Murray State President on Academic Year, Enrollment, Pensions, Infrastructure

Aug 30, 2017

Credit Dr. Bob Davies, Murray State University

Another academic year at Murray State University is underway. On Sounds Good, Matt Markgraf speaks with President Bob Davies about his outlook for the semester and the freshmen class, enrollment numbers, how university presidents are addressing the public pension issue, infrastructure needs and health services.

Outlook & Enrollment

President Bob Davies expressed optimism for the year ahead, placing an emphasis on academic rigor. "Our freshman class this year is academically one of the highest academic standards that we've had in a very very long period of time," he said, citing that 50% of freshmen come from the top 25% of their graduating classes and 45% have a GPA of 3.75 or higher. He also said the number of students needing remedial courses has declined and that there are more in the honors college.

Despite academic progress there are some challenges in enrollment. Davies said this year's class is around 1,445, which is lower than the 1,502 last year. Enrollment numbers are still preliminary and won't be finalized until later in the fall. He suggested an enrollment impact from the J. H. Richmond Residential College incident over the summer. During the Board of Regents meeting, a decline in international students (affecting higher ed across the country) was also noted as a factor. Davies said an "aggressive" recruitment effort is underway.

Pensions

A new consulting report was recently released at the state level with recommendations for numerous drastic measures to fix the pension issue. Western Kentucky President Timothy Caboni recently spoke about the implications for universities and a possible exit from the state retirement system. He discussed with WKU Public Radio a plan for new hires moving from direct benefit plans to defined contribution plans.

Davies said the pension issue is a significant problem that Murray State has not shied away from. He read statistics that said in fiscal year 2010 the contribution was around 11% and it is now around 49.47%. In 'real dollars' this translates to $4.3 million in 2010 compared to $14 million in the past year.

"Each time the pension cost goes up other state agencies receive state funding to cover those pension increases. We do not. These are additions to our cost structure. So that is a significant cost burden to the university," he said. "We ended this last year, the fiscal year that just ended, with revenues exceeding expenses by roughly $10 million before pension liabilities had to be applied. We were sent the pension liability and that is from the KERS/KTRS audits in Frankfort." He said the numbers are up to the performance of the pension system based on Murray State's calculated share of the increased liability, which was $20 million. "So we went from a positive 10 to negative 10." While it's an accounting mechanism, not a cash flow, it does impact net assets. If pensions were performing better, he said, it could be a positive impact to net assets.

Davies said university presidents have been asked by legislators and others to present ideas. One idea involved new employees be put in a defined contribution plan versus a defined benefit plan. "To me it is a possible solution that needs to be discussed among many other ones," he said. University leaders didn't discuss in those meetings some of the specifics of the new consulting report, like employer/employee match. Davies said to "stay tuned" for the outcomes of the special session.

Infrastructure

The Board of Regents approved a six-year capital plan for 2018 to 2024 and biennial capital budget for 2018 to 2020. Much of this involves a request for funding for maintaining and upgrading facility infrastructure, such as the electrical grid and steam pipes. Davies said the electrical grid is 40-plus years old and needs updating, pointing out that the demand from computers and devices wasn't around when the grid was installed.

The case made to state legislatures was that these upgrades are a matter of safety and preserving university assets. While perhaps not as enticing as funding new building, the infrastructure needs are there and those needs go beyond incrementally addressing deferred maintenance issues. He said the request for funding is a $32 million package. "It is not sexy. We're not going to have a big old ribbon cutting for the electrical grid or name a pipe in someone's honor," he said, jokingly.

The request goes to the legislature as part of the capital project. He said he feels it will be met with a positive response from lawmakers. If the funding needs were met, the issues wouldn't be resolved with the 'flip of a light switch,' he said.

Other Topics

On the horizon, there is a Health Services Review town hall meeting on September 14 discussing the future of health services on campus. The university has sent out RFPs (request for proposals) from regional and national businesses. A proposed timeline has vendors invited to campus later this semester. Murray State currently 'self operates' services and is considering outsourcing services, though no definite decision has been made yet. Davies said he wants to have health services on campus. "I think that is an important component of our community. The primary audience is students. The secondary is the faculty and staff. I think it is an extreme benefit that we are able to provide health services to faculty and staff. Most universities do not."

Family Weekend is also coming up September 22-24.

Washington Monthly has released college guide and rankings for 2017, in which Murray State is listed as a "Best Bang for the Buck." MSU is number 28 in the South and is the third highest ranked in Kentucky, and the first two are private institutions (Berea and Brescia).