Spring 2010 Convocation Speech

The Politics of Piracy: A Matter of Life and Debt

Susan Moulton
Chair of the Faculty

Spring 2010
January 28, 2010

Spring 2010 Speakers

Ruben Armiñana
President

Eduardo Ochoa
Interim Provost and Vice President for Academic Affairs

Susan Moulton
Chair of the Faculty

Heather Hanson
Associated Students President

Dolores Bainter
Staff Representative to the Academic Senate

Welcome back to a new decade in this new millennium. It began for us yesterday with a productive faculty retreat attended by more than 50 of your colleagues in a process that modeled true collaboration. Thanks to the Provost for supplying us with food for the day and to Carmen Acton and Tim Abraham, the two Organizational Development facilitators who helped plan and assist the discussion. Over the break our Academic Senate Office has moved directly south, across the Stevenson Hall courtyard to Stevenson 1027. We all owe a big thanks to Laurel Holmstrom for working so hard to provide a smooth transition. As you noticed when you arrived, for the first time in over 10 years we have no coffee at our Convocation. Prices on campus are too astronomical! Last Fall the California Faculty Association paid $300 for our coffee. This year the charge for coffee for 175 persons would have been $800—you can do the math to figure out how much SSU Enterprises is now charging for a cup of coffee. Much has happened since last August. We survived the Fall semester despite a loss of more than 20 Full-Time Equivalent teaching positions. This translates to between 80 to over 102 fewer colleagues in the classroom and more than 100 fewer classes available to students. (During the past decade SSU enrollment increased by 1000 students for which we received a net gain of two full time faculty positions to handle the additional work.) Sonoma had admitted a significant number of students over target in order to gain extra money in fees. The short-range benefit dried up quickly when the state cut its support to the CSU. Sonoma cut enrollments (8277 FTES in 2008; 7050 by the end of 2011) but was left with responsibility to provide classes for the over target students in addition to the inadequately funded new students within target. We now pay the price. The self-inflicted condition has limited Sonoma’s ability to help our students progress on time to graduation. I understand we will go over target this spring while we continue to cut faculty lines. This means increased workloads for our already underpaid faculty, academic staff and Student Services Providers. The CFA (California Faculty Association) has sent out emails regarding workload and the raising of class sizes and I’m sure we’ll hear more about this today and in the weeks ahead.

Last Fall I outlined two main challenges for this year. (1) To survive this year of furloughs, reduced incomes, increased faculty and staff workloads while planning for an even worse 2010-2011; and (2) to move beyond the dialogue of financial despair to plan for 5 and 10 years ahead to ensure that SSU retains its hard won traditional character and academic integrity. In an era where “barely legal” has become the mantra, we must strive to stress integrity, morality and putting foremost the best interest of the greater good. The recent devastation in Haiti has shown that only teamwork and collaboration can provide results in times of desperation; that unforeseen disaster can strike anywhere at any time.

Certainly the State budget could be termed a disaster, perhaps not entirely unforeseen. Its consequences are drastic. So, where are we? How did we fare in the face of fiscal shortfall. What lessons did we learn? Have we been efficient? To what degree were we been able to focus on the greater good for our students and our academic mission or has it been more of the same?

I recently read an eye-opening article on Pirates in The Scientific American (Professor Peter Leeson, The Invisible Hook, Princeton University Press, 2009) that describes pirate society as “a bottom-up spontaneous self-organized order,” an egalitarian collaboration that responds to a breakdown of the established wider social order. Pirates divide their loot equally to avoid retaliation. They have mutual oversight and balance. In a time of restricted funding and collapsing economies, we in higher education, and specifically at SSU, have much to learn from pirate communities that divvy up treasures according to mutually acceptable codes of conduct. Such activity requires a code of conduct among the “in group” at odds with code of conduct understood by the larger group as a whole. If the division of resources is rapacious, we can rightly call it piracy. Last summer as a new Senate Chair, I went through our campus Expenditure Plan line-by-line, comparing it with previous Plans in order to understand how funding the university works. Since, as Tim Wandling notes, we are just faculty with calculators, my results have benefited from the help of credentialed fiscal experts on the Senate Budget Committee and from the campus community. What I have learned since my report last August is highly interesting. Statewide budget cuts were severe and unprecedented. And although we lost massively in the classroom someone else gained at the classroom’s expense.

SSU’s budget this year totaled nearly $200 million in General Fund monies plus locally generated and outside funds. Why has SSU’s approximately $15 million budget cut hit primarily the offices and units most closely associated with the Academic mission and from individuals who earn among the lowest salaries at SSU? How do the annual oppressive payments on our approximately $250 million of debt affect our current survival?

Here I must bother you with details. We are told the budget reductions are calculated according to the same Marginal Cost Formula that is used to allocate General Fund additions during times of growth. This formula was adopted in 1996-97 to provide a figure based on a percentage increase in the previous year’s funding plus a specific amount per student (the “marginal cost”) for enrollment growth. Since 1990 our Student Faculty Ratio (SFR) has increased from19.1 to 23.1 today with a workload increase over the last decade of 25 percent. To respond to enrollment cuts required by the Chancellor, the administration determined that based on current marginal cost figures, 38% of the $15 million-- must be cut from the approximately $98 million with a loss of about 5.7 million to Academic Affairs. The largest part of cost will come from faculty positions, as they are the largest item in the Academic Affairs budget. By contrast, how will Administration and Finance fare? Can we find revenues outside of teaching positions and classes for students in order to retain our core academic mission? What is the larger campus context for these cuts?The Senate Budget Committee noted some well known facts in its last report: in the CSU each President is accountable only to the Chancellor and Board of Trustees. On this campus the Chief Financial Officer also heads his own division of Administration and Finance. This arrangement enables compromise of democratic decision-making. Faculty led research discovered that SSU is spending as much as $4.2 million more per year on administrative pay than should a campus of our size. That comes to $3.2 million more than per year than the CSU average for a campus our size. We have fully twice as many administrators on payroll than CSU campuses of comparable size (our numbers are in line with a campus of 20,000 FTES). Could we cut resources in this division?A&F claims that last year it reduced itself by 17 positions. A review by outside experts finds otherwise. Four of these positions were already vacant (some carried over year after year). Others are obscured because A&F titles are often unique, their holders reassigned to new titles to increase compensation rather than overtly to give raises at a time when salary reductions are required of other units.Although many lecturer positions have been lost, the number of managers has risen steadily, to a high of 206 in 2006 when SSU ranked third within the CSU. With the closure of the California Institute on Human Services in 2007, the number of managers dropped by 29 to a total of 177 due to the loss of off campus personnel.Between October of 2007 and October of 2008 13 MPP positions disappeared, 10 of them were off campus grant and contract workers. At the same time, 11 new positions were added, including 5 off campus professionals. The campus also refilled 14 positions with new people and gave raises to 17.5% of the MPPs for a total of over $300,000, with Management Trainees receiving some of the largest increases from $7000 and $15,000 per year. (A number of high level MPPs received $30,000 pay increases.) Between October 2008 and October 2009, when 17 positions were supposedly cut, there was actually an overall increase of 3 MPPs.Not only did the total number of MPPs increase, internal raises increased the salary cost, without benefits, by nearly $500,000, to a total of nearly $16 million. If benefits are factored in, the sum is increased by an additional 38% (approximately $190,000). But the cost to Sonoma State is even greater, for the recent new positions are paid from the General Fund rather than outside grants and contracts, as many had been before.We should be clear. Despite the complexities I have just described to you, SSU’s MPP pattern is outside of System-wide norms. Between 2008 and 2009 only six CSU campuses increased MPP positions at all. SSU, a smaller CSU campus, increased its MPP positions by six, second only to Long Beach, one of the largest CSU campuses. Having jettisoned dozens of CIHS MPPs, SSU still ranks sixth overall in MPPs in the CSU. At Sonoma a top-heavy administration scenario is exacerbated by the President’s decision to grant permanency to his service at will MPPs, privileging them above lecturers and other non-permanent staff. (This information was included as part of the Senate Budget Committee Report completed last May. The data were drawn from the Sacramento Bee website on state wages). At the same time our Student Faculty Ratio was identified well above the CSU average of 22.6. In 2004, after draconian faculty cuts when our SFR was about 25:1 (some say 28:1) statistics were not publicly available until late that spring. As we face an uncertain future, at a recent Academic Affairs Budget Advisory Committee meeting the Provost announced that SSU could handle a SFR as high as 30:1 because we had already handled large classes and increased SFRs near that.

I have just described the price to faculty in terms of workload. Students also have paid a price. In 2008 our students paid an average of $1,833 per administrator--$751 above the CSU average. These figures were derived before the 32% fee increase went into effect last year, and administration costs went up by another $500,000. Students continue to pay more and more for less and less. They need relief.Debt service is yet another cost that the campus must pay. SSU has been saddled with some $250 million in debts. Many of you have been following the saga of SSU’s Academic Foundation in the Press Democrat. Problems with the Carinalli loans and other fiscal discrepancies at SSU underline the PD’s call to support and get the Governor to sign Senator Leland Yee’s new SB330 calling, once again, for transparency and accountability in the use of foundation and other “soft money” on CSU campuses. Write, email or call your legislator today and encourage support for SB330.The PD did not mention that several years ago the university borrowed $6 million for the remodeling of Salazar Hall. The annual cost to service this loan is $525,000, yet the SSU General Fund pays more than twice as much. About $973,800 is paid annually to Enterprises for the loan as “rent” on the building that we own. And, this isn’t the only building on campus where this is happening! Moreover, at an Enterprises Board meeting this fall, a Board member proposed using the $600,000 profits from housing, food services (dare we say coffee costs?), parking, etc., to offset cuts to classes and faculty lines. The request to even discuss the use of these funds was flatly denied by President Armiñana who presided over the meeting. Using this money to support classes was done in the past; why not now? Together just these areas alone total over a million dollars that could have been used for classes and replace lost student services. Calculating actual costs is made even more difficult, in part, because Administration and Finance is the only division that (1) does not report it’s Operating Expenses in the Expenditure Plan and (2) because funding sources and disguised assessments against existing budgets (e.g. utilities costs) make these dollar lines difficult to separate out. Also unclear are the total costs of administrative consultants and paid overtime. We should be reminded that President Armiñana presides over the Boards of both the Foundation and Enterprises, neither of which is required to report their finances to the public.

Utilities are another line that allows for massive transfer of dollars within the budget. If you attend the President’s Budget Advisory Committee or Campus Re-engineering Committee meetings, you may have heard me calling for a building-by-building utilities audit. SSU is reported to have exceeded its utility budget by $90,000 last year. Research shows that our utilities are charged at a very high rate per square foot, benchmarked in a Chancellor’s Executive Order that is a guideline, not a requirement. Utilities costs are generally assessed to all divisions after their budgets have been allocated. Green buildings at SSU, like the Student Recreation Center, pay very high per square foot cost, even though they use only a fraction of the utilities for which they are charged. There are other examples, as well. We should only pay for the real costs per building, any savings from present practice made available for other needs. A recent Webinar on Sustainability showcasing top academic executives, administrators and faculty reported that protocols across the country have been calling for energy audits and a reduction of campus carbon footprints. At Arizona and Oregon State universities, these savings are reinvested in sustainability curricula and alternative energy options. Stanford has saved hundreds of thousands of dollars by retrofits and redesign of its utilities. How about SSU? Evidently an ENSP class at SSU did an energy audit three years ago that was never released. It is time to do another audit and release the results. We may find that not only the $90,000 to $100,000 in utilities overage could be made available for other needs, but that we can also save in other ways to meet the 21st century mandate to be energy efficient and simplify what we do. Literally millions of dollars in grants and other forms of support are available for green initiatives that have softened the blows of financial cuts on other campuses. How do other unnoticed charges play into our bottom line? Where else might we find funding that could help our core mission? The relocation of Athletics to A & F to resolve its $600,000 deficit is also confusing. Since the relocation, however, there has been an increase in salaries (a $30,000 raise for one administrative employee), new positions and costs to Athletics of almost $200,000. The coaches’ salaries were not included in the last Expenditure Plan, but are available on line through state records. Coaches are faculty, but, strangely, they are now in the Division of Administration and Finance. It was reported at the President’s Budget Advisory Committee that the coaches’ salaries, historically funded by Instructionally Related Activities Funds generated by a student fee referendum, were moved to the General Fund side of the house. Once in A & F, the over $1.9 million dollars in earmarked salaries have been moved from secure IRA funding source to the vulnerable General Fund, placing an additional burden on Academic Affairs. This means that coach positions can now be more easily cut or eliminated, while the administration believes it has the authority to use the almost $2 million in IRA fee money as it deems appropriate. I suggest that if the IRA money does not go to coaches’ salaries, it should be returned to the students. How does the Green Music Center play into all of this? We know that, like the utilities, its costs have been a devastating drain on academic programs. Last semester major work was done on the Green Music Center in an effort to finish the construction so that the building can open this spring. In addition to purchasing chairs funded by a grant from the state, work focused upon adjunct areas such as the Hospitality Center (which, as an aside at Tanglewood and at Davies Hall in San Francisco are modest enterprises), exterior landscaping and entranceway. A four-star kitchen with motorized glass doors on the storage areas and top-of-the-line appliances has been wired and running, lights and refrigerators on, 24/7 since last spring, even though the kitchen has not been used to date. During a time of drastic budget cuts, faculty and staff furloughs and lost classes for students, the university completed a 20 foot waterfall, installed outside gas fired pits for entertaining, covered open ground with costly sod, planted expensive tea roses to replace recently planted shrubs no longer “good enough,” installed $100,000 tile replacements in the new bathrooms–not the fault of the contractor–put into place hundreds of square feet of leather coverings for the walls and constructed a $250,000 entryway. Additional overhead costs include interior design and directing consultants, university gardeners, carpenters, electricians have been assigned to work at the GMC, at an un-factored cost to the campus. What these workers are not doing is repairing and updating existing facilities during the time they work on the GMC. While some may sip expensive chardonnays and enjoy music in a $130+ million world class music hall, at the margins of our campus are growing numbers of homeless people, riddled with debt, despair and depression, some of whom were once faculty, staff or students here whose safety nets disappeared when they lost their jobs. Local food banks distribute food to 100,000 homeless in our county. In these urgent financial times the paradox of this situation becomes more than uncomfortable. Does the GMC fit into the mission of the university? How much have we really spent on this enterprise? How does it look to the outside world? Can we sustain this level of investment? The 21st century is witnessing an urgent ideological change that advocates sustainable ways of life in which simpler is better. Should SSU embrace this changing reality and realign our funding priorities? What is our ethical and moral obligation in the face of unparalleled ecological, social and economic challenges? What specific things can we do right now as faculty, staff and students? One is to demand the accountability and transparency needed to maintain our core mission and achieve our goals of academic quality, sustainability and diversity? While attending the approximately 17 committees I currently sit on as your chair, many of which are administrative budget advisory committees, I am repeatedly struck by the lack of a campus-wide shared vision to guide key decisions around funding priorities. Most of these budget committees appear to give the “illusion of inclusion” rather than offer a forum for spirited exchange about real priorities and urgent needs.In fact, students, faculty and academic support are at the bottom of the SSU funding pyramid. Administrative actions show that what we give lip service to as priorities, really aren’t priorities at all when it comes to opening up the collective purse strings. A recent Town Hall on the Foundation was scheduled last December, unfortunately during the last week of the semester when pressures were greatest on faculty, staff and students attending. The speakers slow-walked the audience through a presentation that took more than an hour. They offered, after one o’clock, when many in the audience had to be elsewhere, no satisfactory responses to repeated questions about loans, budgets, the funding and costs of the Green Music Center, for its Hospitality Center or its entranceway.The President is responsible for the actions of his top administrators, who work at his pleasure, and are paid handsomely. Because the CSU invests its presidents with full authority for their campuses, they can act, and sometimes do act, as potentates. This power has led on more than one campus to a disregard for the values held dear by their institutions: valuing the mission of teaching and learning as its top priority, supporting a bottom-up-and-top-down form of collaborative decision making and extending respect to all members of the campus community. Nell Minow, co-founder of an independent research firm engaged by Treasury Secretary Timothy Geitner to discuss executive compensation, observed that executives are ingenious at eliminating any personal risk, turning various income sources into corporate play money. She went on to note that “pay disconnected from performance is a critical element in the bad decisions that lead to economic catastrophe.”.Part of the problem is executive nonsupport for transparency and accountability. Minow notes that “most of the control rests with chief executives who often effectively choose their own directors and, if they serve also as chairman of their own board, preside over their meetings.” Because of the absence of local oversight, CEOs increasingly pursue business strategies that address their interests rather than those of their organization. As President Obama observed in his State of the Union speech last night, we are here to serve our citizens, not personal ambitions.

Now let’s to turn to the future. What new, 21st century directions could both stabilize our university and offer new options for our students. SSU has a long established history and mechanism for steady adaptation and development in both programs and curriculum to address changing times and values. The Hutchins School, ENSP, the Holocaust and Jewish Studies programs, Women and Gender Studies are only a few. Our individual programs and majors regularly undergo transformation and streamlining as a result of program review. Regardless of what we decide to do, our fundamental liberal arts and sciences values are needed now more than ever and must remain intact. Sustainability and Diversity are urgent issues in the face of global climate change and population shifts. Both of these topics could extend these liberal arts values and outside funding is available to develop and support them. They are issues that would allow us to connect across disciplines and build partnerships with the community and which would bring savings and new income to the campus. After the retreat and despite our dire financial situation, I am strangely optimistic about the future of SSU. We truly are at a crossroads, but we seem to be coalescing around new goals. We can succeed in facing up to the causes of our financial difficulties and find a process to share the difficult decisions we must make, but we must consider the larger context of the university budgets and expenditures. We must also include in our assessment of outcomes those things that cannot now be measured that I referenced last August: students’ ability to challenge their personal myths, to dissect rationally not only what they are being told, but how it is communicated; to nuance their search for pathways to careers, families, citizenship; to gain the skills to adapt to rapid change; to entertain new ideas, to engage in challenging, visionary, inclusive, empathetic dialogues outside their comfort zones; to help society face the looming global issues and invest in a common good. At SSU and in the CSU our students, faculty and staff must feel that the institution values and supports them. The tax payers of California must see that we take efficiency and academic quality seriously. Our Chancellor, following the University of California Chancellor Yudof’s lead could find significant savings if he directed a decrease in administrative bloat before reductions in faculty and student support staff. Classes must take priority, faculty lines and salaries must be fair; academic workloads, our SFR and class sizes must hold at the system average; the $200 million SSU total funding can easily absorb the cuts in places other than Academic Affairs and Student Services; the GMC must reflect the values and interests of the larger campus, releasing its stranglehold on fund raising priority, returning redistributed funds from other campus divisions, and scaling back its emphasis on luxury and indulgence. In place of this, funding for diversity, globalization and sustainable initiatives could be pursued along with support for teaching and other on-going curriculum development. We are already behind most other campuses in these essential, core regards. The time for planning has passed; now is the time for action. As Naomi Klein observed when she spoke at SSU, institutions use crises to push through policies that would not other wise be tolerated. We should be wary of proposals, like Barber’s “Deliverology” or Dickson’s “Prioritization” that may call for radical change or quick fixes and we should refuse to be complicit in the dismantling of our Master Plan for Higher Education in California. Some, once again, have proposed technology as the answer. A recent Press Democrat article discussed the problems of “tech overload” for teens. (Crissy Dillon, January 15, 2010). “ …it is technology’s effect on our ability to socialize face to face that may be the bigger worry.” While a valuable tool, technology is not the sole solution. Its ongoing front end and maintenance costs and questionable efficacy make it problematic, particularly at SSU where, though we spend $6 million per year on technology, there is a woefully insufficient commitment to Academic Technology. We are the “people’s university” not a private ivy-league campus or the for-profit University of Phoenix. Creative alternatives to the status quo can be found. Sustainability and our survival can be assured if we have equality in funding decisions, along with transparency and accountability. Even pirates respect this approach. Can’t we?