Board approves system budget request

June 28, 2016

The State Board of Higher Education took steps to finalize its budget June 16-17 when it met for its annual retreat and budget meeting.

Thursday’s strategy session saw a wealth of details as members of the chancellor’s cabinet presented findings on six studies that have been underway for some time. Those studies – Administrative Costs, Governance, Mission, Retention, Shared Services and Tuition – provided details for the future of higher education. Paired with findings from the Envision 2030 educational summit, the studies provided the North Dakota University System and Board members a more defined path forward as the afternoon session progressed.

Involved discussion on strategy continued Friday morning as the Board’s annual meeting kicked off with a presentation from a local executive and author, who focused on the need to utilize technology now more than ever in fostering success in a younger workforce.

 

Embracing millennial technologies

Vern Dosch, CEO of NISC, presented on millennials and technology.

Vern Dosch, CEO of NISC, presented on millennials and technology.

Vern Dosch, CEO of the National Information Solutions Cooperative, presented on culture, millennials and technology as noted in his book, “Wired Differently.” During the presentation, he encouraged the university system to both embrace how millennials worked, as well as how technology could be, and was, the driving force for that change.

“We’re using words like honesty and passion, and appreciation and determination,” Dosch noted. “That’s the language of a successful leader. Someone who motivates people who report to him.”

He expanded on the ‘servant leadership’ outlook – that the notion of serving others was key, and when paired with humility, would create a successful leader. Dosch drew comparisons between his private sector work as CEO of a cooperative and the public sector work of campus or system leadership, and how both types of leaders “serve many masters.” He expanded on the idea that collaboration was key – not just in working with those who might be considered competitors, but in listening to team members and leadership in top-down and bottom-up approaches.

Highlighting an example of NISC’s transition from being a regional service company to an international company? through a merger that brought different cultures together.  People who had been competing for years were asked to “take those swords and make them into plowshares.” The result, he said, was a once cash-strapped company that grew from 300 employees, 350 customers and 15 percent equity in 1990 to a 1,300-employee, 55-percent equity organization serving 750 customers, that is able to utilize cash flow to pay for infrastructural and system costs today.

“That was because our board saw that our business model was broken, and that we needed to change it to fit with the needs of the times and grow,” Dosch said, noting that the university system and higher education could now find itself in a place to do the same. Doing so would increase system output – high-quality students.

“The quality of our employees is a direct result of the educations that they’re getting in this state,” Dosch said. “We’re fortunate for that.”

“If you want to partner with business, we’re all in,” he continued. “You have systems and processes that we need to grow our employees. The average employee of 30 years will change their skill set three to four times. We need help in growing those employees. You are bringing a vitality to our communities that we wouldn’t get any other way.”

 

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Jim Kelly, executive director of the Theodore Rooselvelt Presidential Library Foundation, described details of the Teddy Roosevelt Presidential Library.

Roosevelt Library

Jim Kelly, executive director of the Theodore Roosevelt Presidential Library Foundation, presented the Board with details of the Theodore Roosevelt Presidential Library to be located on the Dickinson State University campus. A 99-year ground lease agreement with DSU would give the 55,000 to 60,000 square foot facility a construction site of about 28 acres at the current DSU rodeo grounds, which were already planned for relocation to south Dickinson.

Kelly said that the foundation was creating a team of construction developers to detail plans and funding. He noted that projected funding would include $12 million from the N.D. Legislature, $3 million from the city of Dickinson, and with an additional $5 million made available conditionally. He noted that the organization would seek another $5 million from the state. Proposed site construction would total $55 million with another $15 million needed for interior exhibits. The foundation would also seek to set up two endowments of $15 million each for ongoing operations.

Kelly said the facility would be open to the public and allow for all types of public events, with a “strong connectivity to Dickinson State University.” He added that a working library and museum would be the main attractions of the facility, and access to digital libraries would also be available.

“There are only 13 presidential libraries in the country,” Kelly said. “North Dakota will have the fourteenth. That’s a huge feather in the cap for our state and it will impact many things, including academically.”

After further discussion with more input from Kelly and DSU President Tom Mitzel, the Board voted unanimously to approve the agreement.

 

SBHE Chair Kathy Neset and Vice Chair Don Morton hear details of the budget request.

SBHE Chair Kathy Neset and Vice Chair Don Morton hear details of the budget request.

Budget

During budget talks, the Board delved into discussion of budget implications from the prior day’s Board retreat, and needs for the system office, campuses and forest service, State Board of Agricultural Research and Education, Upper Great Plains Transportation Institute, and Northern Crops Institute.

Chief Financial Officer Tammy Dolan reported on the system office, campus and forest service needs. NDSU President Dean Bresciani and the UGPTI, SBARE, and NCI heads spoke to the other budget agenda items.

In her report, Dolan noted a decrease of nearly $62 million, which fully complies with the 10-percent reduction guidelines recommended by Gov. Jack Dalrymple. She said the amount included completed student credit hour production, which generated an $11 million increase for the campuses. Brief discussion touched on employee raises, and how those would be determined after the governor makes his recommendation.

Detailed conversation followed, including questions concerning the formula, salaries and necessary timelines for budgets. Dolan explained the base budget request, the optional base budget requests, and one-time requests including capital projects. Rick Tonder also spoke to the Board on how capital projects had been prioritized. Only two projects were recommended by the Board to be added to the budget request.

 

Other business

During his report, Hagerott thanked his cabinet for the members’ diligent work on the six studies. He recapped key findings of those studies, including governance, tuition and fees, administrative costs, mission, retention, and shared services.

“We are in epic times, so this is the time to think big in lots of categories,” said Hagerott. “We have to frame everything because money is tight. Nothing has to be solved today, this is the beginning of an 18-month effort.”

Vice Chair Don Morton brought forward the consent agenda from the Budget, Finance and Facilities Committee. That consent agenda included the NDUS office and SBHE FY17 budget, the authorization for NDSU to proceed with the Walster Hall Lab renovation, the authorization for NDSU to enter into a capital lease agreement, the authorization for NDSU to adopt a new resolution regarding bonds. Each item of the consent agenda items was approved by the Board.

Board member Kari Reichert brought forward the recommendations from the Academic and Student Affairs Committee, which included authorizations from Central Michigan, Embry-Riddle, Park University and Rasmussen College to operate in North Dakota in 2016. The recommendations were approved.

Neset took a moment near the end of the meeting to thank Interim UND President Ed Schafer for his work.

“You’ve been an active, statesman-like leader,” Neset said. “That’s one thing that’s missing in this world these days: statesmanship.  You’ve done that, and you have elevated the University of North Dakota with the work you’ve done there. You’ve taught Leadership and Our Food Systems, at both UND and NDSU. To me that is the culmination of “lead by example” and was collaboration at its finest. I commend you for that. You came into this role at a difficult time, a time in our budget cycle that’s been trying at best. Overall, in the end, the university, through your guidance, has trimmed $21.5 million to balance the budget, which allowed the university to invest in top priorities. And, President and First Lady Schafer have truly involved yourself in the campus community. You’ve endeared yourselves to the students. That is something that’s so important to us. You’ve created an atmosphere of open communication.”

The Board also held its internal election of officers and committee appointments, and presented plaques to its outgoing Board members: Emma Tufte, Eric Murphy, and Brett Johnson. Neset and Morton were both nominated and unanimously approved to continue serving in their current capacities as Chair and Vice Chair, respectively.

It also held the second reading of policy 302.2 (audit committee), 802.8 (internal audit charter), and 1202.1 (acceptable use of use of information technology resources). A special meeting to finalize presidential evaluations and salary increases was scheduled for June 29.