RESPONSE TO 1990 NASC EVALUATION TEAM CONCERNS AND 1995 NASC INTERIM REPORT
There were five (5) major areas of concern expressed by the 1990 NASC Evaluation Committee: funding, planning, administration, library, and facilities. In an effort to provide the context for a current response, these original concerns are listed and detailed. Included are the modifying actions taken by MSU, the follow-up 1995 NASC Interim Report, and MSU's 1999 Update.
Further evidence of MSU's updated responses can be found in the Self-Study, in accompanying appendices, and in supporting exhibits. In addition, the 1990 NASC Evaluation Committee Report can be found as Exhibit 0.04, the 1995 MSU Interim Report for Reaffirmation of Accreditation can be found as Exhibit 0.05, and the 1995 NASC Interim Report for Reaffirmation of Accreditation can be found as Exhibit 0.06.
Instability and inadequate levels of state funding since the mid-1980's. The fact of this support problem is indisputable by any comparative measure one chooses to make. What may be less apparent is the enormity of the negative consequences. They are pervasive, affecting virtually all of the institution's programs from facilities, to on-campus and off-campus instruction, and to outreach services to the agencies and citizens of the state. In short, the ability of the institution to achieve its stated mission and objective is jeopardized.
MSU's headcount enrollment in Fall 1990 was 10,392, and dropped to 10,111 the following year when the University converted to the semester system. Headcount enrollment has increased annually since that time and is presently at 11,267 in Fall 1995. Concurrently, the University's state support has declined by 9.1%. During the same five (5)-year period, the Board of Regents approved tuition increases which have resulted in a revenue increase of 91.1%. The University expects state support to remain at approximately its current level for the near future. See accompanying "Overview of Funding Changes from FY 1991 to FY 1995" in Appendix "A" [found in Exhibit 0.05].
MSU has effectively and creatively found alternative sources of revenue to counter the serious decline in state funds, a decline that is dramatic by any reasonable standard. By contrast, the institution has increased its tuition revenue by 91.12% from FY91 to FY95 and increased funding per FTE during the same period by 84.40% while the state funding per FTE dropped by 12.30%. In addition, funded research more than doubled from the $17,000,000 reported in 1990 to $36,200,000 in FY95; this has been accompanied by good recovery of indirect costs. Other alternative revenue sources have included new fees for equipment, computing, and athletics with still another new fee for the library under consideration. A special legislative appropriation for engineering accreditation equipment needs was secured. There have also been increases in revenue from a variety of activities such as conferences, and allowing for programs such as professional development workshops in areas of need, e.g., expertise in distance delivery via telecommunication and a grant for various electrical conservation projects. Private gifts have increased, and they are used for programs within colleges, as well as overall University needs. Some areas receiving these gifts have been the library, portions of construction costs (e.g., the Burns Communication Center), and campus beautification. At least five (5) colleges are now using professional development personnel. The institution has also been successful in securing foundation challenge grants.
The increased tuition revenue has enabled MSU to begin to address the seriously low faculty salaries cited in the 1990 report, and to avoid a proposed $100,000 loss in purchasing power. The evaluator heard from department heads about their strategies to recommend raises. A major development concerning salaries - and other issues - occurred just at the time MSU was preparing its fifth year interim report, and so the pertinent information was sent separately to the evaluator before the site visit. After nearly a year of what the Commissioner of Higher Education calls "shared governance discussions," an agreement was reached by the governor, the commissioner, the Board of Regents, and MSU on a Productivity, Quality and Outcomes Agreement, hereafter called the PQ&O Plan, that includes a commitment to raising faculty salaries to competitive market levels contingent upon fulfillment by MSU of certain quality and outcome requirements and specific productivity goals, e.g., in teaching and funded research.
Alongside revenue generating actions, MSU has taken other non-fiscal measures. For example, the core curriculum has been revised both to reduce the time-to-graduation and the state. s cost per undergraduate degree granted.
In general, this evaluator concludes that MSU is effectively addressing the 1990 report's concern about funding levels. This conclusion, however, assumes that the 3% state funding increases that are projected in the PQ&O Plan will materialize and that no new policy that will prevent future growth in tuition revenue will be adopted by the Board of Regents or the legislature. The tuition rates today remain competitive (enrollment has increased this year), and they are within the middle third of peer institutions. The deputy commissioner indicated during the site visit that he expected the campuses to use market factors and he did not anticipate any cap on rates. Nonetheless, since a significant factor in the increased tuition is due to the higher non-resident rates, any type of action that limits non-resident student growth could be worrisome. Other actions with potential for adverse impact on tuition revenue include a cap on the number of credit hours per student that the state would subsidize (this also has serious academic quality implications). More details of the tuition strategy appear in Part B, No. 10 of the institution's report [found in Exhibit 0.05].
MSU continues to effectively address the impacts of minimal state funding growth over the last several years by various means. These initiatives include: substantive increases in tuition rates while maintaining overall enrollment growth; significantly increased revenues associated with research grants and contracts activities; and improved external fundraising efforts, including college-based development work and enhanced budgetary planning which has become more comprehensive.
In recent years, priority has been given to raising faculty and professional salaries to competitive market levels. Despite the substantial financial obligation of this effort and other fiscal commitments, MSU has been able to fundamentally achieve its stated mission and objectives by continuing to diversify its revenue sources and placing increased emphasis upon entrepreneurial activities.
Planning and Prioritization. Little evidence exists of university-wide planning and prioritization for the future. This should be instituted as soon as possible since it impacts not only the instructional programs, but the physical facilities that support them and the morale of faculty and staff as well. The institution needs to have a clearer sense of, and commitment to, where it is going and why.
In response to this criticism, the university administration, in concert with the Faculty Council, created the Long Range Planning Committee (largely constituted of faculty members, but also including the Provost, the Vice President for Research, classified and professional staff representatives, and an ASMSU student) that drafted a Long Range Plan which was accepted by the campus community. (The Plan is available under "Reports" on the MSU Info Web page.)
The effectiveness of that document has been clouded, if not altogether obscured, by the Commissioner of Higher Education's mandate to restructure the Montana University System into two (2) subsystems centered around the two (2) universities (Montana State University and University of Montana). Concurrently, Montana State University - Bozeman has been intensely involved in drafting the "Productivity, Quality, and Outcomes Agreement" and in negotiating its acceptance by the Commissioner, the Board of Regents, and the Governor's Office.
As the Long Range Planning Committee began its work, a newly established University Budget Committee was charged with oversight for short-range planning and prioritization within the current budget period. Thus, recommendations of the Long Range Planning Committee might be implemented (or not) by the University Budget Committee within the context of the current budget period. The University Budget Committee is comprised of the members of the Provost's Council (chiefly vice presidents, deans, mid-level administrators, and an ASMSU student representative) and the members of the Faculty Council Steering Committee. The membership, charge, and other details about these committees are available on MSU Info.
Since 1990, MSU has developed a Long Range Plan which will soon be annualized. In view of subsequent actions that impact the campus plan, e.g., the PQ&O Plan, the institution has taken steps to link the two (2) efforts; for example, the chair of the campus plan will participate in the implementation committee for the PQ&O. In addition, the campus will need to tie certain physical facilities planning with the above efforts. For example, if the goal for smaller classes is to be achieved, there will need to be suitable classrooms. Currently, an assessment is underway of space utilization which will form part of the basis for facilities planning. Another recent development to be incorporated into comprehensive planning is the recent restructuring of the Montana Univesity System into two (2) subsystems including one (1) centered around MSU. Found in both the campus plan, as well as the PQ&O Plan, is the objective of increased use by MSU in course delivery via telecommunication. Other planning activities that are linked with the Long Range Plan and the PQ&O include the Outcomes and Assessment Committee which is developing a university-wide system [see Part B, No. 1 in Exhibit 0.05]. In this effort, retention information is already being secured which will help achieve certain PQ&O Plan objectives; the evaluator was assured that this information is or will be shared with appropriate campus groups.
In short, the planning and priority setting that was missing in 1990 is either in place or is being reshaped to accommodate new and critical developments.
The Strategic Planning and Budget Committee, formed in 1998, represents the institution-wide effort to address planning and prioritization issues for the near future. Work of this committee has resulted in a draft document that articulates a vision for MSU, and this document is now being discussed among various campus constituencies. The effectiveness of this Committee's work will likely be assessed once implementation of the action items proceeds.
Efforts continue to integrate existing planning efforts, including the Long Range Plan and the Productivity, Quality and Outcomes Agreement. Additionally, given the restructuring of the Montana University System, an MSU-campuses planning document was developed and presented to the Board of Regents in January 1999. This work represents a guidepost for the future of Montana State University and serves as an evolving prospectus for its many constituents.
Administrative Turnover. After more than a decade of effective and vigorous administrative leadership, the University is faced with changes in many major offices, including the presidency. This comes at a crucial time in its history, marked by current efforts to centralize governance of higher education at the state level. The caliber and timeliness of new administrative appointments is particularly important.
President Malone and Vice President Swenson are the only remaining members of the top administrative team which was in place during the 1990 NASC site visit, and President Malone was then Vice President for Academic Affairs. The current Provost and Vice Provost are both interim; a search for a permanent provost is in progress. The Executive Council (the President and Vice Presidents) which was selected to manage the affairs of the state's land-grant university suddenly found itself (as a result of the Commissioner of Higher Education's desire to restructure the Montana University System) in charge of a system that includes two (2) four (4)-year colleges (MSU - Billings and MSU - Northern) and two (2) colleges of technology (Great Falls College of Technology and the other associated with the MSU. Billings campus).
The administration at MSU is as stable today as other similar public universities. At present, a search is underway for a permanent Provost (the previous Provost, appointed after the 1990 report, accepted another position at a much larger institution.) Previous post-1990 searches led to good appointments; so should this one.
The campus is accommodating the current search. The Outcomes and Assessment Committee, for example, selected its strategy in appropriate stages in order to allow the permanent provost opportunity to shape the core curriculum assessment; meanwhile, assessment of majors is well underway.
Attention is also being given to the implications for administrative leadership that the restructuring will require. The president has elected, appropriately, to address this issue directly.
MSU is currently searching for two (2) Vice President positions: the Provost and Vice President for Academic Affairs, and the Vice President for Administration and Finance. Central administration is likely, however, to be as stable as other similar public institutions. The President, nearing his tenth year in office, provides effective campus leadership and continuity within the top administrative team. Turnover in the administration of the Office of the Commissioner of Higher Education has complicated the management of the Montana University System.
Library. The library's financial situation is significantly poorer now than it was ten (10) years ago with specific reference to the materials budget. The collection is barely adequate, if that, to support undergraduate curriculum and is alarmingly deficient in its support of graduate programs and research. This deficiency threatens achievement of the University's stated Mission and objectives.
Despite decreasing funding, The Libraries manages to provide nearly state-of-the-art electronic retrieval of information, but has moved to more reliance on document delivery from other libraries and commercial sources to provide journal articles to its clientele. Increased emphasis on extramural support will be critically important for the long-term success of The Libraries.
The entire University is concerned about the library and, as a consequence, many actions have been taken since 1990 to address certain concerns. At the open forum, the evaluator heard an extreme view calling for abolishing athletics, beautification of the grounds, or construction of the utility tunnels. Mostly, however, the comments heard during the visit reflected customary tensions over traditional print materials versus alternative means of accessing materials, including advancing technology. It is clear to this evaluator that any library such as MSU's that began this decade with insufficient holdings will have a significant catch up (backlog) to address. A library will not be successful when state support of higher education is relatively declining, unless there is a major single dramatic reversal or a single one (1)-time major catch up appropriation. This is unlikely, and thus, in the evaluator's view, MSU is addressing the library concerns to the extent its financial realities permit. Here are major actions being taken:
· Funds are allocated to the library from increases in tuition revenue. In fact, a proposed cut was avoided this year because a portion of the increased tuition revenue was allocated to the library.
· The library has begun a major private fund raising effort.
· Each dean is giving to the library a portion of the private funds raised, and seems pleased to do so.
· A portion of the indirect cost recovery funds is allocated to the library.
· A new library fee is being considered.
In other actions, the library has acted to improve interlibrary loan service and to increase the use of technology to provide alternative sources of materials.
MSU continues to implement the actions described in the aforementioned 1995 NASC response with respect to The Libraries. Several major items have positively impacted The Library's financial situation in 1999. As a part of the budgeting process for fiscal year 2000, an increase of $100,000 was allocated to The Libraries in support of its serials budget. Additional enhancement of these funds is planned, contingent upon the University meeting revenue targets for the year. Fund raising efforts on behalf of The Libraries have also improved in recent years.
The 1999 Montana Legislature approved a $7,500,000 bonding package to provide renovation and new construction associated with the Renne Library building. This funding will provide much-needed additional shelf and public space, as well as improve access to The Libraries' resources.
Facilities. The backlog of deferred maintenance has reached a crisis state, affecting the integrity and safety of certain structures. If these facilities are to remain functional, and if the state is to protect its capital investment, these problems must be taken care of in the near future.
Facilities Services has implemented a Facilities Condition Inventory (FCI) process which provides a systematic evaluation of the condition of the institution's physical assets. The FCI, which utilizes nationally standardized cost data, prioritizes building maintenance deficiencies, and quantifies the total campus deferred maintenance liability, has documented a deferred maintenance backlog in excess of $56,000,000 for all of Montana State University - Bozeman's academic facilities and supporting infrastructure.
The University has been able to address the problem of the supporting facilities infrastructure and heating plant which were identified in the 1990 NASC report as serious. It has spent over $7,000,000 in state and auxiliary funds for steam and condensate systems repairs, replacement, and the first of two (2) phases of a campus utility tunnel system. Phase Three (3) of the tunnel system will be constructed in 1996, at a cost of $6,000,000. In the Heating Plant, Boiler #3 was renovated in 1994, at a cost of $1,000,000, and Phase Two (2) of the Heating Plant Renovation Project will be completed in 1997, at a cost of $5,200,000 which will result in additional capacity and increased reliability. During the summer of 1995, an extensive outdoor lighting replacement project was completed.
Facilities Services has acquired over $300,000 in grants from the Montana Power Company for various electrical conservation projects. The cogeneration turbine, installed in 1991, has already produced over $300,000 in avoided electricity costs, and Facilities Services is evaluating cogeneration capacity upgrades for the existing system.
Portions of the Facilities Services maintenance budget have been specifically allocated for preventive maintenance, as well as classroom maintenance which will concentrate on maintaining and upgrading classroom lighting, finishes, and seating.
1995 NASC RESPONSE
Since 1990 an integrated strategy has been adopted which will address four (4) critical capital project needs: deferred maintenance, ADA requirements, renewals, and code corrections. By linking these areas, the institution can be more cost effective in critical projects and plan better. Facilities Services has implemented an inventory process providing systematic evaluation of the condition of the physical assets and has categorized them by priorities.
A major success last year in meeting a serious need identified by the 1990 team resulted from legislative approval of general obligation bonds. Construction of the badly needed utility tunnel system has started, and the evaluator's tour provided evidence of careful planning so that not only current, but long term future needs can be met.
Unlike some universities that face both backlog of deferred maintenance and yearly slippage due to lack of annual increases in the maintenance budget, MSU benefits from an annual increase. This increase constitutes a separate item from the legislature. In addition, the maintenance costs for the new $24,000,000. Engineering-Physical Sciences building were provided by new state funds. The new costs of another new building will be shared by new funds and MSU jointly.
Some annual progress in addressing deferred maintenance is also achieved by the use of end-of-year funds. Some federal funding has been secured for building retrofitting.
In sum, much progress has been made since the 1990 report.
Since the interim visit of 1995, two (2) major infrastructure projects have been completed: the campus utility tunnel system was finished in 1998, and the heating plant renovation project has also been recently completed. While deferred maintenance continues to be problematic in some areas, MSU has made significant progress in addressing critical issues of structural integrity and safety by means of utilizing a combination of various funding sources and prioritization of its facility maintenance needs.
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