Increasing local control
Efficiency the goal of decentralization
By Dan Heuchert
Privatization. All these -ations what do they
really mean? Decentralization a general movement aimed
at gaining more local control over the business of the University,
in the name of efficiency and perhaps cost-savings has
been under way for some time, and now may be gaining momentum.
But University officials insist that privatization severing
all ties between the Commonwealth and the University runs
counter to Thomas Jeffersons founding philosophy, would
be prohibitively expensive, and is not in the cards.
it comes down to this: As Virginias contribution becomes
a smaller and smaller percentage of U.Va.s budget
its projected to account for just 8.1 percent of all revenue
in the fiscal year that starts next month the University
is seeking more freedom to act on its own without approval from
Richmond, while still remaining accountable for its decisions.
President John T. Casteen III put it in his annual State of the
University speech in April, The state is now very distinctly
the minority stakeholder within the University. And in most
businesses, minority stakeholders call few shots.
what were trying to do is capitalize on the best that is
there because of the relationship with the state, Casteen
said, but at the same time permit the Board [of Visitors]
and the boards various functions to assume more and more
responsibility for the University and for its operation and financing.
Sheehy, vice president for management and budget, has led U.Va.s
efforts at decentralization for more than a decade. She bristles
at the notion that people in Richmond know more about running
the University than people in Charlottesville.
have really good employees here, knowledgeable people who can
make appropriate decisions about running this place, she
said. She notes that the University runs parking and transportation,
housing and dining systems and a bookstore all auxiliary
enterprises that receive no state funds without a financial
does the state think we would treat taxpayer money any differently
than the money we raise? We have limited resources. We want to
make them work as hard as possible. It just makes sense to me,
the 12 decentralization proposals that U.Va. advanced in this
years General Assembly, legislators approved 11.
measure eliminated a requirement that the state Department of
Motor Vehicles preapprove all of the Universitys vehicle
purchases. The approval had been virtually automatic but added
days and even weeks to the purchase process and required that
Executive Vice President and Chief Operating Officer Leonard W.
Sandridge sign a form for each purchase.
state will still review vehicle purchases after they are made
to ensure that U.Va. is getting a reasonable price. That is a
common pattern for decentralization initiatives: instead of advance
approval for an action, the state instead audits the results.
example: The University and the state send money to each other
as many as seven times a day. The University proposed a simpler
system under which the two parties would settle accounts at the
end of each day and make one cash transfer first thing the next
morning. The proposal was withdrawn from the General Assembly
to allow the state and the University to work on it administratively.
University comptroller Steve Kimata says the two parties are talking
and may at least get it down to one daily transaction in each
successful initiatives in the 2003 General Assembly expanded the
Universitys authority to sign leases, as either the landlord
or the tenant; provided U.Va. the authority to obtain easements
on property it does not own; raised the cost threshold for construction,
repair and renovation projects before they require Richmond review;
doubled the cost ceiling on maintenance reserve projects; softened
the cap on the total number of workers the University is allowed
to hire; and exempted colleges and universities from having to
advertise open positions in the state Department of Human Resources
many cases, the proposals actually relieve a burden from the state
and free up state administrators for other activities. Some measures
save money; some dont. Some even cost a little more but
increase efficiency. Its time, and time of course
is money, Sheehy said. And its administrative
notes that not all state schools can afford to take on more local
responsibility, so many measures passed by the legislature apply
only to the states larger institutions.
progress, the biggest decentralization goals are still out there
giving the Board of Visitors final authority to set tuition
rates, and allowing the University to control its own revenues.
Currently, all revenues, except gifts and endowment income, must
pass through Richmond before being reappropriated to the University.
think we have been successful thus far in nibbling around the
edges and getting small concessions to be able to do many things
locally, but the state continues to question big things,
general, the state has been reluctant to cede tight oversight.
She doesnt expect that to change overnight. Only when
we can get in serious discussions about changing our relationship
with the state, she said.
such proposal came in 2000, when then-Gov. Jim Gilmores
Blue Ribbon Commission on Higher Education made the notion of
institutional performance agreements the centerpiece
of its report. The IPAs would have relaxed central control over
universities affairs in exchange for their meeting certain
prenegotiated goals and benchmarks. State funding would also be
linked to such performance targets.
submitted a massive IPA proposal to the state in October 2000.
But the IPA process was delayed and ultimately lost momentum as
the governors mansion changed hands in the November 2001
and other University leaders emphasize that they are not seeking
a clean break from state control or public university status.
I dont think that anyone whos serious about
this argues that this ought to be a private institution,
Casteen said in the State of the University address. Its
extremely difficult to imagine this University, of all universities,
wanting to sever its links to the public.
the judgment in his time, as I think our board has made it in
our time, that despite the inadequate level of support, that state
link is absolutely essential to the identity of the institution
and the work that it does.