Cal Times 4-13-12

California University of Pennsylvania 250 University Avenue  125 Keystone Hall  Box 22  California, PA 15419 Telephone: (724) 938-4293 Fax: (724) 938-5764 Email: apscufcalu@zoominternet.net

April 5, 2012 Mr. Guido M. Pichini, Chair Board Of Governors, PASSHE Mr. Robert J. Irey, Chair Council of Trustees, California University Dr. John C. Cavanaugh, Chancellor, PASSHE This letter is written out of a deep concern on the part of faculty at California University of Pennsylvania regarding the state of academic quality and the methodical assault on our academic programs. Over the course of the past ten years or so there has been a steady, and what appears to be, a purposeful elimination of shared governance. Despite the frequent requests from Faculty Senate, Chairs Forum, University Forum and the local chapter of APSCUF, upper administration at California University continues to misdirect and deflect any real input into the governance process. In light of recent events and public disclosure in regional newspapers regarding the financial state of California University, the executive council of APSCUF requests the assistance of PASSHE Board of Governor, the California University Council of Trustee and the Chancellor’s office in returning our university to the purpose of the State System as established in Act 188: to provide “. . . high quality education at the lowest possible cost to the students.” Clearly, at California University, PASSHE’s purpose has been supplanted by one man’s vision, President Angelo Armenti.

There is no doubt in the past that the president’s vision was aligned with PASSHE but over the years this vision has become an obsession which has replaced any other focus at our university.

The president has openly spoken of PASSHE’s failure to deliver on their mission. At a meeting of the Council of Trustees there were applauses when it was stated that California University would be better off if we were not part of the State System. During faculty convocation two years ago, the president stated that the system has failed to meet the mission both for quality education and the lowest possible costs. Although the president has a right to speak his mind and he may even be correct regarding the failures of the state system, the Executive Committee of California University chapter of APSCUF questions the validity and focus of President Armenti’s vision. In fact, we believe that it is this dogged pursuit of his vision that has created an atmosphere of distrust and fear on our campus. It is this misguided vision that has placed our academic programs in jeopardy. It is this vision which has created a warped financial list of proprieties. California University sits in financial crisis with our academic programs severely hobbled by administrative directives. We call on you, the individuals who are entrusted with the welfare of our university, to end this misguided path of destruction.

An Atmosphere of distrust and fear: Living in an atmosphere of mistrust, uncompromising demand for loyalty, and fear of retaliation would seem incomprehensible; but here at California our managers, faculty, and staff live in such state. At California trust is not given to anyone.

Little or no input into the vision is expected nor requested. It is the duty of our administrators to carry out the vision.

Faculty leaders do not have access to the financial records of our public university. Reactions by administrators and Council of Trustees to recent newspaper articles have demonstrated that the records are not shared with them. In some cases, the information that is released is contradictory. In his December 2011 letter to the state system (see attached “Armenti letter to PASSHE”) the president states that so far the income for the Convocation Center was $250,000 but the Tribune Review (article attached) reported that the income information provided by the university was a little over $11,000. The president has stated publicly that all costs for auxiliary activities, such as parking, must be paid by the users but once again the Tribune Review reports differently. The article reported that the university is using monies from our general account to pay the bond for the Convocation Center, a practice, according to Ken Marshall spokesperson for PASSHE, which is permitted by the system. You can imagine the confusion this causes when funds for the parking bond have to come from user parking fees but the bond for the Convocation Center could come out of the general budget. Which is it? Clearly, if the university would have complete transparency on all matters at the university, these types of discrepancies could be explained. Because of the atmosphere of mistrust at the upper levels of the university administration, most of the stake holders are left to conjecture.

Loyalty is paramount at the upper levels of the university. Indeed, those who have questioned orders are summarily dismissed. This can easily be seen in the revolving door in all areas of the administration. Over the past ten years there have been dozens of firings, early retirements, and other changes in employment for our administrators. In the academic wing alone there have been no less than 11 different deans, six associate provosts, and five provosts. It must also be noted that there hasn’t been a national search for any academic administrator in more than ten years. With one exception, all current academic officers have been appointed by the president. In non-academic areas of the university there have been several dozen upper level managers removed or replaced. At last count there were 116 managers across campus which means there is one manager for every 3.5 faculty members.

Fear can be seen in the behavior of all the managers and administrators at the university. Who can blame them, they serve at the pleasure of the president; a president who has proven to be mistrusting and brutal in his attacks on those he sees as disloyal. Over the past years there have been several dozen law suits for wrongful dismissal. Many of the cases are settled out of court costing hundreds of thousands of dollars, perhaps millions. What budget is used to pay for these settlements?

One statistic that cannot be denied comes from state APSCUF’s yearly report on legal expenses.

Over the past five year, California was number one in legal expenses. In fact, for at least three of the past five years the legal costs paid by APSCUF to support the legal battles at California

have been more than the combined costs for all 13 other universities. In three years (2008 to 2011), the university has had to pay an additional $800,000 in legal fees to five outside council.

That is in addition to PASSHE’s Office of General Council and the Pennsylvania Attorney General’s office Civil Litigation division costs which have been incurred for these cases. If that same $800,000 that was paid for private council could have been used on academic programs at California, we could have paid the salaries and benefits for 11 associate professors at step 3 or 11 assistant professors at step 6. How much more money will be spent defending the actions of one individual?

Academic programs in jeopardy: While the recent retrenchment of faculty at several universities in the state system has caused great concern for both state APSCUF and officials in the Office of the Chancellor, nothing has been done about the unofficial retrenchment of faculty at California for the past ten years. Done in the name of productivity, our regular faculty has been reduced by 27 regular full time members. In 2000 the university employed 285 regular and 51 temporary faculty members and in the current spring semester there are 258 regular and 131 temporary faculty members. The student FTE enrollment increased from 4,586 in 2001 to 7,574 FTE enrollment in 2011 (Armenti’s letter to PASSHE). The student head count in 2000 was approximately 5,000 while the current count is well over 9,000. So in the same time that regular faculty members head count decreased by 27 the student population nearly doubled. In that same letter, Dr. Armenti notes that “during FY 2010 alone, Cal U saved approximately $12 million on faculty costs. . .” He continues to state that “. . . in FY 2011 alone, Cal U spent some $20 million less on faculty, staff, and utility expenditures then we would have, had our productivity levels been the system average.” There can be no doubt that President Armenti is proud of the productivity levels at California. On many occasions the President has stated that the progress at California has been on the backs of the work done by the faculty.

So what has the faculty received for all this effort in productivity? A lowering of our ability to offer courses on our departmental schedules, a mass reduction in overload, and an increase in temporary instructors; in others words, a continuation of the push for more and more productivity. What affect has this doubling and in some departments the tripling of work load had?

At a public forum called by the chairman of the Chair’s forum, the provost listened to tearful, angry, frustrated testimonies of what this deliberate destruction of quality education is doing to students, faculty and the programs we offer at the university.

The chair of the department of Social Work noted with great frustration that more than half of her department faculty are temporary; a fact that has placed her program’s accreditation in jeopardy. For their efforts in productivity, the department of psychology’s chair tearfully presented how her students in the psychology program have not been able to get needed classes and the proper advisement. Others pointed out the massive increases in class sizes. Whole departments have student faculty ratios in the upper sixties. Classes that were at one time capped at 25 are now over 50 and in several cases over 100. The most fragile of our students, entering freshman, now sit is classes of 60 to 100 students. Our non-teaching faculty has also

been hit by this continual productivity. While library hours have been expanded, the number of library faculty has decreased and this semester their search for an additional faculty person was cancelled.

Given the fact that our faculty has been so productive, one would think that the academic department budgets are large but in fact it is the complete opposite. In the same year that the president brags that Cal U saved $12 million in faculty costs, departmental spending was stopped in April. For the 2011-2012 academic year, the department budgets were cut with 25% of the money withheld. So our question; where is all the money the university is saving from faculty productivity? Well the simple answer is that the savings are being used for the presidential vision.

Warped financial priorities: In Dr. Armenti’s letter to PASSHE in Decembers of 2011, he notes that the university has both “delivered our mission while balancing our budget.” At the same time he notes that the university has had operating budget margins between 4.98% and -0.19%.

In comparison to other PASSHE schools these operating margins are most troubling (please see PASSHE operating margins). No other school in the system is operating with this low percentage margins which place the university at the whim of the governmental budgets or enrollment drops. In fact, in January of 2012 that is just what happened. There was a 2.7 drop in enrollment and the governor asked for a 5% freeze. The university administration panicked cutting sections from the schedule, reducing any and all faculty overloads and finding any way they could to cut costs and save more money. Faculty and students alike returned to the university to find that their courses were no longer being offered.

How is it possible that the President reported to the state system in his December 2011 a $ 20 million saving but in January of 2012 major panic occurred for a small drop in enrollment?

Where was the $20 million? Perhaps we can find the answer in the chart of unrestricted funds (see attached). Although nine system universities have over $20 million in unrestricted net assets Cal U isn’t one of them. So we ask again, where is the $20 million? Insight can be found in the Armenti December letter on the chart page 12. A simple review shows that between 2007 and 2011 more than $36 million was spent on the projects that were part of the presidential vision. There can be no doubt that money saved by faculty productivity is being used to pay for non-academic projects across the campus. Despite the pleas from department chairs regarding the dire needs for additional faculty and class offerings, the university seems to have placed priorities in nonacademic or questionable academic projects.

Currently the university has a bond debt of over $100 million. These bonds include $60 million for the Convocation Center, $20 million for parking, approximately $12 million for technological upgrades, and although the bond will be paid by SAI $30 million for new additions to the student union (please see the attached Parking and Convocation Center bonds). The debt service for these bonds is over $3 million a year (Armenti letter page 120). Further review of these projects also revel additional operational costs for parking at $510,000 (parking Annual Net Revenue) and for the convocation center of $1.1 million (Tribune Review). At the start of each year, the university will need to find nearly $5 million just to cover the basic costs of these two pro-

jects. When looking at the income over that past year we become more concerned. Parking had a net revenue deficit of $743,041 and the highest current total income for the Convocation Center was $250,000 (letter). Although it has been reported by administrators that there are 45 events planned in the Convocation Center, we only know of two which will bring in may bring in cash; Kenny Rodgers and the Home and Garden show. What happens if these entrepreneurial projects don’t produce enough revenue to pay the bills? With little money left in unrestricted funds and an operating margin of -0.19% how will the university survive?

Thank you for your time. If you have any questions or wish to discuss this letter, please feel free to contact any of us. We look forward to your response.

Respectfully yours on behalf of the APSCUF Executive Committee California Chapter, Michael J. Slavin, PhD Chapter President

Barbara Hess Chapter Vice President

Elizabeth Mason Chapter Secretary

Cal U spending triggers state audit

By Richard Gazarik, TRIBUNE-REVIEW Thursday, March 29, 2012 Photos click to enlarge

Convocation center Jim Ference | Valley Independent

About the writer Richard Gazarik is a Tribune-Review staff writer and can be reached at 724-8306292 or via e-mail.

California University of Pennsylvania's sprawling $59 million convocation center has become a lightning rod for critics who say they welcome an audit of spending at the school where a building boom has been riddled with cost overruns and revenue shortfalls.

The audit was ordered by state System of Higher Education Chancellor John Cavanaugh after he received eight anonymous complaints about university spending and a critical letter signed by several people, including state Rep. William Adolph Jr., R-Delaware County, an accountant and chairman of the House appropriations committee. Adolph did not return calls seeking comment.

Cavanaugh, who oversees the 14 state universities, outlined what led to the audit in a letter to state Rep. Pete Daley, D-California, a graduate of the school and a member of its board of trustees.

Neither California University spokeswoman Christine Kindl nor state system spokesman Kenn Marshall would comment about the specifics of the audit, but Marshall said it is not a routine review.

"This is a special situation," Marshall said.

Daley said he's concerned the state-of-the-art center, with its 80-foot tower displaying text messages and images, has saddled the school with more debt than it can handle. He said he welcomes the state review.

"I hope it's not a perfect storm," Daley said. " They come up with these (building) ideas and then the budget comes apart."

The 142,000-square-foot center, visible from almost any point on campus, received a $19.1 million grant from the state system, Marshall said. In 2009, the system financed $23 million through a bond issue, he said. The center also received a $1.5 million in grants from the Washington County Industrial Development Authority and the state's Redevelopment Assistance Capital Program.

Marshall said the university pledged $12.3 million toward the center but came up $10 million short. Last year, the state system financed $15 million more so the project could be completed, Marshall added. "At that point, the project was well under way," he said.

Robert Thorn, vice president of finance and administration at the school, said the additional $15 million was needed "due to a funding shortfall and additional enhancements to the facility." After construction began, the school authorized a series of design changes totaling more than $6 million that included installation of a movable floor to convert the facility from an athletic venue to a conference center, Thorn said.

He said the changes were aimed at increasing revenue at the site. Marshall said the university, not the state system, is responsible for the debt incurred to date.

Kindl said debt payments -- totaling $2.55 million a year -- are made from the school's general operating budget and funds specifically earmarked for academic programs, a practice Marshall said is permitted by the state system.

Kindl said the school expects the center's $1.1 million annual operating costs "will be paid by revenue generated by events booked at the facility."

But since it opened in December, only $11,400 in revenue has been raised by 17 events at the center, according to university records. Total attendance at nine basketball games was only 3,100, records indicate.

An exhibition titled "Leonardo da Vinci Machines in Motion" is expected to attract more than 20,000 people before it closes May 6, Kindl said. But because the event is free, the university will not generate any revenue from it. The exhibit consists of 40 replicas of machines designed by da Vinci.

Daley said he worries unchecked spending could jeopardize the school's future.

"We don't have deep financial alumni pockets to dig into," he said.

In 2005, a university-backed study recommended building a smaller center with arena seating for 3,500, but officials decided to build a larger center holding 6,000 spectators, according to records.

Kindl said initial bids for the project were lower than expected.

"In other words, it was possible to get more for our money," she said, explaining why the larger facility was constructed.

Dr. Michael Slavin, president of the California Chapter of the Association of State College and University Faculties, said construction projects such as the convocation center are being funded at the expense of students and faculty at the school with 7,400 undergraduate and 2,000 graduate students.

"I'm tired of academics paying the bills," Slavin said.

Slavin said that at the same time the campus is expanding, enrollment is down 2.7 percent at the school where tuition, room and board and fees run about $23,000 a year.

"That's a lot of money the university is losing out on," Slavin said. Students' feelings about the convocation center are mixed.

Rachel Hull, 20, of Seven Springs said she was eligible last semester to receive one-on-one voice lessons as part of her music minor, but those classes were closed to all except music majors for the spring semester.

"We got the convocation and all the fancy stuff, but funding for music is getting cut. I was told funding was being redirected to the convocation center," Hull said.

But Alexandra Brooks, vice president of the Student Government Executive Board, said she's not heard any student concerns regarding the center."It's going to bring a lot of attention to the university," she said.