The university also responds to the state’s request for suggestions for “formula funding” – a mechanism to standardize appropriations for higher education. The letter argues that this formula approach to funding for higher education, which has resulted in one-time allocations, should instead be used as base-level funding, to provide greater consistency for budget planning. The letter also argues that formula funding, which is based on year-to-year improvements, doesn’t recognize the high level of achievement that institutions like UM have already reached.

Regarding cost containment, the letter highlights UM’s efforts to eliminate $235 million in general fund expenses since 2004. A third phase that’s currently underway is targeting $120 million through 2017 in a combination of cuts and increased recurring revenues. More than $30 million in cuts have been identified in fiscal year 2013, which runs from July 1, 2012 through June 30, 2013.

The letter also includes sections on affordability and economic impact. For economic impact, the letter references the UM Entrepreneurship & Innovation website for more details.

UM’s FY 2013 general fund budget of $1.649 billion for the Ann Arbor campus, which regents approved in June, reflects a $4.3 million increase in UM’s state appropriation to $273.1 million – an increase of 1.6% compared to FY 2012. The previous year, in FY 2011, state funding to UM had been cut by 15%.

This report was filed from the Michigan Union’s Anderson room on UM’s central campus, where the regents held their December meeting.

The retreat on March 5-6 covered a range of other topics, from the college’s projected drop in revenue and possible tuition increases to its shifting student demographics and a raft of facility renovations.

The Chronicle attended the first day of the retreat – the second day was held in closed session. The location – including an overnight stay at what the Book Cadillac website describes as an historic, luxury hotel – was intended to help focus trustees’ attention, according to board chair Stephen Gill. The cost of the retreat came to $9,910.70.

Satellite Campus in Ann Arbor Explored

To accommodate WCC’s growing student population, the board has been considering various options for satellite campuses, including the McKinley-owned building on East Liberty in downtown Ann Arbor, formerly known as Tally Hall. [See Chronicle coverage: "WCC Considers Ann Arbor Satellite Campus"]

At this month’s retreat, WCC president Larry Whitworth said McKinley initially offered to lease the 30,000-square-foot space to WCC for $30 per square foot. But Damon Flowers, WCC’s associate vice president of facilities development and operations, pointed out that to build an educational space out of it – including improving ventilation, putting in a false ceiling, installing computers and other requirements – would have cost considerably more.

Whitworth said that after negotiations, McKinley offered a price of $10.50 a square foot for a 10-year lease. McKinley also offered to pay for all of the necessary buildout.

“Obviously, this is an extremely good price,” Whitworth said.

But that location is not the only option the college is considering. After rejecting an offer from the University of Michigan to rent classroom space, Whitworth said WCC is considering partnering with the Ann Arbor District Library. The library board and administration are considering moving ahead with rebuilding their current downtown facilities. [Chronicle coverage: "Board Renews Library Building Discussion"]

“I thought to myself, if we were thinking about the future, working with the library makes all kinds of sense,” Whitworth told trustees. “[AADL director Josie Parker] thinks that joining forces makes it a much more doable project. We’ve got all the meeting rooms. We’ve got the conference center. We’ve got parking. The bus depot is coming in,” he said, referring to AATA’s plans to rebuild the Blake Transit Center, across the street from the library’s downtown building on South Fifth Avenue.

[Mentions of the parking and conference center refer to an underground parking structure being built by the Downtown Development Authority on the city-owned Library Lot, just north of the library's downtown building. The city also is reviewing proposals for possible development on top of the parking structure – including a possible hotel/conference center.]

Whitworth added that Parker believes AADL will likely move ahead on the library building project over the next year, including going to voters to ask for a millage to pay for construction. “Basically, it’s a 2.5- to 3-year proposition,” he said. “I think we could make do for 2 to 3 years. The synergy that comes about with the library is such a phenomenal connection.”

Before there was any further discussion of satellite campus options, trustee David Rutledge stated he was “very uncomfortable” with discussing the topic in a public setting. He moved that since it was an issue of purchasing real estate, the board should discuss it in closed session.

“We don’t know how our discussion would impact others,” Rutledge said.

The other trustees supported his motion, and agreed that the board would discuss the satellite campus options on the second day of the retreat, in closed session.

Budget and Financial Concerns

Earlier in the meeting, the board discussed a projected drop in revenue over the next five years or so. For the current fiscal year, the college is expected to generate a $1.5 million budget surplus. However, there might not be a surplus in coming years, due to a decrease in the college’s primary source of revenue: property taxes.

According to a WCC financial report presented to the board, there is a projected 7% to 8% decrease in property taxes for the next fiscal year, due to a drop in property values. That amounts to a funding decrease of about $3.5 million.

Property taxes account for 51% of WCC’s total revenue. At the board’s Feb. 23, 2010 meeting, trustees approved a revised fiscal 2009-10 budget, with $98,706,906 in total revenue. Property taxes account for $50,299,300 of that figure.

“I think we’re going to have to understand that over the next four or five years … it all depends on what kind of a college we want to have,” said WCC president Larry Whitworth, referring to the projected loss of revenue. “Do we want to cut or freeze employment, or do we want to raise tuition? We’re probably going to be talking about $8 to $10 a year for tuition increases [per credit hour].”

Whitworth said that a $10 increase in the cost per credit hour would generate $2.95 million annually. According to WCC’s website, the current cost per credit hour is $82 for distance learning courses, $80 for in-district students, $131 for out-of-district students and $174 for out of country or state. He and the trustees discussed how much to increase the credit-hour cost in order to balance the budget and avoid eating into the college’s fund balance. According to WCC’s financial report for the 2008-09 fiscal year, the college has a fund balance of $23,775,264.

“We do have to think seriously about how we move forward and start to consume some of our fund balance without consuming all of it, too quickly,” Whitworth said.

Pamela Horiszny, vice chair of the WCC board, said she felt a $5 increase would be enough to balance the budget. However, Whitworth said upping the credit-hour cost by only $5 would “come back to bite us next year.”

“Even at $10, we’re starting to consume all of these reserves that we have,” Whitworth said.

In talking with The Chronicle after the retreat, board chair Stephen Gill said that another budget concern is the state faculty pension – the Michigan Public School Employees Retirement System (MPSERS) – that the college pays into each year. This past year that payment went up $3 million, for a total cost of about $8 million.

According to a financial report given to the board at their Feb. 23 meeting, WCC was notified by the State Fiscal Management Division that the MPSERS rate will increase from 16.94% of gross salaries to 19.41%. The report states that WCC anticipates the rate will increase 2% each year for the next few years. [A detailed explanation of how MPSERS works is included in a Chronicle report of a Feb. 17, 2010 Ann Arbor Public Schools board study session.]

“It’s costing us a lot of money,” Gill said. “That’s really hurting us.”

Student Demographic Data

Linda Blakey, WCC associate vice president of student services, presented demographic data on the college’s student population. Given the current state of the economy and the subsequent rise in people turning to school to prepare for a career change, WCC has seen a considerable rise in enrollment recently.

In the past year, enrollment has increased by about 4,000 students. There are currently 12,214 students enrolled for WCC’s winter 2010 semester. That’s an increase of  7.5% – 989 students – over the winter 2009 semester. There were 14,202 students enrolled for the fall 2009 semester – 10% (1,290 students) more than in fall 2008. 

The increase in enrollment has led WCC to consider establishing a satellite campus to accommodate the increased enrollment, a topic which the trustees addressed later in the retreat [and reported in an earlier section of this article]. Blakey’s presentation noted that the college has seen the biggest increase in the 18- to 20-year-old age group.

Between the 2004-05 academic year and 2008-09, the number of 18- to 20-year-old males in WCC’s student population went up 2.4%. Female students in the same age group increased by 2.2%. Blakey said the raw numbers for all other age and gender groups – including men and women aged 21 to 24, 25 to 34, and 35 and up – have also increased. However, the percentage of the student population they account for has decreased in some instances, due to the 18- to 20-year-olds taking up such a large portion. For example, the proportion of new students who are males aged 25 to 34 has dropped by 1%.

“I just think it’s important to again point out in terms of raw numbers, all age groups are going up,” Blakey said. “The younger students are just taking up a larger percentage of the group.”

Blakey also presented data concerning the majors that new students are declaring upon enrollment. Between 2005 and 2009, the college has seen a significant drop in the number of 18- to 20-year-olds going into business and computer science, from nearly 700 students to just over 400. The number of business and computer science students also dropped for those aged 21 and up.

However, the number of students in the 18 to 20 age group going into health increased by over 200. There was also an increase in individuals studying math and science.

Blakey said the increased interest in math has resulted from more students enrolling with the intention to transfer as pre-med majors. WCC president Larry Whitworth noted that in general, the number of students who plan to transfer has gone up, particularly among the rapidly rising population of 18- to 20-year-olds.

“We surveyed students … about 70% of the students indicated that they planned to transfer,” Whitworth said. “The actual numbers are increasing pretty dramatically at this point.”

Trustee Pamela Horiszny commented that the downturn in the economy has resulted in recent high school graduates opting to attend community colleges instead of four-year universities in order to save money.

Data presented during the retreat about the percentage of high school seniors opting to attend WCC reinforced Horiszny’s statement. Graduates from Ypsilanti High School attend the college at a rate of 33.5%. WCC’s penetration rate is 36.6% for Manchester community schools, 22% for Milan, 14% for Chelsea and 20.6% for Brighton.

“We’re certainly attracting more recent high school graduates,” Whitworth said. “We have one of the only strong vocational technical programs at a community college anywhere. We have a reputation as a good academic school. That old stigma that used to be associated with a community college just isn’t in place anymore in the minds of most students and their families.”

The board went on to examine data concerning the student population’s geographic distribution. Between 2,500 and 2,699 students live in the 48197 zip code region in Ypsilanti. Between 1,500 and 1,699 students live in the 48198 area in Ypsilanti. Overall, Ann Arbor zip codes 48103, 48108 and 48105 account for 22.5% of the student population for the fall and winter semesters from 2008 to 2010, compared to 29.2% for the two Ypsilanti zip codes.

The student population isn’t as concentrated west of Ypsilanti. Some of the trustees questioned whether there are actually 1,000 students living within a mile of downtown Ann Arbor, a statistic that has previously been used to bolster the college’s consideration of establishing a satellite campus in that location. Whitworth confirmed that the number is correct.

“Downtown Ann Arbor is still the central hub,” Whitworth said. “We’re already serving the Ypsilanti populations that we’re looking at here. The current campus basically serves that population. Once you get on the other side of Ann Arbor, it’s so sparse that you don’t get any concentrations. Ann Arbor then becomes the next concentration point.”

WCC trustee Richard Landau – considering an “If you build it, they will come” theory – proposed that the student population might be concentrated in Ypsilanti simply because of the college’s location.

“Is the reason that we draw so much from Ypsilanti that we’re effectively in Ypsilanti?” Landau asked. “If you had a campus in the 48103 zip code, would you see those numbers go up significantly?”

The board also discussed how the age distribution of the population that the college serves may change in coming years. The Southeast Michigan Council of Governments (SEMCOG) predicts that Ann Arbor Public Schools will see an 8% decrease in residents aged 5 to 17, a 19.1% decrease for 18- to 34-year-olds, and a 189.3% increase for those 65 and older between now and 2035.

The trustees noted this is significant to the college because the senior vote factors considerably into passing millages to generate funding. They discussed a possible explosion in continuing education classes. Whitworth joked that WCC might start offering courses in euchre and square dancing for the older population.

“It’s going to be very, very different as we move forward,” Whitworth said.

David Rutledge, the board’s treasurer, brought up another trend: the shift in jobs away from manufacturing and the growing number of people returning to school for retraining.

Whitworth referenced Dan Pink, an author who has written several books on the changing world of work. He said Pink warns that everything routine is going away.

“The whole nature of the work is going to change pretty dramatically,” Whitworth said. “As we look to the future, it’s going to be those individuals that bring creativity, innovation to the workplace that are going to be successful.”

In order for WCC students to succeed in this changing work environment, Whitworth said the college should consider whether they need to change their academic requirements.

Five-Year Facilities Plan, Parking Project

Damon Flowers, WCC’s associate vice president of facilities development and operations, presented a capital projects and construction plan for the fiscal years 2009-10 through 2013-14. The total for the capital projects budget for the next five fiscal years is $20,172,900.

Improving the OE Building

The plan includes numerous renovations for the Occupational Education Building. By July 2011, the college aims to replace existing air-handling equipment and the pneumatic temperature control system. The plan also includes replacing the OE Building’s roof, which is over 20 years old. Other replacements include the electrical system and switchgear. All of this construction will cost an estimated $13.5 million.

The Student Center

The facilities plan also includes improvements for the college’s Student Center Building. The proposed renovations include replacing galvanized domestic water pipes ($250,000), reconfiguring the loading dock ($200,000), and renovating the first-floor dining areas ($1,007,100) by 2011. WCC president Larry Whitworth commented that improving the Student Center’s condition is an important project.

“We have to redo the first floor of the Student Center,” Whitworth said. “It’s worn out – it’s starting to look bad. We’ve got to look at those reserves that we’ve been putting aside to do these kinds of things. This is, of course, extremely important for long-term financial health because this is how we bring people to the campus.”

Morris J. Lawrence Building

The Morris J. Lawrence Building – which Whitworth called the college’s “front door” because of the many public events that are held there – is up for a proposed storage addition and a new entrance that goes directly into the Towsley Auditorium. Currently, people have to pass through the building’s lobby on their way to the auditorium. The renovations would be complete in 2011 and cost $580,800.

Family Education Building

The facilities plan includes replacing the mechanical systems equipment, upgrading electrical systems and fire alarms, improving the public restrooms, and replacing the outdoor playscapes for the Family Education Building. The project would cost a total of $200,000, with an estimated completion date of summer 2010.

Skilled Trades Annex

Flowers told trustees that the proposed facilities plan includes renovating the 7,500-square-foot skilled trades annex, including classrooms, a residential construction woodworking shop and the faculty offices. The building would also be set up to use geothermal energy for heating and cooling as well as for hot water. The renovations – with a 2011 completion date – will cost an estimated $1.3 million.

Other Projects

The facilities plan also calls for a $50,000 heating pump retrofit, which “provides for the automation and storage of water, which would then be mechanically cooled and recycled back into the central plant heating pumps for reuse.” This would allow the college to use less water.

The plan also includes a $1.15 million thermal storage chilled water upgrade, to be completed in 2012. According to Flowers, the upgrade would provide backup for the college’s existing cooling system, in case one of their existing chillers breaks.

“Things do go wrong,” Flowers said. “We really can’t cool the campus with one chiller. We lose one, and we’re in trouble.”

The facilities plan also suggests replacing the failing valves in the heating, ventilation, and air conditioning tunnel system on campus. This project would be completed in 2012 and cost $40,000. Additionally, the plan calls for repairing eroded asphalt on the campus’ perimeter roads, a $180,000 project to be completed by the summer of 2014.

Parking Structure Project

Flowers also presented information on the parking structure WCC plans to build. He estimated that with approximately 655 spaces at $17,500 a space, the construction alone would cost $11,462,500. Additional costs would bring the subtotal for the project to $14,612,500. Flowers said after the retreat that the grand total for the project is still “up in the air.” Right now, it would probably come to around $15.5 million. “Most of the administration wants to get it to $12 million,” Flowers said. The total budget for the project will be presented to the board in April.

Three-Year Internet Technology plan

Amin Ladha, WCC’s chief information officer, discussed the college’s technology plan for the next several years. Ladha’s goals for WCC’s IT department include establishing streaming video services for distance learning, marketing and other academic purposes; looking into “cloud computing,” the use of leased storage space; a wireless network upgrade; a Microsoft Office 2010 upgrade; and enacting disk-to-disk backups for improved data restoration following disasters.

Ladha also spoke to the board about future trends in technology, such as the increasing popularity of mobile devices. For example, Ladha said the college could make it possible for students to access the online student directory or look up their grades and coursework on the WCC academic site – called Blackboard – using their iPhones.

Ladha said he believes Apple’s new iPad will prove popular among WCC students, and the college’s IT division should look into ways that these devices can be incorporated into academics. The trustees discussed the possibility of students purchasing their textbooks electronically and reading them as ebooks on mobile devices.

“I think it’s absolutely coming,” trustee Richard Landau said of electronic textbooks. “It’s just a factor of the devices themselves right now costing $400 to $500 apiece. You’re going to have to see these devices come down to $150 dollars apiece, and then it’s going to explode.”

Ladha said there is already a class at WCC that uses ebooks and the Kindle, an electronic reader from Amazon.com. “There are instructors who will start doing it,” Ladha said. “There is already an example. I see the trend coming.”

Curriculum Changes

Linda Blakey, WCC associate vice president of student services, and Phyllis Grzegorczyk, interim vice president of instruction, informed the board about changes in the college’s general education requirements, as well as the addition of some new programs.

The change in the general education requirements involves a change in the language of the college’s requirements. Previously, WCC’s general education requirements stated:

Students entering degree programs in Fall 2001 and thereafter also will need to demonstrate computer and information literacy … by competency testing or completion of course work as a degree graduation requirement.

The new language reads:

Students enrolling in associate’s degree programs in Fall 2010 and thereafter will need to meet general education area VIII, Computer and Information Literacy, by completing the specified courses.

Grzegorczyk said instructors’ complaints about their students’ lack of computer skills inspired the change. Previously, she said students would put off fulfilling the computer literacy requirement until they were almost finished with their program. Now, they will be strongly advised to fulfill the requirement before taking the majority of their courses – although completing the computer literacy course work before taking other classes will not be required.

Blakey added that they plan on evaluating departments and instructional areas. If computer skills are absolutely necessary for a particular class, they will make the computer literacy course a prerequisite or concurrent prerequisite. She said many instructors use the college’s Blackboard site to post grades and assignments, and many require their students to use Microsoft Word and other basic software.

“If students don’t have the computer skills, they just have a really difficult time,” Blakey said.

Although the option of competency testing has been eliminated, students still have the option of meeting the computer literacy requirement through “credit by exam,” the equivalent to taking the final exam for the course. Blakey noted that many students think they have adequate computer skills, but they might only know how to update their Facebook status and be clueless about creating an Excel spreadsheet.

“You’d be surprised,” Blakey said. “Even though people have computer skills, they have holes in those computer skills.”

Grzegorczyk said competency testing was eliminated due to the excessive expense and human resources that would be needed to test everyone who thinks they can use a computer well enough to bypass the requirement. WCC president Larry Whitworth agreed, saying that everyone would try to take the competency test, and that would be implausible, given the growing number of incoming students.

“If you just had a competency exam, you would be testing 4,000 people,” Whitworth said. “They’d all go, ‘Well, I can use a computer.’ This is beyond what most of them think.”

In addition to the altered general education requirements, the college is adding an environmental science program. Its requirements will consist of existing courses and two new environmental science courses that are currently in development.

There will also be a new commercial building facility maintenance program. This area of study was specifically designed for University of Michigan maintenance mechanics; UM is supporting the program’s development. No one else will be allowed to enroll initially, but others might be allowed to enroll in the future.

Finally, WCC will introduce a new nursing transfer program designed to prepare students to enter Eastern Michigan University’s nursing program as juniors after they graduate from WCC. The college hopes to start offering this program next fall.

“This is very similar to the nursing transfer to UM that we did about 15 years ago,” Grzegorczyk said. “This is probably the best-kept secret in the county because the admission to UM and EMU has a specific number of slots for our students to move directly into.”

A Coda on the Retreat’s Location: Why Detroit?

Following the retreat, The Chronicle inquired into the choice of the Westin Book Cadillac hotel for the location of the two-day meeting, which included an overnight stay. Stephen Gill, chair of the WCC board of trustees, said they chose to have the retreat in Detroit in order to keep the trustees focused.

“We’ve had experience having the retreat in Ann Arbor, but people are just too distracted by other things,” Gill said. “By having it out of town, far enough away, you commit the time to that two-day retreat. We get everybody’s full attention.”

Gill added that the trustees wanted to get away, but still stay in Michigan. “We liked the idea of being in Detroit because it helps the economy in Southeast Michigan,” he said.

The Chronicle submitted a Freedom of Information Act request to find out the cost of the retreat. The board paid $5,887.43 in hotel charges, including individual guest charges, catering and Internet charges. The board also had dinner at the Westin Book Cadillac’s 24grille, which cost $4,023.87. The total cost for the retreat, including the hotel charges and dinner, was $9,910.70. [.pdf file of receipts from Westin Book Cadillac, in response to a FOIA request]

Present: Board of Trustees: chair Stephen Gill, vice chair Pamela Horiszny, secretary Anne Williams, treasurer David Rutledge, trustees Mark Freeman, Diana McKnight-Morton and Richard Landau. Administration: WCC president Larry Whitworth, executive assistant to the board Mary Faulkner, associate vice president of student services Linda Blakey, associate vice president of facilities development and operations Damon Flowers, interim vice president of instruction Phyllis Grzegorczyk, and chief information officer Amin Ladha. Several other administrators also participated in the retreat.

The WCC Board of Trustees meets on the second and last Tuesdays of each month at 4 p.m. The next regular meeting will be on March 23 in the Board of Trustees meeting room on the second floor of the Student Center Building. For more information, visit the board’s web page.

Michigan Student Assembly president Abhishek Mahanti, far left, points to Royster Harper, UM's vice president for student affairs. MSA leaders distributed "Go Blue – Beat OSU" T-shirts to UM regents and administrators at the Nov. 19 regents meeting. The T-shirts were not effective in ensuring a Michigan victory on Saturday. (Photo by the writer.)

University of Michigan Board of Regents (Nov. 19, 2009): Some media outlets that attended the Nov. 19 regents meeting didn’t get what they came for – namely, comments from UM president Mary Sue Coleman regarding the ongoing NCAA investigation of the university’s football program.

What they heard instead was a report on a five-year initiative to use UM’s physical space more efficiently, including its classrooms and labs. The meeting also included a brief report on the outlook for state funding, discussion of renovations to house the Museum of Zoology’s extensive specimen collection, a question about the band Jazz Pie Music.

President’s Opening Remarks

UM president Mary Sue Coleman typically begins each meeting of the board of regents with remarks highlighting university achievements over the past month. This month, she applauded UM chemistry professor Brian Coppola for being named 2009 U.S. Professor of the Year by the Carnegie Foundation for Advancement of Teaching and the Council for Advancement and Support of Education. “This is a big deal,” she said, adding that it speaks volumes for the quality of UM undergraduate education. She also cited the fact that seven UM faculty and 28 students were awarded Fulbrights for 2009-10, leading the nation in a tie – with Michigan State University, she said, smiling.

Moving on, Coleman described going to the Ann Arbor office of Google recently, and asking how many of the employees there were UM graduates. About 80% raised their hand, she said. Many of them had left the state but returned for the job at Google – an example of how Google is enticing college grads to return to Michigan, she said.

Coleman also noted that UM was recently honored by the Ann Arbor Business Review’s Deals of the Year for its purchase of the former Pfizer research campus, now known as the North Campus Research Complex. The NCRC was recognized for its potential as a catalyst for innovation within the state, she said.

Coleman’s remarks were perhaps most notable for what she didn’t address – recent news that UM athletic director Bill Martin planned to retire next year, an ongoing NCAA investigation into UM’s football program, and results of a UM internal audit earlier in the week that revealed a lapse in mandatory reporting on the amount of hours that football players spend in practice. Her silence on that front actually resulted in a few news articles – several members of the media had attended the meeting specifically to report that issue.

Regent and board chair Andy Richner did address the topic, briefly, following Coleman’s opening remarks. After praising Coleman for her recent inclusion by Time magazine as one of the nation’s top 10 college presidents, Richner said that obviously the NCAA investigation had resulted in a lot of media interest and concern. He said that regents had been well-informed about the status of the investigation, but that they’d been advised by counsel not to comment at this time.

So they didn’t.

Space Utilization Plan

UM Provost Teresa Sullivan introduced a presentation about the university’s space utilization initiative by describing it as a five-year plan aimed at using current buildings most effectively. The project focuses only on general fund space – that is, buildings that are paid for out of the university’s taxpayer-supported general fund budget. That excludes athletics, housing, the health system and parking, she said.

Frances Mueller, the initiative’s project manager, gave a formal presentation, noting that the effort began in 2007 as part of a broader cost-containment effort. The goal is to limit the need for future expansion, make sure that the university’s best spaces are being fully used, and contribute to UM’s energy efficiency efforts.

The approach is to encourage a greater sharing of space, converting space that’s been under-utilized, and changing the culture on campus. In the past, Mueller said, space was considered a free good. Some people believed that once they were allotted space, it was theirs indefinitely. But in fact, it’s an institutional resource, she said, and should be used for the university’s highest-priority needs.

As part of the initiative, the university is developing processes and policies for space utilization. For example, units that request major expansion projects are required to provide analysis of their current space usage. Standard reporting procedures have been put in place to track the use of classrooms and research labs, as well as energy usage within buildings.

Mueller said the university has developed time utilization reports, which provide a detailed look at usage by day and by hour. The goal is to reach 70% time utilization, and 65% seat utilization – that is, to have a classroom occupied 70% of the time, at 65% occupancy within the room.

Another goal: By the fall of 2010, all general-purpose classrooms campus-wide will be shared and made available for scheduling between the hours of 8 a.m. and noon. Historically, Mueller said, individual academic units had control over their classroom space. The project is also looking at shared computing space as well as facilities for animals used in research, which might be consolidated, she said. Consolidation would free up space to be used for other purposes.

The university is also looking at ways to convert existing space into new uses. Mueller cited the examples of converting classrooms in the Dennison building on East University into office space, and renovating the former University Stores warehouse on Varsity Drive into storage space for the Museum of Zoology collection – a project discussed later in the meeting. The goal is to decrease lease costs by over $1 million and avoid construction costs in the tens of millions, she said.

Mueller said that their efforts have been able to slow the university’s average annual growth rate, as measured by square footage of general fund space. From 2000 to 2007, that rate was 1.84% – it has since slowed to 0.45%, she said. Mueller estimates that the university is saving $185 million in one-time construction costs and $7.5 million in annual operating costs, because of the slower growth rate.

Overall, Mueller said that the past two and a half years have been laying the foundation. “Those things are just starting to show results now,” she said.

Regent Libby Maynard asked what kind of pushback Mueller had received from faculty. “You don’t have to name names,” she joked. Mueller said that when she began this job, she held a lot of focus groups and quickly realized that “space is an incredibly sensitive topic” – a remark that drew laughs from regents and administrators. She said she’s worked hard to build relationships, and consults with a faculty advisory group. “They may not always like what we’re doing, but I think they understand it.”

Several regents asked questions about space utilization during off-peak hours, like evenings and weekends. Regent Larry Deitch asked Sullivan, “What happened to the 8 o’clock class?” Sullivan said that when deans approach her with requests for more space, they know she’ll respond by saying there’s lots of space available before 10 in the morning or on Fridays. As they build a database for central scheduling, it will be easier to figure out what space is available, and when, she said. For example, the use of space in the evening will likely increase because there’s high demand from student groups, but now it’s difficult to find out what rooms are open. With a central database, “that’ll be easy,” Sullivan said.

Report from Lansing

Cynthia Wilbanks, UM’s vice president for government relations, gave a brief report on state funding for higher education, in the context of other financial challenges that legislators in Lansing are confronting. Since her last report, she said, Gov. Jennifer Granholm signed the higher education budget for the current fiscal year, which allots $316 million for UM’s general fund, plus an additional $8.7 million in one-time federal stimulus funding.

State revenues continue to decline, Wilbanks said – that’s been the case for months. In addition, federal stimulus funding that at one point was expected to support higher educations funding through fiscal 2011 is now almost depleted, and either won’t be available at all or will be significantly lower than anticipated. To be eligible for federal stimulus dollars earmarked for higher education, a state must fund its higher education budget at a level at or above its funding in 2005-06 – a so-called “maintenance of effort” level. Wilbanks said it’s possible that Michigan will ask for a maintenance-of-effort waiver from the feds, meaning that funding for higher education could go below its 2005-06 level.

Wilbanks reported that departments within the state have been asked to cut their budgets by double-digit percentages. All of these are factors to consider as the university begins its planning for fiscal 2011, she said.

MSA President: T-Shirt, Anyone?

Abhishek Mahanti, president of the Michigan Student Assembly, began his monthly report to regents by talking about the funding situation in Lansing and the recent cuts to the Michigan Promise Scholarship. He said the vision in a quote by James B. Angell, UM’s longest-serving president – that the university’s mission is to provide “an uncommon education for the common man” – is slipping away. The MSA has been lobbying lawmakers, Mahanti said, and he thanked administrators for their support of a video project that allows students to record what it means to be a Promise scholar.

Mahanti noted that he was wearing a T-shirt rather than his usual suit and tie, “but I’m still dressed appropriately.” The shirts – with a “Go Blue! Beat OSU!” logo – were part of MSA’s warm-up to the football game on Saturday, and there were extra T-shirts for everyone who wanted one, he said. Part of the week’s festivities included a pizza-eating contest, and MSA vice president Mike Rorro – who also attended the regents meeting, had eaten six slices in a minute, Mahanti reported. “Was it Little Caesar’s?” joked regent Denise Ilitch, whose family owns that company. “No – don’t tell me!”

Construction, Renovation Projects

Jeff Hausman, director of the Detroit office of the architecture firm SmithGroup, gave an overview of the schematic design for renovations at a Varsity Drive warehouse – the new home for about 6 million specimens currently housed at the Alexander Ruthven Museums Building on central campus. That’s the majority of the “wet” collection – specimens stored in glass jars filled with highly combustible ethyl alcohol – from UM’s Museum of Zoology.

The $17.6 million project, originally approved by regents in late 2008, includes renovating about 46,000 square feet at the Varsity Drive building. The site previously was a warehouse for University Stores – the zoology collection will take up only a portion of the space, and will be self-contained with its own climate controls and fire protection system. The same building also houses the UM Herbarium, which has its own climate control needs.

Hausman told regents that the renovations will include a new road for better fire-service access to the collection, as well as areas inside the building for students and faculty to conduct research. The project also includes renovations to about 6,800 square feet in the Ruthven building, said Tim Slottow, UM’s chief financial officer. The project is expected to be finished in the summer of 2011.

The board approved the schematic design for this project. They also voted to approve several other projects, totaling an additional $13.8 million:

• $6.3 million to renovate 61,000 gross square feet on seven floors of the Wolverine Tower office building, located at South State and Eisenhower. The project will be completed in the fall of 2011. Slottow warned regents that this renovation only covered a portion of the 225,000-square-foot, 11-story building – he said he’d likely be back in the future for additional work. About 700 university employees from five different units – including the department that Slottow supervises – work in the building.
• $3.8 million for the 2010 information technology maintenance and replacement program. The project would include upgrading the data network between campus buildings as well as upgrades to the campus wireless network.
• $2.2 million to renovate four existing labs for the Ecology and Evolutionary Biology Department and the Molecular, Cellular, and Developmental Biology Department, to be completed in the fall of 2010. The renovations would cover the first four floors of the Kraus building on North University Avenue, near the intersection with Thayer Street.
• $1.5 million to replace a steam absorption chiller in the chemistry building, also located on North University Avenue. The university estimates the new equipment will result in $300,000 in utility savings each year.

How Is a Jazz Band a Conflict of Interest?

State law requires that regents vote on potential conflict-of-interest disclosures related to university staff, faculty or students. Often, the items involve technology licensing agreements or leases. For example, UM athletic director Bill Martin is also owner of First Martin Corp., which owns office space that the university leases. These leases are required to come before the board for a vote.

In general, conflict-of-interest items are approved without comment, though on occasion regents will recuse themselves from voting if they have a connection with one of the parties involved. At their Nov. 19 meeting, however, regent Andrea Fischer Newman raised a question about one of the items. She wasn’t concerned about the conflict of interest – rather, she wanted to know why this particular item required regental approval. The item was a $900 payment to Jazz Pie Music.

Jazz Pie Music is a band that includes the musicians Roderick McDonald, Christopher Smith and James Dapogny – McDonald and Smith are also UM employees, and Dapogny is a professor emeritus. The UM Law School’s Office of Development and Alumni Relations wants to hire the band for a reunion tailgate party it’s holding. When a university employee stands to benefit from a contract that the university executes with an outside entity, these kinds of disclosures and approvals are required.

There is no dollar threshold that triggers the need for a conflict-of-interest vote, Tim Slottow, UM’s chief financial officer, told Newman. It’s the law. Regent Kathy White, an attorney and law professor at Wayne State University, agreed. “I just don’t think we have any discretion in this matter.”

The Jazz Pie Music item was unanimously approved, along with three additional conflict-of-interest disclosures. Regent Andy Richner recused himself from one of those items – a tech transfer agreement between the university and TruEnamel LLC, which is owned by Brian Clarkson, a UM professor of dentistry.

Public Commentary

Douglas Smith was the only person to speak to regents during the time set aside for public commentary. He had previously spoken at the regents’ Sept 17, 2009 meeting concerning an incident with the UM Department of Public Safety. This month his comments also were related to DPS. From the Sept. 17 Chronicle coverage of his remarks:

Douglas Smith, a UM alumnus, spoke about the treatment of Dr. Andrei Borisov, whom Smith described as a whistleblower who was beaten by campus police then arrested for assaulting police officers. Smith said Borisov had been a research assistant professor in the university’s pediatrics department when a tenured faculty member took control of – and credit for – some of his work. Smith described a chain of events that he said led to several UM administrators conspiring to fire Borisov and prevent him from getting other jobs at the university. At one point, DPS officers escorted Borisov to his office to retrieve his personal property, Smith said, and ended up arguing with him about the contents of a briefcase, ultimately pushing him against a wall and charging him with trespassing. Smith said that Borisov discussed this incident with Stephen Hipkiss, chair of the DPS Oversight Committee, but that Hipkiss discouraged Borisov from filing a complaint against the officers. This matter should be investigated, Smith said.

At the Nov. 19 meeting, Smith told regents that he was concerned about how the trespass warning is being used by campus police, particularly in how it’s being applied to students and faculty. The process, if abused, “can ruin careers and crush dreams,” he said. He asked regents to have the DPS oversight committee review the policies regarding the use of the trespass warning.

Following his comments, regent Denise Ilitch asked Smith how frequently trespass warnings are issued. Smith says that when it occurs, it’s devastating. The university needs to balance the individual’s rights with the safety concerns of the community. He said you don’t need to file a written complaint against a person – you just have to contact DPS. There’s no process by which to determine whether an individual is truly dangerous, he said.

Present: Mary Sue Coleman (ex officio), Julia Darlow (via phone), Larry Deitch, Denise Ilitch, Olivia Maynard, Andrea Fischer Newman, Andy Richner, Martin Taylor, Kathy White

Next board meeting: Thursday, Dec. 17 at 3 p.m. in the Fleming Administration Building, 503 Thompson St., Ann Arbor. [confirm date]

University of Michigan president Mary Sue Coleman chaired the Nov. 19 meeting of the UM Board of Regents despite the yellow cast on her left arm. In the foreground is regent Andrea Fischer Newman. (Photo by the writer.)

The Vandenberg Room at the Michigan League was packed for a state legislative hearing on funding for higher education.

The three presidents of institutions in Michigan’s University Research Corridor – backed by students and economic development leaders from each region – testified at a state Senate Higher Education Subcommittee hearing on Friday held in Ann Arbor, making a plea for additional state funding. But while legislators at the hearing acknowledged the importance of higher education, they also gave a bleak outlook for Michigan’s financial health, with one senator describing state revenues as “almost in a freefall.”

State Sen. Jim Barcia, a Democrat from Bay City, told the 50 or so people gathered at the Michigan League that a revenue estimate released earlier in the day was “worse news than anticipated.” The Senate Fiscal Agency estimated that revenues could be $2.1 billion lower than projected for the coming fiscal year, which begins Oct. 1. Even in the current fiscal year, the state faces a $1.3 billion deficit that has prompted another round of cuts. Despite that, Barcia said the students who testified on Friday – including a recent University of Michigan graduate who has launched a new company – gave him reason for optimism.

Following comments from legislators, including Ann Arbor’s state Sen. Liz Brater, the hearing began with testimony from UM president Mary Sue Coleman. [.pdf file of Coleman's opening and closing remarks] Mentioning initiatives at Michigan State University and Wayne State University (the two other institutions in the University Research Corridor), Coleman then described UM’s purchase of the former Pfizer research campus as an example of the university’s contribution to the local economy. The site will eventually include an incubator for the private sector and is expected to add nearly 3,000 jobs to the area over the next 10 years, she said.

State Sen. Liz Brater (D-Ann Arbor) is a member of the Senate Higher Education Subcommittee and attended Friday's hearing in Ann Arbor.

“As with many of our respective projects, not only will we broaden our contributions as a research university, we also will stimulate new business in region,” Coleman said. “We believe the two objectives go hand-in-hand.”

Testimony from MSU president Lou Anna Simon and Jay Noren, president of Wayne State, highlighted contributions that their institutions make to the state’s economy as well. Those remarks were followed by testimony from leaders of economic development agencies that work closely with the three universities: David Hollister, president of Prima Civitas in Lansing; Randal Charlton, executive director of TechTown in Detroit; and Mike Finney, CEO of Ann Arbor SPARK.

Finney recalled the history of his organization, which was founded in part with the backing of UM. He read an excerpt from an April 16 Detroit Free Press article, which described Ann Arbor as a hub for startups and venture capital, and which reported that UM and SPARK were the two most-cited reasons that entrepreneurs located in Ann Arbor.

Finney’s comments echoed remarks he’d made at a May 11 Partnership for an Innovation Economy forum hosted by UM. He said that the relationship between UM and SPARK is critical in four ways: 1) providing access to talent, 2) helping create and bolster entrepreneurial ventures, 3) helping work with existing businesses, and 4) assisting with business transformation, specifically in transitioning from an economy dominated by auto manufacturing to one that’s fostering emerging industries. He concluded by saying that you couldn’t separate the economic development agencies from the universities they work with and get the same same results. He urged legislators to support funding for higher education, and in particular for the University Research Corridor institutions.

Jeff LeBrun, a recent UM graduate, co-founded a company that's developing clean energy technology.

Three students, one from each of the URC universities, testified as well. Jeff LeBrun recently graduated from UM’s Erb Institute with an MBA and graduate degree from the School of Natural Resources & Environment. He described how a company he co-founded, Algal Scientific, recently won the Clean Energy Prize, a $65,000 award from DTE Energy to encourage the commercialization of clean energy technologies. Their company is developing treatments for municipal and industrial wastewater, with a byproduct that can be used for biofuels.

LeBrun said he didn’t come to UM intending to be an entrepreneur, but during his studies he encountered the kinds of resources and training that led him in that direction. He said he has his eye on the incubator site that UM plans to start in the former Pfizer campus. “That’d be a great place to set up shop,” he said.

The five senators at the hearing had questions and comments after the testimony. Sen. Bill Hardiman, a Republican from Kentwood, cited state revenues that were disappearing “almost in a freefall” and asked if online education was being considered as a way to curb capital outlays. UM’s Coleman told him that online education was not inexpensive, and that while all the universities have worked on ways to economize – and “gladly” take on economic development efforts – “none of this comes without cost,” she said. MSU’s Simon noted that Michigan is falling behind in building research lab space, and that’s an important capital outlay for the state.

In her remarks, Brater said that every dollar invested in higher education generates $25 in spinoff economic benefits. Noting that her spouse is a faculty member of UM’s English and theater departments, she said that investment in the arts and humanities also relates to economic development. She mentioned that John Warner, a pioneer in green chemistry, had recently spoken at the Ecology Center’s annual meeting, where he’d criticized science education for not teaching about environmental impact. She asked what the universities were doing in that regard.

UM president Mary Sue Coleman, center, listens to testimony given by university students at Friday's hearing. She is flanked by MSU president Lou Anna Simon and Wayne State president Jay Noren.

Coleman said that one of the Erb Institute’s principles was to look at the environmental impact of a product or building’s life cycle. That issue is coming to the fore across all disciplines, she said. MSU’s Simon quipped, “I’m always for green anything.”

Brater also asked for an update on how the URC is leveraging federal research dollars. Coleman said they’d be releasing their third annual report with details on that topic at the Mackinac Policy Conference later this month. (Coleman will be on a panel there, along with former UM regent David Brandon of Domino’s Pizza, titled “Changing the Environment in Michigan to Encourage Growth through Innovation.”)

Sen. Glenn Anderson, a Democrat from Westland, asked how universities were preparing for the inevitable likelihood of declining state support, at least over the next several years. He said that once federal stimulus funds coming into the state were used, Michigan would be in an even worse situation financially.

Simon said that working collectively, as the URC institutions are doing, is one strategy. But she told legislators they need to ensure that the value of a degree appreciates over time, and that higher education in the state is a magnet. “If we can’t do that, the numbers will only get worse,” she said. The universities are going through internal budget reductions, while maintaining a strong commitment to financial aid. Quality of and access to education are key, she said, as is research to drive the future of Michigan.

Coleman said there’s a correlation between the education of the population and the prosperity of the state. She told lawmakers that the state government needs to grapple to find a revenue model for the 21st century, and that she didn’t envy their jobs. She said the universities must have both quality and access, and noted that “it costs a lot to do what we do.”

Our coverage ended as the hearing took a break. Later in the day, the committee was to hear testimony from UM-Dearborn executives and Mike Boulus, executive director of the Presidents Council, a group representing the state’s 15 public universities.