David A. Daigle
UVM Board of Trustees Chair’s Report
October 20, 2017
Good morning everyone. I would like to extend a warm welcome to everyone to our October board meeting. This has been a spectacular week in Vermont, one that reminds us all of how special a place this is.
As always, I want to thank all of the staff and faculty who are at the heart of this institution, for all of your efforts to make the University of Vermont a special and rewarding place for our students. If you want the abridged version of all the great things that happen here, I encourage you to view the recent “Day in the Life of UVM” production; it is inspirational.
I would also like to thank everyone in the UVM community who has participated in President Sullivan’s fifth year comprehensive review. The review has now been completed, and our consultant, Dr. Carol Cartwright, has shared her findings with the full Board. I will share a bit more on this topic in a few minutes.
Let me turn for a moment to the subject of economics. At its core, economics is the study of choice in a world of limited resources. If resources were unlimited, economics would cease to exist. It should be evident to everyone in this room, as you are all very familiar with our University, that our resources are indeed limited.
We essentially have three resource pools. The first is our state appropriation, approximately $42 million annually, for which we are grateful. It allows us to do many great things we could otherwise not do, including providing materially greater access to UVM for Vermont residents. However, in real dollar terms, the appropriation peaked in 1971, and has been declining since. We hope for greater support, but we acknowledge the limitations and probabilities.
The second is our net tuition, the product of net tuition per student and the number of students. This is currently approximately $265 million annually. Real, inflation-adjusted tuition at UVM has increased at an annual rate of 3% for the last 60 years; the real cost to families has increased six fold. Even with nominal increases of 3% annually, we will soon be charging out of state families $250,000 for a four year degree. Themes of affordability and value will remain central.
As for the number of students, the 35% growth experienced over the last 15 years simply cannot be replicated. High tuition, coupled with an inability to grow our student population, strongly suggest that growth in real net tuition will be difficult to achieve.
The third and final pool of resources is philanthropy. The decision to create the UVM Foundation was one of the most important strategic decisions in the history of this University. Managed well, it will be an increasingly important source of funding for our strategic initiatives.
We need to make choices about allocating these scarce resources. If we have higher compensation for our faculty and staff, we may need to reduce the number of employees or raise tuition. If we raise tuition and reduce the number of employees, we run the risk of weakening the value proposition for our students. We can raise tuition and hire more faculty and staff, but may need to limit compensation increases. If we want to invest in a new multipurpose center, we have fewer resources to invest elsewhere. If we restrict investment opportunities, we will have fewer resources in our endowment over time.
Economics is about choices. Our Board does not presume to know the correct allocation, or even that there is a correct allocation. What is important to us is that competing interests are balanced in an equitable manner. Are our tuition and overall value proposition competitive relative to peer institutions? Are staff and faculty compensated fairly relative to their peers? Is the University being managed effectively and efficiently? Is the endowment being managed prudently to maximize the benefit for future generations?
The choices are rarely easy, and even more rarely will please everyone. What we would ask of all of you is understanding, especially when the response from the board or administration is different from the one that you seek. We ask that you appreciate the balancing act that the president, provost, deans, and trustees are asked to make regularly. We all have a shared goal of making this the best possible university we can with our available resources.
Which brings me to leadership and Tom Sullivan, the 26th president of our University. What we have with President Sullivan is a leader who is highly skilled at making these choices in a principled, equitable, evidence-based manner. I have worked with Tom on many difficult decisions over these five years, and can say with great confidence that the UVM community should be thrilled to have him at the helm.
During the 2011 presidential search, our search consultant joked that what we were seeking was “God, on a good day”. While Tom may have fallen a bit short of that mark, the comprehensive presidential review feedback was as impressive as it was extensive.
Tom, I am delighted to offer the following resolution for our Board’s consideration:
Resolution Regarding Five-Year Presidential Comprehensive Review
WHEREAS, the University of Vermont has achieved enormous success during the past five years across a broad spectrum of academic, research, programmatic, and student life endeavors,
WHEREAS, the University has met or exceeded many of the important objectives established in the strategic plan approved by the Board of Trustees in 2013,
WHEREAS, the University community remains dedicated to common goals and shared values,
WHEREAS, these achievements have come from the efforts of the entire UVM community under the outstanding leadership and vision of President E. Thomas Sullivan;
THEREFORE, the Board of Trustees of The University of Vermont, on behalf of our entire UVM community, expresses its deep appreciation, gratitude, support, and affection for E. Thomas Sullivan.
This concludes my chair’s report.
Last modified October 21 2017 09:39 AM