I am pleased to present for the General Assembly's consideration the FY 2006 Operating Budget request for the University System of Maryland Center for Environmental Science. In response to the subcommittee’s request, I will keep my opening comments very brief, focusing on the issues raised in the Department of Legislative Services Budget Analyst’s summary. You have a copy of our 2004 Annual Report and I will, of course, endeavor to answer questions members might have concerning any aspect of the Center’s activities or budget request. First, I want to express appreciation for the General Assembly’s steadfast support for the University System of Maryland, which has led to the most positive budget request in the last three years. The increase in general funds included in the Governor’s budget is particularly important for the University of Maryland Center for Environmental Science which has been severely stressed by the budget shortfalls over the last two fiscal years without the ability to offset them with increased tuition revenues and with substantial requirements associated with the operation of new facilities. Most of the new state funding provided in the request ($675,000 or 91% of this increment) are to provide for the previously unmet portion of operating costs for the Aquaculture and Restoration Ecology Laboratory (AREL) at our Horn Point Laboratory, which was opened in 2003. Despite the lack of new state funding we began operation of this facility, using program budget cuts that Chancellor Kirwan and the Board of Regents allowed us to retain and reprogram for that purpose The completion and placement into service of the AREL is extremely fortunate and timely. As you know, restoration of oysters in the Chesapeake Bay is a prominent and controversial issue and our new AREL facility has become the “Grand Central Station” for science related both to native oyster restoration and to the evaluation of the risks and benefits of the possible introduction of Asian oysters. The shellfish culture facilities are the mainstay of the state’s native oyster restoration program. Over the past four years, we produced over 400 million juvenile native oysters for planting on sanctuaries and managed reserves. With funding of the costs of operation provided in the FY 2006 appropriation request and the additional facility improvements we are planning, we should be able to increase that production to 750 million per year! Much of the research on the Asian oyster is also being conducted at Horn Point, where the AREL quarantine laboratory allows us to conduct research on the reproduction and ecology of this nonnative species without risk of inadvertently introducing it and its diseases into the Bay. Our scientists are assuring that rigorous and sound science will be available in the evaluation of alternatives regarding oyster restoration. In addition, the new facility has allowed expansion of our research on wetland restoration, particularly as it relates to assuring beneficial uses of dredged material from navigational channels leading to the Port of Baltimore. Measuring Performance 
The Analyst has pointed out the difficulties in conducting meaningful comparisons between UMCES and other peer institutions based on mission-related performance measures. In 2004, UMCES completed an extensive strategic planning process, which included both a critical self-study and peer institutional comparisons. We found that it was difficult to obtain comparable, independently verifiable data on the performance measures that we use. Because independent appraisal of the Center’s performance was necessary not only for our strategic planning but also for effective oversight and governance by the Board of Regents, we asked the Chancellor to organize and charge an External Peer Review Committee to evaluate the Center. The Committee consisted of four international experts, three of whom had extensive experience in the administration of research institutions. Among the questions included in the Peer Review Committee’s charge, Chancellor Kirwan specifically asked: “How do you rate the University of Maryland Center for Environmental Science in comparison to other institutions considered as national peers with regard to advanced research, graduate education, and public service?” The Committee responded that The University System of Maryland is very fortunate to have an organization such as UMCES among its institutions. UMCES is clearly among the leading research institutions of its kind, with a very strong national and international reputation, with first-rate faculty and facilities, and with an emerging, high quality, graduate education program.
We are very gratified, as I hope you are, that the reviewers found that the Center’s research is in the top tier of peer institutions and that its contributions in public service through the application of our science may be without equal. This later ranking is founded on our long tradition of service to the state, bolstered by the recent success of our Integration and Application Network, which has been very well received both within the Chesapeake Bay region and internationally. The more measured evaluation of our contributions to graduate education stems in most part from the fact that because the Center does not itself grant degrees it contributes to graduate education in partnership with other University System institutions. The reviewers recommended that we exert more influence on these graduate programs and give them more focus and national identity. While the report of the External Review Committee is not the same as a statistical comparison of indicators, in some ways it is much more reliable and revealing. The reviewers considered reams of background information and brought in their extensive knowledge of other institutions and considered impression of the Center’s national reputation. In addition, they provided much constructive criticism and recommendations helpful in framing our new Strategic Plan. Effectiveness and Efficiency
As was pointed out in the DLS analysis, UMCES expects to save nearly $150,000 in administrative costs as part of the USM Effectiveness and Efficiency Initiative. Because of the lack of tuition revenues, we have long been under the gun to constrain our administrative and other operating costs. While we have traditionally relied on many centralized services provided by the University of Maryland, College Park, the Regents initiative has stimulated new ways to cut costs, for example pooling acquisition of electrical power. Increasing the Center’s effectiveness and efficiency was very much a guiding theme of the new Strategic Plan that I mentioned. We have a strategy to increase our effectiveness by carefully setting directions for our scientific programs that represent opportunities to advance understanding and gain external support for these programs. At least through the rest of this decade we will focus our programs on: (1) science to support ecosystem-based management; (2) multiscale ecosystem restoration; (3) linking observations and forecasts from mountain to sea; and (4) regional consequences of climate change and variability. Furthermore, the Plan identifies ways in which the Center will develop new educational markets and thereby contribute to the broader effectiveness of the USM. These include providing on-line courses to undergraduates at USM institutions and graduate-level instruction for professionals working in environmental fields. Measurable outcomes are specified for all of the elements in our strategy. For example, we have set minimum goals for a 20 percent increase in faculty productivity indicators and a further 10 percent increase in efficiency of administrative and operational functions over the next five years. Personnel Levels
There are three reasons why the total UMCES workforce surpassed the 2002 level. The most important reason is the growth in externally supported research, which has allowed us to add research faculty supported by external sponsors rather than state funds. Small additions to the state-supported staff were required to allow the operations of the new, mechanically and electronically complex Aquaculture and Restoration Ecology Laboratory. Finally, there was a technical adjustment to accommodate a few previously undercounted positions. While we added state-supported positions for the operation of AREL, other positions were eliminated because of budgetary shortfalls and efficiency steps such that there has been no real growth of people on the state-funded payroll. As I close I want to assure the subcommittee that I am paying close attention to resolving any deficiencies noted in the Audit Findings. Although I am pleased that there have been relatively few findings for UMCES, one is too many from my perspective. For the most part, the audit findings for UMCES stem from the small size and dispersion of our laboratory-based administrative support staff. In our most recent audit report, the first three findings are all related to segregation of duty issues and have been resolved by reassigning the noted functions to other personnel to meet the appropriate requirements. The one repeated finding, related to accountability and control of equipment at two of our laboratories, stems from our dispersed locations and the fact that we take equipment into the field all over the world. We are correcting these shortcomings by putting into place an automated property control system during this fiscal year. I truly appreciate the broad, strong and sustained support the University of Maryland Center for Environmental Science has received from the General Assembly and would be happy to answer any questions you might have.
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