Regents will seek state funds to implement funding model

The state Board of Regents' funding request to the 2015 Legislature will include nearly $13 million in "supplemental" funding next year to implement the performance-based funding model for the three regent universities approved by the board in June. If the Legislature funds the request next spring, Iowa State would receive about $6.4 million and the University of Northern Iowa about $6.6 million in additional state funds. The board approved the request 9-0 at its Sept. 10 meeting on the Iowa State campus.

FY16 funding requests are due to the state on Oct. 1.

Under the new funding model, which rewards schools for educating in-state students (60 percent of funds) and for a short list of other desired outcomes (40 percent), the University of Iowa would be overfunded from the state by an estimated $46.5 million next year. But the authors of the new model, a task force appointed last fall by the board, agreed that the loss to any school in a single year during the three-year implementation period couldn't exceed 2 percent of the school's previous operating revenues from the state. For Iowa, that amounts to just over $12.9 million.

The task force also urged board members to ask the Legislature to restore regents funding cut during recent lean budget years (FY09-11) as a means to provide the required support to Iowa State and Northern Iowa without taking funds from Iowa.

Prior to the vote, regent Robert Downer, Iowa City, noted his "yes" vote "should not be construed as support for a reduction in state funding at the University of Iowa if the Legislature doesn't approve this."

Downer, who voiced concern about the funding model's potential ill effect on the University of Iowa's "highly regarded" graduate and professional programs, pledged to work to modify the funding model.

"I urge this board to revisit the funding matrix," he said.

Regent Subhash Sahai, Webster City, also expressed regret about the funding model, particularly the fact that board members didn't have two meetings this summer to consider and discuss the proposal.

Board president Bruce Rastetter, Alden, said it's important to look at the big picture and remember that state operating funds are one piece of the universities' support.

"This board has responsibility for three universities," he said. "We have two universities that have been punished for recruiting Iowa students, because under the old model our universities were disincentivized to educate Iowa students."

Educating Iowans: Enrollment* changes, 1981 to 2013

*Headcount enrollments exclude postdocs

Operating, strategic funds in FY16

The board is asking for a 1.75 percent inflationary increase to state operating funds for the year that begins July 1, 2015. At Iowa State, that amounts to a proposed $3.2 million. The same inflationary increase will be requested for several ISU units receiving a direct appropriation: Agriculture Experiment Station, Cooperative Extension, Leopold Center, livestock disease research, Nutrient Research Center, Small Business Development Centers, Institute for Physical Research and Technology and ISU Research Park.

Iowa State also will seek about $5.8 million in additional state funding for strategic initiatives, including bioeconomy research and leadership ($5 million), Ag Experiment Station ($0.5 million) and the SBDC ($0.3 million).

The board's funding proposal also includes a request that regent university employees be included in the appropriations bill that funds salary increases for state employees.

TIER update

The board approved three new business cases for implementation in its Transparent, Inclusive Efficiency Review (TIER). Representatives from Deloitte Consulting presented the cases, but employee teams from the three universities will do the implementation work. The assignments are:

• Develop clear policy on the size and structure of search committees for vacant P&S positions. Deloitte also suggested a search waiver when a strong internal candidate is identified for a position. Issues with large search committees include hours consumed by a search, delays in hiring leading to losing top candidates, select individuals serving on too many committees because of the demographic they represent.
• Standardize Regent Admissions Index calculations for exception cases when the RAI can't be calculated -- most commonly when one of the four measures, class rank, isn't known. The goal is to improve the decision-making process for admissions staff, and restore the index's intended transparency for prospective students, their families and high school counselors.
• Create a single admissions portal, to benefit students who apply to more than one regent university. Deloitte advises that each university continue to assess its own application fee, both for the revenue and to make sure individuals are serious about their multiple applications.

Research park expansion

Vice president for economic development and business engagement Michael Crum, who also has chaired the ISU Research Park's board of directors since 2004, updated board members on growth at the park.

The park currently has nearly 60 tenants employing more than 1,300 people with annual salaries totaling more than $70 million and an average salary of $65,000. Additionally, more than 2,500 Iowans are employed around the state by 40-plus firms that grew out of the research park. "I've been at Iowa State for 34 years, and this is the most robust period of university-private sector cooperation I've seen in that time," he said.

Iowa State's new $12 million building, which will provide a one-stop shop for Iowa businesses and entrepreneurs seeking assistance from ISU business development and technical experts, launches a third phase of the park. Phase 3 includes developing another 176 acres, adding one million square feet of building space and adding 3,000 research park employees.

In other Iowa State-related business, the board:

• Heard an overview of the Center for e-Design and the Digital Manufacturing and Design Innovation Institute from Janis Terpenny, co-founder and director of the center and chair of the industrial and manufacturing systems engineering department, and student Connor Jennings. Terpenny also serves as technical lead for the advanced manufacturing enterprise area of the institute, for which all three regent universities are partners; Iowa State as a Tier 1 partner.
• Approved state capital appropriation requests for the fiscal year that begins July 1, 2015. The top priority is a $50 million request (ISU allotment not determined) that all regent institutions would share to correct fire and environmental safety deficiencies, address deferred maintenance and make safety and energy conservation improvements on their campuses. Portions of the funds also would provide infrastructure for Iowa Public Radio and pay for repairs and equipment lost in the May 30 Sweeney Hall fire not covered by insurance. A second Iowa State capital request is $8 million to begin work on a proposed $80 million student innovation center for the colleges of Design and Engineering. The funding proposal includes $32 million more in state funds over the subsequent three years (FY17-19) and $40 million in private gifts.
• Approved a $200,000 increase to the project budget (to $3.7 million) for the electrical substation under construction northwest of the Communications Building. The increase is due to unforeseen conditions that require additional design and construction.

Sahai asked President Steven Leath "what it would take to return Veishea." Leath said he has told student leaders to submit to him their best ideas for celebrating Iowa State over the year. But to combine events into a week or a weekend, "I don't see that happening, not in the short term," he responded.