THE UNIVERSITY OFCHICAGODecember 6, 1979 ISSN 0362-4706 An Official Publication Volume XIII, Number 6CONTENTS195 THE STATE OF THE UNIVERSITY, 1979200 THE UNIVERSITY BUDGET, 1979-80208 REPORT ON FUND-RAISING RESULTS IN 1978-79 ANDPLANS FOR 1979-80210 REPORT ON FACILITIES PLANNING AND CONSTRUCTION2 1 1 REPORT ON UTILITIES USAGE AND CONSERVATION FORFISCAL YEAR 1978-79212 FACULTY COMMITTEE ON THE LONG-TERM FINANCIALSITUATION OF THE UNIVERSITYTHE UNIVERSITY OF CHICAGOFOUNDED BY JOHN D. ROCKEFELLER> Copyright 1979 by The University of Chicago. All rights reserved.THE UNIVERSITY OF CHICAGO RECORDTHE STATE OF THE UNIVERSITY, 1 979By HANNA H. GRAY, PRESIDENTNovember 15, 1979The designation of a new provost last week hasprovided an occasion to reflect on continuity andchange in the state of the University and to compel our attention to its future. Two special' andconsistent strengths here reside in our system offaculty governance and in the active traditionwhich has placed the competence and commitment of distinguished members of the faculty inthe service of the whole institution, through participation in the administrative work of departments and committees, through chairmanships and deanships and directorships, all centralto the leadership of our academic purpose and activity. Gale Johnson's extraordinary service asscholar, teacher, chairman, dean, director, andprovost is exemplary of this essential contribution. Amid the growing complexities and distractions of university administration, Gale's patient energy and steadfast gaze have always beendirected with total clarity to the basic values andobjectives which give definition to a great independent university. Gale has helped to sustainthis important continuity just as he has helpededucate us all to the change and renewal we needto plan in order to preserve and strengthen theUniversity for the future. In an institution whichdepends at once on collegiality and individual initiative, in a university dedicated to first-ratescholarship, research, and teaching and to an environment which supports and fosters their unfettered pursuit, the realization of these ideals requires, and has always found in its faculty, thewillingness to take on and to balance many roles.Gale has given us a model of that. So, too, doesKen Dam's readiness to assume the provostshipand its demands. I welcome his partnership withgratitude and anticipation.This afternoon I should like to address the University's future, to talk about the agenda I thinkimperative for us to engage in looking to thoseneeds and choices, those opportunities and directions that we are identifying and exploring forthe coming decade and beyond. Last year, over several occasions, I tried tosketch out my sense of the University's characteristic goals and strengths and of the pressingproblems and issues that are before us. It was ayear of review and learning, aided by many peopleemploying the small discussion groups and individual tutorial methods so cherished in ourteaching. My general assessment has not alteredsubstantially. But it has certainly become moresharply focused within a view of the larger landscape and also, I hope, more fully informed aboutwhere we stand.My review has confirmed my conviction that, ata crucial turning point for all universities, we canhave real confidence in this University's future. Iam persuaded that we should be leading spokesmen for the value of this kind of institution and itspurposes. I believe that we have embarked on,and have the capacity and cohesiveness to pursue,a major opportunity to shape and to enlarge theexcellence of our University. The goal above all isand depends on the quality of our faculty and students. The quality of the process by which wecreate the next form of this university's characterwill be vital. It will rest, as always, on the faculty's participation. The effectiveness with whichwe can, through the intensive management andimprovement of our financial and administrativeresources, give enabling support to the realizationof our academic purposes, will be crucial toachieving the aim of an independent university,free to determine its own course and its ownpriorities.The overriding questions before us, in the faceof the difficult circumstances which confront universities, are how to preserve and fulfill the purposes which we exist to serve, and how to giveshape and expression at once to their renewal andto institutional change.The provost's message on the budget, whichyou have received, describes the dimensions ofthe problems derived from an inflationary economy and their effect on the potential health of theUniversity. It also concludes that their resolution,if we are resolute, is manageable. The report ofthe Bradburn Committee on University Enroll-195ments lays out the dimensions of another serioustrend and its potential impact. It presents to theUniversity community a series of options for discussion and decision. Ultimately, both reports areaddressed to matters beyond budgets or studentnumbers; they enable us to think about how, andfor what educational ends, we should design thecharacter and substance of the academic enterprise.For universities, change can no longer beequated with growth and proliferation of activity.Our first objective must be qualitative growth andcommitted adjustment to its requirements. It isthrough selectivity and the concentration ofstrength that we will in fact be able to grow in thatsense and to create the capacities for flexibility,for responding to new opportunities, and for encouraging from within the University new ways ofdoing things.Hence, in planning to achieve financial health, itis our intention to reduce the scope of currentactivity selectively in order to allocate our resources to what we can do best, rather than trimming and reducing across the board. And it is ourintention also, in the aggressive search for newresources, to segregate a specific portion —perhaps a third— beyond those applied to thesustenance of current programs and their continued improvement. These resources will be devoted precisely to the range of additional selectivestrengths which will make possible some new faculty appointments at junior and senior levels,better support for the sciences, increased attention to book acquisitions, improved financial aid,enhanced ability to respond to exceptional opportunities, renovated or new facilities wherethese are most needed.In all this, it is not possible, if it ever was, toimpose a simple blueprint on a complex and mature institution with its diverse set of relationshipsand programs. The unity of purpose animating thisUniversity is founded on an internal consensusthat arises out of collegial discussion — and eventhe collegial disagreement over means to agreed-upon ends. Its vitality and momentum rest on theshared acceptance of responsibility for reasoneddiscussion. We need to understand the conditionswhich make this a turning point for universities, toask and be determined to come tb terms with itsuncomfortable questions, to collaborate in defining and planning to bring about the kind of university we intend to have five and ten years fromnow. That this will not come about all at onceshould not diminish our sense of urgency.The circumstances affecting universities today196 have potentially large and dramatic consequences. But their outward forms may look ratherdrab, and their sources often appear remote fromour control. We seem to be fighting not a visiblebattle of heroic proportions but an extended, erosive trench warfare where even holding one's owncan be a kind of slow defeat.aFinancial distress, concern over declining numbers of graduate students, fear for the future ofyoung scholars, anxiety over the funding and respect for basic research have been joined to doubtas to the validity of older assumptions about theaims of education, disappointment in the reversalof expectations attached to the academic worldover the last several decades, confusion over thelanguage of * * elitism? ' and 4 * egalitarianism. ' ' AHthese have led to a new sense of limitation, ofdiminished possibility, and to the perceived vulnerability of universities and their most fundamental principles to external intrusions or controls.Out of this situation has come a tendency todeplore the present and to project it into the indefinite future, to look to the past and ask forsolutions that would restore better times. There isa tendency to see in the recurrent attention tobudgets and financial matters not only the loss ofgrowth but a turning away from our proper preoccupation with educational and scholarlypriorities, with high academic purpose, with theultimate nature of a community of learning.The University has never, of course, been insome easy sense secure; I don't suppose universities ever have been. Even in the rare times ofapparent prosperity, there has always existed theproblem of adequate resources and with it, thelinked problems of scope and choice, of self-direction and external influence, of the maintenance and enhancement of the realms of responsible freedom central to the academic enterprise. The age of growth was scarcely one of easeor of an absence of threatening conflicts, and itslonger-term effects are one part of the difficultieswe now have to contend with. The complicatedissues that have emerged out of the growth of federal support are just one example of this; the inflation of expectations attached to academic institutions another.It would be both dangerous and irresponsible todeny the existence of the realities we deplore or toimagine that they can be made to disappearthrough some magical act of will or vision. Itwould be equally dangerous, however, to assumethat these realities are immutable or all-controlling. And it would be truly irresponsiblenot to engage in the necessary task of proceedingforward, however difficult the terrain.And that this University is uniquely qualified tolead in doing. It is precisely in order to supportand realize our proper preoccupations and principles, which have to do with academic excellenceand academic freedom, that trench warfare is wellworth fighting.Its outcome is of great significance. What we dowill have an impact not only on our University buton those conditions that affect the future, thequality, and the capacity for autonomy of majorresearch universities in general.The process we are following will not bring automatic or easy results. It will take time. We mustrespect the obligation to understand and analyzewith care our assumptions and the options available to us without evading the need to come todecision. We must bind ourselves to observing theconsequences of our process. We know that it isnot possible to do all things equally, or equallywell. Reexamination will bring change, but also aclarified sense of educational mission, somegreater selectivity in what we undertake to do,and also the greater strength of concentration, thegreater strength that accompanies renewed quality and the encouragement to risk new ideas.I might characterize this approach as one ofhard-headed romanticism. I regard it as foolishromanticism to think we can ignore difficulty,avoid disagreement, or expect a single individualto offer and impose a comprehensive solution.Our University's vision is an intricate, organicone, single-minded in primary objective, complexin its articulation. That condition is a source ofstrength. The process of consultation, discussion,and debate is its precondition, and it is a unifyingone. A proper concern with effective administrative support and organization is not only compatible with but an essential foundation for boldnessin the exercise and extension of such intellectualpurpose. But, attention to budgets and similarmatters is useful and important only to the degreethat it will truly enable us to concentrate on ouracademic aims. Those purposes must guide all ouradministrative activity and planning. I am hopefulthat we have begun to lay this foundation duringthe past year. While these issues will continue tobe important, they should not prevent us fromturning more fully to the educational discussionwhich is the University's most pressing, and mostinteresting concern.I shall turn now to a brief description of where Ithink we have come. Then I should like to summarize my view of the starting point and destina tion of our discussions. Finally, I will say somewords about my own perspective on the University's future and to suggest some assumptionswhich I know our discussions will test.We have given special attention over the pastyear to examining the financial health and prospects of the University. Our study has concludedthat the University will continue to incur deficitsover the coming years unless significant steps aretaken to increase income and reduce the budgetbase so that income and expenditure are balancedand begin to grow at the same rate. That consideration has led us to plan a four-year timetable,beginning with the current year, for achievingequilibrium and so maintaining the University'sessential health.A new faculty advisory committee is nowstudying the projections. It is charged withanalyzing the long-term financial situation of theUniversity, to assist us in understanding the outlook, and to participate in the discussion of thosepolicies, priorities, and directions which over thelong term will best guide our planning in the service of the University' s academic goals .Reports to the University community on thesematters will be forthcoming.We have established an Office of FinancialPlanning and Budget. Alexander Sharp has beenappointed its first director. He will be responsiblefor financial projections and analysis, for institutional research, for the reorganization of ourbudget process, and for providing information andconsultation to those in charge of making budgetary decisions.We have given special attention also to organizing and planning an intensified and extensiveprogram of development for the University.Jonathan Fanton, Vice-President for AcademicResources and Institutional Planning, has overseen this effort. A new structure has beenestablished, and William Haden has been appointed Director of University Development. Ourefforts to raise funds last year achieved $500,000more than had been projected, for a total increaseof 15 percent over the previous year. The currentyear's target sets an increase of 22 percent overthat amount. A report on University developmentappears in this issue of the Record.We have also given special attention to theproblem of governmental relations. ArthurSussman, the new General Counsel of the University, has assumed additional functions as theofficer responsible for the coordination of our relationships with the state and federal governments. At the same time, the secretaryship to the197Board of Trustees has been assumed by F. Gregory Campbell, who is also Special Assistant to thePresident.Walter Massey became Director of the ArgonneNational Laboratory during the summer. The Department of Energy intends to renew the University 's contract to manage the laboratory, andWalter Massey' s leadership will assure a productive association with the University.As you know, a search is under way for a newDirector of the University Library to succeedStanley McElderry, who has decided to retire atthe end of June 1980. We are extremely grateful toMr. McElderry for his important contribution andfor his persistent advocacy of the needs of a majorresearch library. The occasion of the search opensan intensified review of the library and its essential role in research and scholarship, as well as ofthe complicated future faced by all such centers. Ihope the faculty will respond to this opportunityand to Charles Wegener's invitation to communicate with the search committee he chairs.Other reviews and discussions that have beenmoving forward are related to the planning offacilities and guidelines for future campus planning. The faculty campus planning committee hashad a busy year. An account of the capital construction and renovation now under way and recently completed is presented in this issue ofthe Record. Currently under discussion are thepriorities for projects in the next five and tenyears.A committee chaired by Robert Sachs is reviewing the trends and issues before the University that are associated with government supportof research and education. Its recommendations,expected later this year, will be important for theconsideration of University policies and for thestructure of research at the University.The committee chaired by Gale Johnson whichis analyzing the impact of the new legislation onretirement will make recommendations on futureUniversity policies by the end of the autumnquarter.We have initiated an effort to strengthen theUniversity's relationship with its alumni. Theirunderstanding, knowledge, and support of theiruniversity has never been more important. ACommission on Alumni Affairs, chaired by ArthurSchultz and with membership drawn both fromUniversity faculty and from alumni outside theinstitution, has concluded the work it began lastwinter and has today submitted its report.A committee chaired by Gwin Kolb is examining the official publications of the University. The question of how effectively we communicate bothwithin the University and externally bears on anumber of important matters ranging from recruitment to the effective sharing of informationwith the University community. That committeeis expected to report by year's end.The process of reexamination and of setting ourcourse has* to be guided, of- course, by a sense ofthe areas to which we should turn our best energies. We have been surveying the areas of specialconcern on which we should concentrate and towhich we shall give special priority. As I indicated, one of these is the library, where the decision was made last year and again this year toallocate a significant increase for acquisitions. Thesame is true for financial aid. We plan to givesimilar priority to faculty compensation in thecoming years. These areas, like others Imentioned previously— for example, the raising ofnew resources for selected faculty appointmentsat both the senior and junior levels and for thesupport of the physical sciences— represent ourmost important investments in the future. Theyspeak to the fundamental fact that ours is ateaching and research university whose qualitydepends on attracting and retaining thejbest faculty and students and in providing them with thebest possible conditions for scholarship, research,and learning.We are and will remain a research universityfounded on the conviction that research andteaching reinforce each other.The report of the Bradburn Committee on University Enrollments, now under initial consideration by the faculty, opens the way to wide andserious discussion of the future shape of the University. It describes some uncomfortable factsand suggests a series of options which are designed to stimulate debate. It provokes us to askhard questions and challenges us to undertakemajor but reasonable and necessary risk.In this discussion, I hope we will be careful notto equate numbers and distribution of studentsacross programs in some literal way with our intended priorities or regard for the different functions of the University. There is a troubling tendency to fear, for example* that discussion of recommendations for increasing the size of the College might indicate a lowered commitment oraltered regard for graduate training and research.The most distinctive feature of our institutionlies in the strong sense and presence of a university as opposed to a grouping of schools andfaculties under the same name or umbrella. It isthe active interdependence among its different198part§ which has made the University's academiclife and its academic programs unique.That interdependence should, I think, be themeasure that we apply to the consideration of future choices, whether of enrollment targets andthe distribution of students or in our review ofprograms and in planning for strength. Anothercriterion for our immediate choices should, ofcourse, be that of the longer-term impact they arelikely to have.Our College, with its insistence on breadth andon the liberal values of an education that also encourages independent study and respect forscholarship, is critical to the educational quality ofthe whole University. We must recognize thatfacility participation in College programs is not a4 'service" but an opportunity for engagement inone of the most stimulating and important of ourenterprises. We also should recognize that acommitment to undergraduate teaching and to thework of the College requires no abrogation or diminution of commitment to graduate training andto research.The College will always be relatively small ascompared to its major competitors. In askingwhether we might increase its size to threethousand students we should keep in mind thatthere already has been growth over the past years.It is time that we make a clear decision about theappropriate size for which we should aim. Thatwill make possible better planning of curriculumand related matters and will also allow for a moreadequate and explicit attention to strengtheningthe College. And that, in turn, will strengthen theUniversity as a whole. It will help sustain ourgraduate programs by enabling the graduate faculty to retain a critical size during a time of declining graduate enrollments. It will help to preserve and advance the interactions among different disciplines and approaches to learning thatshape the University's intellectual climate. It willhelp to retain the University's commitment to advanced training and research, even while enhancing the distinction and quality of a universitycollege.It is in the areas of graduate education that theneed to stop looking back is most acute. We mustnot be caught assuming a future just like the present.I believe it is our obligation to lead in designingthe graduate university of the coming decades.The generation of scholars who will be coming tomaturity in the 1990s and beyond will depend onsuch leadership. If the trend of declining enrollments continues for the next five years, there is some expectation that by the mid-1980s this trendwill have stabilized and that opportunities in theacademic professions Will begin to improve. Animportant responsibility for the future of basic research, of undergraduate education, of advancesin the disciplines of knowledge, will rest with ageneration of students who will be entering theacademic world after a period of diminishedgrowth and slowed activity for higher education.The breadth and depth of their contribution will bevital.The University of Chicago has had a history ofgoing against the tide, and we must do so again byaffirming the value of scholarship. It will be a hardtask, whose results will not come quickly. Weshould be preparing to maintain rather than to reduce our graduate student population.In doing so we should not sacrifice standardsbut build on strengths where our standards arehighest.Later this quarter I shall appoint a commissionon graduate education at the University. Thecommission will be asked to consider, in the lightof our discussions of the issues posed by theBradburn Committee's report, whether the kindof approach I have suggested is reasonable or appropriate. It will have to be concerned with therelationship of graduate education to both theCollege and the professional schools. The commission will be charged with examining graduateprograms and their rationales as they are now ineffect. The subject is enormously complicated andits consideration must take into account the natural and important differences among ntany fieldsof study and research. The commission will beasked to look ahead and to consider what theguiding purposes and the forms and styles ofgraduate education should be at this University in1990 and even later.Perhaps the decade preceding its centenary willsee the re-creation of the graduate university.Certainly, it should see the renewal of the impulseto reexamine traditions too often taken for grantedor left unchallenged.My purpose this afternoon has been to indicatethe broad assumptions which underlie my hopesfor the future of this University and to suggestsome of the questions which our discussion anddebate will test and refine as we go forward withthe process of setting our directions. I have spoken to you with the sense that our University hasa purpose to which all of us are committed. Thereis great strength in this common enterprise and forthat we must be grateful.Thank you.199THE UNIVERSITY BUDGET, 1979-80To: The Faculty, The University of ChicagoFrom: D. Gale Johnson, ProvostOctober 31, 1979The 1978-79 budget as approved by the Board ofTrustees in June 1978 was anticipated to have abalance between income and expenditures. InFebruary 1979, the midyear projection of anticipated unrestricted income and expenditures for1978-79 indicated that the University might incura deficit as large as $3.8 million. In a detailed report to the faculty, President Gray stated themajor reasons for this impending deficit: anticipated shortfalls in several income categories andthe need to substantially increase expenditures forboth library acquisitions and operation. I had indicated in last year's budget memorandum that inour efforts to achieve a balanced budget the library budget had been held to too low a level andthat an adjustment in its budget would soon berequired. A careful review of the library situationmade in November. 1978 showed that its budgetwas low by approximately one million dollars.Upon President Gray's recommendation, theBoard of Trustees approved an increase of thatamount in library expenditures for 1978-79 anddid so in full recognition of the large deficit thatwas anticipated at that time. With the increase inexpenditures for library materials, the erosion inpurchases of books and monographs which hadbeen so severe in recent years was halted and, infact, reversed.Fortunately the deficit that actually materialized at the end of the 1978-79 year was substantially smaller than had been anticipated. Theactual deficit at year-end was $483,000. This included the use of a budgeted reserve made possible by the carry-over of a gift of $1 million fromthe previous year.The significantly smaller deficit 4han had beenforecast at midyear was the result of several positive developments. Unrestricted income exceededthe forecast amount by $1,120, 000; nearly half ofthe increase in such income was due to a verygratifying increase in the amount of unrestrictedgifts, which was 20 percent greater than in the previous budget year. Other increases in incomeover the midyear projections were in student fees,earnings on temporary investments, endowmentincome, and indirect cost recovery.It is important and encouraging to note that,except for the approved increase in.library expenditures, the academic and nonacademic units heldtheir expenditures at or below budgeted levels.The auxiliary enterprises (residence halls andcommons, married student housing, bus service,and bookstore) had a year-end deficit of $280,000instead of the $500,000 included in the budget. Itwas not so many years ago that the subsidy fromunrestricted income for such activities was asmuch as $1,000,000.Effective energy conservation efforts contributed in an important way to the 1978-79 financial outcome. With energy prices increasing morerapidly than anticipated and with the very coldwinter, it had been feared that utility costs wouldexceed the budgeted level by 10 percent. In fact,the excess over budget was only $216,000 (3 percent) and this was covered from contingencyfunds within plant operations.The budgetary performance of the hospitals, thelargest of the auxiliary enterprises, is worthy ofnote even though there was no direct impact uponthe 1978-79 unrestricted budget. The hospitalsgenerated net income of $3,400,000. The hospitalmodernization program assumed that a substantialpercentage of the net income generated by thehospitals would be reserved to provide part of thefinancing for the program. Over the period until1982-83, the plan projected total funds from thissource of $13,000,000. The amount projected for1978-79 was $1,750,000 and this amount was putinto the reserve from the 1978-79 net income.The University Press had an excellent year. Itsposition as the largest university press in theUnited States was maintained and perhapsstrengthened. A major achievement was the publication of the Historical Atlas of South Asia.During 1978-79, the Press published 119 newhardcover books and added 88 new titles to itspaperback lists. It publishes forty journals, subscribed to by more than 165,000 individuals andinstitutions.200The 197^-80 BudgetThe University's 1979-80 budget as adopted bythe Board of Trustees is shown in detail in Table Vwith comparisons with the 1978-79 adoptedbudget.1 The unrestricted budget has a planneddeficit of $3,755,000. The total expenditure budgetfor 1979-80 is $308,964,000 or $28,871,000 overthe prior year.2 The increase is 9.3 percent.The following tabulation shows the increases bythe four major sub-budgets:General Funds(Unrestricted)Of which: UtilitiesAllotherRestricted FundsAcademic AuxiliaryEnterprisesOf which: HospitalsAll otherOther AuxiliaryEnterprisesTotal $ 7,302,000 (10.0%)97,000 (16.3%)6,305,000 ( 9.5%)7,157,000 ( 9.1%)13,672,000 (13.8%)13,261,000 (14.2%)411,000 ( 6.8%)740,000 ( 2.5%)$28,871,000 ( 9.3%)Some changes in budgets for particular objectives merit special attention. Student aid, fromboth restricted and unrestricted sources, was increased by $1,270,000 or by 13.5 percent. Whenthe tuition increases were announced, the commitment was made that student aid would be increased by 10 percent.The increase in the library budget from unrestricted funds was $1,591,000 or 32.4 percent.However, this is the change from the original1978-79 budget. The midyear revision of the1978-79 budget resulted in an increase of$1,000,000 in actual over budgeted expendituresfor that year. The 1979-80 budget level was set toassure an increase in the budget of 10 percent overthe prior year's revised budget. For the first time,a specific budget figure was set for library acquisitions from all sources of funds. For 1979-80 acquisition expenditures are to equal or exceed$1,874,000. The increase in expenditures on ac-1. The 1978-79 budget was revised at midyear and total expenditures in the unrestricted budget were increased by $1,355,000.Essentially all the increases were for the library and utilities.The comparisons made in the text are between the adoptedbudgets for 1978-79 and 1979-80.2. The total income budgeted for 1979-80 is $311,183,000. Thislevel of income would create a surplus from all funds (the sum ofA, B, C, and D in Table V) of $2,219,000. This surplus resultsfrom the excess of hospital income over hospital expenditures.However, as noted in the text, the hospital surplus is not available for use in the unrestricted budget. quisitions has made it possible to halt and reversethe decline in the number of monographs purchased.The increase in unrestricted expenditures forinstruction and research is 9.2 percent. This increase is substantially larger than one might expect from the modest increases in salaries andcontinued slight reduction in the number of faculty. Part of the increase is explained by the lossof restricted income that was used to support thecentral purposes of the divisions and schoolsduring 1978-79. Of the increase in unrestricted expenditures for instruction and research of$3,162,000, approximately $600,000 was for thereplacement of restricted funds .Almost all of the increase in budget for operation and maintenance of plant is due to increasedcosts of purchased energy. Excluding purchasedenergy the increase provided in the 1979-80budget for plant operations and maintenance wasonly $93,000, or 1.6 percent, over the prior year.The large increase in the budget for development and public affairs includes an increase ofalmost $1,000,000 in the unrestricted fundsallocated to development and alumni affairs.While decisions have been made that have resulted in increased effort in development andalumni affairs, approximately a third of the budgetincrease replaces restricted funds that had beenused in the past for development expenses. Thebudget for other components of development andpublic affairs was reduced by approximately 8percent.The 1979-80 budget implies a reduction in thenumber of faculty and staff. The goal for reductionin the number of staff is 200. This reduction is tobe achieved by attrition. The fact that the budgetcalls for fewer staff does not mean that there hasbeen a significant growth in nonacademic staff inrecent years. Between October 1975 and October1978, the number of nonacademic staff (full- andpart-time) increased by about 1 percent— from8,003 to 8,096. If the hospitals and clinics areexcluded, there was no increase in the rest of theUniversity.DiscussionIn previous reports the hope has been expressedthat the decline in total real expenditures in support of the University's academic programs hadbeen halted and that some small increase could beachieved. It appears that the decline in real expenditures, as measured by the Higher EducationPrice Index, was halted in 1978-79. Prior to1978-79 the real expenditures supporting our201TABLE I: TUITION IN CURRENT DOLLARS AND DEFLATED BY THE CONSUMERPRICE INDEX, 1970-71 THROUGH 1979-80COLLEGE GRADUATEDIVISIONS )¦ ¦.BUSINESS LAWCurrent Deflated Current Deflated Currento Deflated Current Deflated1970-711971-721972-731973-741974-751975-761976-771977-781978-791979-80* 2,3252,4752,6252,8503,0003,2103,4203,7204,0954,500 2,3252,3912,4332,4192,2972,2982,3082,3542,3682,315 2,4752,6252,7753,0003,2103,4203,6303,9304,3054,740 2,4752,5362,5722,5472,4582,4482,4492,4872,4912,438 2,4752,6252,9253,1503,7503,7504,0504,4254,8755,555 2,4752,536 .2,7112,6742,8712,6842,7332,8012,8222,858 2,4752,6252,7753,0003,3003,6904,0504,3504,8005,460 2,4752,5362,5722,5472,5272,6412,7332,7532,7782,809?Assumes 1979r-80 Consumer Price Index will be 12.5 percent above 1978-79.academic programs had been approximately 9percent below 1970-71. The improvement hasbeen modest, namely recovery to real expenditures 8 percent below 1970-71, and this improvement seems likely to be maintained during1979-80.Unfortunately the reductions in the number offaculty and other economies that have resulted inthe decline in the real expenditures or resourcesavailable to the University have not been enoughto maintain a budget balance. As noted, there wasa modest deficit last year and there is a deficit of$3,755,000 in the budget for the current year.Total expenditures in support of academic programs (Parts A and B in Table V less student aid)for 197£-80 are budgeted at $155,100,000. Thus,the deficit planned for this year is 2.4 percent ofthe budgeted expenditures for academic programs. To have achieved a balanced budget for1979-80 would have required some combinationof increased income or reduced expenditures totalling more than 2 percent of our planned expenditure levels. Since the income levels included inthe budget are at or near the maximums that seempossible, a balanced budget would have requiredexpenditures more than two percent below theapproved level. However, the approved level ofexpenditures reflected the elimination of approximately $4 million of expenditures that wouldhave been considered appropriate under lessstringent financial conditions. /The Board of.Trustees agreed that the harm to the Universitywould have been greater frown a further significant reduction in expenditures for 1979-80 than fromaccepting an incursion into endowment funds.However, continuing deficits are not feasible andover the next three years it is planned to eliminatethe deficit.Student CostsThe last three budget reports included tables thatexpressed tuition rates in terms of dollars of constant purchasing power for each year starting with1970-71 as measured by the Consumer PriceIndex (CPI). The table has been updated through1979-80 (Table I). The increase in the CPI assumed for 1979-80 is 12.5 percent. If the increasein the CPI is approximately 12.5 percent, the1979-80 tuition rates in the College and theGraduate Divisions will be less than the 1978-79tuition rates, in terms of 1970-71 dollars, by aboutfifty dollars.As viewed by the student, tuition is only one partof the cost of attending the University. For Collegestudents the percentage increase in the total oftuition, room, and board has been only slightlymore than tuition alone since 1970-71 . The 1979-80College tuition rate is 193.5 percent of the 1970-71rate; room and board in 1978-79 are 196.3 percentof the same charges in 1970-71. In terms of constant dollars, tuition, room, and board have increased by approximately 1 percent since 1970-71 .Table II provides a comparison of College tuition, room, and board charges with family incomes. Such a comparison is made to determine ifthe costs of attending college have maintained ap-202Faculty CompensationTwo tables (III and IV) present data on averagefaculty compensation. Table III shows the changesin average faculty compensation in current andconstant dollars, while Table IV gives the percentage relationship between our faculty compensationand that of seven other universities.There was a further erosion in the purchasingpower of the compensation for faculty at eachrank. Without the benefit of statistical tests ofsignificance, it appears to me that the deteriorationin the level of faculty compensation for full professors relative to such compensation at sevenother universities (Table IV) was halted in 1977-78and 1978-79.Income SourcesIn last year's discussion of the budget it was notedthat most of the income required for the support ofour academic programs had to be raised anew eachyear. For 1978-79, continuing sources of incomeprovided 12.5 percent of the expenditures made insupport of academic programs (Parts A and B inTable VI); for 1979-80, these sources will providebut 11.8 percent.Tuition income in support of all academic programs is budgeted to increase from 24.0 percent oftotal expenditures in 1978-79 to 24.6 percent in1979-80. However, if student aid is deducted fromboth tuition income and total expenditures, tuitionTABLE II: TUITION, ROOM, AND BOARD FOR UNDERGRADUATES AT THEUNIVERSITY OF CHICAGO AND FAMILY INCOMES IN THE UNITED STATES,1970-71 THROUGH 1979-80Tuition, Room,and Board Family Incomes* Tuition, Room, and Board asPercent of Family IncomeMedian 80thPercentile Median 80thPercentile1970-711971-721972-731973-741974-751975-761976-771977-781978-791979-80 $3,585$3,861$4;065$4,425$4,690$5,010$5,395$5,868$6,405$7,038 $ 9,867$10,285$11,116$12,051$12,902$13,719$14,958$16,009$17,600$19,400 $15,531$16,218$17,760$19,253$20,690$22,036$23,923$26,000$28,600$31,500 36.3%37.4%36.5%36.7%36.4%36.5%36.1%36.7%36.3%36.3% 23.1%23.8%22.9%23.0%22.7%22.7%22.6%22.5%22.4%22.3%Source: Family income data from U.S. Bureau of Census, except last two years have been estimated."Income data are for the calendar year of the first year of the fiscal period.proximately the same relationship with family incomes since 1970-71. Two measures of family income are presented — the median income and the80th percentile income. The 80th percentile incomeis used because little, if any , student aid is availablefor students from families with incomes at thatlevel or higher. If there is any trend in the last twocolumns of Table II, there has been a very smallreduction in the percentage of family income required for payment of tuition, room, and board inthe College.Even with the 10 percent increase in Collegetuition for 1979-80, our tuition remains substantially below that of other major private universities and colleges. The same statement appliesto the total of tuition, fees, room, and board. Unrestricted financial aid for students was held to aconstant absolute amount for several years prior to1976-77. In 1977-78, student aid funds from unrestricted income were increased by 5 percent,followed by a further increase of 8.6 percent for1978-79. Student financial aid from all sources,including governmental and other restrictedsources, for 1979-80 is expected to be 13.5 percentgreater than during the prior year. However, evenwith the significant increases in student aid thathave been achieved recently, students and theirfamilies are still paying a somewhat larger percentage of the total costs of attending college than wasthe case at the beginning of the decade.203TABLE III: AVERAGE FACULTYCOMPENSATION BY RANK1 970-71 TH ROUGH 1 978-79*THE UNIVERSITY OF CHICAGOConstantCurrent 1970-71Dollars Dollars(in thousands)PROFESSOR1970-711971-721972-731973-741974-751975-761976-771977-781978-79 $26.627.528.830.731.933.835.137.239.9 $26.626.626.726.124.424.223.723.523.1ASSOCIATEPROFESSOR1970-711971-721972-731973-741974-751975-761976-771977-781978-79 $18.519.219.720.821.923.424.425.526.8 $18.518.618.217.616.816.816.516.115.5ASSISTANTPROFESSOR1970-711971-721972-731973-741974-751975-761976-771977-781978-79 $14.415.215.616.617.318.319.720.721.7 $14.414.714.414.113.213.113.313.112.5INSTRUCTOR1970-711971-721972-731973-741974-751975-761976-771977-781978-79 $11.711.512.113.314.215.616.917.918.8 $11.711.111.211.310.911.211.411.310.9*Changes in average compensation should not be comparedto changes in salaries since the fringe benefit rates haveincreased over time. income net of student aid declined slightly as apercentage of expenditures net of student aid—from 19.1 percent to 18.8 percent.Endowment IncomeEndowment income allocated to the unrestrictedbudget anfkto restricted accounts from TRIP investments (Total Return Investment Program) in1978-79 was $15,700,000. The actual current yieldwas $17,900,000. This was the first year since theadoption of a total return payout formula in 1972that the current return exceeded current payout.The difference of $2,200,000 was added back to themany endowment funds that are a part of TRIP.The total return to TRIP— current income pluschange in the capital value — for the year was 14. 1percent. For the three years 1976-77 through1978-79, the payout under the total return formulahas almost exactly equalled the current return onthe endowment. For the next several years, it isanticipated that the current return on the endowment will continue to exceed the current payoutand will offset at least partially the substantialwithdrawals from the endowment that occurredbetween 1972-73 and 1975-76 due to the application of the total return formula as it was then formulated.3 The change in the payout formula madeby the Board of Trustees at the beginning of1976-77 clearly appears to have stopped the erosion of the endowment and to provide for relativestability in the endowment payout. Based on reasonable assumptions, endowment payout will remain almost constant in current dollars for the nextseveral budget years. The consequence is that thepercentage of both the unrestricted and restrictedbudgets supported by the endowment will continueto decline.Energy Conservation and CostsAs noted earlier, one reason for a smaller deficitthan anticipated for the 1978-79 budget was thesuccess in holding energy expenditures in checkduring a year that included the coldest winter onrecord. The 1979-80 budget assumes continuingefforts to reduce the use of energy to offset, atleast in part, the increased prices of energy thatare expected. I recognize that there have beencomplaints about some of the effects of energyconservation, especially as it related to the lowering of temperatures during the winter. But it isworth noting that during 1972-73 the cost of en-3. See the University of Chicago Record, Volume X, Number 5(November 5, 1976), pp. 140-1 for discussion of total returnformula.ergy accounted for 4.3 percent of unrestricted expenditures and that by 1978-79 the percentage haddoubled to 8.6. For 1979-80 utility expendituresare budgeted at 8.8 percent of unrestricted expenditures. An objective of our energy conservationprogram is to reduce the percentage of the unrestricted budget devoted to energy expendituresto approximately 6 percent. The importance ofachieving this objective is clear — if it had beenachieved for 1979-80, our budgeted deficit wouldhave been reduced by more than $2,250,000. Concluding CommentsIn last year's report on the budget I commentedupon the adverse effects of inflation as follows:"Inflation continues to be a major threat to theviability of private universities in general and tothe University of Chicago in particular. It erodesthe real value of our endowment. Unanticipatedchanges in the rate of inflation, whether thechange is an increase or a decrease, generallyhave a shortrun adverse effect upon us."(continued on page 207)TABLE IV: UNIVERSITY OF CHICAGO FACULTY COMPENSATION AS PERCENTAGE OFFACULTY COMPENSATION AT SEVERAL OTHER UNIVERSITIES BY RANK1970-71 THROUGH 1978-791970-71 1972-73 1974-75Assoc. Asst. Assoc. Asst. Assoc. Asst.Prof. Prof. Prof. Inst. Prof. Prof. Prof. Inst. Prof. Prof. Prof. Inst.Harvard 97.8 99.5 97.3 95.1 102.1 97.5 106.8 , — 98.2 103.8 108.1 Yale 93.3 106.3 109.1 108.3 97.0 108.8 114.7 105.2 99.7 114.6 123.6 120.3Princeton 104.3 .111.4 109.9 121.9 107.1 110.0 111.4 118.6 105.3 108.4 114.6 129.1Pennsylvania 107.2 106.3 108.3 — 103.6 100.5 102.0 100.8 100.9 97.8 "98.9 106.8Stanford 106.4 103.4 102.1 118.2 105.1 100.0 99.4 — 103.9 103.3 103.6 —Michigan 111.8 105.7 110.0' 106.4 109.9 101.0 97.5 97.6 107.0 99.5 96.1 102.9Wisconsin 125.5* 118.6* 110.8* 108.3* 119.0 110.7 103.3 99.2 118.6 110.6 101.8 104.4Av. Fac. Comp. -at U. of Chicago 26.6 18.5 14.4 11,7 28.8 19.7 15.6 12.1 31.9 21.9 17.3 14.2(thousands)N* Averages for entire University of Wisconsin System, whereas other Wisconsin figures are for Madison campus only.Source: AAUP Annual Report on the Economic Status of the ProfessionTABLE IV (Continued)1975-76 1977-78 1978-79Assoc. Asst. Assoc. Asst. Assoc. Asst.Prof. Prof. Prof. Inst. Prof. Prof. Prof. Inst. Prof. Prof. Prof. Inst.Harvard 94.7 104.9 106.4 — 90.9 107.1 108.4 — 90.1 108.5 106.4 —Yale 99.1 114.1 123.6 120.0 100.2 109.4 120.3 127.9 102.8 111.2 119.9 114.6Princeton 105.6 109.3 113.7 132.2 100.8 105.4 116.9 129.7 102.0 103.5 111.3 123.7Pennsylvania 103.0 101.7 101.1 121.9 98.7 95.9 99.0 94.7 100.8 96.0 98.2 106.2Stanford 103.4 99.6 102.8 — 97.3 97.7 98.1 — 97.8 95.7 97.3 —Michigan 107.0 101.7 96.8 106.1 106.3 99.6 99.5 108.0 107.8 95.7 94.8 101.6Wisconsin 118.2 111.4 100.0 108.3 116.6 109.0 101.5 109.8 117.4 105.9 100.5 106.8Av. Fac. Comp.at U. of Chicago 33.8 23.4 18.3 15.6 37.2 25.5 20.7 17.9 39.9 26.8 21.7 18.8(thousands)2059to o © - ^ »o 1— i oo <ry"*t «0 oo^ en On en vq^ On¦l> vo" en" vo" en" <rT «/V4 eno«neneNOr^QOS *-*¦ 00 Tf. VO 00 ^h ©c* ON rf CN ON en f* f^-<* Tf" en" »n cn" »o >o" r- cm h o ©en Tf -r-4 en *-*ra en en r- oo wv»o 00oo ' r<fsf oo" r-T .^ *-f s IQWH<OhO<CODHSWOhX (3 'T5S OO§3w 3<D « .'5 a:+5 2' 3.S 3 ft tt:oaa3CO«3O €a s >. *i -s5 S 3 '-S <**.-2 3 &^J co- O O 3 3C m cdft e .«-.-9 T c0) w 3Q ¦ O co H 52311CO ^ * 3«fl J W3 <u_¦§ a.Q 55 Es fl- 12 •- u¦2 C (Aa- ya «s. U £< t-j 3emic giate Isan Resocolle spita man "S, ; g o 3CJ ft. ffi ffi £ 3&I.2 c.¦S o< O. o >•a x3.S go 2 3U ft o<D <D H>3 *3 ys 5 CJIIWJ"e©CJ§ 8On Q en »o r- O en© oo r-. ^ © —<vo CN en oo en 0000 fN ON ^h M ffiob i—i envo »oa <N oo «-* ^ ^ rn<t-HHcoWCOW>PJ5 S".—. <U 32^ g.C 3 £< co W c3OS u toO d> oo d .*¦ ££ * 3KltnI %o 3i Oo3 31) HP, £^ eO cuTJ >3 o«woo Ift^ « r»©. 3 0030 goe* O P3c o iO g 3t3 3 ^S « 8 SI ^ e s ". •8^a.2 uJ JS.< o. oQ « 73 2o o13 a3 3rt oW) •rj3 ctfW3 R3 d)oK 3 T3W01}3 >1#3 a> M3 ?>£ §S ^ <u _c '3 «j 2U 13 S fs soUwOur budgeting process requires that decisionsmust be made several months in advance of theperiod the budget actually covers. As this is written, for example, work has already started for the1980-81 budget, and by the end of January 1980,decisions will have to be made concerning tuitionlevels and increases in rates of pay for faculty andstaff. Most "firms" have the opportunity tochange the charges made for their services asconditions change, but universities establish theirtuition rates and student aid levels well in advanceof the applicable period and cannot adjust thesevariables during that period. Consequently, if theactual rate of inflation is significantly higher thanthe rate assumed when budget decisions weremade, the University finds that its viability isthreatened by declining real incomes for its faculty and staff.When the decisions affecting the 1978-79budget were being made, the annual rate of inflation was approximately 6.5 percent; the actualrate for the fiscal year 1978-79 compared to1977-78 was 9.4 percent. At the time the 1979-80budget decisions were made, the rate of inflationwas under 10 percent; it now appears that we willbe fortunate if the annual rate for the fiscal yearwill be as low as 12.5 percent. In two years theunanticipated increase in the inflation rate has resulted in a loss of resources and income to theacademic program of more than $7 million. This isalmost double the projected deficit in the 1979-80unrestricted budget. The two figures are not directly comparable, but I think that it is fair to saythat if inflation rates had remained at the seemingly high rates prevailing at the time the past twobudgets were determined, the deficit in the1979-80 budget would have been much smaller.The reason why the two figures are not comparable is that the costs of the unanticipated higherrates of inflation have been borne primarilythrough lower real incomes for faculty and employees.It is small comfort that we share this loss of realincome with most others in our economy. Facultymembers of all colleges and universities had an increase in their compensation of 6.7 percent between 1977-78 and 1978-79 and a loss in real compensation of 2.7 percent. The average compensation for nonprofessionals increased by 8.4 percentfor a loss of 1.0 percent. In August 1979, the average real weekly earnings of all nonsupervisoryworkers on private nonfarm payrolls was 4.2 percent below the same month a year earlier.In last year's report on the budget I was clearlyoveroptimistic with respect to the University'shaving arrived at the status of balancing its income and expenditures following 'two years inwhich a budget balance had been achieved. Thedeficit planned for the 1979-80 budget of$3,755,000 is*large, though in terms of real dollarsit is significantly smaller than the deficits faced inthe early 1970s. Studies that have been madeduring the past year indicate that without furtherreductions in the scale of the University, furtherefficiencies in the use of our resources, andsignificant increases in income, the deficit wouldgrow in the years ahead to approximately doublethe 1979-80 level. This obviously cannot be permitted to happeaand will not happen.President Gray, in the weeks and monthsahead, will share with you the background material that has been prepared. It outlines the generaldirections which must be taken to carry out a planof achieving financial equilibrium while maintaining the intellectual strength of our University.The years ahead present serious challenges toour University. We must once again struggle toachieve a budget balance in a relatively briefperiod. It makes it no easier to note that this willnot be the first time the University has been facedwith this task. If my memory serves me correctly,it will be the fourth time since I have been amember of the faculty. But the past does offerhope for the future; if we could do it before we cando it again.D. Gale Johnson is Provost and the Eliakim Hastings Moore Distinguished Service Professor in theDepartment of Economics and in the College.207REPORT ON FUND-RAISING RESULTSIN 1978-79 AND PLANS FOR 1979-80November 14, 1979The Campaign for Chicago ended officially onJune 30, 1978 with a total raised of $189 million.During 1978-79, the University began building anongoing development program designed to increase the flow of funds from private sources. ATrustee Development Planning Committee wasestablished to assist in that task. William R.Haden has been appointed Director of UniversityDevelopment and several experienced professionals have been added to the University Development Office. As part of the new approach toUniversity fund raising, the Development Officehas adopted an annual operating plan which setsforth specific goals for activity undertaken and forfund-raising progress. Fund-raising progress includes new gifts, pledges, and life income trusts; itis not a measure of cash income to the Universityin a given year.1978-79 Results in Fund-Raising ProgressIn 1978-79, the University recorded $30,743,189in fund-raising progress. This represents a growthof 17 percent over 1977-78 results of $26,290,430and exceeds the stated 1978-79 goal by 15.3 percent. Table I shows the source of these monieswhich include all gifts to the University, restrictedand unrestricted, from private sources.Several large and significant gifts deserve mention. The Searle Fund of the Chicago CommunityTrust pledged $2,500,000 over ten years, themajority of which will be used to create a SearleScholars program for graduate students in thephysical, biological, and social sciences. The Andrew W. Mellon Foundation gave the University a$1,000,000 challenge grant -to support opportunities for promotion of younger faculty in thehumanities. A renewal grant of $1,450,000 fromthe Commonwealth Fund was made to theASHUM program. The Graduate School of Business received a $1,000,000 grant from the HarryF. Kaiser Family Foundation to support studentsand faculty working in the Hospital Administration Program. The Alfred P. Sloan Foundationawarded $250,000 for program development in theCommittee on Public Policy. The Joyce Foundation issued a challenge grant to stimulate increased unrestricted giving to^the President'sFund. An anonymous donor gave $1,000,000 for strengthening of science library collections. Inaddition, another $750,000 was given to the libraryendowment which earned an equal sum from aprevious challenge grant of $ 1 ,000,000.Of special significance was the performance ofthe University's Alumni Fund, which raised$1,731,5^19 in unrestricted money, a growth of 22percent over the previous year. The pattern ofgiving reveals genuine promise for the future: thenumber of donors grew 39 percent, from 10,584 to14,674, the first significant increase in the donorbase in ten years.Fund-Raising Plans for 1979-80The University expects to record $37.65 millionin new gifts, pledges, and irrevocable trusts during1979-80. This is a 22.5 percent increase overfund-raising progress achieved last year.Table II displays the fund-raising progress bysource and compares 1979-80 projections withlast year's achievement.The following key points help interpret the1979-80 goals:— $37.65 million is a greater amount than the University has achieved in any year over the pastdecade.—Two special efforts, the leadership phase of theMedical Center Campaign and the GraduateSchool of Business capital drive, are expected tomake important contributions toward the goal.— The sharpest growth is projected in the corporate program (96.5 percent) and the major gift program (52.8 percent). The corporate projection isbased on the expectation of the renewal of severalmajor multi-year pledges at increased levels.The major gift increase reflects an emphasis onpotential donors who have been close to the University over the years and who are thought to becapable of giving $500,000 or more.— The foundation achievement last year reflectedthe extraordinary Searle gift and three othergrants of a million dollars or more. The 1979-80goal is in line with the pattern of foundation givingto the University in a "normal" year.—A growth rate of 22 percent ($386,000) has beenestablished for the Central Annual Fund whichrelies heavily on participation in the President'sFund (gifts of $1,000 or more). Each professionalschool that operates a separate annual fund hasalso established goals for increases in both dollarsand donor participation.Three broad purposes are implicit in the dollargoals. Some of the funds, especially those fromfoundations, will support ongoing academic pro-208TABLE I: FUND-RAISING PROGRESS, 1978-79Source Goal Actual ± Variance % VarianceFoundationsCorporationsMajor/Deferred*Annual GivingOther** 7,750,0003,500,0008,500,0001,900,0005,000,000 9,817,3333,307,1859,490,6941,731,5496,396,428 +2,067,333- 192,815+ 990,694- 168,451+ 1,396,428 +26.7- 5.5+ 11.6- 8.9+27.9TOTAL 26,650,000 30,743,189 +4,093,189 + 15.3*A major gift is defined as any gift from an individual over $50,000. A deferred gift is an irrevocable life income trust or a bequestwhich matures. Bequest intentions are not included because they may be changed.**The "Other" category includes gifts to professional schools' annual funds, grants from research agencies, gifts to affiliatedauxiliaries.TABLE II: FUND-RAISING PROGRESS: PROJECTED COMPARISONSource Actual1978-79 Goal1979-80 ± Variance % VarianceFoundationsCorporationsMajor/DeferredAnnual Giving $ 9,817,3333,307,1859,490,6942,873,506 $ 7,000,0006,500,00014,500,0003,384,887 -2,817,333+3,192,815+5,099,306+ 511,381 -28.7+96.5+52.8+ 17.8— Central Alumni Fund— GSB—LAW—BSD¦— SSA 1,731,549469,976490,546104,17177,264 2,100,000517,000550,000124,88793,000 + 368,451+ 47,024 .+ 59,454+ 20,716+ 15,736 +21.7+ 10.0+ 12.1+ 19.9+20.0Other* 5,254,471 6,265,113 + 1,010,642 + 19.2TOTAL $30,743,189 $37,650,000 +6,960,811 +22.5The "Other" category includes grants from research agencies, gifts to affiliated auxiliaries.grams. A portion of the fund-raising increase willhelp the University reach a point where incomeand expenditures grow at the same rate. Still othergifts and grants will enable the University selectively to strengthen academic programs and services.Although the University's Development Officehas the responsibility for proposing an annualoperating plan and providing effective staff support, the success of the University's fund-raisingprogram depends heavily on the involvement of the academic officers, deans, and individual faculty members. An effort will be made this year toencourage increased faculty participation in theUniversity's fund-raising program.William R. HadenDirector of University DevelopmentJonathan F. FantonVice-President for Academic Resources and Institutional Planning209REPORT ON FACILITIES PLANNINGAND CONSTRUCTIONNovember 9, 1979The buildings of the University would cost morethan $500 million to replace . For ten years theUniversity has invested increasing amounts inrenovation and remodeling to extend the usefullife of the buildings and to preserve them.In the past year, the University spent more than$8.5 million for construction, over $7 million ofthat on 149 remodeling and renovation projects.Major remodeling-renovation projects completed during the past year include:Conversion of the Experimental Biology Buildinginto the Eye Research Laboratories.Renovation of Haskell Hall. The AnthropologyDepartment has been moved into Haskell fromWalker Hall which will soon be remodeled for occupancy by the Graduate School of Business (seebelow). Haskell Hall, originally the HaskellOriental Museum, and for sixteen years the officesof presidents Harper and Judson, was rededicatedfor its hew use on September 21. The renovationcost was about $750,000.Conversion of the former bookstacks in Swift Hallinto offices and classrooms for the Institute for theAdvanced Study of Religions. The remodeledquarters have been named the John Nuveen Wingand the Howard Goodman Classroom, after twodeceased trustees of the University.Remodeling of the third floor of Classics as thefirst step in a major renovation program to providenew quarters for the Music Department (seebelow).A number of minor projects were completedduring the year, including: remodeling of the Hospital cafeteria, a new clinical suite for the Department of General Medicine, and the second phaseof remodeling of the Erman Biology Center.Considerable progress was made on a numberof other major remodeling and renovation projectsduring the year:The extensive renovation of the Shoreland Hotelwas nearly completed after eighteen months ofwork. Students were in constant occupancy during the renovation. When completed— about thefirst of the year—it will house over 600 students.The total cost of the renoyation will be about $6.5 million— a cost per student substantially less thanthat of a new building.The Henry Crown Field House renovation, underway for the past three years, will be finished andthe facility ready for full occupancy at the start ofwmter quarter, providing new squash courts,locker facilities , an aluminum roof, etc .Major renovations were begun to provide a newhome for the Music Department in GoodspeedHall. They should be completed by the opening ofnext year's fall term. Lexington-— the University'soldest temporary building and Music's presentquarters— will then be demolished.Remodeling of the Bookstore was considerablyadvanced during the year. The third and fourthfloors were finished and now house student loanfunctions and, temporarily, the Graduate Schoolof Business offices, while Walker Hall is beingremodeled. Future plans include a new entranceon the south side with an elevator and new stairway, flooring over the old printing press area toprovide expanded quarters for Faculty Exchangeand the food service, and a refurbished and enlarged second-floor sales area. A ramped entrancefor access by the handicapped is nearly finished.The first phase of major renovation of AbbottHall, to provide improved mechanical services,was initiated; and the construction of a new laboratory for Clinical Pharmacology was begun.Many of these renovation projects have beenmade possible because of funds borrowed throughthe sale of tax-exempt bonds under the IllinoisEducational Facilities Act (IEFA) at low interestrates in 1977, including the work on the Shore-land, Goodspeed and Classics, Haskell, AbbottHall, and the Bookstore,The following major renovations will begin inthe near future:An extensive remodeling of Walker Hall for theGraduate School of Business. Schematic designshave been completed and a bid has been accepted.In addition to a fairly complete gutting of thebuilding, the project will include the addition ofone and one-half new floors and a new south entrance to the building. Construction should beginlater this quarter. The costs involved areestimated at $4. 1 million and will be covered bythe Graduate School of Business.A major remodeling of Mandel Hall to provideimproved acoustics, a larger and more versatilestage, new dressing rooms, and added space has210gone through the design stage and actual construction will begin in December. The nearly $2.0million estimated cost has been financed by thegenerous gift of the Joseph and Helen RegensteinFoundation.The fourth floor of the Ida B. and Walter ErmanBiology Center will be remodeled, completingwork begun with early projects made possible by adonation from the Ermans and a CommonwealthFund grant.It is planned to remodel Eckhart Hall at an earlydate.Nearly $1 million has been committed for energy conservation projects ranging from stormwindows, insulation, and computerization ofcontrols to major modifications in buildings andequipment in Cummings and the Research Institutes. The new computer installation in Regenstein Library, controlling the HVAC systems,is being studied for expansion and extension toother major buildings. We are studying majormodifications of Searle, Hinds, and the Hospital.The only new construction currently under wayis the addition to the National Opinion ResearchCenter. It is funded by that organization. However, there are several projects in various stagesof planning. The largest of these is the addition tothe Hospitals and Clinics to replace 500 patientbeds in a new, modern, and efficient hospitalbuilding. The architectural firm of Perkins & Willhas been selected to design the building and plansare for construction to begin next year.Other new construction projects contemplatedare:A new theater. Funds for this project have beenraised.A new teaching center for physics is under consideration, as is a facility to house the Computation Center to relieve overcrowding in the presentfacility and make room for badly needed researchspace for the Astronomy Department and theFermi and Franck Institutes.Finally, during this past year committees of theBoard of Trustees and the faculty worked with thearchitectural consulting firm of Sasaki and Associates to prepare guidelines for long-range plansfor the campus.William B. CannonVice-President for Business and Finance REPORT ON UTILITIES USAGE ANDCONSERVATION FOR FISCAL YEAR1978-79November 9, 1979The University spent $9.5 million during the pastfiscal year for utilities, about a 16 percent increaseover the prior fiscal year. Almost the entire increase was a function of price increases for gasand electricity and of wages. The University'sconsumption of energy did not increase, remaining almost identical to that of the prior year.The equality of energy usage between the twoyears should not obscure the very real conservation that was achieved in the face of most unusualweather again, thanks to increasing attention toconservation on the part of faculty and staff andtheir cooperation with heating, air-conditioning,and lighting policies. The real conservationachieved is apparent in the fact that, though thetwo years were equal in total energy usage, theyear that just ended was about 30 percent hotterthan the prior year, while the winters were aboutas cold. In addition, the year just ended witnessedthe full-year operation of two large, energy-usingbuildings, namely, the Surgery-Brain ResearchBuilding and the Kovler Viral Oncology Laboratories. If the extra consumption by these twobuildings is deducted, the University in fact reduced its consumption by about 2 percent lastyear over the prior year. Another indeterminantpercentage reduction is, of course, implicit in thefact that the weather in the year just ended put aheavier burden on energy requirements than theprevious year.These outcomes should be seen in the contextof a midyear assessment which showed that theUniversity was on a course which if continuedwould have increased energy usage by 5 percentover the prior year. An intensified campaign ofenergy conservation gained widespread University cooperation.Because of increases in the prices of gas andelectricity, the total cost for utilities for 1978-79was about $690,000 or 6.8 percent over budget.The overrun for the unrestricted budget, however,was only $216,000 or somewhat more than 3 percent over budget.Since substantial future price increases are probably inevitable, the University must continue totake every step it can to hold down usage.Among the various actions to hold down usage,211capital improvements to the plant are in processor are planned. During the past year a computermonitor was installed in Regenstein to control theheating, ventilating, and air-conditioning systems.As experience is gained in the usage of such acomputer, the system will be extended to othermajor energy-using activities beginning this fiscalyear. Major capital changes such as these arelaunched only after studies which determine themto involve a favorable cost/benefit ratio, as measured by potential reductions in energy consumption.In addition, major modifications have beenmade in the Research Institute structures andenergy-using processes, and comparable actionsare under development for Cummings Life Science Building, for Searle Chemistry Laboratory,and for Hinds Geophysical Laboratory. The Hospital, the major user, is the subject of a specialenergy conservation study by an outside consultant which should lead to major changes.As has been the approach for several years, theenergy conservation program is concentrating onthe largest energy users. This has paid off handsomely in the case of Regenstein which has shiftedfrom using 7 percent of the total energy to 3.5percent. We expect similar shifts in the case ofCummings, Searle, and the Hospital.Storm windows, insulation, and the like arebeing installed on a selective, cost/effective basis.Over 200 timers are being installed in classroomsand library stacks.In total, nearly a million dollars has been committed to date for capital improvements designedto save energy, and all new construction is beinganalyzed very carefully from this angle.Inasmuch as prices of gas and electricity seempredestined to continue to rise substantially infuture years, and are beyond our control, the University's only recourse is to continue to conserveon every front. To repeat, the foregoing discussion of major projects and programs for conservation should not depreciate the very substantialconservation that results from a pattern of numerous individual actions to turn off lights, Xeroxmachines, electric typewriters, and appliances inall 150 campus buildings.Further, it will be necessary — in fact, now required by law — to adhere to heating and air-conditioning policies which set temperaturesmuch lower and higher than we have been accustomed to, except in special cases such as somelaboratories and the Hospital. This is the prospectthat faces the University and others for the in definite future; if anything, the requirements forenergy conservation will become more severe andthe effects more ramifying.The University would appreciate suggestionsfrom faculty and staff for major or minor conservation actions. There is a faculty committee onenergy as well as the University Energy Conservation Office to which you may wish to sendsuggestions.William B. CannonVice-President for Business and FinanceFACULTY COMMITTEE ON THE LONG-TERM FINANCIAL SITUATIONOF THE UNIVERSITYIn October President Gray appointed thirteenmembers of the faculty to a University Committeeon the Long-Term Financial Situation of the University.Her charge to the committee, which will meetregularly with the senior officers of the Universitywho are charged with academic and financialplanning, is:"The object of this faculty advisory group willbe to study the long-term financial situation of theUniversity, to assist us in coming to an understanding of projections and outlooks, and to engage in the discussion of those policies, priorities,and directions which over the long term will bestguide our budget planning in the service of theUniversity's academic strengths and goals."Those appointed to the committee:Gary D. EppenDr. Clifford W. GurneyJanet H. JohnsonRobert LucasPaul MeierDavid W. OxtobyEugene N. ParkerPaul E. PetersonPatricia SpearRobert E. StreeterDon R. SwansonWilliam Wimsatt212THE UNIVERSITY OF CHICAGO RECORDVICE-PRESIDENT FOR PUBLIC AFFAIRSRoom 200, Administration Buildingo Z3 i o' O-313D O " "01^ -o; i^p >s 05 - —» 2?F Oj! S2z O 1-1 0 m*55 03