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Moorhead, MN 56563
Fiscally Sustainable “Good to Great” in the
Minnesota State University Moorhead
Presentation to Minnesota State Colleges and Universities Board of
Edna Mora Szymanski, President
Jean Hollaar, Interim Vice President for Finance and Administrative
April 20, 2010
Minnesota State University
Moorhead (MSUM) is a comprehensive university consistently serving
around 7,400 students in northwest MN. Many of our students come from
families that are not well off; 85% receive some financial aid
assistance; and many are working while attending school full time.
We see ourselves as an important component of the
economic development of the state and region. To that end, we have
worked hard to preserve access and affordability. Our undergraduate
annual tuition this year was a relatively low $5,948.
Our faculty and staff take pride in inspiring students
to excel in life. That pride is demonstrated by our 2009 scores on the
National Survey of Student Engagement, which are the highest in
composite engagement of any system institution. Further, our seniors
rated us higher than state and regional comparison groups; which include
U of M Twin Cities, UND, and NDSU; on three of the five major
indicators: student-faculty interaction, active and collaborative
learning, and supportive campus environment.
During FY 2009, we addressed a significant structural
deficit and planned for the recession caused appropriation decreases.
Thus, we had a head start on preparation for the challenges of 2012. In
the following paragraphs, we describe our current budget situation and
planning along with our approach to future planning through the
(a) Situation and Action in Preparation for the FY
2010 – 2011 Biennium
(b) Preparations for 2012,
(c) Fiscal Sustainability, and
(d) Moving from "Good to Great"
Situation and Action in Preparation for
the FY 2010 – 2011 Biennium
We closed a very significant budget gap by working
together, and we did so without layoffs and with the loss of very few
academic programs. Following is a summary of our budget challenge for
the 2010 biennium and our solution.
Our budget gap coming into the
biennium was $9.07M (~14% of our general fund budget).
Part of the gap came from the recession-caused decrease
in state funding. However, $4.95M was a structural
deficit resulting from the combination of declining
revenue and increasing fixed expenses, coupled with
limited connections between resource allocation and
revenue generation and weak fiscal controls.
We began regular meetings with
bargaining unit leaders and frequent campus town hall
meetings to help our community understand the changing
budget picture and engage them in working to cut costs.
We initiated hiring restrictions,
which remain in place, increased the relationship
between revenue generation and resource allocation, and
tightened fiscal controls.
With the involvement of our bargaining
units, we completed a campus wide review of all
academic, administrative, and support programs. The
result was a phase out of 3 academic programs (an
accelerated bachelor’s in nursing, a master’s in
community counseling, and a master’s in public human
services and health administration) and the
consolidation of some support and administrative
functions. Consolidation and reorganization is still
underway, with LEAN process reengineering playing a
role. At the same time, we continue to monitor all of
our academic programs for both quality and cost recovery
ratios in order to promote fiscal sustainability.
The bargaining units contributed $1.2M
to the solution by settling for limited or no increases,
and we are most grateful.
We used our one-time federal stimulus
funds to buy down our base costs through early
separation incentives and energy refits. The current net
decrease is $.6M for personnel costs and $.2M for energy
costs. We expect continued decrease of energy costs with
possible additional decreases in personnel costs.
We focused on increased revenue
through increased credit generation. Specifically, we
removed disincentives in our tuition and fee structure,
enhanced our summer offerings, and strengthened our
marketing and recruitment efforts. Thus far, we have
seen significant increases in student credit generation
and thus in revenue, both in the academic year and in
the summer session.
Preparations for 2012
We began preparation for the 2012 biennium as we planned
for 2010. Although the exact magnitude of our decreased appropriation
will not be known for some time, we are planning for a decrease of over
$3.5M. To address this gap, we will continue to focus on increasing
revenue and decreasing costs through
working collaboratively with
bargaining units and students,
holding monthly town hall meetings and
meetings with bargaining unit leaders,
empowering employees while holding
using tight spending controls and
strong relationships between resource allocation and
maintain hiring restrictions and using
temporary employees to fill critical gaps until budget
projections are more solid,
continuing reductions of base budget
through selective early separation incentives and
continued energy refits,
investing in increasing revenue (e.g.,
marketing, admissions recruiting, summer session
reengineering our business process for
increased productivity and customer service through
restructuring to promote increased
efficiency and effectiveness.
Given the challenges of the post-recession new normal,
we believe that we must plan long term strategies to assure that the
campus endures and prospers in the face of decreasing state support and
increasing competition for students and resources. To that end, our
actions are guided by two major themes, fiscal sustainability and moving
from "good to great".
Put simply, sustainability is long term viability or endurance. Burnside
(2009), in his handbook, Fiscal Sustainability in Theory and
Practice, noted that "one role of fiscal sustainability analysis is
to provide some indication as to whether or not a particular policy mix
is sustainable" (p. 11). Following are some of our recent initiatives
designed to increase fiscal sustainability through improved policies and
We have tightened our budgeting
policies and processes to be more conservative in
estimation of revenue and expenses, thus lessening the
probability of structural deficits.
We have initiated policies and
processes to better connect resource allocation to
revenue generation. For example, departmental cost
recovery ratios are computed annually. Departments with
relatively low cost recovery ratios are examined by the
Academic Affairs Budget Advisory Committee and required
to demonstrate improvement or face possible cuts. In
addition, cost recovery ratios will be one of the
factors considered in the prioritization of requests for
resource allocation when funds become available.
Put simply, where possible and consistent with
our mission, we work to allocate our resources in ways
that preserve and increase our revenues.
We have increased both resources and
accountability in the revenue producing areas of
admissions, marketing, and the Alumni Foundation. It is
still early, but we are gaining on those fronts and
should see resultant increased revenue.
Finally, and in keeping with how we
used federal stimulus funding, we use one-time funds
(e.g., portions of carry over dollars) to either
increase revenue or reduce ongoing expenses. For
example, summer session advertising increases revenue;
remodeling that collocates similar services decreases
support needs; and energy refits decrease long term
Moving from "Good to Great"
According to Collins (2005) in Good to Great in the Social Sectors,
Enduring great institutions practice the principle
of Preserve the Core and Stimulate Progress, separating core values and
fundamental purpose (which should never change) from mere operating
practices, cultural norms and business strategies (which endlessly adapt
to a changing world). (p. 26)
Key to Collins’s (2005) research on great
organizations is what he refers to as the hedgehog concept,
which he depicts as three intersecting circles that address:
1) what you are deeply passionate about,
2) what you can be the best in the world at, and
3) what best drives your economic engine. (p. 17)
Our new mission and vision statements, approved last
year, clarify our core and address both the first and second aspects of
the hedgehog concept. The mission captures our passion and our essence.
Minnesota State University Moorhead is a caring
community promising all students the opportunity to discover their
passions, the rigor to develop intellectually and the versatility to
shape a changing world.
Marketing, enrollment management, and fundraising,
which have improved significantly in the last year, build on our mission
to drive our economic engine; and our new strategic plan, which is
aligned with the System plan, provides direction through the following
Offer competitive, high quality,
rigorous academic programs and services that provide
students the versatility to shape a changing world and
support the state and regional economies.
Increase enrollment and student
success, including underrepresented students. The number
of enrolled students should reach 8,000 within the next
five years with continued improvements in student
Strengthen our relationships with key
stakeholders, including alumni, other donors,
neighborhood groups, and the business community.
Continue to develop infrastructures
that are sustainable through difficult economic times as
well as consistent with the caring community that is
Significant progress has already been made in all
areas, as noted by our quarterly web update at
*Note that part of this presentation was excerpted
from the MSUM March 25 Town Hall meeting (http://web.mnstate.edu/president/Speeches/general_university_wide_meetings/3_25_2010.htm