This is my annual report on the University community’s top achievements, immediate priorities, future directions, and ongoing challenges, styled as a “state of the University address” in written form. My hope is that these communications will inform, inspire, and continue to engage you in our mutual path to becoming ever greater. And, of course, we celebrate the achievements of the year passed – and there were many.
I begin by expressing heartfelt thanks to you, the U of R community, for your continuing hard work and dedication. Without you, we wouldn’t be able to achieve all that we have – all of the progress and promise that you will read about in the next pages. This report is all about you: your leadership, scholarship, teaching, knowledge, expertise, engagement, and commitment. Every day, your work helps advance this place we love and supports our students, for whom we care deeply. Thank you.
This is a particularly exciting time to work where we do. It’s a time that is not without some vexing challenges, as I will discuss – but an especially exhilarating time in the life of the University, nonetheless. Why? I’ll list just a few reasons here, and I’ll elaborate on each of them throughout these pages:
To be sure, the overall picture I will convey in this report is of a University that is full of momentum; feeling positive about itself; viewed positively by our current, as well as future, constituents; and delivering positive results. Yet, this propitious movement is taking place against a backdrop of change that is rapid, profound, and nearly unprecedented in history. It will take all of us continuing to work hard together to maintain our focus and momentum in this environment.
For this past year the life of our nation – indeed, our world – can be defined by, if nothing else, turbulence. Our lives, whether within or outside of the hallowed halls of our University, are in a state of constant movement. From the federal administration came new policies affecting or potentially affecting the funding that supports our teaching and learning, our value systems and dedication to inclusion and equal rights, and our very mission. These changes have in some cases disrupted the equilibrium of our daily work here at the U of R and of our community. The churning in the political and social structure of the nation creates the “whitewater” that Dean Andrew Wall, Provost Kathy Ogren, and I have written to you about. It disrupts our own flow as it raises questions and concerns for institutions like ours.
I will speak to these changes and ongoing concerns next, and how we will navigate the whitewater to best serve our students in a challenging federal era.
We continue to remain in the gears of important discussions on financial support for students and higher education institutions, Deferred Action for Childhood Arrivals (DACA), Title IX, and other areas under increased scrutiny in the past two years.
In December, the federal government passed a law reducing corporate taxes and changing individual taxes, the provisions of which may make charitable giving less favorable to some donors – particularly the wealthiest – who want to give to colleges and universities; we will wait to see the impact. And for the first time, the revenue that some private universities and colleges earn from billion-dollar restricted endowments will be taxed to produce general federal revenue, even though those endowments are used according to the donors’ philanthropic restrictions to fund student financial aid, research, infrastructure, and academic facilities; one can worry about the slippery slope in such taxation.
For nonprofit private universities such as Redlands, which are integral to both workforce development and the pursuit of new knowledge in this country, the removal of some financial aid and education loan advantages could have an adverse impact on students.
Congress is now working in an unusually partisan way on reauthorization of the Higher Education Act of 1965, the law that regulates financial assistance for students in postsecondary and higher education – from low-interest loans, to the grants directed to students with greatest financial need, to direct federal support for universities. Last updated in 2008, but usually reauthorized by a bipartisan process every five years, initial reports say the reauthorization may bring significant changes that could impact the ways students are able to pay for college. Items that have been discussed are plans to revise student aid programs, set caps on loan amounts, and scale back income-based repayment programs and loan-forgiveness options for borrowers who work for government agencies and nonprofit organizations.
These discussed changes would affect Redlands students financially and create a ripple effect throughout our pipeline of prospective students. The draft legislation also delves into issues that are everyday challenges for us – free speech on campus and Title IX among them – which I will discuss in a moment.
The 2018 federal budget proposal from the White House, recently unveiled, also could impact the students who are in most need. Although it earmarks $4 billion over two years for college affordability, including programs that help police officers, teachers, and firefighters, it also seeks to curtail income-based loan repayment plans and eliminate the Public Service Loan Forgiveness Program, which allows former students who fulfill certain public service positions to have their loans erased after 10 years of on-time payments. Nearly two-thirds of student loan borrowers who have shown interest in the program earn less than $50,000 a year. Such a provision may hold back students from pursuing degrees that will lead to lesser-paying but essential public service careers.
The proposed budget calls for eliminating subsidized loans. Some 30 programs geared toward various aspects of educational development would lose funding, including the Supporting Effective Instruction State Grants, 21st Century Community Learning Centers, and Federal Supplemental Educational Opportunity Grant programs, which add on to Pell Grants for students with the greatest financial need.
Our state budget provides at least some mitigation to these possible effects on students’ ability to pay for their education. The overall impact of the California state budget for U of R is holding steady; through the General Fund and local property taxes, Gov. Jerry Brown has earmarked $33.7 billion for higher education for 2018-2019. The total reflects growth of $892.8 million in funding for higher education, which supports a long-term plan for the University of California (UC), California State University, and the California Community Colleges system.
Most importantly, it sustains the Cal Grant program, which provides additional financial aid for tuition, fees, or other costs of attendance (e.g., books, supplies) for students with demonstrated need. The program is an entitlement for students who meet eligibility criteria, and students who are ineligible are still able to compete for additional grants. Currently, high-need students attending private nonprofit institutions and for-profits accredited by the Western Association of Schools and Colleges (WASC) receive up to $9,084 annually for tuition. However, under the new budget, independent California colleges and universities, as a sector, must now commit to admitting more California community college students through the Associates Degree for Transfer (ADT) pathway to maintain the award at $9,084, with a new requirement that, beginning in 2019-20, the sector admits at least 2,500 students who have earned ADT from the community colleges and are guaranteed junior standing. This number will ramp up to 3,000 students in the following year to sustain this level of support from the governor.
This is significant for our undergraduates, as 30% currently benefit from the Cal Grant. Retention and graduation rates of Cal Grant recipients are higher than those of our total student population (against demographic projections elsewhere), so the impact is felt by some of our most dedicated and hard-working students – those who most want to get to, stay at, and embark from Redlands into successful lives and careers.
Despite Congress’s March 5th deadline to legislate a new law on DACA, the various efforts to reach an agreement that would maintain DACA recipients’ protected status have failed. (One of the proposed solutions in the House was co-led by our own Rep. Pete Aguilar ’01, Congressional Hispanic Caucus whip and Assistant whip in the House Democratic Caucus.) A competing White House proposal also failed. The DACA termination plan, however, is being challenged in multiple courts, and in January a Northern California federal judge issued a preliminary injunction requiring the federal government to maintain DACA until the litigation is completed. The Executive Branch petitioned the U.S. Supreme Court to lift the preliminary injunction without it first going to the U.S. Court of Appeals. But the Supreme Court on February 19th declined to hear the case, deferring to lower courts’ rulings for the time being, turning responsibility for a resolution back on Congress, and leaving DACA recipients’ status in limbo indefinitely.
Protection of our undocumented students is a continuing concern. While the U of R cannot promise our undocumented students that we can protect them from all risks, we are providing proactive support by directly assisting any undocumented student whose ability to continue their education with us is imperiled. We are continuing to:
Another area in the whitewater is Title IX. Last September, the Department of Education formally rescinded Obama-era guidance on how schools should handle allegations of sexual misconduct under Title IX.
The Department of Education is still contemplating the formalization of new rules regarding Title IX. In the meantime, individual schools are free to determine for themselves the optimal ways to address cases of sexual misconduct on campus. Like most peers, we have not lessened standards applied to evidence in investigations and judicial determinations. The University has worked hard in recent years to develop strong and fair policies and continues to remain dedicated to educating its community about, and addressing complaints of, sexual assault and other forms of sexual misconduct. The safety and well-being of our community is our first priority; we take all allegations seriously, and we own our responsibility to act on them. We recently hired a new full-time Deputy Title IX Coordinator, Erica Moorer, who can be reached at 909-748-8916 or email@example.com.
Concepts of free expression have taken a provocative turn in the last year as well, and our University community, like many, has had to rededicate itself to protecting free speech. As just one example, the University adopted a revised Free Expression Policy that gives students greater freedom to speak without first seeking permission to do so and offers greater access to zones for public demonstrations. The issue of free expression requires balancing, of course – including between the right to free speech and protection from the hateful forms of expression or threats sometimes found in “paid speech” – but we can promote and protect free speech without doing damage to our sense of safety or our community ethos of inclusion. Hateful and threatening actions can and will be addressed, even as we remind ourselves and our students that being made uncomfortable by different ideas makes us stronger.
Universities have for a century been key foci of debate on the left and right (and center . . . the world of discourse need not be binary); but, to survive, certain values – the centrality of learning, freedom of speech and open exchange, freedom of assembly, academic freedom, and intellectual diversity – must be protected. To do so, universities, to the extent they may become a nexus of tensions from extreme fringes of the political right or left or of any swirling fervor of xenophobia or hyper-nationalism, must keep their eyes on long-term fundamental values.
We hosted conservative political commentator Ben Shapiro last year, and this year we invited civil rights activists Shaun King and Angela Davis to campus. We also held a forum to discuss “free speech vs. hate speech” on college campuses with our public radio partner, KPCC. Redlands is committed to fostering conversations around the issue of free speech. School of Education Dean Andrew Wall said it eloquently at the KPCC event: “There are many public squares where we can engage each other in society. . . . But the university space is special. We have a commitment to prepare people to serve society in a broad way. We have a special responsibility to help to define speech that is both free and civil. How do we engage each other in civil ways that are about mutual respect? It’s hard sometimes to engage in conversations where ideas are controversial. But in a classroom space, you’re supposed to do that. . . . Professors, in combination with students, set up situations where they can engage controversial ideas, where different points of view come across. That’s the special promise of the university in creating environments for free expression.”
The current times have made advocates and activists of many who may not have felt moved to speak up and take action before. I encourage you to write to your representatives in Congress to explain your questions or concerns about how tax reform, the reauthorization of the Higher Education Act, DACA, or Title IX affect higher education.
National college and university enrollment of traditional-age students continues to decline – a trend that worsened in 2014 – and our sector (private nonprofit) has been relatively flat the past three years. Public universities have been the only sector experiencing any growth since the downturns began, although they, too, saw a small overall decline in 2017. And since the UCs have intentionally grown their in-state undergraduate enrollment during this period, our yield in the College of Arts & Sciences (CAS) continues to be affected.
This overall decline in undergraduate enrollments has been documented for years by The Chronicle of Higher Education and Inside Higher Ed, the National Association of College and University Business Officers, and the National Student Clearinghouse. Let me give you a sense of scale here. Currently, about 90% of high school graduates will at some point enroll in an undergraduate institution. Undergraduate enrollment nationally was 17 million students back in 2015 – an increase of 30% from 2000. While undergraduate enrollment had substantially increased in that first decade of the century, enrollment then slowed and actually decreased by 6% between 2010 and 2015. Undergraduate enrollment is projected to increase by only 1% a year over the next 11 years.
So: Where do these 17 million enrollees all go? The vast majority go to public institutions, including large state-funded universities and community colleges. Only 17%, or 2.9 million, enter our private nonprofit sector. And where do those 2.7 million students attend within the private nonprofit sector? Only 26%, or 700,000, attend mid-sized master’s-level universities like ours. Thus, our sector is a niche, within a niche, within a niche, attracting only 4% of the original pool of 90% of high school graduates aged 18-25. And in California these matriculants are increasingly underrepresented minority and first-generation students.
But the University of Redlands has taken steps to mitigate the impact of these projections. Much of our North Star 2020 strategy derives from these fundamental facts of the market. Expansion at public institutions has important long-term financial implications for Redlands and is a central focus of our planning. It cannot be business as usual for us when shifts in not only the number of tuition-paying students, but students’ financial need, can make or break the University budget.
Our “Cal Grant Tuition Promise,” which ensured that Cal Grant-eligible students admitted for fall 2017 had their entire tuition costs covered through a combination of state, federal, and University grants, was successful in boosting University enrollment and allowed us to compete against the UCs in that cycle. So the impact of the Cal Grant holding steady at $9,084 is good news. A similar plan is in place for fall 2018 recruitment.
A full-time admissions officer position was re-directed to be located in the Pacific Northwest last summer to enhance our focus on recruitment of students from this region, a leading out-of-state market for CAS. As a result, first-year applications from Washington and Oregon were up 12% for fall 2018. Overall enrollment in CAS grew 2%, from 2,408 to 2,456, associated with a larger first-year class. But overall enrollment for the University at fall census was 4,899 students, down 3.4% from fall 2016.
The School of Education saw another record year in overall enrollment, reaching 825 students, representing 72% growth from fall 2013. Congratulations again to Dean Andrew Wall and School faculty, staff, and administrators for continuing this remarkable upward trajectory – in enrollments, quality of the academic and overall student experience, and impact on the leadership of education in California.
School of Continuing Studies (SCS) enrollment remains on par with the very strong results of the previous fiscal year, when it surpassed its enrollment goal by 192 students. The general trend in the School continues upward. This turnaround in the School’s contribution to the University’s profile in and value to the local community, as well as to our bottom line, is very positive indeed. I thank and congratulate Associate Dean of SCS Dan Otter and his colleagues, as well as our extended team that assists him on marketing outreach.
Undergraduate enrollment in the School of Business continues to follow a declining national trend, as the population of degree-completion transfer students historically tends to correlate with a declining unemployment rate. Graduate program enrollments in the School of Business – often counter to macroeconomic cycles – are off 25% from 2016-17, year to date.
Yet, again this year, our overall future enrollment picture is brighter than you may know. Indeed, through a combination of new outreach and improved retention, we plan on strategic, sustainable growth – our North Star plan now identifies a specific percentage of growth by 2020 – as I will explain in the following sections.
The University has experienced declining retention, especially in CAS, for five years now. Declines in retention or graduation rates represent not only lost revenue, but a failure to fulfill our mission: the “social contract” in higher education rationalizes federal support to nonprofits in exchange for producing a highly educated citizenry.
This fall, the University hosted Dr. Charles Schroeder, a scholar and consultant on undergraduate retention, to assess the ways we can improve student success. In response to his outside review, the President’s Cabinet developed a plan of action that involves: (1) an institutional shift from focusing only on “retention” to emphasizing the broader concept of “student engagement” for all University students; (2) explicit connection of student engagement to the North Star 2020 strategic priority entitled, “Heighten Student Achievement and Success”; and (3) the creation of the University Student Engagement Leadership Group (USELG).
A goal of the USELG, comprised of the Deans of CAS and the Schools of Business and Education, the University Dean of Student Affairs, and the Vice President for Enrollment, is to promote greater coherence in University efforts to address student engagement and remove barriers that prevent students from connecting more fully with the U of R. Areas of focus will include re-imagining orientations (both graduate and undergraduate), consistently analyzing retention challenges, ensuring strong academic and co-curricular support services for all students, and providing meaningful experiential and applied learning (such as internships, capstones, research, and study abroad), which are factored into our evaluation. Members of the USELG have established both collaborative and independent working groups to begin to address some of these areas. As an example, Deans Eddleman and Brown recently shared “at risk” factors with first-year student advisors as a means to inform advising conversations leading up to fall 2018 registration. Timelier follow-up with students who do not register for classes or sign up for housing is also planned.
In addition, this group will serve as, in the words of Dr. Schroeder, a “Barrier Buster Team,” working collaboratively to identify and “bust” unintended roadblocks to success. These barriers may exist within systems or processes, result from an absence of technology, or be once-relevant needs that are no longer necessary. As the team’s agenda evolves, it is expected that other members of the University community will be asked to join this important initiative.
Retention of students is not a singular entity but an outcome of all institutional efforts to more actively engage students in the academic, social, and professional life of a University. The broader rubric of student engagement makes clear that students do not simply stay or go as defined by retention rates; rather, students stay based on affinity and a sense of belonging, both of which result from multiple and regular points of contact and experiences that inform their decision to persist or depart. Instead of simply focusing on retention as a single outcome, the Cabinet believes that directing our collective time and attention to the multifaceted causes of that outcome – how students engage in our community and what that experience is like – will have greater impact.
This way of thinking about our work necessitates that University educators and service providers assume an innovative, student-centered perspective on academic, co-curricular, enrollment, operational, and alumni enterprises, all of which impact how students regard their education. For example, faculty members Jennifer Verdolin and Alana Belcon will offer a First-Year Academic Experience in Geographic Information Systems (GIS) intended to challenge and engage students as they explore and consider GIS as part of their education. The pilot academic opportunity will allow curious students to make valuable connections, consider possibilities, and experience education in a way that will both engage and enlighten. This innovative method of academic engagement is a model that is similar to our very successful First-Year Journeys program, which allows upper-class students to teach and engage and first-year students to learn and engage outside the boundaries of the traditional classroom. This type of engagement does have an impact. First-Year Journey participants persist at a rate that is 11% higher than their entire first-year cohort.
As North Star 2020 mandates, we are also creating pathways into the U of R by connecting the dots between sectors. One example is accelerating transfers from two-year public colleges. And we are building a better recruitment pool of qualified students from regional public feeder school districts through guaranteed acceptance, graduation time, and financial aid grants. Our partnership with Tuskegee University, the private, historically black university in Alabama, provides expanded opportunities for students and faculty, including courses in residence at the partner institution for up to one year. As a start, we hope to have two Tuskegee students join us in Redlands next fall. A brand new partnership with Western University of Health Sciences’ College of Pharmacy designates five seats per year at Western for U of R students who wish to pursue the Doctor of Pharmacy degree. And finally, internally, we are connecting our own baccalaureate programs with our own graduate programs; several exciting new pathways are now coalescing that will guide graduating CAS seniors into School of Business or School of Education graduate programs.
Building partnerships also means working directly with corporations and other organizations to help their employees pursue a Redlands graduate or undergraduate degree. One example is our partnership with industrial giant United Technologies Corporation (UTC). The program, which builds on the existing relationship between the University’s School of Business and UTC locations in Riverside and San Diego Counties, provides UTC employees like Dalia Izquierdo with tuition discounts and customizable schedules through the company’s Employee Scholar Program. Another new partnership is with the Firefighters First Credit Union, offering employees an onsite bachelor’s degree program. And we are also working with a branch of the Screen Actors Guild‐American Federation of Television and Radio Artists on another School of Business onsite program opportunity.
The University has similar partnerships with more than 400 organizations – community colleges, school districts, public utilities, banks, the U.S. Department of Veterans Affairs, public agencies such as law enforcement, and city and county governments. The County of Riverside recently joined this list; we are engaged in developing degree programs to be provided at March Air Force Base under a joint-powers educational authority. And we are seeking or have already solidified varying kinds of partnerships with institutions including Loma Linda University and College of the Desert. Tuition discounts are offered within those programs; many partnerships offer classes onsite, which allows students additional flexibility in scheduling work and school.
We are developing new degree programs to keep fresh offerings in front of students and keep pace with changing desires from students. The School of Music is developing a new degree, the Master of Music in Vocal Chamber Music. The School of Business, embracing our distinctive position as a “Spatial University,” will soon offer an online GIS concentration within the MBA. The School of Continuing Studies is offering a Full-Stack Web Development Boot Camp, which provides intensive, affordable training in web and coding skills, as demand for these abilities increases in the job market.
Delivering 24/7 access to education anywhere in the world is also key; two U of R master’s degrees are newly available online. The School of Business now offers an online MBA, which students can complete in as few as 24 months. Once thought of only as a way to expand the geographical reach of the School, enrollment numbers in the online option to date indicate tremendous popularity of online education with even local applicants – even though they already have easy access to our on-ground program – who are seeking more control of their schedules. (Interestingly, 99 of 109 online MBA applications to date are California residents, most of whom have proximity to our regional campuses.)
The School of Education is enrolling students for the online MA in Learning and Teaching (MALT) that will launch in May. The MALT combines a master’s degree and an Education Specialist California Credential and can be completed in two years. With a pronounced emphasis on personalized education, healthy collaboration, and interaction from faculty and fellow students, each of these online programs provides support and flexibility for working students with busy professional and personal lives.
Further, recognizing a coming era of potential consolidation in higher education, we are performing due diligence on potential acquisitions of other existing professional schools, or in some cases lease opportunities, as the right set of circumstances arise.
The University is making strides in increasing enrollment and retention of international students and creating pipelines to entice new categories of these students. University-wide international student enrollment has grown from 1.1% (55 students) to 3.2% (157 students) since fall 2012. We routinely establish Memoranda of Understanding with partner institutions about research, teaching, curriculum, or student exchange around the world, and we have several international collaborations that have been established or are in progress across the Redlands community: We are in discussions with a Chinese university about a 3-2 Master of Science in GIS program, an organization in China about clinical mental health counseling, and a university in Baja, California, about education and psychology.
Historically, these relationships have centered on individual faculty, but the University is moving from faculty-based to institutionally based partnerships between institutions. We are looking to deepen and broaden our practices of internationalization via continued travel courses and global consultancies within CAS and the Schools. We also want to establish cross-culturally infused curricula like ones that currently exist in Education, Religious Studies, Environmental Studies Innovations, and the Southern African Corridor Initiative.
While the University mission highlights global citizenship, Assistant Provost for Internationalization Steve Wuhs is helping to make our community more aware of activities in support of global learning and internationalization. Faculty involvement and support in particular are important to how the initiative will be normalized into institutional life. Plans are under way to develop an English language program that could both serve as support for our current international students and create a pathway/pipeline for prospective international students who need some additional English language training. In addition, we are planning to enhance internship opportunities for undergraduate and graduate international students, and we are considering adding STEM concentrations to our MBA to align with common desires of international students.
In the last 10-year period, the fiscal year ending 2017 was our fourth consecutive year of net positive operating margins (which even includes deferred maintenance) compared to the six prior years of deficits in operating results. Notably, we were able to complete the renovation of Grossmont Hall, which houses approximately 110 students – including the addition of air conditioning, improved access for disabled individuals, upgraded seismic retrofitting, and updated bathrooms – without either adding to our existing debt levels or decreasing reserves. Our reserves – funds set aside for general liquidity, debt service, safety, and other long-term needs required to remain credit-worthy – were essentially unchanged for the year, at nearly $22 million.
And these advances occurred even though we greatly increased financial aid expenditures during this era. In CAS alone, financial aid expenditures doubled in the decade from FY ’06-07 to FY ’16-17, outstripping the rate of tuition increases by more than half. As a result of constraining tuition growth so we can be more affordable for students, we were able to maintain enrollment (growing 1% over that decade) against strong downward demographic pressures, yet still increase net tuition revenue by 41%.
Our endowment spending rate continues to gradually move towards a more sustainable level, now 4.1% of the trailing five years’ average (for FY ’18-19, our budget policy will be 4.0%). Although overall endowment levels are still significantly below where we must be for our size, we achieved endowment growth from $191 million to $213 million in the year just ended – a noteworthy achievement.
Also noteworthy, as reported by three+one, a financial management services company whose clients are municipalities, small banks, and medium-sized colleges/universities, the University of Redlands earned a “cashVest® score” of 97 out of 100 – the only institution that scored above 95 out of hundreds of public and private institutions analyzed throughout the United States. A cashVest® score represents the health of an institution’s cash flow coupled with the optimization of cash available for investment.
And in a Student Loan Report using Department of Education data, the University of Redlands was ranked in the top 8% – #146 among 1,900 U.S. colleges with 500 or more students carrying student loan debt – for our graduates’ successful repayment of that debt. A low default rate means students are graduating and handling their student loan debt successfully, a testament to the affordability and quality of a school’s programs.
All of these factors reflect our focused efforts to continually improve our financial health. Nonetheless, responsible foresight mandates that we maintain a close watch over our expenditure levels to avoid a return to the period of deficits and negligible reserve funds that we all have worked so hard to leave behind.
Accompanied by a musical tribute created by recent honorary degree recipients Marilyn Magness Carroll ’75 and Steve Carroll ’74 during last October’s Homecoming, we launched our $200 million comprehensive fundraising campaign and showed the impact that giving will have today and for generations to follow. I also acknowledge Campaign Chair Alice Mozley ’70 for spearheading the campaign, the biggest for U of R so far.
As we move forward with the Forever Yours campaign, we not only reflect on the lifelong connections that are forged with the University, but are also reminded that every significant aspect of the Redlands experience is made possible in part through the generosity of our donors. From financial aid to faculty and academic resources, from the experiential learning taking place outside the classroom in athletics and community service, to our wide range of study abroad opportunities, each of these areas are among the important priorities identified within this campaign, for which funds are being actively solicited.
With more than $138 million raised to date from 11,000 donors, we continue to encourage alumni, trustees, administrators, staff, faculty, parents, and friends to help preserve and enhance what they love about the University through their philanthropic and lifelong engagement. Thousands of gifts have been made since our public announcement last fall, including the following leadership commitments:
Details about the campaign’s five initiatives – Scholarship Promise, Personalized Education, Experiential Learning, Global Perspectives, and Educational Innovation – along with personal stories about the Redlands experience – can be found at www.foreveryours.redlands.edu.
Despite all of the positive ongoing and new efforts I have discussed above, which are designed to have a long-term impact on enrollments and endowment, the budget planning for our near-term operations must continue to be wholly realistic and practical. We entered this fiscal year with a positive operating margin for unrestricted funds that was less than half the size of the prior year, thus reducing our ability to fund general reserves or capital improvements. While we are compensating for a two-years-long toll of recent enrollment declines in CAS and the School of Business, and despite successful engagement of new and existing donors that I have described, enrollment and retention issues continue to make our funding situation deeply challenging. We remain acutely and continually dependent on tuition revenue, and the decreased enrollment revenues compound negatively as they roll into each new year. While we welcomed the second-largest entering class in our history in CAS in FY’17-18, the net revenue per student declined. The percentage of Cal Grant students in the entering class rose to a record high of 39% (previous high was 28%), and the overall percentage of CAS undergraduate students receiving Cal Grants rose to 30% (previous high was 26%).
Our net operating revenue in FY ’16-17 was reduced by $2.6 million when compared to FY ’15-16, and we ended the year at $129 million in revenue. However, as a result of strategic expenditure reductions, reorganization, and prudent management, our operating expenses did not increase from FY ’15-16 levels. The decrease in net operating revenue was the primary factor in reducing our positive operating margin from $3.8 million in FY ’15-16 to $1.2 million in FY ’16-17 – a downward trend we must eliminate. (Remember, that figure is not a surplus but includes deferred maintenance costs we must cover.) These results are not unique to Redlands, as many of our peers are facing similar challenges. We should keep the recent results in perspective.
The Cabinet and I, along with the Budget Office, continue to prepare three-year budget scenarios for the Budget Planning Committee and Board of Trustees.
Based on enrollment projections, and compared to FY ’17-18, we are assuming an overall decline in net tuition per student for CAS, School of Business, and School of Education. The reasons include:
Continuing to be the best stewards possible for our beautiful main campus and facilities, both to serve today’s students and to preserve them for future generations, is a very difficult charge to uphold in tight financial times. Yet, we are making progress.
We are increasing our on-campus combined heat and power (cogeneration) plant by one megawatt. The Facilities Division is working with an energy and environmental consultant to add three micro-turbines to our existing Energy Center, which will increase efficiency and limit our dependency on Southern California Edison for electricity. We are also updating our aging high-voltage infrastructure, which will include replacing the aging switches and wires that feed North Hall.
The University conducted a detailed assessment of Redlands campus deferred maintenance needs, on a building-by-building basis, to provide the foundation for a comprehensive capital plan. With more than 64 buildings containing 1.2 million square feet on our main campus alone, the assessment report found that there is a need for financial investment of $131.5 million for maintenance in the first five years and a need for $198.5 million over the entire first 10 years. We found that the University has a facilities condition index rating (FCI, ranging from 0.00 – 1.00) of 0.31 which is considered to be in only the “fair” range (0.21 – 0.40). The FCI is calculated by dividing the deferred maintenance value by the replacement value ($131,500,000/427,000,000 = 0.31).
We are currently working with a diverse group of campus constituents to create a detailed list of potential capital projects to identify those that are top-priority, and we continue to plan enhancements to the student on-campus experience. Aside from keeping our campus attractive and safe, these plans include:
Campus Safety and Security
Community safety is always one of the University’s highest priorities, and we’ve made progress on our long-term plans for key additions to Redlands campus security:
Last year, students invited me and my Cabinet to a forum, hosted by ASUR and organized by Students for Environmental Action, focused on the University of Redlands’ attention to, current practices in, and future goals regarding environmental and energy sustainability. This followed up on the work of the University of Redlands Sustainability Council, which just released its annual report last month. This report highlights the great progress made by the Council, and it will serve the University very well in provoking us all to further action while acknowledging the good work we’ve done to date.
Many changes called for in the report, offering “ecological integrity, social equity, and economic vitality” for our Redlands campus, are already in implementation. The Grossmont renovation allowed us to install high-energy-efficient, variable refrigerant flow systems for heat and air conditioning and to change to LED lights. We are seeing the upgrade of the Energy Center with three new high-efficiency co-generators; we have made Bon Appetit reforms (e.g., paperless receipts, reusable food containers); and we are vigorous in our recycling and water conservation efforts. The LEED certification standard for building design is now assumed and in practice.
Some suggestions await later action because of their complexity, cost, or interactions with other efforts on campus. For example, further work on solar power solutions must await modernization of the co-generation facilities in the Energy Center because of inherent demand-incompatibilities between our current co-gen systems and any new solar power supply.
Also emphasizing the value we place on sustainable solutions, conceptual planning has begun for a potential new University Village, which involves approximately 35 acres of University-owned land on the south side of campus behind Ann Peppers Hall. The Village will be anchored by a transit center – the future Arrow Line’s terminus station – for the Redlands Passenger Rail Project, expected to begin service by 2021. We will see construction of the station and pavilion under way in 2019 and competed by 2020 to coincide with the testing phase of rail service.
The vision of this University Village is that of a contemporary, vibrant place to live, dine, shop, work, and play. This includes thoughtful development of sustainable, multigenerational, pedestrian-friendly, mixed-use, civic, and commercial spaces that simultaneously enhance the economic vitality of the region and highlight the unique features of our community. Initial market research indicates the capacity for entrepreneurial retail establishments, market-rate residences, limited office space, a boutique hotel, and riparian and green space.
A series of workshops last September enabled area residents and members of the University community to provide feedback on early conceptual designs of University Village and to share ideas with designers and engineers. University design consultants have completed a Master Plan for the project, based on that envisioning consultation, with the specific zoning plan soon to be initiated and partially paid for by the City of Redlands. A new design for the station and pavilion at University Station is now ready for final plan and cost estimates. Currently in progress are the financial analyses of what would be the total return on investment of the project. Eventually we will select a development partner. Remember, this will be a public/private/private partnership, with capital coming from investors behind the development project. The intended result is to create non-tuition income for the University while creating one of the best neighborhoods in Redlands.
Last summer we welcomed University Dean of Student Affairs Donna M. Eddleman, who was appointed on August 7th, 2017. She is the first new dean to lead student affairs in 36 years, and she is continuing to move Redlands forward with vision, strategy, and integrity. She is doing so while cultivating meaningful relationships throughout the community, exploring opportunities and possibilities that will differentiate the Redlands experience from other institutions, and advancing the interests of the entire student body. She provides leadership and administrative direction in the areas of athletics, campus diversity and inclusion, orientation, residence life, community service learning, health services, the counseling center, chaplain’s office, student conduct, student leadership and involvement, outdoor programs and intramurals, career services/professional development, and dining services.
Most recently, Dean Eddleman is co-heading with Provost Ogren a review of the professional development/career services area, as well as delving deeply into and providing much-needed expertise and leadership on retention strategies through the USELG, discussed above. A review of the Division of Student Affairs is ongoing and includes an anticipated re-organization, the development of an assessment plan in collaboration with the Educational Assessment Committee, and the hiring of a new Senior Associate Dean of Students. Strategic planning and a vision for the future of the division will evolve over the summer months through fall 2018, in collaboration with stakeholders from across the University community.
With Dean Thomas Horan newly in place, the School of Business is actively reworking its core strategy to be a competitive, high quality, truly “Southern California” business school (the only one with seven regional locations) with a focus on teaching “21st century business skills.” The Dean and the School of Business faculty believe that these skills, and employees with a grounding in business education generally, improve both an organization’s bottom line and social value. Says Dean Horan, “Survey after survey reveal that employers recruit and promote professionals who can work in diverse situations, drawing upon a host of technical, organizational, and people skills.” This strategic positioning is particularly relevant as the School expands its corporate partner network. As touched on back in the section on enrollment, our growing cadre of partnerships across California and the nation aims to result in an infusion of students from national companies as well as from key local relationships.
Most recently, graduate and undergraduate programs in the School of Business have been accredited by the Accreditation Council for Business Schools and Programs (ACBSP) – an affirmation that the School’s teaching and learning processes meet rigorous educational standards. This 10-year accreditation, received with accolades for exceeding all six of ACBSP’s standards of excellence, positions the School even more firmly to positively impact the successful careers of our business students. In its evaluation process, the ACBSP – which accredits business programs at more than 1,200 campuses in 60 countries – requires intense self-study and examines an institution’s leadership, strategic planning, relationships with stakeholders, quality of academic programs, faculty credentials, and educational support.
Dean Horan arrived in time to help us celebrate the opening of a new San Diego campus location last September. The School of Business has been serving the business education needs of working professionals and corporate partners in San Diego for more than 30 years. The grand opening of spacious new quarters, attended by current students, alumni, faculty, and the media, was testament to the U of R’s continuing commitment to that region.
The North Star 2020 plan is congruent with our mission, history, and location. For over a century, we have empowered students to embark on successful leadership pathways for careers, professions, individual intellectual and social development, and community engagement. This is our mission and purpose at University of Redlands campuses across Southern California.
Our strategy requires us to explore and apply new knowledge, hone skills, and then direct our teaching and learning towards innovative problem-solving. Advancing, achieving, and assessing our prioritized goals ensures that the University can meet the goals of this plan and our external world, and, in so doing, enhance our reputation as a premier master’s university, anchoring our region and positively influencing the nation and the world.
Our recruitment and enrollment strategies are now more fully defined than at the outset of North Star, and we aim for more than 5% overall enrollment growth by 2020. We’ve created our “pathways” as tactics to differentiate Redlands from its competition, help us meet our mission, and achieve optimal enrollment-based revenue. Categorized on a continuum as pathways “into Redlands,” “through Redlands,” and “out of Redlands,” each pathway addresses our need for diversified recruitment and retention of a mixture of students: undergraduates, transfers, graduate, professional, veterans, and certificate or non-degree-seeking students. Commitment to not one traditional pool, but several pools of potential students, is central to this strategy.
Quality learning and support for state-of-the-art student engagement will depend on both programmatic and facilities advances. Through extensive planning with multiple stakeholders and the design firm Noll & Tam, the University has conceptualized one possible way to do this in the future – in a renovated Learning Commons created within the existing Armacost Library. A working group to evaluate the feasibility of this proposal will be launched soon, since it would be a major capital project that would create an integrated learning and student support space at Redlands, equivalent to those at many competitor institutions.
Here are some other areas of progress in North Star’s second year of implementation:
North Star 2020 guides all our work; each of you can find yourself and your role somewhere in the plan. I encourage you to do so. The plan is online.
The President’s Cabinet remains committed to fostering new ideas and encouraging risk-taking by carving out funds to help make our innovations – even our dreams – for the University of Redlands a reality. For the second year, the Cabinet sponsored four projects through the next round of Innovation Grants, awarding a total of $54,200 among them. I commend this group for the energy and entrepreneurialism that sparked their innovative, collaborative thinking and planning:
University Awareness and Profile
As it approaches the one-year mark, the EMBARK campaign is raising awareness of the U of R among broad audiences, statewide and nationally, through strategic messaging and high-quality imagery. To date, more than 41 million people, ranging in age from 13 to 70 and living in states from California to Connecticut, have been shown University of Redlands digital ads as they access select social or traditional media on their desktop or mobile devices. More important than this indicator of sheer exposure is the number of those viewers who have actually responded to the ads: more than 425,000 have seen something to pique their interest and then clicked through to the EMBARK microsite to explore the U of R.
A testament to the quality of this campaign is the recognition it is receiving from organizations that evaluate such work. EMBARK has won gold and silver awards from four higher education and advertising industry groups. I am looking forward to the results of an awareness and perception study, to be conducted this spring, to measure our progress on improving recognition of our University not only through EMBARK but also through new recruitment campaigns (and more efforts) supporting CAS and the graduate and professional schools. Among the endeavors in the “more” category are strong results from our increased outreach to news media and social media, as well as the new Bulldog Blog daily news and feature vehicle, launched last fall.
One of the most gratifying things I get to do as president is read about the latest achievements of our stellar students and faculty members. Each year seems to top the last, in terms of the quality, creativity, and passion for learning and teaching that our community demonstrates through their award-winning activities. Here are some call-outs from the last year:
Abundant opportunities for student-faculty research is another hallmark of a quality academic experience, and our University excels in this arena. The John Stauffer Charitable Trust Student Science Research challenge is a major campaign goal for us. Here are some recent highlights:
In Bulldog Athletics, this year we again have much to be proud of:
To bring to a close this year’s report, here is my message: We are a university on the move – a progressing, positive place. Yet, we live in interesting and challenging times, with more potential impediments to our momentum coming at us all the time, most often out of our control. If we are limited in our flexibility – whether in academic programs, financial operations, enrollment, or resources – the challenges we face now will be even greater. But by staying true to our strategic goals and our mission as a master’s liberal arts university that ensures a high-quality, personalized education, and by optimizing completion rates, increasing enrollments, and managing affordability, we will be able to successfully chart our course to the future.
We cannot be overly focused on the issues or struggles of the moment. To survive and thrive, we must have our eyes on the future. We must be willing to think big and embrace the changes we know we’ll face, and to harness new opportunities. We must plan for the long term, yet be flexible in how those plans evolve. That is precisely what we are doing with North Star 2020. North Star is how together we will navigate and chart our course toward future decades.
I will close this year’s report as I did last year: Thank you for your dedication to the journey.
Ralph W. Kuncl MD, PhD