Regents talk University finances and COVID-19 impact at May meeting

The board also discussed accepting CARES Act money and how Gophers athletics is faring amid the pandemic.

The Board of Regents convene for their October 2019 meeting at the McNamara Alumni Center on Thursday, Oct. 10.

Nur B. Adam

The Board of Regents convene for their October 2019 meeting at the McNamara Alumni Center on Thursday, Oct. 10.

The University of Minnesota’s Board of Regents continued to discuss the impacts of COVID-19 and the 2021 budget at their final meeting of the academic year.

The two days of meetings focused on the University’s response to the pandemic financially and academically. University President Joan Gabel also delivered an update on her strategic plan, which she is expected to finish this summer.

Academic Impacts

One order of business for the regents has been measuring how the switch from in-person to online classes has impacted learning.  

Due to recent changes to the grading policy, around 15,000 students across the system have chosen to take classes pass/fail this semester, compared to the typical 10,000 students. The University will add a note to student transcripts alerting graduate schools and future employers of the change.

The University has also seen a roughly 9% dip in fall enrollment from years prior. 

To compensate, the University has allowed students to push their acceptance date to June 1. Additionally, roughly 800 students from the waitlist have been given offers to attend the University. 

Students are likely to stay local because of COVID-19, which may lead to an increase in University students, said Robert McMaster, the vice provost and dean of undergraduate education.

International student enrollment is down around 28%.

“We have to redouble our efforts around retention of students, not only at the freshmen level but at the overall level,” McMaster said.

Finances

At the Thursday meeting, the board reviewed Gabel’s proposed budget for the 2021 fiscal year. The COVID-19 Adjusted Budget accounts for the financial stressors created by the pandemic and is valued at $3.9 billion. 

Along with this proposal, Gabel also presented two contingency budgets based on the undetermined status of fall semester. The first contingency plan assumes that normal operations will resume mid-fall, with the second assuming normal operations will resume January 2021. 

A possible third contingency plan may be created to account for the case in which spring semester is also disrupted by the pandemic.

“A big piece of the financial impact isn’t about students. For the University’s budget, it’s about all the other activities we engage in and whether those are able to continue,” said Julie Tonneson, associate vice president of University finance.

The board also discussed the creation of a fall semester planning committee that will operate under the direction of Executive Vice President and Provost Rachel Croson. 

The CARES Act

Another topic of discussion was the Coronavirus Aid, Relief and Economic Security Act. The board discussed the potential benefits and losses of accepting the roughly $35 million from the federal government and unanimously accepted the motion.

The CARES Act requires the University to keep as many people employed and paid as close to their original salary as possible, said Doug Peterson, who leads the Office of the General Counsel. 

Peterson asked the regents to consider what it would mean for a public university to say ‘no’ to the money.

Some regents expressed hesitancy at the idea of a long-term commitment.

“The ambiguity is if it’s October of next year and things are still ugly, it doesn’t seem to me to be a reasonable expectation for $18 million …  that we have a never ending obligation to employ everybody in the system,” Regent David McMillan said.

University administration is still deciding how the money is going to be distributed. However, graduating seniors are eligible to receive money from the $18 million pool based on need.

UMN Medical School and physicians

Gabel reported that in collaboration with Mayo Clinic, the University is on track to manufacture 20,000 COVID-19 testing kits within the coming weeks.

Although the cost of these testing kits will vary, they will first serve patients, students and staff, before they are deployed around the state, said Medical School Dean and Vice President for Clinical Affairs Jakub Tolar. 

“This is very clearly and intentionally nonprofit medical work,” Tolar said.

Tolar also provided an update on the status of the University’s Medical School and University of Minnesota Physicians. With revenue down approximately $4 million a week, physician and staff salaries will be cut between 10% to 25% until mid-July. 

The board voted to allow the Medical School clinical reserves to defer up to $5 million in University of Minnesota Physicians clinical revenue for up to 24 months, under Gabel’s authorization.

Gophers athletics

University athletics director Mark Coyle presented an update on Gophers athletics.

Coyle said no decisions had been made regarding the status of fall sports, and the primary area of focus will remain on the fall season before looking ahead to winter and spring. 

Working under an operating budget of $123 million, the organization has implemented voluntary salary cuts, hiring and spending freezes and a reduction in internships. 

Gophers athletics is currently estimating $10 million in lost revenue due to the COVID-19 pandemic, with the possibility of that amount increasing to $75 million depending on when they are able to resume. 

“There’s no doubt in my mind that we’ll be back when the data allows us to be back,” Coyle said. “Sports connect people, unites people. We’re very grateful for our role on campus.”