Financial Stringency Must Be Declared

at the University of Minnesota?

And Why Is This?

My friend and fellow U of M alum writes tellingly of the behavior of the administration of the University of Minnesota over the past few years:

The University of Minnesota is facing a financial crisis due to the decisions of the senior administrators and the Regents on the use of its revenues. Consider the following expenses:

(1) costs of administration at the University (now at 40 vice presidents with combined annual salaries of $8.4 million--see
http://www.mndaily.com/2010/01/26/share-sacrifice);

(2) multi-million dollar advertising campaign [$4.4 million to the Olson & Co. advertising firm from April 2007 through June 2009 for the Driven to Discover campaign, including funds from the University of Minnesota Foundation (!) for this purpose--see p. 12 and pp. 25-26 from the June 12, 2008 report of the Finance & Operations Committee of the Board of Regents at http://umn.edu/regents/docket/2008/june/finance.pdf.]

(3) costs of legal services ($5.7 million to outside counsel in 2009 in addition to the salaries and benefits paid to the 18 attorneys in the Office of the General Counsel at the University--see p. 13 of the 2009 Annual Report of the General Counsel at http://www.ogc1.umn.edu/stellent/groups/public/documents/webasset/da_029600.pdf.

(4) annual multi-million dollar subsidy to the athletic department ($4 million in 2010--see p. 5 of the September 3, 2009 report of the Faculty Consultative Committee at http://conservancy.umn.edu/bitstream/54354/2/09-09-03%20_II_%20FCC.pdf);

(5) UMore Park on which the administration has spent more than $9.3 million since 2006 to plan residential and commecial development on contaminated land in rural Dakota County that is miles away from existing municipal services--see p.7 of the December 2009 report of the Finance & Operations Committee of the Board of Regents at http://www1.umn.edu/regents/docket/2009/december/finance.pdf.

The public funds for this adventure in land development have come from the Central Reserves Fund at the University that is supposed to be used for contingency expenses. These multi-million dollar expenditures and other withdrawals will reduce the Fund to $12.6 million by the end of fiscal year 2010, far below the $26 million REQUIRED by the Regents' Policy. See pp. 24-25 of the U of M Operating Budget 2009-2010 at
http://www.budget.umn.edu/FY10docs/FY10_OpsBudget_Approved.pdf.

For more details see
http://blog.lib.umn.edu/bgleason/pt/2009/12/a_universitys_priorities_part.html.

(6) spending a principal amount of $248 million to construct a new football stadium that will be used for six games per year. The citizens of Minnesota will have to repay stadium bonds in the principal amount of $137 million plus interest over the next 20 years as the University obtains an additional $111 million from donors and students. The administration is strong-arming the students (and their parents) for this purpose by collecting yet another fee from all 50,000+ students, most of whom will never attend a single game.

[Added later: Actually it is worse than this. The projected principal cost of the stadium was $248 million in May 2006 when the legislature passed the stadium bill. In January 2007 then Regent David Metzen persuaded his fellow Regents to spend an additional $40 million on the stadium. See the January 4, 2007 Star Tribune report on p. 1A. This increased the principal cost of the stadium to $288 million and the University share of the cost to $151 million.]

See
http://www.umn.edu/umnnews/Feature_Stories/Proposed_deal_with_state_would_increase_funding_for_stadium.html.

The state legislature and the U of M faculty should be Driven to Discover how the University is setting its priorities and spending both state appropriations and funds given by donors for education, research, and public service (the reasons for its existence).


Michael W. McNabb
University of Minnesota B.A. 1971; J.D. 1974
University of Minnesota Alumni Association life member