HONOLULU (HawaiiNewsNow) - Two years into what was supposed to be a five-year appointment, University of Hawaii at Manoa Chancellor Tom Apple will be removed from the position, but he may remain at UH as a professor, sources told Hawaii News Now.
Sources said UH President David Lassner told Apple more than a week ago that the university does not plan to keep him on as head of UH's largest campus.
And negotiations are underway over Apple's exit from the top job, but he might stay at the university since his employment agreement allows him to "fall back" to a tenured bio-chemistry professor position at the UH’s John A. Burns School of Medicine, assuring a salary as high as other senior faculty there.
Hawaii News Now first reported Apple's impending removal Saturday night.
Apple has hired Big Island employment lawyer Jerry Hiatt, who also represented former UH President M.R.C. Greenwood.
Hiatt wrote a demand letter first reported by Hawaii News Now in November 2012 to UH regents in the aftermath of the failed Stevie Wonder fundraising concert , saying Greenwood would step down from the president's job if UH paid her $2 million, a demand regents rejected.
Reached for comment Sunday, Hiatt told Hawaii News Now: "There's been no decision to remove Tom Apple as chancellor," a statement that is technically correct because sources said negotiations are underway to work out his departure from the job.
Apple is two years into a five-year agreement that pays him $439,008 a year.
Hiatt said Apple is doing an "excellent job" because he has attracted more students to UH, increased graduation rates, and reallocated funding across the board with a “shrinking budget.”
Hiatt said Apple "intends to complete the job that he was hired to do and any attempt to remove him would violate his contract."
That means UH could be on the hook for nearly $1.3 million to pay Apple the balance of his employment agreement, which expires in June of 2017.
But Apple’s employment agreement also said the five-year deal is "subject each year to successful annual performance evaluations at the level of satisfactory or above."
UH officials said Sunday that Lassner has held confidential performance assessment discussions with all the people who report to him.
"The university does not disclose the details of those conversations. The Board of Regents has been briefed," UH said in a statement.
"Tom Apple is the Chancellor of UH Manoa and President Lassner continues to work with him to address the challenges facing UH Manoa as Hawaii's research university and the flagship campus of the UH System," the UH statement said.
Apple was returning to Hawaii from a UH business trip to California Sunday and not available for an interview.
But sources said Apple has been told he's being replaced because he's unpopular with some of the deans and directors he oversees.
For instance, he cut $1 million from the UH medical school budget and has proposed combining some UH departments to save money.
Sources added that Apple has been told some community leaders "lost confidence" in him when he tried unsuccessfully last fall to fire Dr. Michele Carbone, the head of the UH Cancer Center.
Apple has been concerned about the 25 grievances and personnel complaints filed against Carbone by Cancer Center researchers and professors, more than any other UH department.
Sources said Apple is also worried about the Cancer Center's $10 million annual debt that has been erased by the center's share of cigarette tax revenues that have declined by at least a half million each year, as more people quit smoking.
“They get about 15 million dollars a year from the state cigarette tax,” said UH Manoa Faculty Senate Vice Chair Bob Cooney, a critic of Carbone.
“And all the projections are that it's not going to be enough, and they basically forced Tom Apple to agree to support the Cancer Center as it heads toward deficit,” said Cooney, who was on the panel that selected Apple two years ago.
"The UH Cancer Center is not responsible for any of the annual UH shortfall recently described by Chancellor Apple," said Carbone in a statement to Hawaii News Now Sunday.
"The amount received by UH Manoa as overhead on grants earned by UH Cancer Center faculty is about equal to the amount provided to the Cancer Center in its budget. Further, the annual operations expenses are less than its reserves, resulting in a positive bottom line," Carbone wrote.
UH figures released to Hawaii News Now a year ago showed the amount of UH Manoa tuition money used to support the Cancer Center went up from $676,981 in fiscal year 2009 to $770,702 in fiscal year 2013.
As Hawaii News Now first reported July 17, Apple ordered a $10 million-a-year budget cut for this year and next, equal to 2.5 percent of the money UH Manoa receives from state taxpayers and tuition annually.
As part of those cuts, Apple announced a hiring freeze and said any units that ended the fiscal year in the red would fall under special monitoring and deans would be expected to develop a plan to move them out of the red.
Apple said those changes were needed to stop UH Manoa from drawing down about $20 million in reserves every year to cover its debts.
When Apple was appointed in June 2012, his $439,008 salary was more than then-UH president Greenwood, who was being paid $427,512 a year.
In a memo to the UH Board of Regents asking them to approve Apple’s hiring, Greenwood noted that the five-year term of the deal was an “exception to board policies, which permit initial appointments of up to three years for academic leaders.”
“The duration of this appointment reflects my assessment that the UH Manoa campus needs to be assured of sustained, continuous leadership in order to continue to achieve its academic goals,” Greenwood wrote in the May 2012 memo.
Apple was hired from the University of Delaware, where he spent three years as provost and four years before that as the dean of Arts and Sciences. Prior to Delaware, he spent 14 years at Renssalaer Polytechnic Institute in New York state, where he was vice provost, dean of graduate education, dean of the chemistry department and a chemistry professor.