These minutes reflect
discussion and debate at a meeting of a committee of the
Minutes
Senate Committee on Finance and Planning
Tuesday, October 12, 2004
2:30 - 4:15
238A Morrill Hall
Present:
Charles Campbell (chair), Rose Blixt, Steve
Fitzgerald, Joshua Jacobsen, Lincoln Kallsen, Joseph Konstan, Cleon Melsa, Kathleen
O'Brien, Diane Parker, Richard Pfutzenreuter, Charles Speaks, Kate VandenBosch,
Susan Van Voorhis, Warren Warwick
Absent:
Calvin Alexander, David Chapman, Arthur Erdman, Daniel
Feeney, Thomas Klein, Michael Korth, Ian McMillan, Terry Roe, Thomas Stinson, Alfred
Sullivan, Michael Volna
Guests:
Michael Berthelsen (Office of University Services),
Orlyn Miller (Campus Planning); Senior Vice President Frank Cerra, Senior Vice
President E. Thomas Sullivan, Vice President Carol Carrier
Other:
Jon Steadland (Office of the Board of Regents)
[In these minutes: (1) Michael Moore visit to the Twin Cities
campus; (2) six-year capital plan and debt capacity; (3) financing graduate
education; (4) faculty efficiency]
1. Michael Moore Visit
Professor
Campbell convened the meeting at 1:35.
Vice President O'Brien asked for a moment to provide the Committee an
update on the visit of filmmaker Michael Moore to the campus; she said it would
be good to have a statement on the record.
There
is in place a procedure for those who must handle requests by individuals to
visit campus when the visit would require a lot of planning. Such requests can come from academic programs
or student organizations, internally, or from groups that want to rent space at
the University. When the issue of Mr.
Moore's visit was raised, the question of which track it was on arose; when
they learned that it was part of his "Slacker's Tour," a political
event, they went with the normal procedure for such events.
Of
the $30,000 cost, $3000 was for rental of Williams Arena. Other costs included security, televisions in
the Arena, and clean-up. Vice President
O'Brien said she signed the contract on behalf of the Regents and stipulated
what must be provided. There were a lot
of questions about the event, she said, but the University followed its
standard operating procedure and handled it in the normal way.
2. Six-Year Capital Plan
Vice
President O'Brien next reviewed the capital improvement planning and oversight
process. There are four stages, starting
with potential projects identified by chancellors, vice presidents, deans,
faculty, departments, business units, etc., during the compact process. The primary factors are programmatic needs
and facility conditions. The second
stage is preliminary review and program analysis; criteria include academic
priorities, facility conditions, financial constraints, student experience,
project logistics, and other considerations.
The third stage is the six-year capital improvement plan, items that
have moved from stage two to stage three; these projects are permitted to begin
resource acquisition and do the necessary pre-design and schematic
designs. Stage four is approval and
implementation: the project is fully
funded, pre-design and schematics are complete, it is approved by the Regents
(if over $500,000), and goes into construction.
The
six-year plan outlines the next three capital requests to the legislature, sets
priorities and direction for continued capital and academic planning,
identifies the impact of additional debt, assigns responsibility for
fund-raising for a project, forecasts additional building operating costs, and
is updated annually. This year it will
be presented to the Regents for review in November and action in December. The plan focuses on projects that cost more
than $1 million, or require statement funds/University debt, or have an impact
on campus aesthetics or the adjacent community.
The capital plan is guided by certain principles: advancing new and strengthening existing academic
and program priorities; support stewardship and sustainability by preserving
existing infrastructure and repairing current facilities; protecting the health
and safety of faculty, staff and students; supporting and strengthening the
student experience; and managing long-term financial requirements and future
operating costs within realistic resource goals.
On
the last point, Vice President Pfutzenreuter distributed a handout with
information about the University's debt service, debt service assumptions and
ratios, and historical data. He told the
Committee the goal, in developing the six-year capital plan, is to look
analytically at debt issuance and ratio analyses. He talked about the factors used by the
rating agencies and the various ratios that come into play in evaluating the
limits of the institution's debt service.
In general the University is in good shape, he said, because it has
conservatively estimated growth in the value of its assets and
foundations. It still receives $550+
million per year from the state, has high student demand, has reasonable debt
ratios, and has strong management. For
these reasons, he said, the University can reasonably support the projects in
the six-year capital plan that total $461.3 million in new debt (over the next
six years). The plan would require
funding a $30-million annual debt payment, of which $7 million would come from
the state if it supports 40% of the cost of the football stadium. The $30 million also does not include money
from student fees for a stadium or any fund-raising by the units for capital
projects (which is required).
Professor
Speaks asked how the football stadium fit within the academic plans. He noted that the description of the capital
planning process "begins with its academic planning." Mr. Pfutzenreuter noted that there are
requests to the state and there are others, non-state items (that include
auxiliary enterprises, equipment, the
Vice
President O'Brien next reviewed the six-year capital plan, which also includes
the 2004 request (with inflation added to some projects, at a projected cost of
about $7 million, and others combined with the 2006 request). She mentioned that the President is committed
to replacing the science classroom building at the end of the
Of
the total request, 82% is for renovation and renewal, Mr. Pfutzenreuter said,
and only 18% for new construction, which relates to the University's theme last
year of preserving what it has and not proposing a lot of new buildings.
Ms.
Blixt asked what plans are for Williamson Hall and the space formerly occupied
by the bookstores. Ms. O'Brien said that
they are doing an assessment of how to solve the water infiltration problem,
but several uses of the building are envisioned. The water problem must be solved first,
however.
Professor
Campbell said he understood how the various indices are used to assess the
University's capacity for debt but said he did not know how the debt service
would actually be paid. He said there is
nothing in the capital plan about an income stream. Absent a new institutional budget model, Mr.
Pfutzenreuter said, auxiliary units pay their own debt service and debt service
for academic units is 1/3 of the cost, which is shared equally between central
administration and the units. The
central funds come from reallocation, increased state appropriations, increased
tuition, increased internal taxes, etc.
Are the Governor and legislature concerned about the evaluation of the
University's debt, Professor Speaks asked?
Do the ratios or ratings have an impact on the capital request or the
biennial request? Mr. Pfutzenreuter said
he did not believe those in
Would
the proposal for the football stadium affect what the administration can put
into other projects, Ms. VanVoorhis asked?
It would not because the administration is not paying that debt, Mr.
Pfutzenreuter said. The plan is that the
University would provide 60% of the cost and the state would provide 40%,
either by paying its share or providing the money for the debt service. The University's 60% includes game-day
parking, fund-raising, sponsorships, naming rights, and student fees. In his judgment, the stadium would not have
an impact on the projects on the six-year capital plan. There is a theoretical limit to the
University's debt capacity, which could be affected by the stadium, but he said
he is comfortable with the debt ratios that include the full six-year plan,
which includes the stadium. The amount
of the debt is less an issue than the ability to pay the principal and
interest.
Professor
Campbell recalled that he has been in many six-year capital plan discussions
and projects seem to fall in several categories: ones that make it up the ladder, as one would
expect; those that do not progress at all or very slowly, those that fall off
the list, and new projects, surprise entries, that come on the list and advance
above those that were already there. He
asked what happened to Scott Hall and Peik Hall, which were on the list
previously but now are not. What changes
the order is the academic priorities of colleges and the administration, Vice
President O'Brien said, as well as what they learn about facility
conditions. For instance, Kolthoff Hall
moved rapidly up the list because of need.
Many factors bring a project on the list or slow its progress and
involve balancing priorities within academic units.
What
he finds most discouraging is how long an item has been on the list for the
English department, usually at the bottom (the sixth year) of the request,
Professor Campbell said. He said he did
not understand how University priorities keep a core department in a shabby
facility for so long, across one of the world's great rivers from its
library. This situation calls into
question the attention the plan pays to global priorities. Professor Warwick noted, on a related point,
that the books of Wilson Library are scattered around the state because there
is no room to store them; the libraries are key to the University and should be
high on the list.
Mr.
Berthelsen said that there is an item on the list that is for Scott or Peik
Hall, although not explicitly identified as such. He agreed that some items have fallen back or
off the list, but surmised that if one looked at the 1998 list, one would find
that the percentage of items on the list that was completed would be quite
high. Peik and Scott were originally
scheduled for 2006 but are now 2010, Professor Campbell observed. Mr. Miller said that was because some things
had to get done.
Professor
Campbell thanked Vice Presidents O'Brien and Pfutzenreuter, along with Messrs.
Berthelsen and Miller, for joining the meeting.
3. Financing Graduate Education
Professor
Campbell noted that the Committee has had a lot of discussion of financing
graduate education in the past and that it is an important topic. The Committee talked last spring about the
cost of graduate assistants. Now a task
force has completed a report on the subject that the Committee should discuss
because this is a financing issue. FCC
asked that the report be sent to all Directors of Graduate Study and members of
the Policy and Review Councils; this Committee should try to schedule
individuals from those groups to discuss the report. The Provost has also asked the deans for
comments, Mr. Kallsen reported.
The report calls for a significant
increase in support for graduate fellowships, Professor Campbell said, and that
happened at the same time the biennial request was being developed, which
includes a request designed to increase the number of graduate fellowships by
35%.
Financing
graduate education covers a broad spectrum of students, Mr. Kallsen (a member
of the task force) said. The University
has 16,000 post-baccalaureate students, less than half of them MA/MS/PhD
students—the others are pursuing an MBA, an MD, JD, etc. There is a very different context for each
student. This report concentrated on the
core, traditional graduate students receiving an assistantship. There are about 4,500 graduate assistants out
of about 7,000 students pursuing an MA/MS/PhD.
Even within different colleges these students have very different
perspectives. In some cases almost all
are TAs; in others, almost all are funded by grants or contracts. CLA might see them as underpaid; the
Professor
Campbell said the report makes it easier to understand a complex problem. The bottom line is that more money is needed,
from whatever source. The report also
points out that the University must consider consolidation or closing graduate
programs and the use of teaching specialists instead of TAs in others.
Professor Campbell said he was
surprised at the reality check provided by the report in dispelling the notion
that the University is not competitive with its peers in the cost of graduate
assistants. It turns out that
institutions face similar problems, and the private institutions are even more
challenged with high indirect cost rates, although they do have more money as
well. Mr. Kallsen said that the
University is not at the top in terms of costs; the individual colleges are
more mixed, with CLA near the floor. Mr.
Kallsen said he was also surprised to learn that the University spent $111
million on graduate student compensation (salaries and fringe benefits); some
of those funds could be moved around to address pay equity and similar
questions. What percentage of the $111
is O&M money, Professor Speaks asked, pointing out that grant funds cannot
be altered. It is about half, Mr.
Kallsen said.
This report will be brought back to the
Committee in the future for additional discussion, Professor Campbell said.
4. Faculty Efficiency
Professor Campbell next welcomed Vice President Carrier
and Senior Vice President Sullivan to the meeting to discuss the issue of
faculty efficiency, focused on the point raised by one Committee member earlier
in the year:
faculty
efficiency may be disproportionately lower in universities than the same people
would be in industry, for three reasons, only one of which is "good": a. Deliberate
"inefficiency" due to always training new people (students) rather
than having a "staff" of trained people; b. Inadequate support--particularly in areas
such as administrative and technician support. This is exacerbated by the dual difficulty of
getting such support from O&M funds and of charging that support to grants
(since it is part of the indirect cost rate base). One might argue that lack of money for seed
projects is another area of inadequate support;
c. Inadequate managerial training.
It seems like we could be a significantly more productive and efficient institution if we were to
address some of these issues. Perhaps
we'd decide nothing is broken, or perhaps we'd develop a model for better
supporting and developing faculty.
Professor Campbell said one question is whether
faculty can do as much as they used to or if they are overburdened because
things are pushed out to/on to faculty members.
The point of the discussion is to find ways to optimize the way faculty
do their job.
Professor
Konstan said there have been recurring issues at Federal Demonstration
Partnership meetings. The FDP is doing a
study of faculty evaluating the burdens on them that are caused by government
regulations. He also said the Committee
should not start with the idea that there was an idyllic golden age, but if
there is something faculty are hired to achieve in teaching, research, or
training, is there a way they could achieve more of it? There is a lot of faculty time spent on
things that others with less education could do at lower cost.
What
role does technology play in the question, Senior Vice President Sullivan
inquired? With the advent of personal
computers, faculty are doing much more of their own writing. To what extent does technology help or hinder
the faculty in doing their work? That is
a big issue, Professor Campbell responded.
For example, technology has put word-smithing into computers so people
spend far more time polishing the product than they should.
With
respect to teaching, there are now 200 classrooms with the same technology and
teaching protocol plus 100 departmental classrooms where departments have
installed the same technology, Mr. Fitzgerald reported. That greatly increases efficiency.
This
is a double-sided issue, Vice President Carrier observed. As the administration has developed a lot of
technology, faculty and staff like having it available, but faculty also find
themselves doing things that others did in the past. There is a different model from the past,
which some like and some do not. Another
byproduct of technology is that people are wired both in their office and at
home so that work never stops, Dr. Sullivan commented, and people lose
reflective time. At the same time,
people who work at home—which they can do—may lose or see reduced collegial and
student relationships, advising, and mentoring.
The web is a cold medium for those kinds of relationships. He said he was concerned about the drift of
people out of their offices. He said he
believes people are working VERY hard, but they are not connected in ways that
they were in the past.
The
fastest-growing employee group is P&A staff, Professor Campbell
observed. There is a more
clearly-differentiated staff than in the past, with advisors, technicians on
grants, and so on. A lot of faculty work
has been parsed—a phenomenon about which he was not making a value judgment
because it is the way universities have gone.
There
are false efficiencies to be had as well, Professor Konstan said, such as the
idea one can go through an undergraduate program without advice from the
faculty and with all advice provided by advisors. That does not hurt when it comes to
curriculum but it may in terms of the bond to the school and the relationship
with the students who become the next generation of faculty. He said he was NOT advocating getting rid of
advisors. Students, however, always
expect a one-hour response to their email but they do not expect to see a
faculty member act as an advisor.
Professor
Konstan said he also recently received data from an NSF workshop about faculty
in Computer Science (his field), and there may be corresponding data for other
fields. From 1995 to 2004, the number of
faculty in Computer Science increased from about 2500 to about 4000; the number
of proposals from Computer Science faculty to NSF over the same period
increased from 2000 (slightly less than one per faculty member) to about 6000
(about 1.5 per faculty member). That is
a shocking number, he said. 90% of the
proposals earlier were from individual PIs; now most of them are team
proposals, which means a lot of faculty are spending time coordinating requests
for funds.
A
related question the Committee has talked about and wants to address is
productivity, Professor Campbell said.
There is a recent book by Vedders which claims that productivity in
higher education has decreased, but there are serious problems with his
research and his methodology.
Nonetheless, universities do hear questions from society about how to
measure productivity. One sees
legislatures asking for indices of productivity. The question of productivity needs to be part
of the answer to the questions about faculty efficiency.
Dr.
Sullivan reported that he had spoken with the Board of Regents the previous
week about program criteria to be used in the strategic planning process; this
is one of the issues. The implication is
that one can measure output, quantitatively and qualitatively. The more difficult question is the impact. There are a range of measures that focus on
the product, Mr. Kallsen said. It is
incumbent on the institution to broaden the discussion away from any one
criterion.
If
one looks at the number of students per faculty member, which is increasing,
the University would not want to be measured that way, Professor Campbell said. Quality is central. How does the University get hold of this
debate and respond to it? One hears
conservative radio commentators claim there is no increase in productivity in
higher education, or a decline in productivity, and therefore its funding should
be cut. The issue revolves around
teaching, and the preparation for teaching, Dr. Sullivan commented; some
outside the University do not understand the preparation that is required or
that research and service are part of faculty responsibilities and that
teaching is only one part of what they do.
If one is not in the classroom 6-7 hours per day, they do not understand
what faculty are doing. Senior Vice
President Cerra had joined the meeting
at this point and recalled an article in the newspaper recently that reported
that many classrooms are not used on Monday or Friday; he said he did not
believe that was true.
There
are metrics that can be used in different parts of the University, Dr. Cerra
said. For example, in some of the
The
Regents heard about the views of graduating seniors, Vice President Carrier
reported, and they demonstrate that the University has improved undergraduate
education considerably. The softer piece
is how the University is doing. Dr.
Cerra said the University does not have a business model with specific metrics
that can be applied, so instead it uses surrogates such as national rankings,
graduation rates, and so on. It has good
denominators, such as graduates or sponsored research, but not good numerators,
Professor Konstan said. Dr. Cerra said
that there is no single measure; the University must bring together several
measures in a way that they complement each other and make sense to
outsiders—if that is the goal—to legislators, business, people on the
street. He said he preferred the
compilation of metrics as a way to answer the questions. More and more professional schools, he added,
are taking a five-year look downstream as part of the accreditation process and
employer feedback goes into the accreditation report.
There
is a hidden piece to the faculty efficiency question he is concerned about, Dr.
Cerra told the Committee: as the
University cuts costs, the ratio of staff to faculty to accomplish a task. It is his sense that the University is paring
support staff, which raises the question of what faculty are doing now that
they were not doing before that affects their productivity. Can that change be captured as part of the
information? As one looks at dollars per
faculty, or graduates per faculty, or staff members per faculty, it would help
to give a picture in the day of the life of the faculty. Dr. Cerra said he worries about this. Dr. Carrier said she has given a lot of
thought to this as well as the University laid off 600 support staff.
The
question is whether the technology systems offset the loss of people in getting
jobs done, Dr. Cerra said. Economists
say that is what is happening. That cuts
both ways, Dr. Carrier said; faculty using technology-enhanced learning say
that it requires a lot MORE effort—more time to plan and deliver the same
course. Dr. Cerra concurred and said
there are data from the health sciences suggesting that on-line courses take
½ to 1/3 more work. And the colleges are not calibrated to
measure this increase in work, Dr. Carrier added.
The
Committee has talked about decision points, the points at which departments
decide to spend money, Professor Campbell said.
When a faculty position opens because of a retirement, is it ever true
that the remaining faculty would benefit from a technology person or secretary
or teaching helper rather than from replacing the position with another faculty
member? There was talk about this when
the University approached the legislature about freshman seminars; some said it
was time to argue about staff support needed when the University adds faculty. But the normal bias of academia is to add
faculty no matter what else. It is
perceived as in the interest of faculty to have more researchers in related
areas than to have other kinds of support.
Is there a way to evaluate this issue?
Dr. Cerra said he believed there are data. If they hire a new faculty member, they know
they will have $300,00 to $350,000 in new NIH funding or a similar increase in
clinical income. One hopes there is the
will to build the support that is needed.
He noted that there is an academic personnel plan required of each college
that came out of the governance system; if there are metrics, they could be
used for a thoughtful discussion of those personnel plans. Will the University move in that direction,
Professor Campbell asked? Dr. Cerra
noted that Provost Sullivan is working on enhancing the capacity of the
institutional research arm, and as it evolves it would be possible to move in
that direction. There must be a common
data set that all work with, not shadow systems, if there is to be consistent
evaluation University-wide.
Professor
Campbell thanked Drs. Carrier, Cerra, and Sullivan for joining the meeting and
adjourned it at 4:15.
--
Gary Engstrand