The following article summarizes the original event which is listed below the summary.
Mike Volna gave a fact-filled and nuanced picture of the U’s finances
At UMRA’s first in-person forum of 2023, held at Midland Hills Country Club in Roseville, members of the Retirees Association heard an excellent presentation by Mike Volna, the University associate vice president for finance and assistant chief financial officer. He spoke to us about the University’s FY2024–25 biennial operating budget request (to the Minnesota Legislature), FY2023 state capital request, and MPACT investment request related to the proposed Sanford Health and Fairview Health Services merger. Volna was a last-minute substitute for Vice President and Budget Director Julie Tonneson and provided a fact-filled and nuanced picture of the U’s finances. He was a great pinch hitter!
View the slides from UMRA’s March 2023 Forum with Associate Vice President for Finance and Assistant Chief Financial Officer Mike Volna.
For context, Volna explained that the U’s budget and resources are about $4 billion annually. Approximately 15 percent ($622 million) comes from legislative appropriations and 25 percent ($1,050 million) from tuition. For many years, the amount of legislative appropriation has declined in relation to the U’s total budget; the income from tuition surpassed the state appropriation more than 10 years ago. This secular decline has caused the U to raise tuition, reallocate funds, and cut costs.
A unique year
Volna said that based on the forecasts, the latest of which was released in March, this was a unique year because the state announced a large surplus of $17.5 billion. A significant amount of that is a structural increase of about $6 billion, and the remainder is in one-time funds. This large surplus set off a scramble for funding from almost every conceivable quarter.
The University submitted an amended biennial budget request in March which totaled $302.5 for the two-year period. The original request covered:
· Core mission, $135 million
· Minnesota Resident Scholarship, $60 million
· Systemwide Safety and Security, $10 million
The amended request added:
· American Indian Scholars Program, $9 million
· Enrollment Driven Tuition Shortfall, $48 million
· Resident Undergraduate Tuition Freeze, $27 million
Based on information from the legislative targets for higher education that occurred the day before the forum, it seemed possible that the University would receive somewhere around $192 million. This is an 11 percent increase in the appropriation, which is higher than the University has received in many years.
Volna then described the U’s capital request of $371 million, which is usually paid for in state bonds. The request includes money for higher education asset preservation and renewal, and five specific capital projects. (See the slides.)
Finally, he spoke about the University’s health care vision—MPACT 2025—and request for one-time funds to support that vision. The point of the vision is primarily to maintain a world-class academic health system for Minnesotans and University governance and control over University flagship facilities.
To support the maintenance of University control of its health care facilities, and of its faculty, the University has asked for $300 million to reacquire the assets that were transferred to Fairview in the mid 1990s. The transfer required Fairview to assume about $87.5 million in debt and costs; there was no payment by Fairview to the University. The current request also includes $650 million for post-acquisition financial and operational support.
Volna took questions throughout his presentation and, as is his manner, answered comprehensively and factually. Many more answers will come in the next two months from the Legislature. The legislature is required by the Minnesota Constitution to adjourn sine die on the first Monday after the third Saturday in May.
—Bill Donohue, UMRA Program Committee
UMRA welcomes U of M Budget Director Julie Tonneson to March luncheon forum
Tue, March 28 2023, 11am
Julie Tonneson
VP and Budget Director
University of Minnesota
Midland Hills Country Club
2001 Fulham Street
Roseville, Minn. 55113
UMRA is pleased to welcome Julie Tonneson, vice president and budget director for the University, to speak at our March 28 Luncheon Forum about the University’s funding request for the next two years, which President Joan Gabel presented to the Minnesota House of Representatives Higher Education Finance and Policy Committee in early February.
The event will be our first in-person luncheon forum of the new year, and it will be held at a new location for UMRA: Midland Hills Country Club in Roseville.
Tonneson is one of the architects of the University’s biennial funding request, and will talk with us about its goals and its prospects for success. She will also address the University’s strategy and goals for obtaining funds from the state surpluses. This year is particularly important because the total of the structural surplus and one-time surplus was estimated, in November 2022, to be a record $17.6 billion. A new forecast will occur at the end of February or the beginning of March, so we will have current numbers before the forum.
Many see the 2023 legislative session as an opportunity for the state to fund some new initiatives, correct some underfunding, and provide relief to taxpayers. As you might expect, the situation has brought forth many proposals from lots of programs and engendered a good deal of competition.
Tonneson is just the right person to speak on these subjects. She was recruited from the Minnesota Department of Finance, by the late University CFO Richard Pfutzenreuter, to manage and enhance the budget process. Luckily for the University, she has been here for more than 25 years and has dealt with virtually every school, college, and administrative unit on the details of their budgets. She is well known as the master of all budget numbers and admired for her calm and cooperative manner in dealing with the tough questions of University finance. Indeed, most regard her as the brains of the fiscal operation. She has made many CFOs look good. As Pfutzenreuter said, “she is pretty damn smart.”
We look forward to hearing from Vice President Tonneson and thank her for bringing her experience and expertise to the UMRA Forum.
—Bill Donohue, UMRA Program Committee member
Upcoming Events
Our August 5 hike will be a reprise of our hike last summer at William O'Brien State Park. This is a beautiful park with a winding trail and a great view of the countryside. The hike is about 5.5 to 6 miles and we'll go at a moderate pace with frequent water breaks. After the hike, we will eat lunch at Rustic Roots Winery, a half mile north of the park.
Kathy Cramer will lead the discussion of The Bookbinder by Pip Williams, a book set in 1914 Oxford chronicling the life of Peggy who works in the University bindery, but craves a life beyond binding books but to being a scholar herself.
Enjoy a two-hour cruise on the Jonathan Padelford, leaving from the Harriet Island dock in St. Paul, boarding time at 5:30 p.m. We will have a brief program on board by Patrick Nunnally from the River Life Program of the Institute on the Environment.
August 31 is the due date for annual reports and updates. Annual Reports, Toolkits, web page updates, operating document updates and archives collections are all due each year on this date.
Autumn is a wonderful season in Minnesota so plan to join UMRA at the Andersen Horticultural Library at the Minnesota Landscape Arboretum. Kristen Mastel, head librarian and curator, will reveal its treasure trove of publications and artifacts relating to plant history, horticulture, and natural history. After the tour, those who are interested may stay to eat lunch together, sitting outside if the weather is nice. Later, you are invited to a one-hour tram tour of the entire Arboretum that includes natural areas of flowering shrubs, bogs, and forests, family garden and landscaping showpieces, and the red barn farm
After a summer break the UMRA Photo Club will next meet September 10, 2024 in the meeting room of the Hennepin County St. Anthony Branch Library. For those interested in lunch, meet at the Great Dragon at 11:30 am. For September the THEME will be Curves
We will continue to discuss the pros and cons of Medicare Advantage. You will also hear about notable non-health plan and non-broker resources.
Topics relevant to managing investments in retirement. By David Foster, CFP©, CRPC©, CRPS©
This trip begins in Madrid and ends in Barcelona with stops 3 cities in between. International round trip airfare from NYC is included in the quoted price. See the attached a copy of the e-brochure with highlights and complete itinerary. Register by May 1.