January 20, 2009
Now that the New Year has dawned, most bowl games have been played, the Super Bowl contenders have been determined, and the students have returned to campus, it is time to bring you some timely and informative updates so you can better tell the Creighton story.
PERSONNEL: I am pleased to announce that Dr. Rowen Zetterman is the new Dean of the School of Medicine. Dr. Zetterman joins Creighton from the Veterans Affairs Medical Center. At this time, I want to publicly acknowledge the services of Dr. Cecile Marie Zielinski, who served as interim dean of the School of Medicine in the all-important transitional months. Dr. Z, the School of Medicine, as well as the University, owe you a tremendous debt of gratitude. Thank you!
It should also be noted that the search for the Vice President for Health Sciences is moving ahead exponentially under the guiding hand of Prof. Patrick Borchers. The candidates have been reviewed and three will return to campus for interviews in February. The pool was strong and the finalists are of exceptional quality and experience.
ENROLLMENT: Between the Registrar and Don Bishop, the enrollment trends are going in the right direction. John Krecek projects the second semester will register a few more students than winter 2008. This will be close to an all-time high second semester enrollment. Kudos to all who work with retention and academic advising! We could not realize these results without your retention efforts.
The fall 2009 numbers are encouraging, given today’s economic uncertainty. We anticipate meeting our budgeted numbers across all programs. While we are slightly down in applications against last year (a historically all-time high number) our deposits are moving in the right direction. But stay tuned, the economy will have the last say in the composition of the 2009 fall undergraduate enrollment.
CONSTRUCTION: Given the freeze on all new construction and deferred maintenance projects, the most significant facility going forward is the Ryan Center and the D.J. Sokol arena. It appears to be on schedule for an August opening. I say “appears” because the city’s sewer project presently obstructs much of the work site. The street project cannot get done too soon, from my perspective!
It should also be noted that the Harper Center has added a few more donor monikers:
FINANCES AND BUDGET: On the economic front, it seems like a lot of “one step forward and two steps back,” where periodic slivers of positive news are swallowed up by reports that more challenges are on the horizon. Uncertainty is the only constant when assessing the length, depth and impact of the recession. What does appear certain is that steps we began taking last fall have put us on the path of being prepared to successfully weather these economic conditions.
One of the measures we offered was the voluntary separation program, which provided severance incentives for up to 25 employees to leave their positions at the University. As you may have seen in the Omaha World-Herald, a total of 22 individuals elected to take this option, which proved to be a win-win for the employees and the University. The employees received a severance benefit as they left to pursue retirement, a new career or other options. The University expects to save up to $500,000 per year as a result of the vacated positions through a combination of work redistribution, restructuring and other means.
As previously reported, each vice president submitted a plan to improve his or her division’s budget by 10 percent through increased revenues, reduced expenses or a combination of the two. The plans demonstrated a very thoughtful effort that focused on protection of areas most central to mission. The budget committee has completed its initial review of the financial enhancement plans and made a preliminary selection of items for implementation. Expected budget improvements from these measures will be quantified and combined with initial revenue and expense estimates as we work toward balancing the 2009/10 budget. Notifications regarding the selected enhancement plans will be communicated as soon as decisions are finalized.
While final decisions have not been made on most budget elements at this point, I can say that the undergraduate tuition rate increase will be the lowest in more than 40 years. This, coupled with enhanced financial aid resources, is needed to assist students and their families so they can continue to afford a quality Creighton education during these challenging economic times. The majority of our expense budget is not surprisingly comprised of salaries and benefits. A high priority for the committee is creating sufficient room in the 2009/10 budget for some level of merit pool increase; this will be a very challenging task, but one we feel strongly about.
There has been much publicity regarding the significant effects of market declines on university endowments, with the range of estimates for the decline in market value typically reported as 25 percent to 35 percent for the last half of 2008 alone. Although we do not have final 12/31/08 valuations for our endowment, we are expecting a similar decline, which compels us to reduce the distribution from the endowment to the operating budget. Although our endowment distributions represent less than 4 percent of our total operating budget sources, we will still need to replace over $3 million of funding in 2009/10 due to the reduced distributions. We believe that reduced spending, a broadly diversified portfolio and continued fundraising will help our endowment recover from the recent market declines.
I want to thank all of you for your patience and understanding as we maneuver through a very complex set of challenges.
SCHOOL OF MEDICINE AND CREIGHTON MEDICAL ASSOCIATES: Many of you saw the Omaha World-Herald article on Creighton’s financial position vis-à-vis our clinics and hospital. The article was fair as far as it went, but with multiple sources addressing some very complex issues, several key quotes were out of context. It was not accurate in terms of our relationship with Tenet, the managing partner in the hospital, with whom we have an ongoing professional relationship. From my perspective, the article failed to mention several key points that the reporter had been provided. First, it failed specifically to reference the tremendous amount of care our faculty and the hospital give to the neediest citizens of our community. That generosity of service speaks to the heart of the Creighton mission. That commitment will not be diminished. Creighton remains the number one provider of charity/indigent care of all hospitals in the city of Omaha (state of Nebraska) combined! That is a badge of honor. And I will not trade on it! But perhaps more importantly, the article failed to mention the quality of care that our physicians and the hospital deliver to all of our patients. I am very proud of the work we do. I am proud of the quality of service and medical expertise provided by Creighton physicians, CUMC staff, and clinical support personnel. As we tackle the challenges before us, we do so with a renewed spirit of mission, an ongoing commitment to quality and professional care, and with the knowledge that we are all in this together. I am proud of our clinical staff, I am edified by their commitment, and I truly believe we will successfully meet these challenges. Creighton Medical Associates (CMA), our physicians group, is in the final stages of restructuring. A chief financial officer is in place and the search for the executive director is going forward. Some very significant steps have already been taken and others are well under way to address the performance of the hospital and the Creighton clinics.
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We live in interesting times. The challenges are real. Universities across the country are clearly feeling the effects of the faltering economy. Like Creighton, many are taking decisive steps to confront the turmoil. At the same time, we as a nation have begun a new adventure with the inauguration of President Obama. A sense of cautious optimism and a feeling that “change” is afoot hovers over the political, economic and social institutions of the country. “Yes, we can” echoes from coast to coast. That is the same spirit I invoke as the Creighton family moves forward in addressing our challenges. May God continue to bless you and yours.
John P. Schlegel, S.J.
President