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Board of Regents December 2011 meeting summary

Regents addressed a number of issues during the December meeting

By Adam Overland

Regents Seal

December 12, 2011

The Board of Regents addressed a number of issues during its December meeting including an update on the Minnesota economy from state economist and U professor Tom Stinson; a report on undergraduate retention and graduation rates; a tuition surcharge proposal from the Carlson School of Management; the annual report from the Office of the Vice President for Research, and other topics.

State of Minnesota economic update
University professor and State economist Tom Stinson presented the board with an update on Minnesota's economy during a board work session Dec. 8. It was the first time since February 2007 that Stinson reported a positive economic forecast. However, Stinson cautioned that "the surplus may be a little misleading since the funds are already spoken for, but still it's good news."

A balance of $876 million is now expected for the 2012–13 biennium. Current law requires any forecast balance be used to restore the state's reserves, Stinson said. Therefore, the funds will be used to add $255 million to the cash flow account, increasing it to $350 million (the amount required by law), and $621 million to the budget reserve, bringing it to $648 million (still $5 million short of the statutory maximum). Stinson said the forecast for 2014–15 shows a $1.3 billion structural gap between revenue and spending, unadjusted for inflation. Read the full summary at Minnesota Management and Budget.

President's Report
President Kaler gave his report to the board on Dec. 9. Kaler updated the board on a number of topics, including engagement, advocacy, philanthropy, the Academic Health Center (AHC) Review, and more.

President Kaler told the board that he is trying to visit one academic department on the Twin Cities campus every week, and has visited all coordinate campuses.

In addition, President Kaler said he had met with everyone from executives at General Mills to the Minnesota Student Association and the chief information officers of all the Big Ten universities.

He also told the board that he continues to meet with state lawmakers as the 2012 legislative session approaches, and is "vigorously advocating for the critical facilities projects that make up our $169.5 million capital request to the state."

He said the state's budget surplus was very good news, and stabilizes the U's budget planning. "It most likely means we can keep tuition increases across the board to 3 or 4 percent, which is too much, but far better than many of our peers," he said.

Kaler told the board that raising scholarship funds is his top priority, calling scholarships critical to the U's ability to enroll a diverse class on all of its campuses. He highlighted a recent $17 million gift from Dow Chemical designed to encourage research in chemical and materials sciences.

As for the recently completed internal review of the AHC, Kaler said that before he makes any major decisions, he will need to fully review studies performed over the past several years.

I am sensitive to the desire for key decisions to be made, and made quickly, but…it is possible—after reviewing all of these reports—that an external review will be necessary," said Kaler.

President Kaler closed his remarks by paying tribute to Donna Peterson, associate vice president for government relations, who is retiring in January after 22 years with the U.

"As a certified political junkie [Donna] will soon be experiencing severe withdrawal symptoms. When that gavel drops at the Legislature in January, I have instructed staff to check in on Donna and make sure she's OK." Read more about Donna Peterson.

Report on the state of University research
Tim Mulcahy, vice president for research, presented the board with his annual report on the state of the University's research enterprise. Mulcahy told the board that grants and contracts awarded to U researchers topped $769 million in fiscal year 2011. This represents a decrease from the previous year's total, mainly due to the expiration of American Recovery and Reinvestment Act (ARRA) funds, but if those funds are excluded from the U's 2010 total, awards increased slightly this year.

The U also reported $786 million in research and development (R&D) expenditures for 2010—a six percent increase over the previous year, placing it eighth among public research universities.

Tech transfer
The Office for Technology Commercialization reported increases in all but one of the key metrics that are used to track the performance of the U's technology transfer program, and launched nine startup companies—the most in U history.

Mulcahy also introduced a new approach to industry-sponsored research, which he called "game-changing." "We believe that we are the only university in the country to offer a program like this," said Mulcahy.

The new approach eliminates the need for protracted negotiations over rights to intellectual property that may result from industry-funded research. Negotiations, which, as President Kaler told the board, often resulted in researchers, businesses, and the University "owning 100 percent of nothing," as businesses pulled out in frustration with the process.

Dubbed "Minnesota Innovation Partnerships," or MN-IP, the new approach is part of the U's ongoing efforts to work more effectively with the business community. Learn more about the process at the Office of the Vice President for Research.

Carlson School Tuition Surcharge
The Educational Planning and Policy committee reviewed a proposal for a tuition surcharge at the Carlson School of Management. Carlson interim dean Sri Zaheer told the board that the Carlson undergraduate program is ranked 14th in the nation, and yet its tuition is often lower than at its peer institutions. Regent Larson pointed out that Penn State's business school is ranked lower than Carlson and yet charges significantly higher tuition. Zaheer said the U's tuition costs are in the "middle of the pack" among peer institutions, and after the tuition surcharge, "we would remain in the middle of the pack."

Additionally, said Zaheer, the surcharge is similar to the practice of public university business school peers such as Michigan, Illinois, Texas, and Wisconsin, along with other public Big Ten universities, each of which charges differential tuition or fees in their undergraduate business programs.

The surcharge would be phased in gradually, beginning at $250 per semester in FY 2013, and reaching $1,000 per semester in FY 2016.

She said that demand will sustain the proposal. Since 1996, the number of Carlson School applicants has grown from 1,000 per year to more than 6,000 in 2011. Over the past eight years, the number of undergraduates enrolled at the Carlson School has grown by 36 percent, while the total number of tenured/tenure-track faculty has remained static over this same period, at 104 since 2003. The money would be used to hire more faculty to better serve students.

Carlson School students have the highest rates of graduation at the U. In 2010, 87 percent of the program's graduates were employed within 90 days of graduation, with an average salary of $50,500, up almost $2,000 from 2009. Forty-six percent graduate with no debt. Scholarship money will be used to assist those most in need, said Zaheer.

The board will vote on the proposal in March.

Graduation rates rise
Vice Provost Bob McMaster told Regents on the Educational Planning and Policy committee that the U's four-year graduation rates continue to improve and retention rates remain strong. On the Twin Cities campus, 54 percent of the students who started their college career in 2007 have graduated in four years during 2011. That compares with a four-year graduation rate of 50.2 percent last year—a significant bump of nearly 4 percent. The rate has more than doubled from 26.1 percent since 2000. Also noteworthy on the UMTC campus:

• First-year retention increased from 86 percent to 90.5 percent
• Four-year graduation increased from 33 percent to 54 percent
• Five-year graduation increased from 56 percent to 69 percent
• Six-year graduation increased from 57 percent to 71 percent

The U is now in the middle of the Big Ten in four-year graduation rates. McMaster expects the U to reach the top 25 percent in the coming years.

McMaster credited programs like the U's Welcome Week, the A+ advising tool, the Graduation Planner, efforts to increase education in financial literacy, and the Access to Success program. Access to Success offers services that address the needs of students with diverse backgrounds, including urban students, first-generation college students, student parents, students with disabilities, students of color, older students, and non-native speakers of English. McMaster said that the program is helping the retention rate for students of color to climb at a faster rate than the rate for white students, narrowing the first-year retention gap to just 1.5 percent lower for students of color (in 2010) and the four-year graduation rate gap to a difference of about 20 percent between white students and students of color, lessening the difference by more than 10 percent from 2002–07 (the latest data available).

Facilities committee
During the meeting of the facilities committee, the board approved moving forward with schematic plans for a student residence hall and dining facility to be located on the corner of 4th Street and 17th Avenue.

Currently, some 250 to 300 students are housed in "expanded housing." UMTC is already over capacity with space available to first-year and transfer students, and with an expected increase in STEM students, the issue will continue. Additionally, on-campus living has shown to positively relate to student retention and the four-year graduation rate. Students report a greater sense of community and involvement on campus through living in dorms, and those who live on campus have an average GPA of 3.2, versus 2.8 for those living off-campus, the board heard.

The new hall would include space for 600 residents, as well as a dining hall seating 350, based on a fresh food market concept that would be open to the public. The 227,000-square-foot building would also include shared space for multi-cultural sorority and fraternity meetings. The project is expected to be completed in the summer of 2013, and would be ready for students that fall, said Kathy O'Brien, vice president of University Services. The motion was approved and a capitol budget amendment will come before the board in February.

The board also approved the schematic plans for the construction of a residence hall and academic classroom on the University of Minnesota Crookston (UMC) campus. UMC demand for student housing also exceeds capacity, and some current class sizes exceed classroom capacity, the board heard.

A clean energy capital request
The U's 2012 capital request includes a Combined Heat and Power Plant request that would replace inefficient, WWII-era coal burners, significantly reducing the U's reliance on coal and its carbon footprint by a full 10 percent. Support the capital request by attending the U's Legislative Briefing.

The facilities committee also heard a report on the U's sustainability and energy efficiency efforts. Sustainability has played an increasingly important role in the U's operations, from academics to U infrastructure. Nearly 70 percent of college applicants in a 2011 Princeton Review survey of college students said that a school's commitment to the environment plays a part in their decision to attend a school. In 2011 at the U, 247 faculty and 37 academic departments are engaged in sustainability efforts and research, and 73 departments offer sustainability-related undergraduate courses. Students enrolled in the Sustainability Studies minor have risen from 36 to 246 from 2008–11.

Through U-wide energy efficiency efforts, the U's carbon footprint has decreased 4.5 percent from 2008 to 2010, even while building space has increased. The UMTC campus alone has avoided $4.6 million in energy costs over last two years—$76 million since 1996.

The U's Environment and Sustainability Portal provides more information on U-wide sustainability efforts, and an opportunity for faculty to share their programs and research.

Other board news

Collective Bargaining

At the December 9 Board of Regents meeting, the Regents voted to approve four new collective bargaining agreements:

• Unit 3 Teamsters Contract
• Unit 4 AFSCME Health Care Contract
• Unit 6 AFSCME Clerical & Office Contract
• Unit 7 AFSCME Technical Contract

These contacts cover approximately 4,400 University clerical, health care, and technical employees in the Twin Cities, Duluth, Crookston, and Morris. Union members previously ratified these agreements.

For more information on these topics and others, see the meeting docket materials.