Tim Steller's column: U of A's aggressive moves risk long-term problems

That means it's time for some big moves by the University of Arizona as the administration pushes to right the ship financially after the disaster of 2023-25.

They have moved aggressively, breaking up the university's 53-year-old Health Sciences division and separately putting in place what some call an "accounting trick" to boost their days of cash on hand.

It strikes me as good that they're being aggressive. The university's chief financial officer, John Arnold, reported to the Board of Regents this month that the U of A only added one day's worth of cash on hand during the fiscal year that ends June 30. 

That leaves the university with 78 days of cash on hand, a measure of financial performance that represents the amount needed to cover operating expenses for a day. The university is still 65 days short of the minimum, 143 days of cash on hand, established by the regents. So yes, they have to continue moving aggressively.

But with the latest moves, I can't help but worry they are being penny-wise and pound-foolish. By making moves that could discourage donors and breaking up one of the university's most famed units, they are risking saving money now but losing it over the long run, and costing Tucson its place in the health field at the same time.

And of course, they're doing it in the summertime, when many people who might object are not around.

"That's a tried and true administrative tactic," said Leila Hudson, who is chair of the faculty. 

Donation shifts

Take the move to shift about $70 million in endowment interest out of the control of the UA Foundation and into the control of the university proper. 

In her story in Monday's paper, my colleague Prerana Sannappanavar quoted a donor referring to it as an "accounting trick or scheme." That strikes me as right because it is unclear that the conditions of a given donation would allow the interest to be used for the university's general daily expenses. 

There are unrestricted donations to the university, which could be used for anything, but there are other donations with narrower conditions or objectives. Yes, the university has allowed donors to opt out of this new system, but it appears to be a way to bolster days of cash on hand with money that wouldn't all necessarily be eligible to cover the university's daily expenses. 

That could raise concerns among donors, who already have other recent reasons to be a bit worried. 

Take the 2016 donation of former Gov. Raul Castro's boyhood home in Nogales. The Board of Regents accepted it on behalf of the university for the purpose of housing a border studies program there, but in 2023 abandoned that plan, citing costs it couldn't cover, and put the house up for sale.

Beth Castro, the daughter of the former governor and his wife Patricia, sued and won a six-figure settlement plus the house back. 

Or consider the 2015 donation of Ruth "Bazy" Tankersley's Al-Marah equine center in the Tanque Verde Valley. The university agreed to move its equine program there, but when a 10-year restriction on the UA's use of the property was up, the university moved quickly this year to sell it.

It's understandable the UA would choose to abide by the letter of such agreements in a time of financial shortfall. But the message I take from all this is that the university will push its prerogatives to the limit when it comes to using these donations, as it works to save pennies and nickels and add a few days of cash on hand.

That could make donors more hesitant to contribute in the long run.

Reshaping health sciences

The breakup of the Health Sciences division makes sense when you think of it in terms of administration and organization, not in terms of heritage. The last senior vice president for health sciences, Dr. Michael Dake, was hired by his friend, then-UA president Robert Robbins, and ultimately made a salary of about $1 million.

That position doesn't exist anymore, as the UA is dismantling the entire Health Sciences division, cutting around 28 jobs as well. Instead of reporting to their own senior vice president, the colleges of medicine in Tucson and Phoenix, college of nursing, college of pharmacy and college of public health will report through the provost, like other academic units. 

In answering my questions about the change, UA spokesman Mitch Zak said by email that it will allow greater interdisciplinary collaboration and fashioned it as more of an administrative restructuring than anything. 

"There is a significant difference between institutional reputation and organizational structure," Zak wrote. "Changes to an administrative reporting structure do not diminish the university's commitment in health education, research or clinical care. Any equating of changing administrative structure with reduced support for the health sciences is unsupported by the facts."

But there's a creeping feeling that the U of A's and Tucson's place as the primary place in Arizona for health sciences has slipped. Arizona's first college of medicine was founded here in 1967, and beginning in 1973, the colleges of medicine, pharmacy, nursing and public health were organized into a Health Sciences division. The first dean of the college of medicine and first vice president in charge of health sciences was Merlin "Monte" DuVal, father of former Regent Fred DuVal.

This health sciences unit built a name as the beating heart of health education and research in Arizona over those decades. Robbins, a medical doctor himself, famously emphasized health research, and a cutting-edge, nine-story Health Sciences Innovation Building opened under his watch in 2019.

Those advantages that the U of A and Tucson had seem to be slipping away, though. First, in 2007, the U of A opened its new medical school in Phoenix. In 2017, the 10-story Biomedical Sciences Partnership Building opened as part of the Phoenix Biomedical Campus, housing the medical school and other functions. And now, though reduced in size, the UA's Center for Advanced Molecular and Immunological Therapies is under construction in the same area of Phoenix.

Plus, in April, Arizona State University welcomed the school's inaugural medical school class. The new building for the John Shufeldt School of Medicine and Medical Engineering is expected to open in 2028.

Branding vs. legacy

While the administration insists the five colleges that made up health sciences remain as prominent and vital as they were, I can't help but see the loss of an advantage that the U of A and Tucson had in those areas. 

Zak told me by email, essentially, not to worry about the Health Sciences brand. 

"The University of Arizona is the brand. Health Sciences is an administrative unit," he said. 

Let's hope the world sees it that way. It would be a shame in both the fundraising realm and this reorganization to save just enough money to add a few days of cash on hand, but lose long-term relationships and advantages that the university depends on.