PSU to seek new revenues

To see Portland State University through the current budget crisis, President Daniel Bernstine will turn down the heat in the offices and turn up the heat on attracting new income that doesn’t depend on the whims of a state legislature.

Bernstine described his approach candidly as “entrepreneurial” as he addressed a convocation Thursday afternoon in Smith Memorial Student Union ballroom.

“We must not be deterred in our progress by declining state revenues, rather we need to manage our efforts through growth, efficiencies and new ways of operating,” he said.

Like any entrepreneur, he sees the ultimate solution is to cut expenses, even if it means layoffs, and to increase revenues.

One way he will cut expenses is to reduce the thermostats in all offices to 66 degrees, turn the heat off an hour earlier each night and discourage any use of space heaters.

Bernstine’s decision to schedule the convocation came as the university found itself with combined budget cuts totaling $14.9 million, with the budget to be brought into balance by the end of the biennium, June 30. He laid out concrete strategies for accomplishing these and other objectives through the next biennium. At the same time, he assured the attendees that all segments of the university community will participate in the long-term decision-making.

The near-capacity audience in the third-floor ballroom consisted almost entirely of faculty and staff, with almost no students in evidence. One student who did attend said she attributed this to the fact that many students had classes at that time.

The president in his prepared speech hinted that layoffs have become inevitable. Bernstine and some top administrators will work with the deans and directors to prepare for up to 3 percent in reductions. He will make the final decision about cuts.

However, in a following question period, Jay Kenton, vice president for finance and administration, said although 250 notices of non-renewal went out to employees, “there is no way we imagine that all those people will lose their jobs.” The notices were required under provisions of union contracts.

If the proposed income-tax surcharge is defeated in this month’s election, Bernstine saw little prospect of dropping or refunding the $125 per term tuition surcharge, which he said is placing a hardship upon students.

To plan for the 2003-2005 biennial budget, Bernstine announced appointment of a campuswide budgeting and priorities committee headed by David Johnson, professor of history.

The committee is to work with the campus community to develop recommendations for budget reductions, reallocations of funds and enhancement of revenues. The committee is to have its preliminary plan ready for distribution in April.

One way the president wants to increase income is to enroll more students, which brings in more tuition money and more state funding support. This will involve, among other strategies, furthering a partnership with community colleges. He stressed that PSU wants to enroll students with high GPAs and outstanding SAT scores.

Bernstine wants to attract more income by registering more out-of-state and international students. To that end, the university in partnership with the PSU Foundation will build a new student housing project at S.W. Broadway and Jackson Street. This is currently known simply as the Broadway Housing Project. It will cover three quarters of the block and include retail space. Cathy Dyk, associate vice president for finance and administration, said it is primarily a PSU foundation project, not generated by the PSU architectural staff.

Bernstein plans to expand upper-division program offerings in community colleges that will allow students to get PSU degrees without ever coming to the downtown campus.

Bernstine also wants to bring in more research, which comes with grant money attached – money that far exceeds the researchers’ salaries. This may mean giving such researchers lighter teaching loads than is customary.

Bernstine became candidly entrepreneurial when he told the audience, “I want the university to further enhance its role as the economic driver and the primary broker of higher education in the metropolitan region. … PSU will do this by becoming even more entrepreneurial than we are today.” He seeks to encourage public-private partnerships that serve the community as well as strengthen PSU’s academic programs.

“One way to develop new facilities and expand research ventures is by creating auxiliary nonprofit entities that are not bound by state agency strictures,” he said.

Bernstine made it plain that the university is looking ahead to involvement in the North Macadam area. He is having staff explore funding and research for developing a self-supporting research park and business incubator in conjunction with research partners. This could locate in the university district or in North Macadam.

Besides lowering the office thermostats, Bernstine presented other potential cost-saving ideas. He would like to analyze private health benefit programs other than those offered by the Oregon Public Employees Benefit Board. Working directly with other providers could, he believes, result in lower costs to PSU while retaining comparable benefits. He assured the audience that any change would come in consultation with unions and other advisory groups.

To help stimulate the local economy, he is asking all department heads and directors to buy from local vendors when it is cost-effective.

Bernstine capsulized his priorities by saying, “In summary, enrollment growth, continued research funding, further development of the University District, and administrative efficiency and accountability are my priorities for PSU’s future.”

Following Bernstine’s speech, Kristin Wallace, student body president, took the microphone to assure those present that the students will work with faculty and staff to solve the budget crisis.

A questioner from the floor asked why needed funds could not be received from the PSU Foundation. Kenton said the foundation is not a public body. Much of its money exists in endowments that must be held in perpetuity, with only the interest available for expenditure.