Office of the Vice President for Global Communications

Friday, July 16, 2010

Regents Roundup

The Board of Regents took action on the following items at its meeting Thursday.

Design for addition to ISR approved

The Board of Regents approved the schematic design for the planned addition to the Institute for Social Research. The four-story addition will add approximately 44,700 gross square feet of space to the ISR facility to support its large and growing externally funded research programs.

The $23 million project is being funded by an American Recovery and Reinvestment Act of 2009 grant from the National Institutes of Health combined with resources from the Office of the Provost and the Institute for Social Research. Construction is scheduled to be completed in the spring of 2013.

Crisler Arena renovation design approved

The design for the renovation of Crisler Arena was approved, including new seating in the lower bowl, relocated and widened aisles with handrails, and new seating that meets the requirements of the Americans with Disabilities Act.

The project also will update the arena’s infrastructure, including a new roof and upgrades to the electrical and life safety systems. The $20 million project is being funded by the Department of Intercollegiate Athletics and is scheduled to be completed in the winter of 2012.

U-M assumes 100 percent responsibility for computing center

The Board of Regents approved agreements that will allow the university to assume 100 percent responsibility for the Michigan Academic Computing Center, housed in the Michigan Information Technology Center building at 1000 Oakbrook.

MITC has had a 15 percent stake in the computing center and had licensed its 15 percent portion of the computing center capacity to other entities.

The university’s decision to purchase the remaining assets of the insolvent MITC assures the uninterrupted operation of the computing center, said Laura Patterson, chief information officer.

Regent meeting schedule amended

The Board of Regents approved changes to its 2010 meeting schedule. The October meeting will now take place Oct. 14 in Ann Arbor, and the Nov. 18 meeting will take place at the Flint campus.

Regent committee members named

The Board of Regents announced changes in the membership of three standing committees.

The Finance, Audit and Investment Committee, which focuses on the university’s internal controls, financial reporting, investment policies and practices, will include Regents Katherine White (chair), S. Martin Taylor and Olivia Maynard.

The Personnel, Compensation and Governance Committee assists the board in evaluating the performance of and determining the appropriate compensation for the president, and advises the president on performance and compensation for executive officers. Its new committee members are Regents Andrew Richner (chair) and Denise Ilitch.

The Health Affairs Committee, approved during the June 17 meeting, reviews and reports to the regents on matters concerning the U-M Hospitals and Health Centers. Members are Regents Laurence Deitch (chair), Andrea Fischer Newman and Julia Donovan Darlow.

U-M adjusts endowment distribution to ensure ongoing support for campus programs

To ensure continued, steady support of operations during uncertain economic times — including funding for student scholarships, faculty salaries and academic programs — U-M has slightly lowered its annual endowment distribution rate, effective with the Sept. 30 distribution.

 

For more information
Additional details on the proposed change
• The endowment, a Q&A

Tim Slottow, executive vice president and chief financial officer, said lowering the distribution rate from 5 percent to 4.5 percent will more effectively preserve the purchasing power of the endowment and ensure long-term stability and growth in distributions.

The change was approved Thursday in a 5-2 vote by the Board of Regents. Regents Julia Donovan Darlow and Denise Ilitch voted against the change. Regent Laurence Deitch was absent.

Darlow said she opposed the change because it does not “adequately address the current public responsibilities of the university and sends the wrong message to the public” during an economic downturn.

Speaking in support of the measure, Regent Olivia Maynard said she had consulted both U-M and outside financial experts and concluded that the reduced distribution rate was “a very important change.”

“This change is a continuation of the university’s prudent financial management strategy that has allowed us to weather the recent recession while avoiding drastic measures taken by many of our prestigious peer institutions, such as faculty hiring freezes, furloughs, program cuts or halting construction,” Slottow said.

The university’s endowment was valued at $6 billion as of June 30, 2009, the end of the 2009 fiscal year. The 10-year annual investment return through FY 2009 was 9 percent, despite a negative 23 percent return on investment in FY 2009.

The university bases its annual payout on a seven-year trailing average market value of the endowment instead of the more typical three-year average used by many universities. Calculating the market value over a longer period and decreasing the payout rate will allow U-M to provide predictable support for university operations as well as endowment growth over time.

Slottow said the new distribution rate would be implemented gradually over a number of years in order to keep the dollar amount of distributions constant on a per-share basis.