Trustees to discuss budget, Duke-Durham relationship

The Board of Trustees is gathered for its last meeting of the academic year this weekend. Members are expected to approve next year’s operating and capital budgets and review Duke’s role in the revitalization of downtown Durham.

In addition to discussing new programs, Fuqua School of Business’s strategic plan and New Campus plans, the Board will take a first-hand look at some of the changes Duke has helped create in Durham. Members will tour new areas of downtown and hold part of their meeting in the American Tobacco Campus.

“Our themes, basically, are focused on the Duke-Durham relationship, and I think it will be quite enlightening,” said Trustees Chair and Democratic state Sen. Dan Blue, Law ’73. “As a board, we look closely at town-gown relations, but this focuses them all together and shows what Duke has done in the downtown revitalization.”

The Trustees have “some serious issues” to review for the University this weekend, as well, Blue said.

As part of its effort to cut a then $125-million deficit in three years, the Board approved a flat budget for fiscal year 2009-2010 at its May meeting last year. This was a deviation from the typical 9 percent annual increase the operating budget traditionally sees. 

The budget for fiscal year 2010-2011, which administrators had previously said would likely be the tightest, will be balanced, Executive Vice President Tallman Trask said. Now trying to cut in the next two years the remaining $40 million of the estimated $100-million deficit, Trask said this budget features “the draw we expected” from the quasi endowment the Trustees approved to help the University transition to a “smaller Duke.”

“Roughly, we are on the mark from where we said we’d be—but obviously this isn’t an easy place to be,” Trask said.

Blue said looking for places in the budget where the University can cut the remainder of its deficit will be a focus, adding that it has been a continual process since the recession hit.

“It’s an idea they have been discussing for some time, the idea is [that it is] appropriate when the numbers work for it,” he said. “I think it’s just an ongoing discussion of where we can be, everyone has to take note of the current fiscal situation. “

Much of this weekend’s meeting will center on Duke’s relationship with Durham, Trask said. The theme would have two components—the Duke-Durham Neighborhood Partnership and the role Duke played in the revitalization of downtown Durham.

“A lot of [them] were students here a long time ago,” Trask said. “It’s important they know how it is different and for them to see what we’ve managed to do, which is very impressive.”

Phail Wynn, vice president for Durham and regional affairs, Durham Mayor Bill Bell and City Manager Tom Bonfield were invited to attend parts of this weekend’s meeting to discuss Duke’s involvement in Durham.

The Trustees were taken on a Carolina Livery bus tour of the new downtown, and were seen driving down Main Street at about 2:30 p.m. Friday afternoon. Trask said one of the University’s most significant contributions to the revival of downtown Durham is its physical presence in the American Tobacco District and West Village.

The University committed to long-term leases in these areas, which gave developers collateral to construct the areas that are now popular office, retail and apartment spaces downtown. 

“The reality is there is a million square feet of buildings that were empty and abandoned that are now rent paying,” he said.

Trask added that downtown Durham now has the second lowest vacancy rate of the region behind downtown Raleigh, a sharp turnaround from having the highest vacancy rate eight or nine years ago.

Bell said Duke’s support was an important factor in the city’s ability to reconstruct parts of downtown.

“I think a lot of things have come together, this has all been timing,” Bell said. “When you consider the economic downturn, the fact that we’ve been able to move forward says a lot, and it could not have happened without Duke in terms of leasing space and the spaces that have been remodeled for reuse, and even when we talked about [the Durham Performing Arts Center], Duke’s monetary contribution had a lot to do with how the space looked.”

As Durham continues to revitalize parts of the city, including through the Southside redevelopment project, both Bell and Bonfield expressed interest in continuing to partner with the University in the future. 

 Bonfield said many of the projects Durham brings to Duke, whether to the University or the Health System, have benefits for both partners. Duke’s monetary investment and the people it employs in the area are key to downtown’s success, and in turn the success of Durham benefits the Univeristy.

Despite the recession, Bonfield said he is not concerned that Duke would reduce its involvement in Durham to cut costs.

“I think there’s a realism about what is realistic to expect, what Duke is in a position to do,” Bonfield said. “I guess I’d like to think that those decisions are made not just because there was money available but because either it was seen as a long-term investment or something that was provided for a longer term benefit.”

 Although, in a time of financial constraint, Trask said he does not expect to see any major new partnerships in the near future, he did note that the University and the Trustees are very conscious of Duke’s relationship with Durham and the city’s success.

“The argument would be we’re not going anywhere,” Trask said. “You can name several universities that watched the town around them deteriorate... Duke didn’t just happen to grow up in Durham, it was put there for a reason.”

In addition to reviewing its partnerships that have led to development in Durham, the Trustees will review plans for the K4 addition to Keohane Quadrangle and the chilled water plant. Both projects have begun construction.

The Trustees will also review plans for New Campus. Blue said although discussion of the campus was halted abruptly by financial concerns, the Board hopes to look for ways at this meeting to “keep momentum going” on the project.

This will be the last meeting for Rev. Charles Smith, Trinity ’62 and Divinity ’65, and Dr. Lewis “Rusty” Williams, Ph.D. ’77 and Medicine ’78. Smith has reached the mandatory retirement age of 70 years, and Williams chose to retire before the expiration of his term to pursue other things, Blue said in a December 2009 interview. Blue said Thursday that the Board has voted on new Trustees, but will not announce the new members until their terms begin in July.

This weekend, members will review proposed new masters and doctoral degree programs in the Divinity School, biostatistics and fine arts.  Academic Council members approved all five new degree programs at their last meeting of the year May 13, Academic Council Chair Craig Henriquez, professor of biomedical engineering, wrote in an e-mail.