Chancellor Larry Vanderhoef recently talked with Dateline about the contrasts between today's state funding challenges and those of the early 1990s, and about March 2 bond measures, the campus's upcoming comprehensive campaign and the state of campus-community relations.

Dateline: You were the provost and then the chancellor during the last major budgetary cut to the university. How does today's budgetary circumstance compare to the one the campus had to handle in the early 1990s?

Vanderhoef: In certain ways, our fiscal challenges today are greater than they were during the recession of the early 1990s, when the university had to contend with a 25 percent cut in its base budget and student fees doubled.

This time, so far, we have not reached a 25 percent cut in our base budget, but we will be cutting each year at least through 2005-06. More important, the cuts this time are difficult because they are more specific and do not permit us our previous flexibility in determining how best to absorb them. One prime example is the proposed elimination of all funding for our K-12 outreach programs, though we remain hopeful that some funding will continue to be provided.

The governor's proposed budget for 2004-2005 makes lots of cuts and specifically identifies fee increases to compensate for many of those cuts. Some of those increases are tolerable, in so far as fee increases of any kind are tolerable, but others are very troublesome and costly. The true "hurt" of these proposed budgetary cuts seems to be growing as we better understand them.

Dateline: What are some examples?

Vanderhoef: Our law school, for example, would find it very difficult to assess an additional $5,000 in fees per year on top of the $17,000 in-state students are already paying. Whether or not the school can remain competitive for the best students with this higher cost is a real question with which we will have to grapple.

Regarding the 40 percent increase in graduate student fees, the costs here are very high, but they would not necessarily settle on the shoulders of the graduate students. Why? Because graduate students, for the most part, have their fees paid by the university, in the case of teaching assistants, or by the granting agencies that fund research assistantships. The burden here would fall to the faculty who have gotten those grants and on the university, which pays graduate student teaching assistants' stipends and fees.

President Dynes and all of UC's chancellors are making a reduction of these proposed graduate student fee increases a top priority in budget negotiations.

The governor's proposal to curtail freshman enrollment by 10 percent, and also to increase the student/faculty ratio from 19.7 to 1 to 20.7 to 1, means cuts of millions of dollars. Currently we intend to get back to our more reasonably paced enrollment plan that is intended to handle the new, UC-eligible students that are headed our way right now. But we have learned from hard experience that there's little chance the student/faculty ratio will be readjusted when times get better. The ratio, for example, was 17.0 to 1 when I arrived at UC Davis in the mid-'80s.

Dateline: Are there lessons that were learned a decade ago that can be applied today?

Vanderhoef: There are several. First, the process has to be transparent to everyone, and everyone has to have a chance for input. We also benefited greatly from a program developed in 1992 and reinstituted now -- we turn ourselves inside out to make sure people who are laid off land on their feet with a new job, including retraining them if needed. And we have to continually resist the temptation to simply hunker down. We must continue to do new things, make new hires, start new programs and build new buildings. We need to keep moving forward, understanding that these tough times for the university do pass. New buildings and new programs remind us all that tomorrow will come, and it will not be as difficult as today.

Dateline: You make the case for continued investment, even in tough times. Could you give an example of a high-priority area for investment?

Vanderhoef: We are guided by our strategic plan, and I'll give two examples identified in that document.

A comprehensive fund-raising campaign is essential at this state in the evolution of UC Davis. It holds great promise for us. For example, over a seven-year period we could bring in up to an additional $400 million to be spent on university needs. But that additional money does not come to your door and ring the bell. It comes only with an investment and hard work. And it is a great investment -- $1 spent brings about $6 in gifts.

But when one is talking about an additional $400 million in gifts, that requires an investment of about $60 million over the seven years. That's a lot of money in any circumstance, and certainly a lot to be spending during a difficult budgetary time. But it is a strategic investment with a very advantageous rate of return that will benefit us all.

Some of that investment might be raised through a gift fee, but we will still need to invest some of our own dollars in order to generate more dollars down the road. If we're to be successful, we have to hire more advancement professionals, we have to conduct periodic survey research to help us better understand potential donors much better than we now do, and we have to convincingly make our case that UC Davis deserves ever-greater support.

Another area of smart investment for us is facilitating research proposals. We've nearly doubled funds awarded over the past five years. And with funding agencies issuing greater numbers of larger grants for multidisciplinary work, we have a distinct advantage in competing for those funds. I know firsthand, from my service on the National Science Foundation Biology Advisory Committee, that no campus nurtures and values collaborative, multidisciplinary work more than we do.

Dateline: In the face of our current budgetary challenges, are you optimistic about the university's future?

Vanderhoef: I am always the optimist when it comes to this campus. I have watched us operate in good times and bad for almost 20 years. I think we will figure this current challenge out, and know what we have to do to meet the needs of the state, but at the same time not compromise at least the long-term possibilities for the campus.

I'm encouraged, as well, by President Dynes' early conversations with Gov. Schwarzenegger and his team. They understand well the value of UC to California and indicate they are prepared to reinvest in UC when the state's finances improve. And we're also taking the necessary steps to initiate a comprehensive campaign that will raise ever-higher levels of philanthropic support for this campus. All of that makes me optimistic about our future.

Dateline: Does the campus have a lot riding on the passage of Proposition 55, the Kindergarten-University Public Education Facilities Bond Act?

Vanderhoef: If voters approve the bond measure, UC Davis would receive upwards of $113 million for needed facility improvements -- the largest amount of any UC campus. Only once during my nearly 20 years at UC Davis has such a bond failed; it was in 1992 during our last fiscal crisis. That worries me lots because these construction and renovation projects are terribly important to the campus.

Projects range, for example, from seismic corrections for seven buildings to construction of the Mondavi Institute for Wine and Food Science and expansion of the Campus Wastewater Treatment Plant. Other projects will benefit life sciences, physical sciences, veterinary medicine, medicine, law and music.

Dateline: Has the university taken a position on the governor's deficit bond measure, Proposition 57?

Vanderhoef: I know polls are showing that people are concerned about that bond measure and that some may feel that voting against the bond would force the governor to put taxes on the table, along with budget cuts and loans, as a way to resolve California's multi-billion-dollar deficit. Many within the university, though, view both bonds as necessary -- one for UC's short-term need to stave off further deep budget cuts and the other for the long-term need to meet the university's continuing construction and renovation needs. If the deficit bond fails, the governor and the Legislature will almost certainly have to cut deeper, and UC would be quite vulnerable.

Dateline: The campus has been served recently with two lawsuits -- one filed by a group of West Davis residents who live across the street from the planned university neighborhood and oppose that project, and the other by a local attorney who argues that the hotel/conference center would drive other hotels out of business and cause blight in downtown Davis. Are you concerned about the outcome of these suits?

Vanderhoef: In both cases, we have been very responsible and quite responsive to community concerns in our planning. I have faith that a judge will agree that we have done things correctly, that we have more than met our obligations.

Both projects are very important to the university's future. The neighborhood will help us provide affordable housing for our faculty, staff and students. We just won't be able to continue to recruit the best people if we can't counter the sticker shock of escalating housing prices. And with its greenbelts, schools, education center, innovative energy and transportation systems, the neighborhood will be a place, like Aggie Village and Davis Commons, about which we all can be proud.

The hotel/conference center will also be a wonderful boon to the campus, to the city and to the county. But I worry that this second lawsuit -- the first, which raised similar issues, was defeated by the university -- could jeopardize the developer's financing and delay the project till interest rates are not as favorable. If the project doesn't go forward, the county would also stand to lose some $300,000 per year in tax revenues, and other hotels that would benefit from large conferences that exceed the hotel's 75 rooms would not see that added business, nor would local restaurants benefit from the added diners brought to town by these conferences.

The hotel/conference center has been endorsed by the Davis Area Chamber of Commerce, the Davis Downtown Business Association and local hotel owners, and it has the support of the Yolo County Board of Supervisors.

Dateline: These lawsuits suggest some increased tension in campus-community relations. How do you view current relations with the city?

Vanderhoef: There's no doubt that relations with the city have been a bit strained the last year or two. I agree with (Yolo County Supervisor) Helen Thomson's observation that the biolab was the most difficult issue with which the city and the university have grappled. The neighborhood is the other. But, on the whole, I believe -- and periodic independent surveys have shown -- that the Davis community is highly supportive of the university and all that it does to enrich our collective quality of life.

That said, we're very mindful of the need to communicate as fully as we can and to work as collaboratively as we can with our Davis neighbors.

Toward that end, for example, we've created a newsletter -- it's called Keeping in Touch -- that is now being mailed each quarter to some 27,500 residences in Davis. And incoming Davis Mayor Ruth Asmundson and I have pledged to work very hard to ensure an open, honest and respectful dialogue about issues of importance to the university and to the city.