Office of the president

Convocation address

Gregory L. Geoffroy, President
Monday, Sept. 11, 2006

Before we begin this program, please take a moment to remember that today is the fifth anniversary of the very tragic events of September 11th, 2001. Let us observe a moment of silence to honor all of those who were lost on that day and all of those worldwide who were affected by it. Moment of silence. Thank you.

This Fall Convocation is one of the special events that helps us kick off the new academic year, because it is a special opportunity to recognize many of our outstanding colleagues and friends. But before we do that, I want to briefly review some of our accomplishments of last year and to discuss some of the most important agenda items for the coming year.

First, we had a very successful accreditation review. We don't yet have the final report, which should be coming any time soon, but all indications are that it will be as good as we could have hoped for. The reviewers especially complemented us for the great culture of interdisciplinarity we have here at Iowa State, and on how well the people here at Iowa State work together as teams.

Last year, we filled two of the most important leadership positions in any land-grant university with two great leaders--Wendy Wintersteen, Dean of College of Agriculture, and Jack Payne, Vice President for Extension and Outreach.

And last year, we were honored by the appointment of Ben Allen as the University of Northern Iowa's new president, a testament to Ben's great leadership here and a very positive reflection on Iowa State.

This past year, we put increased emphasis on student recruiting, and it has paid off, with the largest class of new students in several years. We saw an increase in total number of new freshmen, an increase in the number of transfer students, an increase in the number of international students, an increase in the number of graduate students, an increase in the percentage of out-of-state students, and a 12% increase in the number of U.S. minority students. And we continue to enroll more graduates from Iowa's high schools and more transfer students from Iowa's community colleges than any other university in the state. In short, we continue to do a great job of serving Iowa as its land-grant university and in providing access to Iowans to top-quality higher education.

We also took important strides last year in strengthening our ties to Iowa's Community Colleges, which are growing in importance as providers of students to us. We finalized an innovative Veterinary Medicine partnership with Nebraska to train up to 25 Nebraska residents each year, to help a neighboring state meet its need for practitioners while bringing increased revenues to our veterinary medicine program to help us excel.

This past year, we made excellent progress in developing our new budget model for the university, and I was very pleased with the great input that was received from so many faculty and staff, and that input was very important in shaping the committee's final report.

We had a truly great year in private fund-raising, with total gifts of $91.2 million! That is an 11% increase over the previous year and 139% higher than 2003. And while we did not receive the level of state appropriations that we had hoped for, it was still good to have an increase, and it was especially important to receive funding for our capital projects and economic development efforts.

In the area of capital projects, we made very good progress, including Morrill Hall and the Hixson-Lied Student Success Center. We started the renovation of the Memorial Union, the addition to Coover Hall, the new Dairy Teaching & Research Farm, and our new Alumni Center.

In research, we established several important new research centers, including our new Nutrition and Wellness Research Center, Center for American Intercultural Studies, and the he Iowa Center for Advanced Neurotoxicology. And to support our research activities, we installed the new CyBlue IBM supercomputer, we upgraded our virtual reality facilities to create the highest resolution virtual reality environment anywhere in the world, and we increased our emphasis in the general area of biorenewables, such as biobased fuels, where Iowa State is one of the world's leaders, and where we have many tremendous opportunities for further achievement.

Last year, we also successfully completed the review of our campus food service, with a decision to remain with ISU Dining. We are now looking forward to the many improvements that will occur over the next few years, including the new Bookends Café in Parks Library and a new Grill and coffee outlet in the Hub.

We had a truly great VEISHEA this past year, thanks to the great work of our students and many members of our community.

And we had a terrific year in Cyclone Athletics. We enjoyed another bowl game for football and brought back the Cy-Hawk trophy. We won the HyVee Cy-Hawk Series all sports trophy. We appointed great new coaches in Cael Sanderson in wrestling, Greg McDermott in men's basketball, and Jay Ronayne in women's gymnastics. And most importantly, we again enjoyed great fan support.

And let's not forget the terrific summer we just completed, with the highlight being the very successful hosting of the first-ever Special Olympics USA National Games, which really showed what ISU and Ames can do together.

Last year was, indeed, another very good year for Iowa State, because of the great work of you and all of our faculty, staff and students.

I would now like to turn to the year ahead, and outline some of our most important agenda items.

An immediate agenda item is to complete the search for an outstanding new Executive Vice President and Provost. We have two outstanding candidates who will be visiting us on campus next week. I hope you will attend their open forums and provide feedback to me and the search committee. Remember that these visits are simultaneously an opportunity to evaluate the candidates, but also a part of the recruitment process to ensure that the candidate we select will want to join us. I especially want to thank Susan Carlson for stepping in and doing an absolutely terrific job as the interim vice president for academic affairs and provost.

An ongoing important agenda item is to continue to put a very strong emphasis on student recruitment. We did have very good recruiting year for this fall, but we must not let up. We must continue to put high emphasis on student recruitment and work to achieve or exceed next year's recruitment goals of at least 3,900 new freshmen and 1,450 transfer students.

We must also continue our good work in student retention, to help students succeed with their educational dreams and keep them on the path to graduation. This is an area where we have made very good progress, and our students are now graduating at a higher rate than ever. Our six-year graduation rate now stands at 68%, up from the 62% level just five years ago--a very significant increase in a short time. We must continue to work to achieve our strategic plan goal of 72% by 2010, and I am confident that we will do that.

Another important agenda item is working to ensure that the university has the level of resources we need to fully carry out our mission and strategic plan at a high level of excellence and impact.

As you know, we have had challenges with our state appropriations, with four straight years of budget cuts followed by increases at about half the rate of inflation for the last two years. State appropriations this year stand at the level they were in 1997 in actual non-inflated dollars.

Budget Slide -- FY2007 One-Time Funding & Expenses

Further complicating the budget picture, we have about $8.5 million of recurring operating expenses in this year's budget funded entirely on one-time funds--about half from the state and the other half from the special energy tuition surcharge. This really means we have an $8.5 million deficit in our recurring budget that we plugged this year with one-time funds. Going forward, we will have to either fill that gap with recurring funds from tuition increases and state appropriations, or with more one-time funds, if we can find them, or reduce our budgets by that amount. And we have already alerted major university units to prepare tentative plans for those reductions, just in case we have to take them, and I sincerely hope we don't.

Budget Slide - Recurring Funding Needs

Looking ahead to FY2008, we have estimated that we need $26 million in new funds, from some combination of state appropriations and new tuition increases, to basically just stay even--to cover that $8.5 million one-time funding problem, to provide reasonable salary increases to our employees, and to cover our estimate of new expenses, including energy costs. But that won't allow us to make progress on our top priority, which is increasing the competitiveness of our faculty and staff salaries. For that, we estimate we will need an additional $7.7 million per year for three years to get to the midpoint of our peers, so we really need a total state appropriations and tuition increase of about $33 million to make progress on that important goal.

We will be working very closely with the Regents to put the right package together for our state appropriations request and tuition increases to address these recurring funding needs.

Sponsored funding is a critical source of funds for many of our research, education and outreach programs. Last year, after many years of steady increases, we saw a slight downturn, dropping from $287 million two years ago to $280 million last year. That is largely a result of an 8.5% drop in federal funding, which may be due to such factors as the timing of some grants coming in, tighter federal budgets, and the loss of some key faculty at Iowa State.

We intend to do everything we can to reverse this trend, and we will work this year toward a goal of at least $290 million in sponsored funding. Assisting that effort will be: increased staffing and a number of process improvements in our Offices of Sponsored Program Administration and Sponsored Program Accounting, and an improvement in our ability to more quickly negotiate research contracts with industry, especially in addressing the intellectual property issues that often complicate those agreements.

The fourth piece of our funding picture is private giving, where we have enjoyed really great success. Our goal this year is to raise $100 million from private gifts, part of the advance gifts phase of our next big comprehensive fundraising campaign, which we will publicly launch about a year from now.

And speaking of budgets and finances, another major agenda item for this year is our continued work on the new budget model. This is the key year for those discussions as we continue to refine the model, evaluate how it will work in practice, develop the key implementation details, and, of course, make the decision whether or not to proceed with its implementation.

I do very strongly believe that Iowa State needs a new budgeting approach, for many reasons.

First, we all know that our overall funding picture has changed markedly over the last several decades, and we can no longer count on the kind of strong state support that we once enjoyed. The fraction of our budget that comes from state appropriations has steadily decreased, a trend that shows no sign of abating. This is happening to land-grant and public universities everywhere, and we are most certainly not unique. But what this means in practice is that we have to pay much more attention to all of our other revenue sources, and to managing our expenses if we are to have the funds we need to excel and achieve our mission and strategic plan priorities. And it is imperative that we have sufficient incentives and financial rewards for achievement built in to our budgeting process, to encourage all units to pay close attention to decisions that affect revenues, for both their unit and for the overall university.

Unfortunately, our current budget model is woefully short on incentives and rewards for performance. But in that regard, we are no different than most public universities. But private universities long ago recognized the need for incentive based budgeting, and have used it very successfully for many years. And it is only recently that public universities have started to implement incentive based budgeting, mainly because of the steady decline of state support that we have all experienced, and our becoming much more dependent on other income sources.

A number of public universities have adopted some form of incentive based budgeting, some with great success, and others not so because of mistakes made in the design and implementation of their particular model--mistakes that we have noted and learned from.

To me, one of the reasons that incentive-based budgeting is so attractive, and why we are vigorously pursuing our new budget model, is because it very clearly links the allocation of resources and expenses with a unit's responsibilities and performance. Units that achieve at a high level will receive additional resources to support that continued achievement. And the new budget model will have a very clear relationship between causes and effects so that leaders and units will clearly understand the longer term impact of decisions that are made. I also believe that this new budget model will spur the generation of increased resources, because leaders will necessarily be more focused on resource generation.

I know that some have worried about who will be the "winners and losers" in this new budget model, but I very strongly believe that there should be no losers, that all should win, if units, and especially unit leaders, pay attention to the incentives and make the right decisions.

The new budget model should also provide much greater transparency in the budgets and budget decisions, with much more of those decisions being very much out in the open. This is very different from our current budget approach, where there is no clear correlation between causes and effects, and where budget decisions are not all that transparent.

And finally, the new budget model will have built in processes for ensuring that units that provide support and services, and that do so in the most cost-effective manner, ultimately helping ensure a high level of efficiency and overall better use of our limited resources.

But we must make sure that we get the design of the new budget model right, and that we avoid the mistakes made by others. I am confident that we will achieve that, and I am very pleased with the vetting and good broad input we have received from many quarters throughout the design of this new budget approach.

The next step is for the campus to receive the report from the Budget Model Review and Implementation Committee, which is expected in mid October. That will then trigger review and recommendations from various campus groups, with a final "go/no-go" decision to be made by me early next semester.

This year, it is also important continue to keep our Strategic Plan goals and priorities in front of us, and that we take advantage of special opportunities as they are presented, if they are consistent with those goals.

One of those right now is the broad area of biorenewables, such as biobased products, renewable fuels. Iowa is already the nation's leader in bioethanol production, and it is growing fast. And our university is also already one of the world's leaders in both research and education in the broad area of biorenewables.

The national interest in this area is huge, with tremendous funding opportunities and partnerships coming to us fast from many different directions--from the federal government, from private industry, from venture capitalists, from commodity groups, and from private donors. We are exceptionally well positioned, and we must aggressively take advantage of this truly great opportunity--one that builds on our existing strengths, and one that has very high impact for Iowa and our nation. And we intend to, as this will be a major focus for the university this year

There are several other important agenda items on our plate for this year--that I won't describe in detail, but I do want to briefly mention.

We must continue to strengthen our relationship with Iowa's Community Colleges, especially improve the range of articulation agreements with our academic programs.

This fall, we will complete the review of the Principles of Community, with an anticipated adoption before Thanksgiving.

And this year, we must complete the planning for the university's Sesquicentennial Celebration--our 150th birthday--which will be kicked off at next spring's VEISHEA, and it will be great year-long event. It will be an opportunity to showcase the university all across the state, to build pride in what we have accomplished in our first 150 years, and to create excitement for the next.

This year, we also will be planning to take advantage of Iowa's special role in the 2008 presidential elections. We will complete our plans to host in November of 2007--before the Iowa Caucuses--two presidential candidate forums on the ISU campus, one for Republican candidates and one for Democrats. These forums will have a primary focus on technology and its impact on society, on the economy, and on American competitiveness and innovation, and the candidates will be asked to address those important issues. This should be a major political event for the presidential race, and one that will showcase Iowa State before a national television audience.

This year, we must also make sure we do a great job in representing the quality of our programs in the National Research Council's review of graduate programs that finally we think will finally get going this year. These are the ratings that really count, much more than US News or anything else.

Also, the Ames Laboratory contract is up for recompetition this year, and, of course, we must win that competition and successfully negotiate a new contract. It looks like we are the only bidder, but we cannot take anything for granted until the new contract is signed!

And we have a long series of capital projects to ensure good progress on, that they remain on schedule and within budget, including Morrill Hall, the Hixson-Lied Student Success Center, improvements to our campus dining facilities, the Electrical and Computer Engineering addition, the Alumni Center, the Memorial Union project, the new dairy teaching and research facility, the Veterinary Medicine Teaching Hospital project, renovations to Snedecor Hallplanning for a new chemistry building, a new Agricultural and Biosystems Engineering building, improvements to our athletics facilities, and a new campus recreation facility.

And finally, we must do everything we can to ensure that we have another great VEISHEA this spring!

In closing, we have tremendous momentum on a variety of fronts, building on a very successful year last year, and with many exciting and important initiatives to work on this year.

Iowa State will continue to be a great university, because of our terrific students, great faculty and staff, and thanks to the outstanding work of our faculty and staff like those we are honoring today.

My thanks to all of you for your hard work in making Iowa State the great land-grant university that it is!

Streaming video of the convocation

• Full convocation (president's address and awards)
• President's address
• University awards

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