State of the University Address
President Michael J. Garanzini, S.J.
Thank you for taking time from your schedules today to come to this State of the University Address. Each time we come together as a community to examine where we have been and where we are headed, I think it important to begin by recognizing the vital work you do to contribute to the health and vitality of our community of scholars.
A smooth and enthusiastic launch into the new school year each fall is possible because of the efforts of many people: those who helped recruit the new classes, those who processed and worked at getting the students registered, and those who prepared class syllabi and who engage these young minds in the classroom. It's an effort that relies on inter-connected and inter-related processes and teams, and counts on the good will and talent of each of us. Those of you who were around all summer know how hard people worked to build, or rebuild, and ready our classrooms, residence halls and offices. There were a record number of capital projects this summer and a record amount of money was spent this year on infrastructure upgrades. I'll talk about those projects in a minute.
This university community was equally busy building a different kind of infrastructure - one that will enrich our lives together in other "quality" ways. These project managers and committee and task force members were involved in such things as the upgrade to our student information system, Peoplesoft, which will give us an up-to-date and people-friendly Web-based record and advising system, among the many other things it will do. A Law School task force prepared recommendations that will guide the university's efforts to increase the visibility and quality of the school. A service excellence task force was busy working on the plan for a single-service center in Sullivan for students. The North Central Steering Committee was busy preparing a report to share with you that will form the basis for our reaccreditation efforts.
There were perhaps a dozen more such projects, and all have been essential in keeping the momentum going as we build a strong and healthy Loyola. To those of you who worked on these projects into and throughout the summer months, thank you.
I'd like to share some information about the budget and the university's financial picture because it has been for so long a concern. For fiscal year 2004 (this academic year we recently ended) we anticipated a $2.2 million surplus. Audited numbers will now show that we exceeded this amount easily. Thanks to good enrollment projections, a concerted effort to keep down expenses, especially once we discovered a glitch in our financial aid packaging, and several better-than-expected results of operations, we were $5.1 million in excess of expenditures. Furthermore, our endowment grew by 20% last year. That is not the first time it grew by this amount. It is, however, the first time only a modest amount (3-4%) was spent on operations.
As you know, our goal is to rebuild endowments that were depleted of earnings in recent years. Plus, we continue to work diligently to find sources of drain and potential sources of revenue due us. I feel confident that our improved financial picture will actually be even better this coming year. A rebuilt financial services office, new internal audit service, counsel from an outside investment guidance firm, and a reform of our project accounting services for principal investigators have been completed by Bill Laird and his team.
I want to thank Terry Richards and Paul Roberts and their staffs for their recruiting successes. And, I want to thank Bill Laird, Gene Grotbeck and Tom Hickey for their efforts at clarifying our budgeting process, enhancing our financial-planning capacity and helping to identify the sources and solutions to problems.
The revenue surplus from last year has been allocated - in case you are wondering where that money goes - to the following. $1.3 million is from lease payments for the property that will be used to build The Clare. I have decided that the annual lease revenues from The Clare and from rental in Lewis Towers will be placed in a fund for debt retirement. Our debt retirement plan and projections increase our health and vitality. Our aim is to keep a discipline in place whereby we charge to housing its fair portion of debt service and principal, and that we use lease revenues from downtown property to pay down interest and principal for debt attached to non-housing and non-revenue generating operations. Over the next 20 years, we will be able to wean ourselves from debt payments from revenues generated by educational activity. In addition, we will, in time, increase our bond rating and thus reduce the fees we pay to borrow money for new projects.
Back to the budget surplus: $500,000 will be used to support construction of the Life Sciences Building. The surplus also will be used to complete the corpus of several endowments that can be used to boost scholarly resources. Fully endowed chairs need $2 million before we can begin recruiting a scholar to fill them. Junior chairs are intended to recruit in or retain younger, emerging scholars who show great promise and are designed to support scholarship for up to three or four years. By investing the surplus in the following partially endowed chairs, we will now be in a position to begin recruiting several new people with national reputations to be a part of our community in academic year 05-06.
The Rigali Chair in Political Science has now been completed and is now at $1.5 million. This chair will be dedicated to recruiting a junior professor in government. Dean Crawford will work with a search committee this year to fill this chair. The Cody Chair in Theology is completed at $2 million and a search will commence this fall. The Clark Chair in Psychology is completed at $2 million. This chair will be used to advance the proposed Center for the Study of Children and the Family. Dean Crawford will be setting up that search committee. The Considine Chair in Applied Ethics is completed with an investment of funds and will be designated a visiting chair. The Provost will form a committee that will establish a process for rotating this chair annually to the schools, and for recruiting a visiting scholar. Finally, we will be establishing a junior chair in the Department of English to attract and retain a younger scholar.
In addition, I am looking at several smaller university-designated endowments and considering how they might be used to support centers of excellence. Some of the smaller funds can be put together to enable something significant to happen by way of scholarship or program support. For instance, several endowments have been set aside over the years to advance lectures or scholarship in Catholic studies. I have asked Fr. Dan Hartnett and Dr. Adriaan Peperzak, the Schmitt Chair in Philosophy, to work with interested faculty to develop a proposal for a center dedicated to our Catholic intellectual heritage. My request here is deliberately vague. I am looking forward to their proposal and intend to launch this effort with a $2.3 million endowment to support this center's activities.
A press release two weeks ago announced record university enrollments. We have the largest number of new students in our history and undergraduate enrollments are at 8,400. The previous record of undergraduate enrollment was 6,524 set 24 years ago. Graduate enrollments are up 100 students over last year. In addition, there are more full-time students overall - 11,558 on campus this year, more than in the past 20 years, and the university's overall enrollment of 14,147 is the highest it has been in 10 years. Full-time undergraduates have increased 46.6% in the past five years. We chose to stabilize our freshman enrollment and planned a decrease in the freshman class by 100 students. In doing so, we were able to increase the quality of our freshman class. Transfers remain at record healthy levels and account for the overall positive increase in numbers of new students. One key figure is that we are about 1% over budget in enrollments.
An analysis by school shows that the College of Arts and Sciences' enrollment is up by 9.7% in the undergraduate area, up by 5.8% in master's degrees, and down by 2.7% in the doctoral area. The School of Business Administration's undergraduate enrollment is up by 200 or 18%. Master's degree enrollment is down by 129, but the good news is that we are stopping erosion.
Also noteworthy, we've seen remarkable growth in enrollments at the master's level in the School of Social Work - up by 27%. This is largely due to the efforts of the faculty in Social Work who, with the assistance and support of Paul Robert's shop, played the key role in that recruitment process. Other enrollments at the master's degree level are either healthy or down where anticipated.
One area that has been of interest to us all is the area of doctoral education. After keeping those numbers steady in recent years, we are back to growth in doctoral education. I will address this question and some ramifications and opportunities this brings when I speak to the graduate faculty later this month.
A word on our discount rate: It remains high, at 36% overall and about 41% for freshmen, but frankly, while we want to lower it, we are finding that tuition increases are difficult for the kind of students and families we seek to serve, especially at the undergraduate level, even though our applicant pool continues to grow. We still need to be fairly generous with our financial aid, in order to serve the kind of student we want here. An unintended but very positive result of all this has been that in the 2005 U.S. News & World Report rankings, we moved from 44th in overall best buy for a national university to 22nd. This places us in some pretty prestigious company. The University of Chicago and Notre Dame University are slightly ahead of us in the list and Northwestern is ranked 23rd, right behind us.
There is significant growth in our capital assets, as anyone can see. The Life Sciences Building is coming in on time and on budget. We have a dedication planned for December 3rd and a move-in planned for the mid-year break. Simpson Hall dining was significantly remodeled, and if you have not seen the facility, you ought to. It is the best of its kind I have seen. Work on the exterior of Santa Clara was completed. The new apartments, called the Georgetown at Winthrop and Rosemont, came on line. A new community area for Mertz gives that facility some help. And the new residence hall which will house 400 students is on time and on budget. The locker rooms for men and for women at Halas are now renovated. And, we even have two tennis courts on Loyola Avenue. Fr. Salmi and Phil Kosiba, and their teams, made sure all these things were done on time and to specification.
We are also in the middle of more projects. Madonna della Strada Chapel is undergoing renovation and was recently air-conditioned. We will be involved with that project for another year. Speaking of air-conditioning, over the summer we rebuilt the plant that houses the heating and cooling for the Lake Shore Campus to increase energy efficiency and capacity.
The Science Library is being merged into Cudahy. Seldom-used books, about a quarter of a million of them, are being placed on shelves in the lower level of Sullivan, retrievable at any time, and a plan to expand Cudahy is being developed. The major goal of the expansion is to create study and quiet space, plus upgrade our electronic services. Then, Sullivan will get an upgrade as we plan for its use as a service center. I have also asked a commission of potential users to review the Mundelein Center building where as much as 40% of our facility is unused or poorly used. I am ready to embark on upgrades to the infrastructure in the building, in order to make it fully usable, once we have a plan that accommodates classroom and office space needed by the college. I see Mundelein as a potential site for improving our art, music and theater programs, among other things.
The Water Tower Campus will also see dramatic changes, beginning this year. The Clare should break ground next summer. But, before it does, we will likely be in the ground for a new residence hall. We have completed the planning, financing and permits for building a 25- story student center and residence hall on the corner of East Pearson and Wabash, where we now have both Flapjaws and a parking lot. Flapjaws, you will be happy to know, plus a bookstore and a chapel, as well as dining facility, will be a part of the student center. Apartments for upperclassmen and for graduate students will occupy floors 4 through 25, with capacity to house 600 students. The structure is handsome, and I believe will change the campus in important ways. We also opened a new state-of-the-art cyber café, or what I like to call "Nina's Place," in the lower level of 25 E. Pearson.
Let me say just briefly how things are shaping up at Water Tower. Beginning with Lewis Towers, the first floor will be market rental property. We have secured several tenants who recognize the value of this location. The second and third floors of Lewis will be the home of the new Loyola Museum of Art, LUMA, and will house the university's D'Arcy collection with space for special exhibits amounting to five times the size of the present D'Arcy. This is being done thanks to a $6 million gift from the State at the request of the Illinois Council for the Arts whom we petitioned for support for the project. Overseeing LUMA will be Pam Ambrose, Loyola's new Director of Cultural Affairs.
Construction for The Clare should begin next summer and will be completed in Fall '07, two years after the start of construction. When it comes on line, it will also house on three floors the new programs in communications and technology that are being launched. Dr. Harvey Jessem joins us from the University of Hartford to develop the downtown programs. Our portion of The Clare will then be the home of this new academic unit.
The person who negotiates all these deals, who works to secure the university's interest in each project, and who suffers through sometimes tense meetings with community advocates, politicians and city agencies is Wayne Magdziarz. Wayne continues to be an invaluable asset to us in advancing our capital assets and leveraging our properties.
Let me give some highlights regarding what is happening in some of the schools. What this does not do is detail all the efforts with new program development that we see in each of these schools.
The Law School, under the able leadership of Professor Diane Geraghty, and the School of Business Administration, under the able leadership of Dr. Tassos Malliaris, will both be looking to a new home. The plan is that they will trade places. This is a bold move but is intended to move each school into the future. We are working on plans for the incorporation of the Law School into renovated facilities in the 25 E. Pearson building, and for the Business School to have renovated space in Maguire Hall. The additional land we have acquired the past year on State Street will allow us to develop a complementary academic and support center on that property in the future. Both schools are recruiting new deans, and both deans will be expected to advance the planning for the future that has been begun.
The Institute for Pastoral Studies is now under the leadership of Dr. Bob Ludwig. Bob is not new to Loyola. He returns to Loyola from DePaul and before that he worked at Loyola New Orleans. I have great confidence in his leadership and his vision for building on our tradition of contributing to the Church through solid preparation for ministry.
Dr. Fred Kniss has taken on the interim deanship in the Graduate School. The splitting of responsibilities of graduate education and research, with a new position for vice president for institution-wide research efforts, will enable us to concentrate on increasing quality in the graduate programs. A new academic program review process headed by Dr. Tim O'Connell will help us assess and plan more deliberately from program-to-program. In addition to this duty, Tim heads faculty administration and also co-chairs with Dr. Marge Beane our North Central re-accreditation effort.
Dean Peggy Fong Bloom has been recruited into a position at our sister institution, Marquette University. The acting dean in education, Dr. David Prasse, will lead the School of Education. I thank him for stepping into that role.
As you already know, Dr. Jack Wall is our new Dean of the School of Social Work. Jack has proven his abilities already with the leadership he gave to efforts with respect to this fall's enrollment.
To give us new energy in the area of research and research stimulation, we have appointed a search committee to recruit the new vice president for research. This new vice president will be recruited to work with the Director of Research at SSOM, Dr. Richard Kennedy, and the Associate Provost for Research, Dr. Nancy Tuchman, to coordinate our potential for increased research and for joint collaborative opportunities within Loyola and with other institutions.
The Core Curriculum revision is now complete and was approved by the Board at its June meeting. I want to thank Dr. John Pelissero and his committee for their diligent, patient and very impressive efforts. I believe we have a Core that we can be proud of. Implementation is under the direction of Dr. Paul Moser, the chair of the Philosophy Department.
Our Strategic Plan that will take us into 2009 is now complete. Copies are being distributed to you this week. It might better be described as "strategic directions," for it focuses our energies and points us in the directions we need to head without overly prescribing how we intend to get there. Opportunities come along that cannot be anticipated, and we want to take advantage of them. It describes our academic ambitions and articulates our promise while informing our budgeting and planning process. Much of what you have just heard is the result of suggestions coming from the seven task forces that put the plan together and follow from their recommendations. In other words, what you are hearing is the implementation of that plan.
Finally, we recently launched the planning process for a Capital Campaign to support and enhance all of these endeavors. Jon Heintzelman, vice president of university advancement, and Tim Weidmann, who heads advancement at the Medical Center, are working on preliminary stages for assessing the parameters, goals and timing of a campaign, working with a team internal to the university at this point. Several capital projects are envisioned, but we hope to attract the bulk of the gifts for academic support and student scholarships. Our preliminary timeline indicates that we will be in the "silent' phase of the campaign in 2005 - 2007 and in the "public" phase in 2007 - 2010. The total we are currently thinking of is a $300 million goal. Our several focused campaigns, namely the campaigns for Law, LUMA, the Life Sciences Building and the Rome Center, give us experience and help us involve our alumni in supporting us. Some recent successes in fundraising give us hope that we can develop a reasonable but challenging goal. It does not hurt that the economy is changing for the better, even if slowly.
In closing, and before I take questions, I want to thank all Loyolans, once again, for all of your hard work and efforts on behalf of our students. I am very proud of the institution we are becoming, and it is due to the work of all of you.