NORTHERN MICHIGAN UNIVERSITY

BOARD OF TRUSTEES

Minutes of the Meeting of the Alternative Funding Subcommittee

Friday, August 12, 2011

A conference call meeting of the Alternative Funding Subcommittee of the Board of Trustees of Northern Michigan University was held on Friday, August 12, 2011.  It was convened by Chair Stephen L. Gulis at 8:20 a.m. 

Members present:                                               Members absent:

Mr. Stephen L. Gulis, Chair                                         Mr. Gilbert L. Ziegler

Mr. Stephen F. Adamini

Mr. Brian D. Cloyd (ex officio)

Other Board members present:

Ms. L. Garnet Lewis

Staff present:

Mr. R. Gavin Leach, Vice President for Finance and Administration

Previous Minutes

The minutes of the July 13, 2011 subcommittee meeting were approved.

Approve Subcommittee Objective

Objective:  To explore, identify and articulate alternative sources of funding available to the University (i.e. governmental, public, private) that can supplement and further leverage current funding sources of the University.  Additionally, the subcommittee assumes the responsibility of understanding trends related to “formula funding” and its relationship to tuition, enrollment, and retention.

The subcommittee approved the subcommittee objective noting that this objective can be fluid if it needs to be changed or modified.  This objective will help keep the group focused on its goals.

Update of Current Funding Issues

Mr. Leach indicated that the University has received its official letter from the State Budget Office giving NMU a technical compliance approval of the tuition that was set by the Board at the July meeting.  However, he indicated there is still a chance that NMU will have to testify.

Mr. Leach gave an overview of the meeting between the fifteen public universities regarding the formula funding scenario the State is considering for next year.  The goal for the potential formula funding model is for the State President’s Council to establish some basic principles together; however, the Governor could come out with his own formula and we may have to work off of that.  The State is hoping to have a formula ready in January 2012.

Mr. Gulis asked Mr. Leach to provide the committee, and perhaps the full Board, how many dollars in total we are talking about and what the current formula is based off – as different proposals are being discussed we can then follow what the impact would be.

Establishment of Dollar Target

Mr. Gulis discussed that as we look at new revenue sources, we need to think about ways to find the big items versus finding funding for a specific item.  We need to scope out the potential opportunities from a dollar perspective so we are not facing a bunch of small dollar ideas. An example would be that you may have grants that are small by themselves, but in total may be much larger.  We do not want to necessarily set a hard dollar amount as things can change over time.

Expansion of Current Programs

The committee agreed on the following areas that should be looked at when establishing alternative funding:

a) Utilization of Superior Dome, other facilities, and how athletics plays a part in that.

b) Grant programs – do we have a current process that is flexible but aggressive?

c) Business partnerships

d) WiMAX opportunities

When other opportunities items are identified, they will be brought forward to the committee.

The committee would like to have some conversations about each of the areas over the next 4 – 6 month period.  The goal is to have university staff come to a meeting to discuss each of these initiatives.  Mr. Gulis and Mr. Leach will meet to identify who is appropriate to come in and talk to the subcommittee.

Benefit of Revenue Increases

The committee discussed the topic of ways to determine how we are going to handle benefit/compensation for revenue increases.  If a department is willing to work on the issue, they may expect some type of benefit in the revenues.  The committee will need to talk about how it will work in a university setting to provide incentive to activate it, keeping in mind that we do not cross lines between policy and operation.  Mr. Gulis will follow up with President Wong.

Subcommittee Make-Up

Non-supporting prospective -   May be more appropriate to let the structure develop as we move forward to see what may be needed rather than getting a large committee structure.

Other

Mr. Gulis said he challenged Mr. Leach with a concept – if we add 100 students to our enrollment, how much revenue did that produce?  Is there anything prohibiting us from almost providing an incentive program by saying if we increase our enrollment by 100 students, if we were to put 5% of the money in a pot for an incentive to give back to the people who help get those students?  Need to see if that would work in a university setting without violating any policies, etc.

Mr. Gulis asked if there are other programs where we can see some real incremental dollars where we would be able to compensate or provide incentives for results.

Mr. Leach said we need to be careful in tying it directly to an individual’s compensation (e.g., admission officers).  May be a way to do this from a broad sense.

Mr. Adamini suggested that we look at ways to incentivize teachers who are NMU alums who speak more highly of NMU or suggest us as a destination for their students.  This item will be added to the next agenda as a topic of discussion.

Next Meeting

The next meeting will be held on Friday, September 9 at 10:30 a.m., prior to the Finance Committee meeting with the external auditors.

Mr. Gulis adjourned the meeting at 9:17 a.m.

Respectfully submitted,

Stephen L. Gulis, Jr., Chair