Heckler to Retire: New President Search

[78crusader]

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I have seen many different university presidents over the years, at Valpo and other institutions. Count me in as a Mark Heckler fan. He deserves enormous credit for launching the most ambitious fundraising campaign in VU's history, which should close successfully within the next year or two. The new facilities were much needed in a competitive era when applicants look closely at a college's real estate in making enrollment decisions. He has established a more inclusive campus atmosphere while holding true to the University's Lutheran roots. It's all a balancing act, and I think he's done it very well.

I have no idea if there were any behind-the-scenes machinations that led to his announcement. But 11 years is a very good run for university CEOs these days, so obviously the board overall has recognized his accomplishments over this long stretch.

During my period of familiarity with VU -- basically the post-O.P. era -- presidents Huegli, Schnabel, Harre, and Heckler have brought different personalities, inclinations, and skill sets to the fore. I think President Heckler will be credited for modernizing VU in a good way.

Finding the next president who can put in a good decade's worth of service will not be easy. VU has been fortunate to have stability in this position, but if you're familiar with the higher ed landscape these days, university presidents can come and go very, very quickly.

Good points but the mismanagement and lack of oversight of the law school ultimately falls on the president's shoulders. It has resulted in a big financial drain on the university, an ongoing PR disaster, and a loss of prestige.

Paul

I'm a law professor at another law school, and I followed the VU Law situation closely. I don't put this one on Mark Heckler. The post-recession fallout in legal education has been significant, and we haven't seen the end of law schools closing. In hindsight, I do question the decisions of the longtime dean who left for the deanship of another school right before the worst of things hit VU Law. (Interestingly, that law school was forced to close a few years after his arrival.) Perhaps with extreme foresight, steps could've been taken to save the law school, but even the faculty members themselves didn't realize how bad it was -- per the detailed NY Times account of the law school published in 2016.

I don't perceive that VU as a university has lost much prestige because of the law school situation. VU Law always struggled in the US News rankings of law schools, whereas VU overall continues to do well in the US News rankings of regional universities in the Midwest. In any event, the law school was getting bashed to bits once the entering class LSAT scores and graduating class bar pass rates plummeted. It all happened so fast that they didn't know what hit them. It's a very sad story of a law school with a proud tradition.

But isn't that what a University President and Board of Directors are for -- to employ "extreme foresight?"  Especially when there were red flags popping up everywhere.  The Wall Street Journal, numerous lawyer publications, and The Chronicle of Higher Education all reported the decline in law school applicants, a trend that didn't begin overnight.  And yet VU was reporting larger entering class sizes?  Something didn't add up and, it seems, VU dozed. 

Paul

[David81]

[/quote]

I'm a law professor at another law school, and I followed the VU Law situation closely. I don't put this one on Mark Heckler. The post-recession fallout in legal education has been significant, and we haven't seen the end of law schools closing. In hindsight, I do question the decisions of the longtime dean who left for the deanship of another school right before the worst of things hit VU Law. (Interestingly, that law school was forced to close a few years after his arrival.) Perhaps with extreme foresight, steps could've been taken to save the law school, but even the faculty members themselves didn't realize how bad it was -- per the detailed NY Times account of the law school published in 2016.

I don't perceive that VU as a university has lost much prestige because of the law school situation. VU Law always struggled in the US News rankings of law schools, whereas VU overall continues to do well in the US News rankings of regional universities in the Midwest. In any event, the law school was getting bashed to bits once the entering class LSAT scores and graduating class bar pass rates plummeted. It all happened so fast that they didn't know what hit them. It's a very sad story of a law school with a proud tradition.
[/quote]

But isn't that what a University President and Board of Directors are for -- to employ "extreme foresight?"  Especially when there were red flags popping up everywhere.  The Wall Street Journal, numerous lawyer publications, and The Chronicle of Higher Education all reported the decline in law school applicants, a trend that didn't begin overnight.  And yet VU was reporting larger entering class sizes?  Something didn't add up and, it seems, VU dozed. 

Paul


[/quote]

The bureaucratic reality is that law schools are often given more autonomy to make enrollment and operational decisions than other schools at a university, and thus, the law school dean tends to be the person for whom "the buck stops here," in terms of ultimate responsibility. True, VU, like many regional law schools, did not cut the size of entering classes until it reached a point where bar pass rates started to fall hard. Personally, I think it was foreseeable that would happen (LSAT score is a leading predictor of likelihood of success on the bar exam), but there's also not much give in a law school budget once it's predicated upon a given enrollment expectation. And if reduced enrollment means cutting full-time faculty and programming, that word gets around quickly in legal education and can create a public impression that the school is heading toward the exits.

Bottom line is that as a smaller, regional law school competing with larger regional law schools in Chicago, VU Law was always the Little Engine That Could, until it couldn't due to circumstances only partially within its control. If VU was richer, it could -- like some universities are currently doing -- subsidize the law school over a longer haul, while it severely reduced enrollment and thus revenue. But I'm guessing that the board decided that this would undermine efforts to build on areas of comparative strength at the university.

Let's also remember institutional history. This wasn't the first "will it close" crisis for VU Law. In the late 70s -- and I remember this well because I was a Torch department editor at the time covering academic affairs -- there was serious talk of closing the law school after it received a devastating ABA accreditation visit report concerning its resources and finances. Ultimately VU decided to double down and invest in the law school, leading to the building of the new Wesemann Hall among other things, but during that time the law school was a major drain on university finances.

Thus, if you're going to point the finger at the president and provost for the law school closing, then you also have to add to the list the board of trustees and all the previous presidents and deans and boards who didn't raise the kind of money that would enable the university to comfortably subsidize the law school today. While we can look at the closing of the law school in terms of the immediate events that prompted the decision, a lot of other factors contributed to its fate. It was, sadly, a perfect storm of bad stuff. Had VU decided to save the law school, it very likely would be hanging on in a diminished form, perhaps indefinitely. I can easily think of over a dozen private law schools that are doing just that, and the parent universities aren't benefiting a lick from continuing that form of life support.

[wh]

The question regarding the demise and loss of the law school is not primarily caused by Heckler. Law schools are closing everywhere.

I like to think VU is a cut above Whittier, Western State, and Arizona Summit, three other law schools that have recently closed.

The fact remains that law schools everywhere were reporting up to a 40% decline in enrollment when VU was reporting an increase in their incoming class size. This fact alone should've tipped off the administration to look into what was going on, but they sat back and did nothing. It is inexcusable.
Paul

Furthermore, as enrollment rose, bar exam pass rates declined. Thus, not only did they accept students they should not have, they "passed" them through the program when they should not have in order to keep the money flowing. To '78's point, the alarm should have sounded in Heckler's office long before the embarrassing NY Times article. Instead, he waited until the law school was publicly exposed. By then it was way too late to turn it around. To add insult to injury the good students (like my son, who went through the program and passed the bar exam with flying colors) are left with the stigma of having the name Valparaiso University attached to their law school diploma.

[vu84v2]

A very thought-provoking article that poses the challenging questions that search committees should ask to finalists for President/Chancellor positions.

https://www.theatlantic.com/ideas/archive/2019/09/17-questions-every-college-should-be-asking/597310/

I must admit that I also like Sasse's comments about committees hiring the 'safe' candidate...in his example the Deputy Assistant Provost for Violin Studies.

[NotBryceDrew]

As it doesn't look like anyone has mentioned it an email survey went out on 9/20 regarding the president search. Closes today at 5 (just came across it myself).

Additionally it mentions that there will be in person alumni panels held at Valpo Oct 7th and 8th on the topic.

I know everyone here has a lot of great ideas and concerns so let's get them in.

Just an FYI for anyone that didn't see the email.

[vu84v2]

I liked the survey, in that it solely required the respondent to write answers instead of just rating items. It also asked you to prioritize (top 2) if you have more than two inputs or recommendations in a response.

[vu72]

So now Mark Biermann, our Provost and Number 2, is a finalist for the Chancellor job at UW-Stout.  Is this a normal job move, trying to get the top spot somewhere or is part of a "House Cleaning" in that when Mark Heckler leaves it is assumed the new person would want "their person" instead of a leftover?  Is it kinda like basketball that when the head coach leaves so does the entire staff?  Hope there isn't more going on...

https://chippewa.com/community/dunnconnect/news/finalist-for-next-uw-stout-chancellor-announced/article_5c684a84-9974-541d-a9a2-d57ef8b3d2d0.html

[vu84v2]

I would not read this as a sign of 'house cleaning', as there are several far more likely scenarios. He might end up as a finalist at Valparaiso (who I assume keeps their search private and is not far enough along in the process to have a short list), but is not putting all of his eggs in one basket. He might believe that Valparaiso likes him, but does not feel he is ready or appropriate for the position of President yet - but he feels that he is, so he applies elsewhere.

The point here is that the more apt comparison for President and Provost is CEO and COO of a company, rather than head and assistant coaches in sports. In sports, the head coach has virtually all of the decision-making authority regarding his or her staff, whereas the board has much more input in who is COO (or in the case of the university, provost). But it is also different than either of those contexts, in that other stakeholders (i.e., faculty) in universities are very much involved with the search and interviewing process and provide input (but not the ultimate decision) on the hiring of Presidents and Provosts. (as a side note, this can be very strange in public universities since the sessions when faculty meet with candidates are publicly held and reported in the press)

Given all of the above, it would be very unlikely that a new President at a university could demand that 'his or her person' be the Provost. If they made that demand in the interviewing process, most universities (i.e. the board and the search committee) would remove them from consideration.

[ml2]

Valpo's leadership is currently organized to have a specifically designated role of "COO" separate from the position of provost.

https://www.valpo.edu/president/leadership/presidents-council/david-n-phelps/

[vu84v2]

Valpo's leadership is currently organized to have a specifically designated role of "COO" separate from the position of provost.

https://www.valpo.edu/president/leadership/presidents-council/david-n-phelps/

Thank you for pointing that out. While I do not know the individuals and how the executive team actually operates at Valpo, having a COO and a Provost (in general) seems redundant and unnecessary.

[vu72]

Valpo's leadership is currently organized to have a specifically designated role of "COO" separate from the position of provost.

https://www.valpo.edu/president/leadership/presidents-council/david-n-phelps/

Thank you for pointing that out. While I do not know the individuals and how the executive team actually operates at Valpo, having a COO and a Provost (in general) seems redundant and unnecessary.

Redundant indeed.  This from the Provost's description at Valpo: The provost serves in a position similar to that of a chief operating officer in the corporate setting


I think the real difference is that the COO is focused on "institutional sustainability"  While the Provost is more focused on "providing leadership for academic programs".

[crusadermoe]

Why not hire an Associate Vice-Presidents for Corporate Role Conflation? 

All kidding aside I suggest it's as simple as the new EVP-COO has been brought in to look under the hood and fix Heckler's fiscal mess before they search out and hire the new President. The guy doesn't have the fancy degrees to be a president, but it would appear he worked in the real world where life isn't a stage.  He will lead some downsizing inevitably.

Meanwhile Heckler gets placed in the upstairs window like Bernie in the movie weekend at Bernie's and be the public face.     

[vu84v2]

Why not hire an Associate Vice-Presidents for Corporate Role Conflation? 

All kidding aside I suggest it's as simple as the new EVP-COO has been brought in to look under the hood and fix Heckler's fiscal mess before they search out and hire the new President. The guy doesn't have the fancy degrees to be a president, but it would appear he worked in the real world where life isn't a stage.  He will lead some downsizing inevitably.

Meanwhile Heckler gets placed in the upstairs window like Bernie in the movie weekend at Bernie's and be the public face.     

While I have no inherent like or dislike for President  Heckler, what data do you have to support that there is a fiscal mess? The law school issue is a mess - but that is not fiscal. The endowment has increased significantly. There has been substantial construction (most of which I would view as necessary). I have seen no data that shows what attendance level and discount rate are necessary to service debt associated with that construction while maintaining a reasonable budget. Without that data or direct comments from the administration that there are major problems, I do not see how you can contend there is a fiscal mess.

[mj]

I've heard that some departments have been ordered to reduce staff. And I've heard from students complaining about the changes to the meal plan. Heck, the students I met said that students joke about the university shutting down.

So yeah, I think Valpo is facing some serious trouble.

[NotBryceDrew]

Students complaining about a large overhaul in the meal plan isn't that concerning. There's pros and cons to changing the system and humans do love to complain.

As far as students joking about the university shutting down I'm sure few if any have sat down with Scroggins and had a look at the financials.

Are we in the best financial position, no but I do not believe it is anything outside manageable. I am confident in the leadership that has been been installed and the semi recent additions for a better stronger future.

[mj]

Cutting faculty is always a good sign...

Valpo took on a lot of debt to build out for an unrealistic number of students. And became top heavy with administrators. But hey, Heckler did a great job

[vu84v2]

Again, there is no data available to say whether there is a fiscal mess. I do not believe anyone on here can say whether an undergraduate enrollment of 3000-3500 with a competitive discount rate can or cannot effectively service the debt for the new buildings.

There are likely areas in which demand has dramatically decreased where Valpo needs to reduce faculty, and other areas in which Valpo needs to add faculty. My guess is that the latter, to some degree, has already happened in new programs.

[FWalum]

Cutting faculty is always a good sign...

Valpo took on a lot of debt to build out for an unrealistic number of students. And became top heavy with administrators. But hey, Heckler did a great job

Not saying you are wrong, but an example of an unneeded building or facility which increased the universities debt load would be appreciated. I honestly cannot think of something that was built needlessly, maybe some living spaces. Haven't most of the recent projects that weren't donations or bequests been related to STEM and Engineering?

[vu72]

Apparently the Alumni aren't too concerned.  The fund drive just exceeded 220 million.  The schools facing financial difficulties will be/are those with smaller endowments.

[crusader05]

Most of the buildings are financed by bonds that were bought at the ridiculously low interest rates and/or are residence halls that have room rates to match their pay out.

Also, the university has done a lot of building, it's true but it has in no way built out for an excessive amount of students. Almost everything built was needed to because of degrading structures or lack of space. If you look at the master plan you can see just how much building they anticipated if they grew to 6,000 and we have not scratched the surface of that.

The university is definitely under financial constraints and is in a readjust to plan for the future mode but so are many many other institutions. It's not all sunshine and roses there right now from what I understand but it's also more a function of fiscal restraint with tight times ahead vs the ships going under let's bailout so we don't sink types.

[valpo95]

Again, there is no data available to say whether there is a fiscal mess. I do not believe anyone on here can say whether an undergraduate enrollment of 3000-3500 with a competitive discount rate can or cannot effectively service the debt for the new buildings.

Actually, there is some data to show that Valpo has been operating at a loss: https://projects.propublica.org/nonprofits/organizations/350868125 These are from the Form 990 required federal filings. The data available shows an average annual loss of about 6.6M per year over the last five years, and about the same across 10 years. In the most recent data available, it also shows net assets of $593M (this would be the endowment plus the buildings, land, equipment, etc.) It also shows debt of $164M, for net assets of $429M.

The net loss is lumpy, as in years that correspond with larger building projects seem to correspond with larger losses. Contributions show up as "revenue" even though they may be earmarked for the endowment, or they could be contributions for specific building projects. Still, running a net loss over the long term is probably not a great sign.

Beyond this, the freshman class (fall 2019) is among the smallest in years, which makes the revenue outlook for 2019-20 poor. In addition, the demographics show that the population of high school graduates is on a downtrend until about 2026, and is probably worse in the midwest where VU traditionally draws a larger fraction of its students.

These may not qualify as a crisis, yet there are challenges for VU and the next president.

[covufan]

Again, there is no data available to say whether there is a fiscal mess. I do not believe anyone on here can say whether an undergraduate enrollment of 3000-3500 with a competitive discount rate can or cannot effectively service the debt for the new buildings.

Actually, there is some data to show that Valpo has been operating at a loss: https://projects.propublica.org/nonprofits/organizations/350868125 These are from the Form 990 required federal filings. The data available shows an average annual loss of about 6.6M per year over the last five years, and about the same across 10 years. In the most recent data available, it also shows net assets of $593M (this would be the endowment plus the buildings, land, equipment, etc.) It also shows debt of $164M, for net assets of $429M.

The net loss is lumpy, as in years that correspond with larger building projects seem to correspond with larger losses. Contributions show up as "revenue" even though they may be earmarked for the endowment, or they could be contributions for specific building projects. Still, running a net loss over the long term is probably not a great sign.

Beyond this, the freshman class (fall 2019) is among the smallest in years, which makes the revenue outlook for 2019-20 poor. In addition, the demographics show that the population of high school graduates is on a downtrend until about 2026, and is probably worse in the midwest where VU traditionally draws a larger fraction of its students.

These may not qualify as a crisis, yet there are challenges for VU and the next president.

Challenges indeed. Especially when you consider that every school will be after the decreasing number of students.


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[vu84v2]

Again, there is no data available to say whether there is a fiscal mess. I do not believe anyone on here can say whether an undergraduate enrollment of 3000-3500 with a competitive discount rate can or cannot effectively service the debt for the new buildings.

Actually, there is some data to show that Valpo has been operating at a loss: https://projects.propublica.org/nonprofits/organizations/350868125 These are from the Form 990 required federal filings. The data available shows an average annual loss of about 6.6M per year over the last five years, and about the same across 10 years. In the most recent data available, it also shows net assets of $593M (this would be the endowment plus the buildings, land, equipment, etc.) It also shows debt of $164M, for net assets of $429M.

The net loss is lumpy, as in years that correspond with larger building projects seem to correspond with larger losses. Contributions show up as "revenue" even though they may be earmarked for the endowment, or they could be contributions for specific building projects. Still, running a net loss over the long term is probably not a great sign.

Beyond this, the freshman class (fall 2019) is among the smallest in years, which makes the revenue outlook for 2019-20 poor. In addition, the demographics show that the population of high school graduates is on a downtrend until about 2026, and is probably worse in the midwest where VU traditionally draws a larger fraction of its students.

These may not qualify as a crisis, yet there are challenges for VU and the next president.

Thank you. This is very insightful information.

Just to provide some rough estimates. If we assume a 4% interest rate and a 15 year term on the debt, that would equate to approximately $14.5M in annual payments. Certainly something which requires attention, but not a crisis. However, with the likely challenges of sustaining enrollment, it is hard to support a large number of future capital projects.

[crusader05]

I have heard all capital projects are on hold at this point as they feel that they have met the more dire needs via new buildings or demolishing/refurnishing older ones.

They university also has a ton of land that they have been accumulating over the years. I'd think that using that land to lure businesses could be a way to help both the community, the campus, and the budget.

[vu72]

Interesting stuff, though difficult to decipher.  What I did glean was that in the most recent numbers, showing the top 13 highest paid employees, only one was from the law school at 258,000.  In the previous year 4 of the top 13 were from the law school being paid 1.2 million. The law school was a drain, no doubt.

Matt's total comp was 396,000 which probably makes him the lowest paid coach in the Valley but number 8 in Valpo's top 13.