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University of Minnesota Board of Regents approves biennial budget request and legislative proposal

October 12, 2012

The University of Minnesota Board of Regents today approved President Eric Kaler’s biennial budget request and legislative proposal for fiscal years 2014-2015.

The request represents a new partnership with the state of Minnesota that freezes tuition for Minnesota undergraduate students; commits the university to $28 million in cost savings; reduces student debt; and launches four targeted research initiatives that address some of Minnesota’s toughest problems and advance the state’s economy. The university will officially submit its request to the state by Oct. 15 and will advocate for it during the upcoming 2013 legislative session.

“President Kaler has developed a strong proposal that focuses on our land grant mission of ensuring access to Minnesota students and solving our state’s most pressing challenges through research and outreach,” said Board Chair Linda Cohen. “We hope state policymakers will join us in this bold new partnership which helps students, families and Minnesota’s home-grown industries.”

A key component of the budget request is the creation of the MnDRIVE (Minnesota Discovery, Research and InnoVation Economy) funding program. The university will seek $18 million beginning in 2014 to focus research on four areas that are critical to grow Minnesota industry and business. U of M researchers explained to the board today that the university is well positioned to lead this research, based on work already underway in the MnDRIVE focus areas: 

  • Securing the global food supply
    Francisco Diez-Gonzalez, Professor, Food Safety Microbiology, Department of Food Science and Nutrition, discussed the development of integrated approaches to ensuring a sustainable, safe and resilient food system — from farm to fork.

    “Food is the primary engine of Minnesota’s economy and the U of M fuels that engine,” Diez-Gonzalez said. “We envision that this initiative will support enhancements to the supply chain that will increase Minnesota’s food industry competitiveness and protect public health.”
     
  • Advancing discoveries and treatments for brain conditions
    Timothy Ebner, Professor and Head of the Department of Neuroscience, Max E. and Mary LaDue Pickworth Endowed Chair in Neuroscience, talked about how critical U of M research is to the state and to Minnesota’s medical device industry. Ebner explained how neuromodulation (a treatment that changes the activity of brain circuits) offers the potential to improve stroke recovery and address complex and debilitating disorders such as Parkinson’s disease, Alzheimer’s disease and schizophrenia.

    A growing list of neurological/psychiatric diseases are already being treated with neuromodulation, including depression, obsessive compulsive disorder and chronic pain, Ebner said.

    “Depression and obsessive compulsive disorder are incredibly hard to treat and they are now turning to neuromodulation,” Ebner said. “If we could intervene in these diseases, we could make a major impact.”

    This initiative could make Minnesota the world leader in neuromodulation, he said.

    “We will improve health and reduce suffering for Minnesotans and strengthen the state’s medical device industry,” Ebner said.
     
  • Supporting robotics, sensors and advanced manufacturing
    Maria Gini, College of Science and Engineering Distinguished Professor and Associate Head of Computer Science and Engineering talked about how the university and state will emerge as a robotics leader in the nation, benefitting citizens in everything from personal lifestyle to advanced manufacturing.

    It is a growing industry with increasing demand, Gini said. Worldwide industrial robot sales went up by 38 percent from 2010 to 2011.

    The university is a world leader in miniature robots for reconnaissance and surveillance. That technology came out of the U’s Center for Distributed Robotics. In addition to spurring Minnesota job development and economic growth, Gini highlighted the successful use of university-developed Scout robots in military applications and civil rescues.
     
  • Advancing industry and conserving the environment
    Michael Sadowsky, Distinguished McKnight Professor and Director of the BioTechnology Institute, discussed how to enhance opportunities for Minnesota’s energy, agriculture and mining industries by solving environmental challenges and more efficiently using current and future energy sources.

    The university conducts much research in bioremediation -- the use of microorganisms to render hazardous wastes non-hazardous or less hazardous.

    “We could apply these technologies throughout the state on currently stalled industrial and agricultural processes,” Sadowsky said.

    For example, many have wanted to reuse mine pits for aquaculture, he said.

    “This has been tried in Minnesota but failed due to problems with nitrate contamination,” Sadowsky said. “Microbial bioremediation of that nitrate contamination would allow the aquaculture industry to prosper,” he said.


Cost definition and benchmarking


Kaler has said that to achieve Operational Excellence — identifying savings that can be better used to benefit students and the U’s mission — the U must determine how it is doing currently. Building on workforce and mission cost analyses presented to the board in June, CFO Richard Pfutzenreuter outlined how the university will define personnel and non-personnel costs related to mission and administrative oversight.

According to the analysis, mission-related personnel and non-personnel expenses in fiscal year 2012 totaled about $1.5 billion or 50 percent of the university’s expenses; student aid represented nearly $283 million or 9 percent; mission support and facilities personnel and non-personnel cost nearly $989 million or 32 percent; and administrative oversight totaled nearly $265 million or 9 percent.

The analysis cannot be used to compare the university’s spending in these areas to other institutions across the country because there is no common methodology used to measure these expenses. However, the analysis does provide an important benchmark for the university’s purposes because it will help the university make the best decisions on spending and where to find efficiencies over time.

Assessing the U’s structure in light of the Freeh report

In a special work session on Thursday, Kaler and the full board discussed lessons from former FBI Director Louis Freeh’s report about the actions of Pennsylvania State University related to child sexual abuse. According to Kaler, the University of Minnesota already follows many of the best practices cited in the Freeh report.

“However, the Penn State situation provides an opportunity for self-examination as a university to determine what additional actions are needed to protect children,” Kaler said. To that end, Kaler will convene an ad hoc committee to review and recommend systemwide policy on the safety and protection of children on U campuses. The committee will determine whether additional operational changes are needed and will present recommendations by the end of this academic year.

The board also:

  • Learned about Kaler’s plans to launch a new president’s Emerging Scholars Program in fall 2014. Full details will be reviewed at the board’s December meeting. The program will be designed to assist incoming students who face challenges that may have affected their high school ranks and test scores, but whose personal experiences and high school records indicate strong potential for success at the U.
  • Reviewed a proposed entrepreneurial leave policy that supports faculty in commercializing intellectual property or pursuing other private sector development opportunities. Under the policy, faculty could take a leave of up to one year at no salary to work in the private sector. The new business-friendly option would become part of MN-IP (Minnesota Innovation Partnerships), the U’s effort to streamline the sale of intellectual property rights from academic discoveries.
  • Reviewed the university’s Annual Report on Private Giving.
  • Approved a capital improvement budget amendment of $2.657 million to fund the design and construction of the Community University Health Care Center in South Minneapolis.
  • Approved the 2012 University Plan, Performance and Accountability Report.


The next Board of Regents meetings will occur Dec. 13-14. For more information, go to www.umn.edu/regents.
 

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