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 Campbell (chair), Calvin
Alexander, Brittny McCarthy Barnes, Stanley Bonnema, David M. Brown, David
Chapman, Dan Feeney, Michael Frankosky, Gary Jahn, Thomas Klein, Joseph
Konstan, Michael Korth, Kathleen O'Brien, Richard Pfutzenreuter, Charles
Speaks, Sue Van Voorhis, Warren Warwick, Susan Carlson Weinberg, Michael Volna
Absent: Thomas Stinson, Terry Roe
Guests: Al Sullivan (Office of the Executive
Vice President and Provost); Wendy Pradt Lougee (University Librarian), Janis Jaguszewski, Charles Spetland (University Libraries); Associate
Vice President Steve Cawley (Office of Information Technology)
[In these minutes: (2) capital projects/capital request; (3)
library acquisition funding; (4) new financial system (PeopleSoft vs. Oracle)]
1. Welcome and Introductions
Professor
Campbell convened the meeting at
2. Report from the Capital Projects
Subcommittee
Professor
Campbell turned to Professor Brown for a report from the Capital Projects
Subcommittee. Professor Brown began by
noting that capital projects have usually been thought of as new buildings but
now also includes HEAPR funding (Higher Education Asset Preservation and
Renewal). HEAPR funds are intended to
preserve existing facilities by repair or replacement of things like electrical
systems, windows and roofs, air quality systems, etc. If funds for capital construction are not
designated by the state as HEAPR funds, the University must contribute
one-third of the costs; the University, in turn, now requires that units
provide one-half of the one-third, or one-sixth of the project cost. The administration has decided to emphasize
HEAPR funding over new buildings in the University's capital request.
The
University's proposed capital request for 2004 totals $159.9 million, of which
the University would be required to contribute $23 million. HEAPR funds, the majority of the request, are
a "bottom line" amount and not identified facility by facility,
presumably because the expenditure of these funds is a less political process
than is new construction. The University
also worries that identifying HEAPR funds on a building-by-building basis
invites politicization of the process.
The schedule for the request, Professor Campbell noted,
is that it was presented to the Board of Regents in July as a preliminary
request and will be brought back in September and October as a final
request.
Professor Brown said that he had asked that Committee
members receive information before this meeting; it was not sent, so he could
not review the items of the request.
Professor Konstan asked if the University is in the
process of setting priorities for the HEAPR funding, even if it has not
identified them in its request.
Professor Brown said he did not believe so. This is a very small capital request, he
pointed out, and priorities do not need to be set further. Vice President O'Brien had reported that
there will be a meeting about the request with the (state) Finance Commissioner
in the near future; it may be, Professor Brown said, that that meeting will
determine if the University must identify priorities in its request.
The directions from the Finance Commissioner for the
bonding bill indicated that the administration is less interested in creating
more space and is more interesting in retaining the space that already exists,
Vice President O'Brien explained. That
led the University to be more responsive to the administration. With 24 million square feet of space, she
said, if the University receives this and future HEAPR
requests, the funds can be used to make space more usable.
Many of the items identified for HEAPR funding, Professor
Brown said, have been identified earlier; the list of projects is not off the
cuff. Vice President O'Brien added that
they come from academic priorities and facility conditions.
Professor Brown then drew the attention of Committee members
to a resolution adopted by the Subcommittee in June. The resolution provided: "Capital improvements which include
centrally-scheduled classrooms should NOT be the financial responsibility of
the academic unit which houses the facility and should be exempt from the 1/6
cost-sharing principle which applies to other capital improvements that are not
designated for HEAPR"
[emphasis in original].
Committee members debated the resolution at some
length. One concern was that if the
resolution became policy, it would encourage units to include
centrally-scheduled classrooms in facilities in order to avoid paying part of
the 1/6 cost and could lead to a flood of requests to be on the capital
projects list because classrooms are "free." Another concern was that the resolution did
not specify that only the costs of the classroom were to be exempt from the 1/6
cost, not the entire facility. Another
concern was that it is not always clear what a "centrally-scheduled"
classroom is; Ms. VanVoorhis pointed out that there are partnerships between
colleges and central scheduling so that a college receives first priority in a
centrally-scheduled classroom. It would
be odd, she said, if a college has first priority in a
classroom but has no financial responsibility for its construction.
Vice President O'Brien commented that before the Brenner
report in 1994, there were a lot of ad hoc decisions about facility
maintenance. The report provides guidance
on supported and non-supported space and might help this discussion; in any
event, she said, the University should avoid returning to a system of ad hoc
decision-making.
Ms. McCarthy Barnes asked what the financial implications
of the resolution were. Professor Brown
said that would depend on the size of the building and the number of classrooms
in it. The financial implications could
range from the tens of thousands of dollars to the millions.
What problem is the resolution intended to remedy, Mr.
Klein asked? That there is no mechanism
to separate the costs of centrally-scheduled classrooms from the 1/6 matching
requirement imposed on academic units, Professor Brown explained. Such classrooms meet academic needs beyond
the unit making the request for the facility.
If Mechanical Engineering does a major renovation that includes a
centrally-scheduled classroom, the department should not be responsible for the
cost of the classroom, Professor Speaks amplified.
Professor Campbell observed that there are priorities for
classrooms in buildings and that classroom technology upgrades are not charged
to departments; classrooms are treated as a common good. There is the general issue that classrooms
are for students and students come from everywhere.
The Committee voted on one proposed amendment to the
resolution, which failed. It then
approved the resolution, with another amendment, 5-4. The final resolution read as follows: "Capital improvements applicable to
centrally-scheduled classrooms should NOT be the financial responsibility of
the academic unit which houses the facility and should be exempt from the 1/6
cost-sharing principle which applies to other capital improvements that are not
designated for HEAPR." Professor
Brown said that Mr. Pfutzenreuter and other central officers had been present
at the Subcommittee discussion of the resolution and did not oppose it. Professor Campbell said that it was his sense of the discussion that there was broader support for
the principle than the vote indicated but he did not have specific wording to
propose.
It was agreed that Professor Campbell would bring the
resolution to the Faculty Consultative Committee for disposition.
3. Library Acquisition Funding
Professor Campbell next welcomed
Professor Lougee and her colleagues, Ms. Janice Jaguszewski and Mr. Charles
Spetland, from the University Libraries.
Professor Lougee distributed copies
of a set of slides dealing with library collections and reviewed them with the
Committee. Some of the salient points
were these:
-- While the majority (83%) of the Libraries
funding in 2002-03 was from state funds, there has been a recent shift in
support. About one-half of the state funds have been swapped for University
fees, resulting in 33.7% from state funds and 48.7 % from fees in 2003-04. In addition the Vice President for Research
has allocated $500,000 from the $38 million in royalty income toward library
collections for several years.
-- In terms of measures of institutional
support,
-- The libraries' collections comprise
both traditional (over 6 million books, 38,000 current journals, maps,
manuscripts, etc.) and digital (270 databases, 16,000 e-journals, and growing
e-book resources) The University ranks 17th in the nation among research
libraries in its traditional holdings, but holdings generally are becoming
increasingly digital.
-- Of those elements that make up the
Higher Education Price Index (HEPI), beginning in the late 1990s it is library
material costs that have seen the greatest increases. They have averaged 8-9% annual inflation in
the last few years; this year journal inflation rose to 12% (which was both
unexpected and unwelcome). The
cumulative effect of these pressures is reduced purchases of both monographs
and journals.
At
-- Electronic publishing presents
entirely new models for the library. These resources may be dynamic or
interactive. A significant change is
felt in the manner of acquisition. Electronic content is licensed through
contractual agreement specifying how it can be used. Electronic licenses for journals tend to run
15-20% above and beyond print costs; for reference works they are two to six
times greater than print costs. Licenses
can restrict users, uses, and ownership.
-- Two examples of commonly-held titles
were presented: SCIENCE (print version)
costs the library $425 and costs an individual $125; the campus license for
SCIENCE (electronic version) costs $10,105 (which includes two of the
coordinate campuses). NATURE (print
version) costs the libraries $920 and costs an individual $159; the campus
license for NATURE (electronic version) costs $6,800 (which includes the three
coordinate campuses).
Is it legal for a department to buy
one of these subscriptions at the price an individual pays, Professor Campbell
asked? Ms. Lougee noted that some
smaller libraries have utilized donated copies of individual subscriptions, but
the costs of managing these gifts are high.
Asked if she had any sense of the number of individual versus
institutional subscriptions to SCIENCE or other titles, Ms. Lougee said the
libraries do not have ready access to these data. Studies have demonstrated, however, that
typically departments purchase approximately 25% of the information content
acquired for a campus. As the libraries
license electronic content for the campus (at greater cost) departments will
benefit in that they can cancel departmental subscriptions.
Professor Konstan asked, apropos the
electronic license cost, if it would be affected if the University cut in half,
or doubled, the number of users. What if
the license were granted to a state system that included MNSCU and all other
institutions? Ms. Lougee said the price
models for licenses vary depending on the title. Some are based on campus FTE,
some are based on the number of simultaneous users allowed. By and large, publishers have executed very
few state licenses.
Professor Chapman complimented Ms.
Lougee on the presentation; he said it describes the situation very well in a
few slides. He noted that in the case of
a print subscription, if the University suspends a subscription it owns the
materials it has received; does it keep what it has received electronically if
it suspends a subscription? In the
growing majority of cases, electronic licenses convey ownership, although there
are still some pricing differentials between leasing access vs. ownership. Even if the library owns the content,
however, the costs of actually maintaining the content locally and developing
that infrastructure could be prohibitive.
Consequently, there is an incentive to keep the licenses active and rely
on publishers maintaining and serving the content to users.
Other points from the presentation
were these:
-- The University is devoting a smaller
proportion of its library acquisition budget to electronic content than many of
its peers (i.e., about 20% by Penn State, about 17% by research libraries generally,
about 14% by the CIC schools on average, and about 12% by Minnesota).
-- From national surveys that included
Minnesota, the libraries are learning that users want more electronic content
but they want the print materials retained, they want anytime/anyplace access
but also want the physical facilities more functional (e.g., new types of
on-site services), and they want more specialized staff support as well as
tools for independent inquiry and navigation.
(And they want all this for free, Mr. Pfutzenreuter observed.) Undergraduates tend to be heavier users of
library facilities than are graduate students or faculty. Graduate students and faculty are heavy users
of electronic content.
-- New publishing models include new
subscription models, open access journals (typically involving author payments
for publication), e-prints, and institutional repositories (services to manage
publications of an institution’s own faculty).
With respect to the last, Professor Campbell said he knows a lot of
faculty who put preprints on the web so that people can download them; it is
not clear how long that will be allowed.
Ms. Lougee said that publishers vary in accepting manuscripts that were
previously available on the web or allowing authors to post content on personal
websites. Authors need to realize they
have some ability (depending on the publisher) to strike publisher clauses in
copyright agreement. Some disciplines
(e.g., math) have created a network of e-prints through self-posting of
manuscripts on personal websites.
Are the libraries in a position to
help someone find items that may exist on department repositories or on
individual faculty web pages, Professor Konstan asked? The libraries have always provided assistance
in finding information and increasingly services are responding to these types
of needs. Ms. Jaguszewski commented on
the Science and Engineering Libraries participation in online and real-time
reference services to assist users regardless of location or time. Her library also has a pilot program to
provide librarian office hours onsite within academic
departments to aid in research and instructional support.
There is also the "deep
web," Professor Campbell commented.
Ms. Lougee explained that over half of the content delivered through the
Web does not actually "live" in the web and is not retrieved by
search engines (this includes the majority of publisher resources). Libraries are actively engaged in development
to create more robust retrieval tools to integrate resources of the so-called
"deep web."
It would be useful to have a draft
copyright release form for authors, Professor Alexander said, or to have
guidance on what to look for in such forms.
Ms. Lougee said the libraries are interested in forming a more formal
copyright assistance center (and have asked for support for such a service
through the compact process). It might
also be helpful to keep an archive of what terms are acceptable to different
publishers, Professor Konstan suggested; such information would help junior
faculty know when not to give up the copyright.
The copyright rules often vary considerably between publishers and even
within publishers, depending on specific editors.
Professor Campbell reflected that
this is the Finance and Planning Committee and that it consults on finance and
planning matters; it should hear about tradeoffs in the future, he said. In the compact process, are the libraries
treated like a college? While academic
in nature, the libraries are different in that they have no tuition revenue,
Ms. Lougee replied; nearly all income is from the University. Professor Campbell recommended that Committee
members read the longer document prepared for the Regents that Ms. Lougee had
provided; it gives a good sense of what happens to the libraries with a flat
budget.
Ms. Lougee observed that the
libraries needed an additional $900,000 in collection support this year simply
to maintain the status quo in collection commitments. It has received the additional $500,000 in
royalty income, which will help. There
is a process in place to consult with faculty and departments on journal
cancellations. Mr. Spetland reported
that the planned journal reduction will be about 1200 journals, across all
disciplines (a reduction of about $450,000).
He said that the libraries would like to be able to do more than simply
maintain the status quo; while some journals can be cut because they are no
longer useful, at the same time there are new journals and electronic resources
that the library would like to add in order to keep up with the work that
faculty are doing.
Professor Konstan said that their
librarian talks with the faculty about how often items are used and the cost
per use. The consensus in their case was
to cancel more than the librarian requested and obtain things that they do not
now have. Seeing the actual costs led a
number of faculty to realize that what they might
request would not be worth the cost. Ms.
Lougee noted that the libraries also need to engage faculty in a dialogue about
trends within disciplines that affect how information is created and shared.
This information is critical to future planning.
A cut of $450,000 for journals will
affect everyone, Professor Campbell said.
It is often hard to describe the impact, Ms. Lougee said. Information use is so amorphous and diffuse
that it is difficult to tell the impact of reductions on any one department or
field. Have they lost ground in the
2003-04 budget, Professor Alexander asked?
The libraries received a cut of $630,000 and have also needed to
reallocate an additional $600,000 internally to handle increased operational
costs. The recently committed $500,000 in new royalty money will help, but by
no means matches inflation.
Is what they are seeing in journal
prices an economic crisis in publishing costs or monopolistic behavior by
publishers, Professor Feeney inquired?
It is not a pure monopoly, Ms. Lougee said, but it does reflect
consolidation in the publishing industry, something that the federal government
has examined in the past. The problem is
an inelastic market; journal prices go up but there are fewer cancellations
than might be expected from libraries.
Professor Konstan speculated that the process was more corrupt: Publishers pay good money to editors, buy dinners,
and so on, and provide benefits that professional societies cannot offer; all
publishers have to do is get a few high-profile names in a field to identify
with a journal and it will be successful.
One can fight this on an individual basis but to be effective an entire
discipline must fight. Ms. Lougee
commented that several movements have emerged in the last several years. Perhaps most notably, the Public Library of
Science launched a petition among scientists to avoid involvement with some
publishers. In the end, few scholars
were willing to break ranks with high-prestige journals.
On the question of information
literacy (discussed in the Libraries report to the Regents), Professor Konstan
said that it is not an appropriate subject for this Committee but argued that
the University should require demonstration of such literacy at the
undergraduate level. Departments could
provide instruction; so could the libraries.
Is there any model for such a requirement? Ms. Lougee said there is the beginning of
language about information literacy in accreditation standards. The libraries do have a substantial number of
program offerings for undergraduates, and a recent addendum to its compact
request to greatly expand the Libraries educational services to undergraduates.
Professor Campbell asked Ms. Lougee
if there had been any response to her report to the Regents. They were concerned about competitiveness and
service to the state, Ms. Lougee said, and raised questions similar to those
raised at this meeting. One outcome of
the report is that the libraries are being asked to provide advice on proposals
for new academic programs, noting the level of library resources available to
support the new program.
What else can the Committee do on
behalf of the libraries, other than communicate the message about the problems,
Professor Campbell asked? There is an
institutional question about "how much is enough?" Ms. Lougee said;
the CIC provosts have wondered whether the libraries are not a bottomless pit given
the high inflation in publisher costs and high demand among users. There is evidence that the
Professor Warwick suggested that the
libraries create a new category of friends:
Industrial friends of the periodicals.
Ms. Lougee said they do have a corporate friends
category, membership in which grants borrowing privileges to corporations, and
they also have fee-based services for corporations. The libraries are currently reviewing the
rates charged to corporations. One
additional outcome of journal cancellations is that the libraries corporate
income is jeopardized as there are fewer resources to draw on in these
services. Professor Campbell said that
Ms. Lougee's predecessor was sometimes frustrated at the constraints he faced
in fund-raising. Fund-raising is
difficult because the libraries have no alumni, Ms. Lougee commented, but the
University Foundation had been very supportive in this last year of the
Campaign. While the libraries have a
reasonable donor base, individual gifts are typically not large. Many citizens
of the state expect the University libraries to be a public good and feel
entitled to access by virtue of tax support.
Professor Campbell thanked Ms.
Lougee and her colleagues for joining the Committee and asked her to keep it
posted. He said he believed the
Committee would support the libraries as a common good at the University. It does need to be made clearer how the
libraries fit into academic priorities, he said.
4. Financial
System Replacement Project (PeopleSoft versus Oracle)
Professor Campbell now welcomed Associate Vice President
Cawley to the meeting, joined by Mr. Volna, to provide an update on the
Financial System Replacement Project.
Mr. Volna distributed copies of a set of slides and
reviewed the history of the University's financial system going back to the
purchase of CUFS. He noted, as he had at
previous Committee meetings, the potential financial risks and impacts of a
CUFS failure, depending on how long the system might be down. He also recalled that after an extensive and
participatory process, the University had selected PeopleSoft as the vendor for
a new financial system. He emphasized
that at the beginning of the process it was NOT a foregone conclusion that
PeopleSoft would be the vendor chosen; they relied on the expertise and advice
of over 200 people across the University to review the vendor proposals.
The University negotiated with PeopleSoft and obtained a
proposed contract--shortly after which time PeopleSoft announced it was buying
J. D. Edwards and then Oracle announced its hostile takeover attempt of
PeopleSoft. Since that time, the
University has slowed down its negotiations and has been waiting to see what
happens.
In the meantime, the University proposed to begin a
"trail blazing" project in 2003-04, rather than a full-blown
implementation project. They are
proposing that the University will purchase PeopleSoft software and necessary
hardware as soon as practical after negotiations are completed, will present a
full budget and implementation plan in 2004-05, and begin full implementation
in 2005-06. The "trail
blazing" project consists of doing a test-drive of the system using
existing funding and staff to test critical decisions that have to be made;
this will help minimize the cash needed to hire consultants to implement the
system--it will allow full implementation with most of the major decisions
already made. The "trail
blazing" project will take about 18 months.
Professor Campbell noted that Messrs. Cawley and Volna
had been in meetings with PeopleSoft earlier in the day. Mr. Volna explained that PeopleSoft would
prefer that the University buy the system in September, so the purchase counts
in their third quarter corporate sales, but he and Mr. Cawley have been adamant
that the University will not do so because it has not consulted with this
Committee or with the Board of Regents for several months to inform them where
the discussions stand and what might happen if Oracle buys PeopleSoft.
The terms and conditions of the University's proposed
contract with PeopleSoft expires on September 12, a date originally set so that
the Regents could approve it, Mr. Cawley told the Committee. The pressure on PeopleSoft will be the same
in the fourth quarter as in the third, however, and the University believes it
must have the extra time for internal communication and consultation.
Professor Warwick, noting the potential financial risks
and implications if there is a CUFS failure for 1-2 days, 2-5 days, 5-10 days,
and so on, asked what the probability is that each of those events would
happen. Mr. Volna replied that his
answer must be somewhat like that given by stockbrokers: Past performance is no guarantee of future
performance. CUFS has gone down 4-6
times per year, 2 or 3 for a measurable period with an impact across the
campus. Have
there been any 2-5 day interruptions, Professor Warwick asked? Not since the system was installed in the
early 1990s, Mr. Volna said. It is,
however, an aging product, Professor Campbell observed. The problem is lack of vendor support, Mr.
Cawley said, and the links to other products make support of CUFS and related
systems exceptionally difficult. CUFS
cannot be upgraded, so the other systems cannot be, either. The likelihood of an interruption is greater
with CUFS than PeopleSoft; in the latter case, the University has contracts
which provide for immediate service in the case of an interruption. CUFS becomes more and more risky as time passes,
he said.
Professor Konstan said that if there is a lack of
internal support for moving forward with a replacement project, it would be
useful to have a table illustrating the annoying elements of CUFS that would be
eliminated with a new system. There are
a lot of examples, he said. He also
asked if Oracle had submitted a bid when the original request for proposals had
been issued. They did not, Mr. Volna
said; they had indicated they would, but then decided not to. Is that worrisome, Professor Konstan
asked? It is, Mr. Cawley said, but on
the other hand Oracle is not a bad company; the University uses its
products. But Oracle does not have the
history of supporting higher education that PeopleSoft does.
There are a lot of good reasons to use the "trail
blazing" approach rather than the $20-million-for-consultants approach,
Professor Konstan said, but it does mean the University has about four more
years with the existing system. If CUFS
were to fail catastrophically, the University would be required to make a
cut-over to the new system in an emergency situation. And if the University is going to put people
on the "trail blazing" effort, people who are not otherwise idle,
what is given up? Mr. Volna said they
recognize the risk of the approach, and one "deliverable" of the
"trail blazing" effort is that there be a rapid implementation plan
that could provide minimum services required (e.g., accounts payable vendor
checks) if necessary. As for the staff,
the Enterprise Systems have had recurring funding for several years in order to
avoid the use of consultants; that funding will be used to provide the staffing
necessary for both day-to-day support as well as the "trail blazing"
effort. There will be no new funds
required.
Mr. Pfutzenreuter said the University began the Enterprise
System funding a few years ago because he had concluded it was "nuts"
for the University to be paying $500 per hour for consultants when, for the
amount of money involved, it could hire people and move them around to projects
as needed. Mr. Cawley added that they
are ready to do this project and have evened out resources so that people now
helping Admissions and Records and Human Resources, for example, could be moved
to the "trail blazing" project.
He said he believed the "trail blazing" project would pay off
extremely well for the University, at low risk and low cost, allowing the
University to spend much less later, during full implementation, and
significantly reduce the risks that arise during system implementation.
Some will no doubt ask how the University will pay for
the project, Mr. Pfutzenreuter observed.
The University has the
Professor Feeney said that if there is known to be
hostility between PeopleSoft and Oracle, and if the University moves forward on
the "trail blazing" project, is it then committed to PeopleSoft? Or are there options for re-bidding the
project? Or can the University make a
decision but delay implementation for a couple of years? Mr. Pfutzenreuter said there are sunk costs
in the effort that would be wasted if the University were to re-open the RFP
and change vendors. Mr. Volna said the
University will need to know the vendor before it does the "trail
blazing" project; it needs to decide, as an institution, if it will decide
or continue to wait. There are
attractive parts of the proposed agreement with PeopleSoft: Maintenance agreements for the human
resources and student systems purchased earlier are expiring, and the proposed
contract includes good pricing for maintenance in the future. They decided today that the University must
evaluate whether to buy or re-bid the financial systems project, no matter the
outcome with Oracle. The contract with
PeopleSoft includes a provision that any new owner must pay the University five
times the cost of the contract if it fails to deliver--an amount that would pay
the substantial part of any new system the University might have to purchase in
the event a PeopleSoft system were not to receive the contractually-obligated
support.
Mr. Cawley pointed out that Oracle has committed to
supporting PeopleSoft products for ten years.
The University will have to decide if it believes Oracle, but he
repeated that the University has a good relationship with Oracle. If the Oracle-PeopleSoft deal goes through,
and there is a 10-year guarantee, he said he would feel a lot better about
using the PeopleSoft product.
Professor Konstan said he thought this was a
well-thought-out process. He said that
if it were not because of the cloud of uncertainty surrounding the future of
PeopleSoft, he would urge the University to purchase the system. Professor Campbell agreed. He said he was impressed with the project charter
presented to the steering committee for the new financial system (of which he
is a member by virtue of being chair of this Committee); he said the process
inspires confidence--but there is still much uncertainty.
Mr. Volna said that an update would be provided to the
Regents at their September meeting and that there would also be a report to the
Twin Cities deans, to UMD, and to others.
It would be best for the University if PeopleSoft would extend the offer
through October so it could be brought to the Regents for action at that time,
with a decision that the faculty and the President could support.
Professor Campbell noted that Mr. Volna was scheduled to
join the Committee several times this year for a report on this topic. Professor Feeney said he felt much more
comfortable with what was going on now that he had learned the details.
Professor Campbell thanked Messrs. Volna and Cawley, and
adjourned the meeting at
--
Gary Engstrand