Contact: Monty Jones, (512) 499-4363

Date: June 10, 1999

Statement by U.T. System Chancellor Cunningham

Statement by Chancellor William H. Cunningham on his retirement

It has been my great honor to serve the people of Texas for the past 14 years as a chief executive officer with The University of Texas. As president of The University of Texas at Austin for seven years (September 1985 to September 1992) and as chancellor of The University of Texas System for almost seven years (September 1992 to the present), I have done my best to advance the mission and goals of these extraordinary and closely intertwined educational enterprises.

While both positions have been demanding, complex, and all-consuming, they also have been exciting, exhilarating, and personally satisfying. There have been, of course, some difficult challenges, but I can say with complete candor that there has not been a single day when I have failed to approach my work with enthusiasm, energy, and optimism.

Concurrently, I have had a powerful and sustained awareness that what we are about within the U.T. System is of fundamental importance. While our nine general academic universities and six health institutions have distinct missions and challenges, they all share a common vision and a fundamental commitment to enhancing the lives of individuals and to advancing a free society. And they are all committed to fulfilling the constitutional mandate to be "a university of the first class." I am honored and grateful for the positions entrusted to me over the past 14 years. As they say, I have had "a great run."

Today, I am announcing my intention to step down as chancellor of The University of Texas System, effective August 31, 2000. By that date, I will have completed a full eight years as the chief administrative officer of one of the nation’s largest, most advanced, and most complex higher education organizations. I believe the record will reflect that the U.T. System is in excellent shape; that its faculty, students, and staff are among the finest anywhere in the world; and that the future is indeed bright.

My decision to resign at this time is based on three factors.

First, The University of Texas System and all of Texas higher education have just completed their best legislative session in the past 20 years. The final appropriations bill provides Texas higher education with $1.214 billion in new resources for the next biennium. The higher education coalition’s Access and Affordability (Back to Basics) initiative for four-year universities and health science centers represents $843 million of this increase. The state's elected leadership has determined that higher education must be adequately funded if Texas is to succeed in the 21st century.

In addition to those appropriations, endowments totaling $445 million from the tobacco lawsuit settlement have been established by the Legislature for the benefit of U.T. health institutions. The six U.T. System health institutions will also share in the proceeds from an additional $350 million endowment established with tobacco settlement funds.

The legislature also approved a proposed constitutional amendment related to the Permanent University Fund that will go to the voters of Texas in November. If approved in that election, the amendment would permit the U.T. System and the Texas A&M System to spend a limited portion of the capital gains from the PUF to support excellence programs and capital projects. I am confident that, if this amendment is approved in November, it will prove to be one of the most important legislative initiatives ever undertaken in Texas.

These are just a few of the many successes that Texas higher education realized during the most recent legislative session.

The second reason that I have decided to step down is that I firmly believe that the U.T. System is in an excellent position to continue to provide high-quality educational services to the people of Texas. The 15 institutions in the System are very strong academically and financially, each of them has strong leadership from their presidents and executive officers, and each is poised for greater achievements as we enter a new century. The U.T. System has made dramatic progress on a variety of priorities and initiatives related to educational opportunity, effective financial management, and expanded educational services. While it is always difficult to let go of something you love so dearly, I am confident the new chancellor who is selected by the Board of Regents will inherit a great organization that is ready and willing to push the educational envelope.

The third reason that I consider this to be a good time to leave the chancellorship is my interest in exploring a long-held personal desire to enter the private sector. Opportunities within the business community abound and, after receiving several proposals to enter private business, I feel the time has come for me to explore these and other private-sector opportunities carefully and deliberately. Specifically, the many opportunities that exist with regard to electronic commerce, as well as other business opportunities, hold much fascination for me. I feel that contributions that I could make in this field would only reinforce my commitment to education; I would be applying my knowledge and experience to a field that recognizes the importance of life-long education.

In addition to evaluating such opportunities, I will look forward to considering the possibility of returning to a faculty position in the Department of Marketing at U.T. Austin, where I hold the James L. Bayless Chair in Free Enterprise. My experience as a faculty member at U.T. Austin has been one of the most rewarding phases of my career, and I have always delighted in working with undergraduate and graduate students to help them master the fundamentals of an academic discipline and to broaden their horizons.

I informed Donald L. Evans, chairman of the Board of Regents, of my decision last week, and other members of the board this week. I have assured Chairman Evans and other members of the board that I am dedicated to working as hard in the coming year as I have ever worked, and I plan to move key priorities and initiatives forward with vigor and intensity. However, should a new chancellor be designated and should he or she be available to assume the position prior to the effective date of my resignation, I will, of course, step aside at an earlier time. I pledge to do all that I can to ensure a smooth, orderly, and positive transition. My goal will be to make my successor’s first days on the job as successful and rewarding as my predecessor, Hans Mark, made my own first days back in 1992.

I have been blessed to work with outstanding regents since I became president of U.T. Austin in 1985. These individuals have been truly dedicated public servants who care deeply about their public responsibilities. The presidents of the U.T. System components are also distinguished professionals who are providing visionary and energetic leadership for their institutions. They have very difficult jobs with pressures from many different constituencies. We all owe them a great debt of thanks for a job well done, and I am personally very grateful for their support and friendship through the years.

Louis Beecherl, former chairman of the Board of Regents, told me when his term expired that the U.T. System had the best group of staff with whom he had ever had the pleasure of working. While I am enormously proud of what has been accomplished during my years as chancellor, I agree with Mr. Beecherl 100 percent. I have had a great team of executive officers and other staff members, and most, if not all, of the credit for the successes of recent years should be given these remarkable individuals. Collectively, they are the most committed, hard-working people I have ever observed in either the public or the private sector. They are capable of running any major public or private organization in this country. It has been a pleasure and an honor for me to be associated with this group of dedicated, creative, and competent public servants.

I would like to highlight very briefly some of the accomplishments that have occurred during my term as chancellor and that lie at the heart of the fundamental mission of the U.T. System and its component institutions.

• I am very proud of the sustained efforts that have been made to strengthen undergraduate education across the System. As a result of the hard work of many dedicated people, I am convinced that each one of our academic institutions provides better instruction, a higher-quality undergraduate educational experience, and stronger retention programs to its students than it did seven years ago.
• The extraordinary strength of our graduate and research programs is internationally recognized. The national rankings are evidence of our strength in many disciplines, and research expenditures System-wide have increased by almost 25 percent since 1992. The discoveries emanating from our laboratories have an incredible impact on the lives of people throughout our state and our global community. The System’s international leadership in many fields of research is evidenced by the presence of no less than seven Nobel laureates on the faculty of
  U.T. institutions.
• It is important to recognize the continuing advances in providing excellent, affordable, and compassionate patient care through hospitals and clinics associated with U.T. health institutions. Each year we record 60,000 hospital admissions and more than 3.7 million outpatient visits, and we provide more than $824 million worth of indigent health care annually. Medical miracles take place every day at U.T. institutions, and the depth of the gratitude of those who are the beneficiaries of those heroic interactions is incalculable.
• The service that members of the U.T. community render to the public is phenomenal. Examples are far ranging and nothing short of amazing -- from our faculty and staff members who serve on state and national committees to our students who volunteer to mentor and help underprivileged children. Our people do make a difference.

The first four areas of achievement that I have mentioned are broad-based, fundamental elements of the mission of the U.T. System. The following areas are somewhat more specific.

1. South Texas/Border Initiative (STBI). This critical initiative was first funded by the legislature in 1993. Since then, the state has invested over $440 million in new resources for buildings, equipment, and academic programs at U.T. System institutions in South Texas and the region. These resources have been responsible for the development, since 1991, of 68 new academic programs at U.T. institutions in South Texas and the border area – 17 bachelor’s programs, 24 master’s programs, and eight doctoral programs. In addition, 15 new academic buildings have been constructed and five major renovation projects have been undertaken at these institutions. Lt. Governor Bob Bullock led the development of the STBI from its inception. Without his support and dedicated leadership, the STBI would never have been enacted into law. Regents Bernard Rapoport and Tom Loeffler were instrumental in every aspect of this effort. Michael D. Millsap, vice chancellor for governmental relations, provided his usual excellent strategic and tactical advice and leadership that permitted us to effectively communicate the importance of this program to the legislature. I am also grateful for the service of Dr. Mario Gonzalez, who did an outstanding job of coordinating the initiative on behalf of the System once it was enacted into law.

2. Strong Financial Management. Under the leadership of Executive Vice Chancellor Dan Burck and the outstanding staff associated with the Office of Business Affairs, the U.T. System has developed one of the strongest programs of financial management in U.S. higher education. One mark of their superb performance is the fact that over the past several years all three of the major rating agencies have given a triple-A rating to U.T. System revenue bonds and Permanent University Fund bonds. No other public university in the nation has a triple-A bond rating.

The U.T. System has made very significant progress in efforts related to cost savings, cost avoidance, and revenue enhancement. Documented savings and revenue enhancement of approximately $624 million have been realized since 1993. Those savings have made it possible for the U.T. System component institutions to enhance educational quality during years of relatively flat state appropriations.

I also take a great deal of pride in our progress with Historically Underutilized Businesses (HUBs), a program that has been led with great skill and dedication by Associate Vice Chancellor Lewis W. Wright. HUB purchases by the U.T. System increased from $59.8 million in FY 1993 to $119.9 million in FY 1998.

Dan Burck and his staff have also taken the lead in carrying out the U.T. System’s compliance and risk-reduction initiative, as well as coordinating the System’s work in dealing with the Year 2000 computer problem and our effort to reduce deferred maintenance to a minimum. Former Regent Sam Barshop deserves special recognition for this important priority.

3. The University of Texas Investment Management Corporation (UTIMCO). The reorganization of the U.T. System’s asset management function and the formation of UTIMCO are landmark actions. While preserving regental control of investments, this separate 501(c)(3) corporation ensures that the people of Texas will realize the greatest return on the precious resources that are entrusted to us. Thanks in large measure to the greater flexibility and enhanced oversight made possible by the UTIMCO structure, we have moved in a short period of time from less-than-average performance in managing university assets to slightly-above-median performance among college and university endowment funds. I am grateful for the leadership of former Regent Thomas O. Hicks in establishing UTIMCO and seeing it through its initial years, as well as for the outstanding management provided by UTIMCO President Tom Ricks and his staff. I am confident that over time the creation of UTIMCO will result in hundreds of millions of additional dollars being made available to programs and facilities that benefit the students and faculty of the U.T. and the Texas A&M Systems.

4. Public School Partnerships. I have been very pleased by the U.T. System-related actions and programs that are designed to improve education at all levels. Since its founding, The University of Texas has been a strong partner with the public schools of Texas. The System’s commitment to a seamless continuum of education from pre-kindergarten to post-graduate studies is intense, and our collaboration and impact are escalating. The U.T. System commissioned, in 1994, a system-wide study to determine what we were doing to support the schools of Texas and to make recommendations as to what new initiatives should be taken in the future. Regents Rapoport, Martha Smiley, and Ellen Temple were particularly supportive of the initiative. We found, much to our satisfaction, that U.T. System component institutions were already spending more than $50 million each year from non-state-appropriated funds on dozens of programs and initiatives to assist students and teachers in the public schools. Among our activities is strong support for the Governor’s Reading Initiative, through a wide range of activities related to advanced research, teacher education, and development of learning materials. Vice Chancellor Ed Sharpe, former Acting Vice Chancellor Francie Frederick, former Associate Vice Chancellor Gwen Grigsby, and Associate Vice Chancellor Joe Stafford all deserve special thanks for the leadership role they played in this critical initiative.

5. Governmental Relations. The U.T. System has developed strong governmental relations programs at the state and federal levels. The U.T. System tracks and evaluates more than 1,200 bills each session. Vice Chancellor and General Counsel Ray Farabee and the Office of General Counsel do a superb job in providing legal advice and counsel as to the impact of each of these bills on the U.T. System. While law prohibits us from "lobbying," we are able to educate and inform. We educate and inform in a comprehensive and energetic manner and, in collaboration with component officials, our governmental relations professionals, led by Vice Chancellor Mike Millsap, do an excellent job of interacting with state government officials. As I indicated previously, I strongly believe that U.T. System had the best legislative session it has experienced during the last 20 years. Mike Millsap and his especially gifted senior staff (Tom Scott, Armando Diaz, Amy Shaw Thomas, Lewis Wright, Roger Starkey, Mel Hazelwood, and Larry Crawford) worked tirelessly on behalf of U.T. and all of higher education. For most of my tenure as chancellor, this excellent team also included Gwen Grigsby, who has moved to a new position at U.T. Austin. On the federal level, the System has recently appointed Mark Franz as a vice chancellor to represent us in Washington – an appointment that signals an expanded effort to monitor and have input into federal government statutes and policies that affect the System. Regent Tom Loeffler has been the guiding force as we have developed our Washington presence.

6. Distance Education. I am enormously excited by the progress we have made with the System’s telecommunications and information technology initiative. The UT TeleCampus was inaugurated a year ago, and instruction will begin in the first two totally Web-based graduate programs, in business management and educational technology, this fall. I am quite optimistic that we will have as many as eight new graduate and undergraduate programs, plus a substantial number of new System-wide enrichment courses, available through the U.T. Telecampus for Fall 2000. The System will continue to broaden such online course offerings to meet the diverse educational needs of a rapidly changing society. Other aspects of the initiative, such as the System-wide digital library, are flourishing. Vice Chancellor Mario Gonzalez, Darcy Hardy, and the rest of the staff have done a masterful job of managing this initiative. Regents Martha Smiley and Tony Sanchez have been particularly strong and effective advocates for distance education.

7. Private Philanthropy. Major progress also has been recorded in the ability of institutions throughout the System to attract private-sector support. Philanthropy has a vital role in the support of public higher education, and I am delighted to note that private support has increased from $240 million in FY 1993 to $365 million in FY 1998. Vice Chancellor Shirley Bird Perry and members of her staff have been instrumental in assisting the component institutions in implementing comprehensive and highly professional fund-raising programs. The presidents of the components and their development staffs deserve our special gratitude for their dedicated pursuit of increased private support. Several special campaigns are underway or in the planning stages at System institutions, and I am confident these will be successful. We thank our friends who understand the critical need for private support for our U.T. institutions.

8. Managed Care. U.T. System health institutions have worked hard to restructure their health care delivery and other program activities so that they may operate effectively in a national and state health care environment dominated by managed care. Design and implementation of strategic plans to address the dramatic impact of changes in health care delivery represent a formidable challenge. Executive Vice Chancellor Charles Mullins, Vice Chancellor James Guckian, and the presidents of our health institutions have risen admirably to this challenge. It is also gratifying that the Legislature in 1995 approved key changes in the way M.D. Anderson Cancer Center is managed and approved similar changes for the U.T. Medical Branch in 1999 – changes that have allowed these unique institutions to continue to fulfill their mission in the fight against cancer and also to remain strong components of the U.T. System. Former Regent Tex Moncrief's early support of our efforts in helping the U.T. System adapt to the changes in the health care system meant a great deal to me.

9. Educational Opportunities for all Texans. With regard to the challenge of maintaining educational opportunity while complying with the Hopwood decision, I am particularly grateful for the work of Vice Chancellor Farabee and Francie Frederick, formerly acting vice chancellor for academic affairs and now executive secretary to the Board of Regents, as well as President Larry Faulkner and his extraordinarily talented admissions staff at U.T. Austin, and the presidents and admissions personnel of the System’s medical schools. While I have often commented that the pursuit of access and equity is not a race for the short of wind and, while I recognize that much work remains to be done, I believe we have made substantial, and even historic, gains over the past several years.

10. New Component Presidents. During my tenure as chancellor, the Board of Regents has appointed nine presidents to lead the System’s component institutions. This is one of the most critically important functions of the board, which has played a very active and thoughtful role in carrying out its responsibilities. It is particularly important to recognize the contributions of former Regent Lowell Lebermann in revising the board’s procedures for conducting presidential searches. I have been honored to provide the regents with my candid counsel regarding these appointments. I am enormously pleased that we have been able to attract renowned academic leaders for these positions, and I am proud of the outstanding jobs they are doing. The presidents who have been appointed during my tenure as chancellor are Robert Witt at U.T. Arlington, Robert Berdahl and Larry Faulkner at U.T. Austin, Franklyn Jenifer at U.T. Dallas, Charles Sorber at U.T. Permian Basin, Ricardo Romo at U.T. San Antonio, Rodney Mabry at U.T. Tyler, John Stobo at the U.T. Medical Branch at Galveston, John Mendelsohn at M. D. Anderson Cancer Center in Houston, and Ronald Garvey at the U.T. Health Center at Tyler.

11. Regional Academic Health Center. The U.T. System has been proud to join in partnership with communities throughout the Lower Rio Grande Valley and in Laredo in planning and developing the new Regional Academic Health Center, which will bring expanded health professional education programs to this long under-served region. With outstanding leadership from Regent Tony Sanchez, and with the continuing wise counsel of Executive Vice Chancellor Charles Mullins and Vice Chancellor James Guckian, the Board of Regents has inaugurated the RAHC by approving four sites in the Valley (in Harlingen, Brownsville, Edinburg, and McAllen) that will enable us to fulfill the mandate of the Legislature. I have been proud to participate in this historic project.

In this statement, I have been able to cite only a few of the basic priorities and initiatives during my tenure as chancellor. Among the other important areas I could have mentioned include efforts and activities associated with strategic planning, legal services, faculty and staff compensation, System-wide communications and a coordinated System-wide communications plan, retention and graduation programs, the capital improvement plan, the focus on campus master plans, and the many responsibilities of the System Administration that are designed to assist the component institutions. In addition to value added, we are able to achieve substantial economies of scale which are afforded by System Administration offices and personnel.

I would like to thank, in particular, the five chairmen of the Board of Regents with whom I have had the pleasure of serving. Jess Hay took a chance on hiring a 41-year-old business school dean to be president of U.T. Austin back in 1985, and I shall forever be thankful for his confidence in me and his unfailing support through the years. Jack Blanton was a chairman of incomparable vision and dedication, a man who always strove to uphold the public interest in maintaining strong and dynamic educational institutions. Louis Beecherl always focused on the demand for excellence in everything the U.T. System undertakes, and he always did this with admirable directness and candor. Bernard Rapoport was dedicated during his chairmanship to one overriding concern – what is best for the U.T. System and for the young people of Texas. And Don Evans, the current chairman, has been an unfailing source of support, of wise management, and of deep compassion for the welfare of the new generations of Texans who will share in what he is fond of calling "the magnificent treasure" of The University of Texas.

I must also underscore that no chief executive officer of any private or public organization has ever been better served by his or her immediate support staff. Executive Associate to the Chancellor Joyce Moos, Connie Saathoff, and Mary Kaszynski have all been with me for at least 14 years. Becky Boyer, assistant to the chancellor, and Bea Sanchez have worked with me for seven years, and Elaine Moore for less than one year. They work hard, work smart, and are dedicated to serving the people of Texas. I owe them a deep sense of personal gratitude for all that they have done to make me look good and serve our students, faculty, and staff in an efficient and productive manner. I am also greatly indebted to Monty Jones, director of news and public information, for his many contributions and dedicated service.

I want to conclude this statement by saying once again that it has been a high honor for me to be chancellor of The University of Texas System. I have been surrounded by friends and colleagues both inside and outside the formal U.T. System community who have done their best to ensure that the U.T. System and its components are at the cutting edge of undergraduate and graduate education, research, patient care, and public service. This has truly been an exciting time to serve as chancellor.

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Cunningham Chronology