Campus Resources and Planning Committee
November 9, 2009
Present: Pete Wyckoff, Mark Privratsky, LeAnn Dean, Sarah Mattson, Sydney Sweep,
Pam Gades, Carol Marxen, Lowell Rasmussen, Bart Finzel, Maddy Maxeiner,
Brook Miller, Lowell Rasmussen, Dave Swenson, Sara Haugen, Naomi Wente
Guests: Colleen Miller, Linc Kallsen, Gwen Rudney, Jennifer Zych-Herrmann,
Pareena Lawrence, Janet Ericksen, Cheryl Contant
Minutes from 10/12 and 10/26 were approved as presented.
Pete introduced two new members to the committee: Naomi Wente replaces Kathy Julik-Heine and Pam Gades replaces Karen Cusey. Pete also introduced Linc Kallsen from the Twin Cities budget office who will be working on budget modeling with us. As the committee will recall, we have been charged by Vice President Robert Jones to come up with a financial plan and Linc will help us create the budget spreadsheet.
Linc said that because our enrollment numbers are up, so itŐs possible we could to see greater than budgeted tuition revenue this year. On a related note, he has asked Colleen to look at the need for an American Indian tuition waiver update, saying that he believe the University now assumes that covering the waiver obligation is a system-wide responsibility. He believes we should keep reminding both VP Jones and President Bruininks of the actual waiver number. If we do have additional revenue, Linc has asked the Chancellor to think about how we might use that money. There is a need for this campus to have a central reserve. Jacquie also noted that the other directive in the budget instructions says if there is any excess tuition revenue that we will put that toward our debt. Gwen Rudney asked about standards or recommendations for reserve amounts. Linc suggested 10-15% overall for a campus of this size.
Regarding FY10 expenditures, each vice chancellor will be monitoring the expenses for their area to make sure we do not create a deficit in FY10. Linc has asked the Chancellor to start thinking about FY11 so the campus has enough time for input and to talk through big budgetary items. For example, the President has recommended a tuition increase of 7.5 this year and 7.5 for FY11. As a campus, you could propose something different than that, either higher or lower, keeping in mind that both have ramifications. He thinks the Twin Cities administration would entertain any proposal as long as it is budget neutral. President Bruininks has strong feelings about keeping the coordinate campuses tuition lower than the Twin Cities.
Regarding enrollment estimates, Linc suggested we pick a number to budget on. Pete asked what date we should keep in mind for a finalized FY11 budget. Linc said probably not before the budget meeting in March. He also thinks we should discuss O&M scholarship assumptions. Jacquie added that we have commitments out there now that include Merit, Prairie, Morris and named scholarships. Tenure and tenure track faculty hires for fall 2010 really call out the need for long term staffing plans. At this point we will model flat for staffing levels. Pete asked about two additional pieces that are missing: health care cost and fringe benefit costs. Linc will bring the latest preliminary revised fringe assumptions to the meeting next week. Pete also asked how we would make assumptions about utilities. Lowell said we would generate those amounts based on the information we receive. Jacquie asked about salary increases. Linc responded that 2% is being modeled for all employee classes subject to Board of Regents approval.
Regarding long-term strategic questions, he wondered if we would be driven by revenue availability, by expenditure needs, or both? Typically in higher education, the best practice is to start with the revenue side in order to ground a potentially limitless appetite for expenditures. Jacquie added that UMM is more dependent on state funding and it is harder for us to find the revenue we need because we donŐt have the resources the Twin Cities has. Linc suggested we be realistic in modeling. He does not think this campus works unless the University understands there will need to be continued and growing state O&M support put into this operation. As we begin modeling, Pete asked if Linc could tell us what the Twin Cities expects from us, even it itŐs just a guess. Additionally, if we are planning five years out, there are expected tuition assumptions, health care assumptions, O&M state funding assumptions and assumptions about raises. Linc said we will also need a reasonable student growth plan associated with scholarship/discount strategies. Are there tuition rate maximums and rationales? Is there a maximum percentage tuition increase that this campus would not choose to go beyond? Pete asked if Linc would be willing to send the planning model ahead of time so committee members could play with the budget modeling numbers ahead of the next meeting. Jacquie thought that would be fine although the committee needs to have this conversation as a whole. It is not the case that we will set the budget next week but will play with the budget model and examine revenue and expense implications of various scenarios