President Gary Ransdell outlines how Western Kentucky University partners with government and business to benefit the community
By Ed Lane
Gary Ransdell: I’m in my 15th year. Jim Votruba at Northern Kentucky University was hired about four months before me. Jim is retiring this year and that kind of scares me because it makes me think, what am I doing wrong? Why am I not near that moment? I’m a much younger person than Jim Votruba; I’m years younger (big smile). Jim and I are great friends and I’m envious of him.
A couple years ago the board and I worked out an agreement for 10 more years. Well, I still run into people today that say 10 more years; that’s great. I have to remind people that the contract extension was a couple of years ago when we said 10 more years. I am in for the long term and could not be having more fun; the job is very satisfying.
You asked me a question that makes it a little hard for me to be modest, but I would answer that in different ways. First: attitude. The board challenged me in 1997 to lead a transformation in
every aspect. The campus was tired and needed to be rebuilt. Our academic programs were complacent. In fact, complacent is probably a good word to describe the entire university. It hadn’t grown much in numbers or dollars. Our ambitions were modest, and I think at that time WKU was satisfied being a good regional university.
Fortunately, we had a Board of Regents that wanted no part of that. Nor did I. As an alumnus who had been on an 18-year road trip with Southern Methodist University and then at Clemson University as a vice president, I was interested in coming back to WKU, but only if I had a board that was as aggressive, bold and aspirational as I was. And that was the case.The first and perhaps most important thing was raising the sights of the institution, changing the attitude, creating an entrepreneurial spirit and understanding that nobody works for anybody else; we all work with each other. What are we capable of becoming? And how do we chart a course to achieve it? Fortunately the faculty, administration, board and an alumni population all said, it’s about time – let’s go for it.
First, we completely eliminated the word “regional” from our vocabulary. WKU is all about national prominence, and consequently we set our sights accordingly. WKU’s vision today is driving its strategic plan to be a “leading American university with international reach,” making sure WKU’s academic programs were relevant, timely and market driven. A “leading university” can be measured in a lot of ways. WKU tracks 15 to 20 measures to validate that the vision is being achieved. A big part of the vision is three words – “with international reach” – and what WKU is doing internationally.
Next, from a physical standpoint, WKU had to rebuild the campus. It was tired, with a lot of deferred maintenance. Not much had been invested in the campus since I was a student during the late 1960s and early 1970s. WKU had only built one academic building since 1976. When I started, our residence halls were just deplorable. A major challenge was restoring a sense of place, pleasantness, comfort and quality. WKU has invested about a half billion dollars in construction since 1998. I’m proud of that.
The investments have been very entrepreneurial. Only about 20 percent of the funding has come from the state; the rest has come from private sources, the federal government, entrepreneurial balance sheet recapitalization, and partnerships with the city and county governments.
The third would be financial: WKU had to change its financial profile. We immediately embarked, from 1998 to 2003, on what ended up being a $102 million capital campaign. This spring and summer, WKU will achieve its $200 million capital campaign goal. The endowment has grown from $14 million to about $120 million; it’s recovered from the 2008-2010 recession. Our cash flow has gone from $2 million a year to about $20 million a year.
WKU is becoming much more focused, structured, organized and aggressive in research grants and contracts. WKU was doing pretty well with direct appropriations and earmarks at the federal level – right up until those went away. That set us back a little bit, because earmarks were driving a lot of WKU’s research and quality-of-life initiatives across this region.
Initially, tuition at WKU was underpriced within its market. We were very aggressive with tuition for six or eight years in a row and even had a couple of mid-year tuition increases to do strategic things. That window has passed, and WKU’s tuition is now stable and equitably priced within the marketplace in Kentucky and surrounding states. The decisions on pricing have served the university well.
EL: WKU prepares a strategic guide that sets goals and performance standards. The 2010-2012 guide said, “The revenue goals of the 2007-2012 strategic plan had been rendered moot by the global recession. The intent of this abbreviated strategic plan is to allow the university to measure the realities heading into the 2010-2012 biennium. The three primar y priorities of the 20102012 plan focuses on academic quality , efficiency and sustainability, and physical plant improvement.” Could you comment on how the university has progressed in these areas?
GR: Between 1998 and 2008, WKU had a very corporate-like strategic planning model – very data driven: Everything had to have a precisely identified outcome that WKU could measure. Our team would update the guide every three to five years and each year prepare a report card that stated how WKU was doing. In 2008, WKU approved a pretty aggressive five-year plan, and things were rocking along pretty good in fall 2008 until November/December. That’s when I learned how the word recession was spelled.
All of a sudden WKU got a call from Gov. Steve Beshear saying we are going to have to cut budgets. It’s been downhill ever since, and WKU had to take $10 million out of its budgets. The budget cut WKU is currently dealing with is another $5 million. The financial underpinning of the strategic plan WKU rolled out in 2008 had become moot. WKU achieved most of the goals in the 2008 plan but without the financial strength of state appropriations and an anticipated tuition strategy.
What I did in 2010 was to call a “halftime.” I said let’s pause, catch our breath, take stock of things, and continue to do strategic initiatives that are opportunistic. Now, we’ve charged out for the second half. The strategic plan that WKU is creating right now has the entire campus engaged, and we’ll roll it out this coming August.
EL: WKU is an innovator in on-campus student housing. Could you comment on the financial model that has worked well for WKU, as well as any areas in which future enhancements could be made?
GR: WKU was the first university in the state to renovate a state building using a general obligation bond issued by a county. A municipality actually financed the improvement – it was a Bowling Green city bond.
WKU’s residence halls in 1997 were deplorable and probably the university’s most pressing physical problem. As the University of Kentucky is doing right now, WKU was not going to solve the problem in the conventional way by renovating one residence hall at a time. Renovating buildings is a long process. WKU had 17 residence halls.
In a nutshell, WKU is doing what UK is doing, except there are no middle men. WKU keeps every penny of the profit and reinvests it right back into those properties and continues to do so to this day. WKU didn’t go to a private sector company to do it; it created a 501(c)(3) not-for-profit corporation, Student Life Foundation. I appointed an eight-person board and continue to appoint that board.
WKU sold its residence halls to SLF; WKU had $22 million in outstanding debt on those buildings, plus they needed to be renovated. So, the first thing the SLF did was issue a $65 million tax-free bond pledged against revenues from those beds. SLF signed an agreement for the university to manage the properties. It’s an invisible transaction to the students – the students pay their housing fees; the fees come to our offices; all that money is transferred to the Student Life Foundation. SLF has done all the construction, managed every renovation, and is now paying cash for new beds. With such a good business model, WKU has been able to keep the pricing of student rentals in the middle of the pack of Kentucky universities because it is not paying a middle man and there’s no profit margin.
All 17 buildings are now renovated. Moody’s bond rating is not a factor since SLF is a completely different foundation and bought WKU’s properties. The first $22 million SLF spent was to pay WKU for the properties and the balance of the bond proceeds was reinvested in renovations. It’s been an incredible plan.
WKU had to obtain legislative authorization because it sold WKU’s property. It took a lot of trips to Frankfort and a leap of faith because, at the time, I was not a known entity and the concept was entrepreneurial, appeared to be risky, and had never before been done on a public university campus in America. What made us think WKU could do it? I said, “Because it’s a sound business plan.” I don’t mind taking risk if the reward-risk ratio is good.
EL: Warren County, the City of Bowling Green and WKU have been using tax increment financing (TIF) funds to revitalize the central business district and the WKU campus. How well has the TIF worked for the university?
GR: The name of the Bowling Green TIF is WKU Gateway to Downtown Bowling Green. That’s what the city, county and WKU took to the General Assembly to get this TIF and the $150 million threshold spend by 2014. Mayor Bruce Wilkerson (and former mayors), County Judge-Executive Mike Buchanon, the Bowling Green Chamber of Commerce and I work very well together. There’s a lot of magic in Bowling Green right now – teamwork and cohesion, vision and “sure we can do that!” kind of attitude.
A WKU alumni and conference center is being built and is privately funded. The rest of block 12 includes a parking garage, and it’s being wrapped in apartment-style student housing. A university police station will be located on the ground floor of the parking garage, and we’re planning retail space, a coffee shop, a fresh market and a bookstore. We’re talking with a developer right now – it’s not a done deal – on that same site for a hotel that would connect to the alumni center. All of these initiatives are university driven. WKU will not own these facilities but will lease them. The net rental cash flows will make the TIF work. The parking garage won’t generate revenue.
WKU will move its entire School of Nursing into a new medical center building. This TIF project will allow the School of Nursing to double its enrollment as well as accommodate the doctor of physical therapy degree program. Employment demand in healthcare allows this business plan to work, and the cost of the facilities is being incorporated into the tuition pricing structure.
EL: U.S. Sen. Rand Paul is a resident of Bowling Green. What is your relationship with Kentucky’s junior senator?
GR: I did not know Rand before he ran for office, even though he was a member of the medical community in Bowling Green. When he decided to run for the Senate, I called and said, “Let’s get together; we need to know each other.” He laughed and said, “Yes, we do.” We had a two-hour lunch about half way through his campaign and have since become great friends. He comes to WKU ballgames and last year, before he played in the congressional baseball game, he came down and had batting practice in our facility.
EL: Many university presidents have significant issues arise when overseeing the athletic program. Could you comment on your oversight of WKU athletics?
GR: Any president who’s going to stay in his or her job over an extended period of time has to understand the importance of maintaining a close working relationship with the athletic program.
The president who understands the athletic program, appreciates the values it brings, tracks it and can deal with a crunch before it becomes an issue or a controversy, can stay out of trouble. But the minute a president starts ignoring it or discounting its value is when an athletic program can become problematic. WKU has a rich athletic history. For me to downgrade athletics would be a major mistake and would never be accepted by our alumni population, if not our faculty, staff and students. I love watching our students compete – student athletes included.
EL: How has WKU enrollment progressed in the last decade, and what is your expectation for future growth?
GR: As WKU improved its campus and facilities and recruited more highly credentialed faculty, it also built a world-class honors college. WKU became the destination point for students and especially the very good students. The applicant pool has increased from 7,000 to 14,000 over the last 14 years, and our enrollment has gone from 14,500 to 21,000 over that period of time. So we’re doing a lot of things right. People want to be a part of WKU and enjoy its traditions and academic quality. Enrollment strategy is all a part of WKU’s transformation.
WKU has regional campuses in Owensboro, Elizabethtown and Glasgow with about 5,000 students enrolled on those three sites. Approximately 14,000 undergraduate students and 2,000 graduate students are on the main campus.
WKU’s budget (over this same period of time) has gone from $130 million to $385 million. State appropriations have gone from $60 million to $70 million – that’s with about a half dozen budget increases and about 10 or 12 budget cuts over that period of time. State appropriations have gone from 51 percent of the WKU budget when I started this job to 18.6 percent today WKU must continue to grow modestly. I don’t want to be in this job if enrollment declines because that multiplies financial variables by taking money out of the budget.
EL: The Carol Martin Gatton Academy of Math and Sciences opened at WKU in 2007. How does this program help high school students?
GR: The Gatton Academy is driving academic quality on this campus. WKU has for 30 years had the only center for gifted studies in Kentucky higher education. WKU partnered with Duke University and the Duke Talent Identification Program that identifies seventh and eighth-graders who scored in the 90th percentile on ACT tests. These students are recognized on campus then WKU has summer programming for gifted and talented students. When the Gatton Academy was conceived, WKU wanted to create a destination point for Kentucky’s best high school juniors and seniors to enroll in a live-in academy and to receive their junior and senior year courses in our classrooms with faculty and students engaged in undergraduate research, studying abroad and doing all the things our best undergraduates do. Fortunately, WKU went to Frankfort when funding was possible and the state appropriated $2.8 million recurring to fund the academy. The base appropriation covers the student’s scholarship, housing, room and board, books, tuition, spending money.
Bill Gatton made a gift of $4 million (Bill Gatton’s Generous Spirit) and WKU named the academy for Bill Gatton. When students come to the academy, they know they’ll graduate in two years with 60 hours of college credit, basically combining the freshman and sophomore years of college with their junior and senior years of high school; the high school students are taking freshman and sophomore university courses. These students are typically an anomaly in their high school. Sometimes they are ostracized or get into trouble, some may drop out because they don’t have peers and they are bored. Most public schools and sometimes private schools don’t meet their needs, but if you surround these students with their peers and put them in a tenured faculty honors course in physics, they are off the charts. Bill Gatton is not on the WKU board; he is a good friend and a visionary who understood what the academy could become. And now, after four years, the Gatton Academy, according to Newsweek, is the fifth leading public high school in America and in U.S. News & World Report it’s No. 6.
EL: Bowling Green and Warren County’s combined population now exceeds 113,000, making it a top urban area in Kentucky. What initiatives helped the community grow 23 percent in the past decade?
GR: The visionary leadership in this community and the passionate drive to improve both economic opportunities and the quality of life. I would like to think that WKU is one of the major drivers in both economic and population growth in the county. WKU has grown from 1,000 employees to 2,300 employees and 14,500 students to 21,000 students. That helps swell the population of our community. About a half billion dollars a year of economic impact is pumped into the local economy because most of WKU’s budget is spent locally. And when you add students into the community, they spend money above and beyond what it takes for tuition, housing and food.
EL: There’s been a number of people from foreign countries moving to Bowling Green. How does that program work?
GR: Bowling Green has a diverse population and is a very embracing community. It is a tolerant community and maybe a bit unusual for a Southern town of its size, but that’s just evolved. Again, the university has largely been behind that embracement and tolerance because university faculty and staff are a little more open-minded on social matters and a little less rigid on matters that may have plagued this nation and the South over time. WKU embraces international reach in its strategic plan and recruits students and faculty here from around the world.
EL: Do you have a closing comment?
GR: I have the best job in the world. People are having fun, there’s great confidence, and the WKU spirit is as much about the heart as it is about the head. And that is the philosophy I want our graduates to take with them when they leave.
Bill Gatton’s Generous Spirit
Man behind UK’s business school and WKU’s academy is ‘investing’ fruits of seven decades of success into education
Partly Sunny, But Keep An Eye On Those Clouds
Banks and businesses have improved balance sheets and see 2012 building on improvements seen in 2011
Finding a Venture ‘Angel’
Accounting sector foresees rising demand for business services and expects firm mergers
Major Verdicts and Settlements
In business cases, Kentucky courts clarify contract law-tort law claims, LLC capital calls and bank-borrower responsibility
Reaching Kentucky’s Unbanked
With education, 600,000-plus households could avoid fees and be ready when U.S. agencies go to direct deposit in 2013
More Interest in Business Loans
Commercial and industrial lending went up 10 percent in 2011 and is rising as those with strong balance sheets invest
One-On-One: Gary Ransdell
President Gary Ransdell outlines how Western Kentucky University partners with government and business to benefit the community