Thursday, June 28, 2012

No rest for the Rotenberg...

Our General Counsel continues to engage in questionable legal action.  After all, it is not his nickel.

From the Minnesota Daily:

Nursing dean conflict could go to court
Connie Delaney’s former assistant claims the dean broke federal laws.

School of Nursing Dean Connie Delaney’s former executive assistant has taken steps to initiate a federal lawsuit against the University of Minnesota, claiming she was discriminated against and wrongfully terminated.

The legal team representing Erica Goetzman, the former assistant, filed the complaint, alleging the University violated the Americans with Disabilities Act, the Family and Medical Leave Act, the Minnesota Human Rights Act and the Minnesota whistleblower law.

On Friday, the University’s Office of the General Counsel will file an answer to the complaint, outlining the University’s defense, General Counsel Mark Rotenberg said.

Although many students expressed support for Delaney and the School of Nursing’s national ranking has improved under her leadership, controversy has surrounded the dean over the past year.

The Star Tribune published multiple investigations into Delaney’s activities in March and April, reporting she used favoritism in hiring and violated University policies.

In March 2012, Provost Karen Hanson sent a letter formally reprimanding Delaney for violating the University’s policy on outside consulting for Delaney’s 2007 hire of a clinical professor who was also working full time for Mercy Hospital in Iowa for 17 months without formally reporting outside employment to the University. She also revoked Delaney’s hiring privileges for employees exceeding 30 hours per week until June of next year. 

 “Although you were early in your tenure as a dean, you should have known the requirements of the University’s Policy on Outside Consulting,” Hanson said in the letter.


Goetzman worked for Delaney from October 2007 until June 2010. According to the complaint, she received the highest possible performance ratings during this time.

The University could not release these ratings because they are considered private personnel data under Minnesota law.

Adrianna Shannon, one of Goetzman’s attorneys, said the parties have tried to solve things informally through mediation talks since the end of her employment, but they could not come to an agreement.

“We are ending up in federal court because we really have exhausted every other opportunity to try to get things resolved,” she said.

Rotenberg said he was not aware of these informal mediations.

In early 2012, Goetzman’s attorneys filed a charge with the Minnesota Department of Human Rights and the Equal Employment Opportunity Commission. In February 2012, the agencies ruled that Goetzman had “probable cause” to file the discrimination report because Delaney failed to accommodate her disability and fired her as retaliation for her report.

Rotenberg said the University has concluded that Goetzman’s claims “lacked merit.”

“As this case proceeds,” he said, “the University will have the opportunity to provide significant evidence showing that no unlawful action was taken against this former employee.”

‘Probable cause’

Goetzman suffers from migraines, coughing and burning eyes around certain chemicals due to her disability of multiple chemical sensitivity.

She alleged in the complaint that Delaney repeatedly refused to accommodate this disability by wearing a perfume that Goetzman was allergic to and not allowing her to place a sign on her desk declaring it a “chemical-free environment.”

The MDHR found this failure to accommodate, along with the way she was released from her job showed “probable cause” to go to federal court.

But Rotenberg said despite her claims, Goetzman’s disability was not why her job ended.

“The functions of her job and the classification of her job was simply shifted for cost-cutting reasons and has nothing to do with any disability that she may have,” he said.

Because the MDHR and EEOC found probable cause, Goetzman’s suit was legitimized. Rotenberg said that probable cause does not mean the University is at fault.

Delaney’s expenses

The complaint also accuses Delaney of misusing University funds.

In one instance mentioned in the complaint, Goetzman’s attorneys call out Delaney’s 2010 trip to Hawaii.

Delaney’s expense report shows she spent $1,559.36 on the trip, which Goetzman alleges was a personal vacation.

The School of Nursing and the Center for Spirituality and Healing defend Delaney, claiming this trip was to visit a hospital the center counsels in Hawaii.

“She met with a variety of U of M faculty and health care leaders, focusing mainly on informatics and sharing information around changes occurring nationally that would impact health care systems,” the school said in a statement.

They also said Delaney traveled to visit potential donors as a “fundraising effort” for the school.

In the complaint, Goetzman said there were dinners and drinks that were not “legitimate business expenses.”

Shannon said she believed Goetzman’s job was terminated because Goetzman reported Delaney’s alleged misuse of funds as well as her discrimination claims.

“Ms. Goetzman was willing to put her own job security at risk to protect the public’s best interests,” she said.

The receipts show Delaney spent $137.66 on town cars for transport to and from the airport, $1,155.08 on roundtrip airfare and $266.62 on dinners — which adds up to the amount listed on the expense report for the nine-day trip.

‘What justice would require’

In the complaint, Goetzman asks for an excess of $75,000, which could mean much more.

But Shannon said the case is not just about the money — she and her client would like to see more checks and balances in the system.

“After the parties have had some more discovery in this case, we’ll have a much better understanding of what justice would require,” Shannon said.

Rotenberg did not mention any misuse of funds. He said the University’s main defense for the case will show Goetzman was not discriminated against.

“The University believes that the Goetzman complaint lacks merit,” he said. “And we will be defending that case in court.”
Oh, boy...

Wednesday, June 27, 2012

Rotenberg Shot Down 


Once again the courts have ruled against the bully boy tactics of the crack University of Minnesota legal staff.

From the Pioneer Press:

State appeals court rules in favor of aviation enthusiasts in UMore Park case 

When airplane enthusiasts were told they had to leave land they leased at UMore Park in Rosemount, they reluctantly complied.

Then they asked the property owner -- the University of Minnesota -- for the cost of moving their planes, hangars and other property.

On Monday, June 25 the Minnesota State Court of Appeals ruled in the group's favor, ruling the University must distribute nearly $142,000 to the 10 hangar owners who made up the now-defunct Jensen Field private airstrip. 
The appellate court concluded the hanger owners are considered "displaced" because they temporarily used the leased land while the university planned its redevelopment with the use of federal funds.

The appellate decision reverses a September 2011 ruling by a university-appointed administrative hearing officer who concluded the group is not considered "displaced" because the leases were terminated by specific terms of the lease, not by the turbine project.

University General Counsel Mark Rotenberg did not immediately return a call for comment Monday. 

The more things change, the more they stay the same. I wonder what the U of M legal expenses were for this dog-fight?

Corporations boost agricultural research funding

(I thank my friend Michael McNabb for pointing out this important article.) 

The gap between federal support for agricultural research at large public universities and private investment continues to grow -- and the divide comes with increased threats to academic freedom and more instances of meddling, a report suggests.

A recent study by Food and Water Watch, a Washington-based environmental group, shows that nearly one-quarter of the money spent on agricultural research at land-grant universities comes from corporations, trade associations and foundations, an all-time high.

The consumer advocacy group's report is rife with what it calls examples of how corporate money corrupts public research mission at land-grant schools, which were created by the Morrill Act of 1862

The examples range from a University of Georgia food safety program that allows industry groups to join an advisory board in exchange for annual $20,000 donations, to an Ohio State University professor whose research on genetically modified sunflowers was blocked by two seed companies after results suggested the biotech sunflowers fostered the growth of weeds.

Such alliances are a far cry from land-grant universities' historic role in promoting public knowledge and freely sharing the fruits of their research, said Patty Lovera, Food and Water Watch's assistant director. The report notes that publicly funded university research led to the domestication of blueberries, early varieties of high-yield hybrid corn and common tools to fight soil erosion.

"There's a real sense in agriculture of what these schools used to be," Lovera said. "There was much more trust in what they put out. This is not the same research system of decades ago, and we're acting like it is."

With the current five-year farm bill set to expire at the end of September, Food and Water Watch wants Congress to boost the federal investment in campus agricultural research, with more resources steered toward sustainable methods, organic farming and reduced use of pesticides. The group also is calling for land-grant universities to more fully disclose gifts by private donors and wants agricultural research journals to adopt more stringent conflict-of-interest rules, similar to the recent crackdown by medical journals.

This situation is critical to understanding the apple licensing situation at the University of Minnesota as well as the brouhaha over Troubled waters...

Monday, June 25, 2012

Why LeRoy Neiman, a son of St. Paul,

Was not too fond of it...

... one thing comes through loud and clear.
Neiman never made peace with his hometown – or with critics who refused to give him the respect he felt he deserved. Even though he was in the final stages of negotiating with the city of St. Paul to establish a downtown museum displaying much of his artwork, he was outraged when Pioneer Press columnist Katherine Lanpher wrote that his art "stinks," and compared his work with "Precious Moments figurines and ceramic villages of Little Dickensian houses."
Neiman promptly withdrew his offer to put $4.5 million in the project and denounced Lanpher's column as a “savage, insulting attack on my character and work. I feel like I was mugged ... in my old home town.” As a result, the museum was never built.
Neiman writes in his book that the museum idea was opposed by “a cabal of uptight citizens (who) couldn't justify matching me up with their Saintly City. It was the Playboy artist stigma again, but I was over it. That was the last time I let St. Paul put me on a roasting spit.”
Ironically, Lanpher moved to New York in 2004, where she is a radio host and writing mentor. She told Mary Ann Grossmann of the Pioneer Press she is “still stunned at the reaction to that column. It makes me wonder if Neiman was looking for a way out of that museum. After all, he usually brushed off his critics.” But she added, “His paintings have their fans. But even those of us who didn't like his work have to admire his masterpiece: his colorful, exuberant life.”
Neiman was no less forgiving of the art world’s establishment, which refused to consider him a major artist. Its attitude was summed up by a New York Times art critic on Saturday who described him as “the archetypal hack” whose popularity and enormous commercial appeal stemmed from “his ambitiously opportunistic personality and his position as Hugh Hefner’s court artist. … With his ever-present cigar and enormous mustache, he was a cliché of the bon vivant and a bad artist in every way.”
That’s a cruel judgment and, I think, a snobbishly wrong one that will change now that Neiman is gone from the scene. I predict that he will be remembered as a quintessential American artist who, while often outside the mainstream of the art world, was at the center of American life in the 20th century.

We shall see. Stranger things have happened in the art world. 

Sunday, June 24, 2012


The phrase "The sky is falling!" features prominently in the story, now used
as a common idiom for mistaken belief that disaster is imminent.

Did the University of Virginia Rector

and Board of Visitors

Have a Chicken Little Experience ? 

An analysis of the train wreck at a great nominally public university provides many relevant lessons for stakeholders at the University of Minnesota, members of the state legislature, and citizens of our state. 

 (emphasis mine)

For those seeking insight into the crisis under way at the University of Virginia, I offer the following summary and interpretation of emails that were released last week as a result of a Freedom of Information Act request made by the student newspaper, The Cavalier Daily, to the university. This summary and interpretation is mine alone, and I wrote this analysis on my own initiative and without the advance knowledge or participation of anyone connected to my employer, the University of Virginia.
» In recent months, UVa Rector Helen Dragas and ex-Vice Rector Mark Kington seem to have persuaded themselves that online technology was about to cause a profound disruption/revolution in higher education. They came to this conclusion — or the conclusion was affirmed in their minds — after they read:
First, an April 8 Chronicle of Higher Education article by Ann Kirschner, dean of the City University of New York, titled “Innovations in Higher Education? Hah! College leaders need to stop talking about transformation before it’s too late,” which speculated that “[t]he ultimate threat to universities could come from the disaggregation of the degree, as students take advantage of the growing availability of open-source learning networks to present evidence of competency to prospective employers.”
Second, a May 13 op-ed by New York Times columnist David Brooks on “The Coming Tsunami” in higher education, which praised the for-profit University of Phoenix, the for-profit online-education company Coursera, and the nonprofit Harvard/MIT online education partnership edX, and speculated that “what happened to the newspaper and magazine business is about to happen to higher education.”
Third, a May 30 Wall Street Journal article, “Higher Education’s Online Revolution,” written by two Hoover Institution-affiliated academics who cited the for-profit University of Phoenix as well as the edX partnership to advance a bold, if speculative, claim:
“Over the long term, online technology promises historic improvements in the quality of and access to higher education. The fact is, students do not need to be on campus at Harvard or MIT to experience some of the key benefits of an elite education. Moreover, colleges and universities, whatever their status, do not need to put a professor in every classroom. One Nobel laureate can literally teach a million students, and for a very reasonable tuition price. Online education will lead to the substitution of technology (which is cheap) for labor (which is expensive) — as has happened in every other industry — making schools much more productive.”
The rector told the then-vice rector in an email that this article demonstrated “why we can’t afford to wait” presumably, to force President Teresa A. Sullivan’s resignation.
» Harvard MBA and UVa bachelor of science alumnus Jeff Walker, a major UVa donor, told the rector that the “on-line learning world has now reached the top of the line [sic] universities and they need to have strategies or will be left behind’ and sent the rector a video about a “hugely successful on-line course at Stanford” that promised, according to The Cavalier Daily reporter’s summary, to “lower costs” and “improve productivity.”
The rector responded: “BOV is squarely focused on UVa’s developing such a strategy and keenly aware of the rapidly accelerating pace of change.”
The rector appears not to have:
First, questioned Walker’s assumption that the higher education industry is about to enter an era of survival-of-the-fittest competition.
Second, asked if the future envisioned by Walker might not allow, as it does today, for a diversity of approaches to higher education.
Third, researched the claim that online delivery of higher education lowers costs and improves productivity.
Fourth, asked if online education results in better or worse educational outcomes.
And fifth, raised any questions about possible differences in mission between for-profit and nonprofit private institutions of higher education on the one hand, and public institutions of higher education on the other.
» The rector sent the then-vice rector a June 3 Williams College commencement address by Dr. Atul Gawande that argued that calamitous failure can sometimes only be avoided by assuming a high degree of risk. According to Gawande: “All policies court failure — our war in Iraq, for instance, or the effort to stimulate our struggling economy. But when you refuse to even acknowledge that things aren’t going as expected, failure can become a humanitarian disaster. The sooner you’re able to see clearly that your best hopes and intentions have gone awry, the better. You have more room to pivot and adjust. You have more of a chance to rescue.”
Presumably, the rector interpreted this article as justification for carrying out a bold, if risk-laden, “rescue” operation at UVa, the goal of which apparently was to avoid an unspecified “humanitarian,” or other, “disaster” down the road.
» The then-vice rector emailed the rector on June 10: “[UVa’s] Darden [Business School] is a near and visible template for much of what we seek.” What this statement means is unclear, but it is worth noting that Darden receives no funds from the state, is a professional school and charges what industry insiders consider to be “market-rate” tuition.
Perhaps not coincidentally, it is also the school from which the rector and the ex-vice rector received their two-year postgraduate degrees.
At the Sulgrave Club in Washington, D.C., venture capitalist Jeff Neuchterlein (a UVa College of Arts and Sciences and Law School alumnus) appears to have questioned President Sullivan about what UVa was planning as far as online education was concerned. Neuchterlein later told the then-vice rector, in a private email, that he found the president’s response — which is not summarized in the FOIA’d emails — to be “rather pedestrian.”
In her final statement to the Board of Visitors on June 18, President Sullivan had this to say about the online delivery of postsecondary education: “There is room for carefully implemented online learning in selected fields, but online instruction is no panacea. It is surprisingly expensive, has limited revenue potential, and unless carefully managed, can undermine the quality of instruction.”
» The rector and then-vice rector seem to have conspired to remove the president, exchanging between themselves, on June 2, drafts of a public statement announcing the president’s dismissal and meeting — privately, it seems — to handle loose ends before any “group” meeting took place (meaning, presumably, a meeting of the Board of Visitors).
» The then-vice rector inadvertently acknowledged the lack of transparency surrounding the forced resignation of President Sullivan when he emailed the rector and UVa Chief Operating Officer Michael Strine on June 11: “[M]aybe a modicum of candor is called for” (emphasis added editorially).
» In a June 12 email to the rector, the then-vice rector and Provost John Simon, the COO seems to have consented to publicly making the argument that there was a need for “urgency and action," given the financial/academic environment. Presumably, such an argument would have helped legitimize what the rector and then-vice rector had just done — namely, force the abrupt resignation of President Sullivan.
» The same day, the then-vice rector emailed the rector, the provost and the COO, urging them to publicly make “the case for unavoidable change” — presumably, the “unavoidable change” of a forthcoming disruptive/revolutionary transformation of the higher education industry. This is a speculative argument, but one that the ex-vice rector appears to have believed would justify radical change imposed from above, including the forced resignation of President Sullivan.
Thus did a handful of wealthy and well-connected individuals who have no recognized credentials or expertise in the field of higher education, including two members of the Board of Visitors (namely, the rector, a real-estate developer appointed by Gov. Tim Kaine, and the ex-vice rector, a venture capitalist appointed by Gov. Bob McDonnell), privately persuade themselves that a revolution was on the horizon and that this revolution — the arrival, trajectory and outcome of which are, to say the least, uncertain — necessitated destabilization of one of the world’s great public research universities and the public and private humiliation of UVa’s first woman president, the internationally esteemed scholar and public higher education leader, Dr. Teresa A. Sullivan.

Saturday, June 23, 2012

LeRoy Nieman, Son of St. Paul,

Has Smoked His Last Cigar


Frank Bowles, whose galleries exhibit the work of Neiman, writes:

It was with great sadness that I learned last night of the passing of my dear friend LeRoy Neiman.  Not only was LeRoy a great personal friend, he was a warm and generous collaborator with our galleries, who touched the lives of so many clients and staff that came to know him over the years.  He will be remembered and missed by us all. 
I first met LeRoy 37 years ago, and since that time we have been continuously exhibiting his work to the intense delight of his many fans here and abroad.  Over the years, LeRoy has attended innumerable opening nights with us, and believe me, he loved his public as much as they loved him.    LeRoy brought an extremely high level of energy to everything he did, and his presence at the gallery could generate excitement like nothing I’ve experienced before or since.  It was wonderful just to be in the same room as him.
The catalyst for this cherished relationship was obviously LeRoy’s important work as an artist.  He was active for many, many years and was a prolific creator, embracing and experimenting with a diverse spectrum of media.  His skill in capturing the spirit and energy of people and events was remarkable, filled with charm and wit, while resting firmly on an assured technical ability.  Not only a great artist, he became a cultural icon—instantly recognizable—with his trademark cigar and Clark Gable mustache, LeRoy was a true American original.  His personality sometimes outshone the bright colors in his paintings, but at heart, LeRoy was an artist who loved making art, and was driven by the creative impulse.
His association with Playboy magazine, his official affiliation with numerous sporting events, his friendships with luminaries such as Frank Sinatra and Muhammad Ali, all of these things put LeRoy at the epicenter of a great many exciting and important moments in world history.  As LeRoy watched the transformation of the American landscape in the second half of the 20th century, he was busy chronicling these often turbulent times with his keen, insightful eye and we are much the better for his efforts.  LeRoy Neiman was an exceptional American artist and will undoubtedly be recognized by history as such.
Not everyone knows it, but LeRoy Neiman was also a wonderful philanthropist.  Early in his career, LeRoy taught at the Art Institute of Chicago, where he was also a student, and he continued to dedicate a significant amount of his considerable energy to fostering the next generation of young artists.  From youths at his LeRoy Neiman Center for the Arts here in San Francisco, to graduate students at the LeRoy Neiman Center for Print Studies at Columbia University in New York, LeRoy gave his time, his talent, and his money, so that the arts would thrive both now and in the future.
One of LeRoy Neiman’s greatest attributes was that he lived and painted according to his own rules.  LeRoy went his own way, staying true to himself, and he maintained his artistic integrity despite what the critics had to say.  He embodied a rugged individualism that strikes me as uniquely American, and I feel most privileged to have been, even in a small way, along for this incredible ride.  He was an icon, but also an iconoclast.  As Frank Sinatra once said, LeRoy did it his way, and we wouldn’t have had it any different.
LeRoy continued to produce beautiful work up until the time of his death.  His vibrant new memoir All Told, brings a lovely closure to his excellent career and life.  
We’ve had the honor of exhibiting and selling works from practically all of LeRoy Neiman’s many oeuvres.  His large acrylic and enamel paintings are as beloved and accomplished as his small-scale silkscreens.  I personally own a great number of his works and intend to continue collecting, exhibiting and selling the works of this remarkable man.  As his primary dealer, we shall continue to focus on his work and make it available to his legions of admirers.  We will miss LeRoy greatly, but as in life, so in death, we will honor his work and his legacy, and continue to share his art with the many people who are captivated by it.
Franklin Bowles

Son of St. Paul?

 From an excellent obit by the AP:

 St. Paul native LeRoy Neiman, whose art captured energy of sports, dies

Emphasis mine...

NEW YORK-- St. Paul native LeRoy Neiman, the painter and sketch artist best known for evoking the kinetic energy of the world's biggest sporting and leisure events with bright quick strokes, died Wednesday. He was 91.
Neiman was the official painter of five Olympiads and also was a contributing artist at Playboy magazine.
His longtime publicist Gail Parenteau confirmed his death Wednesday but didn't disclose the cause.
Neiman was a media-savvy artist who knew how to enthrall audiences with his instant renditions of what he observed. In 1972, he sketched the world chess tournament between Boris Spassky and Bobby Fischer in Reykjavik, Iceland, on live television.
He also produced live drawings of the Olympics for TV and was the official computer artist of the Super Bowl for CBS.
Neiman's childhood was spent in St. Paul, where he grew up on Van Buren Av. He hung out on the periphery of the ballgames and brawl games in Frogtown and set bowling pins by hand in a downtown bowling alley.
"As soon as a snowstorm came, we took off up the hill to shovel the sidewalks of the wealthy people," Neiman once told a reporter.
His interest in art was nurtured by nuns at St. Vincent de Paul school. As a sixth-grader, he earned national honors for his portrait of a fish.
Neiman returned briefly to St. Paul after World War II but soon left to study and teach at the Art Institute in Chicago. His mother, Lydia, is buried at Fort Snelling National Cemetery.
A lost art
Neiman's "reportage of history and the passing scene ... revived an almost lost and time-honored art form," according to a 1972 exhibit catalog of sketches at the Indianapolis Museum of Art.
Neiman's paintings, many executed in household enamel paints that allowed the artist his fast-moving strokes, are an explosion in reds, blues, pinks, greens and yellows of pure kinetic energy.
He has been described as an American impressionist, but preferred to think of himself as an American artist.
"I don't know if I'm an impressionist or an expressionist," he told the AP. "You can call me an American first. ... [but] I've been labeled doing neimanism, so that's what it is, I guess."
But his critics said Neiman's forays into the commercial world minimized him as a serious artist. At Playboy he created Femlin, the well-endowed nude that has graced the magazine's Party Jokes page since 1957.
Neiman shrugged off such criticism. "I can easily ignore my detractors and feel the people who respond favorably," he said.
Neiman, a self-described workaholic who seldom took vacations and had no hobbies, worked daily in his New York City home that he shared with his wife of more than 50 years, Janet.

Monday, June 18, 2012

For the first time since ouster...

University of Virgina's President Sullivan Speaks Out

(emphasis mine)

The NBC29 newsroom received the following statement from University of Virginia President Teresa Sullivan:

In 1816, our founder Thomas Jefferson said, "as new discoveries are made, new truth discovered and manners and opinions change with the change of circumstances institutions must advance also to keep pace with the times." 

We are all aware that the UVA needs to change and for the past 2 years I have been working to do just that.  Apparently, the area of disagreement appears to be just how that change should occur and at what pace. 

I certainly want to take some time and talk about the many changes that I have made because they are significant.  But first, I need to make one thing clear.  The current reaction by the faculty, staff, and students on and off Grounds, and among the donors and alumni to my impending departure, is not something I have stirred up.  I have made no public statement.  I have done my best to keep the lowest possible profile. I have fulfilled previous commitments at the White House and elsewhere in Washington, and I have visited with friends in another state.  I have not even responded to the innumerable people who have reached out to me personally and demonstrated their love for this great institution.  I did not cause this reaction in the last ten days, but perhaps the reaction speaks to the depth of the connections I have made in the last 22 months.  Through all of the last ten days, my overriding concern has been the welfare of the University of Virginia.

I have been described as an incrementalist. It is true.   Sweeping action may be gratifying and may create the aura of strong leadership, but its unintended consequences may lead to costs that are too high to bear.  There has been substantial change on Grounds in the past two years, and this change is laying the groundwork for greater change. But it has all been carefully planned and executed in collaboration with Vice Presidents and Deans and representatives of the faculty. This is the best, most constructive, most long lasting, and beneficial way to change a university.  Until the last ten days, the change at UVA has not been disruptive change, and it has not been high-risk change.

Corporate-style, top-down leadership does not work in a great university.  Sustained change with buy-in does work.  UVA is one of the world's greatest universities.

Being an incrementalist does not mean that I lack vision. My vision was clearly outlined in my strategic vision statement.  It encompasses the thoughts developed by me and my team as to what UVA can become in the 21st century and parts of it were incorporated into the budget narrative that you adopted last month .       

FACULTYOne of the great strengths of UVA is our outstanding faculty.  As a tenured member of faculty, I have tried to view the campus not only from the president's chair, but from the faculty's lectern and it has been an amazing and rewarding experience.  Nearly every faculty member here has opportunity costs for staying and has attractive options elsewhere. The faculty we most need to keep have many options elsewhere. Most of the faculty could earn more in some other organization, academic or non-academic.  They stay to participate with other faculty "of the highest grade" and to interact with students who will be the leaders of the next generation.  Their financial sacrifices have their limits; of course the faculty must be appropriately compensated. 

But at the end of the day, money alone is not enough. The faculty must also believe that they can do their best work here.   They must believe in the future here. At any great university, the equilibrium – the pull between the desire to stay and the inducements to leave – is delicate.   Rapid change rapidly upsets this delicate equilibrium. 

Already in the last ten days we have lost faculty to other universities. Fortunately, we are well past the usual hiring season in most disciplines. But deans and provosts at every peer institution are setting aside funds now to raid the University of Virginia next year given the current turmoil on our campus.

Clearly we have financial challenges.  Our net financing from the state has been steadily cut for two decades, despite the efforts of the Governor and General Assembly to modestly reverse that trend.  Both political and market forces limit the tuition we can charge.  We are addressing these challenges in multiple ways.

The academic mission is central and must be protected. Strategic cutting and large-scale cost savings have therefore been concentrated in non-academic areas, and these areas have become notably leaner and more efficient. 

The historic practice at UVA was that any necessary budget cuts in the academic areas were directed by the central administration, often by a non-academic officer. And because that officer often, almost inevitably, lacks sufficient information to make detailed choices, these cuts were usually applied across-the-board, the most non-strategic approach to cutting.  I undertook to change this approach.

In the last two years, we have been working to implement a new internal financial model. This is no technical accounting matter. The new model would empower deans, improve their financial incentives, and hold them accountable for the results. Each dean knows his or her own school far better than the central administration can ever know it. But the deans have had limited financial planning tools, and if they did find a way to cut costs, or a creative way to raise revenue without raising tuition, there was no assurance that they would keep the savings or the revenue.  We expect better financial decisions, new cost savings, and where necessary, more strategic program cuts from the new internal financial model. 

The budgeting changes we have already set in place this year have created transparency and accountability and dispelled the perception that politics drives the internal allocation of resources.   The budget meetings that we initiated this year provide the opportunity for the provost to work with deans on priorities for strategic investment. And often he discovers that multiple deans have a similar idea, and that a co-investment strategy will produce greater gains at lower total cost. We are making a portfolio of these "small bets," which cumulatively will build strength in important areas of teaching and research. This approach acknowledges that we are neither prescient nor omniscient. No single initiative will do serious damage if it doesn't work out.

One example, already under way and being expanded, is the Quantitative Collaborative, which addresses simulation and predictive statistical models and the challenges of massive data sets that exceed the limits of our analytic tools.

Others that are well along in the planning and funding stages include:

The Contemplative Sciences Center, which has broadened considerably from the original donor proposal to an exciting synergy among faculty from the Medical School, the College of Nursing, Asian Studies, Religious Studies, and other departments.

Our international focus: We are broadening and deepening the connections among our international faculty, especially among those who study China and Africa.  These are not areas that should be siloed within academic units, but there should be ways for scholars across Grounds to interact on them.  My recent trip to China was used as a way to integrate these scholars' expertise and help us chart a course for the future.

Environmental sustainability is a topic that excites faculty and students from nearly every school, including the College, Architecture, Engineering, and other. .  A new partnership with the National Fish and Wildlife Foundation, together with our widely heralded Bay Game, offer opportunities for study in species conservation and clean water, which will be one of the most important issues of this century. Many more ideas are bubbling up both from faculty and from students.  These projects require new funding, typically from interested private donors, but they are also force multipliers. They enable our existing faculty to expand the reach of their teaching and research through structured collaboration with colleagues in other departments and other schools.  They do not tear down departments, but instead they provide ways for faculty from different departments to interact, enriching the departments but also allowing new activities.

We have taken similar initiative with respect to faculty compensation. We found funds for a 2% faculty pay raise last year — not enough, but the first raise of any kind in four years. Equally important, we instructed deans not to give a 2% raise across the board, but to allocate all raise money on the basis of merit. This rewards our most valuable faculty and improves the incentive structure for all faculty.

A dramatic top-down reallocation in our general fund, simply to show that we are "changing," or that we are not "incremental," seems to me fiscally imprudent, highly alarming to faculty, and unfair to students who expect to get a broadly inclusive education here. I have chosen a lower-risk and more conservative strategy, because I am accountable to the taxpayers and the tuition payers. 

If we were to embark on a course of deep top-down cuts, there would also be difficult questions regarding what to cut. A university that does not teach the full range of arts and sciences will no longer be a university. Certainly it will no longer be respected as such by its former peers.

Faculty collaborate both within disciplines and across disciplines. In the nature of things, many of these collaborations are not even known to the central administration. If we cut from the top down, without consulting the affected faculty, a cut in one department may have wholly unintended consequences in another department that we are trying to build up.

Nor can we always predict which kind of knowledge will be of greatest import in the future.  Before September 11, few of us understood just how important Arabic and other Middle Eastern and Central Asian languages would become — to our students, to the nation, and to national security.  Suppose we had eliminated some of those languages because of low enrollment or other fiscal considerations before 2001. We would be scrambling to recreate them now.

Beyond finances, there are many other innovations I have undertaken and about which you are regularly briefed. 

We conducted national searches to fill our two executive vice presidencies with talented administrators. No president can act alone; filling these positions was essential to further progress.

We have increased the emphasis on the unglamorous but critical task of patient safety in our hospitals.

We are undertaking or evaluating strategic alliances with other health care providers, to strengthen our position in the face of a changing and more complex and difficult market for health care.

We have taken initiatives to improve student safety. This is obviously a matter of great concern to parents. These initiatives include the Day of Dialogue during my first month on Grounds, and the follow up from that day, and a new policy on sexual misconduct that is considered a national model.

We greatly expanded our MLK Day celebration, both as an additional educational activity for our students but also as a way to link with the community of Charlottesville.  We have worked with the Governor, with the Higher Education Advisory Commission created by the Governor, and with the legislature to implement the Higher Education Opportunity Act.

We are gradually increasing enrollment, preserving the quality of instruction with the initiative pre-funded by the General Assembly, and we have implemented Early Action in admissions, increasing our ability to compete for the best students.

We have created the 4VA telepresence consortium with the state, Cisco, Virginia Tech, George Mason, and James Madison that uses sophisticated technology to share courses and other resources; examples are advanced Mandarin and national security policy. I would have become the consortium's chair on July 1. There is room for carefully implemented online learning in selected fields, but online instruction is no panacea. It is surprisingly expensive, has limited revenue potential, and unless carefully managed, can undermine the quality of instruction.

We have initiated the Hoos Well program, which in the long run will save money on our employee health care plan.

In this very Rotunda in which you are sitting, I initiated and secured funding for the critical roof repair.  Much more must be done to complete this, and we had a plan in preparation to raise the funds.

Fundraising takes time. A new President first has to meet donors and establish trust and rapport. Instability is as alarming to donors as it is to faculty and in the last few days you are already seeing the impact.

Fundraising during my tenure has been rebounding from the effects of the recession and the presidential transition. Since I came on board in 2010, philanthropic cash flow has increased by 15.6%.  New campaign commitments to date averaged $17.1 million per month in FY 2010 and averaged $24.6 million through April 30th of FY 2012.  A number you may not know yet is that we raised $44 million from our Reunions classes at Reunions Weekend.

Beyond fiduciary matters related to the budget model and fundraising, the University's new administrative team has had a considerable human impact. If you want to know about the impact on the faculty, on its morale and energy and commitment to UVA, go outside and talk to them.

I want to turn to the issue of trust.  The community of trust is not merely a term to describe a Code that applies to our students. We equally need a community of trust between faculty and administration and among our leadership teams.  Trust does not mean an absence of disagreement. But it requires that disagreements be frankly discussed. No matter how accomplished he or she may be, a president cannot read minds.  When you choose a new president, tell him or her what you are thinking.

Finally, I would like to thank you for the great honor of leading the University of Virginia.  In only 22 months, Doug and I have felt warmly embraced by the University and by Charlottesville and Albemarle County.  Whatever the problems this University may be facing, make no mistake: This is one of the world's great universities.  Every day on Grounds, great ideas are pursued; outstanding books are written; patients' lives are saved, often after despair had set in.  The products and industries of tomorrow are being crafted in our laboratories, and the leaders of the twenty-first century fill our classrooms and seminar rooms.

One of the greater duties of the president is to listen carefully to the needs and aspirations of the community. Only with that input have I been able to identify and analyze the issues that required action.    I am proud of my service here, and I thank you for the opportunity.

An outstanding leader for another university. Sad

Saturday, June 16, 2012

 Morrill Hall - The University of Minnesota

On The Cost of Administration Part II

The U of M administration has (finally) made an attempt to determine the percentage of total compensation spent on administrative staff.  On May 1, 2012 the director of financial research and the chief financial officer described their analysis to the Senate Committee on Finance & Planning.  See the report of the Committee.

Here are the three employee categories that were classified as "administrative or operational overhead" and the percentage of total compensation paid to each category:  University leadership 6%; organizational support 24%; facilities staff 4%. 

A fourth category, higher education mission support, was not classified as part of administration.  This category includes student services, health services, and general mission support, and receives 14% of total compensation.  The rationale for excluding this category from an administrative classification is tenuous:
Mr. Kallsen [director of financial research] said they struggled with this category and agreed that one could make an argument that these employees are "institutional overhead."
See p. 7 of the May 1, 2012 report of the Committee.

In fiscal year 2011 the total compensation paid to all employees at the University was $1.97 billion.  To make a very conservative calculation of the percentage of total compensation paid to administrative staff, exclude the categories of higher education mission support and facilities staff.  This leaves the University leadership and organizational support categories classified as administrative.  Together those two categories received 30% 
($590 million) of the total compensation paid to all employees. 

In fiscal year 2011 the total operating expenses of the University were $2.9 billion.  See p. 11 of the 2011 annual report.   So administrative overhead ($590 million in compensation) consumes at least 20% of the operating expenses.  (This calculation omits from administrative costs the tens of millions of dollars spent each year on supplies and on compensation for outside law firms, advertising agencies, and countless consulting firms.)

Is administrative overhead of 20% too high for a non-profit institution of higher education?   It is difficult to find an answer within those institutions:

More specific metrics about the efficiency of certain administrative or spending practices are not widely available. . . . For example, there is no common understanding on how much each institution spends for each dollar it raises, no statistics about staffing ratios, and no available information on what other universities spend in financial transactions.
See the section on the Need for Better Metrics in the September 16, 2011 Inside Higher Ed report on Where Universities Can Be Cut.

So how does the cost of administration at the U of M compare to the world outside the campus?  Let us look at an industry that is notorious for high administrative costs--health insurance:

The monthly premium goes toward paying the worker's medical bills, but the insurance firms also soak up a significant share of the premium dollar to cover the costs of marketing, underwriting, and administration, as well as their profit. . . .
Most for-profit insurance companies maintain a medical loss ratio of about 80 percent, which is to say that 20 cents of every dollar people pay in premiums for health insurance doesn't buy any health care. . . .
Every organization, public or private, business or charity, has administrative costs.  But the U.S. private insurance industry has the highest administrative costs of any health care payer in the world.  Americans tend to believe that the private sector can manage any type of business better than government can.  That is not the case, though, when it comes to health insurance.  Medicare, the government-run-single-payer systems created by Congress in 1965 to pay for basic health care for the elderly, has administrative costs of about 3 percent; the single payer government system run by different provinces in Canada have about the same.  Britain's National Health Service, a system where government provides and pays for health care, has administrative costs of 5 percent.
T.R.  Reid, The Healing of America (New York:  Penguin Press 2009) at pp. 36-38.

If the U of M administration cannot be as efficient as Medicare, at least it should be able to have administrative overhead far less than the health insurance industry, an international leader in excessive costs of administration.  To achieve that modest objective there must be a change in the culture of the University administration.

Earlier this month I had lunch with a Regent.  He repeated the refrain of the administration that current levels of compensation for senior administrators are necessary in the market to attract "top talent."  This is the same justification used to pay extravagant compensation to Wall Street executives.  The "Masters of the Universe" who are the chief executive officers of the Wall Street firms have an unwavering confidence in the market.  Their misplaced confidence combined with greed to bring our national economy to the brink of chaos.

Have we not learned from the Great Recession just how wrong "the market" can be?  The disastrous failure of the market to determine the absence of value in securities based on subprime mortgage loans is described in horrific detail by Michael Lewis in The Big Short (New York:  W.W. Norton & Co. 2010).

The lavish compensation paid to senior administrators has placed the University at risk of losing the financial support of state legislators and the general public.  This year the legislature, outraged by the payments of millions of dollars to departing senior administrators, slashed the Capital Request submitted by the administration.  See The Incredible Shrinking Capital Request Part II.

There may be more bad news at the legislature next year when state appropriations are allocated.  The Pioneer Press issued a warning in its lead editorial on Sunday, March 11, 2012:

But here's the problem:  This is the tip of the iceberg.  Don't believe that institutions that spend tax dollars in this way in this instance ["transitional" compensation] don't spend like this in general. . . .
There's linkage between this situation, spending practices in general and the seeming inexorable cranking up of tuition costs year after year.  Remember that next budget cycle when the University cries poor.
Read more of the editorial in Vacation Pay $455,000.

At our lunch the Regent dismissed the state legislature with a comment that state appropriations now cover less than 20% of the operating costs of the University.   But that statistic is misleading in isolation.  In fiscal year 2002 the University received $684.7 million in state appropriations and had operating costs of $2 billion.  In fiscal year 2011 the University received $623.3 million in state appropriations and had operating costs of $2.9 billion.  The reason for the significant decline in the percentage of operating costs covered by state appropriations is the billion dollar explosion in spending over the past decade by the administration.  The fuel for that explosion is skyrocketing tuition that increased from a total of $293 million in fiscal year 2002 to $634 million in fiscal year 2011.  See Ten Year Review of University Inc.

It now takes scores of students (and their parents) paying full tuition to support a single senior administrator.  There should be substantial reductions in the annual compensation of senior administrators and in the sheer number of administrators.  If the administration does not voluntarily take such actions, then the legislture may compel such actions by slashing state appropriations just as it slashed the 2012 Capital Request. 

End Quotes

It is extremely important for academic leaders to remind universities, and to remind themselves, that [intellectual development] is why we are here.  We're a nonprofit.  We're not here to make money.  We're here to improve the lives of students.  We're here to create new knowledge and we're here to serve the people of Minnesota.  That's  what we're about.

To the best of my knowledge, no great scientific discoveries, no insightful social science tracts, and no novels have been produced in Morrill Hall.  No classes are taught in Morrill Hall.  No patients are made well in Morrill Hall. . . . Without authority invested where the real work of the University is done, the light of excellence will only grow dimmer.
President Mark Yudof  

See Tenth Anniversary of Inauguration.

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

Friday, June 15, 2012

Brother, can you spare a paradigm...

The Research University Conundrum

Nation's Research Universities Are Offered Hope of Fatter Budgets—at a Price
(Emphasis, in red, mine. Comments, in green, mine)

A two-year Congressionally mandated assessment of financial threats to the nation's research universities ended on Thursday with the offer of a grand bargain: Cut costs and form more partnerships with communities and industry, and expect increased revenues and fewer regulations.
A report on the study, coordinated by the National Research Council at the request of four Democratic and Republican lawmakers, begins by affirming a widespread sense that years of steep budget cuts at the state and federal levels are endangering American research universities' global pre-eminence.
Its authors, a 22-member panel of university and business leaders, propose averting such a disaster through a set of 10 recommendations describing steps to be taken together by the universities, governments, and industry.
"The basic recommendation is: We want the relationship to be a partnership," said the panel's chairman, Charles O. Holliday Jr., a retired chairman and chief executive officer of the DuPont chemical company. It should not be universities' just saying, "Give us more money," Mr. Holliday said.
For universities, the recommendations include raising graduation rates among science and engineering majors and halting runaway growth in costs by keeping annual budget increases to no greater than the nation's overall inflation rate. States would be expected to fully reverse cuts in support to higher education that have ranged from 25 percent to 50 percent in recent years.
The federal government would meet a longstanding commitment to double the basic-research budgets of its main science agencies, reduce regulations governing university research, begin a program of matching state and private donations for facilities and endowed faculty, and fully cover overhead costs associated with grants. Corporations would restructure relations with research universities to meet broad educational and economic goals that extend beyond narrow job-training objectives.
And total public and private support for research and development would be increased to 3 percent of the nation's gross domestic product, up from levels between about 2.5 percent and 2.8 percent in recent decades.
It's a big list of commitments, potentially costing each of those main categories of partners as much as $15-billion to $20-billion a year over all, said James J. Duderstadt, a panel member and former president of the University of Michigan at Ann Arbor.
As such, Mr. Duderstadt said, the plan could be tough to sell to universities, despite their eagerness for more state and federal support. "The universities are only going to benefit if they also come with commitments of comparable scale," he said.

Following the 'Gathering Storm'

[The report] was intended as a follow-up to the National Academies' "Gathering Storm" report of 2005, in which a similar panel warned that the United States was risking its economic future by cutting back on education spending, particularly in the sciences, just as other countries were realizing the long-term value of such investments.
The "Gathering Storm" recommendations included doubling federal spending on the physical sciences over seven years. Congress took some steps toward carrying out that panel's ideas, driven in large part by the forceful personality of its chairman, Norman R. Augustine, a former president and chief executive of the defense-technology company Lockheed Martin.
But Congress has fallen short of the doubling goal in recent years, as the nation's economy has worsened and lawmakers have emphasized a fundamental desire to cut government spending. The panel led by Mr. Holliday, who served on Mr. Augustine's commission, was conceived as an attempt to revive the momentum, particularly as it concerns university-based research.
The image of industry support is critical to winning support for such ideas in Congress and in state legislatures, said M. Peter McPherson, president of the Association of Public and Land-Grant Universities, who was not a member of the panel. "To have a major corporate guy talk about what the country needs from the universities is a wonderful complement to the universities' saying that themselves," Mr. McPherson said.
Lawmakers constantly need reminding of the value of research universities, said Barton J. Gordon, a former Democratic member of Congress from Tennessee and one of the four lawmakers who requested the study. Even if many of the recommendations are based on ideas that have been proposed in some form in the past, Mr. Gordon said, there's real political value in packaging them together.
Nevertheless, the ultimate success of Mr. Holliday's panel appears far from certain. Its report, despite covering 250 pages, has left even advocates describing shortcomings, such as its avoidance of some tough questions that precipitated the study, and its lack of any clear path toward carrying out its recommendations.

A Missed Opportunity?

In his original proposal for the study, back in 2009, the then-president of the Association of American Universities, Robert M. Berdahl, said he'd like an evaluation of whether the country might simply have too many universities competing for its federal research dollars.
Among the programs that have raised questions for some lawmakers is the Experimental Program to Stimulate Competitive Research, or EPSCoR, through which the National Science Foundation sets aside money for institutions in states with historically low rates of success in winning grants. Its defenders include Paul W. Ferguson, president of the University of Maine at Orono, which has a niche expertise in offshore wind turbines. Programs such as EPSCoR have allowed Maine researchers to become more competitive, he said, with the idea that they eventually will be weaned off it.
With universities themselves divided on such programs, Mr. Berdahl's successor at the AAU, Hunter R. Rawlings, who served on the panel before taking the AAU post, said he didn't want to touch the subject of potentially limiting the number of research universities.
It may have been a missed opportunity, said William E. Kirwan, chancellor of the University System of Maryland. "There might have been an opportunity there to address that very point more explicitly," Mr. Kirwan said, "and I think that would have strengthened the report."
Mr. Kirwan, who serves as chairman of the Business-Higher Education Forum, an organization of senior business and higher-education executives, said the report also left him wanting more-explicit strategies for realizing its goals. Without that, he said, "I'm just afraid that this will be another very well written and well intended report that won't really move the needle."
Mr. Holliday, however, said he was determined to see the report gain traction. Although a lobbying strategy may not appear in the report, he said he had learned much from watching Mr. Augustine persuade Congress and others following the "Gathering Storm" report. Mr. Holliday's main method of winning allies is a planned series of regional forums around the country where he hopes that commission members will make clear to local business leaders, policy makers, and university officials the importance of jointly contributing to its success.
As a corporate leader himself, Mr. Holliday said he recognized he had a special responsibility to help other business executives understand the depth of benefits they receive, either directly or indirectly, from a strong national base of university research. He said he rejected any suggestion that the nation's political environment was too toxic to deliver such a message successfully. "I categorically disagree" with such a notion, he said. "We approach this with a lot of optimism."

Needed: Paradigm Shifts (Gak!)

Mr. Duderstadt was less willing to predict success in selling the idea to his fellow university leaders, many of whom he sees as still having trouble making deep structural changes in their spending habits, even as government support collapses around them.
"That requires paradigm shifts," Mr. Duderstadt said. "It requires sharing equipment in laboratories rather than giving every PI their own electron microscope. Maybe building one nanotechnology laboratory in the UC system and having everybody use it rather than build one on every campus.
[Cough, cough... That has already been done to a large extent.]
"Maybe changing the ways that you teach, reducing the number of majors that you have, reducing the number of postdocs that can't find jobs anyway," he continued. "There are a whole series of things that have to be put on the table and seriously considered."
There's also uncertainty about what a new and deeper relationship with industry might look like. Mr. Rawlings said existing relationships were generally positive, though he said he was wary of deeper corporate involvement in undergraduate education.
At the same time, Mr. Rawlings and others endorsed a project of the Business-Higher Education Forum in which companies work with faculty to design undergraduate curricula. The group announced this past week an expansion to a total of 12 projects across the country. They include one, championed by Mr. Kirwan, in which the government contractor Northrop Grumman will spend $1.1-million at the University of Maryland, hoping to generate a steady flow of students trained in cybersecurity.
In general, university leaders said they were confident they could manage such expanded partnerships without compromising their educational mission. The key safeguard is vigilance to ensure faculty fully control the curriculum, said Robert L. Caret, president of the University of Massachusetts system, which is also participating in the Business-Higher Education Forum program.

Top Down, or Bottom Up (Double Gak...)

Universities are right to be wary, Mr. Holliday said. But companies also value workers with a broad education, and the balance at most universities still favors liberal-arts training, he said. "I think we're a long way from being in trouble on that yet," he said. Brian K. Fitzgerald, chief executive officer at the Business-Higher Education Forum, endorsed that sentiment. "We don't want to turn America's great research universities into proprietary training programs," Mr. Fitzgerald said. "But there is a way to do a better linkage."
Other key goals identified by Mr. Holliday's panel include the passage of legislation that would allow U.S. residency to foreigners who graduate with science degrees, the greater encouragement of women and underrepresented minority students in science, and the permanent extension of a federal tax credit for research and development.
Over all, the panel's goals for changes by universities, businesses, and governments may be too optimistic, said Lou Anna K. Simon, president of Michigan State University, who was not a member. But that's not necessarily a bad thing, Ms. Simon said. A truly worthwhile goal, she said, is "never viewed as realistic."
The panel's members included Teresa A. Sullivan, who was forced out on June 8 as president of the University of Virginia, in part because of her disagreements with the university's governing board over how to handle the tougher financial environment.
During a briefing on Thursday with panel members about the report, Ms. Sullivan said U.S. research universities were stronger than their foreign competitors in large part because they tolerate a diversity of opinions. "The only advantage we have right now in that competition is that other countries have not yet figured out how to do it—they believe that the way to build a great research university is from the top down," she said. "That's not right. A great research university is far more distributed and networked, and many ideas are allowed to bubble up, some of which will be successful."

A thought-provoking, but ultimately depressing, discussion.