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), Brittny McCarthy Barnes,
Stanley Bonnema, Daniel Feeney, Steve Fitzgerald, Thomas Klein, Joseph Konstan,
Cleon Melsa, Kathleen O'Brien, Charles Speaks, Alfred Sullivan, Kate
VandenBosch, Susan Van Voorhis, Warren Warwick
Absent:
Calvin Alexander, David Chapman, Michael Korth, Yi Li,
Timothy Nantell, Richard Pfutzenreuter, Terry Roe, Thomas Stinson, Michael
Volna, Susan Carlson Weinberg
Guests:
Associate Vice President Laurie Scheich (Auxiliary
Services), Associate Vice Provost Gerald Rinehart (Student Affairs), Robert
Crabb (Twin Cities Bookstores), Leslie Bowman (Housing and Dining Services),
Amelious Whyte (Student Affairs), and Michael Berthelsen (University Services)
[In these minutes: (1) fringe benefit rates for graduate
assistants; (2) sustainability and energy efficiency policy; (3) parking,
bookstores, Coke, and ARAMARK]
1. Fringe Benefit Rate for Graduate
Assistants
Professor
Campbell convened the meeting at
Professor
Speaks said it would be helpful if the Committee could be provided data on the
number of graduate students at the University over a period of a number of
years so that it could evaluate the impact of the fringe benefit pool policy
change that was made in the 1990s and any continuing impact of the substantial
increases in the fringe benefit rate.
Professor
Konstan said this is the sort of thing that should be promoted as one of the
successes of the consultative process, given the difficulty of getting students
and faculty to understand that it does provide benefits for people.
2. Sustainability and Energy Efficiency Policy
Professor
Campbell turned now to Executive Associate Vice Provost Sullivan to lead a
discussion of the policy on Sustainability and Energy Efficiency. Dr. Sullivan recalled that he had spoken with
the Committee earlier on this topic; this report is an update. He distributed copies of the charge letter
from the President to the Sustainability and Energy Conservation Policy Work
Group as well as the draft policy on sustainability and energy efficiency. This initiative, he said, had its roots in
the President's State of the University address, in which the President
announced a number of initiatives.
The
Work Group had a lot of faculty expertise as well as representation from the
operations side of the University and was charged to develop a policy framework
that would "translate into long-term, systematic strategies for
integrating sustainable practices and energy conservation across research,
teaching, operations, and outreach."
The group met every two weeks since the beginning of 2004 and after
hearing about what the University is doing and what others are doing, developed
the draft policy. It has been presented
to the Committee on Social Concerns, the Research Committee, and now this
Committee.
The
draft policy read as follows:
Section
i. Purpose
Subd.
1. Sustainability Principles The
The
The
sustainability process, which is made up of collective actions of the Board of
Regents, administrators, students, staff, and faculty, will be guided by the
wise use of all resources within a flexible framework that integrates
environmental, social and economic factors.
Subd.
2. Leadership As a preeminent
educational institution, the
Through
discovery, discussion, development and implementation, the
Section
ii. Sustainability and Energy Efficiency Goals
Subd.
1. Modeling Sustainability. The
Subd.
2. Operational improvement for sustainability.
physical planning and development, including buildings
and infrastructure;
operations;
transportation;
purchasing;
waste management and abatement.
Subd.
3. Energy efficiency. Recognizing the
central importance of optimizing how we use energy in an overall process of
campus sustainability, the University of Minnesota will undertake a process to
increase energy efficiency in our operations, to reduce dependence on
non-renewable energy, and to encourage the development of energy alternatives
through research and innovation on our campuses.
Subd.
4. Innovation in sustainability and energy efficiency.
Subd.
5. Educating for sustainability and energy efficiency. The
Section
iii. Policy and Oversight
Subd.
1. Policy formation. The
Subd.
2. Accountability. The Administration
will develop appropriate indicators and measures of success in the implementation
of the Sustainability and Energy Efficiency Goals outlined in Section ii, with
the participation of appropriate faculty, staff, students, and experts in the
broader community.
Subd.
3. Administration and reporting. To
ensure that there is support, alignment and progress towards these objectives,
the Board of Regents directs the president to designate one Administrator
position and an advisory committee to report on activities towards these
goals. The Administration will report
back to the Board of Regents annually in the University Plan Performance and
Accountability Report on the degree to which the targets and standards that
have been set are being achieved, and will use this information to identify
opportunities for continuous improvement.
Administrative units should be staffed and equipped to facilitate
cross-unit interactions that follow through with leadership, innovation and
accountability.
Section
(ii)(2) sets goals in five areas, Dr. Sullivan noted, and they will use
University expertise to identify specifics in each area. He said he believed energy to be of central
importance, so it is in a separate section (rather than a separate
policy). Section (iii) commits the
administration to maintain policies and accountability measures and to report
on what has been achieved. One
administrative position is to be designated responsible and there is to be an
advisory committee.
Vice
President O'Brien commented that she and Dr. Sullivan had an interest in having
a full range of views from across the University when dealing with the issue of
sustainability. Some wanted specific
issues included in the policy; others wanted to be sure it was not a blank
check and wanted to balance the financial resources needed. The Regents are adopting more aspirational
policies, and do not want operational performance, but they do want a report on
the goals and if they are being achieved.
What
one-time and recurring funds will be required to implement and maintain the
policy, Professor Speaks asked? Ms.
O'Brien said they are not recommending any funding. To a large extent what the policy calls for
is embedded in the work of the University, Dr. Sullivan said; the policy
recognizes what is already happening.
When he chaired the earlier commission, he said, his biggest
"eureka" was learning what was already going on at the University in
these areas. He said they did not see
this an expensive new program.
There
are some initiatives that the Committee is aware of, Ms. O'Brien said, such as
energy efficiency and test burns on oat hulls (which could save the University
$1.5 to $2 million annually). There are
upfront costs to some projects, but there are also immediate savings in some
cases. In other cases there would be
costs--if the University were to use only all-green fuel, it would cost $5-7
million more per year. On the other
hand, the University is a pilot site with 3M to test environmentally-safe
cleaning products, which will not cost anything extra.
Professor
Konstan said he liked this initiative but several things are put together in
it. Much about University operations is
non-controversial; parts of the policy, however, set Regents' policy on
education and research and contains highly visible research projects and
education. He said he was uncomfortable
with this because teaching and research initiatives come from the faculty. In addition, (i)(1) is very broad and may
have meanings not intended.
Sustainability means everything--how the University spends money, how it
uses land, who it admits. Referring to
environmental, economic, and social factors is meaningless--or they will be
used to defend someone's pet cause. He
said he liked energy efficiency and operational sustainability but was not
comfortable with setting academic priorities.
Dr.
Sullivan said that in terms of sustainability principles, it could be a matter
of cultural jargon; it may not be specific enough for an engineer but is common
language for sustainability. Professor
Konstan asked for a definition. Dr.
Sullivan referred to the second paragraph of the policy, which is drawn from
the Bruntland Commission; while it is understood that needs in the future may
change, sustainability means trying not to compromise the ability of future
generations to meet their needs.
Professor Konstan asked if a decision by the Senior Vice President for
the Health Sciences to stop putting money into faculty salary increases because
in the future there may not be income to pay them would fall under
sustainability. Or is the concept
limited to natural resources and the environment? The latter, Dr. Sullivan said.
Professor
Speaks referred to the language of (i)(1), paragraph 2 about meeting present
needs. Are those in the footnote? What kinds of needs? Environmental and natural resources, Dr. Sullivan
said.
Professor
Campbell said he concurred with the tone of Professor Konstan's comments; this
is a larger issue than the policy at hand.
The Senate Research Committee has been concerned about the practice of
the legislature in assigning research objectives (e.g., energy) instead of
having them emerge from the faculty, where the interest and expertise lie. It is from the faculty that research
objectives should emerge. This raises
the question about the centrally-defined academic initiatives: They may not be in the realm of current
faculty expertise. What responsibility
do the faculty have to follow them?
Professor
VandenBosch suggested that the first sentence of the policy is ordered in the
opposite way it was intended. It is
aimed at operations; she said she objected to the teaching, research, and
outreach mandates. To change the
sentence would meet the objectives and not prevent units from embracing them.
Mr.
Klein said one can argue that this policy is the place one wants a tension between
(1) research and initiatives arising from faculty expertise and interest, and
(2) legislative/public interest in research expressed through the Board of
Regents. It is good to have these
tensions put in play, he said, so they are not in play in the legislature
instead. He said he thought the policy
was very non-directive as a statement of interests. There is a natural tension here, he said, and
the Regents' policy is the right place to express it, rather than through
department budgets and line-item vetoes.
Professor
Speaks said that (ii)(4) is what is most objectionable: University campuses "will
establish" research projects. That
is not the role of the Board of Regents.
One could revise it to say that University campuses "will
welcome" or "will be receptive to" projects proposed by the
faculty. That is close to what he had in
mind, Professor Konstan agreed: In its
operations, the University will work with/will be open to/will collaborate with
faculty and students in research and teaching.
The policy should set a good example, not mandate academic programs to
do certain things. The process could be
like issuing an RFP, Professor Speaks agreed; programs could respond if they
wished.
This
is like the issue about spending royalty income, Professor Campbell said. The Committee argued that the University
should use the money to do what it does best.
Most proposals come from below, not making money available and saying one
can apply for it. He said he was
uncomfortable with that approach. There
are no funds here, Professor Konstan observed.
The idea is that University operations can be a model for sustainability
and the administration understands the charge to be to integrate with education
and research programs where possible.
That is already happening.
It is
more complex, Vice President O'Brien said.
As the University pursues sustainable operations, the administration
encourages consultation and partnering with faculty who are experts. When they seek to partner, they find it
difficult to find faculty to work with.
Connections through this Committee have been responsible for
establishment of some relationships that have been helpful to the operations
staff, she said. They would like to have
something more attractive than "invite" and would rather use "encourage
or promote." She said she
understood the point about the directive, however. They are here because they have concerns, Dr.
Sullivan added, and they can modify the language to make faculty more
comfortable with the policy. They have
not encountered these objections before this meeting; the faculty who are
already involved in sustainability and energy conservation are enthusiastic
about it.
Professor
VandenBosch said she believed these efforts provide a great educational
opportunity for students. If the faculty
could partner with the operations side, one could make simple language changes
in the policy. Section (ii)(4) makes it
sound like funds will be granted, which is misleading.
Professor
Campbell thanked Vice President O'Brien and Dr. Sullivan for their
presentation.
3. Parking, Bookstores, Coke, and ARAMARK
Professor
Campbell next invited guests to join the Committee: Associate Vice President Scheich (Auxiliary
Services), Associate Vice Provost Rinehart (Student Affairs), Mr. Crabb
(Bookstores), Ms. Bowman (Housing and Dining Services), Mr. Whyte (Student
Affairs), and Mr. Berthelsen (University Services).
Ms.
Scheich said they brought four topics to the meeting: parking rates, review of the bookstores, and
information about the Coke and ARAMARK contracts. She recalled that Mr. Baker had provided the
Committee in February with information about the factors that would affect the
2004-05 parking rates. She distributed
copies of the proposed rates for next year and told the Committee they have set
the rates as were indicated at the earlier meeting but without making the
program cuts that were thought necessary.
Free night parking, contract parking during major events, the
Professor
Konstan asked if the U/Metro pass is being subsidized less and costs are
increasing. The cost is increasing, Ms.
Scheich affirmed, and the federal grant ends for the
Professor
Speaks asked what income would be generated if event parking were to increase
by $1. Do they have any sense of how
elastic that rate is? Would increasing
the price $1 have any effect on usage?
They do not have the information for this meeting, Ms. Scheich said, but
they can provide it. Mr. Berthelsen said
it was his sense there would not be much drop-off in use. What is event parking downtown, Professor
Speaks asked? It is in the $9-12 range,
Ms. O'Brien said, and they monitor those levels. Professor Speaks said he asked the question
because if Mr. Berthelsen is right, and an increase would not affect usage, he
would rather see some increase in those rows of the table than increases for
faculty, staff, and students. Professor
Konstan noted that the price of event parking downtown varies, depending on how
far away from the venue one is. The
University, however, charges the same rate in all facilities, but it could vary
the price for a basketball game, for example.
Using only a "major" and "minor" categorization for
event parking rates may not maximize the income, even though people would be
willing to pay. Moreover, the event rate
may still be less than the hourly rate in some facilities.
Event
rates are charged in certain facilities, Ms. Scheich said, but they do not
charge more if the facility is closer to the event. She agreed that it could be a good time to
look at that issue.
Ms.
VanVoorhis noted an increase in the loading zone parking fee and said that she
is not allowed to push costs elsewhere in the University. It appears that Parking and Transportation
is, however. Ms. Scheich pointed out
that auxiliary units are self-supporting.
Mr. Berthelsen said that the rates would have been higher if not for
budget cuts in the units. Vice President
Pfutzenreuter insisted that auxiliaries make an effort to cover salary
increases, utility cost increases, and so on, but the units were not provided
any new revenue source. One objective
they have is to not shift costs from one unit to another; these cost increases
fall on faculty and staff but they do not shift costs between units.
Professor
Speaks recalled that the Committee had earlier seen numbers for reserves and
building depreciation; have those been retained? They have, Ms. O'Brien said; they tried to
fund some depreciation and eliminate some cuts.
Professor
Konstan said that hourly parking (not proposed for an increase) hits two
groups: infrequent visitors to the
campus (which he did not worry about) and those who must come frequently but
who are not eligible for a contract.
Have they thought about allowing these frequent visitors the opportunity
to buy down the hourly rate? If they
reduce revenue in one place, they will need to increase it somewhere else, Mr.
Berthelsen observed.
Ms.
Scheich said if Committee members have additional questions, Mr. Baker would be
glad to return to the Committee to discuss them. She then turned to Mr. Crabb for a report on
the Bookstores.
Mr.
Crabb noted that it had been awhile since he had met with the Committee; the
last time he was at a meeting they had five small bookstores across the campus;
Williamson was the largest, at 15,000 square feet. Since then they have closed three of them and
opened the Coffman store, at 45,000 square feet. The Coffman store provides the campus with a
very respectable facility that is common to large research universities, many
of which have stores of 45,000 to 100,000 square feet. The driving forces that led them to move to
Coffman were to make the student experience more palatable (so they did not have
to go to different stores to purchase their books), help the Union (which is on
the edge of the campus and not normally a destination, something the store
could help with), allow the store to provide academic, technical, and
scientific books common to large universities (academic bookstores
traditionally carry books that the big suburban superstores do not), and
finances (e-commerce, discounting, and electronic books loomed, and while they
have not materialized yet, they remain on the horizon; to compete, the
bookstores needed to close small inefficient stores with high fixed
costs).
The
new bookstore came in under budget and on schedule, Mr. Crabb reported. The results of the move have been
overwhelmingly positive and the store has received a tremendous response from
the University community and the outside.
Suppliers say the store ranks with the top stores in the country and is
something the University can be proud of.
They have met all financial objectives to date. Mr. Crabb reviewed the sales data. Text and general sales are up markedly, the
store is said to have the best art supplies in the city, and they have many
more clothing and gift items and are selling a lot more UM-insignia items.
Professor
Konstan noted that sales are up, the cost of goods is up more, and credit card fees
are up much more. Are those because the
store is into different rates or different merchandise or because of smaller
margins? Textbook sales are low-margin,
Mr. Crabb said, and they are high sales, so the overall margin was
reduced. They expect better gross margin
rates as they go forward and control the inventory better. The store is doing better than expected, it
is a wonderful facility, but how long can it be sustained in order to get to a
net positive cash flow (which it does not have)? Mr. Crabb noted that the store had net income
of $249,000, but must pay "dividends" to the University--the IRS and
enterprise taxes--and it must pay capital debt to finance the project. They were not compensated for the space paid
to build out in Williamson, Moos, or the
Professor
Campbell recalled that the Committee had a concern that the bookstore was being
asked to take on too much burden in order to help ensure the success of Coffman
Union. The original pro forma set
expectations about what the store would take on. Mr. Crabb said they pay rent of $460,000 to
the
What
about minor supplies that students need, Professor Warwick asked? If they run out of note cards in Wilson
Library, there should be a small place that carries supplies. That was a concern, Mr. Crabb said, and they
spoke with the
Professor
Campbell thanked Mr. Crabb and congratulated him on the performance of the new
store.
Ms.
Scheich next introduced Leslie Bowman, who oversees the Coke and ARAMARK
contracts. Ms. Bowman began by reviewing
the Coke contract: 10 years (through
Dr.
Rinehart reported on how the funds from the $4.9 million quasi-endowment and
the $240,000 for campus initiatives are used in Student Affairs. There are three major areas supported with
the approximately $180,000 per year from the quasi-endowment: the leadership minor program (an
interdisciplinary program with the Humphrey Institute, Education and Human
Development, and Student Affairs), the Coffman Union theater remodeling, and
the Marching Band pre-fall camp. The
initiatives are applications funded in academic, community building, and campus
life. They provide awards of up to $2000
($1000 in the future because of increased demand). They make about 5 awards per year for
academic efforts (and $20,000 of the funds are directed annually to
scholarships).
Professor
Campbell said he was not aware of any academic program that benefited from the
initiative funds and was glad to see that some do. He asked about the leadership minor. Dr. Rinehart said that Dr. Jones had made the
decision to fund that program; once it was approved, tuition did not cover the
full cost, and this support is in line with a student activities leadership
focus.
Professor
Campbell said he would be interested, as the University negotiates a new
contract or extends the existing one, how resources would be used. Dr. Rinehart said with the Coke arrangement
has the potential to pit one part of the University against another. The TCF model, where the University receives
the money and decides how to use it, may be a better model overall. Professor Campbell said the Committee should
hear about the contract with TCF.
Ms.
Bowman next reviewed the contract with ARAMARK.
It is a 10-year agreement, through June, 2008, provides ARAMARK the
right to operate all food service venues (28 residential and retail), the
University owns and operates all the facilities, the labor is University
(Teamsters and students) but managed by ARAMARK, and it is only a Twin Cities
campus contract. ARAMARK operates the 6
residence dining halls, the 19 retail venues and 3 convenience stores, the
catering operations (but it does not have exclusive rights), and the
non-beverage vending operations. The
commissions from the contract fund facility upgrades/renovations, repairs and
maintenance, utilities, major equipment purchases, and insurance, IRS taxes,
and administrative costs. There have
been a number of significant changes and upgrades in programs and facilities,
which Ms. Bowman reviewed. There were a
couple of recent audit recommendations that were not major, but one drew
attention to a plateau in customer satisfaction survey results (satisfaction
increased each of the last three years and this year hit a plateau). They anticipate developing committees for
discussion about 18 months before the contract ends.
Professor
Campbell recalled that this Committee had considerable involvement with student
dissatisfaction with ARAMARK and participated in high-level meetings with ARAMARK
executives. He said he was surprised to
hear that there was a reasonable level of satisfaction in the survey
results. Ms. Bowman said the
satisfaction had IMPROVED over the last three years. The levels are reasonable but not as high as
they wanted. In 2002-03 there were some
declines, but the survey was changed so it is difficult to make comparisons
with previous years. Ms. Scheich said
that she and Dr. Rinehart worked with the students about flexibility in the
dining plans, appointed a University Dining Services advisory committee, have
monthly meetings with student groups, and provide UDS feedback on initiatives
they are thinking about. Are they
benchmarking customer satisfaction and trying to be at national levels, Mr.
Klein asked? In some areas they are at national
levels, in some areas they exceed national levels, and in some categories they
are below, Ms. Bowman said.
Vice
President O'Brien thanked the Committee for the opportunity to make these
reports. Professor Campbell said the
Committee will want to participate at some level when the University negotiates
the new contracts or contract renewals, and then adjourned the meeting at
--
Gary Engstrand
† This definition focuses specifically on environmental, social and economic sustainability goals through design, planning and operational organization, but is referred to simply as sustainability for the purposes of brevity.