Communications and News
May 19, 2010
Year-End Budget Update
State budget negotiations ended this month with no real surprises for the University. Although the Minnesota Supreme Court ruled against the governor's unallotments from last July, the outcome for the University in the budget bill passed on Monday did not change. This means that the University's base budget from the state has been cut from $703 million to $591 millionthe lowest level in a decadein just two years. And with Minnesota facing a state budget shortfall of $4 billion to $6 billion in the 2012-13 biennium, the budget pressures we face today are likely to last for the foreseeable future.
These challenges are real and substantialbut they are not unmanageable. Although the reduction in state funding as a result of the global economic downturn was sudden and unexpectedly rapid, we had anticipated the declining role of state funding in the University's budget when we launched strategic planning in 2004. We began at that time to make long-term decisions that are resulting in substantial savings today. In the same way, the long-term decisions we are making today will yield real results in the next biennium.
Many of our past decisionsfrom college redesigns to health care changes; construction management reforms to energy use strategiescontinue to help the University reduce or avoid tens of millions of dollars per year in overhead and operating costs. These examples, along with our proactive efforts over the past two years to use a retirement incentive option (RIO) and significantly restricted strategic hiring practices to reduce our workforce through voluntary means and normal attrition, and our strategic application of federal stimulus dollars as temporary bridge funding, are the reason the University of Minnesota has not been forced to announce dramatic cuts to employees or academic programs. Like several of our peer institutions, we spoke recently to an external consulting group about optimizing our efforts to reduce costs and overhead at the University of Minnesota. This initial consultation was free, and the consultants confirmed that we were already taking the strategic actions they would recommend. We declined their offer to assist us with implementation, choosing instead to save that money and rely on our own expertise, resources, and strategic plan to continue to guide us forward.
Our long-term financial framework is founded on that same strategic plan, although our efforts have been refined and accelerated to meet the new economic realities we face. In the final year of my presidency, we will focus our financial planning efforts on the following four long-term financial strategies. (The University's senior administrative team will communicate additional details and specific examples pertaining to each of these strategies throughout the coming months.)
First, we must continue to set clear priorities and invest our resources accordingly in order to protect the academic quality, productivity, and impact of the University. We cannot cut our way to the future, but reductions as deep, sudden, and sustained as we currently face make it necessary to re-examine and adjust literally every budget in the University. Every unit has difficult decisions to make regarding what should be strengthened, maintained, reduced or consolidated, and eliminated.
It is important to note that, although all academic and support units were given consistent budget targets and expected to reduce spending both this year and last, actual reductions were not the same across the board. We are making, and will continue to make, strategic choices based upon the long-term best interests of the University, its students, and its mission.
To that end, the provost has charged each college to form a "blue-ribbon" committee to address these issues. A similar charge and effort was undertaken within the AHC and across the University's statewide system. Senior Vice Presidents Sullivan, Cerra, and Jones have informed me that more detail regarding academic reshaping, reductions, and reinvestment will be available this fall, when these recommendations are finalized and shared.
The process of evaluating and disinvesting or reinvesting in academic programs and departments necessarily takes timeparticularly where students are involvedbut long-term efforts like these will produce significant savings over the next few years.
Second, we must continue our efforts to reduce overhead, operating costs, and projected cost increases. Since June of 2008, we have cut or reallocated more than $36 million from central administration. This year, we have cancelled or deferred $200 million of planned capital projects, and three buildings are slated for demolition, avoiding $4 million in renewal expenses plus additional operating costs. Recommissioning of buildings and voluntary efforts by the University community to reduce energy consumption are saving more than $2 million this year alone, and the recent strategic procurement initiative should save nearly $3 million a year in the near term, and much more down the road. In big and small ways, all of us are making every dollar go fartherand this work must continue at all locations and levels of the University.
Third, we must stabilize, protect, and leverage state support by making a compelling case for the essential role of the University in Minnesota's future. We are Minnesota's economic enginea primary developer of our state's human capital and a premier source of new knowledge, innovation, and jobsas well as a cultural center for the state. While we recognize the deep financial challenges the state will face in the next biennium, we must continue to make the case for the University's fundamental value to the state and its citizens.
Our goal in the short term is to protect the funding we have as best we canand I believe this electoral season is a prime opportunity to engage state leaders on this critical issue. Over the longer term, we need to establish a new covenant with the state of Minnesota, based on a common vision; agreed-upon goals, expectations, and metrics; and adequate resources.
I have no illusions about the state's ability to fund the University at the levels of the last century, but I do believe that by reinforcing the economic argument; by continuing to preserve Minnesota history and advance the arts and humanities; by better demonstrating the value of the education, innovation, and outreach we provide; and by presenting an integrated and responsive view of higher education that acknowledges the unique roles and strengths of our various systems and campuses, we can advance a higher education agenda that benefits students, citizens, colleges and universities, and the state.
Fourth, we must grow non-state revenues while preserving our land-grant mission, shared values, and affordability. We continue to refine our strategies for garnering sponsored funding and private supportareas in which we have been incredibly successful in recent years, despite the economic downturn. We are also creatively leveraging real estate and other assets, most notably at UMore Park, to increase future financial support for the University's academic mission.
Our top priority heading into the next biennium must be to find ways to generate new tuition revenue (our most stable source of operating funds) while maintaining affordability for our students. It is worth mentioning that, although tuition rates have increased significantly in the past decade, the net price for Minnesota undergraduate students has gone up an average of just 3 percent per year.
Even so, we know that tuition rates cannot continue to climb as quickly as they have. I believe we can achieve an increase of 10 to 20 percent in annual tuition revenue by expanding our educational services to include enhanced e-education offerings; evening, weekend, and summer courses; and more. I have asked the appropriate University leaders to work together on these issues, and I look forward to their progress in the coming months.
In addition to these long-term strategies, we are taking essential short-term actions to balance next year's budget. These adjustmentsespecially insofar as they impact compensationare not easy to make, but they are enabling us to avoid additional job losses and preserve employee benefits. Addressing the economic challenges posed by the "new normal" will require ongoing and persistent effort, but I believe we have the right principles and framework in place to guide our efforts.
I would like to thank you, not only for your hard work in achieving our budget goals, but for your essential role in delivering on our mission. Last year the University again garnered approximately $700 million in sponsored research funding and nearly $100 million from patent and licensing activity, creating tens of thousands of jobs for Minnesota. And in just the last month, the University graduated approximately 14,000 leaders, lifelong learners, and engaged global citizens. While I make every effort to congratulate our students on their achievements, I would be remiss not to congratulate you as well. Our students and our state benefit from your dedication to the University, and I am personally grateful for your support.
Robert H. Bruininks
May 11, 2010
New UMD Chancellor Announced
Dear faculty, staff, and students,
After an extensive national search, and broad engagement of the Duluth campus and surrounding community, I am very pleased to announce Dr. Lendley (Lynn) C. Black as the new chancellor of the University of Minnesota Duluth. Dr. Black's appointment as chancellor is effective August 1, 2010, pending Board of Regents approval later this week.
Dr. Black's candidacy for this position received strong support from the Duluth and University communities. His demonstrated leadership ability, strong administrative and academic credentials and experience, and commitment to communication, collaboration, and consensus building made Lynn the top candidate for this position, one who I strongly believe has the qualifications and leadership style to drive the unique academic needs of the campus. As the Duluth chancellor, Dr. Black will be responsible for the academic, executive, and administrative leadership of the campus, for facilitating, nurturing, coordinating, and supporting the work of the faculty, students, and staff, and for representing Duluth within the University and with the community, the state, region, legislature, and public and private sectors.
Dr. Black comes to the University from Kennesaw State University in Kennesaw, Georgia, where he served as Vice President for Academic Affairs from 2002 until he was promoted in 2006 to his current position as Provost and Vice President for Academic Affairs. He has an exemplary record of senior administrative experience, including nine years as Dean of the College of Liberal Arts and Sciences, three years as Director of Undergraduate Studies, and over three years as Director of Student Advising at Emporia State University in Emporia, Kansas. Dr. Black has a demonstrated record of success leading comprehensive strategic planning efforts with the full engagement of the campus and surrounding communities; establishing strong and trusting relationships with faculty, staff, and students as well as civic and business leaders in the community; leading significant fundraising efforts for both campus and community organizations; demonstrating a strong personal and professional commitment to the value of diversity; leading several curriculum innovation efforts to better support student learning and success; and serving as a vocal advocate for campus needs and priorities. He earned his Ph.D. in Theatre at the University of Kansas.
I want to take this opportunity to thank the members of the search committee and members of the Duluth community for their outstanding leadership and their support of this important search process. The engagement of the faculty, staff, and studentsas well as civic and business leaders in Duluth, two of whom personally served on the search committeehas been simply extraordinary.
I am confident that, with your support, Dr. Black will build on the critical progress made in the past several years and provide the vision and leadership needed to further position the Duluth campus and the University for the future. Please join me in welcoming Lynn as our new chancellor for the University of Minnesota Duluth.
Robert H. Bruininks
May 5, 2010
Leadership During Transition
Dear Colleagues and Students,
For the past two years, I have said publicly that next year (the 2010-11 academic year) will be my last as president of the University of Minnesota. I have informed the Board of Regents that I intend to step down as president at the end of my current contract, which expires June 30, 2011. I have truly treasured this opportunity to serve for the past 13 years as provost and president, but I look forward to returning to the best job I have ever had at this great Universitythat of professorand Susan and I look forward to pursuing our personal interests and spending time with family, including our grandchildren.
I made this announcement early to provide more time for planning this leadership transition. This is a time of substantial change and numerous challenges on our campuses statewide, and I believe that setting a clear direction for my own future will help the institution plan for its needs and priorities in the coming months.
On Thursday, May 13, the Board of Regents will convene a work session to discuss its plans for conducting the search for the next president of the University of Minnesota. It is the Board's responsibility to oversee and administer the search, which will be managed by the Board office. I am certain that many of you will be engaged in the process. This is a critically important opportunity to shape the University's future, and I encourage all of you to offer your best advice to the Regents as the search commences.
In the meantime, we have much to do, and I plan to work diligently with you to strengthen the academic mission and resources of the University, to finalize and approve a new budget, and to refine and begin to implement a long-term financial plan. During the next 14 months, my focus will continue to be on strengthening the University's academic excellence and financial vitality as outlined in this year's State of the University Address
. We must set priorities, both locally and at the all-University level; reduce overhead and operating costs; improve service and productivity; redesign academic and support programs and services; and eliminate activities that are not producing significant return on investment in terms of the University's core academic mission of education, research, and outreach. The changes we have yet to make are neither easy nor obvious and will require all of us to be fully engaged in making decisions that advance the University of Minnesota as a whole
as an academic community and a statewide system.
We also have other significant changes to manageincluding the transitions of Senior Vice President Frank Cerra and University of Minnesota Duluth Chancellor Kathryn Martin, as well as the departure of Vice President Rusty Barcelo to become a college president. With regard to these changes, I will work to maintain strong leadership for our public mission while ensuring that my successor has an appropriate level of engagement and flexibility in shaping the University's senior management team.
I take pride in what we have accomplished together. I want to thank you allfaculty, staff, students, alumni, friends and Regentsfor your hard work, especially in these challenging times, and for your continued support of the University of Minnesota. All of you continue to make the University of Minnesota one of the best public research and land-grant university systems in the world.
Robert H. Bruininks