Ohio State continues belt-tightening measures

Efforts will help shore up endowment and credit rating

In an effort to protect the university's resources in a time of continued uncertainty in the state and national economies, the university's Board of Trustees has approved several measures recommended by the administration to rein in spending and control borrowing. These plans -- which include decreasing the payout from the university's endowment and setting more stringent guidelines on how and when the university takes on debt for capital projects -- are designed to continue Ohio State's efforts to tighten its belt and improve its fiscal stewardship during this period of economic uncertainty.

"These actions are necessary to preserve two of the university's most valuable financial assets: its endowment and its good credit rating," Bill Shkurti, senior vice president for business and finance, told trustees at the Dec. 5 meeting.

The university's endowment -- which ended the last fiscal year with a value of $956 million -- is funded by gifts from donors and grows largely on the strength of its investments. Recent declines in the stock market have adversely affected the endowment's growth, Shkurti said.

A continuation of the current distribution policy could have undesirable consequences, he said. For example, assuming a payout of 5 percent, plus expenses, and an inflation rate of 2.5 percent, the endowment must grow 9.13 percent annually to preserve the value of a donor's original gift.

"Maintaining the confidence and trust of
donors is extremely important to us," said James Schroeder, vice president for development. "These actions will allow us to assure them that the value of their original gift will be preserved even in a period of market decline."

Important steps the university will take to counteract these declines include reducing the payout rate on funds currently in the endowment and additional gifts to those funds from 5 percent this year to 4.75 percent in fiscal year 2005 and 4.5 percent in FY 2006. For new funds beginning in fiscal year 2005, the payout rate will be 4 percent. The university will report back to the trustees regarding proposed payout rates for FY 2007 and FY 2008, but any payout will be limited to a 3 percent increase or a 1 percent reduction.

The university also will now calculate payout amounts based on a five-year rolling average rather than a three-year average. This will give the university a more predictable picture of the endowment's value and will help the university better address the peaks and valleys in the stock market.

"Adopting a predictable range for future endowment distributions will help us assure the colleges and other units of a predictable stream of income while at the same time protecting the value of the endowment," said Jim Nichols, university treasurer.

Reducing the payout to academic and support units will cost colleges nearly $12 million in lost revenue during the next four years, Shkurti said. Particularly hard hit will be the College of Engineering, which will lose nearly $2 million of revenue from the endowment; the Fisher College of Business, which will lose $1.6 million; the College of Food, Agricultural, and Environmental Sciences, $1.5 million; the College of Medicine and Public Health, $2.7 million; and the Moritz College of Law, nearly $1 million.

"Although these actions will present challenges to our academic units, we are working to minimize the effects on our academic units so that we can continue to work toward the goals of the Academic Plan," said Barbara Snyder, interim executive vice president and provost. "As these decisions have been made, we have communicated broadly with deans and chairs, and we will continue to keep the campus informed as we seek ways to help colleges absorb these losses."

In addition, the university will decrease the amount it takes from the endowment to support development efforts from 1.33 percent this year to 1 percent in FY 2007. This means the university will have to find other sources for approximately $3 million in continuing funds over the next four years to replace the operating funds lost by the Office of University Development. Officials will report back to the board early next year with their proposals.

Policies address debt and credit for capital projects

The university, which in the past has aggressively used university-backed debt to help finance capital projects, also set guidelines that limit the amount of new debt it will take on and capped at $400 million the amount of capital projects the university will fund in its next bond issue. The university also will freeze for 12 months bonding for new projects that have not already been identified and approved.

Current capital projects that will continue as planned are renovations of the Main Library, Robinson Lab, Smith Lab and Brown Hall, as well as new buildings for psychology and the student recreation center, and the expansion of the Comprehensive Cancer Center.

"Using university-backed debt has not been a problem in the past because our debt ratios were very low," Shkurti said. "But over the last 10 years, we've issued a substantial amount of new debt to finance needed facilities, and now we need to be concerned that we are approaching our capacity at our current credit rating.

"Addressing the issue now will allow us to meet our current commitments, as well as retain enough capacity to meet a limited number of new commitments consistent with our Academic Plan," he said. "Failure to address this issue could result in a rating downgrade, which would cost the university higher interest rates on future projects."

A similar set of guidelines defining when internal lines of credit will be granted to academic and support units also was approved.

News briefs

Recent news items in an abbreviated format.

NCAA certifies university's athletics program

NCAA officials have notified President Karen Holbrook that the university's athletics program has been re-certified, indicating that the program operates "in substantial conformity with principles adopted by the association's Division I membership." Holbrook received the letter following action taken by the NCAA Division I Committee on Athletics Certification during its meeting Oct. 22-23.

The certification follows the university's self-study, in which four committees broadly representative of faculty, staff, students and the community, comprehensively reviewed the athletic operation's overall integrity and compliance. The process also included a visit April 13-16 from a peer-review team made up of representatives from other colleges, universities and conference offices. The team then reported back to the NCAA's Certification Committee. The university first was certified in 1996 following a similar process.

Petry named acting university police chief

John Petry has been appointed acting chief of the University Police Department by Vernon Baisden, assistant vice president and director of public safety. Petry is a 25-year veteran of the university's police force. A search for a permanent replacement for former chief Ron Michalec, who left the university, will begin this year. During the next several months, the university will review the needs of the police department, re-engineer some aspects of the Department of Public Safety and conduct a self-assessment of its overall strategic public safety plan.

OSU's lab animal program is accredited

Ohio State's program for using animals in research once again has been accredited by the national organization responsible for overseeing such work. The Association for Assessment and Accreditation of Laboratory Animal Care International informed the university last week that it had earned "full accreditation," the top rating the organization bestows. The accreditation recognizes excellence of both the institution's University Laboratory Animal Resources operation and the Institutional Laboratory Animal Care and Use Committee, a federally mandated institutional review board charged with monitoring all use of animals in research.

Entrepreneurship center starts outreach program

The Center for Entrepreneurship at the Fisher College of Business has launched a free outreach program designed to provide budding entrepreneurs with the tools to transform their ideas into reality. Titled "Ideas to Business," the program combines online resources with in-person consulting services.

The Center for Entrepreneurship is teaming with Accenture, a global management consulting, technology services and outsourcing company, on the program. Accenture has committed $300,000 over the next three years in a combination of cash and in-kind services. In addition, the Coleman Foundation has pledged $25,000 in support for the 2003-04 pilot program.

Individuals can use an online entrepreneurship model to see the steps that need to be implemented before launching a new business. In addition, they can work closely with undergraduate and graduate student consultants and the consulting committee for marketing support, financial analysis and assistance with business plans. The entrepreneurship model is available online at www.centerforentrepreneuship.com. For more information, contact the center at 292-4085.

MBI receives funds

The Mathematical Biosciences Institute (MBI) has received a contract from Pfizer to carry out research in pathodynamics of drug induced hepatotoxicity. The project will involve faculty and students from four departments: mathematics, statistics, computer science and pharmacogenomics. The project will seek to create mathematical models, statistical procedures and computational algorithms to help Pfizer better understand liver toxicity that arises in clinical trials.

Funded by the National Science Foundation and Ohio State, the institute opened in Autumn 2002 with a first-year focus on mathematical neuroscience. This year, the theme is the mathematical modeling of cell processes. In addition to offering workshops and tutorials for researchers across the nation who come to Ohio State to participate, the MBI encourages collaborations within the Ohio State community as well.

Krenzel named to Academic All-America team

Ohio State quarterback Craig Krenzel has been named to a first-team berth on the CoSida Academic All-America team. Additionally, Krenzel, a senior with a 3.68 grade point average in molecular genetics, was selected as the 2003 Academic All-American of the Year. He is the first Ohio State student-athlete to win the latter honor.

The 24-man first-team was announced recently by the College Sports Information Directors of America (CoSida), whose membership selects the team. To be eligible, a student-athlete must have a GPA of at least 3.2 on a 4.0 scale. Krenzel was a second-team selection last year. He also is one of 13 college football seniors who were honored in New York City as recipients of the $18,000 National Football Foundation and Hall of Fame Scholarship.

Krenzel, whose record on the football field is an equally impressive 23-3 in games that he has started, is also a nominee for the NCAA's prestigious Top VIII Award, which is presented annually at the NCAA convention. Krenzel is the 25th Ohio State player to receive Academic All-American honors.

Holiday Recipes

onCampus thanks all the faculty and staff who answered our call again this year for holiday recipes. Happy cooking and enjoy the season!

Chocolate Chip Cheeseball

8 oz. cream cheese

1/2 cup softened butter

1/4 teaspoon vanilla

3/4 cup confectioners sugar

2 tablespoons brown sugar

3/4 cup mini chocolate chips

3/4 cup finely chopped pecans

Mix all but the pecans into a smooth mixture and form a ball. Roll the ball in pecans. (Add a few extra chocolate chips if you like.) Wrap in plastic wrap, and chill overnight. Serve with graham crackers or the new graham sticks.

-- LINDA JONSSON, office associate, Ohio State Marion

7 Layer Cookies

1 stick margarine

1-1/2 cups graham cracker crumbs

1-1/2 cups coconut

1 bag chocolate chips

1 bag butterscotch chips

2 cans Eagle Brand sweetened milk

1-1/2 cups crushed pecans

Melt the margarine in the bottom of a 9 x 13 cake pan. Throw the graham cracker crumbs in and mix well, lining the bottom of the pan with the graham cracker crumbs. Throw the coconut along the bottom - on top of the graham cracker layer. Next the chips ... no matter the order. Then cover the entire mixture with the Eagle Brand milk (non-brands work too). Top with pecans. Bake at 375 degrees for 1/2 hour. You have to scoop out a spoonful while it's still gooey and eat with a big glass of cold milk. Then once it sets, cut into squares for everyone else.

-- VALORIE VALENTINE, office associate, Human Resources

Pumpkin Logs

For 4 Logs (16 pieces, depending on the cut):

Bread:

10 eggs

4 cups flour

1 can (29 oz.) of pumpkin

5 teaspoons baking soda

4 cups white sugar

2-1/2 cups chopped pecans (optional)

2-1/2 teaspoons ground cinnamon

4 tea towels

Filling:

8 tablespoons margarine or butter

24 oz. cream cheese, softened

3 teaspoons vanilla

4 cups powdered sugar

1 cup Cool Whip

Preheat oven to 325 degrees. Grease a 10 x 13 cookie sheet. Line with wax paper and then grease the wax paper. Mix separately the ingredients for the bread with a mixer and the filling with a food processor for best results. Pour 2-1/2 cup bread mix on cookie sheet and spread evenly. Sprinkle nuts over dough and lightly press down into the batter (optional). Bake for 10-12 minutes. Upon removal, sprinkle with sugar then cool for a few minutes. Roll up the bread with sugar/nut side down in the tea towel and refrigerate until cool. Remove from refrigerator, unroll, and remove wax paper. Spread appropriate amount of filling evenly over side that previously had wax paper on it. Re-roll the log while removing the tea towel onto plastic wrap (for storage) simultaneously. Refrigerate. For longer storage before consumption, place in freezer.

-- RICH THOMAS, research associate 1-b/h, Health Sciences

Sesame Beef Steak

2 pounds round steak -- cut into bite-sized strips

1 cup Italian salad dressing

3 tablespoons sugar

1 tablespoon soy sauce

1-1/2 tablespoons sesame seeds

Combine Italian dressing, sugar and soy sauce. Marinate steak in mixture for 2 hours. Take steak from marinade with slotted spoon to remove some of juice. Brown steak in skillet then add sesame seeds. Transfer meat into crock pot. Add remaining marinade and simmer on low heat for 2 to 3 hours.

-- CHERI WISE, business services officer 1, Ohio State Lima

Turtles

Grease cookie sheets with cooking spray.

Place 3-4 nut clusters of whole roasted and salted pecans (or large cashews) on the sheets. Makes 6 dozen.

Bring to boil:

2 cups light corn syrup

1-1/2 cups sugar

Pinch of salt

Add slowly so it doesn't stop boiling:

1/2 cup margarine

2 cans sweetened condensed milk

Stir constantly to prevent scorching!

Boil to 242 degrees.

Remove from heat and add:

1 teaspoon vanilla

Drop with a tablespoon onto the nut clusters. Cool. Dip in melted chocolate.

Carmel also can be used for 20-25 carmel apples or poured into a 9 x 13 greased pan, cooled, cut and wrapped in wax paper as carmels.

-- TAMI SMITH, office associate, Athletics

Cabbage Roll Casserole

2 pounds ground round

1 medium onion (diced)

2 cans tomato soup

1/2 cup uncooked rice

1 can sauerkraut

1 tablespoon brown sugar

1 large head of cabbage (savoy cabbage works best)

Season to taste (pepper, garlic salt, parsley flakes)

Brown onions and ground round. Add tomato soup, rice, sauerkraut, brown sugar and seasonings. Simmer for 10 to 15 minutes. Cut cabbage and place in bottom of a roasting pan. Pour ground round mixture over cabbage (do not mix — poke with fork several times). Bake at 350 degrees for 1 to 1-1/2 hours. Tastes like cabbage rolls. Also works in a crock pot.

-- ROSS MCCLAIN, safety engineer, Business and Finance

Pumpkin Banana Mousse Torte

For the crust:

2 cups graham cracker crumbs

1/3 cup sugar

1/4 teaspoon ground cinnamon

1/4 pound (1 stick) unsalted butter, melted

For the filling:

1/2 cup half-and-half

1 (15-ounce) can pumpkin puree

1 cup light brown sugar, lightly packed

3/4 teaspoon kosher salt

1/2 teaspoon ground cinnamon

1/4 teaspoon ground nutmeg

3 extra-large egg yolks

3 teaspoons (1 1/2 packets) unflavored gelatin

1 ripe banana, finely mashed

1/2 cup cold heavy cream

2 tablespoons sugar

For the decoration: (Whipped topping may be substituted)

1 cup (1/2 pint) cold heavy cream

1/4 cup sugar

1/2 teaspoon pure vanilla extract

Orange zest, optional

Preheat the oven to 350 degrees.

Combine the graham cracker crumbs, sugar, cinnamon and melted butter in a bowl with wire whisk and mix well. Pour into an 11-inch tart pan with a removable bottom and press evenly into the sides and then the bottom. Bake for 10 minutes and then cool to room temperature.

For the filling, heat the half-and-half, pumpkin, brown sugar, salt, cinnamon and nutmeg in a heat-proof bowl set over a pan of simmering water until hot, about 5 minutes. Whisk the egg yolks in another bowl, stir some of the hot pumpkin into the egg yolks to temper (heat) them, then pour the egg-pumpkin mixture back into the double boiler and stir well. Heat the mixture over the simmering water for another 4 to 5 minutes, until it begins to thicken, stirring constantly as you don't want the eggs to scramble. Remove from heat.

Dissolve the gelatin in 1/4 cup cold water. Add the gelatin and banana to the pumpkin mixture and mix well. Set aside and cool completely.

Whip the heavy cream in the bowl of an electric mixer fitted with a whisk attachment until soft peaks form. Add the sugar and continue to whisk until you have firm peaks. Carefully fold the whipped cream into the pumpkin mixture and pour it into the cooled tart shell. Chill for 2 hours or overnight.

For the decoration, whip the heavy cream in the bowl of an electric mixer fitted with the whisk attachment until soft peaks form. Add the sugar and vanilla and continue to whisk until you have firm peaks. Pipe or spoon the whipped cream decoratively on the tart and sprinkle, if desired, with orange zest. Serve chilled.

-- ANTHONY WRIGHT, office associate, Neuroscience

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