These minutes reflect
discussion and debate at a meeting of a committee of the University of Minnesota
Senate; none of the comments, conclusions, or actions reported in these minutes
represents the views of, nor are they binding on, the Senate, the
Administration, or the Board of Regents.
Minutes
Senate Committee on Finance and Planning
Tuesday, December 11, 2007
2:00 – 4:30
238A Morrill Hall
Present:
Judith Martin (chair), Rose Blixt, David Chapman, Adam
Faitek, Steve Fitzgerald, Lincoln Kallsen, Thomas Klein, Joseph Konstan,
Kathleen O'Brien, Kathryn Olson, Richard Pfutzenreuter, Terry Roe, Gwen Rudney,
George Wilcox, Aks Zaheer
Absent:
Olivier Asser, Jon Binks, V. V. Chari, Russell
Luepker, Mikael Moseley, Justin Revenaugh, Michael Rollefson, Thomas Stinson,
Michael Volna, Candace Wagner, Warren Warwick
Guests:
Julie Tonneson (Office of Budget and Finance); Vice
President Karen Himle, Ms. Jan Morlock (University Relations); Police Chief
Gregory Hestness, Terry Cook (Director, Emergency Management), Robert Janoski
(Director, Central Security)
[In these minutes: (1) budget planning parameters; (2)
budget-model subcommittee report; (3) Neighborhood Revitalization Committee;
(4) public safety and emergency preparedness]
1. Budget Planning Parameters
Professor
Martin convened the meeting at 2:00 and welcomed Vice President Pfutzenreuter
and Ms. Tonneson to discuss budget and cost-pool issues.
Vice
President Pfutzenreuter distributed a handout with the budget planning
parameters. All numbers are increments
over 2007-08.
Resources
16,510,000 New
state appropriation funds
39,300,000
Tuition and University Fee
(assumes 7.5%)
4,836,979 FY
07-08 balance (intentionally set aside)
3,700,000
Central recurring resources
(spending authorized earlier that did not occur)
64,346,979
Total Resources for 08-09
Must Dos
5,610,000
Student Aid (Founder's program, 2% tuition buy-down for MN residents)
27,500,000
General compensation (all faculty/staff on state funds, 3.25% plus
fringes)
3,805,764
Facilities (utilities, leases, debt, new-building operations)
36,915,764
Total Must Dos
27,431,215
Available for Investment
The
amounts to be provided for cost-pool increases have not been determined; they
are in progress. The requested increases
in the cost pools are $55 million (which is more than 10% of their current
budgets, Professor Konstan observed).
Mr. Pfutzenreuter said the increases will be substantially less than
10%, although he could not say yet what they will be. If there are contract or safety issues, they
will be addressed (e.g., more police officers), and there are some strategic
ACADEMIC investments in the cost pools (e.g., the honors program, the writing
initiative, libraries, graduate fellowships).
There are also strategic support investments in the cost pools (e.g.,
Enterprise Financial system trainers, veterans certificate coordination, the
Vice President for Scholarly and Cultural Affairs).
Professor
Konstan asked about contractual/safety obligations. If they are currently in the cost pools, and
when central funds go into them, is there a central subsidy or all the costs
distributed to the units, which then pay higher charges? The Enterprise Financial System is paid up
front, Mr. Pfutzenreuter said, but there will be annual license fees that fall
into the contractual category and incorporated in technical costs
systemwide. Each decision finds its way
into a cost pool. Where are the funds to
pay for them to come from, Professor Konstan asked? If the expenses go into the cost pools, there
must be an assumption that there will be new tuition income for the units to
pay them. That is part of the $27
million available for investment, Mr. Pfutzenreuter said, which is what is left
of the $64 million in new funds. If the
cost pools were to go up $10 million, then there will be a decision to
make: do they take $10 million of the
$27 million to pay cost-pool increases or distribute all the money and make the
units pay the increased $10 million?
Those decisions have not been made and are done unit by unit.
Professor
Konstan recalled that originally the cost pools were to be accountable to
users. With central mandates, however,
it is a different game. The University
buys PeopleSoft and the costs are in the cost pools, and central administration
must juggle budgets for each unit. They
have always looked at units on an all-funds basis, Mr. Pfutzenreuter said, and
make case-by-case decisions about what source will pay for what—that is not
new. They do not ignore tuition income,
he added.
Professor
Zaheer said it seems that the $27 million is already spoken for due to other
commitments. He asked what Mr.
Pfutzenreuter's best guess was about the amount of money that will be available
for academic investments. Mr.
Pfutzenreuter said it was a fair questions but that he could not answer it
because they have not completed a final review of how new charges will flow
through the cost pools. But some funds
have been spoken for, Professor Zaheer pointed out; they have, Mr.
Pfutzenreuter agreed, but the senior officers must make the final
decisions. In reality, Professor Martin
said, there will be some new funds but the amount will be modest.
Professor
Roe asked how the process provides incentives to officers. An additional $20 million in the cost pools
might be absolutely legitimate, but are there any process incentives to those
responsible for cost pools to be more efficient? They have charged each cost-pool owner to set
up a group to talk with, but they are not doing a good enough job in that
respect, Mr. Pfutzenreuter said; there is not enough tension in the
system. Professor Martin pointed out
that Vice President O'Brien can talk to the deans about utility costs, but if
the colleges do not get to retain any savings in energy use, there is no
incentive. However much the cost pools
increase, Mr. Pfutzenreuter added, almost one-half of those expenditures are in
strategic academic investments, not administrators (as he noted previously, in
libraries, classrooms, etc.).
There
are two ways to achieve efficiencies, Ms. Tonneson said. One is incentives in the units, and the only
immediate one is utilities, which are charged directly on consumption—if
consumption goes down, the cost goes down.
The other cost-pool charges are not designed in that way. A second way is to provide incentives on the
support side in order to keep costs down.
Mr. Pfutzenreuter said that he knows that if the cost pool increases are
in double digits, they are in trouble, and they will try to keep the increases
to the low single digits. If the
increase is 6% and one-half of that money is going to academic investments,
that is not bad. If the increase is 10%
and only one-fifth of the money goes to academic investments, that is not
good. One problem is that the cost-pools
never seem to retrench things, Professor Roe commented.
If
the central and service units make investments that are viewed as academic
investments, how will a general reader be able to identify the academic versus
general administrative investments, Mr. Klein asked, and how will the rationale
for the investments be communicated? Ms.
Tonneson is working on that, Mr. Pfutzenreuter said.
Ms.
Olson commented, apropos utilities, that a challenge in multiple occupant
buildings is to increase efficiency with a lot of different units. In general
even in single unit buildings, Facilities Management does not have the
resources to work on more than a handful of projects at any given time and
isn't able to provide broad leadership in this arena. It takes money to save
money, she said, and the units can't get the dollars they need. It would be
nice to have an incentive pool, she said. Mr. Pfutzenreuter agreed. The
University should cut utilities by $45 million through using switches that turn
off the lights when one leaves the room, not have toilets that run 24 hours per
day, and so on—those are changes the University is not getting to. The power
plant is using oat hulls, which has saved a lot of money, but there is much
more the University can do.
Could
the savings be used to create an incentive pool, Professor Martin asked?
That money goes into the $27 million available for investment, Mr.
Pfutzenreuter said. Ms. Tonneson added that if a unit has budgeted $5
million for utilities, and actual consumption is $4.5 million, the difference
stays in the unit budgets. Ms. Olson said if buildings are recommissioned
and an energy savings results, money saved could be used to create a pool for
incentives; since the efforts consumed in the recommissioning process are
all-University costs, an agreement could be made so savings would be available
for other efficiency projects.
Some
cost pools will increase more than others, Mr. Pfutzenreuter said. He expects the number to be in the 4-6%
range, with half of that in academic investments, not bureaucrats. Professor Zaheer said it would be nice if the
Committee could see the numbers; Mr. Pfutzenreuter promised to provide
them. Professor Martin noted that however
the numbers settle, the University-wide communication about the investments
will be critical, because there will be a lot of pushback unless people
understand the investments are for the entire University.
Is
there a place for cost-pool owners to look at their own incentives, Mr. Klein
asked? Is there senior-level discussion
of cost-pool budgets? The Committee and
Mr. Pfutzenreuter discussed the incentives and support-service reallocation. Professor Zaheer suggested that achieving
efficiencies could factor into the compensation system for the heads of
units. They are working on ways to slow
growth, Ms. Tonneson said; Mr. Pfutzenreuter added that everyone knows it is
difficult for units to say they are going to stop doing something. They are good at starting to do things,
however, Professor Roe observed.
The University continues to have a model that requires units to try to be cheaper by (for example) 2% every year, but it can't shed costs or increase prices like a private-sector corporation because the University has policies that make that impossible. For example, the living-wage policy requires paying more than the market, and a private organization would outsource some activities, but the University has made policy decisions that say it will not be a place that sacrifices culture for money. Similarly, units cannot independently raise tuition, but they are still told to cut, while they are better equipped to focus instead on productivity and should spend less effort pinching pennies and more effort on advancing knowledge. Units are not given the structure to trim (e.g., send librarians to India) because it does not have the same standards as Wal-Mart. Mr. Pfutzenreuter agreed and said he was tired of the term "reallocation": the University's value system gets in the way of reallocation.
Ms.
Olson said, about productivity, that she did not know what tools are available
to measure management outputs, but if there are any, that could be a way to
guide the discussions.
Mr.
Pfutzenreuter said he would return at the next meeting with more details. After the senior officers approve the
cost-pool budgets, they will develop instructions for academic units.
Professor
Martin thanked Vice President Pfutzenreuter and Ms. Tonneson for the information.
2. Budget-Model Subcommittee Report
Professor
Martin next asked Mr. Klein to present the report of the ad hoc budget-model
subcommittee, which was jointly commissioned by this Committee and the Senate
Research Committee.. (A copy of the report
is appended to these minutes.)
Mr.
Klein reported that the subcommittee set out to do two things: understand the budget model and understand
various issues surfacing across campus.
They talked with deans and department heads from a cross-section of the
campus. They heard the same or similar
issues from different perspectives. He
said that Ms. Tonneson had been generous with her time; they also spoke with
Senior Vice President Cerra, Senior Vice President and Provost E. Thomas
Sullivan, vice President and CFO Pfutzenreuter and had candid conversations
with the deans and department heads.
Finding
#3 (see below) was the number one issue the subcommittee heard about. It was unclear how these funds were allocated
and how or if they are linked to University priorities, unit priorities, or the
goal of being among the top three. If
research is such a critical priority, for example, why is the Vice President
for Research not on the committee or part of the group that allocates state
funds?
Mr.
Klein emphasized the point in #4: the
subcommittee was surprised that there is no mechanism to influence cost-pool
units' level of services or the charges.
There was extensive discussion on the need for standards that cost-pool
units can be held to (e.g., service agreements), and the charges should not
simply be mandated to the academic units without any control. The original plan for the use of cost-pools
included discussion about market-like mechanisms that would provide feedback
from the customers to the service units.
With
respect to #5, Mr. Klein observed that the committee heard from several
collegiate units that the perception is that academic departments must bear the
burden of decreases in revenue while most cost-pool units do not have the same
revenue pressures.
On
#6, Mr. Klein observed that if a unit saves money by spending less than its
budget on utilities, there is no assurance that there will not be a cut in
state funds which offsets the savings.
Until it is clear that utilities savings are a plus for units, there
will be suspicion on the part of units that they will be cut elsewhere if they
generate savings. Mr. Pfutzenreuter
observed that utilities are the only place where there is a clear linkage with
consumption. The budget model is supposed
to provide a lot of incentives, but it does not because in many circumstances
the units cannot control the supplier. A
unit can save money in Facilities Management charges if it vacates space, but
to get better space costs more than not moving.
Professor Roe said that there is a THEORETICAL direct relationship, but
the unit must find another one to take the space. Some things look good on paper but are
difficult to implement.
Professor
Zaheer (a member of the subcommittee), said that the report highlights issues
and makes recommendations that are embedded in the report. But the subcommittee recognizes that recommendations
may not be the optimal solutions because the subcommittee was not certain
enough about the options and the solutions.
Some recommendations, however, are obvious.
Is
there anything in the report they did not know before, Professor Martin
asked? Are there deep insights from the
analysis? It is important to take
questions that come from the deans and department heads and find out if
something needs attention, especially if there is to be continuous improvement,
Mr. Klein said. There is probably an
underlying reason why several of these issues come up repeatedly and it
suggests there are issues that should receive attention. Perhaps it is a budget-model issue or perhaps
it is a communications issue. They did
not uncover a disaster but it will be important not to let the budget-model
issues slip and to keep them before the governance committees.
Professor
Zaheer said his views were these: (1) it
was never clear what the impacts of the budget model would be, although they
heard some horror stories and uncovered some themselves, and (2) they tried to
take a more dispassionate look at the model, tried to be fair to both sides, and
tried to steer a middle ground. The
report serves a useful purpose, he concluded.
Professor Martin asked the Committee to take the work of the
subcommittee and develop recommendations.
Mr. Klein reported that the subcommittee members had different views
about the level of confidence they would have in any recommendations: some wanted recommendations fully developed
and defensible while others were comfortable with recommendations to be
developed as the work goes along.
Professor
Martin thanked Mr. Klein for the report.
3. Neighborhood Revitalization Committee
Professor
Martin next welcomed Vice President Himle and Ms. Morlock to the meeting to
discuss the Neighborhood Revitalization Committee (NRC).
Vice
President Himle told the Committee that the NRC was the first activity she
volunteered to participate in when she took her position at the
University. She said she was impressed
by the work that Ms. Morlock has done.
In
response to a requirement in the bill authorizing support for the new football
stadium that called for a report on the impact of the University on the
surrounding community, the University, Minneapolis, and Stadium Area Advisory
Group "appointed an Impact Report Task Group"; the report is on the web (at http://www1.umn.edu/urelate/govrel/pdf/07nirfull.pdf
). More recently, the University, the
city, and neighborhoods "have recently formed a steering committee to
guide an alliance to propel neighborhood revitalization forward." The legislature provided $750,000 in one-time
money to launch the alliance and for demonstration projects; the University is
the fiscal agent for the alliance but the funds will be used for
revitalization—the University is NOT the beneficiary. Ms. Morlock said they hope to go back to the
legislature to obtain additional support for the alliance, and they also hope
to expand the number of partners participating.
Ms.
Morlock explained that it is useful to think of the University as living in a
neighborhood that is important to it, like each of us lives in a neighborhood
that is valuable to us. If one sees
changes in the neighborhood that one does not like, one takes action. For example, if the majority of the
properties come to be owned investors who have no long-term interest in the
neighborhood, and the great majority of their tenants are in the same
approximate age group (i.e., 18-24) and for whom this is their first time
living alone, problems ensue. The
neighborhood school is closed. The
center city close to the area is doing well but the city revenues are down with
a decline in the tax base. That is the
neighborhood where the University lives.
That has always been the situation but there have been marked changes in
the last 15 years, in part a result of the University's success in getting
students to live on campus. When
students leave the residence halls after one or two years, many choose to live
nearby. The neighborhoods around the
University were built as single-family homes, unlike New York City, for
example, in which a lot of renters are normal.
These single-family homes are purchased by rental-property owners who
convert them to a lot of bedrooms, which changes the culture of the
neighborhood and places infrastructure demands on the community.
Ms.
Morlock quoted from a memo that she and Vice President Himle prepared for the
Committee.
The
campus and the neighborhoods adjacent to it are a unique asset in the city and
the region. This asset is endangered by
decline: in the condition of the
housing, upkeep of the 'public realm,' and student/neighborhood relations. There has been a substantial decline in the
percentage of owner-occupied homes, with a sharp increase in the conversion of
single-family homes to over-occupied and poorly-maintained rental
properties. The drive to create an enriched
on-campus residential experience for first-year students has resulted in a
great increase in the numbers of students living in neighborhoods close to
campus—we are a 'commuter campus' no longer.
Approximately 25% of Twin Cities campus employees live in the City of
Minneapolis, but only 3% live in the neighborhoods adjacent to campus that were
once home to many more University faculty and staff. The decline in property maintenance [e.g.,
broken windows] is part of a spiral of disinvestment that threatens the future
safety and livability of the neighborhoods.
A study of the best practices in other campus communities suggests that
the best response lies in a partnership approach among the University, city
government, the neighborhoods, local businesses, private investors, and other
institutional partners.
These are dangerous
directions but there are tools to approach them. Ms. Morlock emphasized that the University
cannot act unilaterally but must be in partnerships with other organizations
and the neighborhood.
What
does the University have to gain? Ms.
Morlock noted the point in the memo.
"What we have to gain is a campus area community that is welcoming
and safe for students and University employees and others to live, that is an
asset in recruiting the great talent needed by a world class research
university, and that distinguishes the University area as a premier place to
live, work, learn, and visit. The risk
in ignoring it is a trajectory of decline that can create very serious safety
and livability conditions, as we have seen from the experience at other
universities. The University of
Pennsylvania, for example, needed to invest $79 million from their endowment in
order to jump start a turnaround in the Philadelphia neighborhoods next to their
campus."
These are the priorities (all are direct quotes):
-- Encourage long-term residency and University/resident
connections in the neighborhoods adjacent to campus. This may include encouraging home ownership
for U faculty and staff, alumni/retiree housing, rental opportunities for
graduate and professional students and staff, campus-affiliated people of
diverse ages living near campus.
-- Foster the development, restoration, and/or preservation of
decent, safe housing for students within walking and bicycling distance of
campus.
-- Encourage student, faculty, and staff civic learning and
engagement; civic responsibility; and community safety in the neighborhoods
adjacent to campus.
-- Encourage a high quality environment along the “gateways”
to the University campus, and in the commercial districts that serve University
community members and visitors.
-- Foster and support the efforts of adjacent neighborhoods,
business associations, and local governments to preserve and enhance the
vitality, beauty, and safety of the communities adjacent to campus.
-- Brand and market the University district as a premier place
to live, learn, work, do business, and visit.
-- Engage local government, other major stakeholders, and
potential partners and investors in focusing attention and resources on these
priorities.
She has visited other universities to learn what they are
doing, Ms. Morlock related, but has concluded there is no recipe. There are a lot of moving parts and the
University cannot simply assign someone to do something. There has to be collaboration with others who
may have different views.
Professor
Roe commented that these problems are endemic to a lot of universities: fundamental economic forces drive
neighborhoods to high-density housing that requires a high level of
services. There is often also low-cost
on-campus housing, which adds to the problems.
They must look at the forces affecting these developments. One of the factors is increased commercial
real-estate development, Vice President Himle said, which is a double-edged
sword, because what developers want might not be compatible with nearby
low-cost housing. The alliance will try
to address these issues. She agreed,
however, that there is a need to develop economic hypotheses about what is
occurring.
Mr.
Klein questioned the implication that faculty want to live near campus but are
moving away. It is not known if they
have moved away because of the neighborhood, or because they want bigger
suburban yards, or for other reasons.
The report probably should not state as fact that faculty want to live
near the University and use that as an assumption for neighborhood planning
efforts. Ms. Morlock agreed that they
have much discovery to do. They have
done a survey of University employees and want to do a focus-group discussion
with newly-hired faculty to learn where they decided to live.
Professor
Zaheer asked what the demonstration projects supported by the state will
be. Ms. Morlock said they do not know
yet; Ms. Himle said the alliance will develop proposals. What form might they take, Professor Zaheer
asked? Ms. Morlock said that while she
will not choose them, one example might be University issuance of an RFP to
lease off-campus housing for graduate and professional students, and
demonstration projects funding might be used to make external physical
improvements to a property that might not otherwise be up to standard—good quality
housing is provided for graduate students and the community has improved a
substandard property. Ms. Himle observed
that $750,000 will not go far but the good news is the number of people who are
engaged in the process. But there will
be a problem if they must say "no" to many people and then do not use
the money to get results that the legislature will fund.
Students
are the primary driver of the issues raised, Mr. Faitek said, because they have
no long-term investment in the neighborhood.
The University should look at why students move off campus and what it
can do; the primary motivation for most students is money: if they want cheap housing, they don't care
how crowded it is. How can that be
changed? Ms. Morlock agreed that the
University cannot solve affordable housing issues but it can try to identify
where the levers are. The University
does not want to eliminate students from the neighborhoods but it can try to
create more commitment to the area and neighbors. One demonstration might be to build
affordable rental housing, because much of the rental housing in the
neighborhoods was not intended to be rental so it has gone into decline. Developers around the Twin Cities have
already demonstrated it is possible to build affordable rental housing.
Professor
Roe said needs to be a multi-faceted approach that includes such things as
zoning (limit the number of multiple-occupancy buildings) and subsidized
busing, and the initial balance will be important. Professor Martin observed that the zoning
code already requires fewer than six unrelated people in one building; the
problem is enforcement.
Professor
Martin thanked Vice President Himle and Ms. Morlock for the presentation.
4. Public Safety & Emergency
Preparedness
Professor
Martin next welcomed Vice President O'Brien and Police Chief Hestness to the
meeting to inform the Committee what is being done in public safety and
emergency preparedness. She noted the
recent increase in bomb-threat calls and wondered how many are prompted by a
desire on someone's part to avoid taking exams.
Vice
President O'Brien began by reporting that in the last 5-6 years the University
has focused on strengthening its public-safety functions. The 1990s saw a major fire, a demonstrator
hanging on a building, and eco-terrorism on campus, all of which predated the
events of 9/11. After 9/11 the University
examined what it should do to strengthen public safety; before that time, no
office had responsibility for assessing security and assessing risk and there
was only a limited emergency-preparedness function. Since then the University has invested resources
and obtained top-rate staff.
Professor
Martin asked if public safety and emergency preparedness are part of the
Facilities Management cost pool. They
are not, Ms. O'Brien said; they are part of the administrative cost pool. The (Twin Cities) Department of Public Safety
(which includes the policy, security, and emergency preparedness) reports to
the Vice President for University Services (her).
Chief
Hestness said he appreciated the opportunity to brief the Committee again,
introduced his colleagues Mr. Cook and Mr. Janoski, and made a few opening
comments to the Committee. He observed
that there has been a lot of interest in public safety this year, both for
emergency preparedness and for crime and safety. The incident at Virginia Tech, other
shootings, the 35W bridge collapse, and bomb threats on the Twin Cities campus
have sparked an interest in emergency management. He and his colleagues have briefed the
Regents, the deans, the President, and the legislature. The crime alert messages have also led to
requests for briefings with student leaders.
The media have also been interested.
He said he would talk about public safety at this meeting, but that can
be a presentation quite separate from emergency preparedness, which he said he
would be glad to talk with the Committee about in the future.
The
Department of Public Safety was formed in 2002 ("in response to a
heightened concern for security following the events of 9/11/01, and to provide
a less fragmented approach to the needs of the University community") and is
focused on the Twin Cities campus. Their
budget is $13.3 million, 72% of which comes from O&M funds, and has a total
of 159FTEs (including 65 student-monitor FTEs consisting of 277 different
students). The Department includes three
departments: the Police Department (which also consults
with and on occasion provides support to Duluth and Morris), Emergency
Management, and Central Security (both of which serve all campuses). They have four full-time employees in
Emergency Management; all are state-certified emergency managers.
Their goals for serving the University
community are that "people are safe, people feel safe, [and] services are
provided in a fair, impartial manner."
The strategies they use to strengthen public safety include enhanced
partnerships (on and off campus) and
communication, increased training opportunities for Public Safety staff,
technology advancements, enhancing the University's security infrastructure,
and strengthening emergency preparedness efforts.
The
strategies to enhance partnerships including working with Student Affairs,
Housing and Residential Life, Environmental Health and Safety, the Academic
Health Center, student associations, and so on.
They also have cross-department task forces, work with
community/neighborhood organizations, have public-private partnerships, and
work with other public safety colleagues.
They are responsible for 270 buildings in three cities, and even with 50
officers and over 200 students, they cannot have eyes everywhere. Security equipment helps but they also need
people to call if they observe suspicious behavior. The Virginia Tech incident raised a number of
issues with respect to students with mental health problems. The Provost created a committee that has been
working for three years on better support for students struggling with mental
health issues; it is easy for them to slip under the radar on a big campus and
the Department of Public Safety needs faculty support to identify those
students and provide them with help.
Professor Martin observed that many faculty teach large lecture classes
so would have no idea if a student has mental health problems.
Chief
Hestness also reviewed the strategies for strengthening emergency preparedness
efforts and to enhance the security infrastructure as well as the steps taken
by the Police Department to maximize safety (improved records management,
computer-aided dispatch, emergency communications systems, crime analysis from
Minneapolis, and digital cameras in all marked vehicles).
Although
they have had concerns about crime trends, and robbery in particular, both
robbery and other crime rates are down on campus. Part I Crimes (the most serious offenses in
the FBI Uniform Crime Reports, such as homicide, rape, robbery, aggravated
assault, etc.) are down 7% in 2007 (through October). 85-88% of campus crime is theft; in 1995
there were 1,263 thefts on campus while there were 715 in 2005 and 2006. (Almost all of these are preventable, Chief
Hestness commented.) Part I Violent
Crimes gook a jump in 2005 (to 33 from 6 the previous year and 13 and 12 the
two years before that) and has stayed above the earlier levels since (26 in
2006 and 22 in 2007). Part II crimes
(less serious ones) have been declining slowly since 2003.
They
also look at Part I crimes near the University and the data gives him concern,
Chief Hestness said. There was a
significant increase in 1998 and the numbers have stayed high ever since
(ranging from 3,087 in 1998 to 2,849 in 2007).
Robberies did not increase with other crimes in 1998, but it has jumped
since 2005. He said he is concerned that
something is fundamentally different from what it was earlier—for robberies,
there appears to be a "new normal" in southeast Minneapolis.
Robberies
on campus increased from fall 2006 to fall 2007: from 5 to 7.
It is some of these incidents that led to the crime alerts that have
caused anxiety. They cannot find any
consistent pattern either in the on-campus or those in the campus area (of which
there have been 32 this year on the Minneapolis east and west banks).
The
staffing plan is to increase the policy force by 10 officers (to the 55
mentioned) by the time of the opening day for the new football stadium in
2009. At present the police department
staffing ratios are the lowest in the Big Ten, which makes responding to urban
crime a challenge and which also leads to lower visibility. They are staffed adequately to respond to 911
calls. The President has noticed a
difference in policy coverage with the increased number of officers and
encouraged the department to develop a plan, and has twice asked for briefings
on the issue. The plan includes several
elements: form a community-relations
team (sergeant and four officers) whose members will walk through residence
halls, etc.; add a second bomb canine (they have only one, but with the new
stadium and an increase in visits by dignitaries, they need a second); add two
more officers for day duty and two more officers to the middle shift (who would
be on bikes); and other elements.
Professor Zaheer said that when he came
to the University from MIT 15 years ago, crime was far less visible; now it is
a problem with young women faculty receiving crime alerts and finding it
difficult to work on campus at night (which affects productivity). How does Minnesota compare with other
land-grant universities? Minnesota seems
not to have the same level of police visibility that would make one feel
safe.
There
are resources on campus, Chief Hestness said.
Security monitors are available to all and his office is responsible for
getting information to everyone about the services that are available. In the 1980s and 1990s, the number of police
officers was reduced significantly (to 35) in order to transfer money to
academic budgets. They are now working
their way back to 55 officers (they now have 45 and are budgeted for 50). He noted that adding 3 officers equals one
officer per day around the clock.
Finally, when concerns are highlighted and information is made available
(e.g., crime alerts), that do not necessarily make people feel safer. He said it is helpful to talk to the
Committee to get perceptions of how they can communicate more clearly with the
community.
Professor
Zaheer said the issue is not going to 50 officers but going to the number
needed. Does the Department have the
appropriate resources to cover the campus?
Young women faculty worry, and have expressed their worries, so there is
a problem. Will the increased number of
officers solve it? There is no number of
officers that would make the campus completely safe, Vice President O'Brien
said. The number of officers is based on
Chief Hestness's strategic plan on how to deploy them. But one cannot say that even if there were
150 officers that nothing bad would ever happen. How do they benchmark the resources and
officers, Professor Zaheer asked? That
is important and the strategic plan will provide ways to do so, Ms. O'Brien
said. But it is difficult to compare
Minnesota with Ohio State or Northwestern; her job, and Chief Hestness's job,
is to ask whether they have the right number.
Will
the people who are affected (e.g., those who feel threatened) have any input,
Professor Zaheer asked? If young women
faculty do not feel safe, they need to rely on the escort service, Professor
Martin said. It is not just moving
around campus, Professor Zaheer said; they are concerned about sitting in their
own offices. They never see
officers. Ms. Blixt commented that in
McNeill Hall they have installed card readers on the outside doors. Those provide an audit trail, Chief Hestness
agreed. Student monitors also have
radios to contact the police department—and they are usually not backlogged in
calls so can respond quickly. Vice
President O'Brien said that help can arrive in minutes. She also noted that there is a security
committee for the West Bank that meets with academic units and that has plans
for units to support each other, something akin to a neighborhood crime watch. The investments that have been made also help
with safety and with investigations, Chief Hestness added; they were able to
identify on video cameras someone who committed a crime, and while these
investments make people safer, they seem not to make people FEEL safer. Having members of the custodial staff around
also helps to increase the comfort level, Vice President O'Brien said. Ms. Olson said the crime alerts are a good
idea but they are jarring when people are not used to them. It would probably help if there was a
follow-up to them. Vice President
O'Brien said that she and Chief Hestness discuss the crime alerts before they
go out; they rely on his expertise but they also do not want to cry
"wolf." The crime alerts give
the impression there has been a big increase in crime, Professor Zaheer
said. There has not been, Chief Hestness
responded. They try to err on the side
of giving people information they need to be safe, Ms. O'Brien commented.
Professor
Martin thanked Chief Hestness and his colleagues for joining the meeting and
making the report. She adjourned the
meeting at 4:30.
--
Gary Engstrand
University of Minnesota
* * *
November 15, 2007
The ad hoc committee on the new budget model has members from the
Senate Committee on Finance and Planning and the Senate Research
Committee. The committee was specifically charged by the Chairs of these
committees
-- "To
consider what impact the new budget model is having on areas of importance to
the faculty and staff, including interdisciplinary teaching and research, cost
of services and infrastructure support"
-- "To
ensure that appropriate feedback mechanisms are in place so that colleges, the
Central Administration, and the two Senate committees are regularly informed
about the effects of the new budget model"
To this end, the ad hoc committee began regular meetings
in late Fall, 2006. We held discussions
with administrators, college deans, and department heads, broadly
representative of the University.
In what follows we first
describe our understanding of the new budget model. We then briefly report some of the
observations we collected from those who are engaged in trying to make the
model work. Finally, we summarize our
findings.
University documents state
that the “new” budget model is designed to be a set of stable revenue and cost
attribution rules for use in achieving the strategic goals of the
University. Of necessity, the new budget
model is also at the heart of a process for distributing and reallocating
resources among units.
The model was first used in
the 2006-07 budget year. As implemented, the budget model defines how most
money flows to and from colleges or equivalent units. The University calls these units resource
responsibility centers (RRCs). The new
budget model is intended to apply to RRCs, but not smaller units like
departments or centers, although some RRCs seem to be implementing the new
budget model by passing expenses and revenue through to these smaller
units. The guiding principle in the new
budget model is that an
-- All revenue
earned by an
-- All
tuition and fees, subject to agreements between colleges on how tuition is
shared when students in one college enroll in a course in another college.
-- All indirect cost recovery (ICR) funds
-- Direct costs from grants
-- Other
sources of revenue include state specials, internal service organization
income, gifts, private practice income, investment income, endowment income,
sales, admission fees, and possibly others.
-- All
-- Expenses
that RRCs paid under the “old” budget model including salaries, fringe
benefits, student aid, supplies and other items. The list of expenses does not include the “
-- Many
expenses previously paid centrally “off the top” are now paid by RRCs. These expenses are grouped into nine cost
pools: Facilities – Operations & Maintenance;
Utilities; Debt & Leases; Office of Information Technology; Administrative
Service Units; Research; Libraries; Student Services; General Purpose
Classrooms.
The
costs of these services are determined by Central Administration and are
allocated to RRCs using fixed formulas. Some of the formulas are based on
actual
-- No
Deans and Department heads
generally expressed unhappiness with the new budget model and distrust of the
decision process at the next higher level.
These problems appear to stem from three basic causes, none of which is
necessarily intrinsic to the new budget model:
-- Incomplete information. Most faculty
do not understand that the budget model is intended to determine
-- Inadequate funding. The main
problem with University budgeting is that it is trying to do too much with much
too little money. Lack of funding is not
the fault of this or any other budget model.
-- Internal reallocation. Internal
reallocation of
Our own overall evaluation is
that the budget model itself is neither intrinsically good nor bad. However, its implementation has created a
number of difficulties we discuss in the next section.
1. No
This aspect of the budget process is viewed with skepticism and concern by many
of those we consulted, in part because allocations may not agree with
priorities set by departments and Deans.
While complete elimination of these difficulties may not be possible,
they may be reduced by increasing the information available to faculty and
Deans about
One means of increasing information availability on the new budget model
suggested to us, would be for the Office of the VP Finance or the Provost and
VP for the Academic Health Center to establish a Q&A section of the Budget
Office webpage. At this site, budget and
compact funding questions could be directed, the question researched and a
response posted that would make the information available to the entire
University community. Questions not suitable for broad dissemination could be
handled directly with the person or group asking the question and not posted.
2. Budget
allocations from the State are based on priorities determined by Central
Administration, but based on our interviews, it is not clear if these
priorities are set with input from the RRCs or if the rationale for setting the
priorities is clearly communicated. With
the explicit goal of the University to become one of the top three Public
Research Universities, the committee was quite surprised the Vice President for
Research is neither an integral part of the budgeting process nor directly
involved in the discussions with the RRCs which determine the distribution of
the state funds.
3. A
frequent complaint we heard was that the costs from the cost pools are
allocated to RRCs without any
input from the RRCs. While this may have
been necessary in the first year of the new budget model, each of the cost
pools could now work to establish a mechanism, perhaps through advisory
committees, that would help set budget priorities and establish equitable
methods for distributing expenses.
4. Since
RRCs operate with very limited budgets and thus cannot be expected to support
cost pools that are ineffective or too expensive, the committee was surprised
the RRCs did not have a mechanism to influence their charges or services. It appears the RRCs must pay their cost pool
bill without the ability to establish quality standards, require a response to
their needs, or demand a response to complaints.
5. In
2006-07, RRCs faced budget decreases shortly before the beginning of the
academic year, but RRCs were not permitted proportional decreases in their cost
pool allocations. Thus RRCs cut funding
to academic programs, while the cost pools appeared to be protected. This seems to us to be contrary to the stated
goals of the University.
6. Small
variations in departmental revenue can be devastating to departments that are
committed to cover their fixed cost pool allocations. RRCs seem to be the appropriate unit to bear
the risk of paying cost pool allocations rather than passing charges onto
departments or other units.
7. One
purpose of the budget model is to provide units with incentives to use
resources more effectively and save money, for example by building appropriately
sized buildings, saving on administrative matters like payroll processing, or
reduction in utility use. There are not,
however, mechanisms to insure that RRCs can keep their savings, and assurances
that these will not be offset by decreased allocations of state funds.
8. There
does not appear to be a means to insure that RRCs will not be punished for
protecting activities that promote the aspirational goals of the University,
even at the expense of higher costs. For
example, the sharing of tuition for co-teaching arrangements when one or more
instructors are from an outside RRC seems to be difficult to negotiate. In addition, not all cost savings are
desirable. For example, a college’s
costs can be reduced by increasing class sizes, increasing the use of adjunct
faculty, or teaching more undergraduate courses and fewer graduate courses;
none of these are likely to improve measures of the University’s success in its
mission.
9. Reserves
are necessary for the long-range stability of RRCs. Some reserves are encumbered, for example in
a faculty member’s research account, others are for particular purposes, such
as start up funds for a new hire or to cover unexpected short falls due to
unexpected events. Reserves of these
types should not be considered by Central Administration as possible sources
for reallocation of funds.
Interdisciplinary research and centers
10. The new
budget model describes how Central Administration allocates funds to RRCs, but
it does not address how RRCs allocate money to their constituents, which
include both departments and centers that are completely housed within one
The committee members would
like to acknowledge the cooperation, candid discussion and generous sharing of their
time by department heads, deans and central administration. We believe we have
a better appreciation of the University’s financial structure as a result of
the efforts of these individuals. We
look forward to the Research and Finance & Planning Committees’ review of
our findings.
Committee Members:
Dan Dahlberg, School of
Physics and Astronomy
Paul Johnson, Department of
Information and Decision Sciences
Tom Klein (Chair), Minnesota
Council on Economic Education, Department of Applied Economics
Justin Revenaugh, Department
of Geology and Geophysics
Sandy Weisberg, School of
Statistics
Aks Zaheer, Department of
Strategic Management and Organization