Regent Millner

Regent Millner

MILWAUKEE, Wis. – Members of the University of Wisconsin System Board of Regents called the recent vigorous and contentious public debate surrounding the University’s 2013-15 biennial budget a learning opportunity.

“This is a very important teaching moment for the UW System, for us as Board members,” said Regent Regina Millner. “We should be examining what we are doing ourselves as board members … and examining what’s happening at our system.”

Regent Jeff Bartell, whose term on the Board is ending, called the apparent breakdown in the university’s relationship with the legislature that precipitated proposed cuts in state funding and flexibilities an indicator of the need to educate decision-makers about the university’s finances.

“We need to repair (the relationship) as we can,” Bartell added, while urging current and future Board members to remember that their primary duty is to support the UW System. “We are not partisans on this board, we are supporters of the UW System, and we should do what we can to retain the quality that … we are so proud of.”

As part of Thursday’s board meeting, incoming Senior Vice President for Administration and Fiscal Affairs David Miller updated the Board on the UW System’s 2013-15 Biennial Budget, including additional information about proposed changes in funding to UW System’s operating budget and a comparison to the Governor’s budget recommendations. Miller also reported on Joint Finance Committee actions on the capital budget. New reporting requirements and mandates included in the Joint Finance Committee omnibus motion were also discussed.

“The bottom line is we can manage this. We can, and we will,” Miller said. “It will not be easy because all those dollars have to be managed by decisions of not doing something that was either planned or committed. But those decisions will be made, and we will move forward and adjust. And we’ll do better in the future years, beginning this year, in transparency and reporting, and be sure that we have very open processes that everyone understands the funds we have available and how they plan to be used.”

In amending the Governor’s proposed budget last month, the JFC removed a provision that would have let the Board of Regents take full responsibility for faculty and staff compensation, Miller explained. Legislators also delayed implementation of new UW personnel policies that have been in the works for two years.

UW System President Kevin P. Reilly told Regents that these changes together with the financial challenges imposed by the current proposed state budget, present a growing threat to the health and vitality of UW institutions – most especially in the fact that faculty salaries remain 18% lower than those at peer universities.

“This gap should concern anyone who wants our public university to strengthen Wisconsin’s workforce and boost its economy,” Reilly said. “The quality of a UW diploma is a product of quality people who teach and support UW students, and that quality is being undermined because we are not closing that compensation gap.”

Regent Bartell

Regent Bartell

Following the budget presentation, Regent John Drew observed that the proposed tuition freeze was probably inevitable under the circumstances, but reminded Regents that tuition has gone up because state appropriations have continually gone down. “Whatever we do, it’s not going to put us in a position to do what the faculty really needs in closing the (compensation) gap. All in all, it’s a sad day for the System and really a sad day for the state of Wisconsin because we’re moving away from a high-quality public education that is accessible and affordable.”

Regent Gerald Whitburn expressed the opinion that UW’s financial information was not clear or detailed enough. Regarding the rapid growth of reserves, for example, Whitburn commented, “No one knew. The Regents didn’t know.” He went on to say that a lack of transparency and detail “is the reason why we lost $200 million in the proposed response from the legislature.” Regent President Brent Smith countered that details were, in fact, publicly available and provided to Regents.

Regarding program revenue balances, Regent José Vásquez suggested that the university needs to do a better job of explaining what such balances are used for. “We have to make it very clear that it’s not just a pot of money sitting there that we as Regents and the university system can use at any time. Those funds are going to have some anticipated usage.”

Regent Tim Higgins said it’s important for Regents to “work as hard as we can with legislators and their constituents, the people of Wisconsin, to make sure they do understand that the funds we are entrusted with are being used as well as possible and being reported in a way that’s transparent as possible.”

Regent Vice President Michael Falbo agreed. “Our direction is to be more transparent and to set up financial goals that are reasonable and that we can set up to assure the university is financially sound.”

Regent David Walsh urged Board members to remember that the UW is a large and very complex public institution. “I’m not exercised by the fact that people disagreed with us because that happens,” Walsh said. “I think it’s a red herring that it’s about reserves. It’s really about the economy and political philosophy. But the decision-makers make the decisions, and we’ve got to live with that.”

David L. Miller

David L. Miller

Walsh continued that it should be the mission of everyone in the room to “go forward and tell our story.” “Our challenge is to persuade decision-makers that we’re not an expense on a balance sheet but part of the solution,” Walsh said, adding that it’s the job, the challenge, and the responsibility of the Board to convey that message.

Regent José Vásquez expressed concern about the potential erosion of Regents’ governing power in recent legislative proposals. “The biggest concern I have in all this is the number of instances where other external entities are making decisions about this institution that we are governing,” he said. “If we continue to lose the ability to make decisions over this system, I would dare to say we’re no longer a true governing board, but an advisory group or ambassadors.”

Regent Chuck Pruitt suggested to the Board that there might be an alternative to the budget proposed by the Joint Finance Committee in returning to the Governor’s amended budget. “I know it’s hard but I do think we might consider raising our individual and collective voices and ask (legislators) to take a look at that budget and that proposal and consider whether it would provide many of things they desire while also providing this university with an opportunity to move forward.”

President Reilly noted profound changes in the UW’s financial model, including the increasing importance of reserves as a way to finance the university’s work. Those shifts, he said, require new ways to talk about that model, both internally and to the people of Wisconsin. “I think we can simplify the explanation and get the people out there to understand how we’re using the money they pay in tuition, the money that all citizens pay in taxes, and lots of other entities that provide revenue to the university and help fund us, and how we do good things with it.”

Chancellor Lovell and the transformation of UWM

Joined by a student entrepreneur and leaders of the Greater Milwaukee Committee and Medical College of Wisconsin, Chancellor Michael Lovell presented a detailed story about the transformation of UW-Milwaukee.

Lovell said the transformation can be seen at UWM in its focus on a changing student population, the development of capital projects throughout the Milwaukee metropolitan area, and emphasis on strengthening the innovation ecosystem of the region with new and established partners.

Although UW-Milwaukee is traditionally a university populated by state students – it has enrolled the most Wisconsin residents since Fall 2004 – Lovell explained the university intended to expand recruitment outside of Wisconsin to counter the demographic trend of shrinking numbers of high school graduates inside Wisconsin. Nonetheless, the university still intends to fulfill its traditional access mission for students who are first-generation students, come from families with lower incomes or are older, Lovell said.

Lovell illustrated UWM’s emphasis on serving a growing number of U.S. military veterans or their dependents with a video about the degree earned this spring semester by Marine and Army veteran Patrick Léon.

He also offered brief updates on progress being made at the School of Freshwater Sciences expansion, Kenwood Interdisciplinary Research Complex and other buildings, and recounted the lifting of the final beam into place the previous night at the Innovation Accelerator Building at the UWM Innovation Campus.

Julia Taylor, president of the Greater Milwaukee Committee, explained the GMC’s current initiatives and UWM’s role as a partner with them. Their work together and with others has resulted in the creation of MiKE, which is bringing together Milwaukee’s innovative talent to develop creative solutions, and Scale Up Milwaukee, an entrepreneurial initiative funded by American Express. “I think it’s very honest to say we would not have Scale Up in Milwaukee if it wasn’t for Mike bringing it to our attention and UWM’s involvement,” she said.

UWM graduate student Carlton Reeves recounted his academic and research successes during his time as an engineering doctoral student. Reeves went on to describe his work as founder and president of Tali Payments, an electronic payment service he and partners are developing. Through a mobile device app called Tabit, users can have access to a participating restaurant’s menu, and place orders and pay for those orders on that device.

After talking about several partnerships under way at UWM – including the Edison Award-winning collaboration with Johnson Controls – Chancellor Lovell introduced a major Milwaukee-area partner, Medical College of Wisconsin President John Raymond, who spoke about the spirit of collaboration between the Medical College and several UW System institutions including Milwaukee, Green Bay, Stevens Point, Marathon County, Marshfield/Wood County, and Eau Claire. Raymond thanked UW System President Kevin Reilly “for his leadership in helping form these bridges” between the System and the Medical College to the benefit of the state.

UW-Milwaukee reports on Division I Athletics

Under the new reporting guidelines approved by the Board of Regents last November, officials from UW-Milwaukee presented the Board with their first NCAA Division I Athletics 2013 Annual Report.

Regents heard that of the nearly 400 student-athletes listed for 2011-12, more than 50% earned a 3.0 GPA or better, and more than one-quarter made both the fall and spring league honor rolls. Graduation success rate amongst student-athletes was 82%, above the average of the overall student body.

UWM noted in the report that it aims to eliminate the department’s annual operating deficit by 2017 through measures including a focus on potential external funding sources, implementing cost-containment measures, and exploring additional opportunities for revenue generation from ticket sales, royalties, and sponsorship agreements. Students have also committed to a higher segregated fee to help support the department in fiscal years 2013-15.

REDI Committee looks at role of WiSys

The Research, Economic Development, and Innovation Committee approved a resolution reaffirming the Board’s support of WiSys as the sole technology transfer mechanism for research, innovation, and technology transfer on UW System two-year and four-year comprehensive campuses. The resolution also reaffirmed the Board’s support of further developing policies and practices that support and encourage faculty and undergraduate research, technology transfer, entrepreneurship, and innovation.

UW System has agreed to allocate up to $1 million of funding annually to WiSys for administration and project development, and the Wisconsin Economic Development Corporation (WEDC) has committed to providing additional funding (up to $500,000 per year) to support projects that align with the state’s economic development priority industries and industrial clusters.

With undergraduate research identified as a high-impact practice, the Committee also recognized that such research requires institutional support including staff support of oversight and release time, as well as funding to cover salaries, overhead, and related costs.

Regent Mark Tyler is leading an initiative to identify practices and policies that could be implemented to further recognize, encourage and reward faculty members who engage in activities related to research, economic development, and innovation. Senior Vice President Mark Nook provided an overview of best practices in this area.

Capital Planning and Budget Committee

UW-Milwaukee presentation: UW-Milwaukee updated the committee on its approach to the integration of academic, strategic, and space planning as well as describe the results of a collaborative “Space Retreat” that was recently held to engage academic leadership, as a group, in a discussion of the most pressing space needs faced by the campus today.

Robin Van Harpen, UW-Milwaukee’s Interim Vice Chancellor for Finance and Administrative Affairs, outlined the strategic challenges the university has faced in aligning its physical needs with the university’s academic mission. This process began after a 2010 assessment showed the campus faced a space deficit of more than a million square feet, leading to a six-year capital building campaign known as The Milwaukee Initiative.

From the beginning of the planning process, Van Harpen noted, UWM had earmarked funds from its cash balance to cover the operational costs of the new buildings. With the UWM School of Public Health completed and four other building projects ongoing, UWM facilities planners are now determining whether to demolish or renovate deteriorating existing buildings.

In other business, the Committee:

  • Approved a request from UW System for four All Agency Maintenance and Repair projects on two campuses totaling about $7.5 million, including utility upgrades and a roof replacement at UW-Madison, and the third phase of a UW-Superior project that repairs extensive damage to the steam distribution system, which occurred during a flood in June of 2012;
  • Heard a report from Associate Vice President David Miller on April and May Building Commission actions.

Education Committee

UW-Milwaukee Presentation:  Johannes B. Britz, UW-Milwaukee’s Provost and Vice Chancellor for Academic Affairs, led a presentation on “Embedding Innovation into Academic Planning: Process and Outcomes.” Britz discussed how the university worked to develop a planning process that was flexible and adaptable, used resources well, and engaged stakeholders while building community.

Report of the Senior Vice President
Senior Vice President Mark Nook updated the Committee on the impact of the Biennial Budget on Academic Affairs in the UW System, and expressed concern about the system’s hiring challenges as salaries continue to fall behind neighboring states. He also discussed proposed legislative changes that would impact the transfer of credits, veterans’ tuition benefits, priority registration for veterans, and the allocable portion of segregated student fees.

In other business, the Committee:

  • Approved the Bachelor of Business Administration in Management at UW-Oshkosh;
  • Approved the Bachelor of Science in Statistics at UW-La Crosse;
  • Approved the Master of Science in Architecture at UW-Milwaukee;
  • Approved the Master of Sustainable Peacebuilding at UW-Milwaukee;
  • Approved the Master of Science in Transnational Human Services Leadership at UW-Oshkosh;
  • Accepted the proffer from the Vilas Trust Estate to UW-Madison and UW-Milwaukee;
  • Approved the 2013 Report on Promotions, Tenure Designations, and Related Academic Items;
  • Approved UW System appointments to the Natural Areas Preservation Council; and
  • Approved revisions to the UW-Eau Claire Faculty Personnel Rules.

Business, Finance, and Audit (BFA) Committe approves pay plan resolution

The BFA Committee approved a resolution requesting that the Office of State Employment Relations (OSER) recommend a salary increase for UW System employees of no less than that recommended for all other State employees in each year of the 2013-15 biennium. The resolution further requested that such pay plan be funded through the State compensation reserve, where the funding that was originally built into the University’s block grant for such purposes was moved by the JFC action on the 2013-15 biennial budget.

The resolution also included a statement of the Board’s intent to return to the Joint Committee on Employment Relations (JCOER) to request the use of institutional funds for supplemental pay plans during the 2013-15 biennium for all UW institutions.

“Nobody expects we’re going to close an 18% gap in one biennium … but people are looking for a signal there’s at least some reason for hope,” Reilly said. He noted that weaker candidate pools, failed searches, and the exit of not just faculty “stars” but also assistant professors, all affirm the urgent need for action.  “Once the word starts to spread on accreditation teams, you really increase the chances of serious quality problems in the system,” Reilly said.

In amending the UW budget, the JFC removed the proposal to provide pay-plan setting authority for the Regents from the Governor’s recommended biennial budget. The JFC also moved funding for a pay plan from the UW’s block grant to the state’s compensation reserve, which would be used to fund salary and fringe benefit increases for all state employees in the 2013-15 biennium.

Program Revenue Balances: Following up on earlier full-Board discussions, Incoming Senior Vice President David Miller led a discussion on the goals and considerations for Board policy on program revenue balances in the UW System.

“We need to craft a good policy and determine what level of reserve is appropriate,” Miller said.

UW Flexible Option: UW Colleges and Extension Chancellor Ray Cross and UW-Extension Interim Provost Aaron Brower presented background information on proposed pricing and term lengths for the new UW Flex Option programs. The proposed approach for 2013-14 is to use two pricing options: an “all-you-can-learn” option based on a three-month term at $2,250/term; and an “assessment-only” option offered at a “cost-plus” fixed price. Regents will be asked to endorse the UW Flex Option pricing structure at the July meeting.

In other business, the Committee:

  • Heard a summary of the gift, grant, and contract awards for the third quarter, from July 1, 2012 through March 31, 2013. Total awards for the period were approximately $1.1 billion, a decrease of $49.0 million compared to the prior year;
  • Heard an update from Assistant Director Steven Mentel on recently completed and on-going audit projects along with information on current activities of the Legislative Audit Bureau impacting the UW System;
  • Heard an update from UW-Madison Vice Chancellor for Administration Darrell Bazzell, along with UW Service Center and UW System staff, on efforts to address HRS payments, processes, and controls; and
  • Heard a report from Senior Vice President Michael Morgan.

Photo credit: UWM Photo Services


The UW System Board of Regents will resume its meeting at 9 a.m., June 7, 2013, at UW-Milwaukee.

Related: June 7 (day 2) news summary

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