Thursday, March 12, 2009

 

Transparent as Running Water

Tim Burke has a characteristically thoughtful post up about transparency and cost-cutting, and the various dilemmas that cost-cutting poses in the context of Swarthmore. Check it out.

He does a nice job of outlining the 'you first' dilemma in accepting cost reductions. Basically, if my area goes without in the name of austerity and your area doesn't, then my area has been played for a sucker. He suggests that detailed and rigorous transparency can build confidence that nobody is free-riding on anybody else's cuts, and that without that kind of confidence, small cuts are unlikely to stick.

I fully agree about the free-rider problem, and the inanity of a blanket 'use it or lose it' policy on line items. (Anyone who has endured multiple cycles of hurry-up-and-spend at the end of a fiscal year knows the insanity of that drill.) I tend to doubt that the level of 'granularity' he advocates will generate the clarity he envisions – in my experience, there aren't many more effective ways to make people tune out than to trot out the spreadsheets – but the theory is nice.

Burke's post is written from within Swarthmore, and it reflects that context. A private institution with high tuition, plenty of applicants, and a decent endowment can make its own decisions about all kinds of things. It controls most – not all, but most – of the variables relevant to its own budgets. That kind of year-to-year stability makes relatively fine-grained transparency realistic.

At my cc, and at every public institution I know, that's simply not the case. Our budget year starts July 1. We don't know yet what our allocation from the state will be, and we probably won't know for another month or more. The range of possible numbers is staggeringly wide. We don't know, either, how the money from the stimulus will be allocated, or what the rules for its use will be. (At this point, as I understand it, the money will go to the states. That means that we have to wait for the state to decide how to allocate it. What could possibly go wrong?) We don't cap enrollments, so we can't just pick a target population size and multiply it by tuition to get a magic number. The range of unknowns, usually wide, is particularly so this year.

When the genuine unknowns in your budget add up to millions, it's hard to have intelligent conversations about cuts of a couple thousand here and there. They may be absolutely crucial, or they may be helpful but not urgent, or they may be superfluous; there's really no way of knowing yet. By the time we'll know for certain, we'll have so little time to make decisions that we pretty much have to have already made them. And if you think getting everybody to accept a cost-cutting plan is difficult, try getting everybody to accept multiple contingency cost-cutting plans.

Transparency in cost-cutting gets even more difficult when it goes from 'let's take a look at staff retreats' to 'let's take a look at staff.' When you get to that second level, it's difficult to keep the conversation from getting personal and heated, since those are people's livelihoods at stake. If you decide to reduce the staff in the tutoring center from five to four, people will figure out pretty darn fast who the fifth staffer is. At that point, the dynamics of the conversation change fundamentally.

I've been as open as I can be, and so has the 'finance' side of the house, in discussing the scenarios as they look likeliest to play out. But the kind of conversation Tim Burke advocates – charging a few bucks to use a tennis court, say – is just not realistic here. Still water can be transparent. But the water here is rushing so fast that even purity doesn't make it clear.

Comments:
Yeah, I completely agree that the kind of approach I'm talking about only helps when the institution has very significant autonomy over its own budget. Moreover, it has to have a fairly long horizon within which it can plan, whereas many CCs and larger public universities can't be sure at all what the next budgetary cycle will bring in terms of decisions made totally outside the institution that have enormous impact on it.

It seems to me that would make some of the issues I'm thinking about even worse--there's even less reason to expose your own unit's budget to any possible vulnerability in the name of a common institutional objective. But on the other hand, nobody would even dream that they could be insulated from budgetary pressures, or autonomous from the general financial imperatives that drive day-to-day operations.
 
Hey, DD: Why don't you cap enrollments?

I mean, there has to be a practical maximum to the number of bodies you can handle: even if you're teaching with adjuncts and therefore have a highly elastic instructional staff, there are only so many classrooms and so many hours in the day.

If your demand is high, as you've mentioned previously, why not put your cap at the largest number of students your campus can accommodate and take it from there? Is there something I'm missing?
 
Dicty, I'll answer for our CC. There is a practical maximum for the Fall semester as regards classroom space, with every room in use throughout the popular block from 9 to noon. (Many of our students go to work after lunch.) We have added seats in the early AM and in the evening to deal with that. Spring does not have the same problem.

I'm not in a position to know how deeply we scrape the barrel for adjuncts or if that constrains our offerings at the last minute. I do know we haven't had to raise adjunct pay or (thank goodness) cancel any classes I know about.

We don't cap enrollments, so we can't just pick a target population size and multiply it by tuition to get a magic number.

But, Dean Dad, you can do some basic modeling and make predictions. How have applications tracked, year to date, over the past few years? What is your current semester retention (as midterm arrives) and historical retention from, say, English 1 to English 2? Man, I can tell you that we track every bit and byte of each transaction once students start registering for fall semester in a week or two, and have a pretty good (historical) idea what fraction will pay and actually show up in the fall.

The uncertainty is whether they will show up this fall, with an unknown economy down the road, which is where financial aid becomes a huge deal.

On the topic of this post, we do our budgeting from the ground up, justifying positions by the classes we need to teach to handle projected enrollment.
 
My comment to Burke's post about lights on the tennis court is twofold: (1) Ask. (2) That is why you have a math and physics department: to teach you how to multiply Watts and hours to calculate kW*hr, and then how to multiply that result by 10 to 15 cents.

If you have those 400 W halide lights, count the number in use.
 
Every CC Admin is in the same boat as DD. We've been notified about how much the State THINKS we will receive as an annual location, but things could get worse so that amount may be revised downward. So we've all based our budgets on receiving that possible amount, with an eye toward what else we will have to do if things get worse. Its great to be transparent, but its also easy to get accused of dissembling when you can't give straight answers about exactly how much needs to be cut from a particular budget.

As for the proposal to cap enrollments, I don't think that most of us would be allowed to do so. One of the main guiding principles of CCs is open admission. Of course, there may not be anything left to enroll in, once you are admitted, unless you are interested in Calculus IV, Japanese VI, or Organic Chemistry III.
 
For Al and CCPhysicist: I'm still confused, I think. I can't figure out what you guys mean by "cap enrollments".

I realize you're open admission, which means that you can't say "Sure, we have space for 12,000 students, but we feel it comports better with our mission to have 10,000". If you have the capacity and a willing student, you've got to take them.

However, you do have a finite capacity. If you can only cram 12,000 students onto the campus, that's an enrollment cap, no matter how much Student 12,001 wants to attend. Seems to me that you could calculate three figures (10-year average enrollment, 10-year minimum enrollment, and maximum physical capacity) and get a pretty good idea of your target numbers for budgeting.

However, CCPhysicist's comment suggests that there's something else going on. Why is "maximum capacity" measured only for the 9-noon time block? I know a lot of students work part-time, but if DD's anecdotal evidence is to be taken at face value, the cc's are also getting a lot of traditional-age students who would be expected to avoid morning classes like the plague. (Nothin' like a 4 AM prayer to the porcelain god to take the shine off that 8 AM calculus class.)

I also suspect "open enrollment" doesn't necessarily mean "open enrollment at the place and time of the student's choosing, infrastructure limitations be damned". Or if it does, IMO it shouldn't.
 
I was hired at my CC during a short boom time... the baby-boom echo was turning 18...

The only thing we could do was to decide a date, after which we would not accept new students for Fall semster. This date ended up to be a few days before the start of the semester. That semester I had 250 students in 5 philosophy sections -- to say it was a brutal way to start teaching at a CC is an understatement.
 
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