The University Senate
of Michigan
Technological University
Minutes of Meeting 482
4 November 2009
Synopsis:
The
Senate:
1. Call to order and roll call. President Rudy Luck called the University Senate Meeting 481
to order at 5:30 pm on Wednesday, November 4, 2009. The Senate Secretary
Marilyn Cooper called roll. Absent were Senators Solomon and Vogler and representatives of Army/Air Force ROTC, Academic
Services B, and Auxiliaries and Cultural Enrichment.
2. Recognition of visitors. Guests included Max Seel
(Provost), Dave Reed (Vice President for Research), Alex Mayer (Center for
Water and Society), and Scott Thompson (USG).
3. Approval of agenda.
Hamlin moved to approve the amended agenda; LeMay
seconded the motion; and it passed on
a voice vote with no dissent.
4. Approval of minutes from meeting 481.
Hamlin moved to approve the minutes of meeting 481; Scarlett seconded the
motion; and it passed on a voice
vote with no dissent.
5. Presentation of the University Budget by Dave Reed
Vice President Reed presented information
to update the Senate about last fiscal year’s budget and projections for next
year (slides with complete information are attached). To put the University
budget in context, he referred to an article from the Sunday, November 1, New York Times (“At Public Universities:
Less for More”) about the decline in public
university financing. The situation at Michigan Tech is somewhat different, but
the observations in the article are still relevant. He said that the state
appropriation has never been a source of growth for over 40 years at Michigan
Tech, and we are not looking for it to become so in future. A graph of state
appropriations adjusted for inflation from FY1965 to FY2009 shows 2002 as the
high point for appropriations at $55 million, dropping to about $48 million in
2003. We experienced the drop earlier than other institutions, who are experiencing it now, and we took many of the same measures
that they are taking now, measures like furloughs. We never came back; our state appropriation is
still well below what it was in 2002. Measures like furloughs are short-term
fixes to a long-term problem that eventually has to be dealt with. Hoping for a
quick turn-around is not realistic. He also noted that the federal stimulus package
requires states to fund higher education at a level no lower than the 2006
level. The federal government has not granted any states a waiver to go below
this level. This year the state funded us at exactly that level and probably
will do so next year too. The stimulus package has protected Michigan Tech from
the severity of cuts faced in other states, because our appropriation never
increased after 2002, whereas in other states it did.
A
summary of the general fund and current fund for FY2009 shows that the general
fund ended up $1.5 million low (from the projected balanced general fund) and
the current fund with a surplus $220 thousand (from a projected $1 million
surplus). (The current fund includes the general fund, the designated fund,
auxiliaries, retirement and insurance, and the expendable restricted funds.) Two
major things happened to cause the changes from the projected to the actual
budget: the legislature in September cut the appropriation by $1 million from
what was budgeted in June, and investments, which in the budget were anticipated
to provide a $500 thousand gain, instead dropped in value by about $1.25
million. These added up to a shortfall of $2.25 million.
Luck
asked what miscellaneous revenues are. Reed said gifts are a big part (though
gifts to the Tech Fund are not included here), federal financial aid, and other things.
Mullins asked if the Tech Fund is audited with the University. Reed said yes.
The
total current fund balance for FY2009 was $15.634 million, and the unrestricted
fund balance was $12.813 million, which Reed considers the indicator of the
financial health of the university. Moran asked why there is a negative balance
in the retirement and insurance fund of $3.099 million. Reed said that is
because that’s where the investments are held and that’s where the investment
losses show up. L. Davis says the investments
themselves would be positive and what’s causing the fund to show a negative
balance is the retirement liability. Mullins asked how the investments did in
the retirement and insurance fund this year. Reed said there was a $1.25
million drop in investments. He said that benefits expenses larger than
budgeted also show up in this fund as negative items.
A
chart of daily cash balance for 2007, 2008, and 2009 shows a high in January
when spring semester tuition comes in and a low in August before fall tuition
comes in. The regular bump ups are from the state appropriation which comes in
every month for 11 months. The overall cash balance throughout the year is
about $23 million; in 2002 it was about $5 million, and it often went negative
and we had to borrow money. We have not had to do that for the past several
years. Our goal is to have three pay periods in the bank at the low point in
cash flow for the year. Right now, we are about $5 million low from previous
years because we have that amount expended on various building projects with
bonds just issued, but when the bond revenues come in a week or two we will be
back on track.
Luck
asked who buys the bonds. Reed said he doesn’t know. Hamlin said they are sold
nationwide. Luck asked what interest the bonds pay. Hamlin said 6 percent. Reed
explained that the bonds we issued are Build America bonds from the stimulus
package, and the federal government pays one-third of the interest. We pay
two-thirds of the interest, which amounts to around 4 percent; if we had issued
municipal bonds the interest would have been 5 percent, so we saved about 1
percent on the interest. Mullins asked how our bond position compares to that
of other universities in the state of Michigan. Reed said we had 55 bonds out before
this issue, and there are 18 going out now, so we have about 73. We are one of
the lowest in the state in number of bond issues. Michigan Tech and Oakland
have the highest bond rating in the state. Moody has a rating site online where
you can read the financial analysis of our situation.
The
FY2010 budget approved in July by the Board of Control shows a balanced general
fund and a $528 thousand surplus in the current fund. Since the board approved
this in July, the state passed a slightly higher appropriation for Michigan
Tech, but it includes $1 million in stimulus funds which we will not get next
year. We are expecting the 2006 level appropriation next year, of $48 million.
Luck
asked what tuition increases are budgeted for next year. Reed said that the
line in the budget shows tuition revenue and fees, which include expected
revenues from higher enrollments. L. Davis asked Reed to talk about what’s
going on with the Promise scholarships and what the impact is going to be. Reed
explained that there are two scholarship programs affected by state’s
appropriation changes: the Promise scholarships and the Michigan Competitive scholarships.
The state approved no funds for the Promise scholarships. The amount for these
scholarships at Michigan Tech was $650,000 for fall semester, which we covered.
Saginaw did the same for its students. Grand Valley sent all the Promise
students a bill. But we are not covering the Promise scholarships for spring,
and we told students to talk to their legislators. The state funded half of the
Michigan Competitive scholarships; these scholarships at Michigan Tech also
amount to about $650,000. We are working with the state on what he restrictions are on the funds we receive for those
scholarships, so we don’t yet know what we will do. The impact of the lack of
funding for the two programs is about $900 thousand to $1.2 million. But because
of the enrollment increase, the tuitions and fees are running about $1.3
million above what we projected. From June 30 to September 30, we also had Investment
gains of about $1 million. We’re looking at funds in the Tech Fund that might
be available to cover some of the students’ scholarship needs in the spring and
some of the expense in the fall. We’re also looking at the needs of the
students who will not get the Promise scholarships in the spring.
Wood
asked what is going on at Michigan State which seems to be in much worse shape
than any other university in the state. Reed said that Michigan State is
certainly going public as being in much worse shape. They just announced a 10
percent reduction in budget; they just announced a program review; they are
closing two departments. Wood said they are laying off
600 tenure-line positions. Reed said he really doesn’t know the cause, but he
said that Michigan State is much more reliant on state appropriations than we
are. Seel said that six years ago we were in much
worse shape than other universities in the state, so we’ve been working to get
out of this slump longer. Reed said we have done a lot since then to stabilize
our financial position so that we are more buffered from changes. Moran asked what is the goal for the percentage we will rely on from state
appropriations in the near and short term. Reed said there is a school
of thought that all state appropriations will go away. There is another school
of thought that says our appropriation will fall to 10 percent of income. Other
income will have to go up: tuition revenues, research, designated fund,
auxiliary fund. It’s reasonable to anticipate state appropriation will fall to
10 percent of income in the next 5-10 years. Mullins asked about how external
research funding impacts the overall picture. Reed said that in new external
funding received, we went from $41 million in FY2008 to $53 million in FY2009.
The only thing that comes into the general fund from those funds is the
indirect costs; the rest is in the expendable restricted fund. When graduate
students get supported on grants, that’s tuition money that goes into the
general fund; money spent on equipment also augments all kinds of activities.
Mullins
asked how Michigan Tech’s financial situation compares to that of other universities
in the state, excluding the University of Michigan. Reed said he is not
familiar with the situation at all state universities, but in general we are in
reasonably solid shape compared to the others, especially in comparison to
Northern, Wayne State, and Michigan State. He said we have a much better handle
on where we are and what is realistic for us, and we have budgeted and planned
accordingly; we have buffered ourselves from the variations that occur.
6. Presentation of the results of Proposal 5-10: Survey of
Senate Constituency on Compensation Changes by Tom Snyder
Snyder reported that the response rate
was pretty good: 48.3 percent of faculty and 44 percent of staff. On question 1
(do you support the proposed changes in the University’s retirement
contribution structure for next year), 75 percent of responding faculty said
no, and 64 percent of responding staff said no. On question 2 (do you support
the changes to health benefits), 81 percent of responding faculty said no, and
73 percent of responding staff said no. On question 3 (do you support the
current communication process of the benefit plans), 79 percent of responding
faculty said no, and 65 percent of responding staff said no. On question 4 (do
you agree that these changes will make it easier for the University to attract
and maintain excellent faculty and professional staff), 83 percent of
responding faculty said no, and 71 percent of responding staff said no.
There
were not a lot of comments. The most were on question 4 (34 comments). Snyder
summarized the comments on each question. On question 1, respondents said they didn’t
know that the changes were going to occur or what the changes were. On question
2, respondents said they didn’t know enough about the changes to intelligently
answer; that the HR web pages didn’t have information on the new plans, so they
couldn’t evaluate the changes; and that they couldn’t afford the current
premiums let alone any increases. On question 3, respondents said that the decision
deadline was actually 6 weeks rather than 2; that more written information should
be available; that the fast rollout made it difficult for them to calculate
what their own interests were; that if there was some discussion and feedback
during the decision process there would be more buy-in from employees; that
changes in health care last year were misrepresented as changes in carrier and
co-pays when there were some significant changes in the procedures and
consultations that were covered by the plan. One responded asked specifically
to be quoted: “There is no communication between the executive and the
employees. It was like a king making a decision and then just announce to his
subjects. Are we still in the middle ages?” On question 4, respondents said
that the idea that cutting benefits for a small increase in salaries will
attract and retain employees is ridiculous or the executive thinks we’re
stupid; that the people who come here and stay are at least as much influenced
by quality of life decisions as they are by salary, and that good benefits are
very important in people making quality of life decisions; that it would be
fine to have a benefits package like Northwestern if we had salaries like
Northwestern; that eroding benefits would make it harder to attract and retain
faculty and staff. The complete results are available on the Senate website.
Mullins
asked what will happen with the results. Snyder said we forwarded them to the
administration. He said that there is some divergence between the faculty and
staff and some administrators. Wood said that the people who didn’t vote may be
sending a different message. Johnson suggested that an email be sent to the
Senate constituents. Snyder said that senators should send an email to their
constituents with a link to the results on the Senate webpage. Seel said that the administration will possibly respond to
the survey at the next Senate meeting. L. Davis said that in looking at the
comments, one of the things he senses is some frustration with communication processes
and with the failure of the administration to engage in shared governance on
this issue. He said he was one of the original members of BLG, and one of the
reasons he got off the committee was the that
inability of faculty members to talk with their constituents conflicts with the
notion of shared governance. He asked whether the Senate should continue to
have representation on the committee if our representatives are not allowed to
talk to their constituents. Luck stated that he wouldn’t use the word shared
governance in describing the function of the BLG. L. Davis agreed.
7. Report of the President
Luck notes that in Tech Today on November
2, President Mroz was quoted on the issue of possible
parking fees: "It's important for people to weigh in with their
concerns," Mroz says. "This is a complex
issue involving both operations and aesthetics. We need the guidance of the
campus community." The 11 members of the Parking Task Force will complete
their work by January 1. They will address the number of parking lots and
parking spaces available, procedures for assigning parking spaces, the
effectiveness of existing parking gates, vehicle registration, the possibility
of implementing registration/parking fees, visitor parking passes and handicapped
parking placards, and violations, citations, fines, an appeals process, and
delinquent payments. The members of the task force are:
Ellen Horsch-
Administration, Chair- eshorsch
Daniel Bennett- Public Safety & Police Services- dpbennet
Andre Bonen- Housing & Residential Life- aabonen
John Bramble- Dining Services, McNair Hall- jgbrambl
Nik Chaphalkar- Student
Body, Engineering- nschapha
Katie Elicerio- Student Body, Biomed Engineering- kaelicer
Randal Harrison- Graduate Student Council- rsharris
Jarrod Karau- Information Technology- jlkarau
Andy Neimi- Facilities- agniemi
John Rovano- Facilities- jarovano
William Sproule-
Civil & Environmental Eng- wsproule
Luck said he does not know how task
force members were chosen, and that William Sproule
is the only faculty member on the committee. The committee has been discussing removing
the parking gates which cost $8000 per year. The committee is also trying to
develop the total annual cost of providing parking. From parking literature the
annual cost for operating and maintenance of surface parking is on the order of
$150 to $200 per space and there are over 4000 spaces on campus. Luck suggested
that a member of the Senate’s Institutional Planning Committee should sit on
the Parking Task Force, as the purview of that committee includes the allocation and utilization of the
university's human and physical resources. Seel
promised to bring the question to the attention of the task force.
Luck
played a recording from NPR’s Marketplace Money Report of October 31, in which
a spouse of a Michigan Tech employee asked which of the two new retirement
options make the most financial sense. Chris Farrell, economics editor for
Marketplace, said, “You can’t go wrong; both of these options are good.” You’ll
pay more taxes with the higher salary. If the 4.5 percent salary increase
allows you to save money in a taxable account and you won’t be borrowing much,
he said he would advise that plan. But with the 2 percent you get the value of
the tax shelter and more money in your retirement plan.
Luck
made some comments on the survey on compensation changes. The survey was proposed
on October 14 and composed, distributed, collected, posted, and discussed by
November 4. He thanked Judi Smigowski and the elections
committee for the tabulation, which took two hours to accomplish and an
additional two hours to type up the comments. The results are posted on the Senate
website, together with the comments, and Senators should notify their
constituents. The survey cost $125. In response to comments on the survey that
asked why members of the BLG do not convey information about the plans being
discussed, he noted that BLG members are restrained from revealing the
deliberations of the group. He said that it is clear that the administration
could do a more constructive job explaining the reason(s) behind the retirement
changes. A one page email with the
pertinent details might be useful in advance of all the forums. The
administration could have a calculation spreadsheet available on the HR website
so as to demonstrate to employees exactly what these retirement changes mean. He
said that since this will not save Michigan Tech any money, people should have
been allowed the option of keeping the present retirement plan. Health care
costs are increasing everywhere. The contention that these changes will lead to
recruitment of excellent faculty and professional staff, while a noteworthy
goal, is not relevant to the existence of most people already working at Tech. This
reason should not be proffered as a justification to have employees paying more
for health benefits, unless the savings are being used for these recruitment purposes.
Luck
noted that the current Senate secretary will be on leave spring semester, so a
new secretary needs to be chosen. Luck asked for volunteers or nominations, but
received none. The secretary must be a faculty senator, and there is some
recompense for service.
Committee Reports.
Caneba, chair of the Administrative Policy Committee, asked the
help of senators in developing a survey to evaluate the president and vice
presidents of the university with the goal of increasing the response rate,
which was 16 percent last year, up to the level of the response rate to the
recent compensation survey. The committee has suggested the following timetable:
on November 4, senators will be asked to rank issues as to their relevancy in
evaluating administrators; on November 18, the committee will present sample
questions to the Senate and seek feedback on the manner of the survey as it
relates to confidentiality; on January 20, the committee will describe the
proposed survey, based on input from Senate constituencies and the
administration, to the Senate; on February 24, the survey will be distributed;
on March 17, the survey results will be processed. Caneba
thanked the members of the committee for their work, and especially Smith who
has contributed greatly to the design of the survey.
Smith
distributed a ballot listing some issues and asking Senators to respond by circling
‘include,’ ‘exclude,’ or ‘neutral’ for each. He said that surveys like this are only
effective if you can get a response rate of around 80 percent. The committee’s first
goal is 30 percent, Smith’s goal is 50 percent and eventually 80 percent, but,
he said, it takes several years to get there. He said
we need to get a commitment from the Board of Control and President Mroz and the vice presidents about how the results of the
survey will be used and how it will be responded to. We also need to make the
survey easy and confidential. Today’s ballot is the first step to make the
survey relevant. He said that the committee has an unpaid consultant from the
University of Michigan Research Center helping with
the development of the survey.
Issues
listed on the ballot were the President and his Executive Team’s decisions on
Aetna’s administration of the Michigan Tech health plan; the health plan
changes in coverage/costs this year, the move of many administrative units off
campus, efficiency/productivity of administrative units, movement of benefits
money to salaries, and the Strategic Plan process and implementation; the
leadership skills, communication skills, and administrative philosophy of the
President and his Executive Team; and retaliation issues, salary structure
efforts, administrative ethics, and administrative diversity.
Moran
asked what is meant by retaliation issues. Smith said people have said they
will not fill out any surveys at Michigan Tech because of their fear of
retaliation. Luck asked which administrative units are moving off campus. Christianson
said Human Resources, Vice President for Research, General Fund Accounting, Vice President for Accounting, Budgeting, Accounting,
Purchasing, Institutional Analysis, and Internal Audit.
Onder, chair of the
Elections Committee, reported nominations for the Committee on Academic Tenure,
Promotion, and Recruitment, Zhangping You, and for the
Faculty Distinguished Award Committee, Diane Shoos. The committee is still
seeking a nominee for an alternate member of the Faculty Review Committee. There
were no nominations from the floor. Mullins moved to elect Shoos to the Faculty Distinguished Award Committee since
there is only one candidate; Hamlin seconded the motion; and the motion passed on a voice vote with no dissent.
Snyder said that the faculty must vote on the member of the CATPR. A ballot
will be distributed to the faculty.
8. Old Business
a. Proposal 16-09 Double Majors at Michigan Tech
Keen said that the Curricular Policy Committee
recommends approval of the proposal. Boschetto-Sandoval
moved that the proposal be approved;
B. Davis seconded the motion; and the motion passed on a voice vote with two dissenting votes.
b. Proposal 6-10 Graduate Certificate in Sustainable Water
Resources
Keen said that this is an excellent
certificate program, and Alex Mayer is in the Senate to answer questions.
Hamlin moved that the proposal be
approved; B. Davis seconded the motion; and it passed on a voice vote with no dissent.
9. New Business. There
was no new business.
10. Adjournment. Hamlin moved that the meeting be adjourned; Malette
seconded the motion; and President Luck adjourned
the meeting at 6:55 pm.
Respectfully submitted
by Marilyn Cooper
Secretary of the University Senate