2/22/2010

2-17-2010 Brodhead finally gets around to annual faculty address -- and Fact Checker likes it

Fact Checker here.

Hardly a week goes by that someone (usually the person writing with the handle Duke Parent) doesn't charge Fact Checker with being a lacrosse nut, still pissed at Dr. Brodhead because of the way his administration responded to the hoax by the prostitute and prosecutor in March 2006.

So it is with risk that I say that I thought of Dave Evans half-way into Dr. Brodhead's appearance before employees yesterday.

The day after his graduation, the co-captain of our lacrosse team was arrested and charged with a felony that could land him to prison for 30 years. Because of the bonding together of the families of the players, he -- like two others arrested earlier -- got out of jail immediately by posting the absurdly high, punitive bail of $400,000. Non-Dukies charged in other rape cases at the time had their bail set at $50,000.

Dave stepped to a bank of cameras and microphones assembled in front of the Durham court house and speaking extemporaneously hit a grand slam home run. I was in London and watched him speak live, and no one I was with -- not one of them a Dukie -- doubted at that moment that he was innocent.

And so to Dr. Brodhead. His back was to the wall, having come under withering criticism on the editorial page of the Chronicle in the past week, a newspaper that just weeks earlier seemed to endorse the way he was handling the fiscal crisis. And yes withering criticism from Fact Checker as well.

I am not prepared to call his performance a grand slam, but I have to tell you, it was a bases loaded triple in a key game in the World Series.

Or in basketball parlance, a triple double against Carolina back in the years when they were competed in the big leagues.

It was a Brodhead we have seen too little on this campus. In command. Engaging. Truly well spoken and erudite, not just reading but moving to the front of the Page Auditorium lectern and being himself. Well informed, able to relate statistics and examples as well as spin yarns, some of them with great warmth and compassion.

He was even sometimes funny. I got a real kick several times when his arms went into motion, and also when he maneuvered his lip and kicked up his eyebrows when, surprisingly, no more questions arose from the floor. When someone did rise, he said "just when I thought I was out of the woods...."

Leadership.

You have to wonder why -- why on earth -- has he been so out of public view on this campus, and why he has not had true communication with the stakeholders of Duke since March 1, 2009.


The big news of the afternoon was President Brodhead's moving the goalpost. (To jump to another sport, from lacrosse to basketball to football) Once set at approximately $125 million to be cut from the budget over three years, he revised that target to an estimated $100 million. Yet there was precious little explanation of this adjustment, and indeed some deep questions arose:

1) We know that Duke's trustees are considering tapping the endowment for more money than the current payout formula allows. This is folly that would see us eat more than our fair share and leave far less for future generations. I wondered if Dr. Brodhead was counting on this formula change -- to a consistent flat rate of spending that would provide more dollars -- in moving the goalposts. I hope not, for that would be deceptive.

2) Dr. Brodhead himself mentioned federal stimulus funds: $160 million snared in intense competition to be spent this year and next. He properly said none of us knows what the government will do to sustain this, but that begs the question of what number he put into his budget. Is this why he and his financial gurus could move the goalpost? Because our income from this source is higher? No answers.

3) I was hoping Dr. Brodhead would clarify what the $100 million was being cut from. When he talked of a "smaller Duke" last March, he said the cut would be from the 2008-09 budget, not some planned for scheme but from reality. Since our budget in 08-09 was $1.85 Billion, excluding Duke Health, is he now saying he is aiming for a budget of $1.75 million?

There was also the Brodhead who couldn't help himself. Again, as he has done before, he droned on about DukeEngage and Duke in China. And for his audience, there was 15:48 of this recitation before he got down to the reason they were assembled: will we get a raise next year? Will benefits be sustained? Will there be layoffs.

On these issues, the goalposts stayed in place. Any increase will be "modest," to be announced within six weeks, because galloping costs of fringe benefits are eating up most of the available money. But everyone who pays attention knew that conclusion already, for he had said this last week in a faculty gathering.

Dr. Brodhead reminded his audience that benefits "are truly excellent at this place, certainly far superior than many places." Fact Checker agrees, but views this as a minus, rather than something to express positively.

Taking a stab at Dell Computer, which got incentives paid for by taxpayers to build a plant in North Carolina and which has announced it will move the jobs elsewhere, Dr. Brodhead said employees could rest assured Duke will never close its plant. "We're here and we are staying here," he said.

Still the layoff question loomed over the few people in Page Auditorium, a sparse turnout of 75 after the event was moved from a 200-seat Pratt School auditorium into the cavern of Page. The president gave no new information nor assurance, only repeating there would be no "sizable" university wide layoffs. He did not venture to estimate whether school by school, department by department layoffs would add up to a sizable number.

He spoke wistfully of Yale from whence he came, noting its employees have seen layoffs, a cutback in vacation days, and elimination of any vacation days accumulated from prior years.


If there was one area that Dr. Brodhead seemed on the defensive, it was whether all stakeholders in Duke had been accorded the opportunity to input into decisions. He gave no specifics about any contributions. But at one point he said cutbacks were not formulated by a team of experts, but by everyone who works here (he was addressing employees on this day so he did not extend to students or other stakeholders.) And at another point he declared "you do not hear top-down orders from The Allen Building" dictating to Deans and Departments. He explained our management is decentralized.

Dr. Brodhead took questions from the floor, live, which surprised Fact Checker. Some were pointed: How about special sacrifice from administrators making more than $300,000 a year. His answer was weak, that this would be only a drop in the bucket, not resolving the budget crisis.

Fact Checker does challenge Dr. Brodhead on some of his figures. He declared "We have no choice but to live within our means.... we do not have credit cards."

Yes this is the same Brodhead who is planning to build Keohane dorm with not one cent of real money, all of it on a credit card. The same Brodhead that borrowed $500 million 18 months ago because the endowment wasn't earning enough to provide money for current operations.

And the same Brodhead who arrived five and a half years ago at a university whose debt totaled about $1 billion and whose last financial report showed we owed $2,447,000,000.

And I am going to nudge President Brodhead who boasted that over the past decade, our endowment was the 2nd best performer among universities with a 10.1 percent sustained return. Now, now Mr President, you know that is about to change radically.

With the meteoric rise of our endowment during the dot.com boom year of 1999-2000 about to fade from the ten year average, we face an average return in the six percent range during the past decade. Ugh.

You can win a lunch with Fact Checker, just like an employee won lunch with the President: do you think he will be boasting about six percent over the decade come July 1 and the start of the new fiscal year.


Some tidbits:
Dr. Brodhead said that Duke was North Carolina's second largest private employer. I understood the State Secretary of Commerce to rank us as third after Wal-Mart and Red Lion.

1500 people got hired at Duke last year, despite the cutbacks. In a normal year, 10 percent of our 33,000 employees depart.

Dr. Brodhead cited Duke's work on the environment, its Nichols school as well as everyday activities on campus. Then he drank from a bottle of water, repeatedly, when everyone knows that the effort and cost and carbons needed to shuffle water around the planet is one of the least friendly human activities.

The President dealt with a rumor that 2,000 to 3,000 people would be furloughed in mid-March. "Absolutely and categorically false," he said, pausing to ask "Is that rumor really going around?"

Dr. Brodhead said the cost of providing health insurance to Duke's 33,000 employees plus family members jumped 12 percent last year. This was surprising since Duke itself is a health care provider and books employee costs for services they get within Duke Health in a strange way.

The President said the wage freeze meant Duke saved $18 million this year. But he said the school is spending $25 million more on benefits. And to underscore that people would never make up for this freeze, Dr. Brodhead spoke of how the $18 million saved would repeat itself year after year after year.

He ducked a question about performance based raises, why superior employees are not rewarded, why everyone is in the same boat enduring a freeze no matter what their performance.

Dr. Brodhead was asked, since the budget shortfall makes up barely 1 percent of the shortfall, why he just doesn't put the entire university on a one percent diet. For someone so versed in other figures, he had none, merely dismissing the suggestion as a step backward with great a psychological impact.

And after last year's wage freeze, Dr. Brodhead indicated he expected an avalanche of reaction. He got one email.

Oh yes potholes. He said TowerView would be paved this coming summer after construction trucks finish their rumble.


One performance can break a career, but one does not make it. What a good day can do is restore a lot of enthusiasm and confidence and faith.

Dr. Brodhead still has a need for better communication with stakeholders. Students are out of the loop still, not to mention alumni. And of course, as the antithesis to all his openness yesterday, the winter Trustee meeting is just days away, when the doors slam shut and clandestine discussions and decisions begin.

✔✔Thank you for reading and supporting Fact Checker. I am pleased to report I get more email than Dr Brodhead.

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