Bruininks talks University finances

The Daily sat down with University President Bob Bruininks Monday to discuss hiring freezes, the UniversityâÄôs budget and campus alcohol sales. Can you give me any more details about the hiring pause you announced last Tuesday, and how much money you expect it to save the University? The budget we have proposed requires the University to save at least $13 million a year for the next two years, and that current budget assumes a substantial increase in state funding that may not materialize. Seventy cents of every dollar spent at the University of Minnesota is tied to someoneâÄôs wages or salaries. Any substantial cut to the University of Minnesota means that we have to reduce the workforce of the University to balance the budget. We felt it was very important for people to evaluate every single open position to determine whether it was necessary in the next, letâÄôs say, two academic years. If positions are really important and are mission critical, we have to be prepared to fund them and move forward. But I think if there is some way to restructure our work, restructure our assignments, become more efficient, then I think we should take advantage of retirements and resignations to try and balance our budget. I wanted to use every available opportunity to benefit from attrition, rather than forcing layoffs of people who work at the University of Minnesota. In terms of how much money can be saved, I think it will be probably pretty close to $15 million or more in the next two years, and it may be close to $20 million. Who is affected by the executive salary freeze you announced on Friday? Lots and lots of people; it would be the president, the senior vice presidents, all vice presidents, associate vice presidents, assistant vice presidents, vice provosts, chancellors and vice chancellors, and deans of the Twin Cities campus. There are a couple of additional positions that will either volunteer for the freeze or be subjected to the freeze that do not have those titles. It saves approximately $500,000 a year, and IâÄôve declared it for 2009, 2010. IâÄôm hoping that the economy and the appropriations to the University will get better so that we can provide raises in the subsequent academic year. Are you planning any other dramatic changes to help the University financially? Yeah, weâÄôre going to take a number of actions to reduce the cost of the University. This is one of the deepest recessions that I think weâÄôve seen in a number of years. I think itâÄôs inevitable that we will see very, very severe strains on the state of MinnesotaâÄôs budget and on the UniversityâÄôs budget over the next few years. A second reality that we have to confront is, we donâÄôt have the same elasticity or the same flexibility to increase tuition today that we may have had 10, 15 years ago, or even five to 10 years ago, because the cost of higher education has gone up. The incomes of people have not kept up with the cost of education. There are basically four ways that you can cope with a budget challenge at a place like the University of Minnesota. One is that you can be tenacious in driving down your operating costs; people need to shut their computers off when they leave the office, they need to conserve energy, we need to have a hiring pause. We may need to freeze some levels of compensation here at the University. The second thing you can do is you can reduce your expenditures in new investments. We have to be very careful that we donâÄôt cut too deeply in the area of new investment for fear that it will eventually erode the quality âĦ of the University of Minnesota with respect to higher education, but thatâÄôs one of the things we will do. The third strategy is you can raise prices. We have services here at the University, we can increase the prices on those services, we can increase tuition costs, to increase revenues, but I believe that we have less room to do that today than we did in previous years. WeâÄôre going to make every attempt to solve these problems without putting pressure on tuition, but if the cuts are deep, we will have to increase tuition more than we have projected. But I do not want to increase it. The final strategy is you can try to engage in some ways to increase your revenues by doing new things, increasing online instruction, providing new services, but those revenue enhancement strategies take more time, and they are not likely to give us an immediate level of relief to the budget challenges of the next two years. The University is in the midst of the biggest building boom weâÄôve had in 20 years, but the money to perform maintenance and upgrades on the existing buildings is already short. How will the University afford to pay for the upkeep on the new and existing buildings? We are making that a priority through the re-budgeting of our own resources, and through a very aggressive request to the state of Minnesota. We always request a significant amount of money for building improvements. Many of our construction projects actually are projects that take care of deferred maintenance. A very good example would be the civil engineering building at the University of Minnesota-Duluth. It is actually taking a very old and inefficient building and restoring it so that it can support modern forms of education, and research in civil engineering. The third strategy is to actually reduce some of the buildings that are totally obsolete and are not worth restoring, and weâÄôre in the process of developing a plan to do that as well. If the state doesnâÄôt approve the budget increase that the UniversityâÄôs proposing, how much do you expect tuition to increase? ItâÄôs too difficult to say at this point. I would hope that it would be relatively modest. I would hope that the state could find some way to moderate any possible impact on the UniversityâÄôs budget. I would like the state to make some effort to put new money into the University of Minnesota. I think weâÄôve earned it, and I think weâÄôre deeply deserving of that kind of attention. If the budget is actually reduced, we will go first to reducing operating costs, to adjusting our long term investment strategy, and only as a last resort go to tuition increases to balance the budget. But I canâÄôt at this point, with this level of uncertainty, guarantee that we wonâÄôt increase them, at least at some modest level. Are you concerned that providing alcohol in the premium seating areas of University sports venues and not to fans paying regular price creates a double standard? I donâÄôt know that it creates a double standard. You could argue that it creates a double standard compared to the Metrodome, but it doesnâÄôt create a different standard than the one you find applied to probably 90 plus percent of the collegiate stadiums around the country. Clearly weâÄôre very much in step with all the stadiums, or nearly all the stadiums and universities in the Big Ten. I actually think this puts more control on the sale and distribution of alcohol in the stadium. I will have personal seats in the stadium, when I finish as president here, that are not going to be in the premium areas where alcohol is served. I basically like the idea of reducing the consumption of alcohol around sporting events and in the stadium. It is restricted solely to those areas where people that bought suites, and are entertaining guests on behalf of their company or organization and itâÄôd be under very strict controls. ItâÄôs not perfect, but I think actually it isnâÄôt a double standard; ItâÄôs not going to make much money for the University of Minnesota. I think itâÄôs more an effort to send the right message that we want our athletic events to be largely alcohol-free. Gophers soccer is headed for their first NCAA tournament Sweet 16 appearance âĦ I think thatâÄôs awesome. WomenâÄôs soccer in the United States at the Division 1 level is very, very competitive, the players are just extraordinary, and they compete with the very best soccer players in the world. So this isnâÄôt just a minor achievement for the University of Minnesota, this is a major achievement to have a cold-weather team be in the Sweet 16. I think we have a right to be justifiably proud of this team and their extraordinary record this year.