University of Minnesota
June 15, 2012
The University's Board of Regents worked through a robust agenda at its June board meeting.
By Adam Overland
The University's Board of Regents worked through a robust agenda at its June board meeting. Regents heard the Report of the President, which included his intent to reinstate the Regents Scholarship at 100 percent for employees seeking a first degree. Committees received an update about the costs of the U faculty/staff health insurance plan (UPlan), and the success of the associated Wellness Program. Additional information included an update on the space utilization initiative, a planned Enterprise System Upgrade, and a detailed analysis of the cost of delivering the U's mission.
The board also heard from the Special Committee on Executive Compensation about its recommended changes to executive compensation and transition policies.
Report of the President
President Kaler updated the Board of Regents first by showing them a video of what it means to be land-grant institution, in this, the 150th anniversary year of the Morrill Act, which created the land-grant universities—and Minnesota's one and only land-grant research university. Watch the video at landgrant150.umn.edu.
Perhaps the biggest news for staff in President Kaler's report to the board was in his proposal to reinstate the Regents Scholarship at 100 percent for employees seeking a first degree. In response to heavy cuts in state funding, the policy changed in the summer of 2009 to cover 90 percent of the tuition costs for employees enrolled for the first time in a baccalaureate degree program and 75 percent of the tuition cost for all other eligible employees. Employees seeking a second degree or taking non-degree classes will stay at the 75 percent level, said Kaler.
"The value of a higher ed is undisputed," Kaler said. "Americans with a four-year degree have an unemployment rate less than half the national rate." I have been told repeatedly about the great hardship that cutbacks on the Regents Scholarship program had on many of our employees. I hope you will join me in supporting this change," Kaler said.
President Kaler also shared numerous successes with the board. He highlighted the recent launch of the U-sponsored Ramp-Up to Readiness school-wide guidance program, which helps students in grades 6 through 12 obtain the ability to succeed at a technical college, a community college, or a four-year college or university. More than 40 middle and high schools have already joined the program, Kaler said.
Kaler additionally told the board that the U's undergraduate honors programs was highly ranked among all public universities with honors programs of more than 1,700 students by the Public University Honors evaluation program, and was picked as the best "new" honors program in the nation. The U's honors program is entering its fifth year in 2012–13.
You can view the full remarks of the president online.
Workforce cost analysis
The Offices of Budget and Finance and Human Resources presented three significant studies to the University's Board of Regents during committee meetings. The studies provide the deepest look to date into both the costs and the composition of the workforce involved in delivering the U's mission of instruction, research, and outreach/public service. The studies will give regents and University leaders critical information necessary to make future budget and workforce decisions. They also provide leaders a baseline against which to judge the U's ongoing progress in operational excellence and related work.
UPlan health care costs
On June 7, the Faculty, Staff, and Student Affairs committee heard an update about the UPlan, the University's health insurance plan. Director of employee benefits Dann Chapman told committee members that the uncertainty around health care legislation at the federal level and Minnesota's own health care reform have and will continue to result in "shifting sands," but that the U is holding costs down. He said that one challenge at the University is that its population is on average older and therefore more at risk, and that highly educated workforces tend to use health care services more often.
Health care costs are a significant part of the U's overall expenditures. The cost of the U's medical coverage was about $221 million in 2012, not including employee out-of-pocket costs, up from about $213 million in 2011, Chapman told the committee. The U will pay approximately 73 percent of the plan cost, or about $9,511 in 2012 (projected) and $9,989 in 2013. The employee amount is projected to rise slightly from an average of $3,491 to $3,646 during the same time period.
Of the top ten attraction and retention drivers in the employment world, U.S. employees list health care benefits behind only job security as the most important reasons they would work for and stay with an employer, according to a 2010 study by Towers Watson.
Chapman said that the University understands the value employees place on health care benefits—and that the U is focused on managing costs and continuing to provide access to coverage at a price affordable to both the employee and the University.
"It's not our practice to say we'll limit University costs and shift those to employees," said Chapman. A 5 percent shift in costs from the University to employees did occur in 2011 for the 2012 plan year, he said, but "that was due to a very heavy hit from the legislature."
"We understand that there is value to both the employee and employer in maintaining quality health benefits—and quality includes affordability. Because if you make it unaffordable for employees to get care that they need, and they choose not to get it, that hurts everybody," said Chapman.
One highlight of the report was the success of the U's wellness incentive program. Through a system of wellness points, employees can earn reduced premiums by participating in health goals ranging from biking to health coaching. The U increased the dollars available in the form of a premium reduction from $130 in 2012 to $300 for individuals and $400 for families in 2013 (rewards must be accumulated by Aug. 31, 2012 to be applied to 2013 premiums).
The increased investment is in response to a study conducted by School of Public Health professor John Nyman and assistant professor Jean Abraham, which found that the return-on-investment of the U's wellness program resulted in an approximate $1.65 in savings (cost avoidance) for every $1 spent.
Chapman said the U will continue to invest in the program, with more options for earning points coming in 2013.
The Facilities Committee received an update on the U's space utilization initiative, an effort to optimize the type, quality, and amount of space the University maintains. The U maintains nearly 30 million square feet of space including labs, classrooms, office space, residence halls, and more. It's more space than the U can afford to operate and support with its current resources, said U Services assistant vice president Brian Swanson.
Facilities has been constraining growth by emphasizing renewal and replacement in capital plans and communicating the true cost of space, by decommissioning high cost and/or obsolete buildings, and by reducing demand for space through adopting Alternative Workplace Strategies (AWS) or flexible work areas.
The effort also includes decommissioning, demolishing, or mothballing buildings that are high cost or obsolete. Since 2010, the U has demolished nine buildings, including the Eddy Hall Annex, 1701 University Ave S.E., the Veterinary Anatomy building, Wesbrook Hall, and others. Eddy Hall itself has been vacated and awaits future funding for renovation. Pending the Eddy Hall renovation, which was part of the U's 2012 capital request but which did not receive funding, the U would decommission Fraser and Williamson Halls and relocate and consolidate activities there into Eddy Hall, the West Bank Office Building, and the Donhowe building.
Enterprise System Upgrade
The Facilities and Operations Committee also heard an overview presentation for the proposed Enterprise System Upgrade Project. The purpose of the project is to update and solidify the current human resources, student services, and financial system platforms and business processes to improve efficiency and cost-effectiveness and take better advantage of emerging technologies and capabilities.
Initial planning and scoping of the project is under way, with the goal of presenting a more complete project plan and budget to the regents in the coming months.
E-Tearning and E-Textbooks
CEHD Dean Jean Quam and staff presented an overview of the college approach to innovations in technology for teaching and learning to the Board of Regents' Educational Planning and Policy Committee on June 7. Part of a larger presentation led by Provost Karen Hanson on e-learning and e-textbooks, the CEHD report included insights on college initiatives in mobile learning and iPads and open textbooks, among others. For more information, see this CEHD summary.
Other Board News
The Board approved President Kaler's FY 2013 Budget and the Capital Investment Budget.
The Board approved Leon Assael as the new dean of the School of Dentistry.
The Board approved Fred Wood as the new chancellor for the University of Minnesota Crookston.
Board of Regents executive director Ann Cieslak will retire June 17.