BY MATTHEW STONE

Staff Writer

Its long-term financial health on the line, "transformational" changes are in store for the University of Maine System, Chancellor Richard L. Pattenaude warned this week.

Financial troubles will dog the seven-campus system for more than a few fiscally tight years, Pattenaude said.

"The trustees, presidents and I believe that ... our current manner of operation is not financially sustainable over the long run," Pattenaude wrote Wednesday in a memo to the universities' faculty and staff. "We are committed to developing a new operating model, one that will provide and sustain high quality, affordable and accessible academic programs and support services."

What shape that new operating model will take is not yet known.

Pattenaude promised to kick off a conversation about the changes at a Board of Trustees meeting in January.

"Our ultimate objective for this effort is to create a new model for sustainability, one that has been shaped by the collective wisdom of those who know best our universities' operation and purpose," Pattenaude wrote.

In the short term, the university system is reeling from reduced investment income, students who've cut back on the number of classes they take, and Gov. John Baldacci's spending curtailment order, which forced the system to take an immediate $8 million hit.

The system is facing a $15 million budget hole for the current fiscal year, according to Pattenaude.

In the long term, the number of college-age students in Maine is trending downward, and lower enrollment translates to decreased revenue from tuition. While the university system could compensate by recruiting more adult-age and out-of-state students, a weak economy is hampering recruiting efforts, Pattenaude wrote.

"There's nothing that I see or read ... that suggests that we're going to be able to turn this situation around quickly," University of Maine at Augusta President Allyson Hughes Handley said. "If anything, we're likely to see more of a freefall."

Pattenaude spokesman John Diamond said discussions about structural change have been under way among trustees "for at least the last five years."

"The global financial situation, plus the wild fluctuations, have made it imperative that something transformational occur," Diamond said.

Handley said university system officials will likely look to states with similar population sizes for alternative models on administering a public higher education system.

"The way we've been operating just doesn't work currently, nor will it work in the new, emerging world," she said.

Handley suggested some back-end functions, like purchasing, could be centralized, rather than sustaining seven separate operations. The system's seven campuses could also use the same legal counsel, rather than maintain separate legal operations at the Orono and Southern Maine campuses.

"Do you need at seven institutions to have the full complement of services?" Handley asked.

On the academic side, she said, officials might discuss stopping duplication of academic programs.

The system might locate a particular program at just one of the seven campuses and allow students at other campuses to take those classes online or through interactive television.

"If five of the seven institutions have (a particular program) and we're each only graduating two or three students a year, in my mind we can't afford to do that anymore," Handley said.

The call for restructuring is an effort to reduce the size of future tuition increases, ending a pattern of annual, double-digit increases, the university system officials said.

"There have been several years of budget cuts," Handley said. "The temptation, I think, is often to just brace yourself as an organization for the next round of bad news."

"I think this is very much a proactive approach."

Matthew Stone -- 623-3811, ext. 435

mstone@centralmaine.com