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Page 4285 Minutes of Senate Meeting 211 9 Mar 1994
THE SENATE OF MICHIGAN TECHNOLOGICAL UNIVERSITY
Minutes of Meeting No. 211
9 March 1994
Synopsis: The Senate
(1) corrected and approved minutes of Meetings 209 and 210;
(2) learned Proposal 11-94 had been submitted to the
administration for approval;
(3) learned that the establishment of Senate standing
committees had been designated as Proposal 15-94;
(4) learned that there were problems with the Winter Quarter
Teaching Evaluations;
(5) discussed Proposal 1-92 Retirement Benefits Plan, Parts
B and C;
(6) approved Proposal 2-94 Supplemental Health Benefits.
_______________________________________
I. Call to Order
President Bornhorst called the meeting to order at 5:33 pm on
Wednesday, 9 March 1994, in Room B37 of the Electrical Energy
Resources Center.
II. Roll Call of Members
Secretary Keen called the roll. 31 senators or alternates were
present. Senators or alternates from AF ROTC, the Library and Non-
Academic Group 3 were absent. Absent liaison members: Dean of
Sciences & Arts, CTS, GSC, and Staff Council.
III. Introductions and Recognition of Visitors
Recognized visitors were F. Arbabi (CE), I. Cheney (Human
Resources), E. Carlson (BL), F. Dobney (Exec. VP & Provost), W.
McGarry (Treas & CFO), D. Thayer (MY), E. Vandette (SS) and B. K.
Whitten (BL).
IV. Agenda Adjustments
Bornhorst referred to the published agenda [Appendix A of these
minutes] and proposed adding a report from the Instructional Policy
Committee and considering New before Old Business. Bornhorst asked
for other adjustments; there were none. Grzelak MOVED approval of
the adjusted agenda, and Grimm seconded the motion. Bornhorst
asked for objections to the motion. There were none, and Bornhorst
declared the motion APPROVED.
V. Approval of Minutes
Bornhorst called for corrections to the minutes of Meeting 209
distributed to senators. Hubbard noted two corrections. Carstens
MOVED approval of the corrected minutes. Arici seconded the
motion. The motion PASSED without dissent in a voice vote.
Bornhorst called for corrections to the minutes of Meeting 210.
Hubbard and Leifer noted corrections. Leifer MOVED approval of the
corrected minutes. Grzelak seconded the motion, which PASSED
without dissent.
VI. Report of Senate President
1. Proposal 11-94 Revision of Faculty Handbook was submitted to
the administration [Appendix B of these minutes].
2. The administration was informed of Senate acceptance of the
President's proviso for Proposal 16-92 [Appendix C of these
minutes].
3. On February 17, Bornhorst represented the Senate in an
administrative meeting examining weather-related closings and
excuses. An ad hoc committee will work on the problem over
the summer. A Senate representative to the committee is
needed, and Bornhorst asked for volunteers.
4. The February 17 meeting of the President's cabinet considered
issuance of departmental credit cards with a $500 limit per
purchase. The Provost presented the budget to the cabinet.
5. A meeting on constituency issues was held February 23 with
Senate officers, Staff Council officers, and some concerned
senators. A result of the meeting is that Bornhorst will ask
for placement in Tech Topics of a notice that Staff Council
constituents may petition for Senate representation.
6. On March 8 the Senate officers met with Provost Dobney and
considered several issues. Faculty evaluation problems were
discussed. For next year there will be 133 TAs and 20 GAs,
a net increase of 16 above this year's GTA allocation. Funds
for the increase came from administrative sources including
reductions in legal, consulting and TQE fees.
(Leifer asked if the amounts were for this year's budget.
Bornhorst said it was for next year's.)
Walter McCoy introduced a policy on harassment and
discrimination, which will be presented soon as a Senate
proposal.
8. Secretary Keen has noted that under the bylaws, creation of
Senate standing committees requires a proposal. Earlier
Senate action that created the standing committees has been
assigned to Proposal 15-94 [Appendix D of these minutes].
9. A budget request for Senate Office operations has been
submitted to the Provost.
Bornhorst opened the floor to questions. There were none.
VII. Reports from Committees
A. Board of Control Relations Committee. As Committee Chair,
Bornhorst reported that Senate representatives would not meet for
breakfast with the Board at its March 18 meeting. Instead, an
informal meeting for May 20 has been requested. At a special open
Board session on March 18, he and B. Seeley would make
presentations on departmental governance and conflict of interest
policies, respectively. Bornhorst asked Beck, Bulleit, Glime,
Hubbard, and Mroz to attend as Senate representatives for any
discussion of departmental governance.
Bornhorst called for questions or comments. There were none.
B. Instructional Policy Committee. Committee Chair Heuvers
distributed a handout [Appendix E of these minutes], and reported
that there had been problems with processing of winter term
teaching evaluations. Some problems were solved this time, but
other problems remain. Course-offering departments should be
warned of possible errors, including missing forms, incorrect
counts of forms, and mix-ups in return of forms. The problems
originated with the conversion of computer operating systems. The
information can be reprocessed from the tapes of raw data.
A subcommittee has been formed to investigate the processing
mechanisms and the statistics being computed. The subcommittee
members are Gimmestad (MA), Drummer (MA) and Seidel (CS). The
subcommittee has invited comments and suggestions.
VIII. New Business
-Proposal 12-94 Option for the BS Degree in Biological Sciences.
Bornhorst referred to Proposal 12-94 [Appendix F of these minutes]
circulated with the agenda, saying that it was being introduced as
new business to be voted on at the next meeting. Bornhorst asked
for questions. There were none.
IX. Old Business
A. Proposal 1-92 Retirement Benefits Plan, Parts B & C. Bornhorst
referred to the copy of the proposal attached to the agenda
[Appendix G of these minutes], and said that by agreement, 22
minutes would be divided between minority and majority Finance
Committee reports, followed by an 8-minute comment by the Provost.
Bornhorst suggested that the remaining time be given to discussion
limited to 3 minutes per questioner. He asked for objections to
the limits; there were none.
1. Minority Report: Bornhorst introduced Brokaw with the
minority report. Brokaw began by summarizing the parts of the
proposal. Plan A is an annual payment after retirement equal to
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Page 4286 Minutes of Senate Meeting 211 9 Mar 1994
years of service times 2% of the final year's salary; the
qualifying criteria are 80 points (age + years of service) or 65
years of age + at least 10 years of service. Plan B is a lump sum
payment at retirement equal to year of service times 10% of the
final years salary, capped at $250K, with the same qualifying
criteria. At retirement, a choice would be made between plans A
and B. Plan C is paid up life insurance equal to twice the annual
salary at retirement. Brokaw said Plan C resembles Plans A and B
from a cost point of view. Brokaw distributed copies of the
Finance Committee's minority report on the proposal [Appendix H of
these minutes].
Brokaw summarized the minority objections. (1) The cost
estimates may be low, because they are based on a closed group
analysis. New employees would increase the costs. (2) Life
insurance primarily provides financial protection of families from
unexpected death of a wage earner. This need decreases with age.
The majority explanation of the need for life insurance has little
merit; cf. the minority report. (3) All three plans favor some
employees over others. An employee who works for MTU for 10 years
and then moves elsewhere would enjoy no benefits. The proposed
retirement plan most benefits those who are now older with more
years of service at MTU. Tables 1-4 of the minority report are
scenarios showing this. (4) The plans decrease mobility. They
encourage people to stay at MTU until they qualify for the
benefits. (5) Is the cost affordable? The costs per year for A,
B, and C are about $6.4M, $3.9M and $1.1M. If Plans A and C were
implemented, total cost would be about $7.5M per year for about 20
years. This is a 15% increase over current wage and benefit costs,
or about a $7.5K wage increase for a person earning $50K. (6)
Previous retirement programs have strained MTU, with $1M per year
still going to those. These were big financial mistakes. The
proposed plans will have a chilling impact on future wage increases
and program development.
Brokaw said that there were alternatives to the proposed plans.
(1) Current life insurance payments could go toward a whole life
policy to produce paid-up policy at retirement. (2) As a general
rule, wage increases are better than any plans like those proposed.
This allows individuals to make their own decisions on how to spend
the money. (3) If retirement benefits are to be increased, they
should be distributed equitably into portable plans. (4) Are there
less costly ways to ease the transition to retirement? A 3-year
phased-in retirement has been discussed in the Finance Committee.
2. Majority Report: Bornhorst introduced Leifer with the majority
report from the Finance Committee. Leifer distributed copies of
the majority report from the Finance Committee [Appendix I of these
minutes], and reviewed the history of the retirement benefits
program (cf. Appendix G, cover sheet).
Leifer referred to cost analyses done by the Fringe Benefits
Committee in 1991. Figs. 2 and 4 describe 20-year and 30-year
self-funding for the lump sum payout. The 30-year plan drops the
initial cost from $3.9M to $3.6M. The cost drops markedly in the
last year; this is the result of self-funding. Fig. 4 answers
Brokaw's objection to the closed-end analysis. After 30 years,
most current employees will have retired or died, and the fund will
have built to $13.5M. At 7.5% interest, this will produce more
than the $90K needed by the current personnel; minor budget
increases will provide the benefits for new personnel hired in the
interim.
Leifer noted that costs and self-funding of the 2% annuity were
described in Figs. 3 and 5 for 20-year and 30-year periods. Any
monies remaining at the death of the employee and the spouse revert
to the university. Leifer said that the 2% figure is not cast in
concrete. Any lesser percentage will reduce costs linearly.
Leifer indicated that Fig. 6 shows the cost of the life
insurance plan for self-funding over 20 years. The life insurance
plan is needed to secure mortgages for houses to be bought by
retirees moving away from the Copper Country.
Leifer said that Table 1 (Appendix I) showed the necessity for
the proposed retirement benefits. The table compares salaries at
Northern Michigan University and MTU, contrasting only departments
common to the two universities. MTU faculty now earn $13,000 per
year less than comparable faculty at NMU. The effect of this over
15 years, including a TIAA/CREF contribution of 10.55%, is a loss
of $174K. If half the earned income difference after taxes were
invested, it would produce a total of $50K. The total difference
between MTU and NMU is thus $225K after 15 years. For MPSERS
participants, there is also a considerable loss. Assuming a $12.5K
salary difference between an MTU and NMU employee retiring after
30 years of service, the annuity difference per year is $6,000.
Both TIAA/CREF and MPSERS participants need some supplement for
their MTU retirement benefits.
There are four reasons for the program. (1) It would permit
orderly planning for new programs by the university. (2) It would
allow faculty and staff to retire with dignity. (3) It would
enable MTU to attract bright young faculty with a good benefits
program. (4) It's the right thing to do. Without the program MTU
will have difficulties. (1) Planning and implementing new programs
will be hindered. (2) Senior faculty and staff will delay
retirement. (3) Morale will be lowered. (4) New faculty and staff
will be harder to retain.
Leifer said the majority of the Finance Committee felt the
minority report was flawed. (1) There are no losers in the program
because all employees will eventually retire. (2) Salaries are
not a fringe benefit, they are an earned benefit. (3) The closed-
group problem has been addressed. (4) The necessity for life
insurance has been explained.
Leifer said that the program could be afforded by eliminating
excesses in administration, by not decreasing undergraduate enroll-
ment by 500, and by not building a graduate program from the
general fund. The proposal is no longer a voting issue. The
program can be implemented, and there should not be a deadline on
negotiations with the administration. The Committee is ready to
work toward a successful conclusion.
3. Administrative Presentation: Bornhorst introduced Provost
Dobney for a presentation of the administration's position on the
proposals.
Dobney said that the main priorities of the management and
budget are, in no particular order: maintaining affordable tuition,
reducing accumulated deficit and building cash reserves, starting
new programs and enhancing existing ones, maintaining the physical
plant and minimizing deferred maintenance, compensating faculty and
staff fairly and tying increases to productivity and performance.
Dobney said three matters of principle needed restating:
(1) There is no intention of funding retirement incentives now or
in the future. There will be no repeat of the 83-84 and 86-87 buy-
outs and golden handshakes. The current administration has no
intention of adopting this strategy. (2) People will be compen-
sated for working as opposed to not working. Compensation is tied
to productivity and performance. (3) Compensation for current
employees will come from current revenues; there will be no
commitment to current benefits from future revenues.
Dobney said some factors had been obscured by the rhetoric
surrounding the proposal. (1) The budget bearing most of the
fringe benefit costs is the $74M general fund, not the total fund
budget of $115M. In the 93-94 budget, about 80% of the $42M salary
and $15M fringe benefit costs will be charged to the $74M budget.
(2) The proposed annuity and life insurance retirement benefits are
not common university benefit offerings. I. Cheney has been unable
to find any other school offering comparable benefits. (3) When
examples of TIAA/CREF payout amounts are cited by the proposal's
supporters, it is always the worst-case scenario of a 20-year
payout to the retiree, spouse and surviving dependents. This
example provides the lowest possible payout, combining retirement
and survivor inheritance benefits. Income from investments, social
security and accumulated capital are never referenced.
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Page 4287 Minutes of Senate Meeting 211 9 Mar 1994
Dobney said he did not support the proposal for several
reasons. (1) The proposal is financially irresponsible. At 38%
the current fringe benefit program is the most expensive in the
state. Increases for medical costs, retiree health care and the
MPSERS program over the past 3 years have been $2.3M per year. The
proposal would put the fringe benefit rate at 50% or higher, which
is an intolerable rate. (2) The retiree medical insurance benefit
along with TIAA/CREF provides retirees with the most important
retirement benefits. The cost of retiree health care benefits will
be over $3M next year. (2) The proposal does not provide
retirement incentives if people do the math. By delaying
retirement 2-3 years, the combination of reducing retirement years
actuarily, continuing TIAA/CREF contributions, and accumulating
interest on investments will significantly enhance retirement
payout. Working 2-3 years longer will provide more money than the
proposed lump-sum payout. (3) It is not fair to those not
approaching retirement to be taxed for 20 years to subsidize a past
service liability.
Dobney said that discussion should continue on other retirement
benefit options such as phased retirement, a cafeteria plan, tax
sheltered benefit contributions, health care insurance for
surviving spouses of long-term employees ineligible for the 80-
point plan, health care insurance for disabled employees, and
retiree-paid life insurance under the MTU group policy. Discussion
of the proposed benefits should end; they are counter-productive,
creating false expectations that cannot be realized. There should
be joint efforts to contain costs of existing benefits, and to
explore innovative ways to help those about to retire.
4. Discussion of Proposal: Bornhorst thanked the presenters, and
opened the floor for questions.
Carstens asked Leifer how much the proposal would cost if it
were implemented this next year. Leifer said that the budget
picture could be changed, and began to distribute a handout
[Appendix J of these minutes].
Carstens asked Brokaw whether the university could obtain more
cost-effective annuities for employees than the employees could
obtain on their own, if the cost of the proposed benefits were paid
as salary instead. Brokaw said that individual purchase of a tax-
deferred annuity was done simply and as cheaply as if bought by
MTU.
Carstens again asked Leifer how much it would cost to implement
the proposal for the first year. Leifer replied that the handout
addressed the point; $1-2M could be saved from administrative
excesses. $2.15M could be obtained from maintaining undergraduate
enrollments. More funds could be obtained from ending the self-
funding of graduate scholarships. Leifer said that the money saved
could be used to do all the items requested, including salary
increases, better employee benefits, and a nice retirement benefits
program. With a 1.5% annuity and the life insurance, a nice
retirement benefits program could be funded for about $5M or
perhaps $6M. With $8M available as indicated in the handout, it
would only cost $1.4M to increase TIAA/CREF by 5%. Funds for
another few percent in salary raises would also be available.
Bornhorst commented that the requirements for funding retire-
ment programs had changed since the initial passage of the proposal
in 1992. Previously there were no accounting standards that had
to be followed. The present retirement health benefits plan is not
funded acceptably according to these standards. The current
expenditure should be $3.5M. Leifer said that the two plans are
self-funded according to current accounting standards.
Leifer asked Dobney whether a copy of Dobney's comments could
be provided for analysis. Dobney replied that they would be.
Bradley asked whether the number of undergraduates was being
decreased intentionally, or the loss was an uncontrolled market
reaction. Item C of the handout represents a move to increase
research activity; it is not wasted money, but a trial. Whether
it will succeed remains to be seen. Leifer replied that self-
funding a graduate program is like trying to start a motor-cycle
by squirting gas in the carburetor. It will sputter but not take
you very far. A graduate program must be self-sustaining, unless
an endowment of $500M is available.
Boutilier said that the build-up in the graduate program over
the past 10-12 years has been on the backs of the faculty and of
the undergraduate programs. It is not the fault of the current
administration, but the money has come from the general fund, and
all have suffered for it. The program may not be immediately
turned around, but if it is built much further, it will kill the
university.
Grzelak said that various departments had been trying actively
to reduce enrollments to maintain parity with resources. This can
have the effect of reducing overall enrollment. Leifer commented
that he agreed with Grzelak.
Leifer said that Dobney and McGarry were engaged in a new
mathematics. He asked how they proposed to meet their priority of
moving faculty salaries to the norm with a 3% raise, when faculty
counterparts at NMU were expecting a 7% raise on higher salaries.
Thayer asked how much MTU was spending per year for lawyers.
Dobney said that the budget for legal fees was in the range of
$200K-250K. McGarry said it was $200K.
Carlson asked about the cost of legal insurance. McGarry
replied that MTU was self-insured. Carlson asked whether this was
paid for. McGarry said that MTU was part of a cooperative
consortium of state schools, to which a fee was paid. To the
extent it is not used, the fee is returned. The insurance is on
three levels: up to a point there is self-insurance, above this the
cooperative takes over, and above that an outside carrier handles
catastrophic insurance. Most of the claims are handled through
the cooperative. Bornhorst asked how much that cost per year.
McGarry replied that there were 17 different insurance programs,
covering buildings, automobiles, and personal damage, etc.
Bornhorst asked for the total cost. McGarry said about $300K
per year. Leifer said he had seen numbers like $1M. Dobney said
that the numbers did not come from the administration. Carlson
said that the insurance costs were $300K, the fees were $200K, and
some settlements were secret with unknown costs. McGarry said the
secret settlements could not be discussed.
Mullins said that an impasse had been reached. The Senate had
passed the proposal unanimously, and the Provost had related that
the Board and the administration would not accept it. Some
compromise was needed to break the impasse. Mullins asked whether
an altered form of the proposal might be acceptable or might be
negotiated, because it was not the business of the Senate to vote
on the proposal again. Mullins asked whether the retirees could
somehow participate in the group life plan, and whether some sort
of annuity could be worked out.
Dobney replied that there were some areas where progress might
be made to aid those looking at retirement. The basic principle
remains that MTU will not engage in programs requiring advance
funding. The Univ of Michigan has a retirement furlough,
equivalent to a sabbatical with full pay at the end of the career.
This plan would be funded by the faculty just as they now support
the current sabbatical program. Other programs include phased
retirement with faculty reducing their workload and their amount
of compensation. Other programs exist in which faculty members
teach a course or two to earn up to the maximum allowed under
social security. Dobney said it might be possible to continue in
the life insurance plan. This would by-pass the pre-existing
condition issue and permit better rates than otherwise. All these
possibilities could be examined, but the issue needs to be
resolved. Before the end of the academic year, some agreement
should be reached about what is and is not possible.
Vandette asked what percent of the MTU budget would be
encompassed by the proposal. Leifer responded that the lump-sum
payout plus the life insurance would be about $4.7M divided by
$75M, or about 6.2%.
Bornhorst asked McGarry whether the 30-year funding calcu-
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Page 4288 Minutes of Senate Meeting 211 9 Mar 1994
lated by Leifer is acceptable under current accounting standards.
McGarry replied that it would have to be a 20-year plan to be
acceptable. He added that the projections are based on a closed
group of current employees, resulting in low numbers. Leifer said
that in a conference call between himself, McGarry and an actuary
the figure of 30 years was used. McGarry said that was the figure
used by the actuary from Wyatt, and that a later check with the
Arthur Anderson firm indicated a 20-year figure was correct. The
difference is about 5%, in the ballpark of $3.5M-$3.9M.
Heuvers asked whether the 6% figure was for one year, or over
what period of time. Leifer said it was for the first year, and
that the number would decrease, starting at 6.2% and going down
over 20 years to nothing.
Glime said that two factors would cause the costs to rise.
(1) A number of faculty approaching retirement have a relatively
low salary. Some have only an MS or even a BS degree, with
salaries well below that of their replacements who will have PhDs.
(2) If salaries are increased, the costs must also increase.
Higher salaries are a way of attracting new faculty who are not
very interested in their retirement.
Vandette asked whether Brokaw had any historic evidence that
funding retirement benefits would jeopardize salary increases at
MTU. Brokaw replied that the university is still putting $1M per
year toward funding the retirement programs from the 80s.
Mroz said he was concerned that the proposal would constitute
golden handcuffs, keeping in place persons who might otherwise
leave. Other benefit enhancements would avoid this problem. He
said he also was concerned with fairness, which has a lot of
different aspects. Mroz said he could retire under the proposal
at 55 and collect $70K per year at taxpayer and student expense;
this is not fair to them. The history of money grabs in the past
should not guide future behavior. The spirit of the proposal is
more toward getting even for what happened in the past than toward
going forward.
Arbabi said that the previous administration began with no
support for retirement benefits, but after 6-7 years they decided
to rejuvenate the university with a crash retirement program. The
problem was that there was no program for an orderly retirement.
The discussion should continue to achieve a program this time.
Grzelak said that nobody in the room favored the 84 and 88
programs, and that any new plan should benefit everyone as much as
possible.
Beck said that the argument about portability was incorrect.
The people who can leave are those who you want to stay, and the
people who can't leave are frequently the ones you wish would
leave. The marketplace governs movability, not portable benefits.
Arici said that Mroz's argument was not quite sound. In the
case of GM, everybody who buys a GM car is paying for the benefits
of retired GM employees. Something reasonable surely can be done
to benefit retirees at MTU.
Dobney said that he would like to return to the Senate in 2 or
4 weeks with a proposal along the lines of a compromise mentioned
by Mullins.
Keen said that Leifer had presented charts and graphs, and it
reminded him of the presentations of T. Whitten for the 1984
retirements, of E. Koepel for Ventures, and of D. Stein for
Carnegie I, all offering to trade pie in the sky for current
salary. On the other hand, the previous retirement plans were
unfair to those wanting to retire today. Keen said his first vote
for the proposed plan was based on the need for medical coverage,
and the second was out of irritation at the provost's request for
a second vote.
Bornhorst said the Fringe Benefits Committee should be
commended for getting the health insurance retirement benefits.
He added that the Senate needs to find out what is negotiable,
because under the constitution there is no option for going to the
Board on the proposal. The administration has to be dealt with on
the issue.
Leifer said that his previous question about the administra-
tion's new math had not been answered. Dobney said that his
statement had been twisted, that the administration would try to
bring MTU salaries to the average of its peer institutions. NMU
had not been mentioned. NMU was not a peer; it had been funded for
political reasons at a level well above every other comprehensive
state university. NMU gets $5700 per student, while the others get
$3000-$3600. NMU is funded $500 less per student than MTU, but
they run far less expensive programs like Secretarial Science
instead of Electrical Engineering. As a result they have
significant money to invest in salaries, which they have done
successfully.
Thayer said that the Senate had voted on a proposal, and had
sent it to the administration. The administration had said they
were not going to fund it, so the ball was in their court.
Bornhorst responded that it was in nobody's court; the issue was
dead after an administrative refusal.
Mullins said that he would like to get some ball back into
somebody's court, and that he did not like the idea of a proposal
being all-or-nothing. He said that there should be a mechanism
for some accommodation, and asked Bornhorst what that might be.
Bornhorst replied that other proposals had been taken to the
administration, and that he had discussed these with the Provost
to ensure their acceptance. This included the proposed suspension
of the 3-year-and-out policy. The proposal was rejected, but a
compromise was worked out. This proposal is the first to be flatly
rejected, and in fact it was not developed under the present
constitution. Bornhorst added that the issue is not yet at an
impasse, because the Provost has said he would come back in two
weeks with a counter-proposal on benefits.
Grimm said that the problem is that proposals have been
developed in isolation. Instead, a system of working with the
administration needs to be developed. In this case, some
representatives of the Committee should work with Dobney to develop
some kind of compromise or alternatives.
Bornhorst said that under the new constitution the Senate and
the administration were starting to learn about shared governance.
The officers and the administration have discussed these issues.
Most issues will involve minor differences on both sides that can
be altered, just as in the case of the proviso with Proposal 16-92.
In that case the administration should have commented before the
faculty vote; the proviso might have been included on the ballot.
With the present proposal, perhaps more feedback should have been
obtained from the administration before the Senate votes. Errors
have been made on both sides of the fence.
Mullins said that the proposal had spanned two administrations,
which made the situation a little more awkward. Mroz said that
another fringe benefits committee existed on campus, and that there
should be some cooperation between the two committees. Bornhorst
said that I. Cheney had requested Senate representatives on a
Fringe Benefits Committee, and that he had passed on the request
to Finance Committee Chair Pickens.
Cheney said that the University Benefits Committee consisted
of Drummer (MA), Kowatra (MY), Frayer (FR), D. Kent & K. Salo
(professional staff), B. Ruotsala (UAW), and J. Campioni (AFSME).
Miner said that his constituents were concerned about how a
phased retirement plan might be implemented for staff that worked
on an annual basis, not quarterly. The minority report assumes
that there is some amount that can go towards salary raises or
towards fringe benefit, but this is not so. The salary increases
have already been determined. Miner added that he would like to
see a fair retirement benefits package addressed.
Bornhorst asked for further comments. There were none.
B. Proposal 2-94 Supplemental Health Benefits Program. Bornhorst
referred to copies of the proposal [Appendix K of these minutes],
and stated that the motion to adopt Proposal 2-92 had been tabled
at a meeting earlier in the year. Grzelak MOVED to take up the
motion again. Heuvers seconded the motion. Bornhorst asked for
discussion. There was none. The motion
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Page 4289 Minutes of Senate Meeting 211 9 Mar 1994
PASSED without dissent in a voice vote. Bornhorst called for
discussion.
Arici asked for the Provost's views on the proposal. Dobney
said that he had promised the Senate to put the proposal into place
on an ad hoc basis, and had done so in one case. If the proposal
was too late to be included in the budget, the benefit would be
provided until it could be funded permanently, assuming passage by
the Senate and Board approval.
Bradley asked whether the accounting in the included tables
was correct. McGarry said that it was correct.
Roblee asked for the cost of implementation. Pickens
summarized the coverage of the proposal and said that the cost
would be $117K per year. Leifer said that the annual cost would
decrease over a 20-year period.
Diebel asked Dobney whether the age and service limitations
would apply to the ad hoc implementation of the proposal. Dobney
replied that he would ask the University Fringe Benefits Committee
and the Appeals Committee in the Human Resources office for
guidance. Diebel commented that it might be better to keep the
policy on an ad hoc basis than with a defined age limit.
Beck commented that an ad hoc policy would not be better in
the long run. While the current administration seems sympathetic,
MTU has a 100-plus-year history of the opposite.
Glime asked whether situations might be covered if they fell
outside of the policy's limits. Dobney said that the
administration would consider appeals through the Human Resources
Office. Heuvers asked if the ad hoc policy would still be
followed. Dobney said it would be, that the administration would
try to be humanitarian within reason.
Bornhorst asked for further discussion. There was none. The
motion PASSED 24-0 in a show-of-hands vote.
Dobney commented that the proposal would be considered at the
Board meeting in May, which is the meeting at which the budget is
adopted. The proposal would therefore not be funded as a base item
for the next year. Dobney said that, for the record, the spirit
of the proposal would be followed in the meantime.
C. Proposal 14-94 Recommendation on the ESTR Program. Bornhorst
referred to the proposal [Appendix L of these minutes] and called
for a motion to approve the proposal.
Galetto distributed a handout [Appendix M of these minutes]
and said it was a response to a question from the previous meeting.
Galetto said that another question had involved extending the
program to more than adjacent states. This extension would not
be a problem with his office, but might cause a negative reaction
in Lansing.
Galetto said the handout was based on a survey of students from
adjacent states who had decided to attend other schools after being
accepted at MTU. The table showed numbers of students surveyed and
some rough calculations of differential between resident tuition
for their preferred schools, for MTU's in-state tuition, and for
tuition under Proposal 14-94. The proposed change results in about
a $1000 annual increase over the current ESTR. Galetto said he was
not sure how the change would alter the enrollment.
Kawatra said that out-of-state tuition for the Univ of Minn
was charged only for the first year at that school: it dropped to
the in-state rate subsequently.
Roblee asked whether other schools had programs similar to
ESTR. Galetto said that Minnesota and Wisconsin had reciprocity,
so that students could move between the two states paying in-state
tuition. The ESTR program had been developed as a response to
this.
Roblee asked about students moving between Michigan, Wisconsin
and Minnesota. Dobney said that reciprocity was arranged at the
state level in Minnesota and Wisconsin. The state universities in
Michigan were so autonomous that no one body could negotiate for
all of them.
Glime asked whether lab and other fees were included in the
table, and how the dorm costs differed. Galetto said that the
table included only the $126 annual matriculation fee, and that
the residence hall costs were probably slightly less at MTU.
Bornhorst called for a motion to adopt the proposal. Beck
MOVED that Proposal 14-94 be adopted. Mroz seconded the motion.
Bornhorst asked for discussion of the motion.
Dobney said he favored the proposal, but would not implement
it until he had received an overall tuition strategy from the
committee chaired by Malette. Bornhorst said that the proposal
would be forwarded only as a recommendation.
Bornhorst asked whether there were objections to the
recommendation of voting units listed on the proposal. There were
none, and Bornhorst declared the recommendation approved.
Bulleit noted the policy requirement for a 2.50 CGPA after
spring quarter. He stated that this seemed to be low for an
exceptional student, and asked which spring quarter was intended.
Malette replied that the policy required a 2.50 after every spring
quarter. Galetto said that 2.50 every spring quarter was the
current MTU requirement for holding any scholarship. Bulleit said
that these were exceptional students, not just scholarship
students. Boutilier said that the program currently had no GPA
requirement. Beck said that the student market should be kept in
mind; that tightening requirements will reduce student numbers.
Diebel said that the program should be opened up nationally,
and asked whether Dobney might anticipate any backlash from the
legislature from such a move. Dobney said he did not think it
would be a problem if the higher rates were in effect. Beck said
that part of the original objection to a national policy was that
no recruiters could be put into other states, and that the policy
is without practical effect without recruiters. Brokaw said that
the extension would add nothing to the cost of the program, and
that alumni could serve as effective recruiters. Unless there
would be adverse political repercussions, the policy should be
extended nationally.
Arici said that his constituents favored a national extension.
They also favored limiting the program to the top 10% of the
graduating class; at smaller schools, the top 15% can include
students of lesser caliber.
X. Adjournment
Bornhorst called for a motion to adjourn. Galetto MOVED to
adjourn the meeting. Mroz seconded the motion. Without
opposition, Bornhorst declared the meeting adjourned at 7:30 pm.
Submitted by Robert Keen
Secretary of the University Senate
.