University News

BUCC discusses U.’s growing deficit, sustainability goals

Student Labor Alliance urges administrators to consult council before outsourcing U. jobs

By
Contributing Writer
Wednesday, October 29, 2014

President Christina Paxson announced that University reserves will be depleted in three years if the current budget deficit level persists.

The University’s deficit and progress in meeting its sustainability goals took center stage Tuesday at the Brown University Community Council’s second meeting of the semester.

The Student Labor Alliance also delivered a presentation reflecting on the University’s decision to outsource mail operations, and urged administrators to solicit and consider community opinions before making similar decisions in the future.

At the meeting, Ravi Pendse P’17, chief information officer and vice president for computing and information services, spoke about the working group the University formed to examine ways to reduce the University’s budget deficit by at least $7 million. The University’s structural operating budget deficit is nearing $10 million, The Herald previously reported.

The group will be looking for innovative new ways to allocate University resources more efficiently, Pendse said.

“Our assets have never been higher, which is a good thing, but our operating deficit is higher than we would like it to be,” President Christina Paxson said at the meeting. “If we don’t do something within three years, our reserves will be gone.”

“I am here to assure you … working together, we will be able to step up to the challenge of reducing the structural deficit,” he said.

Chris Powell, assistant vice president for Sustainable Energy and Environmental Initiatives then reported on the University’s sustainability progress over the last several years.

Powell reported that since 2007 the University has brought green house gas emissions from existing buildings down by 26.6 percent, meaning the University is ahead of schedule in reaching its goal of reducing green house gases by 42 percent below 2007 levels by 2020.

The University has invested about $23 million to make the necessary environmental changes, Powell said. As a result, the University has seen rewarding outcomes, with the Building for Environmental Research and Teaching and the Miller and Metcalf residence halls achieving gold LEED level certification.

Powell also discussed the progress the Sustainability Strategic Planning and Advisory Committee has made since its establishment in 2012. In moving forward, “We really want to make it a collaborative effort for the university,” Powell said. SSPAC has been working with student groups and faculty to formulate objectives beyond its original greenhouse gas reduction goals.

Toward the end of the meeting, the Student Labor Alliance gave a presentation on the outsourcing of jobs at Brown, focusing on the University’s decision to outsource mail services operations to Ricoh USA.

Liliana Sampedro ’18 and Cameron Johnson ’17 spoke on behalf of the organization, proposing that future decisions that may involve outsourcing University jobs “be brought before the BUCC” so that the community can offer feedback and the University can more fully consider additional staffing options and how to best deal with worker displacement.

Beppie Huidekoper, executive vice president for finance and administration, responded to the presentation by explaining that all displaced mailroom workers were given the opportunity to apply for other University jobs. Though some workers retired or took severance, several workers applied successfully to other University positions. and others were hired by Ricoh USA.

Meeting attendees examined the BUCC’s role as an advisory group and largely agreed that important community issues, like the Mail Services decision, should be brought before them in the future.

Paxson suggested that increased BUCC involvement in such issues would make the meetings more meaningful and relevant to the Brown community, a sentiment that several other BUCC members echoed.

  • I’m glad that the subject of “sustainability” has been brought up and discussed. For many of us, however, “sustainability” means how can Brown survive financially in the future. That is, are Brown’s expenses and revenues at a level that can assure that Brown will continue to exist in the future?

    The current answer is “NO.” Brown’s expenses have increased at 3x inflation over the past 30 years. At present, there are 4,500 employees for 8,500 students–almost 1 employee for every two students. The main job and expense growth has come from Administration. Check the Brown site–you’ll find 211 departments (!). This administrative bloat has proceeded despite Brown’s budget moving from surplus to deficit. It has proven intractable for Christina Paxson and her predecessors.

    On the other hand, revenues are anemic. Like other Ivy League universities, Brown relies on its endowment (currently 17% of the operating budget), contributions, government grants and tuition. All are in trouble:
    – tuition can’t increase by much more–Brown’s already in the top 10 in what it charges
    – government grants are down, and will continue to move downward
    – contributions are holding up well, but
    – Brown has an anemic endowment at $3.2 billion, and Brown’s financial performance trails nearly all major Ivy League and other colleges (such as Notre Dame–$9 billion, Stanford–$15 billion, Harvard–$34 billion). The Brown endowment’s anemic size and sub-par growth mean that Brown can’t compete with the “big U’s”.

    So, what to do?
    Please, BUCC, address the herd of elephants in the room.
    Please take leadership in the following areas:

    1. Reduce employee expenses, particularly in ancillary services and administration, below current levels.
    2. Increase income from non-conventional sources, particularly internet teaching. Brown has failed to enforce and grow its brand among alums, high school students and the wide world. Brown must move away from tuition and grants, and towards a “sustainable” income stream.
    3. Forecast reasonable (i.e. “lower”) investment performance for the endowment–16% is both sub-par and unsustainable.

    Failure to address these issues would condemn Brown to ever-declining resources in comparison to not only the Ivy League, but also Stanford, Notre Dame, the University of Texas and many other forward-thinking institutions (not to mention those in Europe and Asia).

    So, Brown, are you ready to face the REAL challenge to “sustainability” at Brown? 250 years of history provide no assurance that Brown can survive. Only concerted leadership and action can save Brown now.

    John Lonergan
    Brown ’72, Harvard MBA ’76, Venture Capitalist (medical devices), San Francisco, author of “Antidote” at http://www.john-lonergan.com