Office of the President

Chancellor Page Announces New USM President

Appointment of President David Flanagan at USM

July 23, 2014

University of System Chancellor James Page:

Good Morning.

There is no straighter path to opportunity and advancement than higher education.  Those of us entrusted to lead Maine’s public universities must therefore do all we can to ensure our programs are affordable while meeting the needs of our students and communities.  

More than a decade ago, the incumbent business model for public higher education in Maine became outdated. The trends in demographics and taxpayer support for higher education that helped build and sustain an expansive, statewide public university system began to reverse.  And we saw our cost structure change as health care and other costs started to escalate at ever-­‐faster rates.  

Rather than face these changing realities and live within our means, the University of Maine System too often kicked the can down the road.  Across Maine we relied on tuition hikes to preserve our size, structure and silos. Our failure to address the root causes of our challenges, especially in the areas of affordability and access, could not have come at a worse time.

Tuition increases at public institutions combined with transformational advancements in technology to create fierce new competition in the higher education marketplace.  Expanded private and for-­‐profit institutions are proving to be attractive alternatives for many students, creating even more financial pressure on our public universities.  

Nowhere are these pressures more evident than at the University of Southern Maine where we have seen our largest declines in enrollment and our biggest budget deficits. Given these trends, we have to take steps now to ensure a strong and vibrant public university for this region.

4-­‐out-­‐of-­‐every-­‐5 new jobs added to the Maine economy over the last five years were created in the Portland region. The second highest job expansion occurred in Lewiston-­‐Auburn where an additional 1,200 jobs were created over the same

period. We must continue to add educated workers and jobs skills to the labor pool if we hope to sustain this expansion.

There is unanimity among the Board of Trustees and strong consensus across the community that the University of Southern Maine must change to address our financial and competitive challenges. We must act decisively if this institution is to remain a viable, valuable and affordable pathway to opportunity and advancement for the Portland and Lewiston-­‐Auburn regions. And we will.

While the search for a permanent president for USM is set to begin soon, we cannot wait to bring bold leadership to the university. Consequently, the Board of Trustees and I have asked David Flanagan, one of Maine’s most accomplished and respected leaders, to serve as the University of Southern Maine’s interim president and lead this critical change initiative.  David starts July 28th and will serve until a new, permanent president takes the helm at USM sometime next year.

We are grateful that David is once again answering the call of public service. The Board and I have asked him to implement an ambitious agenda knowing that the work will be neither easy nor without controversy. But the work must be done, and he will have our unwavering support.

David Flanagan is one of Maine’s most trusted, experienced and accomplished business leaders and public servants.  David has answered the call of governors and senators. He has tackled the spruce budworm and led the investigation into the government’s response to Hurricane Katrina. David has helped balance state

budgets, shepherded a utility through deregulation and declining market share and, perhaps most famously, helped lead the effective response to the 1998 Ice Storm that left hundreds-­‐of-­‐thousands of Mainers without power in the dead of winter.

In addition to his business acumen and accomplishments, David is a consensus builder who brings an insider’s knowledge of higher education and its challenges to this post. David was a member of the University of Maine System Board of Trustees for nearly a decade and chaired the board in the early 1990s. Since 2008 he has served as Chairman of the Board of Visitors of the Muskie School of Public Service where he chaired the landmark external review committee on institutional restructuring. He chaired the New Challenges, New Directions Task Force in 2009 that reached prophetic analysis on the financial risks facing UMS and the need for a new approach. David knows the challenges facing higher education in Maine, and he knows USM.

I have consulted with campus and community stakeholders about the challenges we face at USM and the need for a strong, trusted leader to help guide the university as we transition to a new model and the leadership of a new president. Based on these consultations the Board of Trustees and I have asked David to lead the campus in accomplishing five interrelated goals.

President Flanagan’s first priority is to rebuild trust and productively align the campuses around common objectives. We are at times going to disagree. But all of us -­‐   faculty, staff, students and administrators -­‐   must agree to work together to find solutions that move past what divides us to our common love of, and commitment to, this university, its students and its mission. And we must accomplish this with mutual respect and civility.

Based on a stronger foundation of trust and inclusion, President Flanagan is tasked with shepherding this campus through a difficult budget process to close what is currently expected to be a $12.5 million gap between projected revenues and expenses in the next fiscal year. It will take incisive yet inclusive leadership to balance both our budget at USM and the competing interests of our many stakeholders.

A third objective of David’s presidency is to provide the necessary leadership to move forward with USM’s Metropolitan University Model.  This involves supporting the work of Dick Barringer’s Metropolitan University Steering Committee whose work is underway with great promise, as well as engaging campus and community leadership as USM begins to implement its plan to make this university an indispensible partner in the future of Maine’s two largest economic and urban communities.

President Flanagan is also being asked to strengthen USM’s relationships and standing throughout the region. This institution is southern Maine’s most valuable depository of intellectual capital. We have an obligation to the taxpayers who support our mission to deploy our knowledge and energy across the region for the advancement of all.  President Flanagan, his team, and our students must build a stronger connection to the community and demonstrate to everyone that we all benefit from the tuition and tax dollars invested in public higher education.

Finally, I am asking David to use each of these tasks to lay the foundation for success for the permanent president we will be searching for starting this fall under the leadership of trustee Jim Erwin.

I see a future for public higher education in southern Maine where strong and inclusive leadership brings people of good will together around common goals.

I see a future where our talent and resources are strategically invested in high value programs that prepare our students for tomorrow’s opportunities.

And I see a future where our intellectual capital and energy are deployed across the region to build a stronger community and open new doors for our students.

The future I see for the University of Southern Maine is a bright one. It is with great appreciation and optimism that the Board of Trustees and I ask David Flanagan to light that way.


 

University of Southern Maine President David T. Flanagan
Remarks upon his appointment
July 23, 2014

Portland is a great city, and only getting better.  Southern Maine is one of the most attractive regions of the country.    And up the road, in Androscoggin County, we serve a vital role in meeting the needs of the Lewiston/Auburn community that is also deserving of a public university presence.  USM serves the two largest population centers in the state.

This university has extraordinary assets – talented faculty, dedicated staff, serious students and the most desirable locations in the state.  Yet, something is seriously wrong here. USM is losing out.

In enrollment, in revenue, in public support.

I have seen this phenomenon before --- a competent, well-meaning organization built up over decades in a cocoon of monopoly conditions suddenly has to confront competition and changing conditions. In USM’s case, the demographics have changed, competition has increased and state support has seriously declined.  When you look at the statistics on enrollment, revenue, market share, and deficit spending, you know we have kicked the can down the road for far too long.

The University should have come to grips with the changing world a decade ago --- and certainly when we issued our report on the University's finances and structure five years ago.

The USM business model is obsolete. Outside forces have rendered it unsustainable.

USM must transform itself to ensure its future value to the people of Maine. And this university with all its strengths has the capacity to undergo such a transformation.

I know this first hand.  I was CEO of the largest public service company in Maine during some trying times – trying politically, commercially and financially. Reform, restructuring and repurposing is a hard, wrenching, sometimes personally painful job. But it is possible for even a large unwieldy organization like USM to come out of it stronger and better and more service-oriented than ever.

I know it can be done, because I have seen Mainers do it before.

With decisive leadership, high performance teams, committed faculty and staff and a supportive community, we CAN get from here to there -- to a new model of a USM that is leaner, smaller both in employment and footprint, more agile, less bureaucratic, competitively priced and offering greater flexibility for students.

The new model would include a university with combined undergraduate and graduate programs, more interdisciplinary majors, state-of-the-art technology with blended and online learning and academic programs that retain our liberal arts values but also prepare students to pursue careers upon graduation.

In short, the new USM must be student-centric and community supportive.    

We know this work will not be easy.  Transitioning a bureaucratic organization into a successful competitive one will be hard work.  And it will require many hardships and sacrifices.   I know -- I've been there before.

Achieving this vision requires, first, acceptance of our financial reality.  We must accept that there is no magic pot of gold at the end of any rainbow for us to go deplete.  Survival will require a general consensus that it is we who must help ourselves out of this financial crisis.  That we really are facing an unsustainable structural deficit of at least $12 million for FY 16, which could actually grow significantly deeper based on the latest enrollment projections.  And an acceptance that the required change will mean curricular reform and letting go of some cherished programs and treasured traditions.

That we understand the taxpayers of Maine will not, and should not, support half-empty classrooms and dorms.

That we will have to work in cooperation with our sister campuses in our program offerings and that this system cannot afford duplicating specialties other Maine campuses can better support.

Instead our future will depend on two things: Responsiveness to the market to achieve enrollment growth and efficiency in our operations.

The best way to eliminate the deficit and start rebuilding would be through a combination of cost savings AND revenue growth.

There is an overwhelming amount to do here, but we will not dawdle or equivocate.  We need to submit a budget template to the Board of Trustees by their September 22 meeting and a final budget by January 1, 2015. We will meet those deadlines.

Further, we will join the effort to advocate for a restoration of some of the significant appropriations cuts the State has made in university appropriations in recent years.

The more we can do to raise revenue and create public good will, the fewer positions we will have to give up.

One of our worst problems is a perception, inside and out, that USM is in terminal disarray -- with dysfunctional leadership and an utter lack of direction or priority. Some experts on governance here have said USM needs a kind of "servant-leadership."

I could not agree more.  The job of every one of us, in every position and at every level of responsibility, is to serve the students, who not only are our reason for being, but also, by the way, have choices as to which university can serve them best.  Which university offers the best value proposition?

And secondly, to serve the community of Maine, whose financial and moral support is indispensable to our success.

I challenge everyone at USM to recognize we are not here to serve ourselves, but rather our students, our communities and our state.

One final word on leadership

A recent blog posting proposed that USM needed "No more Mr. Nice Guy."

I understand the depths of frustration with indecisive leadership that may have led to this outburst.  And I assure you my leadership team will act comprehensively, quickly, and in accordance with a clear set of goals and objectives, which the Chancellor has already outlined.

But I also want to stress that we want to act fairly, openly, collaboratively and civilly, in the best Maine tradition.   We respect the valuable work of the faculty, administrators and staff in all departments. It is our intention to consult appropriately on the configuration of our management team, on our budget process, and on the major initiatives we undertake with the faculty, students and staff.  We know we have no monopoly on good ideas, and believe USM has many professors, adjuncts, and staff who can greatly contribute to transforming this university into someplace great.  Indeed, we think the Metropolitan University committee now underway is an excellent paradigm for future work.

I expect a civil, courteous dialogue that will facilitate reaching common and constructive understandings as we work our way forward.  And we know all of you appreciate that shrill invective, reckless exaggeration and disrespect for individuals are ultimately corrosive to both the public confidence and enrollment growth that we so desperately need.  The university should serve as the model of civil discourse for all of society.

Servant leadership, respect for people and their ideas, management by fact, and adoption of best practices to succeed in a competitive world… these are the principles I have adopted in the organizations I have been honored to serve over the course of my career, and that is how I will lead in the future.  I look forward to working with all of you in that spirit at USM.

As the Chairman and the Chancellor clearly laid out, our mandate is to:

· Balance the budget;
· Bring the Metropolitan University to life;
· Manage the change process as constructively as possible; and
· Win back the confidence and support of Maine students, their families and their communities, for this great public asset.

I believe, with the help of dedicated faculty, committed staff and aspiring students, plus the University of Maine System, the Legislature and the Maine community, we can develop and implement a multi-pronged plan to both achieve efficiencies and plant the seeds for future growth that will fulfill these challenging goals.

I deeply appreciate the confidence of the Board of Trustee and the Chancellor in placing these responsibilities with me.

I look forward to the day when Maine students and communities again point to USM with pride and I am eager to get to work with all of you.


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