Dear Campus Community,
I am writing to follow up with the campus community after the board meeting on November 21. I share these comments as it is critical that we continue to be transparent and open during these times of change. I want to begin by sharing that the board is committed to a financially sustainable future that supports our students, faculty, and staff as we come together to move this institution forward in the face of ever-declining enrollment. While we recognize the hardships of addressing our current deficit, we can not expect that this problem will go away through increased enrollment.
Our November 21 meeting had three agenda items: Academic Profile, Financial Profile, and the Bridge to the Future. The two profile documents helped highlight the rationale behind the work in the Bridge to the Future plan. Over the past 5 years, we have seen an enrollment decline of over 24%, degrees awarded have declined 16.9%, and expenses per Student Credit Hour (SCH) have grown by over 46%. Our financial challenges during the pandemic were masked by the funds received through the federal Higher Education Emergency Relief Fund (HEERF), and this has contributed to a delay in responding to the continuing crisis. This year, we are operating at an $18 million Education and General Fund deficit. We must address this to ensure that we can remain an access institution that serves the region for years to come.
We know addressing this deficit in a tight time period is an immense challenge. However, any further delay in making these budget adjustments will impair our ability to implement our strategic plan, Future in Focus, which positions PSU to thrive in the future. We believe all of this is possible and that we are on the right track with the work taking place this year so that we can invest in our future rather than continue to operate at a deficit.
During the public comment section of the meeting, 16 individuals participated, including four union representatives. Many of the comments touched on common themes, and I want to take this opportunity to address these themes with the campus community:
Path to financial sustainability
- As I said above, we must address our financial situation to ensure we can invest in and support our students, faculty, and staff for years to come. While we recognize the hardships these adjustments impose on our community, we also know that we must tackle them at this time to ensure we can invest in the future of PSU.
Settling a fair contract
- As a board, it is not our role to manage the university's day-to-day operations, which include union negotiations. We know that the University is committed to settling a fair contract and, at the same time, being a responsible steward of our public and student funds.
Ability to support strategic plan with financial sustainability work
- Our new strategic plan focuses on achieving the Key Performance Indicators (KPIs) outlined in the October 31 meeting of the board's Executive and Audit Committee. Many of these KPIs focus on supporting our students by improving retention and graduation rates. The work that we are doing this year with Program Revitalization and Curricular Stewardship allows us to adjust our offerings to ensure our students can graduate from PSU with a cost-effective degree tied to opportunities for future employment.
Advocating for investment in higher education
- The Board of Trustees is committed to advocating for greater state funding for higher education. Oregon ranks 44th in the nation for public funding of higher education, and we know that investments from the state allow us to keep tuition low, invest in our community, and remain an access institution. One-time funding from the Legislature in 2023 supports much of the current work to improve our long-term financial sustainability. To effectively advocate for additional state investment, we must demonstrate that we are doing the hard work required to ensure that we are in a stronger financial position and that additional investment will lead to strong outcomes for our students.
We understand that a recent budget analysis by Howard Bunsis, a professor of accounting at Eastern Michigan University and member of AAUP National, has generated concern and questions about PSU's financial reporting. The Board has full confidence in our finance team and the independent external audit process. Furthermore, unlike our independent auditor, Dr. Bunsis is not an independent authority nor does he have full knowledge of the finances of Portland State. However, we want to address these concerns transparently. Therefore we have asked PSU’s finance team to provide a comparison of their analysis with Bunsis' report, focusing on key takeaways and assumptions. This comparison will be shared with the campus community in the winter term and we look forward to moving forward together with a shared understanding of PSU’s budgeting process and financial reporting practices.
Again, the Board is committed to the long-term success of PSU, which requires us to have a strong financial footing to ensure we can grow and invest for our students while having a robust, aligned set of program offerings to support our mission to provide the best educational experience possible.
While this year is arduous, we are confident that if we do the work now, we can move forward as a stronger PSU. As a board, we are grateful for the engagement of the campus community and the dedication to all who are contributing to positive change during this pivotal year.
As always, the Board webpage has various resources that you may find helpful, including the yearly calendar, meeting notices, meeting recordings, and other information. Feel free to utilize the Board feedback form, also on the webpage, where you can share meeting feedback, general comments, or recommendations on characteristics or candidates we should consider when we have a trustee vacancy.
Benjamin Berry
Board of Trustees Chair
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