UM Regents Extend President’s Contract

University of Michigan board of regents meeting (Nov. 18, 2010): UM president Mary Sue Coleman got a vote of confidence this month, as regents voted unanimously to extend her employment agreement by two years, and added an extra $100,000 annually in deferred compensation payments.

During their monthly meeting, held on the UM Flint campus, regents also approved a request to the state for a 2.6% increase in appropriations to the university for fiscal year 2012 – though regent Andrea Fischer Newman expressed concern that the request was too low. For the current fiscal year, state appropriations of $316 million represented a 2.8% decrease over fiscal 2010.

Regents got an annual report from the head of the faculty governance group, who proposed an idea to increase the ranks of faculty through a program that would tap retirees. The board also approved several facilities projects, including the purchase of three residential properties in Ann Arbor – two on South Division, next to the Institute for Social Research, and one on Wall Street, near the UM Kellogg Eye Center.

A request to approve a fireworks display at Michigan Stadium during the Dec. 11 “Big Chill at the Big House” generated some discussion, including a query from regent Libby Maynard about whether it would be dark enough to appreciate the display. The sold-out matchup between Michigan and Michigan State, expected to set an attendance record for outdoor hockey games, begins at 3 p.m.

Maynard’s question prompted regent Kathy White to quip: “Unfortunately, it’ll be December in Michigan – it’ll be dark.”

President’s Opening Remarks

As she typically does, UM president Mary Sue Coleman began the meeting with a roundup of remarks related to various university accomplishments. She congratulated the UM Flint campus for being the fastest-growing public university in Michigan, in terms of enrollment, for the fourth consecutive year. She commended Flint for being a powerful magnet to attract students.

Coleman also congratulated regents Andrew Richner and Andrea Fischer Newman for winning re-election on Nov. 2. The two Republicans were elected to their second and third terms, respectively. Each term lasts eight years.

Also related to the Nov. 2 election, Coleman pointed out that Michigan elected a UM graduate for the first time in more than 60 years. Rick Snyder actually holds three degrees from UM, she noted, and is very knowledgeable about the university. Coleman said she’s worked with Snyder to expand the role of the university in the state’s economic development, and has already had several conversations with him since his election.

Coleman also alerted regents that the students she’d mentioned in her Oct. 27 state-of-the-university speech – students who built the Radio Aurora Explorer satellite to collect data on space weather – would be launching it from Kodiak, Alaska on Friday evening. She urged everyone to watch the launch live on UM’s website.

Finally, Coleman congratulated Nancy Asin, assistant secretary of the university, for her 30 years of service, including 24 years working with the board of regents. “She has been patient and wonderful and we really appreciate her service,” Coleman said. Asin received a round of applause.

Contract Extension for Coleman

Immediately following Coleman’s remarks, board chair Julia Darlow moved to extend Coleman’s contract for an additional two years, through July 31, 2014. [.pdf file of Coleman's original employment contract] [.pdf file of Coleman's contract extension]

Darlow noted that Coleman is serving her ninth year, and that her current five-year contract – signed in 2006 – ends in July 2012. She praised Coleman’s service, noting that though other institutions have failed during this “unsettling and uncertain time,” Coleman has kept the university firmly focused on its mission, resulting in outstanding accomplishments.

Over the past few months, the regents have discussed with Coleman the possibility of extending her contract, Darlow said – those discussions resulted in this current proposal. The motion amended Coleman’s existing employment agreement, and includes adding six goals for the next four years:

1. To strengthen the university’s core academic mission and enhance its worldwide stature as a center for excellence in teaching and scholarship.
2. To develop financial strategies – including tuition, state support, research grants and contracts, philanthropy and other revenue sources – to preserve and enhance the university’s academic excellence, accessibility and affordability.
3. To enhance the university’s mission and its campus life with improved facilities across campus, including student housing.
4. To maximize the university’s reputation for quality and innovation in the global market for higher education.
5. To develop plans for a new capital campaign.
6. To strengthen the position and preserve the excellence of the university’s health care system.

In addition, the extension includes a provision to work on developing internal candidates for leadership within the university, including the presidency. Darlow said the intent is not to supplant national searches, but to enrich the university’s leadership pool.

The contract amendment does not alter her salary and benefits, which will be reviewed annually, but it does add a supplemental deferred compensation payment of $100,000 annually for this year as well as the following three years. [At their October meeting, regents approved a 3% salary increase for Coleman, bringing her salary to $570,105. In addition, her total compensation package includes $75,000 in deferred compensation, a $100,000 retention bonus, $24,500 in retirement pay, and an additional $30,850 supplemental retirement payment.]

The additional deferred compensation, which won’t be received until Coleman ends her service as president, is intended to build a substantial contribution to Coleman’s retirement, Darlow said, adding “certainly, she has earned it.”

Outcome: Regents voted unanimously to extend Mary Sue Coleman’s employment agreement through July 2014, adding a supplemental deferred compensation payment of $100,000 annually for this year as well as the following three years.

After the vote, Coleman received applause from regents and a standing ovation from her executive staff. Coleman said she was excited by the vote of confidence, and that she couldn’t imagine working with a better group of people. Directing her remarks to Kyle Swanson – a senior news editor at the Michigan Daily, who covers UM and who attended Thursday’s meeting – she noted that he had inquired about her plans recently, and she said she was sorry she couldn’t say anything about it at the time. Coleman said she’d had a lot of fun over the past eight years, and that she looked forward to the coming years.

Annual Operating Request to the State

Regents approved the university’s annual operating request to the state for fiscal year 2012 – this year UM’s Ann Arbor campus is asking for a 2.6% increase in state appropriations. [The Flint and Dearborn campuses make separate requests.] Provost Phil Hanlon told regents that they were asking for an increase in part to cover inflationary costs. The increase would also help replace scholarship funding to students in the wake of the state’s decision to discontinue the Michigan Promise scholarship, as well as the need for other student financial aid. [.pdf of request letter]

In October, UM-Ann Arbor received a $316 million state appropriation for the current 2011 fiscal year – a 2.8% drop from last year’s funding.

Before the vote, regent Andrea Fischer Newman asked Hanlon why they weren’t asking for more. The inflationary increase doesn’t account for tuition increases, she said. She felt the request was too low, and didn’t feel that they’d taken the opportunity to lay out their case.

Hanlon responded that they had carefully weighed the state’s economic situation in making this request. Cynthia Wilbanks, UM’s vice president for government relations, added that it was a balancing act, weighing the university’s needs with what’s happening in the state. Last year, she noted, they’d been told by legislators not to make a request at all, because it was a lean year – they did anyway, she said, taking the opportunity to lay out their benefits to the state.

As a new governor, Rick Snyder will have an additional 30 days to present his budget, Wilbanks noted – that will likely happen in early March. In advance of that, this request is intended to describe the university’s goals and aspirations. She acknowledged that it doesn’t cover everything they might have addressed, but in the past she’s heard legislators comment that the university needs to take into account the state’s economic realities. That’s what they tried to do, she said.

Newman again stated her concern that the university didn’t “put enough on the table.” She said she didn’t know how seriously this document was taken in Lansing, but it does help to tell the university’s story.

Hanlon said he’d be open to dialogue with regents in future years to prepare the request.

Andrew Richner pointed out that they could amend their request as the situation warranted – it’s not a binding document. If the state economy or the university’s situation changes, he felt they had some flexibility to change the request. Wilbanks said they’d look for those opportunities.

Outcome: Regents unanimously approved the university’s annual operating request to the state of Michigan, which asked for a 2.6% increase in appropriations for FY 2012.

SACUA Annual Report

Ed Rothman, UM professor of statistics, is also chair of the Senate Advisory Committee on University Affairs (SACUA), the faculty governance body. In making SACUA’s annual report to the board, Rothman began by noting that Coleman has the support of all the faculty. He then outlined several issues that the group is working on. They include developing a website that will allow SACUA to interact better with faculty, and efforts to be more proactive in dealing with issues affecting faculty members. One example is the issue of trespass: He said they were working with Sue Scarnecchia, UM’s vice president and general counsel, to develop an automated review process whenever a trespass order is issued. They want to ensure a safe campus, while also reviewing the circumstances associated with trespass orders, so that they can respond appropriately, if necessary.

[By way of background, the issue of trespass orders issued against faculty members has come up during public commentary at previous regents' meetings, with complaints about the circumstances under which such orders are implemented. By way of additional background – involving trespass orders about non-faculty – the undergraduate chapter of the ACLU recently sent a letter to the UM Department of Public Safety, expressing concerns with the trespass order that was filed against Andrew Shirvell. Shirvell was a state assistant attorney general, who was eventually fired in connection with a blog he created about the openly gay president of the Michigan Student Assembly, Chris Armstrong. From the letter: "Regardless of how offensive or mean-spirited Shirvell’s statements may be, DPS must not ban a person from campus solely for his speech."]

Rothman noted that it’s a difficult time for the economy. He said he’d been a consultant at GM’s Buick City, an auto manufacturing plant in Flint, which not long ago employed some 13,000 workers. Now, the facility has “a lot of green space,” he said. [The plant ended production on Nov. 18, the day of the regents' meeting in Flint.] But even with all the bleak financial news, the university continues to attract students and research dollars, he noted, serving as a shining star that many hope will lead the state to better times.

Rothman then presented a chart showing the change in faculty, students and research spending from 1999 to 2009. Over that 10-year period, the number of faculty increased from 2,698 to 2,880 – not a large increase, he observed. Meanwhile, student enrollment grew from 37,828 to 41,674 and research dollars coming to the university have doubled – from $500,000 $500 million in 1999 to just over $1 billion in 2009. Faculty have been turning the crank and getting things done, he said, and it’s time to think about increasing their ranks. He noted that the administration has made a commitment to adding 150 faculty positions. But they need to find ways to add additional faculty without an appreciable increase in costs, he said.

About 45% of faculty are approaching retirement age, Rothman said. Surveys have found that a factor affecting their decision to retire is their desire to remain engaged with the university in some way. Rothman proposed formulating a plan of lifelong engagement for faculty who want to continue working at the university – adding a third option to their decision to either retire, or not. He gave the example of Ralph Williams, a popular English professor who recently retired – there are many faculty like Williams who could be retained on a limited basis, either teaching or doing research with scaled-back compensation. Rothman said his hope is that they could find 300 faculty members who’d be interested in this kind of arrangement. He acknowledged that the plan isn’t completely fleshed out, but expressed hope that they could work with the administration to develop it more fully. “The time to move forward is now,” he said.

Rothman concluded his remarks with a line that elicited laughs from regents and UM executives: “What about the state of the faculty? We’re a happy group. Not all – but you’ve met those.”

Financial Items: Audit, Facilities

Tim Slottow, UM’s chief financial officer, noted that the athletic department had received a clean audit for the fiscal year ended June 30, 2010. The regents received a supplemental report related to the audit, which did not require a vote. [.pdf file of PricewaterhouseCoopers supplement to the athletic department audit]

Regents voted on five items related to facilities – all were approved unanimously without discussion:

• A $2 million project to renovate the second floor and basement of the Modern Languages Building (MLB) at 812 E. Washington. The MLB houses classrooms and offices for nine departments in the College of Literature, Science, and the Arts, as well as studios for the Taubman College of Architecture and Urban Planning. It formerly housed the Language Resource Center, which recently moved to the new North Quad. That opened up space on the second floor of MLB – the college wants to relocate its Instructional Support Services Media Center from leased space elsewhere, to vacated space on the second floor. In addition, the LSA Department of Screen Arts and Cultures Film Editing group will move from the Argus Building to vacant space in the MLB’s basement level. The project will be completed by the summer of 2011.
• A $1.4 million project to renovate space in the School of Education building, creating the Brandon Professional Resource Center and Archive. The renovation, to be completed by the fall of 2011, will cover about 4,800 square feet on the second floor, creating space to house digital records of professional practice and study resources. It will also include a student study and collaboration areas. The project will be funded by a portion of the $4 million that David and Jan Brandon donated to the university as part of the Michigan Difference capital campaign. Brandon, a former regent who now serves as UM athletic director, received a bachelor’s degree in education from the university.
• Approval to buy two properties on South Division north of Jefferson, described as being strategically located next to UM’s Institute for Social Research: $919,425 for 439 S. Division St., which now includes a 3,210-square-foot apartment building; and $805,575 for property at 443 S. Division, where a 6,048-square-foot apartment building is now located. The closing date on these purchases is set for Dec. 17. A memo from Slottow related to these purchases states that the buildings have no known historical significance.
• Approval to buy a property at 963 Wall St., where a vacant, 1,056-square-foot single-family house is located. The purchase price is $350,000, with a tentative closing date of Dec. 1. The property, near Broadway, is adjacent to university property on Wall Street and consistent with their needs, based on the master plan of that area, Slottow told the regents. UM’s Kellogg Eye Center is located at 1000 Wall Street.

In addition, regents authorized seven items that required disclosure under the state’s Conflict of Interest statute. The 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.

This month, the disclosures involved deals with the following entities: Optiprise Inc., the Institute for Social and Environmental Research, Hammzoco LLC, HistoSonics LLC, Vega Therapeutics Inc., Biomatrix Photonics Inc. An additional item reassigned international patent rights from UM to Drs. James Geiger and Shorya Awtar, for the invention of a laparoscopic surgical device. UM would get 15% of any payments received by Geiger and Awtar for licensing these patents.

There was no discussion on any of these items.

Fireworks at Michigan Stadium

Regents unanimously approved a request for a “close proximity” fireworks display at the Dec. 11 hockey game between UM and Michigan State, billed as the “Big Chill at the Big House.”

Fireworks would be displayed during player introductions and for about five seconds following each UM goal, according to a cover memo accompanying the request. A fireworks show lasting about 10 minutes and choreographed to music would close out the game. Fireworks during the game would be set from the field, while the pre- and post-game shows would be done from the rooftops of the east and west towers of the stadium.

ACE Pyro, a company based in Manchester, Mich., would produce the fireworks show.

Libby Maynard, noting that the game begins at 3 p.m., wondered whether it would be dark enough for fireworks to be effective. Kathy White quipped, “Unfortunately, it’ll be December in Michigan – it’ll be dark.”

Andrea Fischer Newman asked whether future fireworks requests would need the regents’ approval. Sue Scarnecchia, UM’s vice president and general counsel, replied that if they need to make a second request, they’ll seek a blanket approval for all future requests.

Newman then wryly observed that this item had generated more questions than any other item they’d voted on.

Public Commentary

Two people had signed up for public commentary, but neither of them showed up to speak.

Present: Mary Sue Coleman (ex officio), Julia Darlow, Larry Deitch, Denise Ilitch, Olivia (Libby) Maynard, Andrea Fischer Newman, Andrew Richner. Regents Martin Taylor and Kathy White participated in a portion of the meeting via conference call.

Next board meeting: Thursday, Dec. 16, 2010 at 3 p.m. at the Fleming Administration Building, 503 Thompson St., Ann Arbor. [confirm date]