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Regents discuss biennial budget, capital projects, and economic development proposals (Apr 4, 2013)

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April 4, 2013

University of Wisconsin System Board of Regents
April Meeting
Day One News Summary

April 2013 Day 1

Regents discuss biennial budget, capital projects, and economic development proposals

LA CROSSE, Wis. – With the state’s biennial budget currently under development, the University of Wisconsin System Board of Regents heard more detail Thursday about the potential for new UW initiatives to benefit Wisconsin’s workforce and economic development.

UW System President Kevin P. Reilly reiterated to Regents that if Governor Scott Walker’s proposed budget is passed “as is,” that budget is expected to “keep tuition down, grow high-skills jobs, prepare the workforce to fill those jobs, and generate considerable direct economic activity.”

Following up on the general budget overview provided at the March meeting, Associate Vice President for Economic Development David Brukardt reported that the proposed budget includes a recommendation to provide $20 million over the biennium for an incentive grant program to help boost the UW System’s efforts in three areas: economic development programs, development of educated and skilled workforce, and improving affordability of postsecondary education.

“The challenge for us is to pick proposals that will have best use of funds so we can drive business success across the state, and provide good experiences for students, faculty, and campuses,” Brukardt said.

While all UW institutions have developed ideas for possible funding, three chancellors provided an overview of economic development concepts from their respective campuses.

Incentive grant funding could help UW-Platteville expand its existing collaborative engineering degree agreements with other campuses around the System, Chancellor Dennis Shields told Regents. Benefits would include growing the number of STEM-educated students in the state and increasing leverage of faculty expertise for area businesses. With grant funding, UW-Platteville would also propose developing a regional innovation center to expand outreach to support existing and future business opportunities.

UW-River Falls Chancellor Dean Van Galen said the incentive grants offer “a great way to leverage the talent, knowledge, and innovation we have in the UW System.” UW-River Falls would propose development of the St. Croix Valley Center for Innovation and Business Development to tap into the unique university and regional strengths. He reiterated that while economic development is important, “all this needs to connect with our educational mission.”

UW-Whitewater Chancellor Dick Telfer suggested that incentive grant funding could help set up a center to coordinate the university’s existing economic development centers, allowing the campus to be more effective and efficient, thereby amplifying the economic benefits to the region and state.

Regent Mark Bradley suggested that going forward it might be preferable to focus on a smaller number of adequately funded initiatives rather than to spread out funding too thinly over a larger number of small projects.

Associate Vice President of Capital Planning and Budget David Miller also updated the Board on new developments regarding the capital budget, including the State Building Commission’s action in late March to add an additional project to the Capital Budget. He noted the Commission also increased funding for UW projects to $703.7 million (all funds), including $240.8 million in General Fund Support Borrowing (GFSB).

Miller pointed out that academic programs drive facility needs.  As an example, he pointed out that the number of STEM degrees has increased by 23.4% in the past decade, while degrees in health-related fields have increased by 35.2%. With these trends predicted to continue, Miller said seven of the 21 major GFSB building projects requested by UW institutions are academic science facilities. All six top-priority major projects in the Regents-approved capital budget are science-related.

Miller explained one change in the composition of the state’s capital budget. Whereas past biennial budgets included “advance enumeration” of future projects in a given budget cycle, the 2013-15 budget now before the legislature only provides bonding authority for current projects. Without advance enumeration, Miller explained, UW campuses may be required to commit funds to begin long-term planning and design, and get reimbursed for those funds later once bonding authority is approved.

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Chancellor Gow reports UW-La Crosse is “Moving Forward Together”

Chancellor Joe Gow welcomed the Regents to the UW-La Crosse campus with a multi-media presentation themed “Moving Forward Together.” He explained the university’s strong commitment to shared governance and introduced the Regents to some of the faculty, staff and students who have helped the university reach its goals and innovate.

Students have been a strong voice behind major campus initiatives, Gow said, supporting initiatives ranging from increasing student fees for services to building a new student center.  

He noted that since November 2007, students have turned out in large numbers to vote on five major referenda.  A referendum in November 2007 asked students if they would be willing to pay more tuition to hire additional faculty and staff. More than 2,200 students voted for the Growth, Quality and Access plan with the vast majority — more than 1,800 — supporting the plan, Gow said. As a result, UW-L has hired about 150 faculty and more than 30 staff and lowered the student-faculty ratio from 24 to 1 to 20 to 1 in the last five years.

The university has demonstrated progress on strategic goals, including consistently high retention and graduation rates since 2006, Gow said. About 86 percent of UW-L’s new entering freshmen return for their second year and the school has a six-year graduation rate of 69 percent.

To continue making such progress requires finding innovative solutions, Gow told Regents.

A centerpiece of UW-L’s recent teaching innovations is its MOOC or “massive open online course.” In January, UW-L launched the first MOOC in the UW System with a $50,000 grant from the Bill & Melinda Gates Foundation. This developmental math course now has attracted people of all ages and backgrounds from all over the world, and will help students spend less time and money on the paths to their degrees, Gow said.

He added UW-L has also demonstrated a commitment to sustainability through two major building projects, pointing out that the campus’ new academic building and residence hall both received prestigious national awards for their sustainable and energy-efficient designs.

Videos throughout the presentation put faces to the successful campus initiatives and statistics. Among those, the Regents learned about a student program called Awareness Through Performance and were introduced to a professor with two hearts who uses his personal experience to teach biology. 

“What we want to do is have people talking and get conversation going,” said Amanda Goodenough, founder of the ATP program.

Regent Jeff Bartell called UW-L’s presentation “illuminating and impactful.”

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Education Committee

Committee briefed on Annual Program Planning and Review
Associate Vice President Stephen Kolison presented a report on UW System’s academic array in 2011-12. He told Regents that array consisted of 1,196 bachelor’s, master’s, doctoral, and professional degree programs, with bachelor’s degree programs accounting for 60 percent of those programs. Also within that array, STEM, health-related, and business-related programs accounted for 26 percent, 9 percent, and 9 percent, respectively. In the last academic year, 15 new degree programs were authorized, 13 were implemented, six programs were discontinued, and four were suspended.

The 2011-12 academic year saw the production of 35,708 associate, bachelor’s, master’s, and doctorate/Ph.D. degrees, Kolison said. This was the largest number of degrees conferred in a given year in the history of the UW System. Bachelor’s degrees accounted for 73 percent of overall degrees.

In other business, the Education Committee:

  • Approved UW-Madison’s request for a Bachelor of Science in Pharmaceutical Sciences;
  • Approved UW-Stout’s request for a Bachelor of Science in Environmental Science;
  • Approved UW-Stout’s request for a Master of Science in Construction Management; and
  • Approved the Requests to Trustees of the William F. Vilas Trust Estate for support of scholarships, fellowships, professorships, and special programs in arts and humanities, social sciences, and music.

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Capital Planning and Budget Committee

UW-La Crosse provided Regents with an overview up their updated campus master plan. They highlighted projects that the campus expects to be funded in the 2013-15 Capital Budget, including the Science Labs Building and the New Student Union.

In other business, the Capital Planning and Budget Committee:

  • Heard a report from Associate Vice President David Miller on February Building Commission actions;
  • Approved UW-Madison’s request for authority to increase the budget of the Memorial Union Renovation-Phase I project to allow for the construction of a theater lounge at the north end of the current theater;
  • Approved UW-Stout’s request for authority to reimburse the city of Menomonie, Wis., for assessable improvements including the replacement of underground utilities, resurfacing the street, and aligning roadways and pedestrian walkways to improve safety;
  • Approved UW-Madison’s request for authority to reimburse the city of Madison for assessable street and utility improvements along West Johnson Street, which would directly benefit the university with improved pedestrian and vehicular traffic facilities along this major arterial street through the campus;
  • Approved UW System request for release of $3.3M Building Trust Funds to prepare preliminary plans, cost estimates, and design reports for two projects expected to be enumerated as part of the 2013-15 Capital Budget: the UW-La Crosse Science Labs Building project and the UW-Stevens Point Chemistry-Biology Building; and
  • Approved UW System’s request for five All Agency Maintenance and Repair projects on five campuses totaling about $5M. The requests include an increase to an energy conservation project at UW-Milwaukee and a fire alarm system renovation at UW- Eau Claire. 

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Research, Economic Development, and Innovation Committee

Undergraduate research highlighted for REDI committee
Assistant Vice President for Federal Relations Kris Andrews reported to Regents that undergraduate research initiatives all around the UW System provide a broad range of benefits to all stakeholders: students, faculty, institutions, and the state overall.

“The economic value UW’s research holds for the state is significant and can only be improved by supporting undergraduate research,” Andrews said.

As part of showcasing student research at UW-La Crosse, Provost Heidi Macpherson noted that the campus is hosting the prestigious National Conference on Undergraduate Research (NCUR) later this month with more than 3,000 student presentations from across the country.

Several students also related their first-hand perspectives. Adam Pugh, a UW-L senior double majoring in Finance and the Honors Program in Economics, shared with Regents a brief overview of his research on the impact and effectiveness of international economic sanctions.

Emily Ross, who graduated from UW-L in 2012 with a major in biochemistry and a minor in microbiology, told Regents how her internship experience at Main Street Ingredients in La Crosse not only helped her define her career interests but also led to a full-time job. “These types of experiences really make you a valuable asset to companies,” she said.

The REDI Committee also hosted a wide-ranging panel discussion with four business leaders, highlighting the benefits and challenges of interactions between businesses and research activities on UW campuses. Panelists included: John Biondi, President and CEO, Xolve, Middleton; Julie Wagner, VP of Research & Development, Century Foods International, Division of Hormel, Sparta; Jay Ellingson, Director of Food Safety & Quality Assurance, Kwik Trip, La Crosse; and David Kettner, CEO, Fused Innovation, Neenah.

In other business, the REDI Committee:

  • Heard a progress report from Associate Vice President for Economic Development David Brukardt on UW System’s Economic Development Strategic Plan.

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Business, Finance, and Audit Committee

Regents hear University Personnel System updates
Associate Vice President for Human Resources and Workforce Diversity Al Crist presented an overview of a UW System Operational Policy intended to guide and govern the distribution of pay plan salary adjustments at UW System institutions other than UW-Madison. This operational policy provides Chancellors with policy guidance on the distribution of the Board of Regents biennial pay plans and for institutionally funded supplemental pay plans. Similar implementation policies are under development for UW-Madison.

“This is in hopeful preparation for a pay plan for the first time in five years,” Crist said. 

The 2013-15 biennial budget request submitted by the Regents requested an amendment to State Statutes, which would change the law to authorize the Board of Regents and the UW-Madison Chancellor to have full authority to approve pay plans for all UW System employees. If the Board and UW-Madison Chancellor were so empowered, the submission of compensation plan recommendations to the Office of State Employment Relations (OSER) for their consideration and further recommendation to the Joint Committee on Employment Relations (JCOER) and the Governor would no longer be required.

At the December 2012 Board meeting, Regents approved the Regent Policy on University Personnel Systems which included delegation to the President of the UW System the establishment of operational policies for all UW System institutions except for UW-Madison, and to the UW-Madison Chancellor the establishment of operational policies for UW-Madison.

Regent Jerry Whitburn noted that if approved, significant authority would be delegated to chancellors under the new flexibility. “It will have to be utilized carefully because if mistakes are made, if steps are taken we’re not able to defend, this is the type of flexibility that will disappear,” Whitburn said.

The Committee also heard an overview from UW-Madison Vice Chancellor for Finance and Administration Darrell Bazzell of the institution’s Human Resource Program Policies. These policies are intended to guide UW-Madison’s implementation of the Regent Policy on University Personnel Systems and are similar to those operational policies for the balance of the UW System brought before the Board at its December 2012 meeting.

Senior Vice President’s Report
As part of the regular update on efforts to address Human Resource System (HRS) payments, process, and controls, Senior Vice President Michael Morgan reported that Employee Trust Funds (ETF) determined, in the process of doing year-end reconciliations, that UW System exceeded its required Wisconsin Retirement System (WRS) contributions by $1.76 million for calendar year 2012. Morgan noted that UW will recover 100 percent of this amount in the form of a credit on UW’s April WRS remittance.

UW-Madison Vice Chancellor Darrell Bazzell also noted that UW is exploring with ETF the possibility of doing more frequent reconciliations than the current practice of just once annually.  

Regarding Act 32’s provision that UW discontinue its relationship with WiscNet and procure alternate internet services from another provider, Morgan reported that several bids have been submitted. He said the review process would be completed by mid-May.     

Morgan also provided a status update on institutional compliance with policy change guidelines related to implementation of recommendations contained in the Report on Reporting Crimes against Children. He told Regents that all institutions except one have now operationalized the required national background checks. The remaining campus will be on board soon, he said.

In other business, the Business, Finance, and Audit Committee:
  • Approved a five-year contract with IMG College Seating, LLC, for the provision of stadium seats/seatbacks at UW-Madison Athletic events;
  • Approved an extension to the UW-Oshkosh Dining Services Contractual Agreement with Sodexo Management, Inc.;
  • Heard a report from Trust Funds Director Doug Hoerr presenting highlights of the Annual Endowment Peer Benchmarking Report;
  • Heard a report regarding voting on 2013 Non-Routine Proxy Proposals; the dominant social issues for the 2013 season included corporate political contributions and lobbying, the environment and sustainability, and human rights issues;
  • Formally accepted seven bequests with a total value of $696,000; and
  • Heard an update from Director Elizabeth Dionne of recently completed and on-going projects along with information on current activities of the Legislative Audit Bureau impacting the UW System. 

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The UW System Board of Regents will resume its meeting at 9 a.m., April 5, 2013, at UW-La Crosse


Related: April 5 (day 2) news summary