A year ago, tuition increased 6.7% for in-state undergraduates at the Ann Arbor campus, and 4.9% for out-of-state undergraduates. At the June 2011 regents meeting, Ilitch and Deitch had cast dissenting votes for those increases, too.

On Thursday, Ilitch spoke against the FY 2013 tuition increases, describing the burden on students as “brutal.” Higher education is increasingly becoming out of range for Michigan residents, and that’s unacceptable, she said. Regent Julia Darlow responded by saying that all the regents are concerned about affordability and accessibility of higher education for low- and middle-income students. But she noted that the net price for a UM education – including all costs, not just tuition – is actually lower now for students from middle-income families than it was in 2004.

The general fund budget for the Ann Arbor campus also includes $144.8 million in student financial aid, an increase of $10.5 million compared to last year. In a media briefing prior to the June 21 meeting, provost Phil Hanlon said this marks the fourth year in a row that a typical student with financial need won’t see an increase in the cost of attending UM, due to increases in financial aid. This year, the financial aid increase reflects additional grants, not loans.

The FY 2013 budget reflects a $4.3 million increase in UM’s state appropriation to $273.1 million – an increase of 1.6% compared to FY 2012. Last year, state funding to UM had been cut 15%. Hanlon noted that while the university is appreciative of this year’s increase, in the past 11 years there has been a drop of $178 million in state aid to UM, adjusted for inflation. He encouraged state legislators to continue their investment in higher education.

Hanlon also highlighted the university’s cost-cutting efforts, pointing to reductions of $235 million in general fund expenses since fiscal 2004. Looking ahead, UM has a five-year goal of cutting another $120 million, he said, which includes more than $30 million of cuts in fiscal 2013. The savings will come in part from consolidating IT operations, cutting about 70 staff positions through a combination of attrition and layoffs, and using the university’s buying clout to get more favorable pricing from vendors.

On the expense side, the budget includes what Hanlon characterized as modest salary increases of 2% for staff and 3% for faculty. He noted that these are not across-the-board increases, but will be made based on merit.

Tuition and fees make up a large portion of the general fund operating budget. For the Ann Arbor campus, a budget of $1.649 billion in FY 2013, which begins July 1, marks a 3.9% increase from FY 2012. Of that $1.649 billion, tuition and fees account for $1.156 billion in revenues. The budget reflects a 6.1% increase in tuition revenue – an increase higher than the tuition hike itself because of changes in enrollment.

Also during the June 21 meeting, regents approved student fees that are unchanged from fiscal 2012: $7.19 per student per term to fund the Michigan Student Assembly; $1.50 per student per term to fund school/college governments; and $8.50 per student per term for Student Legal Services. A $174.40 fee per student per term was approved for the University Health Service, up 1.4% from FY 2012.

Multiple votes were taken on budget-related items, including the overall budget, tuition, fees, housing rates, as well as budgets and tuition rates for the Dearborn and Flint campuses. UM president Mary Sue Coleman chaired the meeting, and there was considerable confusion at the board table about the order of the votes. At points it also was unclear – at least to the media and general public observing the meeting – who cast the dissenting votes. The outcome of the votes was later clarified by Nancy Asin, assistant secretary of the university.

This brief was filed from the Michigan Union Ballroom on the Ann Arbor campus, where regents held their June meeting.

University officials emphasized the context for these increases: The FY 2012 budget reflects a $47.5 million cut in UM’s state appropriation to $268.8 million – a decline of 15% compared to FY 2011. The budget also includes $9.2 million in student need-based financial aid.

Tuition makes up a large portion of the general fund operating budget. For the Ann Arbor campus, a budget of $1.58 billion in FY 2012, which begins July 1, marks a 2.2% increase from FY 2011.

Regents also approved the FY 2012 budget for the UM Hospitals and Health Centers – revenues are projected at $2.169 billion, with a $23.5 million operating loss. The loss is due in large part to $89.4 million in costs related to the opening of the new C.S. Mott Children’s and Von Voigtlander Women’s Hospitals.

UM athletic director Dave Brandon gave a briefing on the athletic department budget, though it doesn’t require regental approval. Projected revenues of $121 million include $45.5 million from ticket sales, while the budgeted $109.8 million in expenses includes a $2.2 million debt service payment for Crisler Arena projects.

This brief was filed from the boardroom of the Fleming administration building, on UM’s Ann Arbor campus. A more detailed report will follow: [link]

University of Michigan provost Teresa Sullivan, left, and vice provost Phil Hanlon brief the media about tuition rates immediately prior to the regents meeting on June 17. Hanlon will become provost when Sullivan leaves at the end of the month for her new post as University of Virginia president. (Photos by the writer.)

This year, with two regents dissenting, a tuition increase of 1.5% for in-state undergraduates was approved for the Ann Arbor campus. UM executives noted that it’s the lowest rate increase in 26 years – but if their projections for state appropriations prove too optimistic, they cautioned that they might need to return to request raising tuition later in the fiscal year.

University officials say they’re buffering the tuition increase by substantially adding to the amount of financial aid available to students – $126 million, up $8.3 million from the current year. They’re also launching a new “economic hardship” program, adding $500 in financial aid per year for up to four years for qualified students.

Tuition makes up a large portion of the general fund operating budget. For the Ann Arbor campus, a budget of $1.55 billion in FY 2011, which begins July 1, marks a 6.75% increase from FY 2010.

Regents also approved the FY2011 budget for the UM Hospitals and Health Centers – revenues are projected to top $2 billion for the first time during this year, with a $66 million operating surplus.

And UM athletic director Dave Brandon gave a briefing on the athletic department budget, though it doesn’t require regental approval. Projected revenues of $105 million includes $38.19 million from ticket sales, while the budgeted $100.3 million in expenses includes a $9.22 million debt service payment for Michigan Stadium renovations.

In addition to budgets, regents approved several construction projects, including a $56 million renovation of Alice Lloyd Hall and a $1.6 million repair of Burton Memorial Tower, which will close the landmark site – and silence its carillon – for about a year, starting in August.

Budget Overview

Tim Slottow, UM’s chief financial officer, began the budget presentations with an overview of the university’s financial status. The university has $13.8 billion in assets – both financial and in its physical plant – and $4.5 billion in liabilities, resulting in net assets of $9.3 billion.

In discussing UM’s liabilities, Slottow cited several threats to the balance sheet. “People often ask what keeps a CFO up at night,” he joked. “This is the list.” Future liabilities include deferred maintenance of buildings, retirement health benefits and increasing future debt liabilities, he said.

Other threats include unprecedented market volatility, which will continue, he said, as will volatility in energy prices, which have swing “wildly” up and down. But the one thing that never seems to go down is health care costs, he said – this year, those costs for UM have increased 2.8%, compared to a national average of roughly 10%.

He discussed efforts to endow the general fund – in FY 2010, the general fund was supplemented by $210 million from the endowment. That money is used primarily for scholarships, professorships and academic programs, Slottow said. Strategically, the move to endow more general fund activities began five years ago, and has included gifts to endow building maintenance and operations for facilities like the Stamps Auditorium and Kelsey Museum. The endowment for the general fund today stands at $213 million, he said, yielding annual revenue of $12 million. The university’s total endowment is an estimated $6.7 billion.

Slottow reviewed the physical plant of the Ann Arbor campus, as a reminder of the infrastructure that the university supports. That includes:

• 25 miles of roads and 4.5 million square feet of sidewalks, steps, and plazas
• 7 miles of utility tunnels and 150 miles of fiber optic cable
• 280 acres of parking lots/decks
• 32 million gross square feet of buildings and core infrastructure
• 601 buildings, 1,807 classrooms and instructional labs, 1,113 study rooms, and 6,125 research labs/rooms
• 540 elevators and escalators
• 14,000 trees and 12 million square feet of turf
• 100,000 network desktop computers

For all three campuses, the university employs 28,809 regular staff and 6,967 instructional, clinical and research faculty. Slottow pointed out that about 40% of employees will be eligible for retirement within the next few years, as will more than 50% of UM’s managers. They need to start preparing for that with leadership training, knowledge transfer and career development for a smooth transition, he said.

As of March 31, 2010, the university’s debt totaled $1.58 billion. Slottow said a prudent debt management policy has helped the university earn the highest possible credit rating from Standard & Poor’s – a triple-A. And soon, he added, UM’s provost will be the only living person to have worked as a senior executive for three universities with that rating: Texas, Michigan and Virginia. Provost Teresa Sullivan, who previously was executive vice chancellor for academic affairs at the University of Texas, will be leaving at the end of June to become president at the University of Virginia.

Tuition Rates, Financial Aid: Ann Arbor Campus

Provost Teresa Sullivan presented the FY 2011 general fund operating budget for the Ann Arbor campus, which included tuition rates and fees. [Regents had approved housing rates at their May 20 meeting – a 3% average increase in room and board.]

For the fiscal year beginning July 1, total general fund operating revenues are projected at $1.55 billion – up 6.75% from the current year. Sullivan cited several reasons for the revenue increase, including higher undergraduate enrollment and increased research funding. [Stephen Forrest, UM's vice president for research, had briefed regents on the latter topic at their Jan. 21, 2010 meeting.]

Julia Darlow was elected chair of the board of regents at their June 17 meeting, succeeding Andy Richner. She's holding an iPad, which regents are starting to use as part of an effort to reduce paper documentation.

The budget assumes the university will receive $315.1 million in state appropriations. Given the state’s financial crisis, “there is the possibility that this assumption is too optimistic,” Sullivan said. She noted that since 1960, state support as a percentage of UM’s general fund has dropped from 78% to 20%. Conversely, tuition and fees accounted for only 20% of UM’s general fund in 1960 – today, it accounts for 65% of general fund revenues.

Sullivan also outlined the university’s cost containment efforts, noting that the budget assumes $39 million in cuts. Those cuts are coming from greater sharing of benefits costs with employees, the consolidation of information technology units, more efficient use of space, and reform of UM’s travel/hosting policy, she said.

Over the past seven years, Sullivan said the university has trimmed $159 million in recurring general fund expenditures – and more cuts are to come. There are five task forces looking at ways to find further budget savings, as well as exploring ways to increase revenues. And a committee that’s examining the costs of retiree health benefits will be presenting its report in the next few weeks.

Sullivan said these efforts also involve reallocating resources to fund academic initiatives – for example, the FY 2011 budget includes expanded funding for the popular undergraduate research opportunity program (UROP). The budget also includes funding for 50 additional faculty hires, above the previously targeted 100 positions that UM plans to add. The new hires are in response to increased undergraduate enrollment, she said, and will make smaller class sizes possible.

The university is increasing its centrally awarded financial aid to $126 million – $8.3 million more than the current year. That’s in addition to financial aid that’s available from individual schools and colleges, Sullivan said. She also pointed out that some families are eligible for a federal tax credit for tuition – as much as $2,500 for families earning up to $160,000 (in a two-income household) or up to $80,000 for a single-income household per year.

In addition, UM has launched the “economic hardship” program, which will provide an additional $500 in financial aid to in-state students with family income in the $60,000 to $100,000 range. The grant will be renewable for up to four years, and will cost the university about $3.6 million over that period.

All of this set the stage for the recommended tuition increase: 1.5% for in-state undergraduate students, and 3% for non-residents. First-year undergraduates would pay roughly $11,837 in tuition and fees, or $178 more than the current year. Non-residents would pay $36,001, or an additional $1,064 per year.

The 1.5% increase is the lowest since 1984, Sullivan noted. [Last year, regents approved a 5.6% increase, with regents Julia Darlow and Denise Ilitch dissenting.]

Tuition rates for both in-state and out-of-state graduate students will go up 2.8% –or $498 per year for in-state graduate students, $1,000 per year for out-of-state students. A tuition decrease of 15.4% for doctoral candidates will keep tuition revenue neutral, Sullivan said, due to a new continuous enrollment policy that requires students to pay tuition throughout their candidacy. [Regents were briefed on that policy change, which has been controversial among graduate students, at their December 2009 meeting.]

Tuition for UM and peer institutions. (Image links to larger file.)

Sullivan put the tuition increases in the context of peer institutions, noting that UM’s increase will bring its tuition rates to fourth among Big Ten universities. She also compared tuition for out-of-state students with a range of private universities, noting that UM tuition ranks near the bottom.

She ended her presentation with a caveat: If the state appropriations turn out to be lower than projected, the administration might return to regents to request a mid-year tuition increase.

Sullivan said the university takes very seriously its responsibility to students to keep tuition increases to a minimum. This budget does that, she said, while also ensuring continued quality.

Comments from the Regents

There was no discussion of the budget proposal, but several regents read prepared statements or made remarks before the vote was taken.

Julia Darlow, who voted against tuition increases last year, expressed support for the entire budget, but directed her remarks specifically toward the budget for the Ann Arbor campus. The limited tuition increase of 1.5%, coupled with significant increase in financial aid, show that the university is reaching out to hard-pressed Michigan families, she said – they know how difficult the economy is. This year, the university is also proposing a huge amount of help for middle-income families as well, she added, citing the new Economic Hardship Program that will add $500 in grant aid to qualifying students. Darlow said she did her own calculations, and was satisfied that, in fact, many families would be paying less in tuition than they do now. It’s not a resting point, she said, but it’s a step toward making the university accessible to all.

Regent Denise Ilitch talks with Tim Slottow, the university's CFO, prior to the start of the June 17 board of regents meeting. Ilitch voted against tuition and fee increases, as well as the overall budget for FY 2011.

Citing the challenges of Michigan’s economic crisis, Denise Ilitch argued against the tuition increase, saying that the university must solve its budget crisis from within, not on the backs of working-class families. She noted that she voted against increases last year, and would do the same this year. The university needs to be more innovative in finding ways to control escalating tuition. Michigan families are strapped, and with each dollar increase in tuition, the university limits the low- and middle-income students who can attend. The price of admission limits the economic diversity of the student body, she said. Ilitch acknowledged that the administration and regents have made progress, including more financial aid, a lower rate of tuition increase and an effort to cut costs – she noted that many executives at the table had foregone salary increases. “Yet we can do more, and we must lead by example.” It should not be the assumption that tuition is raised, she said, adding that the university saw new revenue this year that isn’t being passed on to students. Other universities have stepped up to control tuition, and UM should do the same. She said she’d keep prodding to make sure they did more.

Andrew Richner said he was happy and proud that his son will be one of the 6,000 or so freshman coming to UM in the fall. “I’ll be awarding him my own personal regents scholarship,” he joked. “I hope he appreciates it.” Richner said that’s why he has a very keen interest in this budget, and believes it balances the interests of affordability and accessibility, while preserving quality.

Libby Maynard said she would also be supporting the budget. She agreed with Darlow that it wasn’t an end game, but she felt that the budget preserved the quality of the institution.

Larry Deitch described the budget as restrained. He pointed out that regent Andrea Fischer Newman had been the first to advocate for endowing the general fund budget. He said he shared Ilitch’s passion for working families, and noted that no one worked harder than Darlow in coming up with a budget that balanced all of these interests. He planned to vote for the budget because they need to keep an eye on the long-term. Michigan is in the midst of an economic crisis, but they’ve lived through these before. And when the university celebrates its 200th anniversary in 2017, they’ll still be here, he said, leading the state and the world. They need to balance the needs of the people in the short term with the needs of the institution in the long term, Deitch said. The value of a quality education can’t be underestimated, he said, and unfortunately, it’s more expensive than they’d like it to be.

Votes on the Budget, Tuition, Fees

The board then voted on three budget-related items: 1) The university’s 2010-2011 revenue and expenditure operating budgets, which includes the general fund, designated fund, auxiliary activities and expendable restricted fund; 2) the Ann Arbor general fund operating budget; and 3) Ann Arbor tuition and fee rates.

The items passed, with dissent from Ilitch and Newman.

The budgets for the Flint and Dearborn campuses were presented separately. Both UM-Flint and UM-Dearborn had proposed a 3.9% increase in undergraduate tuition and fees, and a 2.9% increase in graduate tuition and fees.

Before the vote on these items, Newman commented that she would be supporting those increases, even though she had voted against lower tuition hikes for Ann Arbor. The reality is that the Flint and Dearborn campuses have less opportunity for bringing in new revenue, she said, compared to the Ann Arbor campus. The budgets from the three campuses aren’t intertwined, she noted, and Flint and Dearborn don’t get money from Ann Arbor. Newman said she was very aware of how important the general fund revenues were to Flint and Dearborn.

The tuition increases for UM-Flint and UM-Dearborn were approved, with dissent from Ilitch.

The board unanimously approved several fee assessments, which were not raised for the current year. They are, per student: 1) $7.19 to fund the Michigan Student Assembly; 2) $6 for Student Legal Services, 3) $1.50 for school/college student government organizations; and 4) $171.20 for the University Health Service.

UM Hospitals and Health Centers Budget

Doug Strong, CEO of the UM Hospitals and Health Centers, made a presentation on the FY 2010 budget, which ends June 30, as well as a budget plan for FY 2011. He began by noting that UM is the only health system in Michigan that serves people in every county throughout the state.

In looking ahead, he outlined some challenges and risks faced by the system, including a slow economic recovery and the impact of uncompensated care. There’s been a 17% increase in uncompensated care within the system in the past year, and a higher percentage of patients are being covered by government plans, including Medicare and Medicaid, which reimburse at lower rates than private insurers. Other risks include the consolidation in the industry – as other health care systems merge, that threatens UM’s referral base, he said. The state budget’s impact on the Medicare program is another concern, Strong said.

Completing the new C.S. Mott Children’s and Von Voigtlander Women’s Hospital is another challenge, Strong said, and they look forward to opening the facility in the fall of 2011. He also cited the uncertainties and impact of recently passed federal health care reform as a challenge the system will face.

Revenue for the current fiscal year is expected to reach $1.975 billion – next year, it’s expected to top $2 billion for the first time. This year’s operating surplus is expected to be $66 million, for an operating margin of 3.3%. Next year, the system is projecting a surplus of $83 million, for a 4% margin. The numbers for FY 2011 are premised on a nearly 6% increase in revenue, while keeping expenses down. Payroll for the coming year is projected to be $1.075 billion, up 4.6% from the current year.

Strong said the system remains financially strong, but needs to generate cash to invest in the future.

Vote on the UM Hospitals & Health Centers Budget

Regents had no questions or comments on the budget, which they unanimously approved.

Athletic Department Budget

The regents are not required to vote on the athletic department budget, but they heard a brief presentation by athletic director Dave Brandon. The department’s current cash flow is sufficient to sustain a healthy operating margin, he said, describing the budget as fairly conservative on the revenue side – they’re projecting $105 million in revenues for FY 2011, with $100.3 million in operating expenses. That leaves a projected operating surplus of $4.73 million. For the current fiscal year, which ends June 30, the department expects a $16.1 million operating surplus on $100.9 million in revenues.

Ticket sales account for the largest chunk of revenues – $38.19 million for FY 2011, including $32.5 million from football alone. Football revenues will take a hit because Michigan will have one fewer home football game this season, Brandon said, with only seven games played in Ann Arbor. This year, ticket sales brought in $38.26 million. An additional $11 million is anticipated from premium seating at Michigan Stadium.

The department expects to get $20.22 million in FY 2011 from Big Ten conference distributions, including $16.59 million from the TV broadcast of football and basketball games. This year, conference distributions accounted for $18.35 million in revenues.

Total debt – now standing at $175 million – has increased, Brandon said, primarily because of the Michigan Stadium construction project. The FY 2011 includes debt service payments of $9.226 million – $2.84 million in principal and $6.38 million in interest. The balance on the project as of June 2010 is $147.38 million. Two additional projects – Crisler Arena renovations and the adjacent Player Development Center – will increase debt to $215 million.

Endowment balances as of March 2010 stood at $56 million, Brandon said.

The FY 2011 budget includes a $1.5 million contingency line item, Brandon noted, which he said affords him the flexibility to restructure the department, as incoming athletic director. Brandon took over the job from Bill Martin earlier this year.

The athletic department budget also includes a $2 million transfer to the university’s need-based financial aid fund for non-athlete UM students. For the current year, the department transferred $1.6 million into that fund.

Construction, Facilities Projects

Regents approved several infrastructure-related projects, with no discussion. They include:

• $4.8 million for the annual Information and Technology Services maintenance and replacement program. Major project include replacing the networking infrastructure that supports the university’s data network, and upgrading the campus voicemail systems.
• A $56 million “deep” renovation of Alice Crocker Lloyd Hall, which is located on Observatory just south of Ann Street and houses about 560 students. Integrated Design Solutions LLC will design the project.
• A $1.6 million repair of Burton Memorial Tower, to be completed by the fall of 2011. The work will include repairs to the concrete and steel structure that supports the 55-bell, 12-ton carillon on the tower’s 10th floor – the carillon will be silenced during the project. In addition, workers will replace and waterproof the bell chamber floor, and replace the transmission system on bells affected by the structural work. This is only the second time that the carillon has been silenced in the tower’s 75-year history – the first time was in 2006, when a pair of peregrine falcons were spotted in the tower. Tim Slottow, UM’s CFO, told regents that workers would take care to accommodate the falcons. The engineering firm of Simpson Gumpertz & Heger Inc. will design the project, which also includes exterior work.
• A $1.7 million renovation of the molecular beam epitaxy (MBE) lab in the Carl A. Gerstacker Building at the College of Engineering. MBE is a procedure used in the design and manufacture of semiconductors, photovoltaics, and other devices.

In addition, regents acted on seven conflict-of-interest items. State law requires that regents vote on potential conflict-of-interest disclosures related to university staff, faculty or students. The items typically involve technology licensing agreements or leases, but cover other issues as well. This month’s batch, for example, included disclosure of plans by UM’s Office of New Student Programs to buy beverage break service during parent orientation sessions from Thayer Street Ventures. The item required a vote because Mark G. Pavach, a UM Health System employee, is a partner of Thayer Street Ventures.

There was no discussion of any of these items, which were all unanimously approved.

Additional Misc. Approvals

Regents unanimously approved several other items, without comment. They include:

• A new School of Nursing degree program – the doctoral of nursing practice.
• Renewal of the interlocal agreement for the Washtenaw Community Health Organization, a joint effort between UM and Washtenaw County. [The agreement has previously been approved by the Washtenaw County board of commissioners at their June 2 meeting.]
• The FY 2011 business plan for the Michigan Health Corp., a nonprofit entity that’s part of the UM Health System.
• Establishing a new regental committee on health affairs. Currently, there are two regental committees: the finance, audit and investment committee; and the personnel, compensation and governance committee.

Teresa Sullivan, outgoing UM provost.

Farewell to Teresa Sullivan

Earlier in the meeting, regents honored Teresa Sullivan, who was attending her last meeting as UM provost and executive vice president for academic affairs. In opening remarks, president Mary Sue Coleman noted that Sullivan is at the heart of the budgeting process, and expressed deep gratitude for her leadership, acumen and counsel. Coleman also highlighted Sullivan’s sense of humor, “which is more than required in her position.”

Regent Andy Richner, citing the budget challenges that the university has faced over the past few years and its ability to manage them well, joked that they are now “victims of our own success – we’ve lost our provost.” Sullivan has been appointed as president of the University of Virginia, starting Aug. 1. She’s leaving UM at the end of June.

Richner read a resolution in her honor, which highlighted her role in identifying funding for the hiring of 100 new tenure-track faculty, developing a systematic process of reviewing capital projects within the schools and colleges, and establishing task forces on cost reduction and revenue enhancements, among other achievements.

In thanking regents, Sullivan said that she and her husband, Doug Laycock – a UM law professor – “have enjoyed every day in Ann Arbor.” She thanked the board, her colleagues and staff. Regents and others in the boardroom gave her a standing ovation.

Public Commentary

Renee Echols was the only person to speak during the public commentary portion of the meeting. Identifying herself as a doctoral candidate and secretary for the Graduate Employees Organization, Echols told regents in the coming year the GEO will be entering contract negotiations with the university, as they do every three years, and they’d be coming to the regents to bring up issues related to that.

Renee Echols, an officer in the Graduate Employees Organization (GEO), spoke to regents during public commentary.

One concern is the issue of accessibility and accommodations for graduate student instructors with disabilities – she noted that she is visually impaired. The university has an excellent system of accommodation for students, she said, but that doesn’t extend to graduate instructors. When accommodations are requested from a department, they are usually turned down, she said, mainly due to a lack of understanding of what constitutes a reasonable accommodation.

In their upcoming contract negotiations, the GEO hopes to propose some procedures to help solve this problem, Echols said. Specifically, they’d like to develop concrete processes by which graduate instructors can request accommodations through their departments.

Denise Ilitch asked Echols for examples of requests that had been turned down. Echols said she’d twice been turned down for a request to have an assistant in the classroom to help during a course she was teaching. Other graduate instructors with chronic pain issues had requested a specific type of chair to use while teaching – those requests had been turned down, too.

Julia Darlow expressed concern, and asked the university’s general counsel, Suellyn Scarnecchia, whether graduate student instructors were considered as employees under the Americans with Disabilities Act. Scarnecchia said this issue hadn’t been brought to her office yet, and they’d follow up on it. It’s not just a matter of contract negotiations, she said – there’s a lot of law that applies to these issues.

Libby Maynard said the issues that Echols raised are essential to making the university what they want it to be – an inclusive institution.

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

Next board meeting: Thursday, July 15, 2010 at 3 p.m. in the Fleming Administration Building, 503 Thompson St., Ann Arbor. [confirm date]

No, these aren't the University of Michigan Regents. Reporters from the Michigan Daily, Ann Arbor News, Michigan Radio, Detroit News and other media outlets attended a briefing on the budget with UM provost Teresa Sullivan, sitting at the head of the table. To her right is Phil Hanlon, vice provost for academic and budgetary affairs. (Photo by the writer.)

University of Michigan Board of Regents meeting (June 18, 2009): Despite dissent from two regents over a 5.6% tuition hike, the University of Michigan Board of Regents approved several FY2010 budgets at their Thursday afternoon meeting – including budgets for the general fund, health system, and athletic department.

Though budget presentations – and speaking turns by each regent on the budget, most of them reading from prepared statements – took up much of the meeting, the board approved several other items, among them: 1) changes to UM’s technology transfer policy, 2) authorization to demolish seven vacant buildings that make up the Kresge complex at the corner of Ann Street and Zina Pitcher Place, 3) approval to hire an architect for a major expansion to the G.G.Brown building on north campus, and 4) design approval for a new intercollegiate soccer stadium.

We’ll begin our report with a look at non-budget agenda items.

Board Changes Leadership

Regent Katherine White completed her one-year term as board chair. At Thursday’s meeting, the board unanimously elected Andrew Richner as the new board chair. He previously was vice chair, a position to which regent Julia Darlow was elected on Thursday.

Richner is a Republican from Grosse Pointe Park. Both White and Darlow are Democrats from Ann Arbor. Richner told White he would try to follow in her footsteps, noting that she “brought order to a disordered environment – maybe that’s her military background.” White, a law professor at Wayne State University, is a Lt. Colonel in the U.S. Army reserves.

Building Projects

With little discussion, regents approved several building projects at Thursday’s meeting. One project that won’t be moving forward at this time is a previously proposed parking and office building on Wall Street – a decision we reported in a separate article.

Here’s a summary of the projects that did receive regental approval on Thursday:

• A $4.8 million, 10,000-square-foot addition to the Engineering Programs Building on north campus. Regents had approved a schematic design in April – their vote on Thursday allows the university to issue bids for the project and award construction contracts after bids come in.
• A $56 million, 66,000-square-foot addition to the G.G. Brown Memorial Laboratories, which was built in 1958 and houses the Department of Mechanical Engineering. The architectural firm of Perkins+Will, along with Integrated Design Solutions, will be working on the design phase.
• A $9.7 million demolition of seven vacant buildings that are part of the Kresge complex at Ann Street and Zina Pitcher Place. The buildings were previously used by various units of the medical school – those units have been located elsewhere over the past several years. The project would require asbestos removal and the decommissioning of medical labs, as well as landscaping after the buildings are taken down. The architectural firm SmithGroup will work on the project.
• A $6 million intercollegiate soccer stadium for men’s and women’s teams. Regents approved the project in May, and at Thursday’s meeting OK’d the schematic design by architects Jickling Lyman Powell Associates. The stadium – which will include locker rooms, concessions, a press box and grandstand seating for about 1,800 people – will be built on a soccer field located just west of UM’s tennis complex on South State Street. The project is expected to be finished in the fall of 2010. The structure’s exterior will be limestone and brick, prompting Coleman to joke that the university provides “lots of opportunities for brick masons to keep their skills intact.”

Separately, Tim Slottow, the university’s chief financial officer, filed an updated Plant Extension Report, which lists construction projects on campus. The report includes the cost for each project, its source of funding, the companies hired to work on the project, and its expected completion date. This report is updated and filed at each month’s regents meeting, and it’s worth a look – the list is long.

Technology Transfer Policy

Regents voted to change the university’s technology transfer policy, with modifications intended to promote student entrepreneurship. Below is the relevant section of the policy – the redlined clause has been eliminated under the changes approved on Thursday (“OTT” is the Office of Technology Transfer):

D. The University will not generally claim ownership of Intellectual Property created by Students. (A”student” is a person enrolled in University courses for credit except when that person is an Employee.) However, the University does claim ownership of Intellectual Property created by students in their capacity as Employees  or with direct or indirect support of funds administered by the University. Such students shall be considered to be Employees for the purposes of this Policy. Students and others may, if agreeable to the student and OTT, assign their Intellectual Property rights to the University in consideration for being treated as an Employee Inventor under this Policy.

Fiscal Year 2010 Budgets

Remarks from the President

UM President Mary Sue Coleman began the meeting with comments directly related to the budget presentations and vote, which came toward the end of the proceedings. She said the university is in a different league compared to most other institutions, and it’s important – for the state’s economy and for thousands of young people whose future relies on a quality education – to keep UM strong during this tough economic time. The budget has been crafted to do that, she said. Coleman also wanted to assuage any anxiety within the university or state about UM’s fiscal health. “We are stable – very stable,” she said.

Coleman outlined four critical facets to that stability, saying these areas were important in making decisions about how to allocate resources:

• Market presence. The university is aggressively focused on its market presence – having a reputation as an economic development force, as an institution that’s hiring faculty at a time when others can’t, as a university with strong student admissions and research growth, among other strengths.

• Revenue growth. UM is increasing revenues from research funding and donor support, as well as by offering more spring and summer courses, and treating more patients in its health care system, Coleman said. They’re doing this at a time when most institutions are struggling.

• Cost controls. They’ve been insistent on making cuts to keep costs down, she said. That includes asking employees to pay more for health care; closing WFUM, the university’s public television station; shifting the University of Michigan Press to become a digital publishing enterprise; reducing energy costs; and asking units within the university to cut their budgets by 1-3%.

• Strong cash and balance sheet management. The university’s strong bond rating reflects confidence in the institution’s financial position and ability to manage resources, Coleman said. “Our investment strategy has been prudent,” she said, “and is buoying us at a time when other universities are being forced to make drastic cuts.”

The university’s goal is not merely to hold its own, but to advance, Coleman concluded: “We are not out of the woods – we anticipate more budget challenges in the near future, but are confident in the institution’s ability to move forward.”  [Link to full text of Coleman's remarks.]

CFO: Financial Overview

Tim Slottow, the university’s chief financial officer, gave a presentation on UM finances designed to provide context for the budget reports later in the meeting.

The university has a strong balance sheet, he said. Total assets are $12.8 billion, with liabilities at $4.5 billion, including $1.4 billion in debt and $1.5 billon in staff and faculty retirement costs. That brings net assets to $8.3 billion. Slottow described possible threats to the balance sheet’s health, including ongoing market volatility, the state’s economy, rising health care and energy costs, and competitive pressures in recruiting and retaining faculty, providing financial aid to students and maintaining external research funding.

Regarding the general fund, Slottow said they had started supplementing it with money from the endowment, to offset a decrease in state appropriations. In 2009, the general fund received $190 million from the endowment, which was primarily used for scholarships, endowed professorships and academic programs. An example of this strategy includes the President’s Donor Challenge, an effort to raise $105 million for need-based financial aid and professorships.

Slottow outlined other strategies to bring in revenues for the general fund, which included redirecting part of UM’s revenue from its Big 10 TV contract to use for financial aid ($2 million), and moving some non-general fund revenues – such as vending machine, parking and late fee revenues – to support general fund activities ($4 million).

On the expenditure side, Slottow said the university has a “sustained, relentless commitment to the boring stuff” – the kind of upkeep, like upgrades to heating and cooling systems, that requires spending millions of dollars, “and when you’re done, it looks no different.” He reminded regents of the scope of UM’s physical plant, which includes:

• 22 miles of roads and 4.2 million square feet of sidewalks, steps, and plazas;
• 7 miles of utility tunnels and 156 miles of fiber optic cable;
• 280 acres of parking lots/decks;
• 547 buildings, 1,840 classrooms and instructional labs, 1,093 study rooms, and 5,183 research labs/rooms;
• 29 million gross square feet of buildings and core infrastructure;
• 509 elevators and escalators;
• 14,005 trees and over 12 million square feet of turf;
• 97,703 network desktop computers.

In terms of “human capital,” at its three campuses combined, the university employs 28,535 regular faculty and staff, and another 6,729 instructional, clinical and research faculty. He also made note of a pending transition –  within 5 years, 54% of UM’s managers will be eligible for retirement.

Slottow concluded by reporting that UM had the highest possible credit rating from Standard & Poor’s – a triple-A. He quoted from a press release issued in May 2009 from that rating agency, which cited the university’s national reputation, stable enrollment, strong financial resources, exceptional fundraising record and limited dependence on state support.

Provost: General Fund Budget

Provost Teresa Sullivan presented the $1.46 billion general fund budget for the Ann Arbor campus. She praised her staff for working long hours to put together the budget, and commended the university deans – many of whom attended Thursday’s meeting – for their leadership during a difficult budget cycle. They had a twin challenge, she said: Maintaining student access and academic excellence, while facing uncertain financial support from the state.

The general fund accounts for only 28% of the university’s total budget, but is the primary source of support for academic programs, she said. It relies primarily on tuition, fees, state funding and payments from sponsored research activity. Tuition and fees represent 65% of the budget, with state aid at about 22%.

Under the budget and 5.6% tuition hike approved later in the meeting, undergraduate tuition and fees for 2009-10 will be $11,659 for Michigan residents (an increase of $622 from last year) and $34,937 for non-residents (up $1,868 from 2008-09). Graduate student tuition, both in-state and out-of-state, is also increasing 5.6%.

While raising tuition, budget also includes an 11.7% increase in undergraduate financial aid, which would make $118 million available to students. About 80% of in-state students and 55% of out-of-state students currently receive some form of financial aid. Sources of financial aid that are increasing include donations contributed during a recent capital campaign, the amount available from federal Pell Grants, and an additional $1.6 million in federal stimulus funding of student work-study programs.

In addition to tuition, efforts are under way to increase revenues in other ways, while trimming costs, Sullivan said. On the cost-cutting side, the university is targeting $36.5 million in budget cuts over the next three years, including $15 million in the 2010 fiscal year. Current measures include:

• eliminating 63 positions through attrition or that were already vacant;
• cutting the university’s contributions to employee health benefits, and implementing a one-year wait before contributing to a new employee’s retirement savings;
• pulling the plug on WFUM, the university’s public TV station;
• restructuring the University of Michigan Press into a digital-only enterprise.

[A document detailing broader cost-containment efforts is posted on the provost's website.]

Any new academic initiatives will be funded by reallocating existing resources, Sullivan said. The budget also provides funding for a program to hire 100 new faculty members over a five-year period, which began in 2008. At the media briefing prior to the regents meeting, Sullivan said the budget also includes a 2.5% “pooled” increase for faculty, which can be used for merit increases, promotions or retention. A 2% increase will be available for staff, she said.

Regarding tuition, Sullivan put UM’s increase in the context of other public universities, citing higher increases at the University of Washington (13%), UCLA (10.3%), and the University of Minnesota (7%). She said some had lower increases, including the University of Iowa (4.3%) and University of Virginia (4%). Ohio State University isn’t raising its tuition, she said, but they are getting a 6% increase in state funding.

When asked at the media briefing about why UM isn’t proposing a tuition freeze – something than many students have called for – Sullivan said that with cuts in state funding, it wasn’t possible to maintain the university’s academic quality without a tuition hike.

During her presentation to regents, Sullivan also had a warning: They might not have seen the worst. The university is preparing for dramatic fiscal challenges in 2011 and 2012, she said, based on the state’s economic outlook.

UM Health System Budget

Doug Strong, CEO of UM Hospitals and Health Centers, reported that the system’s operating surplus was lower than anticipated in the current fiscal year, coming in at $14 million on revenues of $1.8 billion. The system had projected a $56 million surplus for the year. For the fiscal 2010 budget, which begins July 1, they are forecasting a $33 million surplus on revenues of $1.9 billion.

Reviewing capital projects, Strong said the Kellogg Eye Center on Wall Street is set to open in January 2010, and the $108 million acquisition of the former Pfizer property, which the health system will pay for in part, closed earlier in the week. The massive Mott Children’s Hospital and Women’s Hospital currently under construction will be completed in 2012.

UM’s health system faces several challenges which will continue into the coming year, Strong said. A worsening economy increases the amount of uncompensated care provided by UM – both charity care and unpaid patient debt. A higher percentage of patients are being covered by federal programs like Medicare and Medicaid, which reimburse the health system at lower levels than do private insurers. A shift toward more outpatient care is generally good for patients, he said, but means lower revenues than the system would get from inpatient care.

To contain costs, the system has instituted a hiring freeze in its non-clinical areas and has reduced staff levels through attrition. Sixty employees were affected by job cuts, though the majority have found positions in other parts of the organization, he said.

Finally, Strong said federal healthcare reform could be on the table for the coming year – no one knows how that will play out, but it will surely be a factor in the future.

Athletic Department Budget

Athletic Director Bill Martin gave the final budget presentation of the meeting, and started by saying that this was the ninth time he has presented a budget to the regents. He joked that while the athletic department’s budget was much smaller than the health system’s, his presentation was always longer – that was true again this year.

Bill Martin, UM athletic director. (Photo by the writer.)

Martin said the department has shown a surplus every year since he became athletic director in 2000 – under previous leadership, the department had been running a budget deficit. He noted that UM is one of only a handful of universities with a self-sustaining athletic department. For the coming year, he projects a nearly $9 million surplus on the $94 million budget. The department will end the current fiscal year with a projected $10.2 million surplus. Revenues come from ticket sales – including a projected $33.7 million for the coming football season – as well as corporate sponsorships and donations, among other sources.

Though growth has leveled off in 2009, mainly because of market losses in its endowment investments, the department has seen 16.5% annual growth in net assets from 2002 through 2008.  The department has operating reserves of about $27 million, and an endowment balance of about $46 million.

Looking ahead at capital improvement projects, Martin said the $226 million Michigan Stadium project is on track for completion in the fall of 2010, and several other capital projects – including the new soccer facility approved by regents earlier in the meeting – are in the works. A couple of major projects remain, Martin added, the largest of which is Crisler Arena, which hasn’t been touched since it was built in 1967. That will be the department’s next focus, he said.

At the end of Martin’s presentation, regent Andrea Fischer Newman said, “You’re in great shape – you don’t need anything from us.” “Just your support,” Martin replied.

Statements from Regents, and Their Vote

Prior to voting on several budget-related items, each of the eight regents took a speaking turn, with all but two – Andrea Fischer Newman and Martin Taylor – reading from prepared statements. Most expressed the same sentiments: Times are tough; the university is an important asset to the state and its future; it’s crucial to maintain the resources UM needs to be a national and international leader, while keeping a high-quality education accessible to students.

Regents Denise Ilitch, left, and Julia Darlow were the only two who voted against the proposed budgets and tuition hike at Thursday's meeting. (Photo by the writer.)

While regents were in agreement on these themes, two of them – Denise Ilitch and Julia Darlow – concluded that the university should not raise tuition, and that administrators could do more to cut costs and generate revenues in other ways.

Ilitch said the university needs to fix its budget from within, not on the backs of students and families. She was voting against the proposed budgets because “I think we can do better.” The university can not operate as though it’s immune from the state’s economic crisis, she said.

Darlow said the top priority is to support students and their families, and that holding down tuition won’t undermine the university’s financial position. As an example, she said, a 5.6% increase for resident undergraduate tuition will contribute only an additional $12.9 million, or less than 1% of the general fund total. They should be concerned about student debt, she said – financial aid and tuition restraint are needed.

Regent Katherine White noted that the university has a history of investing during difficult economic times – the law quad and Rackham graduate building were constructed during the Great Depression. Olivia Maynard said that the availability of financial aid had been important in her decision to support the budgets and tuition increase. No matter how each regent voted, they all cared deeply about the university, she said.

Andrew Richner said his son was now a high school senior, so he is more acutely aware of tuition costs. Speaking in support of the budget, he said he has served on the board 7 years, and during that time he’s watched state funding for the university drop from $365 million to $316 million. Larry Deitch noted that this was his 17th budget cycle as a regent, and that one of the reasons he decided to run again in 2008 was to help shepherd the university through this difficult economy, and to take the heat for raising tuition if necessary. Even if decisions are unpopular now, he said, their decision must be made for the long haul.

Andrea Fischer Newman described herself as a tuition hawk, but said that this year she was supporting the budget and tuition hike. State funding might be cut even more dramatically in the near future, she said, and the university needs to prepare for that. Yes, they can do more, she said, but they also needed to remember that so far, they’d been able to cut general fund costs without layoffs, and that was commendable in this economy.

Martin Taylor said that people who attended these board meetings might get the impression that the regents are just rubber-stamping decisions made by the administration – they’re not, he said. Regents had spent hours and hours discussing the budget over the past several months, he said. [Editorial aside: Coleman and several regents alluded to discussions at multiple budget meetings. We'll be following up to inquire about where these meetings were held and whether they complied with the state's Open Meetings Act requirements.] Any tuition increase is too much, Taylor said, but he was pleased that they could hold it at 5.6%. He said the quality education provided by UM is still the best deal in the world.

Outcome: All budgets and tuition increases were passed, with Ilitch and Darlow dissenting.

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

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

UM regent Libby Maynard talks with Bob Kelch, the university's executive vice president for medical affairs, before the March 19 Board of Regents meeting. Kelch is retiring from that position, and his replacement, Ora Hirsch Pescovitz, will be starting the job in May.

In her opening remarks, UM president Mary Sue Coleman praised the performance of several athletic teams, including men’s basketball, hockey, swimming and diving – all were competing at the national level, most notably the basketball team in a NCAA tournament appearance. She said in the midst of this was also sad news about the sudden death of Matthew Hilton-Watson, a 40-year-old UM-Flint professor who collapsed in class and died earlier this month, as well as the death of Bill Davidson, whom Coleman described as a “true gentleman,” philanthropist and exceptional business leader.

Coleman used the reference to Davidson’s business acumen as a segue into announcing that UM will ask employees to share a greater amount of their health care costs. She described employee health care as the university budget’s fastest-growing expense and a threat to its core mission. Details of those changes were released on Friday, the day after the regents meeting.

As is typical of regents meetings, the majority of items on the agenda received little or no comment from regents or administrators. Tim Slottow, the university’s chief financial officer, did not discuss the report on UM’s long-term portfolio except to say that it followed previous trends. (That trend is down: For the fiscal year to day, marketable securities  in which UM has invested  are down nearly 28%, at $3.088 billion.) Under an item asking regents to authorize the issuance of general revenue bonds to help finance various construction projects, Slottow said that authorization for Build America Bonds or Qualified School Construction Bonds, which are available under the recent federal stimulus package, would give the university more flexibility in its financing options. He said it’s not clear whether those bonds would be more favorable, but if they are, the university would take advantage of them.

Vice president of development Jerry May, in his report on donations to the university, said that two recently completed projects – the new Ross School of Business building and the UM Museum of Art expansion – reflected important partnerships between the university and its donors. Though each of those projects had major donors who contributed millions of dollars, there were hundreds of others who gave support as well. Six hundred donors contributed a total of $33 million for UMMA, and more than 2,500 people helped raise the $110 million for the new business school.

Public comment

Nine students spoke during public comment, each taking the three-minute turn allowed at these meetings.

Arthur Peterson: A graduate student in the Ross School of Business and the School of Natural Resources and Environment, Peterson urged the regents to change UM’s policy regarding proxy voting. As an institutional investor, UM currently has a policy of not voting on social or environmental issues when such issues are put before shareholders. Peterson said he wasn’t advocating for a change in investment strategy. Rather, he wanted UM to join Harvard, Stanford and other peer institutions in using its proxy votes “to integrate our fiduciary duty with our university’s values.” He proposed that UM create an Advisory Committee on Responsible Investment, with membership including students, faculty and administrators. They would initially be charged with setting up voting guidelines, then eventually make recommendations about how to vote on specific issues coming before companies in which UM is a shareholder. [Later in the meeting, regent Martin Taylor asked for a copy of the policy that Peterson had discussed. He asked staff to prepare a report looking at the pros and cons of Peterson's proposal, and said he thought it was time they reviewed the policy.]

UM student Zakiyah Sayyed urges the Board of Regents to create an executive position to coordinate the university's sustainability efforts. The org charg, held by Aaron James, shows how many programs are working on sustainability, but with little or no coordination.

Zakiyah Sayyed: Sayyed’s presentation included a prop that drew laughter from those in the room – a large organizational chart that showed how many programs already exist on campus to support sustainability efforts. (The laughs were in part a response to the student holding the chart, Aaron James, whose smiling face could be seen through a whole in the middle of it.) Her point was to show how dispersed and uncoordinated the university’s current sustainability work is, and to lobby for a new executive position, similar to the executive vice president for medical affairs, that would report to the president and coordinate sustainability programs across all disciplines and functions.

Aaron James: Emerging from behind the org chart, James outlined how the university might pay for the kind of position that Sayyed had described. He said students had learned that some major UM donors were interested in contributing, and suggested that an endowment be started to fund the executive position. James said he realized the approach represented a “somewhat unorthodox appeal from a development perspective,” a comment which also elicited laughter from the regents. James directed his final comments to Coleman, saying that they’d sent her a letter in January signed by more than 1,000 people and were still awaiting her response. “We’re doing our part,” he told her. “We need you to do yours.”

UM student Ashwin Lalendran urged the regents to support a tuition freeze. The yellow ribbon on his left lapel is being worn by students in the "Stop The Hike" campaign. Lalendran likened it to the Maize-Out.

Ashwin Lalendran: Lalendran was the first of four students from the Stop The Hike campaign, an effort to get UM to freeze its tuition costs. He said their goal was to keep the university accessible to all who were qualified to attend, regardless of their socioeconomic circumstances. They were calling for a tuition freeze if state appropriations remained constant. Lalendran said he recognized the challenge in this, but that the university needed to find new, workable solutions. He said he campaign has received widespread support from a diverse number of student groups, including student government and Greek leadership organizations. They had set up an online survey which as of Thursday afternoon had more than 1,700 responses. He said the students attending Thursday’s regents meeting were symbolic of the larger number of students supporting this issue. In response to a query from regent Andrea Fischer Newman, Lalendran said he and other students were wearing yellow ribbons as another symbol of the tuition-freeze campaign, saying it was their version of the Maize-Out. Fischer Newman said that with the “if” in their statement, she thought it was a rational proposal.

Bobby Stapleton: A student from northern rural Michigan, Stapleton said that UM was the only school he applied for, and that his older sisters also attended. But now his family’s food business is in extreme debt, he said. His younger brother has also been accepted at UM, but isn’t telling his parents because he knows they can’t afford to send him. His younger sister doesn’t expect to be able to attend, either. In a state with so many lows, Stapleton said, UM is a point of hope for the state. He and his sisters are going to do everything they can to make sure their siblings have the same opportunity as they’ve had.

Rachel Long: Also speaking about the Stop The Hike campaign, Long said she was a UM sophomore, a co-founder of the Progressive Alliance and a first-generation college student. Her father is an electrician, who now often works out of state because that’s where the jobs are, and her mother is a hairdresser. Long herself has worked two to three summer jobs since high school. She’s paying for tuition with a scholarship and small inheritance from her grandmother. Even so, it’s a struggle to keep up with the costs of housing, textbooks and food. That’s her story, she said, but the student surveys they’re receiving tell of many other struggles, which Long described. One student works three part-time jobs while in school, and finds tuition costs “overwhelming.” Another’s father is about to lose his job, and the student might not be able to afford tuition. Another student’s father makes too much to qualify for financial aid, yet the family has seven children and can’t afford the tuition. Long said she knows that UM values socioeconomic diversity, but that it faces losing its lower- and middle-income students. They need to feel they’re being listened to, she said, and that they have an equal shot at a quality education.

Gibran Baydoun: Baydoun said he’s from Las Vegas, and is paying out-of-state tuition. He comes from a single-parent home, and his mother works two jobs. He said that as a freshman, he was talking with someone in UM’s financial aid office who told him that his best bet would be to attend a different school. If even one student isn’t able to afford UM, he said, “then we have not done our job at sharing that Michigan experience.” Baydoun said the students were committed to working with the university’s leadership to ensure that funding for higher education is a priority in Lansing. After his presentation, regent Denise Illitch asked for a copy of the survey results that the Stop The Hike campaign is collecting, and also asked them to inform regents when they planned to lobby state legislators in Lansing. Regent Julia Darlow thanks all the speakers, saying the information they’d shared was impressive and relevant.

Daniel Braun: Braun began by saying he supported the previous speakers’ positions, but that the privilege of attending UM can’t come at the expense of national and global social responsibility. He is one of the students involved with HEI Workers and Students Together for Justice, a group asking the university to reconsider its $65 million investment in HEI Hotels & Resorts because of the way the corporation treats its workers. He said that in addition to problems in two California hotels, within the past month they’ve learned of similar situation in an HEI-owned Sheraton Crystal City Hotel in Arlington, Virginia. He said that indicates the problem is systemic to the corporate culture. Braun thanked Tim Slottow, UM’s chief financial officer, for providing contact information for Nigel Hurst, an HEI executive. The students sent Hurst a letter asking him to address the company’s anti-union rhetoric and tactics.

Laura Misumi: Picking up on Braun’s comments, Misumi said that Hurst had responded to their letter by saying that HEI was a socially responsible company and had excellent relations with its employees. She said Hurst’s letter was disingenuous and revealed a disconnect between management and workers. He failed to acknowledge or address any concerns that had been raised over the past year, she said. UM needs to turn its financial investment in HEI into a socially responsible investment as well. She urged regents to send their own letters of support to HEI management.

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

Absent: Larry Deitch

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