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U of M Board of Regents approves tuition freeze, administrative savings and academic investments

Board also discusses increased neighborhood engagement

June 13, 2014

The University of Minnesota’s Board of Regents today approved a fiscal year 2015 operating budget that freezes tuition for the second time in two years for Minnesota resident undergraduates, commits to more than $20 million in administrative savings and invests more than $23 million in academics.

“This budget will allow the University to continue to be affordable and accessible to students while supporting our world-class researchers as they tackle our state’s most pressing challenges,” said Board Chair Richard Beeson. “The Board thanks policymakers for their support of the University’s tuition freeze and bonding projects and applauds President Kaler for a budget that invests in U students and affirms the University’s status as a top tier institution.”

First implemented in FY14, the tuition freeze — which will save students on all five campuses, on average, between $2,100 and $2,500 — was made possible by a partnership between the U and the Minnesota Legislature. Legislators and Governor Dayton invested $42 million during the current biennium to freeze tuition for two years.

The U’s budget also includes a FY15 tuition freeze for professional resident and non- resident students in the Medical School and College of Veterinary Medicine. Campus and collegiate fees remain frozen for the second straight year.

The budget invests $23.4 million in faculty hires, classroom and lab upgrades, instructional and student support and academic support. In addition, the budget includes $15 million in a merit-based compensation pool increase of 2.5 percent to retain and recruit world-class faculty and staff.

Combined with FY14 reductions of more than $15 million, the FY15 administrative savings of more than $20 million would bring the University nearly $36 million toward Kaler’s commitment to cut $90 million in administrative expenses by FY19.

“The tenets of Operational Excellence — work smarter, reduce costs, remove barriers, enhance services and increase revenues — are taking hold across the University,” said Kaler. “As we continue, there will be some things we currently do that will go away and with the Enterprise System Upgrade Program (ESUP), we will have better tools to more efficiently accomplish many administrative tasks. We are ahead of schedule but there remains work to do.”

The Board also reviewed the FY15 budget applied to a long-range financial planning analysis to ensure continued responsible use of the U’s limited resources.

A great place for a great university
Its unique location in a major metropolitan area continues to be one of the Twin Cities campus’ greatest competitive advantages. Currently, the neighborhoods around the Minneapolis campus are undergoing significant change, with the addition of light rail and thousands of new student housing units being built and more students than ever living near campus. For this reason, leaders discussed with the Board the need for the University to be more engaged and thoughtful relative to the surrounding Minneapolis neighborhoods.

As outlined in its 2013-14 work plan, the Board continues to examine the challenges and opportunities this dynamic environment creates. Today, Regents reviewed a resolution that outlines the U’s commitment to engaging in efforts to enhance the vitality and safety of surrounding neighborhoods. During committee meetings this month, the Board also discussed student housing trends and real estate and took a bus tour of local neighborhoods.

Currently, more students than ever (89 percent) live on the Twin Cities campus during their first year. Research shows on-campus living contributes significantly to students’ academic success, retention, graduation and overall satisfaction with the University experience.

Increasingly, upper class students who used to commute from across the metro area to attend the U, now live in adjacent neighborhoods, which are undergoing great transformation and the addition of about 14,000 new rental units. As a result, the demographics, character, travel patterns and economics of near-campus neighborhoods are changing.

Campus leaders continue to work with the City of Minneapolis, Hennepin County, and other public and private partners, to forge a new approach to neighborhood engagement to ensure a vibrant, welcoming, safe and attractive environment on and around the Minneapolis campus.

Evolving into a 21st century land grant institution
The Board presented its annual performance review of President Kaler. Chair Richard Beeson said Kaler is moving the University in the right direction. In year three of his presidency, Kaler launched an ambitious strategic planning process for the Twin Cities campus and continued driving academic and operational excellence; focusing on diversity and engaging the state; extending and strengthening the University’s brand; and increasing public and private support to advance our mission.

“The University of Minnesota continues to evolve into a 21st-century, land grant, research institution under President Kaler’s leadership,” said Beeson. “He is a smart, inclusive and forward-looking leader who is proving more than able to change the U’s culture by implementing changes quickly and effectively. The Board is fully supportive of Kaler and his performance on all fronts.”

Other agenda items included:
Capital investments.
The Board approved $291.7 million in projects, including those funded by the state Legislature as part of the University’s 2014 capital request. Design or construction on these projects will begin this year.
Strategic planning update. One hundred and fifty faculty, staff and students, out of more than 500 nominations, are exploring five key issues related to the strategic planning goals. The inclusive teams will host university-wide listening sessions, group discussions and forums this summer that will sharpen the goals and identify appropriate steps to pursue them.
Student football tickets. The Board approved a resolution from Gopher Athletics to increase attendance at Gopher football games by allowing the sale of unsold tickets in the student section beginning on the Monday following the first week of classes in September. The goal is to enhance the fan and game day experience by filling more seats in the stadium. Student leaders have been consulted about the change and are working with athletics to increase student attendance at games.

See the President’s report to the Board here.

The Board’s next meeting is Wednesday, July 9. For more information, visit the Regents website.

Twin Cities Campus: