UNC’s revamped board sends a clear message: change is on the way

UNC board member Fetzer: “raging internal conflict” needed for change

Tom Fetzer quotes Margaret Thatcher and says "raging internal conflict is a long held American tradition," and "... "nothing great occurred in this country without raucous, passionate debate..." as UNC Board of Governors focuses on lowering tuitio
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Tom Fetzer quotes Margaret Thatcher and says "raging internal conflict is a long held American tradition," and "... "nothing great occurred in this country without raucous, passionate debate..." as UNC Board of Governors focuses on lowering tuitio

Tom Fetzer had been on the UNC Board of Governors two months when he quoted former British Prime Minister and conservative icon Margaret Thatcher on her definition of consensus.

“The process of abandoning all beliefs, principles, values and policies in search of something in which no one believes but to which no one objects,” he said, reading Thatcher’s definition to the board on Sept. 7. “The process of avoiding the very issues that have to be solved, merely because you cannot get agreement on the way ahead.”

The Wilmington-based lobbyist and former Raleigh mayor made the remarks at a contentious meeting where a faction of the board seemed to take charge, rolling out a series of plans to reduce tuition and fees, study the staff of UNC President Margaret Spellings and consider moving the UNC system’s General Administration headquarters out of Chapel Hill.

The moves were made over the objections of some members, who were caught off guard by the sweeping new agenda. And the meeting itself was perhaps a forecast: The way ahead for the 17-campus university system may be bumpy and without consensus.

Seats on the system’s governing board are coveted and are typically held by politically connected business leaders — the movers and shakers of North Carolina. But the new 28-member board, which like the previous board was virtually all Republican, is smaller and has more members with close ties to the GOP-led legislature, including five former lawmakers and several others who earn their living as lobbyists.

A majority now appears willing to shake up the status quo and demand change at the state’s public universities.

Leaders of the new push say their primary focus is efficiency in order to lower the higher education price tag for North Carolinians. They say the state’s well-regarded university system can no longer rest on its laurels.

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UNC Board of Governors Chairman Harry Smith, a Greenville businessman. Julia Wall

Harry Smith, a Greenville businessman who was elected as the board’s vice chairman Sept. 8, cited the words of an official from the Gates Foundation, who had told the board the system was slipping.

“So if you take a look at higher education, there’s a tremendous amount of disruption going on right now,” Smith said in an interview. “We’ve got to figure out how to make the system quicker, smarter, faster and better.”

Others see trouble ahead for the university system often called North Carolina’s “crown jewel.”

Steve Leonard, a political science professor at UNC-Chapel Hill and former leader of a systemwide faculty group, stood up at a faculty meeting in Chapel Hill the same day the board had voted to ban the law school’s UNC Center for Civil Rights from filing legal actions in its work on behalf of poor and minority clients. The controversial decision was the second time a law school center had been shut down by the board, and faculty charged that the action was a breach of academic freedom and accreditation standards.

“The fact of the matter is that what has happened over the last few days is historically unprecedented,” Leonard said to his colleagues. “The actions of the board to strip away the authority of the president of the university, to strip away the managerial authority of the chancellors of the campuses, and with this vote on the Center for Civil Rights, they have now for the second time in three years, begun interfering with the faculty’s prerogative authority over curriculum, over research and over service.”

And, he warned, there’s more coming.

“There are other things that the Board of Governors will be considering over the next few months or a year, and they’re not pretty,” Leonard added. “I think we should be very attentive to what’s going on.”

Smith, the new vice chairman, insisted that the board wants to stick to policy, and find ways for the university to save money. For example, he said, board members helped organize a refinancing of debt at Elizabeth City State University, which will save the struggling campus about $2 million a year. A similar effort is already under way in a deal that could consolidate high-interest debt across the system, possibly saving UNC $60 million to $70 million. The idea, he said, is to harness the power of the system to help smaller campuses pay lower interest rates.

Other ideas Smith said he’d like to see the board pursue include launching a more comprehensive online education model, something that he thinks could boost UNC revenue in the long run. He cited online giants Arizona State University and Liberty University in Virginia. This year, Liberty has 15,000 residential students and 94,000 online students, though the online enrollment has fallen, according to the publication Inside Higher Ed. Arizona State offers 150 online degree programs.

Keeping tuition in check doesn’t necessarily mean big budget cuts, Smith said, but could involve some targeted reductions.

“I would argue with you the system is not sustainable,” said Smith, who was the first in his family to go to college and worked two jobs when he was a student at East Carolina University. “We should take the scalpel approach now, to keep somebody from taking the chainsaw approach later.”

Affordability was one priority already on the table before the new board members arrived in July.

Last year, the board adopted a strategic plan focused on accessibility, affordability and efficiency, student success, economic impact and campus excellence. The affordability goal is defined as limiting tuition increases for in-state students to no more than the increase in median family income in North Carolina, based on a three-year average. In recent years that has been around 2 percent.

But the recent board resolution goes further, saying the group will “endeavor to reduce tuition and fees at all our member institutions while preserving and enhancing the quality of education.”

In an interview, Fetzer said he was struck by some of the statistics new board members received during their orientation. Tuition systemwide has nearly doubled in a decade, he said, a much higher rate than personal income growth in North Carolina. “We looked at that and said that’s a trend that’s really troubling,” he said.

And, he said, about one-third of students who drop out of UNC system schools do so because of economic reasons. “That is a tragedy,” Fetzer said, adding, “Just limiting the [tuition] increase is not enough to make it affordable. We actually have to reduce tuition and fees to try to make it more affordable for North Carolina families.”

Others are concerned that lowering tuition would hurt educational quality in a system that suffered repeated state budget cuts during and after the recession, even as enrollment climbed.

“We can’t starve the university in the name of free tuition,” said board member Joe Knott, a Raleigh lawyer.

UNC System President Margaret Spellings, left, and UNC Board of Governors Chairman Louis Bissette, listen to board member Tom Fetzer propose a resolution to reduce tuition and fees. during a meeting held Thursday, Sept. 7, 2017 in Chapel Hill. Julia Wall

Former legislator and board member Leo Daughtry said he was concerned about an across-the-board approach to tuition cuts. “If we decrease tuition and fees, I believe we will ultimately have to increase the need for more funds from the General Assembly because it takes a certain amount of money to run the universities in our system,” he said.

Fetzer pointed out that 24 percent of the UNC system’s budget goes to instruction, and there could be savings found elsewhere. “I don’t necessarily agree that this is going to drive us back to the General Assembly with a bigger hat in our hands,” he said.

Spellings said the board’s discussion on tuition “signals the level of scrutiny that we’re going to have around those issues.” On the same day, though, there was talk of UNC going to the legislature for more money for N.C. Central University’s planned student center. “You can kind of get whiplash trying to follow the bouncing ball,” she said.

The board voted unanimously on the affordability resolution, but on other issues there was more discord, including the idea of moving Spellings and her staff out of Chapel Hill to prevent the appearance of favoritism to the flagship campus there. This has been brought up in the past, several members pointed out. But one member, Raleigh accountant Walter Davenport, asked: “What problem are we trying to solve?”

Spellings said she doesn’t think her administration is biased toward Chapel Hill, and wondered if people would perceive a bias toward N.C. State University if the system offices moved to Raleigh. Another possibility floated was moving the staff to Research Triangle Park.

“What I know for sure is it’s going to cost money to move a couple hundred people 25 miles away and sell property,” Spellings said. “So the feasibility study is well worth doing.”

Beyond debate over the details of the resolutions, tension flared among board members.

The meeting followed a blistering Aug. 22 letter to Spellings and Board Chairman Lou Bissette signed by 15 board members. It took Spellings and Bissette to task for a lack of communication with the full board last month before they sent a letter to Gov. Roy Cooper about security and future plans for Silent Sam, the Confederate statue on the UNC-Chapel Hill campus.

The letter was drafted by Fetzer, but it was only circulated to some members of the board. Others took issue with that, pointing out that a complaint about poor communication was withheld from a significant portion of the board. Fetzer said others on the board distributed the letter.

“In all the years I’ve been here I have never seen a letter written like yours, that all the board was not involved in,” the board’s veteran member, Cary businessman Frank Grainger, said to Fetzer. “I knew nothing about the letter. We need to really think about how we handle these kind of things going forward, rather than just put them out there.”

Others were confounded that substantial proposals moved Sept. 7 had not been seen by some board members, who then were in the position of voting on them cold.

“If we’re going to have a united board, we can’t have one group over here drafting motions and the other group not knowing anything about it,” said Bissette, an Asheville lawyer and board chairman, who later said he learned of the final details of the resolutions the day before the meeting. “It’s going to exacerbate problems that we have.”

Former board vice chairman, Roger Aiken of Asheville, said he was stunned to see how the board conducted business at the recent meeting.

“I think it’s obvious there’s been a lot of discussion behind the scenes,” said Aiken, who left the board this summer after he did not get re-elected by the legislature. “That’s where these resolutions seemed to come from. I think they really tended to aim at the authority of both the chairman and the president, which was very surprising to me.”

The Board of Governors meeting on Thursday September 7, 2017. Julia Wall

In Chapel Hill, Chancellor Carol Folt tried to reassure faculty, hours after the Sept. 8 vote on the civil rights center. She suggested the campus would have input on various board committees, and she pointed out that UNC is “still one of the highest funded public universities in America.”

Rosa Perelmuter, a professor in Romance Studies, said she’s skeptical that faculty are “the drivers of the bus.”

“I don’t think I’m alone in my frustration as a faculty member, and about feeling that there’s very little, no matter how hard we work at it, that we can actually get done,” Perelmuter said, “because there’s always going to be the Board of Governors or the Board of Trustees that are going to basically ignore what we say and do whatever they want.”

Knott, a board member who wasn’t informed about the resolutions or the Fetzer letter, cautioned his colleagues against stirring chaos that could hurt the university system.

“The people of North Carolina have loved this institution, and it has come to us to be stewards of it,” Knott said. “We should be very careful never to do damage to it.”

Jane Stancill: 919-829-4559, @janestancill