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University of Minnesota Board of Regents approves tuition freeze and research investments

June 14, 2013

The University of Minnesota Board of Regents today approved a fiscal year 2014 operating budget that freezes resident undergraduate tuition, invests in continued excellence in teaching, research and outreach, and reduces administrative expenses.

"This budget will make the University more affordable for Minnesota undergraduates while making key investments to enhance this world-class public research institution," said Board of Regents Chair Linda Cohen. "We applaud President Eric Kaler’s visionary leadership and appreciate the commitment Minnesota lawmakers have made to higher education in Minnesota."

The approved budget leverages a $42 million investment by Governor Mark Dayton and legislative leaders to freeze resident undergraduate tuition for two years. The U’s 11,000 PELL grant-eligible undergraduates will also receive an average boost of $813 in state and federal need-based aid agreed to by state policymakers. The budget also included no increases to campus and collegiate fees for the first time since they were implemented, and holds the combined total of all resident undergraduate tuition and required fees across all campuses to less than 1 percent.

"This is an exciting day for Minnesota students, their families and the state," Kaler said. "By freezing resident undergraduate tuition and investing in critical research at Minnesota’s only research university, we are providing greater access to an exceptional education, driving Minnesota industry and its economy, and solving critical societal challenges. We appreciate the investments and partnership from Governor Dayton, Senator Terri Bonoff, Representative Gene Pelowski and other legislators that helped make this possible."

The budget also includes:

  • Investment in academic excellence and human capital: $26.1 million for faculty hires, classroom and lab upgrades, and infrastructure maintenance, as well as a compensation pool increase of 2.5 percent to retain and recruit world-class faculty and staff.
  • Research and innovation to solve statewide challenges: $17.8 million for critical research to enhance the state’s economy and improve the health and well-being of Minnesotans. The Minnesota Discovery, Research and InnoVation Economy (MnDRIVE) program will support interdisciplinary research in food safety, neuromodulation, robotics and water quality.
  • Operational excellence: $19.7 million in reallocations and resource adjustments – exceeding Kaler’s initial budget goal of $14 million – to support teaching, research and outreach. Also administrative cost reductions of $10 million and the framework for an additional $5 million in to meet statutory requirements.

The budget was the second of Kaler’s tenure, but the first to include state appropriations from a biennial budget request submitted by his administration.

Benchmarking University operations

An independent study praises University Operational Excellence initiatives, including the job classification study currently underway through the Office of Human Resources (OHR); efforts to upgrade human resources, finance and other outdated operating systems; the U’s transition to Google applications; and the creation and implementation of a new governance model in the Office of Information Technology.

The Board reviewed results of the 12-week study, performed by Huron Consulting Services, LLC. The study evaluated central finance, procurement, human resources and information technology functions. The analysis shows that the U’s staff and budgets in these functional areas is generally in scope with peer and industry-leading practices and notes the University is undertaking major initiatives to promote efficiency and effectiveness. Consultants also acknowledge that the U, like its peer institutions, is complex and historically de-centralized, making benchmarking and analysis difficult.

The study identifies areas for improvement in two main categories: developing metrics to evaluate programs and services, and consolidating transactional activities within each functional area into shared service models to create greater efficiency. Huron recommends the University evaluate its current capacity for change and prioritize additional improvements, acknowledging that a comprehensive overhaul of current service delivery will be a significant and multi-year endeavor.

In accordance with a request by Senators Terri Bonoff and Tom Bakk, the U retained Huron at a cost of $495,000. Data compiled by Huron will be analyzed in conjunction with "spans and layers" reports by Sibson Consulting that measured the ratio of managers to employees in the U’s central operations.

The executive summary and full Huron report are available on the University’s Operational Excellence website at

Board completes annual presidential performance review

Chair Cohen reported on the Board’s annual performance review of President Kaler, remarking that his second year of leadership can be characterized as "stellar."

"President Kaler has proven himself to be a bright, capable, inclusive leader whose energy consistently impresses those around him," said Cohen. "He has brought a new, crisp decision-making style that has increased the pace of change within the University at a critical point in its history.

"He has continued to position the University of Minnesota as a top tier public research university, which is essential to its future success."

Other Board activity included:

  • China delegation: In the first international trip of his tenure, Kaler will travel for 11 days in China to meet with key academic, institutional and governmental partners. The trip, which coincides with the 100th anniversary of the first Chinese students on the University of Minnesota campus, will enhance engagement with alumni and strengthen academic and research exchanges – one of the nation’s longest and deepest relationships between a research university and China.
  • Enterprise Systems Upgrade Program: A report detailed the first phase of a planned $83.5 million, four-year initiative to upgrade the U’s central finance, HR and student records systems. The project is currently on time and on budget. The recent planning and discovery phase has engaged users to define their work and needs and allowed the project team to coordinate with its implementation partner CedarCrestone, Inc.
  • Capital improvements: The Board approved a $110 million FY14 capital improvement budget, modified since it was first presented in May to reflect the state legislature’s decision to not fund the U’s 2013 bonding request. Also approved was the six-year capital improvement plan for FY14-19, which includes projects originally included in the annual capital improvement budget but re-assigned following the legislative session.
  • Duluth campus master plan: Regents approved the plan, which outlines projects to better integrate the campus into the surrounding community.
  • UPlan update: An annual update on the University’s health and wellness programs detailed UPlan’s track record of delivering costs below national average and realizing extensive savings through innovative programs such as the Wellness Plan. OHR Vice President Kathryn Brown and OHR Benefits Director Dann Chapman explained proposed plan changes that are necessary because of tax implications from the Affordable Care Act. The proactive measures reflect the U’s commitment to maintaining a top employer-sponsored health plan that is high quality, affordable and provides ample choice, while minimizing employee out-of-pocket expenses.
  • Introductions: Regents officially welcomed and heard from new Vice President for Equity and Diversity Katrice Albert, General Counsel William Donohue and Alumni Association President and Chief Executive Officer Lisa Lewis. The Board also formally approved the appointment of Danita Brown as vice provost for student affairs and dean of students.

The Board’s next meeting is Wednesday, July 10. For more information, visit

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