Agenda for this week's PSU Board of Trustees meetings:

91Joe95

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Oct 6, 2021
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PART 2:

Item 5) Approval of the spending of $128 million for construction of the new Liberal Arts building.

To the best of my recollection, I was the only Trustee who provided any questions or commentary on this item.
I voted “No” (I believe I was the only dissenting vote), after making the following public comments:

MY PUBLIC COMMENTS:
“I have two concerns with regard to the proposed project:

1) The proposed structure serves the missions of the college of Liberal Arts, a mission which may be very justifiable and appropriate – with approximately 75% of the space being allocated to Offices and Classroom space – and something less than 25% to Laboratory space for the Anthropology Department.


Such a space – based on rough estimates of similar higher education construction throughout the country – would be expected to be priced at somewhere in the neighborhood of $650 per composite square foot, as a reasonably healthy estimate.

[Some background, which I didn’t go into detail with in my public comments: Current construction estimates for such spaces on University campuses, nationwide, are ~$800 per square foot for scientific lab spaces, and ~$600 per square foot for either classroom of office space – and those are “high side” estimates… the ~$650 per square foot is a composite for a space that is 75% “Classroom and Office” space, with the remainder being “Laboratory”. And, FWIW, there are numerous examples of current cost structures in that range among our peer institutions]

MY PUBLIC COMMENTS (continued):
This estimate, $650 per square foot, times the total listed square footage of the new building, would place a total cost at approximately $93 Million. The proposed price – of $128 million (minus $5 million to raze Oswald, if that is included) – is $35 million over that target.

To put that into some relevant perspective, that single “inefficiency” is enough money to provide 1700 full tuition scholarships to Pennsylvania students. While the “mission” may be righteous, the cost – for what we are getting – needs to be refined.

[Some background and clarification, that I didn’t go into detail with in my public comment: This is not a first time or one-of wrt Penn State Capital Expense projects. The “Fenske Lab Replacement”, “Henning Building”, “Abington Dorms”, “Lasch Building Renovations”, etc are but a few examples of similarly perplexingly-priced projects in recent years]

MY PUBLIC COMMENTS (continued):
"2) Razing Oswald:

Is spending $5 million, to tear down a 50 year old office/class building the best option?
I don’t know, but if it is, it is an indictment of our Capital Spending priorities. If Oswald, after 50 years, is in such a state of disrepair that the only viable option is to spend $5 million to tear it down, we have done a very poor job of maintaining the structure over the years.

More often than not, when we put up a new building – and tear down an older building – we hear that the ”costs” will be offset by razing the old building to save on deferred maintenance costs. At the same time, we hear reports on a regular basis that we are putting off required maintenance projects due to lack of funds.

It is far, far less expensive to take care of those assets we have – rather than allowing them to go to seed, tearing them down, and building a new replacement. And we now have well over $3 Billion of long-term debt on the University’s books – a significant portion of which is due to such actions - which will be paid by who? (We know who, it will largely be future generations of Penn State students, and their parents).


That needs to stop.”

Item 6) Field Hockey Stadium Project:

This is an ~$12 Million project to construct a stadium for PSU Field Hockey (they currently play on a field that – IMO – is “playable”, but not high end). I would not approve of the expenditure of $12 million of University funds for such a project (a project that will generate, in all likelihood, near “$0” of revenue, and not further the most critical missions of the University).
BUT (“big” but), the bulk of the funding was raised through specific philanthropy – procured through years of efforts on the part of the Field Hockey staff, with the remainder being taken on by PSU ICA (to the best of my knowledge – I do plan to talk w new Athletic Director Pat Kraft, just to touch base on his thoughts on a lot of ICA items, and will bring up the field hockey issue as well).

So, I voted to approve of the project (and I believe it passed unanimously).

Listed below are my planned comments on the proposal. Because another Trustee – Anthony Lubrano – made a statement about the project that was just about identical to my thoughts, and in the interest of maintaining meeting brevity, I simply mentioned “Ditto”, and that I concurred w Lubrano’s thoughts on the matter.
But here are my thoughts and explanations:

“As opposed to many ICA projects in recent years, this project illustrates – IMO – a reasonable process.
The folks involved with the Field Hockey program – led, largely, I believe, by head coach Charlene Morret – raised the bulk of the funds necessary through philanthropy. I know she was also VERY willing and enthusiastic to discuss the project, her visions for the program, and engage in informative discussions about the merits and requirements. That is a good thing – and it is the process through which optimal decisions are made.

For a “niche program”, with very little opportunity for revenue generation, to have raised such funds via philanthropy is a testament to their hard work, and the generosity of our donors. Kudos to both.

I would like to hear, specifically, that ICA will take on responsibility for any expenditures over and above the amount raised through philanthropy – and I expect to discuss this with new Athletic Director Pat Craft…. Who I am hopeful will provide some much needed sound fiscal management to that department.

In the interim, with both congratulations for a job well done thus far, and the hope for greater fiscal responsibility and strategic vision moving forward by PSU ICA, I can – cautiously – approve of this project.”

Barry, this is some great stuff and very much appreciated. It's funny that construction costs such a premium at Penn State. While the buildings are nice and solid, there is nothing premium quality-wise or unique about them.

I have a side question/concern regarding operating costs for new construction. Even if a building is fully or nearly funded via donations, it requires new and reoccurring operating costs via staffing, maintenance, and utilities. Since donations don't cover those, how does that factor into the evaluation of the feasibility or viability of a project? There is plenty of new construction where older buildings are not torn down (thus 'replacing' operating expenses when this occurs), and even if the capital portion of the project is fully funded via donations, the university still incurs those new expenses. How are they factored in when evaluating the feasibility of a project? A 'free' building is still not free.
 
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Midnighter

Well-known member
Oct 7, 2021
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So does this mean PSU rolls back the tuition increase?

not funny GIF by JUST EAT
 

PSUSignore

Well-known member
Oct 25, 2021
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But somehow the $EC finds a way to prosper supporting 15+ sports and not the 30+ that PSU has committed to. There's a model for success here but it's just that we haven't embraced it for whatever reason
PSU isn't prospering? It's one of the few athletics departments that operates significantly in the black.
 
Oct 12, 2021
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Sandy set us up for great success.
Bob, your magnanimity is refreshing. You've finally seen the light after all that unfair criticism you heaped on Sandy. My only gripe is that she fell just a wee bit short on fundraising for the new stadium. I think that the SCASD boosters raised more for the State High Memorial Field upgrade.
 

BobPSU92

Well-known member
Oct 12, 2021
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Bob, your magnanimity is refreshing. You've finally seen the light after all that unfair criticism you heaped on Sandy. My only gripe is that she fell just a wee bit short on fundraising for the new stadium. I think that the SCASD boosters raised more for the State High Memorial Field upgrade.

State College High School laughs at PSU.

As for Sandy, absence makes the heart grow fonder.
 

Nitwit

Well-known member
Oct 12, 2021
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No doubt. My MBA program was full of engineers who were trying to advance into management positions in their companies. They were strong in the quantitative subjects but they were horrible in any course which required essay questions answered on exams. They couldn’t put two sentences together or express themselves in writing. They were smart people, I’m not implying otherwise, but their talents did not translate into the ability to write reports or memos, and these deficiencies held them back from career advancement.
 

BW Lion

Well-known member
Oct 14, 2021
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No doubt. My MBA program was full of engineers who were trying to advance into management positions in their companies. They were strong in the quantitative subjects but they were horrible in any course which required essay questions answered on exams. They couldn’t put two sentences together or express themselves in writing. They were smart people, I’m not implying otherwise, but their talents did not translate into the ability to write reports or memos, and these deficiencies held them back from career advancement.
You’ve become this board’s new “Cruising Route 66 / Hugh Laurie” without trying.

There’s something really odd about you elderly (ie shelf life expired) Smeal graduates. 🙄
 
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AvgUser

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Oct 7, 2021
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No doubt. My MBA program was full of engineers who were trying to advance into management positions in their companies. They were strong in the quantitative subjects but they were horrible in any course which required essay questions answered on exams. They couldn’t put two sentences together or express themselves in writing. They were smart people, I’m not implying otherwise, but their talents did not translate into the ability to write reports or memos, and these deficiencies held them back from career advancement.
Allow me to probe this for one more post. Initially you said employers love liberal art majors because of their analytical thinking abilities which are better than engineers and technically-focused disciplines. Then you come back and state that engineers obviously have better quantitative skills. Quantitative analysis requires analytical thinking.

If I were the employer in this case, I’d conclude you lacked logic and reasoning skills because your two statements are contradictory to one another. 😁

Do you want one more swing?
 
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Nitwit

Well-known member
Oct 12, 2021
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Allow me to probe this for one more post. Initially you said employers love liberal art majors because of their analytical thinking abilities which are better than engineers and technically-focused disciplines. Then you come back and state that engineers obviously have better quantitative skills. Quantitative analysis requires analytical thinking.

If I were the employer in this case, I’d conclude you lacked logic and reasoning skills because your two statements are contradictory to one another. 😁

Do you want one more swing?

Sure I’ll take one more swing, and for the record, I appreciate that we’re keeping this discussion civil:

My opinion is that the engineers by and large can do the math, but they can’t explain the answer well. For example, can they write a complex business plan, respond to a government RFP, or put together a strategic plan for their product? They tend to be technically oriented, not people oriented. They are often socially inept. Can they “sell their plan” internally to senior management or the the board of directors?

Liberal arts majors can be trained to do the quantitative analysis and they already know how to communicate the aforementioned issues, but not so with the technocrats. Obviously I’m engaging in gross generalizations here, but it’s based upon my personal observations over many years. There are many individuals who don’t fit these stereotypes fortunately. My brother in law was an engineer with a defense company in California and they sent him to USC to get his MBA because as they told him - “He knew how to talk.” He was capable of making a presentation.This was a rarity among his peers.

There are a lot of liberal arts majors at Penn State in many fields such as political science, economics, sociology, public policy, and psychology, who are performing complex statistical analysis on big data sets and performing regression analysis, even discontinuity regressions, and using experimental methods, who are quite capable of transferring these skills into many business, finance, or research settings and communicating their results to their peers or senior management. They aren’t all art history majors, but there’s nothing wrong with that either.

So many times if I’m hiring I’d lean towards the economist or political scientist with strong communication, analytical, strategic, and statistical skills to run my business division and let him/her hire or manage the engineers if needed as support staff. I want someone smart who is trained to think broadly.
 
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