A helicopter over campus. Photo: Greg Merritt
UC Berkeley could face dramatic changes in a comprehensive strategic review. Photo: Greg Merritt

The comprehensive strategic review announced Wednesday by UC Berkeley Chancellor Nicholas Dirks promises to bring significant change to the campus, including staff cuts, academic reorganization, and a more intensive effort to sweat the university’s assets, including real estate.

“Change is difficult for everyone. In universities, change is especially difficult,” Dirks said during a press conference yesterday. “There will be some changes that are painful.”

Read Chancellor Dirks’ statement on the strategic review.

The changes may also, he said, forge a path for other universities.

“We may do some things that are unprecedented,” Dirks said. “We can show the way not just for flagship public universities but many private universities on how to adjust to very different times. Berkeley has led in the past and Berkeley will lead in the future.”

Dirks said the university had deliberately weathered deficits in the past three years “to protect our academic core” and to continue high levels of financial aid. In 2013-14, the deficit was $12 million and in 2014-15 $109 million. This year it’s projected to reach $150 million. The deficits, Dirks stressed, were not sustainable.

“We need to have greater degrees of control over our future,” he said. “We will be uncompromising in our commitment to the maintenance of [our] excellence.”

UC Berkeley Chancellor Nicholas Dirks. Photo: John Blaustein
Chancellor Nicholas Dirks: ‘We need to have greater control over our future.’ Photo: John Blaustein
Chancellor Nicholas Dirks: ‘We need to have greater control over our future.’ Photo: John Blaustein

Student tuition, at 30% the largest part of the university’s revenues, is determined system-wide, rather than in Berkeley. The university is in the fifth of an at-least six-year tuition freeze, mandated by the state. Pensions and healthcare costs have more than doubled since 2007-08. And state support, although increased modestly since a low in 2011-12, now amounts to only 13% of the university’s budget. (The other main contributors to the budget are research funding and philanthropy — which together account for 42% — most of which is earmarked for specific purposes.)

According to Vice Provost Andrew Szeri, who is on the team leading the review, the goal is to “resolve” the $150 million deficit over the next five years, using a mixture of 60% cost savings and 40% new revenues.

One area that Dirks’ statement singled out is “the redesign of some of our academic structures.” The university currently has 170 academic departments and programs; undergraduates can choose between 119 different majors and there are more than 100 graduate programs. In the press conference, Dirks said there would be no faculty layoffs and he was committed to maintaining the current faculty size.

Executive Vice Chancellor and Provost Claude Steele said in the press conference that the review will include “extensive consultation and consideration from all parts of the campus.” The Academic Senate, as well as deans of schools, colleges and divisions, will be heavily involved, he said.

Economics professor Benjamin Hermalin, chair of the Academic Senate, said he had been contributing to the strategic discussions prior to this week’s announcement.

“We have a great tradition of shared governance on this campus, and the administration has been candid about the budget situation,” he said. “The chancellor’s statement will provide some reassurance that there is a process and it will be highly consultive with the faculty and some things will done. Most faculty will feel somewhat reassured.”

“Universities are good about creating new things and really bad about sunsetting things,” Hermalin said. “It’s not necessarily a bad thing to reexamine what we’re doing. For better or worse, the urgency of the budget situation has forced us to do that reexamination. The challenge is going to be to try to figure out how we retain the excellence for which we’re known and restructure things so we have new entities that will be really strong.”

Dirks was asked in the press conference about the impact on athletics. A plan to eliminate five sports in 2010-11 resulted in increased outside funding and no team eliminations. Yesterday, Dirks said no teams would be cut. But athletics will not be spared from cost scrutiny and efforts to increase revenues and donor support.

Dirks appeared determined to paint an optimistic picture of the university’s situation.

“We start from a great position of strength,” he said, noting UC Berkeley’s high rankings in both national and global assessments of universities. “We are working to secure that position of strength for the very long term.”

Chancellor Dirks warns about university’s unsustainable structural deficit (02.10.16)

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Lance Knobel (Berkeleyside co-founder) has been a journalist for nearly 40 years. Much of his career was in business journalism. He was editor-in-chief of both Management Today, the leading business magazine...