Faculty Senate Meeting
November 19, 1996
Present: M. Abbott, J. Brunski, B. Carlson, A. Desrochers, R.
Franklin, M. Goldberg, J. Haddock, G. Handelman, M. Hanna, T. Harrison, G.
Judd, M. Kalsher, J. Newell, B. Racicot, E. Rogers,
Guests: R. Burnham, V. Gregg, S. Molloy, M. Galbraith, K.
Announcements and Approval of Minutes
The Minutes of the October 22, 1996 Faculty Senate Meeting,
as amended, were unanimously approved.
Faculty Senate Planning & Resources Committee – Professor Edwin Rogers
Topic 1: Rensselaer Satellite Video Program (RSVP) Financing
RSVP generates significant revenue for the institute by
arranging performance incentives at several different levels. Departments receive a sliding scale
percentage (0-47%) of revenues based on RSVP registration for the course. Faculty compensations and TA support will be
assigned by the department from this income.
The Institute will receive a sliding scale percentage (0-12%) of
revenues. RSVP will retain remaining revenues
for marketing and operational expenses.
RSVP will assign 5% of all revenues for capital and R&D
investments. The incentive structure is
designed to motivate departments to seek new outreach business through distance
education as well as to make such education part of Rensselaer’s
Concerns of the
Faculty Senate Planning and Resources Committee concerning RSVP:
disincentive for small enrollment courses could lead to missed
opportunities for programs and courses with modest prospects but high
intrinsic value relative to Rensselaer’s
potential for inequities which might be brought about by new departmental
Planning and Resources Committee Recommendations:
portion of the RSVP income should be openly set up as a challenge
incentive for faculty and departments to create new distance courses and
Dean of Continuing & Distance Education should monitor the use of
incentives for faculty by departments, reporting on how well these are
working and on differences in the manner and level of incentives applied
No Senate action was taken on these recommendations.
Topic 2: Contribution Margin Budgeting
A. Fiscal Methodology
E. Rogers described a
method for assigning revenues and costs appropriately to the Institute’s
academic units that derive direct revenue from net tuition (80% from student
credit hours taught, 20% from majors), research, restricted gifts, and
restricted endowment. Academic units
have unit expenses consisting of direct costs, utilities, and depreciation, as
well as indirect costs (e.g. janitorial services, admissions, contracts &
grants, human resources). The difference
between direct revenue and unit expenses is termed gross margin. Indirect costs must be paid for by this
difference; each revenue generating unit contributes a portion of its gross
margin, termed contribution amount, for this purpose. The results of the retrospective study will
form the basis for establishing each unit’s contribution.
E. Rogers noted that it is
possible, based on the results of a retrospective study, to determine how much
money is required from each department and school to cover their expenses. He next described the concept of a “revenue
range’ as a means of establishing parameters for departmental/school
budgeting. A School’s contribution
amount will remain constant provided its direct revenue remains within its
revenue range. If revenues fall outside
this range, the contribution amount will be adjusted by the Executive Budget
Committee. Schools will be permitted to
establish carry over reserves.
Shortfalls in contribution may be charged against future revenue. Clearly, this budgeting approach establishes
strong incentives to control/streamline costs and develop new revenue streams.
B Quality Assurance
E. Rogers noted that a
purely “fiscal” view of the system could lead to a replacement of academic
values with fiscal ones, clearly a detriment to the long-term well-being of the
Institute. To prevent this possibility,
the Faculty Senate Planning and Resources Committee proposes the following
must propose and meet specific and quantifiable metrics which incorporate Rensselaer’s strategic goals and direction.
activity should be integrated under appropriate sharing arrangements.
units with direct revenue responsibility will be managed in a manner
consistent with the responsibility model approach.
Presidents will be responsible for maintaining support service norms with
set targets and standards.
Monitoring, mediating, and policy and parameter setting will
be the role of an Executive Budget Committee, consisting of the President, Dean
of Faculty and Vice President of Finance.
C. Concerns expressed
by the Faculty Senate Planning & Resources Committee
quality and maintenance of clear linkage to Institute mission and
of suitable measures and goals for each unit.
appropriateness and flexibility of internal business services.
unit options to seek external services.
application of contribution margin budgeting to academic departments.
incentives for new revenue programs equal across schools/departments.
citizenship in the face of strong motivation for units to engage in direct
and detrimental competition among themselves.
appropriate setting of policies and parameters as this new territory in
university operation is explored.
appropriate faculty role in oversight of the system (e.g., a faculty presence
on the Executive Budgeting Committee).
A. Wallace proposed the following Motion: that a representative of the faculty senate
be a member of the Executive Budget Committee.
The motion passed unanimously, with no abstentions.
J. Newell proposed the following motion: the faculty senate endorses the proposal to
institute a contribution margin budgeting process for Rensselaer,
subject to continuous attention to the identified concerns.
A motion to table J. Newell’s motion was rejected (6 in
favor, 7 opposed.)
A vote on J. Newell’s motion passed (8 in favor, 1 opposed,
Topic 3: Tuition for 1997-98
Rensselaer’s average annual
tuition growth rate has been 5.9% over the last 10 years and was 11.1% over the
previous 10 years. In comparison, the
Consumer Price Index (CPI) rose 3.7% and 6.5% in those two decades. The increase for 1995-96 matched the CPI’s 3%
growth, after 15 years in excess of the CPI growth rate. The results of a marketing study recommended
that Rensselaer engage in Prestige Pricing, setting tuition levels high to
reflect the extraordinary value of a Rensselaer
education. This method is contrasted
with Value Pricing, setting tuition prices congruent with the CPI. Rensselaer
experimented with modest prestige pricing, increasing tuition 6% during the
1996-97 school year. This increase was
larger than the increases enacted by MIT, Brown, Cornell, Union, Lehigh, University of Rochester, CMU, WPI, Clarkson, and Case
The options being considered for the 1997-98 school year
1. 3% value pricing.
2. 5% or higher continuation of the prestige pricing
E. Rogers also raised the
issue of whether graduate and undergraduate tuition increases should be set
independently. Distinct markets exist
for all degrees and disciplines.
Therefore, Rensselaer should consider
better targeting of markets with tuition policy.
Based on this
discussion, it was moved that the faculty senate recommend that the Dean of the
Graduate School develop a process and policy
template for setting graduate tuitions independent of undergraduate tuition.
Project – Kristen Trout, Grand Marshall
Ms. Tout provided a brief description of the project: A faculty
evaluation system designed and conducted by students.
The goal of the project is to publish the results of the evaluation
in the student newspaper (The Polytechnic). Currently, evaluations are being carried out
on a limited number of faculty in the School of Humanities
and Social Sciences. Apparently, the
process has had a lot of faculty input. Ms.
Trout added that the purpose of the guide is not to trash professors, but
rather to make students more informed about available courses.
G. Judd reported on the “Return to St. Louis” meeting, a continuation of the Pew
Roundtable discussion that occurred three years ago. He reported that there is widespread
awareness of the curriculum reform activities that are going on at Rensselaer and feels that it is important for faculty to
recognize that our efforts are having widespread effects.
A. Desrochers and A. Wallace asked for volunteers to act as
facilitators at the afternoon discussions (6-7) that will precede the Annual