Minutes*
Faculty Consultative Committee
Thursday, December 2, 1993
11:00 - 1:40
Room 626 Campus Club
Present:
Judith Garrard (chair), Carl Adams, John Adams, Mario Bognanno, Lester Drewes, James
Gremmels, Kenneth Heller, Karen Seashore Louis, Geoffrey Maruyama, Irwin Rubenstein,
Shirley Zimmerman
Regrets:
Robert Jones, Toni McNaron, Harvey Peterson
Absent:
None
Guests:
Senior Vice President E. F. Infante
Others:
Maureen Smith (University Relations)
[In these minutes: Strategic planning process; mandatory retirement; the budget, budgeting process, and
budgeting and planning]
1.
Report of the Chair
THE PLANNING PROCESS
Professor Garrard convened the meeting at 11:10 and commented that the Committee needed, at
some point, to decide what communication system there should be so it could learn about what planning
activities are occurring in the colleges and clusters. Such a communication structure, observed one
Committee member, has not been adequately arranged by the administration. In many units it is not
clear, said another, how to translate the vision statement into implementation consistent with what has
been said. There is no clear end to step 1 and a start to step 2, which makes it difficult for the Committee
to participate without stalling what is done or being co-opted; this will require a balancing act. One can
worry, it was said, that the train is leaving the station--but that there's no track!
One model that has been in place at Ohio University for a long time ties planning to budgeting.
They created a strategic investment pool by taking 1% off the top of the budget for it. They have a plan;
they tell units to submit proposals about what they will do--the units "bid" for the money. The bids go
through a budget committee, chaired by the Provost but with faculty, staff, and student members. Each
unit is allowed to ask for up to 3% of its budget. This, it was said, is one way to do things--it is concrete,
people know what the university is doing, and there are plans and dates.
That makes sense as a model, said another Committee member, but the more serious element is not
*
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
December 2, 1993
2
included, which is to figure out how to STOP doing things. The University "starves" them to death,
which is not a good way to do things. Changing by increments means the University carries a lot of
baggage in courses and units that it should not have. If left up to the faculty, it was said, they will not
stop doing what they like to do and know how to do.
The Committee then took up the proposed amendments to its resolution for the Faculty Senate
concerning U2000 and agreed on changes it would accept on the floor of the Faculty Senate.
MANDATORY RETIREMENT AND THE FIFTEEN FACULTY
Professor Garrard then reported on actions with respect to the 15 faculty members who are being
forced to retire effective December 31, 1993. She noted that she had originally referred the issue to the
Committee on Faculty Affairs (SCFA) and had also herself had several conversations about it. Those
discussions were deferred, however, when the attorneys were negotiating, because it seemed unwise to
interfere in those negotiations.
Professor Adams reported that the issue will be on the SCFA agenda on December 14. He recalled
that he had tried to get an agreement with the administration: the current policy would be rescinded
effective December 31, all agreed, in order for the University to comply with federal statute, but the
University would say that the resolution for those 15 faculty would be left open, including the possibility
that they would retain their tenure--and that these discussions would continue. That, he said, was what
he THOUGHT the agreement had been. The recent actions of the administration cannot be interpreted as
observing the agreement that he thought was in place. Now, given the confrontational nature of the issue,
it is plausible to expect that a resolution will come from SCFA to FCC, although he did not want to
prejudge the matter, Professor Adams said.
He agreed that SCFA does not want to get in the way of what is described as near-agreement
among all parties as a result of the lawyers' negotiations.
The larger issue, commented one Committee member, is that this should NOT have gone to the
attorneys first. If the University is to have a collegial atmosphere, perhaps this Committee should say
something about the attorneys having become involved prematurely. Professor Adams responded that
SCFA will return to this issue after settlement on the individual cases is reached.
In response to a question, Professor Adams said it was his understanding that allowing these 15
faculty would NOT open up the question of those faculty who were "mandatorily retired" in earlier years.
2.
Discussion with Senior Vice President Infante
Professor Garrard welcomed Senior Vice President Infante to the meeting. He began his
comments by reporting that he had intended to bring a draft document on collegiate planning to the
meeting for consultation--but that after reviewing it and the budget instructions being drafted, they found
that there was too much overlap in the two documents so both are being revised. Professor Garrard
reminded Senior Vice President Infante in the strongest possible terms that consultation is defined as the
seeking of advice BEFORE action is taken or public statement is made. If advice is sought afterwards,
the process is not consultation; it is the provision of information. He promised that the Committee would
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December 2, 1993
3
be consulted before any presentation is made to the Board of Regents.
Dr. Infante told the Committee that a number of factors are playing on each other as the budget and
planning instructions are being developed. The budgets will be all-funds budgets; performance measures
of some kind will be included; and the Board of Regents has asked for an academic plan.
Asked if there would be any linkage THIS SPRING between planning and budgeting, Dr. Infante
said that two different processes will be underway, one leading to the 1994-95 budget and one leading to
the 1995-97 biennial request. He said he has asked the units--most of which have well-prepared plans--to
incorporate the broad directions of planning incorporated in their 1994-95 budgets. He noted that the
Committee on Finance and Planning has discussed these issues.
Professor Rubenstein commented that the Finance and Planning Committee has discussed the
Strategic Investment Pool (hereinafter the Pool) and how to effect it (i.e., across-the-board cuts--with
differential give-backs--versus non-across-the-board cuts to create the Pool). The Finance and Planning
Committee sentiment opposes the notion of differential unit cuts to create the Pool because not enough
planning has been done to provide information to justify differential cuts. The view of Mr. Pfutzenreuter
is that while that may be true with some units, it is not true with others and that there IS sufficient
information available to make differential cuts.
Dr. Infante reported that those discussions are continuing internally. He said he also believes there
is enough information available to make differential cuts.
He then pointed out that the base budgets of the units have been adjusted before the fourth round
of the 1991 Restructuring and Reallocation cuts are imposed--and that any non-uniform cuts to create the
Pool would be on top of the Restructuring and Reallocation changes. The Finance and Planning
Committee has received the budget data. There are, he added, two more years of Restructuring and
Reallocation adjustments to be made.
Dr. Infante affirmed, in response to a query, that collegiate planning should begin to influence the
1994-95 budgets--and to have an even larger effect on the biennial request. He also affirmed that the
collegiate planning instructions and the budget instructions would inform the Committee about the timing
of how planning will be integrated into budgeting.
The influence of planning on budgeting, he pointed out, will be qualified to some extent by the
Restructuring and Reallocation adjustments as well as any decision--not yet made--about the Strategic
Investment Pool. Creating the Pool, he observed, implies additional retrenchment and reallocation. He
said he was aware that the Finance and Planning Committee appeared to favor across-the-board
retrenchments for this purpose; he said he had doubts about that approach. Any decision along this line
will also be partially dependent on what units can do with tuition--and some units will need to be
prompted to make better use of their resources.
Apropos the 1991 Restructuring and Reallocation, Dr. Infante said, one could say that some
colleges and campuses were "losers" and some were "winners"--but the University's infrastructure was
largely forgotten. Many of the items in the proposed Pool are infrastructure expenditures--computers,
libraries, student services, and buildings. One theme of U2000--user friendliness--will require
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December 2, 1993
4
investment in business systems, for example. This reverses a prior trend; it will mean taking money from
the colleges for the University as a whole.
Some units might argue that they should not have to contribute to the Pool for something like
student recruitment, Dr. Infante commented, because they already recruit their own students. That
argument can be made by a number of units on different activities, retorted one Committee member, and
will permit them to avoid responsibility for contributing to the operation of the entire University. That is
the "every tub on its own bottom" model--and there are other models that can be used. Dr. Infante
agreed--he simply pointed that to justify across-the-board reductions on the basis of the investments is a
slender reed to stand on.
One Committee member suggested that while a process built on the concept of a strategic
investment pool MAY be a good one--and expressed confidence in the ability of the Finance and
Planning Committee to review it--it is nonetheless as SIGNIFICANT issue. Yet one senses the
University is already going down that path. There should be more discussion of it. Dr. Infante agreed
and said the Pool would be part of the budget documents presented for consultation. It is to be hoped, it
was rejoined, that people will suspend judgment until they have a chance to consider the proposal.
The idea has been mentioned before by the President to this Committee, it was pointed out--at least
in part in response to the harsh question repeatedly posed by the Finance and Planning Committee to the
administration: Where's the money going to come from? If plans from units are to be sought, how will
they be funded? This proposal, it was said, seems to be a response; it creates a pool of money that can be
invested so that there is some REALITY to unit planning. The second question--whence the funds if the
Pool is to be created--must also be addressed. While it would be nice if the legislature were to fund all or
part of the Pool, that is not likely, so the money will have to come from within. So the question arises:
Where will it come from?
The issue is whether or not a strategic investment pool is the best way to identify funds to support
planning. It is ONE model; there may be others that should be considered. This is an important enough
issue that THIS Committee should discuss it, it was argued. The Finance and Planning Committee has
already said, Professor Rubenstein reported, that the Pool looks to be a good idea; it has not, however,
considered alternative models. Later in the meeting it was suggested that Finance and Planning, after
considering the Pool proposal, should report to FCC. It was not clear whether or not FCC members
generally concurred with this view.
Would the Pool require a base retrenchment or a one-time cut? asked one Committee member.
That has not been settled, Dr. Infante responded. Inasmuch as the strategic planning process is looking
out 4 - 5 years, and that the budget cycle will be central to its success, there must be a mechanism for
putting funds into planning. The Pool is one way to do so. One would prefer that the funds come from
external sources, or at least a portion of them from that source. Also being discussed is the amount that
should go into the Pool; the President has asked for advice on this issue. The President did say earlier,
Dr. Infante recalled, that there would be a need for $50 - 75 million, in real terms, for the next 4 - 5 years;
that would require a Pool equivalent to 2 - 3% of the budget.
If the money is taken from the base, it would only need to be taken once, it was said. If funds are
to be used as seed money, it would not need to be replaced and could be taken on a one-time basis. If
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December 2, 1993
5
recurring funds are needed, however, $50 - 75 million would have to be carved out of the base.
Dr. Infante said he expected that some of the funds would be needed for initiatives and some
would be needed on a recurring basis. One can expect, he said, that in five years some units will be
"thinner" and some "fatter" than in the past. That, he pointed out, implies a flow of funds among units.
The most control is exercised over the 0100 funds, he noted, but strategic planning must be based on the
entire budget, including federal and other agency money. In some instances, for example, if the federal
money disappears, so does the unit; in others, a decline in federal funds might lead to an increase in
University funding.
After all things are considered, Dr. Infante told the Committee, he believes about 2% of the O+M
and State Specials budget should go into the Pool (about $11 - 12 million per year). The University has a
facilities problem, however. The capital budget will cover some of the problems, and the operating
budget covers some of them (the latter is sometimes being used for facilities maintenance and upgrading,
although not for new construction). But the $10 - 12 million being requested for facilities is not enough;
the University needs to be sure it knows what it's talking about--and what it will do if it does not obtain
the money. One alternative, interjected a Committee member, is to close buildings. That, Dr. Infante
responded, will happen in any event.
One Committee member endorsed the general direction of the administration's thinking, even if
there are questions about the details. The use of the budgeting process as a stimulus to internal reform
and innovation, however, is controversial. For example, the transfer of funds from Education to CLA is
good for the University--but people in Education are "crabby" because they do not believe CLA is well
run and that it could do more to generate funds. If there is to be additional reallocation from one unit to
another, the receiving units must be required to make good use of the money. Another Committee
member expressed strong agreement with these sentiments.
The collegiate planning document, Dr. Infante said, will include a statement that units will be
rewarded for economies and innovation. And the process will be different in year 5 than it is in year 1;
as it evolves, the effort will be made to tie budgeting to performance measures to identify effectiveness
and efficiency. This must be done carefully, he cautioned, using different measures for different units--it
is for that reason that several measures will be used. There is no doubt, however, that the budget process
must provide carrots to improve operating effectiveness and quality.
It is his view, Dr. Infante told the Committee, that sharp questions need to be asked of a number of
units during the budget process. There may be good answers, but there are hard issues that have not been
addressed in the past. There are also a lot of resources that have not been considered in the budget
process, such as endowment funds. Even if their use cannot be tampered with, they should be
CONSIDERED as evaluation of a unit's resources is being conducted. The emphasis in the past has been
on the O+M funds because those are the ones the deans and vice presidents control--but the fact that they
cannot control other funds does not mean they should not be considered.
The Committee should also be aware, Dr. Infante said, that Associate Vice President Pfutzenreuter
has asked for reports on department balances. He is aware, he said, that that request has raised questions.
But there have been regental and legislative questions about certain balances; he said he is trying to
understand what those balances mean because he must be able to justify them. In 80% of the cases, he
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December 2, 1993
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remarked, he is fairly certain they can be defended--but in 20% of the cases, perhaps not. He is NOT
saying that the balances are wrong or that they have been hidden--if a unit faces ups and downs in its
budget, it may be right for it to carry a balance equal to 25% of its operating budget. Or it may be wrong.
In a time of retrenchment, however, those balances must be considered. To members of the Board of
Regents, however, those balances are no different from a reserve fund.
There is a big difference, one Committee member pointed out, between central reserves and
department balances held in order to fulfill commitments made for a 2 - 3 year period, for example. Dr.
Infante agreed and said that that is why he is asking--there may be simple explanations, at which point he
says "goodbye" to the unit.
One Committee member inquired about the all-funds budgeting process. First, how is the linkage
between (1) external and internal funds for personnel, and (2) for infrastructure being considered in light
of the shortage of funds needed for the infrastructure? Second, what is the relationship between (1) the
all-funds budget initiative and (2) the issue of programmatic versus infrastructure needs?
Dr. Infante responded that he and Senior Vice President Erickson are working on them. They are
insisting on an all-funds budget, on good measures, and on identifying all
expenditures--budgets capture only a portion and ignore such things as space, janitorial services,
libraries, and so on. An all-funds budget must identify all the costs of a unit.
In the case of space, he explained, the University has identified none of the space costs associated
with programs. Even if those costs are not to be acted on, the University should know what a program
costs. The O+M budget is only a minor part of some unit costs. One question is if enough information is
gathered, should center budgeting be considered? One could assign all its revenues to a unit (right now
only expenditures are assigned to units) for the sake of information and managing University assets. One
example is ICR funds; if full expenses and costs were identified, it may be that some units would have
less to complain about than they typically have. And if there's a question, the answer should be learned.
He said he doubted that units are being "cheated" out of ICR funds to any great extent once one considers
all the pertinent factors.
Discussion also turned to the uses of ICR funds, such as for hiring staff rather than using them for
infrastructure needs. Dr. Infante said he has a lot of problems with ICR funds. There should be a pot of
money for research initiatives--but it should have nothing to do with ICR funds.
Faculty members, observed one Committee member, generally do not understand ICR funds.
Some people also develop the feeling that ICR funds are their personal property, Dr. Infante pointed out.
One Committee member returned to the issue of the 1994-95 budgets. A number of factors will
affect units budgets, it was pointed out, including perhaps the Strategic Investment Pool, infrastructure
expenses, and Restructuring and Reallocation. There are two additional factors that need to be
considered, it was said. First is salary increases; there have been rumors that there are legislative funds
for salary increases. Dr. Infante said he knew of no such funds. There will be a general increase in the
University's budget of 3.9% but nowhere are those funds identified for salary increases. One also hears,
it was said, that salary increases will be 6%; is that true? There has been no mention, in discussions of
unit budgets, of either salary increases or tuition. Professor Rubenstein noted that the Finance and
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December 2, 1993
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Planning Committee had discussed salaries, including a possible 6% increase, earlier in the week.
Following a discussion that touched upon fringe benefits, the need for equitable treatment of all
employees, the costs of the union contracts, various salary amounts and possible tuition increases, Dr.
Infante said he suspected that a projection that units might have to fund 1.6% of salary increases would
not be out of line. That will be, several Committee members emphasized, an effective retrenchment, no
matter what one calls it.
Dr. Infante then noted the call that had been made for a "time out" (two hours in the middle of the
day when classes would be cancelled) by a group of students trying to stop the U2000 plans. He said he
doubted the University community would support the proposal; the discussions of planning should take
place without canceling classes. He asked the Committee its view.
One Committee member said he objected in the strongest terms to canceling classes for ANY
reason--snow, primary elections, ANYTHING. There is a contract with the students and it should be
honored. There have been plenty of opportunities for participation in the planning discussions and there
will be more.
Following brief additional discussion, Committee members were in unanimous agreement that they
opposed any "time out." They feel, said one, that undergraduate education is a high priority--and
canceling classes would be inconsistent with that priority.
Another point of view, Dr. Infante then reported, is that some in the student community want
significant participation. He told them he has been trying to use the normal consultative process. Is that,
he inquired of the Committee, a reasonable position?
It is the reason the process exists, exclaimed one Committee member. It was also noted that
students requested one-third of the membership on groups discussing planning; it was pointed out that
students are currently allotted one-third of the seats on most Senate committees--and in the case of the
Senate Consultative Committee, they have half of the seats.
This must not become a faculty-versus-student issue, Dr. Infante cautioned. This has been an issue
for several years, responded one Committee member. Students have representatives to the Board of
Regents committees and they have a student regent--if special privileges are now granted to other student
groups it will lead to major division. Dr. Infante should be applauded for resisting such requests, it was
said. In defense of students, observed another Committee member, one has to be in the governance
system for several years to understand the issues--and they are here for only a few years. The system is
also too complicated, Dr. Infante offered, and people feel "disempowered." MSA could help students
understand it, said another Committee member--and so could FCC.
Noting that data presented earlier in the Restructuring and Reallocation process had suggested that
there was more moving of funds within units than across them, Dr. Infante was then asked if he had
tracked any of those changes. He said he had not had time to do so. When units give up funds, it was
pointed out, they like to be reassured the money is being well-used. Much could not be accomplished
during the earlier Restructuring and Reallocation, Dr. Infante pointed out, because at the same time it was
taking place there was also a general decline in state funds. But he agreed that funds should not be
Faculty Consultative Committee
December 2, 1993
8
provided to a unit every year without asking how they have been used.
Units can still make changes during reallocation, even if the total funds decline, it was said. Dr.
Infante agreed but said that the changes may be different than the ones that had been planned. That, it
was rejoined, depends on whether or not the unit is willing to make tough decisions. If the "giving" units
are not satisfied with how funds have been spent, there could be significant trouble if future reallocation
is proposed. Dr. Infante agreed that the funds needed to be justified each hear. The earlier R+R ignored
infrastructure and made long-term commitments, he said, the latter not in direction or strategy but in
dollars--and irrespective of what changes take place in the world.
At this point Professor Garrard adjourned the meeting so that Committee members could attend the
Faculty Senate meeting.
-- Gary Engstrand
University of Minnesota