University Communications

Just the facts

Email from President Eric Kaler to faculty and staff.

January 7, 2013

Dear Colleagues,

You may have read or heard about articles recently published in the Wall Street Journal, Washington Post, and Star Tribune about the University's business operations. If you missed it Sunday, here's my response to the Star Tribune.

These articles can be tough to read because they don't reflect the context of our large and complex institution, and they denigrate the impact of the hard work that all of us—faculty and staff—do for our students, our researchers, and for the people of Minnesota. They don't place tuition increases in the context of a stunning $140 million reduction in annual support from the state. They don't recognize that growth in student numbers and research volume requires hiring. And they diminish the importance of work done by our P&A colleagues in managing our organization.

We all know the challenge in higher education today is to deliver excellence at an affordable price. To do that requires us to do more with less, and that means we have to be efficient and effective. Some of our colleagues bemoan the idea of running a university like a business, and, in many ways, so do I. We have to be a place where ideas, and the people who have them, grow and thrive. That process is intrinsically messy and inefficient, but the operations that support and manage it do need to run in the most effective businesslike way possible. I am committed to making that happen.

Since the day I was hired, I have been working relentlessly with our senior leadership team and all of you to operate differently and reduce administrative costs. The goal is to fiercely hold the line on tuition for Minnesota undergraduates and reinvest in our mission. More than ever—and not just because of a few news stories—we must commit ourselves to reforming how we work, and even ending things that are not important, in every part of our diverse, decentralized organization.

But let me remind you of a few facts and of our many accomplishments.

We're putting students and families first by keeping tuition low and increasing financial aid.

  • My first budget last year proposed the lowest increase in a decade,
    3.5 percent.
  • This year, we're vigorously advocating for a two-year freeze for Minnesota undergraduates, through a renewed partnership with the state.
  • Our investment in financial aid for all students (excluding loans and employment) this year was $210 million, or about $60 million more than just five years ago.

We are improving, growing, and becoming more productive despite deep cuts in state support.

  • We serve nearly 9,000 more students today than we did in 2000, an increase of nearly 16 percent.
  • During that time, employee headcount has increased only 3 percent, a mark of our productivity.
  • After adjusting for inflation, the per capita cost of educating (and graduating) a student is 13 percent lower than it was in 1997.
  • Our research portfolio has increased by 40 percent over the past five years.
  • Private philanthropy has grown to record levels because our donors clearly believe the University is a sound investment.
  • Our debt service as a percentage of our budget has remained relatively flat, at 2.8 percent, well below the levels suggested by our AA1 bond rating.
  • We are in demand: A record 40,300 prospective students have applied for admission to our Twin Cities campus as our reputation and value have grown.
  • Most importantly, thanks in part to exceptional teaching, advising, and other student services, our graduation and freshmen retention rates are at their highest levels ever—which help to keep costs down for students and families.

We are reforming how we do business and we have thoughtfully stopped doing some things.

  • Over the past two years, we've saved $13 million by modernizing our purchasing procedures.
  • We've saved $5.6 million over the past three years in energy costs by tuning up our buildings.
  • We consolidated libraries on our St. Paul campus, saving $130,000 annually.
  • We became one of the first universities in the nation to offer the entire suite of Google apps to faculty, staff, and students, and that's valued at more than $15 million a year.
  • We closed two major administrative offices, saving $2.2 million a year.
  • We reviewed 241 centers and institutes and closed or prepared to close
    9 percent of them.
  • We completed an external review of our Academic Health Center and are launching a strategic planning process in the Medical School.
  • We partnered with the Board of Regents and adopted new executive compensation policies and oversight.
  • At UMore Park, we're holding the line on expenses while generating new revenue.

We will move forward with pride.
I will continue to tirelessly hold the line on tuition and student debt. We owe nothing less to students and families. I'll continue to push our leaders to analyze all we do so we have the information we need to make smart managerial decisions as we continue our work on Operational Excellence. I very much encourage your suggestions and urge you to share them here on our Op Ex website.

We must not lose sight of one thing: We have so much to be proud of. We are a spectacular land-grant university preparing this state's next generation of leaders, innovators, and engaged global citizens. We graduate 15,000 students each year who are well prepared to make a difference in the world, and our advances in research and medicine drive the economy and improve and save lives. I deeply appreciate all the important and hard work you do every day to put our students and their families first, and to keep the University of Minnesota great.

Thank you.

Sincerely,

Eric W. Kaler
President