The Journal Gazette
Sunday, January 10, 2021 1:00 am

Revenue shortfall magnifies PFW gap

Lecturer pay lags as admin costs expand

Stan Davis

In a Dec. 16 article, The Journal Gazette announced a $3 million potential loss for Purdue University Fort Wayne. Chancellor Ron Elsenbaumer stated that “the COVID environment is a hiccup in our environment,” and “we are preparing for fall 2021 to be back to normal.”

But, is back to normal where we really want to be?

I will note some of the cash-flow issues that are not COVID-19-related and should not be lumped together with pandemic issues. As I wrote in an op-ed related to then-IPFW governance in 2016, “The public deserves absolute veracity and transparency as we move forward.”  It is up to the reader to draw their own conclusion – fact or fiction? Should PFW revert to “normal” or should it establish a “new normal” that reflects better stewardship, management effectiveness and respect, and livable compensation for the hard-working limited-term lecturers (referred to as adjuncts at many schools) who support PFW's mission of students achieving an outstanding education?

Administrative bloat

If you want a picture of administrative bloat, relatively more funds being spent on administrative costs than on instructional costs, it can be seen in the accompanying chart, which was presented by the Indiana Conference-American Association of University Professors to an audience of academics early in December. The federal data show Purdue Fort Wayne (and Purdue Global) were the only postsecondary schools in Indiana increasing administrative resources while decreasing the percentage of instructional resources.

As the chart indicates, the proportion of PFW's budget devoted to instruction dropped from 63.9% to 52.1% from fiscal year 2014 to fiscal year 2018. Administrative resources during the same period increased from 10.9% to 18%, an increase of 69.7% overall. Academic resources relate mainly to library expenses.

In 2020, an approximate $1 million decrease in full- time faculty salaries caused by a targeted buyout and an increase in administrative costs and hiring would, all other things being equal, increase PFW's administrative bloat.

The 2019 salary listing shows personnel identified in either 2019 or 2020 as making a minimum of $147,000 yearly. Note that no faculty are included because none reached a yearly salary of $145,000. Salaries at public institutions are public records. The amount reported represents the actual amount of compensation paid as shown on the employee's federal W-2 form. It does not show the 10% contributed to their retirement funds.

The 2020 budgeted salary information shown in the chart is from the July 1, 2020, PFW University Salary Budget. Budgeted salary figures do not include items such as car allowance, housing allowance or bonuses, which are not included in the PFW budgeted salaries.

There are issues with the chancellor's explanation of losses at PFW being a COVID-19-related “hiccup” for the following reasons:

1) None of the salaries listed are COVID-19 related.

2) It seems odd to say PFW places an emphasis on learning and student success, yet the vice chancellor for   academic affairs is paid 11% less than the vice chancellor of communication and marketing.

3) The chancellor's cabinet continues to grow while the number of students continues to decline. Since 2015, the university has added a vice chancellor of communications and marketing, a vice chancellor of development and the chancellor's chief of staff. Another new member has been added in the newly hired chief diversity officer.

4) Two administrators were hired in 2019 – Ruth Stone, vice chancellor of development at $147,500, and David Johnson, associate vice chancellor of communications and marketing at $155,000.

5) A recent executive search was conducted to hire another cabinet-level position to head a newly combined (not new) area known as Diversity, Equity and Inclusion. In January 2020, a resolution was presented and defeated in the PFW Senate to conduct a search for the position of Chief Diversity Officer. From the Senate minutes: “Objections included concerns about PFW's ability to run high-level searches in a fair, equitable and transparent manner.”

One should also note the fact that PFW already has an individual – serving as the associate vice chancellor of admissions – who has coordinated many of the functions performed in the Office of Diversity and Multicultural Affairs over time. He was one of three finalists for the new chief diversity officer position. Why the rush? Why in the midst of nationally predicted enrollment decline, resulting in a potential PFW revenue short fall of $3 million, was the decision made to engage a national search firm (and its associated costs) to create a position, rather than to go one more year with the arrangement that currently existed?

Despite faculty concerns, the new hire began on Dec. 18 at a salary thought to be between $150,000 and $160,000, plus benefits. Independent of a positive assessment of the new CDO's qualifications, which I believe are impeccable and not in any way being challenged, it seems financially unconscionable to roll out a newly created position at an approximate $200,000-plus cost starting within three days of announcing to the campus a potential $3 million budget deficit.

The chancellor told The Journal Gazette the goal is to avoid layoffs and focus on nonrecurring expenses. Since many of the cuts to date have involved nonrecurring costs and salaries are a university's primary expense, this goal may be difficult to accomplish. 

Other costs

Purdue Fort Wayne has other expenses not related to the pandemic:

1) A recent $4 million purchase of a building to house the Doermer School of Business and other administrative departmental units. The amount does not include costs associated with refurbishing the building, equipping classrooms, furnishing offices and electrical and computer needs and upgrades. As with many capital purchases, the university was required to pay the $4 million upfront, with a trailing cash flow of committed and to-be-raised contributions following.

2) The second major cash flow stressor is the athletics budget and costs involved in the switch from the Summit League to the Horizon League. This may have been a good move by PFW, but not without a large cost, amounting to $2.2 million for exit and entry fees to the respective leagues. Here again, the schedule of upfront costs involved and the timing of contributions are problematic, yet were not unknown to campus leadership.

The $6.2 million above for the business building and the fees paid to the Summit and Horizon leagues are considered sunk costs and cannot be cut. In addition, all the oil for heating, energy for cooling, and salt for spreading are committed costs and for the most part cannot be cut.

3) PFW pays more than $2 million to Purdue West Lafayette for services (managerial, clerical, executive) performed for the benefit of the Fort Wayne campus. PFW has been able to make arrangements with Purdue West Lafayette in lean years to defer or restructure payments. Doing so might help offset a portion of the near-term expected deficits. While it may be just kicking the can down the road, it perhaps could buy some time to implement new strategies. Of course, a one-time forgiveness of this overhead charge would be most helpful.

Low lecturer salaries

While the costs related to administrative bloat continue to rise, it is important to shine a light on what some consider the deplorable treatment, lack of respect and embarrassingly low salaries paid to limited-term lecturers by PFW. These women and men are intelligent, educated, reliable and hard-working professionals. According to university data, the lecturer to faculty salary ratio for the most recent semester was 46.7%.

PFW establishes a rate schedule for limited-term lecturers each year. It doesn't change much from year to year. The rate schedule that affects the most adjuncts includes all the schools on campus except business and engineering. A new lecturer, with or without a doctoral degree, earns between $2,000 and $2,175 per three-hour course or a calculated equivalent of $12.51 to $13.59 an hour. An experienced lecturer with a doctoral degree (having taught more than four semesters) can earn up to $2,208 per three-hour course, or $13.80 per hour.

The other schools use the same model with marginally higher rates to compensate for market differentials. There can also be hiring outside the stated scales for those who teach courses that require exceptional expertise or in an emergency hiring situation.

Much of the effort in teaching any class is performed before the actual class begins. Books are chosen, lesson plans outlined, syllabi confirmed and online classes recorded. At PFW (per Purdue policy) adjuncts may have a class canceled the day before it is to start due to low enrollment, earning no compensation. These unfortunate educators, attempting to prepare for the benefit of students, would be left working for no pay. In addition, they may have turned down a teaching assignment at another school and find themselves with no job or less pay for the semester.

Not only do limited-term lecturers receive low pay, they also receive no benefits. They can purchase parking passes at half price, but the $70 cost amounts to about five hours of their pay.

Recently, PFW rewarded both faculty and staff employees with merit pay increases. When asked during a Fort Wayne Senate meeting whether the adjunct faculty also received an increase, the chancellor asked, surprisingly, whether the limited-term lecturers were full-time employees and when told they were not, said, “then they did not.”

Sadly, more than 280 limited-term lecturers, most of whom earn less than $15 per hour (the same as Target's minimum wage and less than most department secretaries earn per hour) and many of whom receive excellent teaching evaluations were overlooked again. Highly appreciated by students, they are not even receiving a pro-rated merit bonus.

Two Fort Wayne Senate committees were recently charged with assessing how welfare, morale and salaries of limited-term lecturers may affect PFW's educational mission. Part of their charge states, “As you may also know, the Chancellor did not follow the recommendation made at a town-hall meeting to award each (limited-term lecturer) $500 per course as bonus pay in recognition of their critical and selfless contribution: rather, he decided – maybe for good reason, we don't know – to reduce the bonus to $200 per (limited-term lecturer) and payable not in cash but in Don Dollars which can only be redeemed at some businesses on or near campus. Unfortunately, babysitters, landlords, and school lunch programs do not accept Don Dollars.”

According to the American Association of University Professors, PFW adjunct pay for 2019 was about 50% below the national average.

My calculation was 56% below.

Here are some recent comments from adjuncts teaching at PFW:

“Yet, we (limited-term lecturers) are not viewed as real employees and do not receive livable wages, benefits or adequate representation.”

“I have been teaching as an adjunct. I have taught at ITT, Ivy Tech and PFW. I also deliver pizza, sometimes to former students.”

The question remains: Do we really want to just get over this so-called “hiccup” and return to the way it was, or create a 'new normal' at PFW, where the goal to provide a great learning experience to our students is actually supported in action, with conservative stewardship of PFW resources and with equitable treatment of all who are involved in providing the excellent PFW experience expected?

Randi Weingarten, president of the American Federation of Teachers, told InsideHigherEd that students and families take on “severe financial risks when they go to college, and it's not well understood outside of academia just how little of that money is going into instruction.”

The sooner the better that those who pay find out. Hopefully, a more knowledgeable consumer will lead to accountability on the part of academic administrators and perhaps one day we will encounter instructional bloat. This, in my opinion, would be a great “new normal.”

Stan Davis was chair of the Department of Accounting and Finance at Purdue University Fort Wayne, presiding officer of the IPFW Senate, IU representative to the Senate and interim vice chancellor of financial and administrative affairs.

School salary costs

FY = fiscal year

  FY14 FY15 FY16 FY17 FY18
Instructional resources 63.9% 60.9% 60.9% 49.9% 52.1%
Academic resources 6.7% 6.7% 6.7% 9.5% 8.5%
Administrative resources 10.9% 12.8% 12.8% 19.6% 18.5%

Source: Integrated Postsecondary Educational Data Systems

Administrative salaries

Name, title 2019 salary
Ronald Elsenbaumer, chancellor $389,905
Jerry Lewis, vice chancellor, Communications and Marketing $224,555
Melissa Gruys, dean and professor of management $219,080
David Cochran, director and professor, Center for Excellence in Systems Engineering $215,288
Carl Drummond, vice chancellor, Academic Affairs and Enrollment $202,698
Manoochehr Zoghi, dean of engineering $198,894
David Wesse, vice chancellor for financial/administrative affairs $195,353
Jon Coffman, head men's basketball coach $179,224
Carol Sternberger, director of graduate studies and professor of education $169,256
Ronald Friedman, interim dean of College of Arts and Sciences $162,489
Cynthia Springer, associate vice chancellor for human resources and Office of Institutional Equity $157,452
Kristina Creager, vice chancellor for student affairs $154,348
John O'Connell, dean of Visual and Performing Arts $147,987
Ruth Stone, vice chancellor for Development $105,374*
Phil Johnson, vice chancellor for Communications and Marketing $87,554*

*figure represents less than a full year's wages


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