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Board of Regents approves agreements that make way for new Ambulatory Care Center, and reviews president?s FY13 budget recommendation

May 11, 2012

During its meeting today, the University of Minnesota Board of Regents unanimously approved two letters of intent among the university, University of Minnesota Physicians (UMP) and Fairview Health Services, considered President Eric Kaler’s budget and passed a resolution related to the Minnesota Vikings’ use of TCF Bank Stadium.

The Board votes allow Kaler and his administration to sign the nonbinding letters and finalize negotiations on the Academic Health Center and Vikings issues.

One of the letters of intent related to the Academic Health Center represents an evolution of the partnership started by the university, UMP and Fairview in 1996. The letter will enable the parties to work toward a common goal: operate a world-class academic medical center, with enhanced performance in all clinical, academic and research aspects and to increase investments in the academic mission of the university Medical School.

The second letter of intent will allow negotiation for the construction of a new Ambulatory Care Center on the Minneapolis campus that would provide new space for clinics currently in the outdated Phillips Wangensteen Building and provide much-needed expansion space for a variety of clinics. The $182.5 million project will be financed by $132.5 million in special purpose bonds that will be issued by the university and guaranteed by lease agreements with UMP and Fairview. An additional $10 million will be provided by the Masons and $40 million for equipment will be provided by Fairview and UMP.

“These are giant steps for our Academic Health Center, our students and thousands of patients we serve, and this project is critical for the financial viability and excellence of the U’s medical education,” Kaler said. “This has been a long time in the making. We are handling about five times more patient volume. And health care, clinical research, medical education, recruitment and retention, patient expectations and the handling of medical records have changed dramatically.”

Design work on the project is expected to begin this fall, with construction beginning in fall 2013. The clinic is scheduled to open no later than early 2016.

FY13 Budget Proposal

President Kaler’s proposed FY13 budget outlined today will hold tuition increases to 3.5 percent for Minnesota undergraduates, which is the lowest tuition increase this century. Tuition increases in recent years have ranged from a low of 4.5 percent to a high of 16 percent.

“This budget reflects my priorities and aligns with the initiatives I have outlined previously,” Kaler said. “We all know there is no more pressing issue than affordability. We have to tackle student debt and this budget begins to do that. We also need to make the value of a university education strong. We are working hard to minimize tuition increases while also investing in what makes the U a leading research and educational institution.”

The Board is expected to act on the proposed budget at its June 8 meeting. Highlights of the budget include:

  • Invest in Access: Keep the U Affordable for Students. The modest tuition increase will be offset by a 14 percent increase in the Promise Scholarship – the U’s need-based program. The increase is made possible by savings secured by restructuring the program. President Kaler is proposing an additional $2.8 million in new money for merit-based aid to attract the top students from Minnesota and the region. The university provides a total of $81 million in undergraduate student aid annually.
  • Invest in Excellence: Keep Faculty World Class. The budget will invest $4 million in faculty hires from a $25 million FY12 appropriation, as well as an additional $7 million in new faculty positions across 11 schools, colleges and campuses. Invest in Research and Technology. The budget creates two new investment pools: a $3 million research infrastructure fund and a $1 million instructional technology fund.
  • Invest in Human Capital: Compensation. After three years of wage freezes, furloughs and temporary adjustments, the budget provides a moderate 2.5 percent compensation pool increase for all employee groups.
  • Invest in operational excellence, hold down operations and support costs and redirect existing funds to ensure the highest use of state resources. New investment in operations and support costs is being held to about one-half of 1 percent of the annual spending base, while redirected resources and prudent budget management provided about 58 percent of the total budget needs.

Minnesota Vikings

The Regents approved a resolution authorizing the university and the Minnesota Vikings to enter into a letter of intent and other negotiations regarding the Vikings’ use of TCF Bank Stadium during construction of a new downtown Minneapolis football stadium. The nonbinding letter of intent provides that the Vikings will reimburse the university for all changes the Vikings require, and all non-game day expenses and game-day operational expenses related to the franchise’s use of the facility. In addition, the Vikings will pay rent to the university and share a portion of additional concessions and sponsorship revenues. The letter also emphasizes addressing potential concerns of campus neighbors. Ultimately, a final lease agreement must be approved by the Board of Regents.

Other business included:

  • Regent Tom Devine, a 1979 U graduate, was sworn in by Minnesota Court of Appeals Chief Judge Matthew Johnson on Thursday.
  • Siebert Field & Itasca: The Board reviewed and approved schematic plans for the Siebert Field ballpark replacement on the Twin Cities campus, as well as the lab/classroom facility at the Itasca Biological Station. 
  • Annual Capital Improvement Budget: The Board reviewed the budget, which would authorize projects totaling $375.7 million to begin design or construction during the next fiscal year. The projects will be funded by grants and gifts, university and other funds, as well as university and state bonding. Action on the budget is expected in June.
  • Director of Gopher Athletics: The Regents approved appointment of Norwood Teague as the new director, who will begin work on June 18.

Students, faculty and staff: Regents recognized the service of outgoing student representatives to the Board. The board also recognized faculty, staff and students who have excelled this academic year, including national scholarship winners and the national champion Women’s Hockey team.
The next Board of Regents meeting is scheduled for June 8. For more information, go to


Tuition increases at the University of Minnesota (undergraduate)

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