These minutes reflect
discussion and debate at a meeting of a committee of the
Minutes
Senate Committee on Finance and Planning
238A Morrill Hall
Present:
Charles Speaks (chair), Jean Bauer, Stanley Bonnema,
Charles Campbell, David Chapman, Thomas Klein, Brittny McCarthy Barnes, Kathleen
O'Brien, Warren Warwick, Susan Carlson Weinberg
Absent:
Prince Amattoe, Bruce Brorson, Tim Church, Robert
Cudeck, Tom Gilson, Gary Jahn, Abu Jalal, Joseph Konstan, Michael Korth, Tim
Nantell, Daniel O'Connor, Richard Pfutzenreuter, Thomas Stinson, Terry Roe, Sue
Van Voorhis, Michael Volna
Guests:
Mr. Bob Baker (Director, Parking and Transportation),
Associate Vice President Laurie Scheich, Mr. Dennis Miller (Assistant Director
for Finance, Parking and Transportation); Professor E. Calvin Alexander,
Associate Vice President Steven Spehn
[In these minutes: (1) announcements; (2) proposed parking rates
for 03-04; (3) University policies on construction projects]
1. Announcements
Professor
Speaks convened the meeting at
-- He
congratulated Professor Bauer on being been elected to the Faculty Consultative
Committee.
-- He
congratulated Professor Campbell, who has agreed to serve as chair of this
Committee next year.
-- It is
a virtual certainty there will be no salary increase next year, and increases
in health care premium costs will be passed to employees, so Mr. Baker has
joined the Committee to explain how Parking will help offset these increases by
reducing parking rates.
2. Parking
Mr.
Baker said he wished he could be so helpful, although what he has proposed
should not be unduly upsetting, he said.
He distributed copies of information about the parking rate plan for
2003-04.
Mr.
Baker began by noting that parking demand has declined, leaving 2000-3000
spaces open daily. This is the result of
completion of a major building program, several thousand new student housing
units added on or near campus, a doubling of the use of transit riders using
U-Pass/Metropass (beyond their wildest expectations), and prices are at market in
some categories. The result of these
changes is that there has been a decrease in revenues.
Costs
continue to increase. Parking debt
service reaches its peak in 2004, repairs and maintenance are increasing as the
parking inventory shifts from lots to structures, technology investments are
being made (e.g., all U-Pass purchases will be on line, as will parking
reservations), and transit costs (fuel and insurance) continue to rise. How many reservations do they make, Professor
Campbell asked? They can do as many as
100,000 per year, Mr. Baker said. Will
the increased costs of technology now save money in the future, Professor
Campbell asked? Mr. Baker said they
would but he noted that most technology has a high up-front cost before there
is any payoff. Professor Speaks asked if
the department had projected the rate of decline in debt service as a percent
of total expenditures (28% in 2003-04) over the next 4-5 years (it has
not). He said it would be helpful for the
Committee to know the rate of decline in debt service in actual dollars for the
next 5-10 years as well as--a "softer" figure--the projection of debt
service as a percentage of expenses over the same period. Mr. Miller said that once the debt has been
fixed, he will be able to tell the exact dollar figures for the next 17
years. They do not, however, make budget
projections for the future.
The previous Parking plan called for
rate increases of 10%. In the current
budget situation, Parking has plans to cut costs, enhance revenue, and reduce
staff, and with a $1.6 million in savings on the East River Road ramp (money
that the department is getting back), is proposing only a "modest rate
adjustment." Mr. Baker outlined the
cuts and revenue enhancements being proposed, totalling $1.25 million. They include reductions in the shuttle bus
service and staffing reductions as well as rate changes and "assigned
stall" contracts. The shuttle bus
cost reduction should have no impact on service, Mr. Baker said; with the
articulated buses, they have enough capacity to address problematic overload
periods, thus reducing the need for a large contingency fund. The "assigned stall' will be entirely
optional; it will cost an additional $10 per month and will consist of the most
desirable spots in the ramp or garage--but anyone opting for it would have a
specific guaranteed parking spot available to no one else. Mr. Baker agreed that assigned stalls would
reduce capacity slightly, but they expect to sell only 5-10% of the spots in a
facility so he thought it would have little impact on revenue.
Ms. McCarthy Barnes noted that the MSA
president campaigned on getting late-night bus routes and capping rates for
students. Mr. Baker pointed out that no
MSA candidate consulted with his office; they will, however, make anyone who
called for capping student rates look like a hero because that is what they
propose to do for this year. His office
has been talking with MSA for the last couple of years about late-night bus
service. He said he would not oppose MSA
pursuing its plans, but there could be an ethical issue for the University
supporting students going to bars.
Liability for such transit would be greater; it would be cheaper for
students to lease a van and hire a student driver than pay for late-night
fixed-route bus service.
Mr. Baker reviewed briefly the capital
plans for the year (largely debt service, structural repairs, and a few other
small projects) and then reviewed the budget.
The budget includes a proposal to create two reserves, one for
transportation and one for operations, of $2.4 and $2.7 million. The projected ending balance for the
department would be $280,585 on a budget of about $28 million (excluding the
proposed reserves).
Professor Speaks said the ending
balance is positive because there will be an infusion of one-time money from
the
Is there a depreciation reserve, Mr.
Klein asked? They would like to get to
that point, Mr. Baker said, but depreciation is currently not funded. Associate Vice President Pfutzenreuter would
like to see the University move to funding depreciation but it has not had the
wherewithal to do so.
They opened the
Mr. Baker then reviewed the rate
increases. There are no proposed
increases in public rates except for major and minor events, for which the
rates will increase from $8 to $9 and $6 to $7.
In contract parking, there will be a rate increase of $1.25 per month
for surface lots (currently $55) and $2.00 for ramps (currently $82.50) and no
increase for garages (currently at $110 per month). The garage rate is not increased because
there are a large number of empty garage spaces available. For transit, there will be no increase in the
U-Pass or the Transportation Fee but there will be an increase of $5 per month
for the Metropass. These changes are
projected to provide increased revenue of $448,000.
Professor Speaks posed a question for
the Committee. It is nice to see rate
increases smaller than originally projected, and any organization needs
reserves. Given the projected balance of
$280,000, a rate increase producing $448,000, and the establishment of about $5
million in the two reserves, in the context of a year with zero salary
increases and increased cost of health care for employees, would it be better
to have the increased revenues come from the proposed reserves rather than rate
increases? Ms. Weinberg said that
lower-paid employees--those most likely to use surface lots or the
Metropass--are the ones who are being asked to bear the rate increases. Mr. Baker said he did not agree with Ms.
Weinberg's premise about who uses surface lots and Metropasses, but agreed that
those two categories would see rate increases.
Ms. Weinberg said if an employee is making $12 per hour, they are in a
surface lot, not a ramp. Mr. Baker
responded that there are students in residence halls who have ramp and garage
contracts; he said he did not agree to speculate on what group can afford what
facility. He said he is trying to run a
business and does not want to increase a price on a product he has more of than
he can sell. Ms. Weinberg said she
wanted it on the record that she believes these increases will fall
disproportionately on lower-paid employees.
Ms. McCarthy Barnes noted that Parking
has a philosophy about the ways it expects people to get to campus; she asked
Mr. Baker if they could consider a percentage increase in rates based on the what they know about how people get to campus? Students with garage spaces, she surmised,
have parental money to help them. Mr.
Baker said while it was a good idea, he did not believe that Parking could do
what Ms. McCarthy Barnes suggested.
Mr. Klein suggested that Parking could
raise the garage contract rate with only a minor effect on volume; those who
can afford it would continue to use the garages and other rates could be held
constant.
Mr. Miller reported, apropos the transportation
reserve, that it is not really Parking funds but
rather money from the federal transportation grant that will continue to be
used to support mass transit.
Professor Speaks recalled that when the
President met with the Faculty Consultative Committee, he strongly and sternly
said that every budget of the University must help face the budget
problems. Professor Speaks suggested
again that if there were no rate increase, a projected balance of zero, and use
of $250,000 from the projected reserves, the budget would be balanced. In a year that will see wage freezes,
significant tuition increases, health care cost increases for employees, a rate increase is not a good idea. The President, moreover, agreed to try to
implement the health care cost increases in a way that will protect low-income
employees; if that is not accomplished, there will be a lot of pain for a lot
of people. He acknowledged that a few
dollars here and there for parking are not a great hardship but the increases
send a signal.
Professor Chapman agreed. He said he was distressed at the regressive
taxation and would rather see cost shifts not imposed where they are proposed.
Have the decisions already been made,
Professor Speaks asked? They have not, Mr. Baker and Ms. Scheich assured the Committee. Vice President O'Brien said she understood
the Committee perspective and was pleased that Parking has cut costs and used
one-time money to keep rates down; she said she assumed the Committee shared
that view. Professor Speaks said it did
absolutely and said he regretted not congratulating Mr. Baker on what he has
accomplished.
Vice President O'Brien recalled that
there had been a structural failure in one garage (Mayo) that had resulted, as
Mr. Baker had told the Committee, in closing it rather than paying the very
high cost of repairing it. That closure
inconvenienced about 200 faculty and staff in the
Professor Speaks did not disagree with
the objective; he said it was more a matter of symbolism than real money.
2. University Policies on Design,
Supervision, and Acceptance of Construction Projects
Professor
Speaks welcomed back Professor Alexander and Associate Vice President Spehn to
take up the discussion of University building contracts and related
issues.
Professor
Alexander reviewed the presentation he had made at the March 4 meeting and then
focused on the four challenges he had identified. He said he had spoken only about the problems
of which he was aware, in a limited number of buildings, and he assumed there
were similar problems elsewhere. The
four challenges [from the March 4 minutes]:
There are four
challenges to be met, Professor Alexander said.
First, "the maintenance of individual memory and expertise for
events whose recurrence interval is decades or [for buildings] which were
constructed decades ago." Second,
"no one appears to be responsible for trending the environmental data in
the University buildings. No one is
extracting from those data streams useful management information on the
buildings' performance. It is too
difficult to obtain information that is--or should be--routinely
generated." Third, "no one
appears to be responsible for inspecting some subcontractors' work during the
construction of
Professor
Alexander then distributed copies of data he was receiving about the Andersen
Library. In some cases, there were no
data on the graphs or charts; in other cases the abscissa scale was not
identified. Why were graphs with no data
sent, he asked? On the graphs that did
contain data, they demonstrated that while temperatures were held reasonably
steady and within the required limits, the humidity in different areas of the
building "wandered around" and was often outside the limits required
for long-term document preservation.
There were no explanations offered for the lack of data; it appears this
relates to his second point, that "no one appears to be responsible for trending
the environmental data in the University buildings. No one is extracting from those data streams
useful management information on the buildings' performance. It is too difficult to obtain information
that is--or should be--routinely generated."
The
fourth challenge is the most important, Professor Alexander said; no one is
examining cumulative impact. The
University should get faculty, staff, and students involved in doing so; there
is a reservoir of talent that could be used to the University's advantage.
Vice
President O'Brien said she would like to deal with each of the four
challenges. She recalled that she and
Mr. Spehn and Ms. Lougee had been present for the earlier presentation; she
said learned a number of things and said there had been good suggestions for
remedies that go beyond individual projects on how to use spaces and
sites. She said she was glad she met
Professor Alexander. Professor Speaks
agreed that the focus should not be on Andersen Library.
With
respect to the first challenge, Ms. O'Brien agreed that there was a period when
the history was retained by individuals responsible for the University's
physical plant; the University lost that history when individuals retired. The University has records but it is not
clear to what extent they have been referred to. What is to be done so that the concerns of
the first challenge will be addressed, Professor Speak asked? A big part is in the system used, in a
positive sense, Professor Alexander said.
There are drawings and sets of figures; they are extremely
important. There are "as
built" drawings, which are more useful because many buildings are not
built as drawn, for various reasons, and it is a lot of work to write down what
really happened. The "complete
report" on Andersen Library contains missing sections. Traditionally a lot of this knowledge was
held by people who were at the University for 30 years and who passed the
knowledge along to apprentices. That
system is breaking down with more turnover so things
have to be written down. Did the people
who worked with the flood waters write things down, he asked? It would be very helpful if they had.
Ms.
O'Brien agreed that there had been a system failure. When the University relied on human memory,
there was a system; now pieces of the process exist but there is no
system. When the President asked her to
restore trust in the capital project system, her reorganization is moving to
establish a system, a team-based process, that should
include the documentation the Professor Alexander has called for. If things are done right, the issues will be
addressed. The University is not there
yet and it will take a couple of years to get there, she said.
Mr.
Klein commended Vice President O'Brien for the changes she is proposing. He said he would like to hear about any
change in the project wrap-up practices and if anyone is responsible for them
and whether the process will be institutionalized. Ms. O'Brien said she would be receiving the
names of finalists for the associate vice president for capital projects; in
the meantime, she and the interim appointee have been identifying elements of
the system that need improvement; the new associate vice president will develop
the new system. She said she would be
glad to return to the Committee with a work plan and milestones and report from
time to time on progress. Professor
Warwick noted that the U.S. Army has for 200 years had after-action reports,
investigations of incidents; perhaps that process could aid in establishing a protocol
here.
There
is a lot of institutional memory in the faculty, Professor Campbell observed;
the average faculty member is here longer than others at the University. There is a lot of expertise in the faculty
and staff; there is no better example than Professor Alexander. He said he could not understand why, when
Professor Alexander asks questions, the expertise is not acknowledged. A more global question is why not harness the
expertise on campus and devise procedures so there is more institutional
memory? He and Professor Speaks have
been on this Committee over a number of years and have a long memory on
financial issues; this is the not the first time Professor Alexander has called
the University's attention to construction problems. But he has not even been consulted or
received the courtesy of a response to his questions. Professor Campbell said he was tempted to
suggest establishing a task force, including faculty, staff, and students, and
while he was not sure that was the best way to proceed, it might help instill
confidence in the process. He encouraged
Vice President O'Brien, as someone new to her position, to do something
different and not repeat the mistakes of the past.
Ms.
O'Brien said there would be many task forces and they will pull in campus
expertise for different elements of the work plan. She said she spent the first six months on
the job talking with deans and others, looking at problems, so she now
"owns" the issues and problems.
The search committee for the capital projects associate vice president
was chaired by the dean of the
Professor
Alexander said he is a strong believer in partnerships and would be happy to
work with the new person hired as associate vice president for capital
projects. The goal is to incorporate
information into the system.
With
respect to the second challenge, Mr. Klein asked if the information--or lack of
it--Professor Alexander presented is simply one incident or if it reflects
systemic problems. This could be a
communications issue. Ms. O'Brien said
there is a team of people working on issues associated with Andersen
Library. Mr. Spehn said he would look
into the missing data; he said he knew that new equipment was being installed,
which might explain the gaps.
These
missing data are trivial in comparison with the larger issues, Professor Speaks
said, but whoever is disseminating the information is not paying attention, and
raises the issue of whether those responsible for dealing with the problems in
the building are getting data of the same quality. It is trivial unless it is systematic, Mr.
Klein agreed. If it was something as
elementary as equipment replacement, someone could simply have noted that event
on the graphs.
When
the temperature and humidity fluctuations are unacceptable, what happens,
Professor Speaks asked? There is a team
in Facilities Management developing a "critical path" to solve the
problem, Ms. O'Brien said. In the long
term, the facility cannot operate this way because it will cause problems with
archival materials. No one appears to be
responsible for trend environmental data, she said, but there are people
watching it closely and working on the problems. When Professor Alexander receives these kinds
of data, and receives no response to questions, that leads to his challenge,
Professor Speaks commented. Ms. O'Brien
agreed.
Mr.
Spehn agreed there is a question about who is watching the trends. There is a Building System Response Team to
monitor building points that has a procedure to follow. Professor Alexander said he had visited the
control room; there are two people in a room with real-time data coming from
all over the campus whose responsibility is to call the Fire Department. There is no chance they will see trend data
on increasing temperatures in the chemistry building, for example. The data must be stored and examined and then
used to prevent a problem before it blows up.
Did
the University bring these problems on itself, Mr. Bonnema asked? Up until about 15 years ago it had a fine
architectural/engineering department that reviewed plans and monitored the
progress of projects and held contractors responsible. That department was cut so the University
must now depend on outside architects and engineers to handle projects, a
system that has not worked nearly as well.
Perhaps Vice President O'Brien should consider returning to at least part
of that system.
That
relates to the third challenge, Ms. O'Brien responded. Mr. Bonnema is correct, she said; there was a
dramatic change in the way the University handled project development. She agreed that there is a need for balance
between the current practice and the old one; the University needs to be sure
it can get some jobs done inside as well as be sure of quality assurance on the
outside.
The
third challenge is partly luck of the draw, Professor Speaks said. He had a very attentive project manager for a
project he was involved in; the person was constantly looking in on the
construction to see that it was being done right. If it IS luck of the draw, in terms of what
University project manager one gets, it should not be. Everyone should supervise projects as well as
the person who worked with him. Ms.
O'Brien commented that throughout the University there are people who do their
jobs well, who are excellent at building management; the question, she agreed,
is how to avoid variance across the institution. There is knowledge garnered in the
construction process that is lost when the University relies on an outside
owner's representative, Ms. Weinberg said, and it is difficult to transfer that
knowledge back to the University. Ms. O'Brien
responded that she was not talking about the owner's representative being from
outside; she was referring to architects and engineers.
These
problems have grown over a number of years, Professor Speaks said, and he was
grateful to Professor Alexander and the Subcommittee on Twin Cities Facilities
and Support Services for the enormous amount of work they did to pull the
information together in a positive way.
He expressed confidence that Vice President O'Brien and the people who
work with her would pull these issues together.
He said it would be helpful for the Committee to have an occasional
progress report.
Professor
Bauer said she was interested in the research that could be done by faculty,
staff, and students. Is there a large
cadre of people who could do it? Or does
the University need more than they could handle? Professor Alexander said that he and a lot of
his colleagues are in the business of training people to deal with society's
problems. He teaches a course in
groundwater hydrology; in a couple of years, those people will be working on
groundwater pollution problems. He said
he approached Environmental Health and Safety a few years ago about using
University wells as a lab session; the project worked very well and the
students loved it. It was a remarkable
teaching experience and it generated a lot of new information about the
Professor
Speaks thanked everyone for coming and adjourned the meeting at
--
Gary Engstrand