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September 17, 2012
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One-on-One: Dr. James Ramsey

Ten years in, President James Ramsey discusses academic progress and big projects, often with private partnerships

By Ed Lane

Dr. James Ramsey is president of the University of Louisville.

About Dr. James Ramsey

Dr. James Ramsey has served as president of the University of Louisville since 2002. Under his direction, UofL’s graduation rate has increased by nearly 60 percent and the university has seen record-breaking fundraising efforts. Prior to assuming his current post, Ramsey served as senior policy adviser and state budget director for Kentucky and was a senior professor of economics and public policy at UofL.

His background also includes serving as vice chancellor for finance and administration at both the University of North Carolina at Chapel Hill and Western Kentucky University and associate dean, assistant dean and director of public administration in the College of Business Administration at Loyola University. Ramsey is a frequent national speaker and writer on economic issues in the public sector. He holds a bachelor’s degree from Western Kentucky University and master’s and doctoral degrees in economics from UK.

Ed Lane: Reviewing your January 2005 One-on-One interview with The Lane Report, I noted that you started as UofL’s interim president in September 2002. Ten years have passed and under your leadership much has been achieved. Two of your top priorities in 2005 were to recruit quality freshman students and improve the six-year graduation rate. How is UofL faring in these two areas?

James Ramsey: UofL has had dramatic improvement in both areas. Right after the education reform act, UofL’s six-year graduation rate was barely over 30 percent; it’s now approximately 51 percent. UofL has made progress, but we’ve got more to do. At UofL’s 2012 orientation last month I was able to tell the freshman class that they were the best academically prepared in our history; their average ACT score this year will be about 25. ACT just reported national and state data, and the national ACT average is 21.2; Kentucky’s average scores are 19.5 for seniors and 19.0 for juniors. The quality of students coming to UofL is getting better and better.

EL: In the 2005 interview, you also discussed state government’s lower funding for state universities and noted that the first cut was budgeted when you served as state budget director for Gov. Paul Patton. In reviewing UofL’s FY12-13 budget report, it stated that more than $59 million has been cut from UofL’s state funding during the last 12 years; the cut for FY12-13 is $9.7 million. What is UofL’s plan to ensure its financial stability and future growth?

JR: UofL developed a seven-point strategy:

• To manage each cost. We’ve actually cut over $100 million in expenditures. Not all of it is recurring, but we have implemented savings and cost management efficiencies.

• To take underperforming assets and make them fully performing. For example, the Shelby Campus is one of Louisville’s most valuable pieces of real estate. Our goal is to generate income from this property to support academics and research.

• To earn more value from our intellectual property. UofL is a research institution and creates intellectual property, which has value – patents, royalties and licensing income.

• To work with the private sector. All the improvements on campus in terms of food service and residence life have all been provided by the private sector. UofL can’t attract the best students if it doesn’t offer the amenities that students demand.

• To increase clinical income from our physicians. The failed UofL hospital merger was focused on finding a merger partner who could bring a strong balance sheet to help grow UofL’s clinical income. After the merger was not approved, UofL initiated an RFP to find a joint venture partner for the hospital.

• To grow our capital base to $1 billion. UofL’s Board of Trustees was advised to set the goal at $600 million by a consultant. Two years ago UofL had a record fundraising year. The board decided to raise the goal to $1 billion and extend the campaign from 2013 to 2014. That’s when I made the commitment to stay at UofL at least until 2014.

• To be creative and find significant revenue streams. A good example is the Tax Increment Financing District. UofL activated the downtown TIF, and Vickie Yates Brown (CEO of Nucleus) expects that the first two TIF checks from state occupational and state income taxes combined will be $1.3 million. The TIF revenue will continue to grow over the next 30 years.

EL: What was the impact of reduced state funding on UofL’s current budget?

JR: Each unit on campus is taking roughly a 2 percent to 3 percent budget cut. The actual cut in state funding was 6.4 percent, which was $9.7 million. UofL sold a piece of land that it had leased for a $1 a year for $2 million to help make a one-time salary payment to our employees. $2 million was transferred from the athletics fund and savings in a variety of programs were implemented.

I don’t believe people on campus and in the community really understand from a macro perspective that UofL has been through 13 state budget cuts in 12 years.

UofL’s budget this year, for the first time in history, has more money coming to the university from the UofL Foundation than it receives from state government. The foundation exists for one reason and one reason only, and that is to support the teaching and research missions of the University of Louisville.

The endowment today is valued at about $750 million and almost reached $1 billion before the downturn. The value of the endowment changes every day. Last year, Keith Inman, who is head of our development office, reported raising $145 million. Some of that was pledges that will pay out over several years, so the amount is not all collected cash.

EL: UofL’s 2020 plan addresses community engagement. What are some of the recent UofL initiatives to assist cities and regions around the state?

JR: There are four areas that UofL is focused on. The No. 1 focus in UofL’s community outreach is education. The second is healthcare; Kentucky’s not a healthy state. There is too much childhood obesity, heart disease and cancer, so UofL is working throughout the state on cancer prevention, heart disease and oral health screenings. UofL has a social services program studying the impact of teen pregnancy on educational opportunities. Our fourth area is economic development. Of course, that would include everything from the UofL Nucleus (life science development) program to training in Louisville’s West End to teaching start-up businesses on how to bid on government contracts. For each of these areas, UofL has set goals to achieve for which I’m held accountable each year by the board of trustees.

EL: Does “distance education” have a bright future in postsecondary education?

JR: It helps our on-campus students and provides flexibility in scheduling. My own daughter needed a course and there was a scheduling conflict, so she was able to go online and take a course. That helps students matriculate more quickly through the system; they don’t have to come back for another year to take one course in order to graduate.

EL: In the past, you have been a strong advocate for the “Bucks for Brains” program. What is the current status of this program?

JR: Funding for the “Bucks for Brains” program was recommended by the Council on Postsecondary Education in the biennium budget, but it was not recommended by the governor or approved by the General Assembly. In 2008, around $60 million was appropriated by the General Assembly for Bucks for Brains, of which UofL’s share was $16 million. B4B has been the most important program in transforming the university. UofL will advocate for investment in faculty, human capital and fixed assets in every budget discussion. The CPE makes the budget recommendation to the governor, but UofL always argues for “Bucks for Brains.” There’s a lot of support for the program, and we really do need to continue those projects.

B4B has employment impact and helps bring in federal grants. That’s additional economic activity, and then in the case of Suzanne Ildstat, MD, and others who are commercializing their research successes, there is the potential for start-up businesses.

EL: Could you describe the mission of the UofL Foundation’s Nucleus, headed by Vickie Yates Brown, and how the program is progressing?

JR: Nucleus’ roots go back to the Louisville Medical Center Development Corp. that was created a long time ago by then-Mayor Jerry Abramson to help people find their way around the downtown medical center. The LMCDC got into managing some properties, but the big change came right after I became UofL’s president. The center then took on an economic development mission to help build a strong healthcare and life science economic cluster in Louisville. Nucleus’ role is to help our faculty members take technology from the mind to the marketplace. Vickie Yates Brown is the CEO of what we call a professional employer organization. If you’re a two-man or -woman business starting out, Vickie can provide the owners of an emerging company with the space and professional assistance they need to be successful.

Vickie also recruits life science and healthcare companies to Louisville, and the example UofL is most proud of is Signature Healthcare. Signature recognized synergies with other long-term care companies already in Louisville and relocated its corporate headquarters here from Florida. Signature’s joint venture with the University of Louisville created Innovate Long Term Care, a research hub to improve the delivery of long-term healthcare services and products.

EL: The new eight-story, 197,000-s.f. Haymarket Building, being developed by Nucleus in downtown Louisville, recently had its topping out ceremony and is scheduled to open in May 2013. Is the Haymarket Building part of the UofL’s first Tax Increment Financing program?

JR: Nucleus created a master plan for the property in downtown Louisville. It contains the Haymarket Building and four future facilities. They are all in our first TIF. All new or renovated UofL buildings will be LEED certified. The Haymarket building will have a green roof comprised of plants native to Kentucky.

Jim Host came to us and recommended that UofL adopt hiring practices that were initially used in the KFC YUM! Arena to hire minorities, women and Kentucky-owned companies as our contractors. Our board adopted that policy early on. UofL recently announced that it exceeded the goals for minority and women-owned businesses, and about 80 percent of the work is Kentucky based.

EL: The 39-acre UofL Belknap Campus is part of a second 900-acre TIF project near the main UofL Campus south to the Watterson Expressway. What is the plan for this new development?

JR: The main UofL campus is not included in the TIF because the incentive mechanism applies to new economic activity. UofL has cleared a former industrial site with the exception of one historical building that it will renovate and a second building that a pharmaceutical company has made overtures of using as a distribution center and potential manufacturing site.

The development on this site will be called the Belknap Research and Applied Sciences Park. The Speed Engineering School will be the driver in a number of areas – advanced manufacturing, nano and NEMS (nano electromechanical systems) technology, innovative energy, logistics and distribution. A pedway from the park will be built over the existing railroad into the Speed School building. We envision a complex of buildings that would be academic, research or incubator, and replicate the Nucleus concept that UofL has developed downtown. The Belknap Campus creates a lot more areas in which UofL can grow, since the downtown TIF is targeted to healthcare.

EL: To create better access to the Belknap Campus and the J.B. Speed School of Engineering’s proposed new research facility, UofL Foundation entered into a cost share agreement with the Kentucky Transportation Cabinet to construct two bridges and roadways at a cost of $25 million. Could you explain how costs will be allocated for this project?

JR: Rep. Larry Clark (D-District 46), in conjunction with Rep. Sannie Overly (D-District 72) and Sen. Ernie Harris (R-District 26), worked with UofL to convince Gov. Steve Beshear that the investment was appropriate. UofL agreed to share 25 percent of the cost. The Kentucky Transportation Cabinet has been great to work with. We sat in with KTC Secretary Mike Hancock and Larry Bond (recently named the governor’s chief of staff) in the governor’s office and went through all these presentations and discussed the economic benefits of the road improvements. An economic impact statement shows the benefits of the $25 million investment will be over $1 billion.

EL: The Speed Art Museum is on the UofL Campus and will undergo a $50 million renovation. What impact will this have on UofL?

JR: UofL leases the land to the museum. The renovation, funded by the Speed Museum, is going to be incredible. UofL has a lot of academic partnerships with the museum. Our students are in there for field work and classes, so the museum is a great partner. The plan is to enlarge and significantly transform the museum and to make it more inviting to visitors and students by adding a promenade. UofL and the museum collaborated on the plan and incorporated it into UofL’s master plan.

EL: UofL students have earned numerous postgraduate awards from the Fulbright Program, Barry M. Goldwater, Boren, and Critical Language Scholarships. How does UofL rank among state universities in the number of students earning prestigious awards?

JR: UofL is the leader in Kentucky and ranks among the leaders of public institutions in the country; even ranking higher than some private universities. Depending on the year, UofL students have received more fellowship awards than Georgetown, Duke and MIT.

EL: Mr. and Mrs. Jim Patterson spearheaded a private fund for expansion of Jim Patterson Stadium, the home of Cardinals Baseball. Patterson, a UofL graduate, is a highly successful entrepreneur. What types of improvements will be made to the ball park?

JR: The improvements will more than double the seating capacity of the stadium, improve the quality of the seating and provide a plaza area. It’s going to take a really great stadium and make it even better. Athletics Director Tom Jurich worked with Jim Patterson, sold him on the vision and got him to make the give. So Tom Jurich deserves all the credit for this initiative. (The stadium’s first game was played on April 15, 2005; the stadium expansion commenced in June of this year after the baseball season ended).

EL: UofL’s Shelby Campus on North Hurstborne Lane is the home of a new 125,000 s.f., LEED-certified office building. The building was co-developed and is owned by the UofL Foundation and NTS Corp. NTS managed the construction and is the leasing, management and marketing agent for the completed project. How successful was this partnership and what are its future plans?

JR: It’s worked out incredibly well. In one of the worst economic times, NTS had the building leased before it opened. That’s just unbelievable. It’s the best high-end building that’s been built in 10 or more years in Louisville, so it’s not a cheap building. It is first class in every way. The lead tenant is Churchill Downs Inc.’s corporate headquarters.

The partnership worked so well, UofL is working with NTS right now on buildings two and three. We have a meeting tomorrow to make a presentation to potential tenants.

UofL also has its biosafety lab on that campus as well; the UofL Center for Predictive Medicine studies infectious diseases. There will be some opportunities for partnerships and collaborations with the center in future research efforts.

UofL will always maintain the inner core of the Shelby Campus for academics.

EL: The KFC YUM! Center opened about two years ago. Net income has not achieved projections, and its bonds were recently downgraded by Moody’s. What is the outlook for the arena’s future? Is UofL financially at risk to pay more?

JR: The Louisville Arena Authority hired a new professional management firm (AEG Worldwide) that has already prepared a budget projection showing a $1 million profit for next year. The TIF upon which a portion of the arena’s financing relies will pay off. It takes time for the TIF to build its revenue level. Often, pro formas on new economic development projects are too aggressive. The arena will be successful and generate the business activity. Do I think UofL is at risk? No.

EL: Mayor Greg Fischer will be completing half of his first term at the end of the year. How would you rate his performance and relationship with UofL?

JR: UofL has a very good relationship with the mayor. Greg Fischer came in during tough economic times with a tight budget and issues related to the new arena. He has learned a lot. I think he appreciates the value of the University of Louisville and how important it is for us to work very closely together.

EL: Of many successes the university has achieved during your tenure, in your opinion what have been two of UofL’s top achievements?

JR: I’m most proud of UofL graduating 1,000 more students per year now than it did a decade ago. That’s what the higher ed reform act was all about, and to do that UofL improved its graduation rate. UofL now has to get its graduation rate to 60 or 64 percent. A president can’t do it all alone. It takes committed academic support, and you have to recruit good students. So everything UofL has done has been focused on getting the best students and then giving them the opportunity to be successful.

One of my proudest moments was when I was at a faculty meeting and the chair said to me, “OK, you can quit talking about improving graduation rates. You’ve said it enough. We get it.”

EL: What has been your most disappointing experience at UofL during the last 10 years?

JR: The UofL hospital decision by Gov. Beshear and Attorney General Jack Conway not to approve the merger with the Jewish Hospital & St. Mary’s Healthcare and Catholic Health Initiates was disappointing. The political leadership had issues and questions. We thought we had negotiated a very strong partnership merger that would benefit the people of Kentucky through expanded and better healthcare. It was also a good financial transaction for the University of Louisville, there’s no question. We cried, complained and went to the top of the bridges here. But after a day or two, we hitched up our belts and said OK, now what? If we can’t do that, what can we do? We’ll develop some type of joint venture and collaboration with a partner. Getting away from giving up control of a public asset, UofL’s restructured plan used the RFP process to address the concerns that the political leadership raised. I doubt that the new proposal will be as good as the full asset merger, but that’s one of the trade-offs.

Current negotiations have gone slower than we initially thought, but they have gone better than we anticipated. UofL Hospital will end up with a strong deal.

The hardest thing for me has been the failure of some of our employees. When you have 5,000 employees, a few people will do things that are inappropriate or illegal. UofL has the case, for example, where an employee misappropriated federal funds. There’s a human cost when people let the university down, and that’s been hard.

EL: Owsley Brown Frazier recently passed away. Would you comment on his philanthropic impact on Kentucky and more specifically on UofL?

JR: Owsley transformed the University of Louisville. At the eulogy, I gave some examples.

Susan Harkema, Ph.D, is the leader in spinal cord research in the world; she’s an Owsley Frazier chair. Owsley provided funding and UofL matched it with Bucks for Brains funds. Owsley B. Frazier Cardinal Park transformed the whole front porch to the campus.

Regarding his recent $25 million gift to UofL, Owsley said, “Jim, I’m not designating how it will be spent; you spend it to meet the highest needs of the university.” Time and time again, from the naming of the business school and the funding for the business school, to little things like funding for new uniforms for the band – UofL needed twirlers to have a complete band and he set up a scholarship program – there’s never been anything we asked Owsley that he didn’t do. He was extremely generous.

As I tried to say in my eulogy at his funeral, it’s not just the generosity; he was a supporter, friend and mentor. I’d been on the job two weeks as interim president. At the first board of trustees meeting, some people saw some opportunities, having a new president, to do some things that otherwise they normally couldn’t do. The board tried to make organizational changes and debated over micromanagement issues in which they shouldn’t have been involved. Owsley said at that meeting publicly, “We want Jim Ramsey to be our president. He’s our president. He’s new, he’s been here two weeks. Let him work on it, and he’ll do what’s right for the University of Louisville.” His comments sent a message that lasted for 10 years. I also said that Owsley believed in me more than I believed in myself. People like Owsley are rare.

EL: Do you have a closing comment?

JR: Athletics is an important part of the university. Win, lose or draw, life goes on; and UofL is an academic institution, and that’s our focus.

When I was at UNC, I learned a lot working with athletics. A university should be absolutely committed to the academic success of the kids; not many of them are going to play as professionals. The school must play by the rules, have financial integrity, strive for gender equity and achieve success on the field. When I look at Penn State and Ohio State, it makes me sick. What happened at North Carolina (changing of grades to keep players eligible) …  Look at what happened at Tennessee and Alabama. UofL is not perfect and we make mistakes, but I thank my stars; I get down on my knees every night, and I’m thankful for Tom Jurich. Because of what Tom does, I don’t have to deal with the problems those other presidents are having, and I can invest my time in improving academic levels and the six-year graduation rate.

EL: What will be the final score of the UK-UofL football game on Sept. 2?

JR: UofL 24 – UK 10 (President Ramsey’s prognostication was made about a week prior to game day. The final score was UofL 32 – UK 14).

Ed Lane (edlane@lanereport.com) is chief executive of Lane Consultants, Inc. and publisher of The Lane Report.

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