RWB

There was a very good editorial about the Rice-BCM merger in the Chronicleyesterday. It completely avoided such fuzzy pollyanna words as "synergy" and "prestige" and looked instead at BCM's finances.

The proposed merger is actually an acquisition by Rice University. BCM is on shaky financial footing and its current situation is not financially tenable (see publicly available financial documents at http://www.bcm.edu/oor/ and http://www.dacbond.com). Over the past six-year period from 2004 to 2009, BCM’s operating expenses have exceeded its revenues by more than $300 million; the largest annual loss ($72 million) was incurred in the most recent fiscal year, ending June 30, 2009. Meanwhile, its debt has ballooned eightfold, to more than $850 million, an amount exceeding its endowment.

The editorial then examined all of BCM's sources of income and discussed the level of risk or volatility associated with each.

About half of the $1 billion-plus budget comes from hospital contracts and medical services, that is, from fees collected from insurance companies, Medicare, Medicaid and others, to provide medical treatment to patients. Another third comes from grants and contracts to perform biomedical research; most of these funds are from the National Institutes of Health (NIH). The rest comes from a variety of sources, including an annual payment from the state of Texas that currently amounts to $50 million, return on the endowment that is around $60 million, and philanthropy, which varies in the range of $20 million to $40 million annually. The problem, as we see it, is that these revenue sources are fundamentally unpredictable. The health care reform bills currently under consideration by Congress may result in significant changes to health care receipts. In these trying times, will the federal government continue to fund the NIH at its current rate? Will the state of Texas be able to afford BCM’s subsidy in the future? No one knows the answers to these questions with certainty.

But Rice is pretty rich, right? So Rice should be able to fill in for any BCM shortfall. Not so fast.

What is certain, however, is that Rice cannot afford to support BCM as is, and will certainly be unable to do so if there is a significant decline in any of these revenue sources. Rice derives approximately half of its operating budget from earnings on its endowment. Because of the recent financial crisis, Rice has seen its operating budget reduced by 5 percent in each of the past two years. While the magnitude of the cuts is small in comparison to BCM’s operating deficits, the cuts are deeply felt at Rice. Departmental budgets have been cut to the bone, and most seriously for the longer term, faculty positions open due to retirement and normal attrition are going unfilled, with potentially severe impact on the quality, or even the viability, of academic programs.

They conclude with a statement that perfectly echoes my own fears.

We aspire to stand among the world’s greatest universities. Can this vision be attained more quickly by diverting our course and merging with BCM, or will Rice simply become a medical school with a small, and possibly impoverished, university attached? Nobody knows for sure, but we firmly believe that merging poses an unacceptable risk to Rice University.

I am not a faculty member nor a staff member of Rice University--just a concerned alumnus. I am very happy to see someone actually looking at the numbers for a change instead of speaking in abstractions. Mergers in the business world often destroy shareholder value--but they certainly build up the egos of CEO and attract lots of adoring press reports. I think Rice+BCM is starting to look like AOL+TimeWarner.

Like I said, it matters little what you, I, the alumni on either side or anyone else thinks. If being ill informed is working for a departmental head at one of the institutions involved who is on a joint academic committee overseeing the merger then I guess I am. My apologies. It's going ahead, so let's all make the best of it.

I think the objection to your post was that it was entirely ad hominem, and that it did not address either the primary concern brought up by the Faculty Review Merger Committee (the imbalance in the size and operating costs of the two institutions) or the well-documented financial concern of Dr. Vardi (that Rice, which is already carrying a debt load and a reduced endowment, would be taking on a huge debt load by buying Baylor--so much so that the school would be imperiled). Vardi offered up plentiful documentary evidence, which you have ignored.

The reason for the silence is that if you enjoined the faculty on either side in this, you'd never get a thing done.

The administration has been working in secret on this for more than a year with nothing to show for it--all while BCM has been sinking closer and closer to insolvency. Is it really so shocking that the faculty and alumni (whose money Rice has been begging for with unusual ferocity for the past year) are starting to ask questions? I don't want Rice to become the next Upsala College or Barrington College. This is perhaps the biggest decision for Rice in its history, and the silence has been deafening.

There is one new development in the Rice-BCM merger--an interim report by the Faculty Merger Review Committee. It's interim because the negotiations have been so secret, that the faculty committee is still in the dark on some things and not permitted to report on others. Thier main concern is the imbalance--BCM is much larger than Rice, and has much larger operating costs. (More details here.)

One faculty member, Moshe Vardi, gave a public lecture on the merger that was very much against it. He based his conclusion on publicly available information, including some very damning financial numbers from Baylor (and not so great financials from Rice--who knew Rice was carrying debt? Not me, and I am an alum.) You can read about his lecture here.

Some will automatically dismiss faculty concerns as whining, but the facts about Baylor's serious financial problems are true and would be inherited by Rice if the merger occurred, and frankly, the administrations of the two schools have been talking in secret for over a year now, and this lack of transparency is very worrying. And anyone who has driven around Rice in the last few years knows that President Leebron is an empire builder, but in this financial climate, perhaps what we need is a consolidator, someone who can hunker down and get Rice back on a solid footing.

In any case, as an alumnus, I am disturbed at the vast silence from the administration on this matter. All I ever hear from them are endless requests for more money.

someone told me that when beltway 8 was completed (circa 87?) on the night or weekend it was finished the city threw a big party on the freeway and huey lewis and the news played. does anybody remember this?

I only bring this up because first it had to be awesome, and second I just saw huey lewis on a capitol fourth. still rockin.

I don't recall that, but I do recall that when they completed the section that ran from I-10 to 59, they opened it up a day early to bicyclists. My friiends and I all took a ride on it (quite taxing, due to a stiff, unimpeded wind that day) and then settled down for a mid-parkway concert by Joe "King" Carrasco. It was awesome.

As a Rice alumnus, I can safely say that I speak for a large number of us who think that this building looks like complete trash. Rice has a fairly uniform Mediterranean style about its buildings, and not only does this new building not match it, but it is painful to even look at. The building's only redeeming virtue is that it is not physically located in the main part of Rice's campus, but instead across University blvd and away from what is really considered to be "Rice".

I have emailed the project manager on this thing voicing my (and many others') displeasure about the look of this, and she didn't bother to reply.

This building is an example of architectural group-think at its finest. I'm really pissed about the whole thing.

I'm a Rice alumnus, and I like it.

I agree this is the issue in the Memorial area schools. You have kids from very smart and successful families, that are very into helping and being available to their kids. Most of the mom's are stay at home. The end result is a lot of kids making great grades and have good extracurricular activities. Getting that top 10% for UT is difficult. But who says you have to go to UT? With the education you are getting there one can go anywhere in the country. I hope my guys want to go to UVA or Duke and even Clemson. I think getting a little more broad experience will be good for them, because I know they will always be Texans and most likely Houstonians. We may join the public system when HS comes around. It just depends where they are in life.

I don't think the schools are snobby, but they are proud of what they have created, and many are proud of the sacrifices they make to get into the district. But if you really want to look at that as snobby, so be it and then its not for you.

I wentr to Memorial back in the Ice Age. I didn't graduate in the top 10%, but nonetheless got into Rice. At the time UT didn't have a top 10% rule, so I'm certain I could have gotten in there easily at that time, if I had so chosen.

Memorial in my antidiluvian day was quite snobbish and strongly aware of its standing in the class structure. Perhaps that has changed in the years since a greater number of "north of the fvreeway" students now attend. It's harder to look down on people when you sit beside them in class.

If you don't consider the quarter of a billion dollars spent on all of these facilities in the past 10 or so years, and if you do not consider the costs of transporting prisoners back and forth from jails to courts, and if you do not consider the costs associated with spreading paperwork functions to far flung places, it might make a little sense, but not much.

I have spent the last 12 years of my life in and around this area. I have watched the transformation. I have also walked every inch of the district. I have never felt even the slightest danger. I realize that some will feel insecurity no matter the realities on the ground, but the fact is, Harris County has done a great job with this area. And, there is more to come. If all we have to complain about is one 3 block stretch on the north side of the bayou, we'll be in really good shape.

I agree. Jails are going to have to be somewhere, and that somewhere might be an undesirable or remote area when they are built, but 10-20-30 years from then, that somewhere might be very valuable and desirable real estate.

They have made the jails look pretty great--so great that I'm sure people regularly assume they are part of U.H. Downtown when they first see them. In fact, they are a model for what governments should do with public property in terms of esthetics. It is reasonable to ask whether they have boxed themselves into a corner--can they really afford to expand downtown if they need to? Possibly not. But at the same time, moving the jails (and the courts) would be prohibitively expensive.

Are you kidding? I've been saying this for a long time. Whenever someone proposes a new this or new that along the bayou/trails/whatever, I always say that it would not be such a good location because:

1. All the homeless bums/panhandlers there. Some more determined. Some not as much.

2. All the newly-release prisoners. Some violent. Some not.

One proposal for a park or some outdoor type of thing was going to be a block or two from where they release all the prisoners. Great! Sheeesh. I've always wondered who in their right mind would take an evening stroll through this part of town with all the inmates and such.

There are already several parks near and adjacent to the jails now. So all that is being proposed is something to conect the existing parks. You are probably right about the homeless--they have already colonized James Bute Park (which is one of the Bayou-adjacent parks downtown). I think you are wromg about crime. There might be lots of criminals getting out of jail there, but there are also huge numbers of cops there too. Cops are usually a pretty good deterrent. crimehouston.com bears this out. The map below shows all the murders and rapes in the neighborhood from January 28, 2005 to January 31, 2008. Murders would be represented by a red dot, if there were any. There have been 8 rapes, which is 8 too many. But compared with other parts of Houston, it's not an outrageous number for a three year period. Indeed, if you scroll in almost any direction from this map (except directly west), the numbers of rapes and murders gets worse.

The jails are along Baker and Allen, by the way.

The converted cold storage facility is not a County jail, but rather an Intermediate Sanction Facility run by the State. In short, it is where parolees are sent for minor infractions, instead of sending them back to our overcrowded prisons. For those who think they have never seen it, it is across the street from Minute Maid Park at Preston and Crawford.

I think we are talking about different facilities. The one I am thinking of is definitely a county jail, and it is just north of Buffalo Bayou on San Jacinto. You can read about it and see a photo here: http://www.hcso.hctx.net/detention/701.asp

I know it's too late, but they should move all the jails and courts, etc. into the Warehouse District.

Aren't they already in a warehouse district? Indeed, one of them is a converted cold-storage warehouse.

In any cases, the jails need to be near the courts, so any talk of moving the jails would mean moving the entire county criminal justice apparatus. I can think of better uses for my tax dollars. (I guess it would make sense if the cost of the downtown land sold was actually less than the cost of buying land and building courts/jails elsewhere in the county.)

No, it is proposed on the north bank of Buffalo Bayou, directly next to the Baker Street Jail. It is proposed for this location for two reasons. One, it is directly adjacent to the other jail facilities, so after inmates are processed, they can walk them through secure tunnels to their bunks in the adjoining jails. Two, the County already owns the land, so it is cost beneficial to taxpayers.

It should be noted that an inmate processing center does just that...processes incoming inmates. It does not hold long term prisoners. It is for the processing of arrestees from the various police departments (including Houston, which currently does their own), before moving them into the County jails next door. For bayou lovers, this bond defeat does not keep jails off the bayou. There are currently 3 jails in this area...two on the waterfront. This facility would simply process inmates more efficiently, including Houston's.

Would this have made the inmate processing center on the south side of the bayou redundant? And if so, do you know if they would have taken away the concrete inmate pedestrian bridge currently connecting the inmate processing center to the jail? (Of course, they would probably still need to use it to ferry prisoners back and forth between court and jail.)

It really is a shame that the waterfront is lined with jails. I went on a boat cruise in the Bayou last summer and the guy giving the tour said that most people mistake one of the jails for condos, but always ask why those condos don't have balconies. It actually doesn't look that bad from the outside, and it's got to have an amazing view of the skyline.

As far as I can tell, the windows of the jail at 701 N. San Jac are completely blacked out! (http://www.hcso.hctx.net/detention/701.asp) So no great views from there.

And I don't think the 1301 Baker jail has windows at all. But the other one might.

Harris County made an effort to make 701 and 1201 Baker look nice, it has to be said.

Anyone know the story on the proposed Harris County Jail that was defeated in the bond election last November? Apparently it would have covered much of the north bank of the bayou downtown... so much so that the Buffalo Bayou Partnership's planned trail would have had to veer away from the bayou and circle around the building.

So is it dead for good, or only postponed? And why are we lining Buffalo Bayou with jails anyway? Don't most counties put jails in out-of-the-way locations? As in, not the city's main waterfront?

The courthouse (and the inmate processing center) are right across the Bayou from the jails, so it is kind of convenient to have jails there. On the other hand, for persons serving longer sentences (who have already had their day in court), I agree-why not build a jail on cheap land in some relatively undeveloped part of Harris County.