projects that have been completed:
- Our new Student Village II residence was occupied at the start of the fall semester and has received rave reviews from our students and attention in the media. As a high-rise residence with great views of the river out almost every window, the facility has been portrayed as being “luxurious.” Actually, the cost-per-square foot is below the median of other major university residences built in the last few years in Boston or on comparable urban campuses. It is nice to be called luxurious at an economical price.
- The renovations of our practice room facilities for the School of Music at 855 Commonwealth Avenue also were completed this summer, giving us state-of-the-art facilities for students enrolled in majors and minors in music.
- The National Emerging Infectious Diseases Laboratories (NEIDL) facility also was completed this spring and was permitted for training of personnel in research protocols. Efforts continue to fill core leadership positions, in addition to the outstanding researchers already recruited. We are still awaiting results of the supplemental assessment by a blue-ribbon panel appointed by NIH and the resolution of pending federal and state lawsuits; this will likely continue into 2010.
- The renovation and expansion of 888 Commonwealth Avenue is now being completed. This building already has become the new and expanded home for International Programs and the International Students and Scholars Office. The move by International Programs has triggered renovation of 232 Bay State Road for expansion of activities in that location by the College of Arts and Sciences.
We are continuing with our plans for the design and construction of several new facilities that will support our academic programs. The East Campus Student Center mentioned above will be built on the site of the parking lot at the corner of Deerfield Street and Bay State Road. We have awarded the architectural contract to Bruner-Cott, a Cambridge-based firm with extensive experience designing academic facilities around the country, with the goal of being prepared to begin construction by summer of 2010.