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Leaders at other merged universities see risks, rewards

Risk factors

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Those looking to merge Augusta State and Georgia Health Sciences universities should watch out for “unintended consequences” unless there is careful planning and much effort to make it work, said an official who has been through a similar merger in Denver.

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University of Colorado Denver campus with downtown Denver in the background.   UNIVERSITY OF COLORADO DENVER/SPECIAL
UNIVERSITY OF COLORADO DENVER/SPECIAL
University of Colorado Denver campus with downtown Denver in the background.

The potential risks from such a move were deemed to be too much for the University System of Maryland, which opted last month to pursue a looser “alliance” between its flagship liberal arts university and the university that houses its professional schools. But some reports do show the economic benefits being touted by proponents of the Augusta consolidation.

GHSU President Ricardo Azziz said a model the Augusta universities will study is the merger of the University of Col­o­rado Denver and the Uni­ver­sity of Colorado Health Sciences Center, which contains its health profession schools.

But a key official in that consolidation, University of Colorado School of Medicine Dean Richard Krugman, said he tried to tell officials he thought it was a bad idea and it has been “awkward,” in part because it came in the midst of a decadelong move of the health sciences center to the $2.1 billion Anschutz Medical Campus several miles away.

But there has also been a “mismatch” of cultures between the two that has taken much effort to overcome. UC Denver was mostly undergraduate and operates on the semester system while the health sciences campus is graduate-level and has its own schedule. When health sciences students showed up for class after the merger, the combined student support services weren’t ready, Krug­man said. When officials called the downtown offices, “they said, ‘Well, you’re not supposed to have students now,’ ” Krugman said.

That difference has already turned up in discussions between the nursing programs at ASU and GHSU, with ASU on the semester system admitting students twice a year while GHSU does it once a year.

Risk factors

It is just one aspect of blending different schools. Augusta State has thousands more students, is tuition-driven, and its faculty members are on nine-month terms.

The health sciences campus, however, is full time, dwarfs ASU in re­search and clinical revenue and has higher salaries that are earned through money generated or research awards.

That could create pay disparities among the campuses when hiring, for instance, an associate professor of neurosurgery.

“That’s going to be a different salary than an associate professor of English,” Krugman said.

The potential pay inequity was one of the risk factors cited by the Maryland task force that ultimately recommended an alliance instead. Another was cost. Maryland projected that to make the merger work it would take an investment of $235 million to $285 million, which would include $169 million in new space to house future collaborations, while yielding a short-term benefit of $1 million in savings a year from administrative consolidation.

In a “self study” UC Denver did for its accrediting body, the Higher Learn­ing Commission of the North Central Association of Colleges and Schools, the school cites “multimillion dollar savings” from consolidating administrative and service functions. But Krugman is skeptical of that claim.

“I have no reason to say it is either true or not true,” he said. “But I’m not sure I trust that.”

About 200 full-time positions were cut from the budget around the time the university let go of its custodial staff and contracted out the service, Krugman said.

“And then we wound up with more assistant and associate vice chancellors and other folks who are making a lot more than janitors,” he said.

There are examples of cost savings at successful mergers at other schools, including some close to home. The Technical College System of Georgia consolidated 15 of its schools into seven in 2009, which has saved the system $500,000 a year in administrative costs and eliminated $6.5 million in allocations per year for the state, according to spokesman Mike Light. Officials pushed the merger because the state had too many small colleges providing similar services within close geographical areas, he said.

“We found it to be all worthwhile,” Light said. “The merged colleges are working together in greater cohesion so … they’re doing a better job at providing a better workforce,” to employers.

Economic boon

After the University of Toledo merged with the Medical University of Ohio in 2006, business leaders said the move has had a positive economic impact on the community. John Gibney, the vice president of marketing and communications for the Regional Growth Partnership in Ohio, said research that has been conducted since the merger has grown companies and created jobs as a result.

“Ultimately what we’re seeing is greater commercialization of technology, companies spinning off from research created on campus,” Gibney said.

The consolidated Toledo university now has a $1.1 billion economic impact on the area, although that figure is not much higher than the combined impacts of the individual universities when they stood alone, according to a study conducted by Bowling Green State University’s Center for Regional Development the same year of the merger.

However Gibney said the benefits have outweighed any costs, especially in pushing Toledo to be a more respected, research-driven institution.

“This merger, what it did was make the University of Toledo the third largest institution in the state of Ohio,” Gibney said. “What that does psychologically is it raises the profile of the university at the state level. The bigger, the better type thing. All of a sudden, we’re standing out and being recognized.”

According to documents received through a Georgia Open Records request, the University System of Georgia has not done a feasibility study or an analysis of the economic impact of the Augusta merger. And Krugman said the Denver example might not be an apt comparison because the schools there are much larger and probably more complex. But he is not trying to dissuade Georgia officials from pursing a merger.

“I’m not providing advice, other than to say things like this are complicated and they take a lot of time and thought, which most people don’t give it,” he said. “Therefore, be prepared for unintended consequences and a lot of effort to make it work. And hopefully, it won’t detract from the core missions of both campuses.”

PROS, CONS

Similar mergers have been carried out at schools across the U.S. Leaders at those schools offer some pros and cons:

PROS

• Cost savings

• Economic growth

• Increased stature

CONS

• Cost

• Pay inequity among faculty

• Cultural differences

THE BACK STORY

UNIVERSITY MERGER

BACKGROUND: On Jan. 10, the University System of Georgia Board of Regents voted to consolidate eight colleges, including Augusta State and Georgia Health Sciences universities to create a comprehensive research institution.

DEVELOPMENTS:

• Records revealed the system kept the plan secret until just a few days before it was to be voted on.

• An e-mail from ASU President William Bloodworth showed his deep concern about the consequences.

• Twenty-one people were appointed to a committee to help the Augusta schools merge.

Comments (8) Add comment
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Craig Spinks
817
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Craig Spinks 01/29/12 - 03:34 am
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Both action and inaction

Both action and inaction bring risks and rewards.

agustinian
689
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agustinian 01/29/12 - 08:19 am
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"Increased stature"? Really?

"Increased stature"? Really? How do you figure that?

Insider Information
4009
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Insider Information 01/29/12 - 11:35 am
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The missions between MCG and

The missions between MCG and ASU are so different. A system of "shared services" or an "alliance" makes much more sense.

You don't need a merger to consolidate departments and positions. Look no further than the Richmond County school system. We have nurses that cover multiple schools. The same can be done for folks in admissions, maintenance, financial aid, etc. at MCG and ASU.

rmwardsr
525
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rmwardsr 01/29/12 - 11:44 am
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We will wind up being the

We will wind up being the University of Georgia-Augusta and the University of Georgia Medical School. Every one seems to have forgotten GHSU's campus in Athens. And those that don't think Michael Adams, the president of UGA, is not a termite in the woodworks on this deal, just hide and watch! The stakes are too high to just let it merrily roll along. Why was a person with a medical background chosen to lead the combined schools, why was one president "forced" into retirement?

DanK
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DanK 01/29/12 - 12:03 pm
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The amount of time and

The amount of time and resources required to merge these two very different universities will be huge. Policies, work processes, governance, organizational structure, personnel, financial services, reconciling every aspect of operations. The two schools use different computing systems for purchasing, personnel and management. ASU is a typical general university with faculty governance. GHSU is a dictatorship with no faculty involvement in decision making.

This merger will completely consume the time and effort of administrators and staff on both campuses -- time they could be spending trying to advance their educational and research programs. The cost of that alone will be tremendous. But then add in the cost of converting to single, shared computing systems for personnel and product management, financial operations, and all other aspects of business operations -- we are looking at many, many millions of dollars.

What will be the benefit of the merger? Larger total numbers of students, faculty and staff? Not many, I think. More administrators? Probably. Additional funding from the state? Unlikely -- the politicians think this is going to save money. But there just aren't many ways to find cost reductions in this merger. President Azziz has already warned about that. Increased economic impact on the city? Minimal if any -- what would be new in the merger to generate increased increased local revenues?

If ASU were a research university with lots of doctoral programs and research in engineering, computer science and bio-technology, the sciences and social sciences like a UGA or Emory, the potential for positive synergy between the two universities would be tremendous. But combining a group of specialized professional programs with an undergraduate commuter college offers little benefit in that regard.

It will take a decade or more to see any offspring at all born of this marriage. But the costs of the marriage will be huge in time and resources.

The winner in this deal is not the state of Georgia or the Augusta metro area or the two universities. The only winner in this deal is Azziz, who expands his span of control. God help everyone involved.

Insider Information
4009
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Insider Information 01/29/12 - 12:32 pm
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rmwardsr, Georgia Tech is THE

rmwardsr, Georgia Tech is THE state engineering school. Michael Adams wanted an engineering school at UGA. Tech fought against it because it would force a competition for grants and funding. Who won? Adams.

You're right to worry.

Chillen
17
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Chillen 01/29/12 - 01:25 pm
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The ultimate benefit to

The ultimate benefit to taxpayers like millions saved per year will likely never be realized. I am starting to get an uneasy feeling that this may actually COST us millions more per year.

The incompetence of those elected and those who work in the govt is absolutely staggering. And we, the sheeple of America, have allowed them to control 1/3 of our GDP. The word doomed just popped into my head.

David Parker
7923
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David Parker 01/30/12 - 10:28 am
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Addressing the influx of

Addressing the influx of students going through matriculation and overtaxing the registrar's office. I waited in lines at Augusta College, UGA, NGCSU, and ASU to register and so on. Why are the young folks these days so special they shouldn't have to succumb to such attrocities? They can take their time and I promise, everybody will get the education they pay for.

Regarding salary inequity, Is this really an issue? One person sells Porsche's and another sells used LeBaron's. They both sell cars and they earn different salary. This is not confusing.

I read yall loud and clear. I can only derive one conclusion from the pessimism up in here. You are satisfied with your lot and unconcerned that this city's future depends on it's indigenous development.

madgerman
236
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madgerman 01/30/12 - 10:29 am
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Looking at the difference in
Unpublished

Looking at the difference in salaries of the schools brings one thoing to mind - class warfare. I believe the merger has one purpose and that is to consolidate a low cost, large a huge student body, with a high cost small student body to obtain cost figures that will be lost in data streams. When you have literally hundreds of high peiced (well over six figures) staff and you are talking about savings because you fired the grounds keepers or clerks, something smells. But no fear, we voters will continue to send our partisan representatives back to Atlanta to keep the wheels greased.

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