About

Any person.
Any study.
Any Cornelliana.

An alumni
blog about Ezra's
University. (more)

Contact

Comments?
Suggestions? Tips?
Leads?

editor(at)metaezra.com

Links

-- WVBR

[+] Cornell News

[+] Higher Ed News

[+] Campus Pubs

[+] Alumni Interest

[+] Diversions

[+] Blogs

[+] Sports

[+] Other Places

Archives

[+] By Month

[+] By Author

February 2010




A Month of Departures

The Sun is reporting that University CIO James Walsh has tendered his resignation, effective at the end of June.

“After 3 1/2 interesting and enjoyable years at Cornell and in Ithaca, my family and I have decided to return home to the United Kingdom,” Walsh said in the release. “Cornell is a wonderful place. I have had the honor to work with a great group of talented and dedicated people, and I’ve learned a lot during my time here that I will apply to new endeavors in the U.K. I also feel proud to be leaving a stronger and more professional Investment Office than the one I found when I arrived.”

In the statement, Walsh also reported that the University’s endowment performance is up about 10 percent so far this year, after suffering a more than 25 percent decrease in fiscal year 2009. In the midst of the bleak financial situation that engulfed the nation in 2009, the statement noted that the University’s “endowment successfully avoided many of the liquidity problems that affected those of its peers last year.”

“Working with the Investment Committee, James helped the University weather the downturn and begin to regain much needed equilibrium in its investment performance,” President Skorton said in the statement. “I wish him all the best in his future endeavors.”

Skorton might as well have added, "And don't let the door kick you on the way out."

While the press release is padded in good will, the performance is obvious: while Cornell lost 26.4 percent of its investments in the last fiscal year, other peer schools, like Columbia and Pennsylvania, lost less than 20 percent.

Remember, when Walsh was first hired, he was aglow in the opportunities of hedge funds and commodities. That didn't turn out so well for us. Walsh also was offered a first year salary of $400,000, not counting any incentive bonuses. We wonder if there were any clawback provisions to his contract for subsequent poor performance.

Curiously, when MetaEzra first learned of a departure that turned out to be that of Doris Davis, our thoughts initially turned to Walsh.

But now we can report that we also know of one other high-level departure coming down the pike as well...


Matthew Nagowski | February 17, 2010 (#)

The Lure of Marcellu$ $hale

As Elie noted last month, Cornell has rightfully decided to postpone a decision on leasing its sizable Southern Tier land holdings to gas companies drilling for the sizable Marcellus natural gas deposits. Cornell wants to wait to see more evidence as to the environmental impact of drilling for the gas with a technique called hydro-fracking.

So the Sun is running an op-ed piece today that implicitly argues that Cornell should be playing a large role in the discussion when it comes to regulating the process.:

Oversight for natural gas drilling in New York is in the hands of Governor David Paterson and the DEC’s proposed regulations — local governments hold no power over the gas companies that drill in their area. Thus, should hydraulic fracturing be allowed under the proposed regulatory measures, gas companies would legally be able to dump millions of gallons of wastewater into local plants, which may lack the capacity to treat all the solvents in the fluid and would not have to publicly disclose what chemicals they have used.

In addition to considering the immense trucking needed to haul the water to and from the well site and protecting New York’s gorgeous natural landscape, consider that under such loose regulations residents would be dependent on the good character of gas companies, geared to seek profit rather than societal well-being.

It's a critical issue that Cornell needs to weigh-in on, because only a land-grant institution like Cornell can gain the confidence of all interested parties, including government, industry, and the public at large. Currently, Cornell Cooperative Extension has an extensive website dealing with all of the issues involved.

What I haven't seen, however, is an estimate of how much the Marcellus Shale reserves could be worth to Cornell. Obviously the value of the gas deposits is subject to market swings, but given the University's structural deficit, it's definitely necessary to place the value of Marcellus within the context of the University's budget challenges.

In Tompkins County alone, Cornell owns 11,000 acres of land. (I actually haven't been able to track down the total number of acres that Cornell owns in New York State, but the University owns 400,000+ acres across the country. If you have a more detailed breakdown of the University's land holdings, please let me know.)

Now, according to estimates by the University's department of Earth and Atmospheric Sciences, each acre of Marcellus Shale is worth approximately $30,000 over the course of the next 10-15 years. That's assuming roughly 6,000,000 cubic feet of gas per acre and a payment of $5 per thousand cubic feet. And prices have jumped around between $3 and $8 in the past couple of years.

So in Tompkins County alone, Cornell could yield $330 MM over the next ten to fifteen years from Marcellus Shale drilling. That's $30 MM a year for the next ten years, or around a quarter of the University's structural $135MM deficit, or just about the cost of the University's increased financial aid packages in recent years.

The question, of course, is whether or not that is worth the cost of potential drinking water contamination and all of the associated health risks. Interestingly, the same Cornell report indicates that wind power actually would produce 25% more energy per acre than drilling. The difference of course, is that wind power is clean and endless.


Matthew Nagowski | February 15, 2010 (#)

An Open Letter to the Lynah Faithful

Hockey games start at 7PM in the evening. Not at 7:10. Not 7:20. Section A should not be 75 percent empty when the puck drops, let alone when the starters are introduced or the Canadian national anthem is played.

I know I am sounding like a crotchety old alum, but part of the Lynah experience is being in the barn before the hockey game starts. If we're not going to win on the ice, at least we can win in the stands.

That said, I was pleased that most of you seemed to know the lyrics to My Old Cornell. The Yale fans that I was sitting with were impressed.

Late Update: Discussion has continued on eLynah and on Elie's blog.


Matthew Nagowski | February 14, 2010 (#)

The End of the Student Aid Bubble?

We've been following the news out of Hanover simply because their 14 percent structural deficit makes Cornell's budgetary problems seem a bit Lilliputian. (As opposed to Princeton's, which are microscopic.)

So it's interesting to note that Dartmouth has decided that its students can begin to shoulder a heavier loan burden:

Dartmouth College announced Monday that it is restoring loans to the aid packages of students from families whose incomes exceed $75,000 -- ending a no-loans policy that was announced with much fanfare two years ago. Dartmouth will continue to exclude loans from the aid packages of those with smaller family incomes and will continue to be "need blind" in admissions, meaning that financial need will not be taken into consideration in admissions decisions.

The announcement by Dartmouth was part of a package of spending cuts designed to deal with a $100 million "structural deficit" the college faces. Students currently on financial aid or those admitted this year (who would have applied believing they were exempt from loans in aid packages) will be grandfathered into the no-loans approach.

Dartmouth's announcement comes a week after Williams College moved away from its no-loans policy, although Williams will also continue to offer its lowest-income students packages that do not include loans.

We'll start counting how many other schools end up having to cut their aid pools. Cornell's own aid pool for undergraduates has grown by $40MM in the last five years. For his part, Skorton has continued to pledge that student aid will not be touched.

We may start to see schools with substantial merit aid programs, like WashU, begin to cut these funds. It can certainly help to close budget gaps without any painful staff or faculty layoffs.

Interestingly, Cornell now has a more generous no-loan policy than Dartmouth:

The following year, 2009-10, the program will take full effect by eliminating need-based loans for students from families with incomes up to $75,000, and capping annual loans at $3,000 for students from families with income between $75,000 and $120,000.

Dartmouth currently wins around 65 percent of the common admits with Cornell. This may change if Cornell can afford to keep its current aid policy.

One final thought: By shifting more of the student tuition burden back onto loans, Dartmouth is just helping to feed the lurking student loan bubble -- and with a continued bleak employment outlook for most graduates, we're still waiting for that one to pop.


Matthew Nagowski | February 09, 2010 (#)

New Budget Model to Require Charter Change

One of the big changes to the University's budget in coming years will be the implementation of a new budget model. The new model will be a significant deviation from current practice in that all undergraduate tuition will be pooled centrally and then disbursed to the colleges by the Provost. Currently, most of the colleges at Cornell "own" their own tuition:

Perhaps the biggest change the task force calls for is to pool all undergraduate tuition -- Cornell's largest revenue stream, which provides about 35 percent of the Ithaca campus's revenue -- which would then be redistributed by the provost, based on several considerations and data such as university priorities, college of enrollment and college of instruction, Streeter said.

This will be useful because it will mean that the University will be able to divert some of the funds going into the Hotel School into the Schwartz Center. Right now, the only way that the Hotel School is supporting the Scwartz Center is either by a) paying the tuition credits for any Hotel Student enrolled in a Schwartz Center class, or b) any Hotel School professors or staff who pay to see Schwartz Center productions.

The catch is that the contract colleges currently have language written into the University's charter explicitly targeting their tuition to their own expenses. For instance, here is the language for the Ag School:

The tuition fees charged to students shall be regulated by Cornell university after prior consultation with the state university trustees and all other fees and charges in said college of agriculture and life sciences shall be fixed by Cornell university, and the moneys received from these sources and from the sales of products shall be credited to a separate fund and shall be used for the current expenses of the said college of agriculture and life sciences.

It will be interesting to see if re-opening the University charter will draw any political attention in Albany.

Late Update: The Sun follows up today with an article detailing one of the Q&A sessions held about the budget model:

The discussion began with a bang. As soon as Fuchs, Streeter and Cathy Dove, the co-chair of the task force report, opened the floor to questions, Prof.Robert Smith, labor economics and associate dean of academic affairs, shot up.

He said that the proposal would create a “Soviet central planning agency…with homogenization across the University” in a “zero-sum game.”

Smith’s fear is that the proposal would turn over too much power to the Provost, giving him unprecedented control over how much money each college receives in return from the Provost’s office.

In a later interview, Smith expressed concern about how the proposal would change the incentives of some of the colleges. “If [we] have to adapt to a formula that’s imposed on us, I’m worried that it will change [our] behavior,” Smith said.

Some of the meeting’s attendees snickered audibly at the Soviet remark, but it quickly became clear that Smith was by no means alone in his reservations about the task force’s suggestions.

He was soon supported by fellow ILR faculty-member Prof. John Bishop, human resources. He said that his “great worry” is that the proposal will “greatly increase power at the center,” adding that Cornell’s diverse, “decentralized” colleges are “what has made the institution great.”

Of course, it's entirely possibly that the amount of duplicity and decentralization across the colleges has also kept the institution from becoming even greater.

Final Update: Paul Streeter writes in with the following:

Please be assured that if it is decided to pursue implementing the budget model as has been proposed we will be working with state officials to make sure we implement in a manner that is consistent and supportive of our stewardship responsibilities for use of state funds.


Matthew Nagowski | February 07, 2010 (#)

Doris Davis Departure?

MetaEzra has been hearing as yet unconfirmed rumors that there will be changes in the Undergraduate Admissions Office in the future -- Doris Davis, associate provost of admissions and enrollment, will be departing her post.

We don't know when Davis will depart, nor whether it is of her own volition. We'll have to watch for an official university statement in the future.

It's important to note what Davis's admissions office has accomplished in the past decade. Between 1999 and 2010, applications have risen by over 75% -- from just shy of 20,000 to over 36,000 applicants. This has come in tandem with a decline in the acceptance rate from 33 to 19 percent.

At the same time, the university has become more diverse under Davis's watch. The number of minority students in the entering class has increased from 916 to 1150, while the percentage of students from New York State has dropped from 42 to 33 percent.


Matthew Nagowski | February 04, 2010 (#)

Money

The folks at the Cornell Review report that Cornell received the third most donations of any school last year, behind only Harvard and Stanford. Of course, $170MM of the $450MM raised was from the Weill gift, of which only $35 MM ended up in Ithaca.

According to this article from BusinessWeek, Cornell posted the biggest percentage fundraising gains of the twenty schools that raised the most money last year. While total donations to U.S. colleges fell 12%, Cornell recorded a 9.1% increase in donations ($446.8 million total). Other top schools mentioned in the article experienced large drops in annual giving: Harvard (-7.5%), Stanford (-19%), Yale (-26%), UCLA (-23%), Duke (-22%).

One could raise the objection that Cornell’s numbers are inflated by the $170 million gift to Cornell from Sanford Weill, which was included in the overall calculations, but I don’t think this should be any reason to add an asterisk to our stats. I don’t have access to the data, but it’s obvious that lots of other schools received large donations from individual donors. Ours just happened to be the biggest this time around.

Meanwhile, the Sun is on the Arts college's case for placing a full third of the College's $6MM deficit on the backs of the Department of Theatre, Film, and Dance:

But it must be noted that the cuts outlined for the Department of Theatre, Film and Dance — somewhere between $1-2 million of the department’s $4.6 million budget, depending on the outcome of that “conversation” — would take up a significant chunk of the total $6 million in cuts required of the College of Arts and Sciences.

That seems like a heavy-handed conversation starter.

In the administration’s eyes and budget sheets, the Department of Theatre, Film and Dance might be a peripheral unit to the University’s core. With a downsized performing arts department, Cornell will likely continue to exist largely as it had before. The students in the department will suffer a sharp loss in the quality of their experience, but they are few in number, and can find another direction (or so the thinking goes). But the department, while not necessarily central to the University's rankings or mission, has undoubtedly had a crucial positive effect on many individuals’ Cornell experience.

It is true that the department has relatively few full-time undergraduate majors — combined, the visual and performing arts awarded 90 bachelor's degrees last year, just three percent of Cornell’s total. And while these students will bear the brunt of the blow, they will not be the only one’s affected. The performing arts, more so than other departments, touch so many lives aside from the students who declare it their major.

I truly hope Dean LePage understands that one of the reasons why students choose to attend Cornell is because it has both strong core academic disciplines as well as strong supplemental programs (think art, theatre, music, athletics). The two need to go together.

What's frustrating is that this University has five colleges that ostensibly offer programs in undergraduate business education (AEM, PAM in Human Ecology, ILR, Hotel, and ORIE in Engineering) and yet the one non-duplicative program in the performing arts is the one that bears the major blunt of the budget cutbacks. To paraphrase something I said earlier this week, the Hotel School needs to start helping to pay for those who entertain it.

And finally, the Motley Fool suggests that more colleges should consider making loans directly out of their own endowment.

There are a number of reasons moving to a direct-lending model makes sense both for colleges and students. And in fact, many colleges -- especially those with large endowment funds -- would be well advised to make loans not only through federally funded programs but also directly from their own assets.

In addition, though, having colleges invest part of their endowments toward making direct loans to students would serve two other valuable purposes. More loan availability would make it easier for all students to attend college, something that serves the mission of the schools and their endowment funds. Moreover, some of the largest colleges and universities have suffered huge losses lately, having invested much of their endowment funds in high-risk strategies like private equity and hedge funds. Taking some of their assets to make loans to students instead would help restore the lost confidence that many donors have in their school endowments.

It's worth a serious thought. Although taking out loans from the University itself might make alums think they only need to pay back their loans and not make any further charitable donations.


Matthew Nagowski | February 03, 2010 (#)

What was that about Harvard?

Jeremy Lin's assist to turnover ratio was 1 to 8. Louis Dale's? 5-0.

Doesn't take a Harvard student to figure out that math.


Matthew Nagowski | February 01, 2010 (#)


Other Recent Posts


-- WSJ: Cornell Wins NYC Tech Campus Bid (EBilmes)

-- Barrier Update: City Approves Nets (DJost)

-- Big Red Cymbal Guy (Nagowski)

-- New York Times Survey on Campus Recruiting is Flawed (KScott)

-- Barrier Update: Legal precedent suggests City of Ithaca will not be held liable for gorge suicide (DJost)

-- Despite MSG Loss, Big Potential for Big Red Hockey (EBilmes)

-- City Council Will Vote on Suicide Nets (DJost)

-- An Encounter on the Upper East Side (Nagowski)

-- Showing Off Your School Spirit (Nagowski)

-- Chipotle Ithaca? (KScott)

-- Cornell at the ING NYC Marathon (KScott)

-- Crossing Over a Fine Line: Commercial Activity on Campus (KScott)

-- Milstein's Downfall (Nagowski)

-- Can any Cornell-associated organization really be independent of the University? (Nagowski)

-- Slope Media Revisited (EBilmes)

-- Slope Media Group Approved for Byline Funding (KScott)

-- Occupy AEM? (KScott)

-- New campus pub to be good for both Greeks and non-Greeks (Nagowski)

-- Gagging the Election (Nagowski)

-- The Changing Structure of Rush Week (Nagowski)

-- Ivy League Humility in the Midwest (EBilmes)

-- Of Median Grades and Economics Minors (Nagowski)

-- Homecoming Recap (Nagowski)

-- My Cornell Bookshelf (Nagowski)

-- The Sun's Opinion Section Has Suddenly Gotten Good (Nagowski)

-- Remembering the 11th (Nagowski)

-- Cornellian Tapped as Top Economic Advisor (Nagowski)

-- Cutting Pledging, and the Good Which Comes With It (EBilmes)

-- Why Cornell Should Not Close Fall Creek Gorge (Nagowski)

-- Welcome to the Class of 2015 (Nagowski)