Minutes*
Faculty Consultative Committee
Thursday, May 23, 1996 (Part III)
12:00 - 3:00
Dale Shephard Room, Campus Club
Present:
Carl Adams (chair), John Adams, Carole Bland, Victor Bloomfield, Sara Evans, Virginia
Gray, James Gremmels, Roberta Humphreys, Laura Coffin Koch, Fred Morrison, Harvey
Peterson
Regrets:
Lester Drewes, Dan Feeney, Russell Hobbie, Michael Steffes
Guests:
President Nils Hasselmo
Others:
Martha Kvanbeck (University Senate); Maureen Smith (University Relations); Bruce
Bromberek (SSCC); a few other faculty
[In these minutes: Discussion with President Hasselmo, primarily about salaries and graduate assistant
fringe benefits]
1.
Committee Business
Professor Adams reported that he would convene the "lame ducks" the following week, using the
long-standing procedure whereby FCC designates its new chair and vice chair. [At its meeting of May
30, the lame duck committee nominated, and FCC elected by acclaim, Virginia Gray as chair and Victor
Bloomfield as vice chair.]
He then reported on conversations he had had with the staff in the Regents' Office about the impact
of actions recently taken by the faculty on the perceptions of the members of the Board of Regents.
The Committee then reviewed and approved the docket of the Faculty Senate for May 30.
2.
Discussion with President Hasselmo
Professor Adams welcomed the President to the meeting, and noted that Professor Morrison had
raised via email three questions that he wished the President to answer.
Professor Morrison observed that the Committee had spoken with two of the provosts earlier in the
meeting about salaries. In the AHC, the standard is 2-2.5% with one unit going to 4% and one at 0%,
split between recurring and non-recurring. Professor Gray reported that CLA is providing 2% recurring
increases, with 1/2% held for special merit, so 1.5% is delivered to the departments; they had no nonrecurring salaries. In Professional Studies, Professor Morrison reported, the standard is 2%, non*
These minutes reflect discussion and debate at a meeting of a committee of the University of Minnesota
Senate or Twin Cities Campus Assembly; none of the comments, conclusions, or actions reported in these minutes
represent the views of, nor are they binding on, the Senate or Assembly, the Administration, or the Board of Regents.
Faculty Consultative Committee
May 23, 1996 (Part III)
2
recurring; in one unit it is 2% recurring and in one college it is 0%.
The President said this was not the information he had; Professor Morrison replied that this is what
the two provosts had told the Committee in the previous two hours. In no place was the increase 3%
recurring, Professor Gray concluded.
The standard pattern is to be 3%, with 2% recurring and 1% non-recurring, the President said.
Several Committee members pointed out that there is no known case of the standard pattern. Nothing has
been approved, the President said, that deviates from that pattern, and promised he would talk to the
provosts about compensation. He had been told CLA would receive 2% recurring and 1% non-recurring
salary increases, with an additional $125,000 for special purposes. He said he would check with the
provosts, and has reiterated the 3% standard several times. There are a couple of exceptions that have
been approved, where faculty have voted for a different pattern, and the Medical School has a revenue
stream problem that must be dealt with.
The problem is that the information the Committee has received, Professor Morrison pointed out,
is different from the information the President received.
Professor Humphreys reported that IT was conforming to the standard the enunciated by the
President: 2% recurring, 1% non-recurring, and departments are using the non-recurring 1% in different
ways. They have the option of not adding it to salaries, but using it for other things.
The coordinate campuses appear all to be in compliance with the President's standard. The
President said if units are not complying, he would take up the issue again. The problem is that the
University is trying to have a system that does not require everyone to be in a lock-step in providing the
same salary increase, because there are different competitive pressures in different parts of the
University. But this is the difficulty; these variations result. Some of the promotional amounts have not
been computed, so the numbers remain preliminary. He emphasized, however, that the guideline remains
3%.
Professor Morrison said he had no problem with the variation, but the guideline seems to have
been perceived as a maximum, rather than a norm. It was stated as a minimum, the President said, and
unless there is a specific request for exemption because of special circumstances, the standard remains.
The next question Professor Morrison raised had to do with the switch to the biweekly payroll; he
related that he had calculated the imputed interest loss to himself that would occur as a result of the
switch. The President noted that the FCC resolution was guiding the change: accept the payroll change
but do everything possible to reduce the negative effects on faculty and staff. That is what they are
doing. Professor Morrison said he then calculated the loss for the faculty as a whole; on average, the loss
was $1 - $2 per thousand of income, annually in perpetuity. (The salary is the same; this is foregone
interest.) This is another one of the issues that is causing, and will continue to cause, a great deal of
unhappiness.
The President repeated that the administration is acting at the behest of FCC to minimize the
negative effects. The Committee made a number of suggestions about things that could be, Professor
Morrison said; when the payroll distribution documents came out for distribution, none of the
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May 23, 1996 (Part III)
3
suggestions had been taken into account. They may have since, however.
The process has not been completed, the President said, and it has turned into a very complex
issue, in part because it is also tied up with union negotiations. A number of things are not resolved, and
the administration continues to seek ways to continue to minimize the adverse effects.
Professor Morrison then recalled that he had reported to the Committee about the dispute over
parking rate increases; the situation had improved since the report was made, but he expressed hope that
the President would reinforce with senior officers the need for consultation. The President said he could
not agree more, and has reinforced it with his colleagues. He noted that Senior Vice President Jackson
has had an extremely demanding schedule in that she is handling the negotiations with Fairview. He
invited the Committee to inform him when consultation is not occurring, because it is critical that there
be interaction with the faculty; he said he would personally handle the consultation, if that is necessary.
He said he agreed with Professor Morrison completely.
Professor Morrison then commented on the Integrated Framework concept, which he described as
a kind of auditing management concept. One thing that needs to be built into the Integrated Framework
is a check-off, for all administrative decisions, on whether the appropriate consultation has taken place.
If it has not, then it is not only a committee problem, it is an audit problem, and the lack of consultation
should cause others involved in the process to say "stop, this cannot go forward, there has not been
appropriate consultation." The President should not allow this happen.
The President said this is an important concept, and for it to work, it must be clearly
communicated across the University, so taking it up in FCC might be appropriate. The Integrated
Framework is a way of trying to come to grips with the fact that issues come floating in from everywhere,
and it is sometimes unclear, in the history of the institution, where the decision should be made, who has
authority, who is accountable. This is a way to try to create a funnel as much as possible through a
systematic process.
The President displayed a graph that proposed levels of decision-making and said there would be a
sort of algorithm, whereby one level would realize it did not have the authority to make a decision, so
would pass it up to the level that does. This would be an attempt to clarify the locus of decision-making
authority, a framework that would lead to a more clearly-defined and regulated decision-making process.
Professor Humphreys inquired about the graduate assistant fringe benefit rates. The President said
he has asked Vice Presidents Infante and Brenner to look at the issue again, immediately, to make sure
every stone has been turned to come to grips with it.
There is a great deal of email about this issue in IT, Professor Humphreys reported--from faculty,
department heads, and the dean's office. The situation is one where graduate student tuition is charged as
a fringe benefit, and is a flat rate across the University independent of actual tuition and fees.
Consequently, it can be extremely unfair, and even unstable; it is for the latter reason that rates have been
going up so dramatically. In one department in IT next year, with the fringe benefit rate of 62%, they
would pay $6600 for an RA, and the following year, at 75%, they would pay $8500. Yet the actual
tuition paid by the graduate student is $4600. Grants and departments are being charged several
thousand dollars more per year in the fringe rate than is actually being paid. If one has a graduate student
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4
on thesis credits, tuition is FAR below the fringe benefits that will have to be paid. As some departments
find ways to get around this, they no longer contribute to the tuition pool, and drive the rates up even
further the following year.
Professor Humphreys said that she knew Drs. Infante and Brenner have received strong objections
to the policy from IT, both this year and in the past, and some feel they have not been responsive to the
suggestions. Vice President Brenner, it is said, believes the present policy is the only way to handle the
situation, and the reason given is that the personnel computing system cannot communicate with the
enrollment computer system. So, instead of having a fringe benefit rate based on actual credits, there is a
rate that is flat across the University. A fair way to do this would be to have direct remission, but the
apparent reason for not doing that is that two software programs cannot communicate. Several in IT have
suggested letting the departments do the paperwork, but that offer has been declined.
This comes back to the payroll system, Professor Humphrey said. One of the reasons for the new
payroll system is that it will be more efficient; she and Professor Feeney were told it would save
departmental effort and money. This year, with the new biweekly payroll, the numbers will have to be
entered manually, in the department, because the computer system keeps coming up with the wrong
answers on the hourly rates as well as vacation and sick time.
Again, the University is tied down to a computer system that cannot be changed, so things will be
done by hand, on paper. If that can be done on paper, why not graduate student fringe benefit remission,
so it can be straightened out and made fair? If that does not happen, at least in one college (IT), they will
not be able to afford graduate assistants. They will not be able to support students on grants. Professor
Humphreys related that she had had to drop one graduate student from a grant, and the next grant
proposal will not include any graduate students; she cannot afford them.
The President reiterated that he has asked Drs. Brenner and Infante to look at the issue again, and
has asked for a response within a short time.
Professor Gray said that this is another example of the top not understanding what is happening at
the bottom. She mentioned this topic to Provost Shively recently, describing the imminent demise of
their graduate program and how they had reneged on commitments and cut back the size of the class and
how people went elsewhere because Minnesota had no money. Provost Shively looked puzzled and said
he had given the colleges money "to take care of the problem," so could not understand why there was a
problem. He is going to look into it, but between them they could not figure out why he thought it was
not a problem and she thought the Political Science department could get out of graduate education.
Professor (C) Adams said he still had difficulty understanding the subject. He said he understood
the impact that Professor Humphreys described, but the amount of money spent by the University is the
same. Suddenly there is a major problem because it is trying to track who should pay the bill. Some of
that may have been motivated by the federal government because of grant funding, but this is a
foreshadowing of RCM. The bill is the same; the issue is who is paying it. All this trouble comes from
figuring out who is paying the bill, while the bill has not changed. There is an enormous impact because
of the accounting.
Professor Humphreys said that because of the flat rate across the University, IT is subsidizing
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5
other units. Professor (C) Adams agreed, but said the University is killing itself over something that is
not a real phenomenon, but rather an accounting phenomenon; this is not triggered by any real change in
expense.
There are two issues, Professor (J) Adams said: one is who is going to pay; the second is why
everyone should pay the same rate if the price is different from place to place. That may be a technical
question about what can be included in indirect cost recoveries. But when this was discussed before,
there was a question about the incentives that will attach to this if a situation is created where people are
financially encouraged to under-enroll or to take classes without paying for them. The Committee must
stay on this, he urged, so that it understands what is being paid, what is received for what is paid, and
where the money is coming from. THAT is the issue; the impact on the programs is severe. It is good
that this keeps coming up, because if this is a research university, and if the research in some units
absolutely requires that external grants and contracts be garnered, then the Committee must think about
this problem means. It may mean that faculty cannot use doctoral students the way it has, or it may mean
that the University needs a different tuition policy. It cannot give away instruction; that costs money, and
someone must pay for it. There was a question on the floor of the Senate, and Dr. Infante gave an
answer, but the people who asked the question were probably not satisfied with it.
The President said that money was provided, for TAs, as the result of a deliberate decision to try to
buffer the effect of the rate increases. He said again he has asked Dr. Brenner to review the whole
matter, because he--the President--is not at all satisfied that this has been done in the best way.
What is the best way to pursue this, asked Professor (J) Adams, since so many units are involved?
The only fair system, Professor Humphreys maintained, is to have the student pay the actual
tuition rate for the program in which they are enrolled. That is another way to do it, Professor Adams
recalled, and the way it used to be done: people were paid a salary and then charged tuition. The reason
the University stopped doing that, and to the present system, is because the present system produces a
bigger benefit for the same amount of money.
It was a great recruiting tool for students, the President observed. Professor (J) Adams agreed,
pointing out that paying tuition with after-tax dollars is less attractive. Professor Humphreys said that
could be accomplished by providing to the department the amount of tuition the student would pay. On a
graduate student, on thesis-only registration, she would be paying the full tuition rate of $8500 in 199798. There should perhaps be a different category of person, Professor (J) Adams suggested, who is
treated differently in terms of fringe benefits. The problem will not be solved here.
Professor Morrison said the problem is more complicated, and federal law would not allow the
alternative Professor Adams had just suggested. He also said it is NOT the same amount of money; as
the rules have come into play, there has been a lot of game-playing. There are fewer and fewer graduate
students, and their enrollments are being organized in a way that generates higher and higher tuition
being charged against this, which generates a higher and higher rate. The game-playing is causing the
rate to spiral up. One thing that has to be done is to stop thinking in ways that involve the present ways
of approaching the problem, something Professor Humphreys has begun. Even she is talking about
compensation; it may have to be thought about in other ways, such as in terms of subsidizing graduate
education. But the Committee must more forward on it. It is too late to do anything for next year, but a
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75% rate is simply untenable. There must be something in place by October or November, 1996, that
will be workable for the following year. Just tweaking it around the edges will not help.
Professor (C) Adams said again that even if there is game-playing, there are some beneficiaries.
Some are gaining and some are losing. The President said that is why the rates are higher than
anticipated: because of the reduction in the number of students that this affects, because other categories
of appointment for research assistance are being used. It is a vicious circle.
Professor Adams then said the Committee needed to go into executive session to consider
personnel matters. Professor Gray moved that it do so, Professor Bloomfield seconded the motion, and it
was unanimously favored.
The Committee discussed with the President the appointment of the Senior Vice President for
Academic Affairs.
Professor Adams then adjourned the meeting at 3:10.
-- Gary Engstrand
University of Minnesota