NORTHERN MICHIGAN UNIVERSITY
BOARD OF TRUSTEES
Minutes of the Formal Session
A formal session of the Board of Trustees of Northern Michigan University was held on Thursday, June 18, 2015 in the University Center of Northern Michigan University, Marquette, Michigan. The meeting was convened at 9:01 a.m. in the Marquette-Nicolet Room by Chair Richard M. Popp.
Trustees present included:
Mr. Richard M. Popp, Chair (via teleconference)
Mr. Scott L. Holman
Dr. L. Garnet Lewis (via video conference)
Mr. Robert E. Mahaney
Mr. Steven M. Mitchell
Ms. Tami M. Seavoy
Dr. H. Sook Wilkinson
Dr. Thomas H. Zurbuchen
Dr. Fritz J Erickson, ex officio
Senior Staff and Counsel present included:
Ms. Martha Haynes, Vice President for Advancement
Ms. Lesley Larkin, Acting Provost and Vice President for Academic Affairs
Mr. R. Gavin Leach, Vice President for Finance and Administration and Treasurer of the Board
Dr. Steven R. Neiheisel, Vice President for Enrollment Management and Student Services
Dr. Steven A. VandenAvond, Vice President for Extended Learning and Community Relations
Ms. Cathy A. Niemi, Secretary of the Board of Trustees
Mr. Kurt McCamman, Legal Counsel
There were none.
TUITION AND FEES
President Erickson said that one of the most difficult issues a university is confronted with each year is setting a budget and tuition and fees. A lot of time, effort, and energy have gone into this complex process this year. He thanked the leadership team for the thoughtful approach that was taken while dealing with the various challenges the university is facing.
Mr. Leach presented on the current resource and expenditure overview, an historical perspective, where things looks as we go into 2015-16, proposed budget reduction measures, where NMU is as far as tuition and fees compared to our peers, and where NMU would be positioned going forward. (Addendum #1) Mr. Leach said the administration is proposing a 3.2% tuition and fee increase which would include a $3.4 million in budget reductions (the reductions would be finalized within the next two months), a graduate tuition increase of 7.5% (two programs that would not include the increase are the MBA Program which was established at a competitive rate and Doctoral Nursing Program [DNP] which was preset at 3.2% when the program was planned). The pros are the increase would be in compliance with the state tuition cap and we would remain the second most affordable tuition, possibly the most affordable with the financial aid package the university provides to students. The cons are that it starts tightening the dollars the university has available to reinvest in programs and in trying to grow programs, which is a challenge the university faces when looking forward, as well as affecting staffing to support those programs. NMU will also fall further behind the state average. Mr. Leach said the University’s next steps would be to refine the budget reductions, identify some one-time funding, and finalize new community outreach academic program rates for distance learning – off campus and online programs (to bring forward at the July meeting). Some next steps for the future include identifying new investment and revenue opportunities for enrollment and revenue growth, implementing and expanding distance learning and online programming, and restructuring financial aid programs.
Following Mr. Leach’s presentation, a lengthy discussion was held regarding the best course of action for the University and the students without disrupting the enrollment process, as well as pros and cons for increasing tuition above the state cap.
President Erickson said that this is a difficult recommendation to make. Tuition caps make it difficult for institutions with lower tuition as the gap continues to widen. He said the most problematic piece of the budget is that the University needs to be at a point in time where it is making some significant investments in how the institution moves forward.
It was moved by Mr. Mitchell, seconded by Ms. Seavoy, that as proposed by the administration, undergraduate tuition be increased by 3.2%, graduate tuition be increased by 7.5%.
Further discussion followed. Trustees shared thoughts and opinions on the motion to increase tuition.
Dr. Wilkinson thanked Mr. Leach for preparing the scenarios. Looking at the numbers it appears it is an inevitable proposition to consider raising tuition above the 3.2%, but we need to carefully and deliberately evaluate all options so we know what we are basing our decisions on.
Dr. Zurbuchen said this is a difficult situation. He said that he believes the priority right now is enrollment. As a priority, we need to look at whether or not the solutions that we have in mind, in the long run or the short term, are solutions that we believe in wholeheartedly. He agrees in going with a growth trajectory. The budget issue also needs to be addressed, possibility with a top one strategy – here is the new NMU we are building – a strategy that’s comprehensive, that moves us up in value relative to what we are offering our students at all levels, and a strategy that makes us a better university, that makes a parent of a current student see why we would want to increase tuition by a larger number than the cap in that particular year. Building that strategy will require a lot of thoughtful input from all constituents. Strategies that have buy-in across the board are ones that can win. He agrees with Mr. Holman that eventually we will need to take a step forward. The question is, where do you start – which step do you take first?
Mr. Holman said he believes that when you have the fiscal responsibility for the university, it is important to look at the needs of the university and the students – what we can do best to create value for their education. He said with the attachment of requirements as to how this is going to be spent and how we are going to invest into increased enrollment and improve the value and quality of the education, he would be more comfortable with that approach. His concern is waiting too long.
Mr. Mitchell said that university has an opportunity to not only to create the type of task forces, but also the type of thoughtful ways in which the additional funds will be spent. It will take several months to develop and implement a plan. He said that he advocates doing a careful exploration of trying to get this done over the next year and taking a leadership position – we may have to raise tuition – here’s why we have to do it – but we’re going to do it in a thoughtful way.
Dr. Wilkinson said as parents and students who make plans of how they are going to afford higher education, it seems unfair to raise the tuition too high without any prior notice. We need to have a thoughtful process and explore all areas that have been mentioned, even if it takes some time. She said she has been proud of the way the university has been able to keep the tuition affordable.
Ms. Seavoy agrees and said that in combination with the timing of how our financial aid is overspent, the timing of increasing tuition above the cap at this time would be hard on the students.
Dr. Lewis agrees that the Board expects the institution to be thoughtful about raising enrollment and setting goals in each division, and that the Board would be remiss in not placing that same responsibility on ourselves. Time should be taken to do a deep dive into what it is we want to do, what we want to be, how we get there, and then weigh that out for everyone well in advance. This process should be done openly and thoroughly to lay out a plan on what we are going to do with tuition regardless of a cap. She supports raising tuition at the cap this year, and then taking the time to set out a plan with goals and objectives for tuition increase next year.
Mr. Mahaney agreed this is a very difficult challenge. He commended the administration for the work they have done. It’s not a question of if we have to raise tuition higher than the cap, but when.
He said he supports Trustee Mitchell’s motion, but would like to attach to it that the Board task President Erickson and the administration with coming back in an acceptable time period with a strategy on what the appropriate tuition increase should be for next year, how that money will be invested, what the impact would be on the university community, and what the return on investment will be for the students.
It was moved by Trustee Mitchell, seconded by Trustee Seavoy, and unanimously supported by the full Board, to amend the motion to include tasking President Erickson and the administration with developing a strategy on the appropriate tuition increase for the next fiscal year, how that money will be invested, what the impact will be on the university community, and what the return on investment will be for the students.
Chair Popp called the question on the amended motion to increase tuition and fees and tasking the administration to develop a strategy for next year. On a roll-call vote, the Board voted as follows:
Scott L. Holman
L. Garnet Lewis
Robert E. Mahaney
Steven M. Mitchell
Richard M. Popp
Tami M. Seavoy
H. Sook Wilkinson
Thomas H. Zurbuchen
The motion was thus approved with seven (7) for and one (1) against.
Mr. Holman said he was voting against the motion because it will never be an easy decision, it’s not an easy decision now, and he believes we will lose a year in making investments to make this a better institution.
Mr. Popp said that as painful as it has been, Northern Michigan University offers great value and congratulated President Erickson and the entire team on being true financial stewards, which includes all the work being done on new programs, the enrollment action, and even this recommendation today – tremendous work. The question for him has been “is it now or later,” and he believes that, as amended, this is the right approach for now.
Trustee Wilkinson said the amended motion is the responsible way to proceed.
It was moved by Trustee Zurbuchen, seconded by Trustee Mitchell, and supported unanimously by the full Board, to approve the Formal Recommendations. (Addendum #2)
ANNOUNCEMENT OF INFORMAL CLOSED SESSIONS TO BE HELD IN CONNECTION WITH THE THURSDAY – FRIDAY, JULY 23 – 24, 2015 SESSIONS OF THE BOARD
President Erickson made this announcement for the public record.
Chair Popp adjourned the meeting at 10:06 a.m.
Cathy A. Niemi
Secretary of the Board of Trustees