Leebron discusses challenges, opportunities in State of the University, Student Association and Town Hall addresses

BY B.J. ALMOND
Rice News staff

In his fifth annual State of the University address to the faculty Oct. 22, President David Leebron said two issues “easily overshadow the rest”: continuing to deal with the budgetary impacts of endowment losses resulting from the economic downturn, and the possibility of acquiring Baylor College of Medicine.

	JEFF FITLOW
	In his annual State of the University address to faculty Oct. 22, President David Leebron noted that Rice continues to be very successful in most areas, including recruitment of top students and faculty, research funding, faculty accomplishments and media visibility.

“This year we still find ourselves in the midst of both danger and opportunity,” Leebron said. “Last year we weathered the storm fairly well, both the literal storm (Hurricane Ike) and the metaphorical storm (the economy). But the question remains whether we are just partway through dealing with the storm and its aftermath or are in fact dealing with climate change.”

As he discussed the challenges facing Rice, Leebron noted that the university continues to be very successful in most areas, including recruitment of top students and faculty, research funding, faculty accomplishments and media visibility.

Though the endowment as of June 30 was down approximately $1 billion from a year ago, both from investment losses and spending, many other numbers are up. For example:

• The faculty has grown to 541 this fall — up 19 percent since FY 2000, with increases in women and diversity.
• Undergraduate applications have doubled since 1999 to a record 11,173 applicants this year. “What’s remarkable about this expansion is that the quality of the applicant pool has been maintained,” Leebron said.
• For the first time in Rice’s history, the number of international students has passed 1,000. Five years ago foreign students accounted for less than 3 percent of the undergraduate entering class; now the percentage is 12.5.
• Doctoral enrollment is also on the rise, with an entering class of
• 261 Ph.D. students this year — 12 more than in the entering class in fall 2008.
• Sponsored research revenues are up 7.3 percent to $85 million, and sponsored project awards for the first quarter of FY 2010 are at $58.6 million, thanks in part to stimulus funding.
• Rice’s Annual Fund is up by almost 10 percent during a year when many other universities reported a drop of 5 percent or more in their annual funds.

Leebron said campus vibrancy has also increased, due in part to the variety of new buildings now open, including the Barbara and David Gibbs Recreation and Wellness Center, Tudor Fieldhouse, McMurtry and Duncan colleges, Brochstein Pavilion, Rice Children’s Campus, Rice Village Apartments and the South Plant.

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The BioScience Research Collaborative opened this fall, and by mid-November 250 faculty, staff and students will be using its laboratories and classrooms, he said. Texas Children’s Hospital has signed a lease to occupy half of a floor, and discussions are under way with at least one other potential tenant. 

Leebron said the endowment, currently valued at $3.6 billion, is about where it was four years ago. Because the endowment distribution supports about 46 percent of the operating budget, Rice had to take a number of steps to balance the FY 2010 budget. That included a 5 percent reduction in operating budgets and limiting pay raises to those who make $60,000 or less.

A board of trustees policy sets a target spending range from the endowment of 4.5 to 5.5 percent, with a ceiling of 6.5 percent, on a three-year moving average. Leebron said further budget cuts will be needed in FY 2011, which begins July 1, as the university works to get the endowment distribution back to the preferred target range in the coming years. He said that some universities have chosen different approaches, including making more significant cuts now to allow them to return to growth more quickly in a few years.

”We have chosen to smooth out the curve by taking less drastic cuts, but some cuts will be necessary,” he said. “We’re a small university doing a great breadth of things: It’s hard to identify things that we can just stop doing. We have to make hard choices about what our priorities are for programs and the infrastructure of the university.”

Leebron outlined the opportunities and concerns of a proposed merger with Baylor and laid out conditions that need to be met before a merger would be possible.

He said the addition of a medical school to Rice would enhance the university’s global reputation for outstanding teaching, life-enhancing research and impact on society and would serve as a beacon of talent and flagship for Houston. Stronger interdisciplinary and integrated research programs in genomics, neuroscience, global health and other emerging fields would enrich educational and research activities and heighten Rice and BCM’s success in acquiring major federal and other sponsored research funding and philanthropy.

Leebron said among the concerns identified early in the merger discussions are the financial risks created by BCM’s budget deficits and debt. As one of the conditions for the merger to proceed, BCM would have to be on a sustainable path to eliminate its operating deficit and on strong financial footing. In addition, a solution for the debt associated with BCM’s McNair campus hospital would have to be found. Additional, significant resources would need to be obtained from a strong, stable relationship with one or more adult private hospitals and significant philanthropy. Funding also will be needed to develop synergistic opportunities between Rice and BCM.

Leebron noted that the original map for the Rice Institute included a medical school. “This is a moment with a challenge to consider. As we approach our centennial year in 2012, it is a time to assess both our history and our destiny,” he said.

Nearly 200 faculty and other members of the Rice community turned out for the State of the University address in Duncan Hall’s McMurtry Auditorium.

Leebron gave similar presentations to about 150 students at the Student Association meeting Oct. 26 in Farnsworth Pavilion and to more than 400 staff and faculty at the Town Hall meeting Oct. 29 in the Grand Hall.

Slides from the presentations are available at http://www.rice.edu/sou/.