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The University had a bad financial year but survived it, is now in a more stable position, but faces continuing challenges, UC Berkeley Chancellor Robert Birgeneau told the annual meeting of the Berkeley Staff Assembly on Wednesday, May 26. He was the principal speaker at the event. 

The meeting, which was somewhat sparsely attended, was held in the Maude Fife Room of Wheeler Hall.It was open to all campus staff regardless of BSA membership. 

“In the last month or so I’ve attended several staff events which have been very uplifting”, Birgeneau began. 

“I sometimes get accused of being excessively optimistic.I’ll be modestly optimistic in this presentation,” he said. 

I’ve only heard him speak a few times, but it seems to be his typical style when talking extemporaneously to mix statistics, arguments, and anecdotes in an energetic delivery. He rapidly shifts from subject to subject. 

Birgeneau said he started on the Yale faculty 44 years ago and “this past year has been the single most difficult year I’ve ever experienced in academia.” 

In terms of personal experience with economic hardship during the current recession Birgeneau added, “one of my kids is in a mortgage crisis right now”.“All of us in a privileged position, you just have to go one person removed before you encounter someone in distress.” 

But he noted some positive indications though during a bad year for the campus. So far the campus hasn’t seen either “an exodus of talented people”, or fewer student applicants.“People really want to still come here.” 

He spoke with pleasure of the recent graduation convocation. 900 graduating students signed up to march, 1,500 showed up to participate, and 11,000 people attended the event. 

He said another positive indicator is the number of graduate students with National Science Foundation grants who choose to attend Berkeley.These grants can be taken to any institution; they are not tied to a particular university.So it is the recipient’s choice as to what institution to attend. 

“It’s an indication of what the young people in the country thing is the best place to pursue their graduate education.” Berkeley was the first this year, had more than MIT, Stanford, Harvard. 

“The most talented young people still look at Berkeley and say they want to come here,” Birgeneau concluded. 

Private fundraising for the University, he said, “had held up quite well.” But “there’s a strange conversation you have with the ultra rich” during an economic crisis, he added.He talked about sitting down with a potential donor who had lost one third of his assets—that is, one billion dollars out of a three billion dollar fortune. 

But “it looks like we’re going to hit the 300 million mark for public fundraising” for the year. 

Alumni, he said, now recognize that the University of California needs private support.It used to be, he said, that wealthy alumni who had attended both UC and private schools would say they were giving their money to the private institutions because UC had public funding and didn’t need the support as much. 

Now, “the one really good thing I’ve seen come out of the progressive disenfranchisement by the State is that everybody knows we have the same sort of financial challenges” as private institutions, Birgeneau said. 

He added that major private foundations used to weight their grant policies in favor of private schools but, with one exception, he now feels “we’ve leveled the playing field.” 

Birgeneau talked about hiring a new Vice Chancellor for Administration, the administrative position under him who is directly responsible for the non-academic programs of the campus. 

“Getting the caliber of person you want at the kinds of salaries Berkeley pays is a challenge”, he said. His profile for this hire is “someone who has had a very successful business career and still has a high level of energy…and for whom money is not a driver.” He added, “ideally a Cal grad.” 

He then discussed the budget crisis of the past year.He recalled that three days before he last spoke to the BSA the campus received an eighty million dollar budget cut.He said, somewhat wryly “it ruined my whole summer.I had no vacation that summer. I was literally on the computer all the time.” 

The effect has been since January 2009, he said, “512 people have been laid off, a large number of them staff.”“Truth in advertising”, he added.“I’m very sad about that.” 

Campus employees also received mandatory work furloughs, which were temporary pay cuts accompanied by days off.“The furlough program had only one purpose which was to save staff jobs”, he said. “The furlough saved 460 staff positions.We would have become dysfunctional.”It “generated about 30 million in salary savings” for the year. 

He added that he recently went to a meeting of University presidents at Yale. “Every single other university president said it would not be possible at their university” to temporarily reduce salaries across the board. “They could put the staff but not the faculty on furlough.”At Berkeley, Birgeneau said, faculty were included. 

Would furloughs continue?“According to President Yudoff the furloughs will end this year”, Birgeneau said. 

Birgeneau said he was upset that some people in the University had criticized the institution rather than focus on the external budget problems. 

“I pleaded with people, as you circle the wagons, to shoot out, not in.Not everyone did.That’s been my biggest sadness.”“There are people who shot in.I think they should be ashamed of themselves.” 

He then spoke about the campus protests in the fall, including the Wheeler Hall occupation, the march to University House where he lives, and other demonstrations.“The peaceful protests had a positive impact”, he said.“Peaceful protests are part of our culture.”“Violence and vandalism are damaging.” 

He said legislators and others had told him the more violent protests had hurt the University’s reputation. 

Next, he moved to the question of whether Berkeley can remain a public institution with only limited public funding, something he called “evolution in character of public universities which we’re working hard to stave off at Berkeley.” He said “sooner or later the Federal government will have to play a role in public higher education.” 

He suggested that a possible solution was a 21^st century version of the 1860s Morrill Act through which the Federal government gave one time funding to states for university support.A proposal he prepared with Vice Chancellor Frank Yeary “has caught the imagination”, he said. 

The idea is that the Federal government would give one time funding to the public colleges and universities throughout the country, distributing the money following a formula he described as “one plus, per state,” that is one or more institutions getting the infusion of funds. 

He noted that in large states like California there is more than one major public university that should get support. 

“How much would the Federal Government have to put up?” under this formula, he asked.“One half the money they gave to AIG” insurance as a bailout.And this would be a one-time grant.“This is not impossible”, he concluded.“There is a lot of attention being paid to maintaining the public character of our universities.” 

Next he talked about the status of the State budget for the coming year.He said “I will be surprised if we have a budget by September 1” because of the ongoing financial crisis and differences among legislators and the governor on how to meet it.
 

For the University’s state funding for the coming year, “if we stay flat, we will not be in luxury but we’ll be OK.”He said 22% of the budget of the Berkeley campus is State money. 

He added the State Finance Director has told the UC Regents that UC funding from the State probably won’t grow through 2015. Birgeneau said the University should not expect a funding increase in that period, “it would be irresponsible to plan on that.” 

How would the campus deal with a long-term decrease in State funding? Fee increases, for one. 

And also an increase in the number of foreign and out of State students.“I was surprised when I came to Berkeley how few international students we had”, Birgeneau said, framing the issue as a matter of having “students with backgrounds that are geographically diverse.” 

For that reason he said he favored increasing the number of students from outside California.But he emphasized that this did not mean a decrease in the number of “in-state” students supported by State funding. 

He explained his understanding of the formula as follows.How much does it cost the University each year to educate a student at Berkeley?“My own number, ballpark, is $30,000” for the “full cost of education” he said. 

And “during this academic year we had an over enrollment of 2,400 Californians for which we get no State money.” 

So the plan of the campus is to reduce the number of unfunded Californian students to 1,900, and “replace these students with out of state students who are paying full costs”, which would bring it about 50 million dollars more a year in fee income. 

“You will not eliminate any Californian from a slotted position”, he emphasized, saying the press has misunderstood the issue.“Our over-enrollment will be dominated by out of state and international students.” 

The last topic Birgeneau discussed was his “Operational Excellence” initiative.“We believe we can ultimately, in our operations over time, save about 75 million a year,” he said.“Many of us would agree we’re not really world class in administration.” 

A “significant amount” of the savings, he said will come from “doing purchasing more cleverly.” 

He said there are eight initiatives, each chaired by a staff member and faculty member. “We have all of these strategies and they all need to work.” 

“We will maintain Berkeley’s excellence.We will maintain our public character,” he said. 

He added that the recession has resulted in the families of many UC students encountering financial hardship.Now, the university has “more low-income students for the worst of reasons.” 

But having a large number of low income students “doesn’t happen by accident. We invest a lot in financial aid.”He said that of $310 million in recent fee increases, $85 million goes to low-income student financial aid, and that’s “illustrative of our public character.” 

Birgeneau then briefly took questions from the audience. Only a few were asked. 

One employee asked if the START program would continue. It allows employees to voluntarily work less than full-time and take a temporary proportional salary cut . 

That’s a UCOP (Office of the UC President) decision”, Birgeneau said.But “I’m strongly in favor of the START program.I presume people like the START program?” he asked, to general assent from the audience. 

Another question was about when the University would extend health care benefits to older children of employees, as the new Federal health care law mandates.Birgeneau deferred to one of his staff in the audience who answered, “right now we don’t know.We are assured UCOP is in discussion with health care providers.” 

On ending employee furlough pay reductions, Birgeneau said, “I hope we all get our salaries back!That’s the goal.” 

A staff member asked how the Operational Excellence goal of centralizing purchasing contracts could be balanced with the goal of supporting local small businesses.“I’ve been getting letters from small suppliers,” Birgeaneau said.“On the one hand I would like to support local business.On the other hand we’re in this budget situation and have to save every dollar.It’s a conflict.” 

One of his staff in the audience said the campus was working with local small businesses to get them better qualified to compete for UC contracts. 

Norris C. Lincoln is a pseudonym for a UC staff member.