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Page 4123       Minutes of Senate Meeting 206        15 Dec 1993


         THE SENATE OF MICHIGAN TECHNOLOGICAL UNIVERSITY

                   Minutes of Meeting No. 206
                         15 December 1993

Synopsis:  The Senate
  (1)  heard presentations on enrollments, finances and budget
       planning;
  (2)  learned that Proposal 16-92 had passed a referendum vote,
       and was being transmitted to the administration;
  (3)  received copies of a Handbook for Senators;
  (4)  received Proposal 7-94, Evening Examination Policy.
_______________________________________


I. Call to Order
    President Bornhorst called the meeting to order at 5:31 pm on
Wednesday, 15 December 1993, in Room B37 of the  Electrical Energy
Resources Center.

II. Roll Call of Members
    Secretary Keen called the roll.  30 senators or alternates were
present.  Senators or alternate representatives from Metallurgy &
Materials Engineering and AF ROTC were absent.  Absent senator-at-
large: Roblee.  Absent liaison members: Dean of Engineering, Dean
of Sciences & Arts, and Staff Council.

III. Introductions and Recognition of Visitors
    Bornhorst introduced Mike Irish, the senator from the new
Department of Fine Arts.  Recognized visitors were F. Dobney
(Provost), Wm. McGarry (Treasurer & CFO), and Robert Weaver (MTU
alumnus).

IV. Agenda Adjustments
    Bornhorst referred to the published agenda [Appendix A of these
minutes], and proposed adding a report on enrollments by Galetto,
substituting two committee reports, and adding a new business item,
Proposal 7-94, Evening Exam Policy.  Bornhorst asked for  agenda
adjustments from the floor; there were none.  Heuvers MOVED to
accept the adjusted agenda.  Heyman seconded the motion.  Bornhorst
asked for objections to the proposed adjustments; there were no
objections.

V. Presentations on Financial Matters
    Bornhorst asked the Senate to hold questions until the end of
the scheduled presentations.

A. Report on Enrollment.
    Bornhorst introduced Joe Galetto, Director of Enrollment
Management.  Galetto presented data [Appendix B of these minutes]
on recent, current and projected student enrollments.  Enrollments
were down 5 percent this year, but the bottom has not dropped out.
The pool of applicants is strong and projected to expand slightly.
Number of accepted applicants is down this year, caused by tighter
admission standards.  Acceptance rate is high, but applicants are
self-selecting based on the university's known high standards.
Enrollments will stabilize at the target of 6000 undergraduates if
about 1500 are accepted per year.  If acceptances are maintained
at the current 1300, undergraduate enrollment will drop to 5000 in
1997.  Total enrollment is projected to drop to 6400 next year.

B. Report on Finances.
    Bornhorst introduced Bill McGarry, Treasurer and Chief
 Financial Officer of the university.  McGarry presented data
[Appendix C of these minutes] describing the recent, current and
projected financial position of the university.  The current
situation is not cause for panic nor for cutbacks in personnel.
Neither is the university spending next years money.  The line of
credit has been paid off, and the cash position of the university
has improved since 1991.  The balance sheet is healthy.  The
unplanned reduction of enrolled students and unplanned increases
in health care costs and MPSER costs have created the current
problems.  The 93-94 budget will balance but with no roll-forward.
Budget development for 94-95 will be difficult.  Financially, last
year was very good, this year will be okay, while next year will
be tight.

C. Report on Budget Planning.
    Bornhorst introduced Fred Dobney, Executive Vice-President and
Provost.  Dobney said that the university was adopting a new
 position that the budget ought to be tied to planning [Appendix
D of these minutes].  Five-year planning documents and prioritized
budget requests for next year are due in December.  The first
drafts of the budget will be discussed in January with the Board
of Control, the President and Vice-Presidents, Deans & Directors,
and the Senate Finance Committee.  A first round of presentations
will be made in February.  After adjustments, the Board will
receive another draft in March, and a second round of presentations
will be made in April, with final approval of the budget by the
Board in May.
    Assumptions of budget development include a decline in enroll-
ment, and varying increases in tuition, state appropriations,
indirect costs, and auxiliary activities.  Three budget scenarios
will be presented to the Board based on different income
projections.  Financial aid will increase along with tuition. 
Academic programs will be assessed one percent for reallocation
and realignment.  Salaries, wages, and fringe benefits will
increase.

D. Questions.
    Bornhorst opened the floor to questions.  Carstens asked why
McGarry's $500K decline in tuition was tied to a drop of 358
students, while Dobney's figures showed the same decline with a
drop of 150 students.  Dobney replied that the budget planning
process had projected a drop of 200 students, and the $500K loss
was attributable to the unexpected additional drop of 158 students.
    Bulleit said that some departments used variable and sometimes
very high standards to control enrollment.  He asked Galetto if
this had a detrimental affect and if it would be better to control
enrollments based on the student-handling ability of departments. 
Galetto said that imposing high standards made it difficult to
control impressions in the marketplace.  Rejection of a well-
qualified applicant to such a program can create an impression
through a whole high school that only superhumans can get into MTU.
In fact, very high standards do not insure success in a program,
and it would be preferable to limit enrollments on a first-come
basis with some reasonable standards.  Later applicants would be
asked to choose another program.  Bulleit asked why this was not
done.  Galetto said he was willing to do this.  Dobney said that
department heads and deans had a lot of input into the process. He
added that a first-year program was being considered in the College
of Engineering that would accomplish the same goals.
    Boutilier asked whether departments were autonomous in setting
their admission standards.  Dobney replied they had been in the
past.  Galetto said that some departments were under-subscribed,
and wanted more students.  Other departments specify goals, and ask
the Admissions Office what standards are needed to achieve the
numbers.  Bulleit said that Environmental Engineering has set
impossibly high standards to reduce enrollments, which creates a
bad impression of MTU among applicants.
    Boutilier asked whether there was a floor or ceiling in
admission requirements beyond which departments could not go in
their autonomous setting of standards.  Dobney said there was no
ceiling.  Galetto said that departments receive reports on the
qualifications of students admitted into their programs.  The
Admissions Office adjusts the floor on the basis of departmental
squealing.  Galetto said that any standard is not likely to be
predictive of success in any department; motivation is very
important and is difficult to measure.  Galetto said that the
first-year engineering program would make it easier to recruit
students


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Page 4124       Minutes of Senate Meeting 206        15 Dec 1993


for MTU.  Admission to departmental programs could be based on
first-year success.  However, some prospective applicants like the
current system of direct admission to a particular degree program. 
Bulleit said it did not seem sensible to adjust numbers of
admissions based on floating acceptance criteria.  Dobney said he
agreed with Bulleit.
    Arici asked whether there was any trend in the percentage of
high school graduates going on to college.  Galetto said that the
percentages were not changing much.  Only about 5 percent of those
that go on to college are qualified to attend Michigan Tech, based
on standard test scores.
    Dobney said that even without the College of Engineering
budget, there has been a $2M increase in budget requests from the
other deans and directors.  The best scenario of an increase in
total budget amounts to $1.9M.  The budget requests are not
frivolous, and include items like GTAs, minority scholarships,
library acquisitions, computing support, (release time for Senate
president and secretary), etc.  Dobney said the problem will
involve hard decisions about priorities among salary increases,
GTAs, library acquisitions; the Senate Finance Committee will be
involved in the decision process.
    Robert Weaver asked about the enrollment decline: how it was
determined that the admissions standards were to be increased, and
were the persons making the decision aware of the declining pool
of applicants?  He also asked how the university was able to get
out of the tight 1991 situation so quickly, and how the drop in 200
enrolled students was planned.  He stated that the university's
decision to enroll fewer students has a negative impact on the
local economy.
    Galetto said that the increase in standards was caused by a
desire of individual departments to decrease numbers of students
in their programs.  The departments were aware of declining
applicant pools.  The standards are set by discussion and agreement
among the department, the dean, and the enrollment management. 
Galetto said that enrollment management is a service organization,
and that it works with departments to achieve the departments'
goals.  The downsizing of various departments had been approved to
get student-faculty ratios into line.  Galetto said the problem is
that when students numbers decline, so does income.
      Weaver said that if the goal of 6000 undergraduates is to be
achieved, then there must be more departments over which students
are spread to obtain fewer students and lower student-faculty
ratios.  Dobney said an alternative approach is to hire more
faculty.  He added that the decision by deans and heads to downsize
is defensible.  MTU has been producing six graduates per faculty
member in engineering, which puts MTU higher than any other
research university by a considerable margin.  Only VMI and Cal
State-Fresno produce more, and neither have PhD programs.  The
faculty have been strained by the enrollment and the increased
expectations of research productivity.  The 200 student decline was
legitimate planning; the problem was that it resulted in a decline
of 358 students.
    Weaver said that the decrease was larger than expected largely
because of the tuition increases; many students are not returning
to school because of financial problems.  Dobney replied that this
might be true, but it is not in line with the recent ratings of MTU
as a best buy in education.
    Galetto said that the 158 student over-shoot was partly the
result of 125 students not showing up as projected from the payment
of enrollment deposits.  Federal financial aid was late in
arriving.  Based on market forces, MTU needs to be early in its
award of financial aid.  The downsizing was based on the complaints
of departments who had to cope with the heavy loads created by the
1992 enrollment of 6,961 students.
    Bornhorst asked McGarry to comment on the quick turnaround from
the 1991 situation.  McGarry said that the university was
fundamentally sound financially.  In 1991, it had been behaving
aberrantly for a few years, and spending its reserves like cash. 
The turnaround was produced by stopping this behavior.  A line of
credit was obtained based on demonstrating an improvement in
revenue flow; this improvement was obtained by a 4 percent budget
cut that involved 67 positions.  The $3.1M cash deficit precluded
careful planning for managing the problem.
    Heyman asked how long the one percent takeaway and
redistribution was to continue, and whether any other change from
incremental budgeting was planned.  He also asked whether as much
as possible was being obtained from auxiliary enterprises for the
rest of the university; specifically, why are there lights on the
ski hill?  Dobney replied that the one percent plan was a sound
way to realign resources without major surgery.  MTU is narrowly
focused with only 29 degree offerings; MSU and UofM have about 200,
and the other Michigan schools have 70 to 80.  Programs cannot
reasonably be eliminated.  A takeback of only one percent
sufficiently upsets deans.  Dobney asked for suggestions on things
that can be eliminated.  MTU has been running on a shoestring for
a long time, and is understaffed at all levels, faculty, staff and
administrative.  The one percent takeaway will be painful, but will
continue forever.  It may result eventually in eliminating
positions.  Auxiliary enterprises is being milked hard.  Lighting
the ski hill was a business decision to increase sales of season
passes; the funds came from an auxiliary reserve, not from the
general fund.
    Diebel asked about the 5 percent increase from indirect costs. 
McGarry replied that externally funded research is now $14M.  The
federally negotiated indirect cost rate is 47 percent.  At the full
47 percent rate, $8M should have been recovered.  However, from
$14M only $2.5M was recovered, a 16 percent rate.  Further, 25
percent of the $2.5M was given back to the departments generating
the research.  The 5 percent increase in indirect costs is a
conservative estimate.
    Heyman asked where the indirect costs were being lost.  McGarry
said that some sponsors are capped at 20 percent.  Other sponsors
like the Michigan DNR refuse to pay indirect costs.
    Leifer said he started to worry when he heard talk about an
understaffed administration.  In a list of Michigan schools, MTU
is next to the bottom in percent of revenues that go to
instructional costs.  The figure is 40.7 percent, which means 59.3
percent is going to administration.  Leifer said the numbers should
be reversed.  McGarry said the figures had a rather narrow range. 
The figure could be raised to 47 percent depending on how some
transfers were recorded.  Changing the classification of CTS and
financial aid would raise the number, for example.  Bradley asked
whether the number was meaningless.  McGarry said it had some
meaning, but that it could be pushed around.  Within the confines
of the current budget and acceptable accounting standards, MTU's
number could be moved to the highest in the state.  Leifer asked
whether everybody did the accounting the same way.  Dobney replied
that they should.  McGarry said that they did not.  Dobney said
that 59 percent does not go to the administration; some goes to
student services, the registrars office, to career counseling, to
placement, etc.
    Weaver asked whether the university was moving to the next
Carnegie classification, and how much of the undergraduate tuition
was being used to support the graduate program in that effort. 
That is, how much are the undergraduates having to carry growth in
the research area.  Dobney replied that tuition accounts for only
38 percent of the total budget, and that more than 38 percent of
that budget goes to undergraduate instruction.  More is being
invested in graduate instruction and research activities than in
the past, but this has not been at the expense of undergraduate
instruction.  Undergraduate instruction has benefited with an
improvement in faculty-student ratio, a wider range of expertise,
and broader course offerings.
    Heyman asked whether the 1 percent takeback was intended to
move funds to the instructional side of the university.  Dobney
said this was focus of the program, and was a way of moving faculty
to high demand areas.  Electrical engineering has cut enrollments
by 400 over 4 years; they can either continue this, or be given
more faculty to avoid further cuts.  EE had 1200 majors with 25
faculty, while ME had 1400 majors with 45 faculty.  The


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Page 4125       Minutes of Senate Meeting 206        15 Dec 1993


1 percent takeback is a method of addressing the problem.
    Boutilier asked about rumors that the new environmental
sciences building was to be constructed with very few or no class-
rooms.  Dobney replied that inclusion of instructional facilities
increased building costs significantly.  Existing lab space was to
be vacated and renovated for teaching; net teaching space would
increase, but would not be in the new building.  Dobney said he
agreed with the premise of the question, that classroom space is
tight.  He added that he would like to see constructed a library
addition with a wing of classrooms.
    Bornhorst thanked Dobney, McGarry, and Galetto for their
presentations.


VI. Report of Senate President
 1.  A memo [Minutes, p.4111] regarding the increased duties of
     senators and alternates has been sent to all department
     heads/chairs, to deans and directors, and to the Provost and
     the President.
 2.  The officers met with the Provost and discussed several
     issues.  These will be discussed at the Senate meeting of
     January 5.
 3.  The President's Cabinet met on December 9, and discussed Total
     Quality Education, enrollments, and the budget.  They heard
     a legislative update.
 4.  A course proposal from undergraduates was referred to the
     Curricular Policy Committee.
 5.  A memo from Faith Morrison was referred to the Senate Ad Hoc
     Committee on Search Procedures.
 6.  As requested by Bulleit, the Senate officers are assembling
     a list of Senate involvement in committees across campus.
 7.  The officers wish a happy holiday season to all senators and
     alternates.

VII. Reports from Committees
  Senate Executive Committee.  As committee chair, Bornhorst
reported that the Committee had met on December 14.  The Committee
had agreed upon a standard format for presentation of proposals to
the full Senate.  Proposal 7-94 is written in that format.
    The Committee discussed the protocol for reporting results of
referenda, and decided that when the Senate President receives
referendum results the issue has been certified.  The Senate
president may then take immediate action based on the results, and
forward to the administration a proposal approved in a referendum. 
The actions were to be reported to the Senate in regular meetings.
    Leifer asked whether Finance Committee Chair Pickens had
reported to the Board of Control Liaison Committee that a faculty
fringe benefit had been tabled by the Board of Control in 1990. 
The Finance Committee was asking the Liaison Committee to look into
the matter.  Bornhorst replied that Pickens was to report during
the meeting of January 5th on the status of all the financial
proposals presented to the Board.


VIII.  Old Business
  Proposal 16-92, Departmental Governance.
    Bornhorst read the results of the referendum given in a memo
[Appendix E of these minutes] from Elections Committee Chair
Greuer.  The referendum had approved the proposal, 178-57.  The
proposal would be forwarded to the administration.
    Arici asked if there was a one-year period for departmental
action after Board approval of the proposal.  Bornhorst said this
was correct.

IX. Handbook for Senators/Alternates/Liaisons
    Bornhorst said that the Senate officers and assistant had
prepared and distributed a handbook [Appendix F of these minutes]
for use by members of the Senate.  The handbook contained useful
information including protocols and lists of senators, of
committees and members, and of constituents.


X.  New Business
  Proposal 7-94, Evening Examination Policy.
    Bornhorst said that he had received a memo from the
Instructional Policy Committee that had been rewritten into a
standard proposal format.  Copies of the proposal [Appendix G of
these minutes] were distributed to the Senate.  Bornhorst stated
that the proposal would be considered at the meeting of January 5.

XI.  Adjournment
    Leifer MOVED that the meeting be adjourned.  Huang seconded the
motion.  Without opposition, Bornhorst declared the meeting
adjourned at 7:03 pm.



Submitted by Robert Keen
Secretary of the University Senate

.