New Year's Resolutions for New President
Guest post by Michael McNabb
Resolution No. 1: Develop an Effective Relationship with State Government
The essay on University Inc. begins with an acknowledgment that over the past eight years Governor Pawlenty and his legislative allies have not been as willing to support higher education as previous administrations. Their approach turns higher education from a common good into a private enterprise.
Some factors for this transformation are beyond the control of the University. Some are not. The tone, timing, and substance of the legislative strategy of the University produce self-inflicted wounds. In 2008 state representative Alice Hausman, the chair of the Capital Investment Committee (that must approve all University bond requests), expressed her frustration with the "arrogance" of the University. See the May 28, 2008 post on The Periodic Table. State representative Tom Rukavina, the chair of the Higher Education Committee, introduced a bill in 2008 to limit increases in tuition. The chief financial officer at the University dismissed Rukavina's proposal with the declaration that the legislature does not have the authority to manage the finances of the University. Rukavina replied, "It's in the bill, tell him to sue me." See the May 7, 2008 post on The Periodic Table.
In January of each year, just before the legislature convenes, the University administration holds a legislative briefing for alumni to enlist their support. By that time the Governor has already established his budget proposal, and that proposal will determine the scope of the discussion at the Capitol. The University needs to begin its advocacy much earlier, and it needs to present its case to the Governor and to more than just a few select legislators. At the end of the legislative briefing a few years ago I briefly discussed the timing problem with Karen Himle, the vice president for University Relations. I gave her my business card and offered to meet with her. I never heard from her. As is too often the case in the insular world of the senior administrators and the Regents, outside views are ignored.
Over the last several years the substance of the approach of the University to the legislature has been a constant drone: support the University so that it can be "an engine of economic development." That approach has not been successful overall as demonstrated by the decline in state appropriations from $709 million in fiscal year 2007 to $591 million in fiscal year 2011. See the time chart of state appropriations on p.3 of the March 2010 report to the Regents on Financing the Future . Here is one reason:
Although every university president eagerly awaits that blockbuster discovery--a cure for cancer, an inexpensive way to desalinate sea water--that would generate millions in royalties, in reality a mere two dozen universities in the entire country make significant profits from technology licensing. Many others barely break even--or lose money. The more universities try to sell politicans on the idea that they can serve as engines of economic development, the more they are setting themselves up for failure and undermining the basis for their public support.
Jennifer Washburn, University Inc. at p. xii (New York: Basic Books, 2005). See On The Hidden Cost of Research.
Even a new legislative strategy may not reverse the fortunes of the University at the legislature in the near future. The front page report in the December 3 edition of the St. Paul Pioneer Press informs us that the state is confronting a $6.2 billion deficit for the two year budget cycle that begins on July 1, 2011. However, a new legisative strategy may at least minimize the damage to the University now and improve its relationship with state leaders in the future.
Resolution No. 2: Set an Example of Public Service
The Regents made an offer to the new president of an annual salary of $610,000.00 plus an annual contribution of $50,000.00 to his retirement account starting in the second year of his term. The offer is within the market range for the position of president at a large public university. Some persons have an unwavering confidence that the market always makes the correct determination in economic matters. Alan Greenspan did when he was the chair of the Federal Reserve, as did the "Masters of the Universe" who were the chief executive officers of the Wall Street firms. Their misplaced confidence combined with greed to bring our national economy to the brink of chaos.
Considerations of equity must balance economic considerations, and that is true in spades when the issue is compensation for the head of a non-profit corporation, such as an institution of higher education. It is the public service of a non-profit corporation that qualifies it for tax exempt status. See section 501of the Internal Revenue Code. A great leader exemplifies that public service.
Prior to his acceptance of the offer the new president declared:
I am convinced that we'll be able to move dollars out of administration and into the classroom. I will work very hard at that. See Moving Money From Administration.
Consider a hypothetical example in which the new president informs the Regents that $150,000.00 of their offer will be used instead for the Kaler Scholarship for Public Service. Each year the University would award a $5,000.00 scholarship to each of 30 students who have demonstrated outstanding service to the community. In monetary terms the addition of $150,000.00 would be a drop in the financial aid bucket. The symbolic value, however, would be immeasurable. The students and parents would see a president who supports them. The faculty would see a president whose actions are true to his words. The state legislators would see a president who makes a personal commitment to use the resources available to the University in the best way possible.
Resolution No. 3: Restore to the University the Value of Open Communication
The new president is at an age when a person begins to contemplate the legacy he or she will leave. He has the great good fortune to be in a position to leave a legacy to the citizens of Minnesota by his acts of leadership.
One of those acts should be to restore to the University the value of open communication. Secret meetings have become all too common at the University. The Regents again attempted to evade the state Open Meeting Law through the elaborate choreography of holding three separate private meetings with the new president with only three Regents in attendance at each meeting. This ruse is still a violation of the law. See the Postscript on Law & Regents . The secretive process also left the impression that the Regents were not interested in listening to a variety of prospective leaders who might have distinct ideas for the University; rather they intended from the start to select a person who would embrace their pre-determined priorities and who would be beholden to them for his lucrative position.
The Faculty Consultative Committee has recently closed a number of its meetings. When a member of the faculty raised a question about this practice, the committee turned to the U of M general counsel. He expressed the novel opinion that the Open Meeting Law does not apply to the committee. His opinion is contrary to the express language of the statute that applies the law to any committee of a public body. See the Postscript on FCC & Open Meeting Law .
In 2009 the administration announced its decision to make a radical change in the structure of the Graduate School and then formed an "implementation committee" to carry out its directive. The University has an official Policy on Reorganization that prescribes an open process to be followed prior to making such a decision. In taking its action the administration either intentionally disregarded the policy or failed to discern that such a policy was in existence. The faculty senate adopted a resolution demanding that the administration follow the policy. The administration ignored the resolution; it simply changed the name of the committee and then proceeded to implement its plans.
There is an urgent need for a new direction at the University. If the actions of the new president demonstrate a commitment to public service, then he may be assured that many will follow his lead.
LAW & REGENTS
The process of selecting a president of the University of Minnesota involves the application of the Data Practices Act and the Open Meeting Law.
1. Data Practices Act
Names of applicants shall be private data except . . . when applicants are considered by the appointing authority to be finalists for a position in public employment. For the purposes of this subdivision, "finalist" means an individual who is selected to be interviewed by the appointing authority prior to selection.
Minn. Stat. 13.43 subd. 3
The Minnesota Court of Appeals discussed the application of this statutory provision in a 1997 case involving the appointment of the city administrator for the City of North Mankato:
The inclusion of the definition of a finalist is a key consideration; it indicates that the triggering event that makes a name public is the selection of a candidate to be interviewed, not the candidate's acquiescence to the interview. To hold otherwise would give the candidate control over when his or her name is made public. The statute does not contemplate such a result.
We recognize that the privacy concerns of applicants for public employment are at stake, but the statute and its legislative history suggest that the public's right to be informed outweighs an individual's privacy right in this context. We believe that the concerns raised by respondents can be addressed if the appointing authority advises candidates before they apply (or early in the selection process) that if they are selected to be interviewed they will be considered finalists under the statute and their names may be made public during the selection process. Respondents' failure to disclose the candidates' names violated statutory requirements.
Mankato Free Press Co. v. City of North Mankato, 563 N.W.2d at 294 (Minn. App. 1997).
On November 13 the Pioneer Press reported on the selection of finalists for president of the University of Minnesota:
Regents went into Friday's meeting with four semifinalists. . . . Each was assigned a letter . . . so regents could talk about them in public without using their names until there was a vote to interview them. Kaler was the only one picked for an interview. . .
Two of the four semifinalists told regents early this week that they would not be finalists if they had to be part of a pool [of finalists].
Here the Regents attempted to evade the Data Practices Act by abdicating their duty to select finalists. Instead, they allowed the candidate to control whether his or her name would be made public by allowing the candidate to withdraw from further consideration. The Regents effectively ceded the selection of finalists to the candidates themselves.
2. Open Meeting Law
In a case arising out of the selection of the current president of the University the Minnesota Supreme Court ruled that the Open Meeting Law does apply to meetings of the Regents. Star Tribune Co. v. University of Minnesota Board of Regents, 683 N.W.2d 274 (Minn. 2004).
Here the Regents attempted to evade the Open Meeting Law by conducting serial meetings with the new president with less than a quorum of Regents at each of the three private meetings. In an interview with Star Tribune reporter Jenna Ross the youngest Regent, Venora Hung, described the meetings with refreshing candor:
"We were just firing questions at him, regent Venora Hung said. "We all had a million questions in our head, like 'How are you going to react to the budget?'
"I would describe it as an intense conversation for an hour."
See the November 18 report in the Star Tribune (emphasis added).
In 1997 the Minnesota Court of Appeals also discussed using this technique to attempt to evade the Open Meeting Law:
Appellants next argue that respondents violated the Open Meeting Law by conducting serial one-on-one interviews. . . .
The [district] court concluded that the interview process "may have violated the spirit of the Open Meeting Law, but technically the procedure did not violate the written statute."
The district court also recognized that determining whether the Open Meeting Law was violated requires more than merely applying the "quorum rule," and cited the caution of the Moberg court that
serial meetings in groups of less than a quorum for the purpose of avoiding public hearings or fashioning agreement on an issue may also be found to be a violation of the statute depending on the facts of the individual case.
336 N.W.2d at 518 (emphasis added) . . .
The Open Meeting Law is intended to give the public access to "meetings at which information is received which may influence later decisions" of a public body as well as "matters which could foreseeably require final action" by a public body [citation omitted]. Here the council members undoubtedly garnered information during the one-on-one interviews that affected their votes about who to hire. Knutson admitted that she asked questions during the private interviews that she did not ask during the public interviews.
While the effect of respondents' interview process may have frustrated the purpose of the Open Meeting Law, Moberg recognizes a violation of law only if the process was designed to avoid public hearings. See 336 N.W.2d at 518. Therefore, on remand the district court should make a proper factual inquiry to determine whether respondents' interviewing procedure was done with the purpose of avoiding public hearings or fashioning agreement on who to hire as city administrator.
Mankato Free Press Co. v. City of North Mankato, 563 N.W.2d at 294-295 (Minn. App. 1997).
The only explanation that stands the test of veracity for the Regents to conduct three serial meetings with the new president with three Regents at each meeting is that the Regents had the purpose of avoiding asking "a million questions" in public. Conducting the meetings with this purpose violates the Open Meeting Law.
FCC & OPEN MEETING LAW
The memorandum of the U of M general counsel on the Open Meeting Law is included in the September 16, 2010 report of the FCC. The general counsel declares (emphasis added):
A plain reading of the statutory text could indicate an exceptionally broad interpretation of the phrase 'committee . . . of a public body.' However, Minnesota courts, the Commissioner of Administration, and practical constraints functionally limit the reach of the statute to include only committees that have the capacity to transact public business on the part of the public body by making final policy decisions. The committees considered by the courts to be transacting public business are committees of the governing bodies of the public body--at the University of Minnesota, this means committees of the Board of Regents. We are aware of no Minnesota court opinion stating or suggesting that the Open Meeting Law applies to a committee such as the FCC, which is not a committee or subcommittee of the Board of Regents and does not transact business on behalf of the Board.
The general counsel needs to review the statute.
Here is Minn. Stat. 13D.01:
Subdivision 1. In executive branch, local government.
All meetings, including executive sessions, must be open to the public
(a) of a state . . .
(b) of the governing body of a . . . or
(6) other public body;
(c) of any
(2) subcommittee . . .
of a public body;
It is true that the scope of paragraph (b) of Minn. Stat. 13D.01 subd. 1 is limited to meetings of the governing body of a public body. However, paragraph (c) requires that meetings of ANY COMMITTEE of a public body must be open to the public. Unlike paragraph (b), paragraph (c) does NOT limit its scope to a "governing" body.
The general counsel also needs to review the opinion of the Minnesota Supreme Court in Star Tribune Company v. University of Minnesota Board of Regents, 683 N.W.2d 274 (Minn. 2004):
Although we have not used the precise term 'public body' to describe the University, we have used terms that convey the same meaning. . . .
In fact, the Regents do not contend that the University is not a public body. Rather they argue that the Open Meeting Law does not appy to the Regents because the legislature did not expressly name the Regents as an entity subject to the requirements of the law. . . .
Because the 'public body' language of the Open Meeting Law is certainly broad enough to encompass the University, the Regents are in essence arguing there should be an exception to the stated scope of the Open Meeting Law for the University. However, as the court of appeals pointed out, the Open Meeting Law contains express exceptions for meetings of the commissioner of corrections, state agencies exercising quasi-judicial functions involving disciplinary proceedings and 'as otherwise expressly provided by statute.' Minn. Stat. 13D.01 subd. 2. The University is not included among those express exceptions. . . .
Given the broadly inclusive language of the Open Meeting Law, our numerous opinions recognizing the University as a public institution, the failure of the legislature to include the University among other expressly-stated exceptions, and our principle of construing the Open Meeting law to favor public access, we hold that the University is subject to the terms of the Open Meeting Law.
Star Tribune Company v. University of Minnesota Board of Regents, 683 N.W.2d at 280-281 (Minn. 2004).
So the University is a "public body" (as that statutory term is applied by the Minnesota Supreme Court), and the FCC as a committee of a public body is subject to paragraph (c) of subdivision 1 of Minn. Stat. 13D.01.
It appears that the FCC needs independent counsel on this point of law.
See also the June 5, 2010 post on The Periodic Table and the April 30, 2010 post.
Michael W. McNabb
University of Minnesota B.A. 1971; J.D. 1974
University of Minnesota Alumni Association life member