The Board of Trustees met this weekend to hear updates on the University’s finances and plans in China.
Board members approved continuing discussions with university and municipal partners in Shanghai and Kunshan, China to build a city-funded Duke presence in Kunshan. In its first phase, the initiative would require 200 acres and newly constructed facilities—funded by the Kunshan government—to house programs for the Fuqua School of Business.
Finalized plans will be announced in early 2010, said Trustees Chair and Democratic state Sen. Dan Blue, Law ’73.
“The continuing discussions in China fit in perfectly with projected international activities,” Blue said. “Our partners in China are being consulted so it’s a work in progress.”
Under phase one of the China proposal, the Kunshan government would offer at least a 20-year lease and five years of utilities free of charge, according to a presentation on the Academic Council Web site. Duke would have control over academic programs, faculty selection and admissions, President Richard Brodhead said.
Budgetary progress
The University has “made significant progress” toward eliminating $125 million from its budget over three years and working to set next year’s budget, Brodhead said. He noted that the University is on track to meet its budgetary goals.
Meeting those goals also entails reassessing the University’s endowment spending rates, which are set at between 5.5 and 5.75 percent for the financial aid endowment and at 5 percent for the University’s general endowment.
The North Carolina General Assembly adopted the Uniform Prudent Management of Institutional Funds Act in March, which permits the spending of endowment principal rather than just endowment earnings. Although some colleges across the state have decided to spend the principle of their endowments, Duke has chosen not to, Blue said.
Still, some of the financial aid endowments are worth less than when they were created, preventing the University from extending financial aid to international students.
“I think that realism dictates that expanding the financial aid program is something I’d like to do some day, but this isn’t the day to do it,” Brodhead said.
Duke’s commitment to need-blind admissions, however, is unaffected by the economy, even if it requires shifting money across portions of the budget to sufficiently fund the program.
“Given the economy over the last year and the impact it’s had on financial aid endowments, less money is generated from financial aid than had originally been anticipated,” Blue said. “This raises a challenge to the Board and administration to juggle things so that the financial need of students as we’ve committed to them will be met.”
Investments managed by the Duke University Management Company “have been doing significantly better” since the summer, Brodhead said. He added that statistics will be available in the end-of-year report, which will be completed in three weeks.
Duke health reform
The Board also heard presentations about the possible effects health care reform may have on the University and on the Duke University Health System.
Vice President for Human Resources Kyle Cavanaugh and Dr. Victor Dzau, chancellor for health affairs and president and chief executive officer of DUHS, offered an analysis of how DUHS will respond to health care reform, depending on which version of the health care bill is passed by Congress, Blue said.
He added that Cavanaugh and Dzau also led discussions on how employee and medical student training and DUHS revenue may be affected by the reform. Blue said he could not recall the specific numbers regarding revenue and directed inquiries to Dzau.
“The analysis showed that Dr. Dzau and his people in the health system are very involved in this discussion on health care reform,” Blue said. “Not just the bottom line proposition of what the cost may be to Duke, but the opportunity to deliver quality health care to more Americans... and making sure Duke plays a role in providing a platform for that.”
In other business:
The preliminary interior assessment for K4—an initiative to add a fourth wing to Keohane Quadrangle—has been completed. The interior layout will now be planned in detail, said Steve Nowicki, vice provost and dean of undergraduate education.
Nowicki said he will consult further with members of Campus Council to draft and select a final plan so the new residence hall can open by Fall 2011.
“It’s pushing it, I can’t guarantee we can do that,” he said. “But the architect and builders say it’s realistically possible now if we move as quickly as we have been.”
The Trustees also approved a one-year Master of Management in Clinical Informatics degree that will integrate business and health information technology education. Fuqua and the Duke Center for Health Informatics will collaborate on the program.
The Trusteeship committee discussed two candidates who will fill the unexpired terms of Rev. Charles Smith, Trinity ’62 and Divinity ’65, and Dr. Lewis “Rusty” Williams, Ph.D. ’77 and Medicine ’78.
The selected candidates will take their posts in July 2010 and an official statement announcing their installation will be made at the Board meeting next May, in accordance with Board policy, Blue said.
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