These minutes reflect
discussion and debate at a meeting of a committee of the
Minutes
Present:
Charles Speaks (chair), Brittny McCarthy Barnes, Jean
Bauer, Stanley Bonnema, Bruce Brorson, Charles Campbell, David Chapman, Robert
Cudeck, Tom Gilson, Gary Jahn, Thomas Klein, Michael Korth, Timothy Nantell,
Kathleen O'Brien, Daniel O'Connor, Richard Pfutzenreuter, Susan VanVoorhis, Michael
Volna, Warren Warwick, Susan Carlson Weinberg
Absent:
Abu Jalal, Cynthia Jara,
Marvin Marshak, Terry Roe, Thomas Stinson
Guests:
Professor Dan Feeney (Faculty
Consultative Committee), Associate Vice President Steven Cawley, Linda Woock (Controller's Office), Vice Provost Al Sullivan
(Office of the Executive Vice President and Provost); Joel Maturi (Director of
Athletics, Twin Cities campus), Professor Eugene Borgida (Advisory Committee on
Athletics), Professor Laura Koch (Faculty Academic Oversight Committee for
Intercollegiate Athletics), Elizabeth Eull (Office of Budget and Finance,
moving to Intercollegiate Athletics)
Other:
none
[In these minutes: (1) new financial system--costs and options;
(2) discussion with Athletic Director Joel Maturi about athletic finances; (3)
land acquisition for the east bank campus]
Professor
Speaks convened the meeting at
1. New
Financial System
Professor Speaks then welcomed Mr. Volna to the meeting
to discuss the planning for a new financial system. He said he would like to hear about the
status of the vendor option and the consortium option as well as whether or not
the current system could be fixed, with what risks, and about what the
University can afford to do at this point given the
financial climate of the state.
Mr. Volna introduced Mr. Cawley, Chief Information
Officer, and Ms. Woock, from his office, who is
leading the effort on a new financial system.
Why replace the current system?
He recalled that he had talked to the Committee about this issue in the
past, but it has taken on more urgency with the financial condition of the
state. There are several reasons to
replace the existing system (CUFS): it
is old technology (mainframe, Cobol, and proprietary software), there is
limited internal and no external support, the cost of operation is higher
because the University is supporting duplicate systems (most of the others are
web-based) and because it is becoming harder to find the expertise to support
the system, a new system would increase "functionality" by allowing
more interfaces with other systems, and there are increasing risks and high
"failure costs" with the existing system.
Mr. Volna outlined the risks and impact associated with a
CUFS failure for 1-2 days, for 2-5 days, for 5-10 days, and longer. Professor Speaks asked if Mr. Volna could
make a probability statement about each of these failures. Mr. Volna said he could not. The consulting company they are using to
evaluate vendors said it is difficult to predict possible failures; it depends
on support talent and changes that are made.
What about the last year or two, Professor Speaks asked. Ms. Woock said the
system has only been down for one day--and that was because of a human
mistake. Otherwise it has only been down
for short periods. Mr. Cawley said the
risk now is not high (perhaps 1-2 days; if there were a building failure, it
could be down longer, but that is unlikely).
The problem is the longer the University goes,
the more complexity works against it. It
is not just CUFS; a lot of other software depends on vendor support, and as the
system gets older, they will soon find they do not have support for key
programs. So if the University spends
the money for a new system, Professor Speaks said, the risk of failure will
decrease and the opportunity to correct problems is improved? Upgrading the existing system could cause
outages, Ms. Woock agreed; every time an upgrade is
installed there is a risk the system will break, Mr. Cawley confirmed.
Would there be a higher risk of failure in phasing into a
new system, Professor Speaks then asked?
Mr. Volna said the University has a pretty good track record in the last
six years of changing to new systems (e.g., human resources, payroll). Professor Speaks said he wanted to explore
the options for getting through the current financial climate; could the
University take the risk of having no vendor support and spending $5-6-7 million
now, rather than $50-60-70 million for a new system? Mr. Cawley said he did not know what would be
fixed. The basic problem is that the
University does not have the source code for CUFS; it does not have the
material to make the necessary modifications.
That is why the consortium option is interesting; it would consist of a
group of universities looking to do what Professor Speaks asks: it would take one source code and rewrite it
to make it modern.
Ms. VanVoorhis asked what communication there would be to
ensure the right people are involved in a new system. Mr. Volna said they have a steering committee
of about 19 people around the University.
They also started collecting requirements for a new system about two
years ago and came up with 2300 requirements, which were given to the
vendors. During the review of proposals
about 35 users across the campus will be involved and there will also be
scripted demonstrations. These results
will be reviewed in January. Ms.
VanVoorhis expressed surprise that her office has not been involved.
Professor Konstan asked if the mainframe would be needed
once CUFS were replaced (it would not).
How much would the University save as a result, he asked? About or more than $1 million per year, Mr.
Cawley said.
Where in the evaluation criteria is usability, Professor
Konstan next asked? Functionality is
irrelevant if people cannot use the system.
It is at the core of functionality, Mr. Volna said; can the user
understand it? The scripted
demonstrations will determine whether or not the systems are
user-friendly. Professor Konstan said
this sounds great but he has seen the problem before. Ms. Woock said they
are setting up a scoring system and the proposals will go through Office of
Information Technology usability labs; she said she believed they are covering
the concern about usability. Mr. Volna
added that the cost to each vendor is about $100,000 and each is being given
live University data to use in showing the functionality of their system. The next step, Professor Konstan said, is to
have University people use their system, not vendor employees.
In a year when the University could face a 10% cut in its
base, how will this system be funded, Professor Speaks asked? Mr. Pfutzenreuter noted that the new
financial system had been included in the biennial budget request. But what if the University is forced to make
a 10% cut, Professor Speaks persisted.
This system will not happen, Mr. Pfutzenreuter said. A lot of things will not happen, he
added. Mr. Volna said they are getting
in a position so that if the funds are available, the question in March or
April will not be which vendor or system but rather can the University afford
the system that has risen to the top.
Will there be tests with randomly-selected employees in
departments, Professor Campbell asked?
They will test the system with University employees, Mr. Volna said,
although he was not sure they would be randomly selected. But there is a high level of interest in the
system; some units have a VERY strong interest (e.g., the
Professor Speaks warned that they should not use
high-ability, high-experience staff in the demonstrations and tests and
conclude thereafter that the system is more user-friendly than it really
is. Mr. Cawley said their commitment, as
they roll out the system, is that it will be web-based and that it can be made
easier as it is implemented. They can
use random selection of employees during implementation to be sure the system
makes sense. Professor Konstan said he
has been impressed with usability at the University in the last couple of
years. He said he was worried not that
there would be problems with any particular piece of the system, or that any of
the details would be wrong, but that there would still be a usability
disaster. Most of the systems will test
fine; the question is whether the system can be implemented in such a way that
people do not have to bend the systems to make the screens usable.
Usability will of course be a high priority, Professor
Cudeck responded, and the best plans can be tripped up. It is has been decided that CUFS will be
phased out; the question is when and how the new system will be paid for. The Committee does not have to discuss the questions
of usability; it should address the question of "when" and in what priority. And also the question of vendor versus
consortium, Professor Speaks added.
Mr. Volna promised the Committee would be kept abreast of
the choice of the best vendor, if that option is chosen, and on the decision
about affording the system. It will also
be kept informed of the risk of system failure and business interruption, Mr.
Pfutzenreuter said.
Professor Cudeck again inquired about keeping the current
system. Mr. Volna said keeping it would
be like trying to use a 386 PC: one can
boot it up, and it would still work, but as one layers more and more systems
on, it is soon not feasible to keep it running.
Professor Campbell said he was somewhat embarrassed to be supporting
retention of CUFS but he remained concerned that the previous experience with
it will NOT be taken into account.
Professor Cudeck opined that of course that experience would be taken
into account. Professor Campbell
responded that the Committee has been told there is a moderate risk with the
current system--but that there has only been one failure in the last two
years. He said he agreed that the system
must be replaced sooner or later but that he wanted to hear more about how the
current system is not working before he would support any decision on a
replacement.
Mr. Volna updated the Committee on the vendor selection
process. There are currently four vendors;
they may winnow the selection down based on the rankings of the four vendors
after all preliminary evaluations have been completed. Each vendor will be given three days to
conduct demonstrations so the University users will spend 12 days within a
month evaluating the proposals. The
investment team has analyzed the total cost of the system, including
acquisition, implementation (University staff and consultants), post-project
operations for five years, and teams of experts.
Professor Konstan asked if the cost included unit efforts
or only central costs. Mr. Volna said
they have included the cost of the interfaces at the department level but they
have not included local costs for 600 departments. They will try to get all up to a base level
of training so will put a lot of money in the training effort. Will the system lead to a need for more
personnel in departments, Professor Campbell asked? The need for personnel has increased over the
last five years. Mr. Volna said he did
not know but his personal view is that some of the increase in department
personnel has been a result of more accounts because of more sponsored research
and also a result of increased regulation.
He said he hoped the new system would add functionality but not require
any increase in staff.
Mr. Volna then reviewed the status of the consortium
proposal. Three of the universities have
opted out.
Would the consortium have the same range of issues that
the
It was agreed that Mr. Volna would return to the
Committee in March, after the scripted demonstrations but before any
recommendation to the President would be made.
Mr. Volna also agreed to provide to Committee members a list of the
steering committee members. Professor
Speaks thanked Mr. Volna for his presentation.
2. Discussion
with Athletic Director Joel Maturi
Professor Speaks now welcomed Mr. Maturi to the
meeting. He recalled that this Committee
and others have talked about athletic finances and the institutional subsidy;
they would like to have his best estimate of the year-end balance and the
financial picture for the next 2-3 years.
Mr. Maturi said he appreciated the opportunity to share
with the Committee what he has learned.
When he came he told the administration and the staff in athletics that
he inherited this year's budget and could not change it--but he did promise
that the department would stay within the proposed expenses. (He has as a result become known as "Dr.
No": coaches and staff may have
wonderful ideas and he says no additional funds will be provided.) While he can guarantee the department will
meet its obligations on the expense side, he can make no such guarantee on the
revenue side. The department has not met
its revenue expectations the last few years; this year's projections were
conservative and the department may be able to meet them. (It will not help, however, that two football
games were moved to Thursday night; that change had a significant impact on
revenue. Men's basketball and hockey are
stable; he said he was optimistic the department could reach the modest goals
set for revenue from women's events.) On
the fund-raising side, Mr. Maturi said he believes the department can reach
revenue projections with a new development officer.
Mr. Maturi said he was aware of campus feelings about the
$10 million annual subsidy to athletics and that they must be dealt with. He has told the athletic department staff
that they cannot expect the present subsidy to continue for an extended
period. The department will need it for
the time promised--the next 2-3 years--but in the meantime he hopes to increase
revenues in two areas (football and fund-raising).
He said he knows a lot of people with whom he can meet to
raise money. Some are disgruntled, they
do not feel connected, but they are still attached to the University even
though repelled by some recent events in athletics. He said he has not promised anything to
anyone except a lot of energy and that he will do what is right.
In the immediate future the department can achieve
savings. Mr. Maturi noted that Ms. Eull
will be joining the department as chief financial officer (a position that has
not existed in athletics before this); this is a steal for athletics, he said,
because she is highly respected by the administration as well as by the people
in athletics. Her appointment will not
answer all the questions but it will help to address a number of policy
problems. There will be salary savings
as a result of retirement and administrative changes. In addition, when the two athletic
departments were merged, he inherited two of everything. There are probably
more staff than the department needs.
Mr. Maturi said he has told everyone they have a job for this year but
there will be no such guarantee next year.
Some will retire, some will leave; in both cases, some positions will
not be replaced, and the immediate savings will be about $250,000 per
year. The coaching staffs are in place,
are mostly well paid, and have the funds they need to be successful.
The "arms race" in athletics is a reality but
that does not make it right, Mr. Maturi told the Committee. The first meeting of Big Ten athletic
directors that he attended was devoted to cost reductions, something that is
very difficult to achieve in the "crazy culture" of athletics. One possibility, for example, might be a
Conference rule requiring that all trips less than a certain distance be made by bus rather than plane. What about squad size, Professor Speaks
asked? The travel squad size is set by
Conference rules, Mr. Maturi explained; athletic scholarship limits are set
nationally. If the Big Ten were to
reduce the number of scholarships unilaterally it would get killed
competitively. Mr. Maturi agreed that it
would be reasonable to have 65 scholarships in football, rather than the
present 85, but the big football schools are opposed to reducing the number
because that would lead to more parity.
The big schools prefer to be able to stockpile athletes. But he said he believed there is slow
movement to sanity; the new NCAA president is a university president--its first
academic chief executive--who will be in a position to lead the way to
significant changes.
There is a lot of money in intercollegiate athletics and
too much emphasis on winning, Mr. Maturi commented. Football bowl games are not controlled by the
NCAA--because the big schools do not want such control in order that they can
get all the money from the games (whereas NCAA control would likely mean
distributing at least some of the funds across NCAA members). The Big Ten has seven ties to bowl games--but
it may not have seven teams eligible to attend a bowl game (Minnesota will be
even if it ends up 7-5; at the same time, Miami of Ohio was 10-1 in 1998 and
not invited to a bowl because those games are about big schools and TV
revenues). The top eight teams (playing
in the top four bowls) will receive $13 million each; it is best for the
University of
The same is true in men's basketball. Every game a team plays in the NCAA men's
basketball tournament generates $106,000 to the teams for the following six
years. Seven Big Ten teams were in the
first round of the tournament last year; five won. By the end of the tournament the Big Ten had
had teams in approximately 18 games, each of which will pay $106,000 for six
years. So a player throwing a free-throw
at the end of a close game is playing for $106,000 for six years. That should not be. He said he believed the money should go to
institutions based on the number of sports, participation rates, and so on. But the big schools do not want the small
schools in the basketball tournament to win because they want to keep the money
for themselves. Mr. Maturi observed
wryly that he is now part of the culture that he has disagreed with; that will
not change who he is, he said, and while he may not be public about it he will
continue to push for what he believes would be good for the
In the best of all worlds, football would be more
successful, private funds would increase, and a streamlined athletic department
would save money, Professor Konstan said.
What must happen for athletics to be self-supporting, if that is
feasible? Mr. Maturi said he believed it
is and that it would be before he leaves the position. What must happen, Professor Konstan
asked--must there be NCAA rules changes?
Mr. Maturi said it would be difficult for the University to make changes
on its own unless it does not want to win; that is the "nuttiness of the
culture." It may be that athletics
will need anti-trust legislation (coaches should not be paid $1 million; there
should be a rule that no coach can be paid more than the highest-paid faculty
member on the campus). There are four
full-time basketball coaches, he pointed out, to coach 12 athletes. There are three hockey coaches for twice as
many players, and there are ten coaches in football for 110 athletes.
Ms. McCarthy Barnes said she had read that when athletes
leave the athletic culture and the university and become alumni, they feel used
rather than committed to the institution--in complete contrast to what one
would expect. There is an opportunity to
think about cultivating relationships with athletes before they leave so they
become supporters of athletics. Mr.
Maturi agreed and said that the public institutions have not done as good a job
as private schools in this regard. He
recalled that he has given money to his alma mater (Notre Dame) ever since he
graduated.
Professor Speaks said he had recently been appalled to
learn that only about half of the faculty respond to a
request for an academic update on athletes.
Professor Koch pointed out that the number has been lower in the
past. Mr. Maturi said he has found
refreshing and energizing the reception he has received at the University; he
said he hoped he would be able to help change the "crazy culture" of
athletics and return it to an earlier time when the situation was not so
"out of whack." He said that
he will not abdicate his responsibilities but to effect the necessary change
the presidents will need to be involved.
Professor Speaks thanked Mr. Maturi for joining the meeting;
Mr. Maturi said he would be glad to return any time.
3. Land
Acquisition
Professor Speaks now turned to Mr. Pfutzenreuter to
discuss land acquisition around the Twin Cities campus; Mr. Pfutzenreuter
turned to Ms. Weinberg, who had prepared a map of properties targeted for
acquisition. The focus was solely on the
East Bank; there is little activity on the
Ms. Weinberg distributed copies of the map and pointed
out the various parcels the University is interested in purchasing (all in the
northeast section of the East Bank).
Some of the land would be used for recreational fields, tennis courts;
other possibly for charter buses and parking (e.g., at football games).
If there is no joint-use football stadium, Professor
Speaks asked, would the current land use continue or would there be
changes? Mr. Pfutzenreuter said there
are no plans afoot other than for a stadium; if that does not come to pass, the
surface parking would remain. Dr. Cerra
has talked about the need for a clinic; could it be sited there? It could be, Mr. Pfutzenreuter said,
depending on the stadium issue and the site plan.
Is it reasonable to assume that there is always a
higher-value use for land than parking, Mr. Klein asked? Is that a natural progression? Vice President O'Brien commented that when
the state moves forward on light rail transit through the area, the land will
be near where a number of lines come together and that could have an impact on
the value of the land and what it is used for.
The football site is highly polluted, Mr. Pfutzenreuter said, and any
use will require tens of millions of dollars to clean up. The University capped the land with parking
lots when it acquired it.
Mr. O'Connor asked if the University were interested in
purchasing the land on which the fraternities on
Are there any other proposals to acquire property in the
Dinkytown area or elsewhere, Mr. O'Connor asked? There are not, Mr. Pfutzenreuter said.
Mr. Pfutzenreuter said he wished to provide the Committee
on a debt briefing; Professor Speaks said he would put it on the schedule and
then adjourned the meeting at
--
Gary Engstrand