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Report on Ensuring the Fiscal Viability of the

Universities at Shady Grove

Submitted to the Budget Committees of the Maryland General Assembly in


Fulfillment of the Requirements of the 2019 Joint Chairs’ “Report on the Fiscal
2020 State Operating Budget (HB 100) and State Capital (Budget HB 101) and
Related Recommendations” (Page 190)

By

The University System of Maryland

December 1, 2019

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Executive Summary

The March 25, 2019 “Report on the Fiscal 2020 State Operating Budget (HB100) and the State Capital
Budget (HB101) and Related Recommendations,” submitted by the Joint Chairs of the Senate Budget
and Taxation Committee and the House Appropriations Committee contained the following:

Report on Ensuring the Fiscal Viability of the Universities [at] Shady Grove: The
committees request the University System of Maryland Office (USMO) to submit a report
detailing a plan to position the Universities at Shady Grove (USG) for future development
to promote regional and statewide interests and advance competitiveness. USMO will
undertake a study in partnership with the University of Maryland, College Park, as the
managing campus, the other constituent institutions offering programs at USG, the
Executive Director of USG, and the Chair of the USG Board of Advisors. They shall evaluate
(1) leadership and a new funding model that better ensures [the] long-term fiscal viability
USG; (2) additional missions for USG based on economic development needs of the region
and State; and (3) current and planned transportation enhancements to USG and a
cost/benefit analysis of the plan. The report shall be submitted by December 1, 2019. (p.
190)

In response to the Joint Chairs’ request, the Chancellor of the University System of Maryland, working
with the USG Executive Director and the USG Board of Advisors, appointed a 17-member USG Joint
Chairs’ Report (JCR) Commission to examine the issues and help develop a set of recommendations to
be included in the report. In his charge to the Commission, the Chancellor noted the following:

1) USG is the only public institution providing onsite upper division baccalaureate and graduate
level instruction in Montgomery County and the largest comprehensive regional higher
education center in the state. It represents one of the USM’s core strategies for addressing the
postsecondary education access, professional development, and workforce training needs in the
economically vital Montgomery County region.
2) In recognition of USG’s role in Montgomery County, the State of Maryland and the USM have
invested almost $218 million in capital-related construction on the USG campus since 2007. This
includes the just-opened, state-of-the art Biomedical Sciences and Engineering Education
facility. USG’s State funding now reaches over $25 million per year, not including the millions of
dollars in faculty and staff salaries and related program support that USG’s partner institutions
spend annually to operate academic programs at USG (which is underwritten partly through
student tuition and fee revenues). Montgomery County also has invested millions of dollars in
USG since 2010 to help underwrite the cost of a parking structure, while millions more have
been raised by USG from private donors to provide scholarship support specifically for students
from Montgomery County studying at USG.
3) The payoff in the investments made by the State, the System, Montgomery County, and local
supporters in USG has been significant. Since 2000, programs operating at USG have produced
more than 12,000 graduates for the Montgomery County and regional workforce. Growing from
just 200 students (headcount) enrolled in a handful of programs in its first year of operation
(2000), USG programs now enroll over 3,000 students—almost three-quarters of whom are
from Montgomery County—enrolled in 80 different upper level undergraduate,

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graduate/professional degree and certificate programs offered by nine USM partner institutions
at the Center. USG’s close articulation between the academic programs at MC and other
Maryland community colleges and those at USG’s partner four-year institutions helps ensure
that the four-year graduation for community college transfer students studying at USG is among
the highest within the USM for similar populations.
4) Finally, USG’s success, in combination with the growth that has accompanied it, also has led to
an increased number of challenges facing the center, and the partner institutions that operate
there. These include 1) challenges associated with planning for and managing a complex, 3,000
student regional center that operates under a uniquely collaborative format where each of the
nine partner institutions has its own mission, institutional culture, and system of operating; 2)
challenges associated with responding to the needs of a diverse County and region whose
postsecondary education access and workforce development and preparation needs have
changed significantly since USG’s creation in 2000 and will continue to change as the County
grows; and finally, 3) challenges associated with operating under a financial model that has
remained basically unchanged in terms of its underlying structure and sources of funding since
USG’s start up in 2000, and which needs to be updated to reflect and accommodate USG’s
expanded size and mission-driven needs.

In response to USG’s critical role in Montgomery County and the State, the level of investment made in
USG, the record of student success it has achieved, and the challenges USG and its partner institutions
increasingly face, the Chancellor charged the Commission to carry out the following:

1. Evaluate the leadership, governance and funding models currently operating at USG.
Develop recommendations for a new model(s) that will 1) clarify, facilitate and streamline
leadership and governance-related roles and responsibilities, and 2) provide adequate and
sustainable funding for programs and services delivered at USG, in order to ensure USG’s
long-term fiscal viability and operational effectiveness.

2. Explore and evaluate any additional or expanded missions for USG, beyond its current
education workforce/training and community support missions, which are needed in order
to address the economic development needs of the Montgomery County region and the
State, both current and projected.

3. Finally, evaluate the transportation enhancement needs, both current and projected, of USG
students, faculty, and staff, and provide a cost/benefit analysis associated with addressing
those needs.

Implicit in these three charges was a fourth--

4. Assess how effective USG has been, to date, in achieving its mission and, to the extent they
can be identified, what key elements contributed to that level of effectiveness.

(See Appendix 1 for a copy of the Chancellor’s full charge to the Committee.)

After five meetings, over 13 hours of discussion and debate (which included more than two hours of
public testimony from members of the USG community and from business, political, education and not-
for-profit leaders from the County and region), and the review of over 150 pages of data and

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information that ranged from presentations on USG’s financial model and student service operations, to
the projected workforce preparation and degree-based training needs -- and gaps -- of Montgomery
County and the wider metropolitan region, the Commission found the following.

With respect to assessing USG’s overall effectiveness in achieving its mission, implicit in the Chancellor’s
charge, the Commission found that—

• The Universities at Shady Grove is a USM success story that should be recognized and
celebrated within the USM and Maryland.
• Personalized academic and student support services are viewed as integral to the success of
USG students and must remain a core aspect of USG’s student-centered model and identity.
• Affordability, or more specifically, providing Montgomery County residents with a lower cost
option to a 4-year or advanced degree, is central to USG’s mission and its success, and is a
need that will continue to grow.

With respect to exploring and evaluating any additional or expanded missions for USG, beyond those it
currently has, in order to address the economic development needs of Montgomery County and the
greater region, the Commission found that—

• Given the array of research and industrial opportunities in Montgomery County, the USM
should have a greater presence and visibility in Montgomery County, and USG with its access
to local industry can serve as a bridge to help identify and connect those efforts.
• The USM, through USG and its partner institutions, should continue to support Montgomery
County in the development of its economy. This includes programs that address, as
appropriate, identified workforce preparation and skills development needs in the County as
the County develops its economy.

With respect to evaluating USG’s current funding model and developing recommendations for a new
model(s) that will provide adequate and sustainable funding for programs and services delivered at USG,
in order to ensure USG’s long-term fiscal viability and operational effectiveness, the Commission found
that—

• USG’s financial model should be adjusted to reflect and support its educational mission, in line
with the following principles: 1) The model supports USG’s goals; 2) Decisions on what assets
and resources can and should be shared are made through a shared governance process that
includes both USG and its partner institutions; 3) Assets and resources that can and should be
shared are funded only once through USG’s budget; 4) Assets and resources that are unique to
individual programs are funded by the partner universities bringing those programs to USG, 5)
Investments required to bring new programs and sources of funding must be identified prior to
program approval; and finally 6) Costs that vary based on enrollment are identified and
appropriately addressed under the model.

With respect to evaluating USG’s current leadership and governance model and developing
recommendations for a new model(s) that will clarify, facilitate and streamline leadership and
governance-related roles and responsibilities, the Commission found that--

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• While no consensus around specific changes to the current model could be achieved within
time provided, the following principles should be used to frame future changes to USG’s
leadership, governance, and decision-making: 1) USG works when the leadership at USMO,
USG, and the participating universities are in accord on strategy and goals; 2) Clear roles and
responsibilities, authorities, and accountabilities (RRAA) are necessary for effective and
efficient management; 3) Development and tracking of annual goals with measurable plans
and outcomes is a best practice that needs to be implemented at USG; and 4) Most
importantly, USG serves the region, so regular, frequent input and feedback on community
needs is critical.

Finally, with respect to evaluating the transportation enhancement needs, both current and projected,
of USG students, faculty, and staff, and providing a cost/benefit analysis associated with addressing
those needs, the Commission found that--

• While no single response can solve the diverse transportation needs of USG students, faculty,
and staff, it is critical that USG continue to work with its partner universities and County
leaders to identify and evaluate a range of transportation options that can facilitate easier
access to USG for its students, faculty, staff, and community stakeholders.

To address these findings, and give them operational substance and meaning, the Commission
developed 33 recommendations. These ranged from more generalized recommendations, such as
reaffirming USG’s core mission and services, to more specific, such as working with inter-campus
Montgomery College Shuttle and other businesses which operate shuttle services to explore the
possibility of adding stops at USG. Each recommendation represents a call to action that the USM
leadership is committed to responding to. The full list of recommendations developed and endorsed by
the Commission is contained in the report.

Ongoing and Continuing Work

In its 13 plus hours of hearings and debate, the USG Commission was able to reach consensus on seven
important findings, and 33 follow-on recommendations associated with the tasks assigned it by the
Chancellor in his charge. At the same time, as it listened to the views of various stakeholders on the
needs of USG, its partner USM institutions, and Montgomery County, and debated the best path
forward for addressing these needs, the Commission recognized that on some issues or tasks, a
consensus position would not be achievable in the time available. For these, the Commission’s
recommendation is that the USMO, USG, and the USG partner institutions continue to work over the
coming months to achieve resolution and identify solutions. These issues or tasks should include the
following:

1. The USMO should undertake with USG, USG’s partner institutions and the USG Board of
Advisors a “Roles, Responsibilities, Authorities, and Accountabilities” (RRAA) analysis. The
analysis should be completed prior to the launch of the search for a new Executive Director
at USG. Responsibility for completing and implementing the RRAA analysis should be
assigned to the USMO.

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2. As part of the RRAA analysis, the USMO, USG, USG’s partner institutions, and the Board of
Advisors should continue to review and discuss the leadership and governance principles
and needs outlined in Finding 7. The list of nine potential recommendations included under
Finding 7 should serve as a starting point for this follow up work. Any recommendations
emerging from this follow up review should be finalized prior to the hiring of the new
Executive Director.

3. The USMO should seek the USG Board of Advisors’ input as it develops and refines the
position description for the new Executive Director. This input should include any change to
the title of the Executive Director position seen as appropriate based on the outcome of the
RRAA. The Board of Advisors should be represented on the search committee for the new
Executive Director (or whatever title is determined to be most appropriate for the position).

4. Once the new Executive Director (or its replacement title) has been hired and is on board,
the USMO, USG, and USG Board of Advisors should develop an overarching strategic plan for
USG, in line with the principles and issues discussed.

5. The USMO should work with the Department of Budget and Management (DBM) and the
Department of Legislative Services (DLS), as appropriate, to explore the options and
requirements for assigning a separate budget agency code to the operations of USM’s
regional centers, with a sub program identifier assigned to USG.

6. The USMO should work with USG to establish an internal budget process and timeline to
allow for input as appropriate from the participating USM institutions and the USG Board of
Advisors. The budget process would follow the standard USM process for review by USMO
staff and approval by the Chancellor and the Board of Regents.

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Report Introduction

The “Report on the Fiscal 2020 State Operating Budget (HB100) and the State Capital Budget (HB101)
and Related Recommendations,” submitted by the Joint Chairs of the Senate Budget and Taxation
Committee and the House Appropriations Committee on March 25, 2019, contained the following
language:

Report on Ensuring the Fiscal Viability of the Universities [at] Shady Grove: The
committees request the University System of Maryland Office (USMO) to submit a report
detailing a plan to position the Universities at Shady Grove (USG) for future development
to promote regional and statewide interests and advance competitiveness. USMO will
undertake a study in partnership with the University of Maryland, College Park, as the
managing campus, the other constituent institutions offering programs at USG, the
Executive Director of USG, and the Chair of the USG Board of Advisors. They shall evaluate
(1) leadership and a new funding model that better ensures [the] long-term fiscal viability
USG; (2) additional missions for USG based on economic development needs of the region
and State; and (3) current and planned transportation enhancements to USG and a
cost/benefit analysis of the plan. The report shall be submitted by December 1, 2019. (p.
190)

In response to the Joint Chairs’ request, the University System, working with the USG Executive Director
and the USG Board of Advisors, appointed a 17-member USG Joint Chairs’ Report (JCR) Commission to
examine the issues and help develop a set of recommendations to be included in the report. In addition
to those named in JCR language, members of the Commission appointed by the Chancellor included: the
president of Montgomery College; representatives of the USG Board of Advisors, the USM office
(USMO), and USG’s partner institutions; Montgomery County business and political officials; an
economist and regional economic development specialist; and a USG student alumnus. (For a full list of
Commission members, see Appendix 2.) Staff from USMO and USG were asked to help staff and
participate in the meetings as needed, and representatives from the Maryland Department of Legislative
Services and the Department of Management and Budget also attended. In his charge to the
Commission, Chancellor Caret assigned three overarching tasks, per the language contained in the JCR:

1. Evaluate the leadership, governance and funding models currently operating at USG.
Develop recommendations for a new model(s) that will 1) clarify, facilitate and streamline
leadership and governance-related roles and responsibilities, and 2) provide adequate and
sustainable funding for programs and services delivered at USG, in order to ensure USG’s
long-term fiscal viability and operational effectiveness.

2. Explore and evaluate any additional or expanded missions for USG, beyond its current
education workforce/training and community support missions, which are needed in order
to address the economic development needs of the Montgomery County region and the
State, both current and projected.

3. Finally, evaluate the transportation enhancement needs, both current and projected, of USG
students, faculty, and staff, and provide a cost/benefit analysis associated with addressing
those needs.

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Implicit in the above was an additional charge, which though not explicitly stated in the Chancellor’s,
was soon determined by the Commission leadership to be critical in helping to frame the terms of
debate and ideally create a consensus-based starting point from which key recommendations for
moving forward could be developed. This fourth, “implicit charge” was to assess how effective USG has
been, to date, in achieving its mission and, to the extent they could be identified, what key elements
contributed to that level of effectiveness. Having achieved consensus on the findings and
recommendations associated with that core question, the Commission was then able to move forward
and use those points of consensus as a baseline for exploring ideas and seeking consensus on the need
for future leadership, fiscal, and mission-related changes at USG, and what those should look like.

Description of the Commission’s Study Process

To carry out the Chancellor’s charge, the Commission met five times between August and November of
2019. Members participated in more than 13 hours of discussion and debate, which included two public
listening sessions at which students, faculty, and staff from USG and its partnering institutions, and
stakeholders from the Montgomery County business, government, and not-for-profit community
presented testimony and answered questions. The Commission reviewed data on USG’s financial
operations, its governance structure, its academic and student support services programs, the student
populations served by USG, and the larger County, regional, and statewide populations that USG draws
from and their postsecondary attendance patterns (i.e., where this population typically chooses to
attend a college or university, if it does attend—within Maryland, outside of Maryland, etc.). To help
identify the current and projected education and workforce training needs of the County and the wider
metropolitan region, and to help determine the potential mission-related impacts of those needs, the
Commission heard from and reviewed the findings of external economic development and
postsecondary education specialists, Avalanche Consulting, Inc. and the Council on Adult Learning and
Experiential Education (CAEL), it had contracted with as part of USMO’s collaboration with the
Montgomery County Economic Development Corporation (MCEDC). Finally, as part of a process to seek
out input from any stakeholders or stakeholder groups in the County who wished to have their
viewpoints heard but were unable to participate in any of the formal meetings or public listening
sessions, the Commission established a link on the USMO Website where these individuals or groups
could submit information and testimony in order to have it reviewed and included as part of the
Commission’s deliberations.

The Commission’s Consensus Findings and Recommendations:

Based on the data and information that was received, reviewed and extensively debated in these
meetings, the Commission offers the following consensus findings and recommendations in response to
the charge given to it by the Chancellor.

Finding 1: With respect to the charge, implicit in the Chancellor’s charge, to determine how effective
USG has been, to date, in achieving its mission and to help identify, if possible, the elements central to
that success, the Commission found the following:

The Universities at Shady Grove is a USM success story that should be recognized and celebrated
within the USM and Maryland. Further, its location within the County; its instructional and
programmatic assets, which include over 80 high-quality upper level undergraduate, graduate, and

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certificate programs; and its proven model for helping underserved populations succeed through
transfer agreements with Montgomery College and other community colleges in combination with an
array of academic and financial support services focused on the multiple needs of this population,
should be leveraged and supported so as to expand its impact in Montgomery County and the wider
region.

By almost any measure examined by the Commission, USG was shown to have had tremendous success
delivering on its education mission, particularly as it relates to transfer student access. Data reviewed by
the Commission showed the following mission-related impacts:

• Since 2002, USG has helped produce more than 12,000 graduates for the workforce of
Montgomery County and the state, many of whom would have be unable to, or would have
struggled to, complete their education elsewhere.
• USG has recruited and helped launch over 80 programs from 9 institutional partners,
representing a wider variety of affordable, high quality workforce-oriented programs than any
single USM institution could have stood up in the same amount of time within the resources
provided. (See Appendix 3 for a list of the partner institutions and when they began operations
at USG.) As a result of this expanded array of programs, enrollment at USG’s programs has
grown from an initial cohort of less than 200 in 2000 to more than 3,000 in Fall 2018.
• With its partner institutions USG has developed a highly successful model of well-articulated 2+2
programs that tightly link the first two years of lower division course work offered through a
community college with the final two years of upper division course work required for a
bachelor’s degree from a four-year institution in a specific field, pathway programs, and
academic and student support services, that have helped propel the four-year graduation rate
for undergraduate transfer students at USG to 75%, 21 points higher than the USM-wide four-
year graduation rate average for undergraduate transfer students from any Maryland
community college.
• Recognizing the importance of financial aid to its undergraduate transfer population, and the
impact such aid can play in boosting degree completion, USG has raised from private sources
more than $1.2 million in scholarships it awards each year to students attending a program at
USG (that represents 52% of the total scholarship aid awarded to USG students from all
sources).
• Finally, and perhaps most importantly, USG has built within the Montgomery County community
a deep reservoir of goodwill and support, not just for the Center itself, but also for the USM
institutions operating at the Center.

In sum, USG was seen by Commission members as having effectively delivered on its 20-year mission to
serve as a uniquely collaborative access point for upper division transfer students interested in
applicable workforce and population needs. While all Commission members acknowledged the need to
update and streamline USG’s governance and fiscal models for continued success in the future – and
actively and appropriately debated what form those updates should take -- there was consensus
agreement that USG’s education-centered mission, with a particular focus on transfer student access,
should continue to be at its core.

Commission Recommendation(s):

1.1. USG’s core mission and educational identity should be reaffirmed as being that of a student-
focused center dedicated to providing expanded access to a range of upper level undergraduate

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and graduate postsecondary education programs that are purposefully designed to be
responsive to the workforce preparation and professional development needs of the residents
and businesses of Montgomery County, as well as the greater region.

1.2. USG’s focus on serving a regional population of students who for a variety of reasons —
financial, cultural, family or job dependency, etc. – face greater challenges to completion of a
four-year or advanced degree at a traditional institution outside of Montgomery County, should
be affirmed and enhanced by the USM, the County, and the State.

1.3. USG’s success in advancing on-time degree completion rates among upper division transfer
students should be publicly recognized and the strategies developed by USG should be used as a
model where appropriate for other USM centers and institutions struggling to improve transfer
student success.

1.4. USG’s leadership role in bringing together its K-12, community college, and four-year degree
partner institutions to develop, implement, and help fund highly-collaborative, student-
centered pathway programs should be recognized and encouraged.

1.5. Finally, USG should be supported at a level adequate to carry out its affirmed mission (see
recommendations 6.1-6.6 in Finding 6 below).

Finding 2. With respect to the charge, implicit in the Chancellor’s, to determine how effective USG has
been, to date, in achieving its mission and to help identify, if possible, the elements central to that
success (or lack of success), the Commission found the following:

Personalized academic and student support services are viewed by USG students, faculty, and staff as
integral to the success of USG students and must remain a core aspect of USG’s student-centered
model and identity.

In the public and written testimony it received, the Commission heard from numerous sources --
including USG students, faculty, and staff -- that the ability of USG students to access personalized
academic, financial, and student support services was a critically important contributor, and perhaps the
most important contributor, to the success of USG students and the success of the center in carrying out
its mission. Such services are designed to meet student needs and maximize the likelihood of their
success. They can be delivered through various modalities (onsite, online, hybrid, etc.) and can include--
• Writing support,
• Library research support,
• Academic counseling,
• Career counseling,
• Disability services counseling,
• Financial aid counseling,
• Mental health counseling, and
• Student life (including student activities and organizations)

Information provided by USG staff testified to the extent to which they work daily to respond to the
support needs of individual USG students. According to data presented to the Commission, USG support
staff engaged in over 18,000 individual contact points with USG students in 2018-2019 academic year

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alone. This included, 1,370 writing consultations, 737 peer tutoring sessions, 2,800 guided study
sessions, and 479 disability support services consultations or exams. Many of the faculty and students
who submitted testimony to the Commission, either verbally or in writing, cited the ability of USG
students to access such services as vital to their ability to thrive academically. The Commission
concluded, therefore, that support for retaining these services and expanding them where needed was
strong, and enhanced collaboration between USG and its partner institutions in determining the depth
and breadth of services to be offered—including the tools, data, and information needed to ensure their
effectiveness -- was warranted.

Commission Recommendation(s):

2.1. USG’s practice of providing personalized academic, counseling, and support services to all
students regardless of program should be reaffirmed. At the same time, the processes used to
prioritize those services, along with the roles and responsibilities of the regional center and the
partner institutions in carrying them out, should be clarified so as to enable services to be
leveraged across multiple programs and to avoid unnecessary and costly duplication of or
overlap in services.

2.2. USG’s financial model should be adjusted to provide the Center with a stable source of
funding at a level sufficient to allow USG to plan and carry out this practice within parameters
established and agreed on by the leadership of USG, USMO, and the USG Board of Advisors (see
recommendations 6.1-6.6 outlined in the financial model under Finding 6 below). The financial
model should avoid penalizing institutions that have invested in the development of
personalized online support models.

Finding 3. With respect to the charge, implicit in the Chancellor’s, to determine how effective USG has
been, to date in achieving its mission and to help identify, if possible, the elements central to that
success (or lack of success), the Commission found the following:

Providing residents of Montgomery County and the greater region with a more affordable, lower cost
option for access to quality four-year or advanced degrees is seen as central to USG’s mission and its
success, and is a need that will continue to grow as Montgomery County grows. It is also part of a
larger strategy for serving the education access and workforce preparation needs of not just
Montgomery County but the state of Maryland as a whole, as identified in the USM Strategic Plan.

The fact that USG helps provide a lower cost alternative to a traditional four-year degree for those
students in Montgomery County who may not have the financial ability to attend a traditional four-year
institution was the attraction most frequently cited by USG students in their written comments, ranking
just ahead of ease of access and the availability of student support services. Data on current USG
students reviewed by the Commission emphasized the degree to which affordability impacts the ability
of those students, particularly undergraduates, to attend and persist. Almost two-thirds (65%) of all
undergraduate students studying at USG in fiscal year 2017 were identified as needing financial aid, with
over half (56%) of all USG undergraduates who applied for aid indicating they were financially
independent, meaning they received no support from their family. In comparison, USMO data showed
that Systemwide the percentage of undergraduates attending a USM institution who qualify as
financially independent is just 35% -- 21 percentage points lower than at USG. In addition, in fiscal year
2017, over one third (35%) of all USG undergraduates received a Pell Grant, demonstrating the most

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substantial level of need as defined by the U.S. Department of Education, while 52% indicated that they
were working while attending USG, many while also attempting to attend USG full time (54% of all USG
undergraduates attend full time). To help cover their financial need, USG students received $6.4 million
in grants, borrowed $7.6 million in loans, and qualified to receive $2.3 million in scholarships (including
$1.2 million from USG-raised scholarships that went to 500 USG students, or roughly one in five USG
undergraduates).

Looking at future projections, the Commission also saw data indicating that the issue of affordability is
likely to continue to be a top priority among a growing number of Montgomery County high school
graduates. According to the Montgomery County Public Schools (MCPS) projections reviewed by the
Commission as part of the study, between 2017 and 2027 public school enrollment at all levels are
expected to increase by just under five percent (4.7%), with public high school enrollment (grades 9-12)
increasing at almost three times (13%) the overall rate. Within this growth, however, the County will
continue to be affected by long-anticipated shifts in demographics, with the number of Hispanic
students exceeding that of any other population group well into the future. MCPS data also show
growing demand for English as a Second Language (ESOL) instruction -- ESOL enrollment was up 39%
between 2007 and 2015 – and increased need for the Free and Reduced-price Meals System (FARMS
grew by 53% over the same time period, with 83% of FARMS students qualifying for the free portion).
Hispanic students accounted for 44% of all FARMS enrollment in Montgomery County in 2015, 21 points
higher than the next largest population group.

In recognition of these trends, and USG’s historic role within the System as a “test site” for the delivery
of innovative and affordable postsecondary education, Commission members actively encouraged the
academic institutions participating at USG to seek out new and more innovative ways to reduce barriers
to postsecondary education in the County and bring more, and more affordable, postsecondary
education options to the growing number of Montgomery County residents who will need them. These
populations are likely to include, Commission members emphasized, not just those recent high school
graduates highlighted in the data above, but also more adult students, returning transfers who have
stopped out at various points in their education careers, and other non-traditional learner populations
as well.

Commission Recommendation(s):

3.1. See recommendations 1.1., 1.2., 1.3., 1.4., 2.1., 2.2., above.

3.2. USG should be recognized and supported by USM as an “innovation test site” for the
development and testing of innovative models that deliver affordable upper division
baccalaureate, graduate, and certificate level programs, and student support services. This
should include support for the development and testing of alternative or non-traditional career
pathways (see also the related financial recommendation 6.6 below).

Finding 4. With respect to the Chancellor’s charge to explore and evaluate any additional or expanded
missions for USG, beyond its current education workforce/training and community support missions, the
Commission found the following:

The USM should have a greater presence and visibility in Montgomery County, and USG with its access
to local industry can serve as a bridge to help identify and connect those efforts. Given the array of

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research and industrial opportunities in Montgomery County, partnerships would include but not
exclusively focus on USG. This strategy should seek to leverage the central location of USG within the
County, along with other USM assets in the region, like the Institute for Bioscience and Biotechnology
Research (IBBR) and the National Cybersecurity Center of Excellence (NCCoE), to help establish a
virtual USM “front porch” in Montgomery County that provides regional businesses and stakeholders
with more direct access to USM education, research, and technology transfer expertise.

The Commission heard testimony from Regent, Commission member, and former County Executive, Ike
Leggett that USG was created twenty years ago specifically in response to Montgomery County’s desire
for its own public, four-year degree granting institution that could respond to the growing need of
County residents for a localized postsecondary educational option beyond the associate’s degree – a
goal long sought by Montgomery business and political leaders. The Universities at Shady Grove, Regent
Leggett noted, was put forward by the USM as a unique and highly innovative model – if a still relatively
untested one – that could respond to the County’s need for upper division undergraduate and graduate
degrees more nimbly and efficiently. It was a compromise, Regent Leggett acknowledged, that was
accepted only reluctantly at the time by many in County leadership but has since shown its value and
effectiveness.

Seeking then a way to build on this history of compromise and innovation between USM and the
County, a recurring discussion among Commission members was how to address Montgomery County’s
desire and perceived need for not just access to additional undergraduate and graduate degree
opportunities but the research and technology transfer activity that many residents of the County
regarded as a benefit that would have inherently come from having a comprehensive four-year degree
granting university located in the County. As part of this debate, the Commission reviewed information
on the variety of USM locations and activities within Montgomery County and the wider region. (A
document reviewed by the Commission showing the location of USM facilities or programs, in both
Montgomery County and the State as a whole, is included as Appendix 4.) While the economic costs of
developing a comprehensive, four-year degree campus in the County were acknowledged by
Commission members to have served as an effective barrier to realizing this desire in the past, and the
ability and willingness of the County and the State to ever have delivered on such a goal was questioned,
there was a consensus within the Commission that the USM, as a whole, should have a greater role and
presence in Montgomery County going forward. Through this role the USM would seek to leverage all its
assets to meet the wide range of County stakeholder needs. Central to this concept was a recognition of
the need for greater strategic and academic planning and coordination among all parties: USG, USMO,
USM institutions, federal agencies in the County, and the USG Board of Advisors. In addition, while
USG’s central location within the County -- and close by major employers like NIST, AstraZeneca, and
Adventist -- was cited as an overall positive by a number of members of the Commission, the need to
improve the accessibility of USG for students, faculty, and staff was also frequently cited as a concern.
To fully leverage the resources available at USG, as well as the other USM research entities close by USG,
more accessible and affordable transportation options to and from the Center/entities need to be
developed.

Commission Recommendation(s):

4.1. The USMO should develop a framework for ensuring greater coordination among and
access to all the System’s assets in the region, including those focused on education, service,
research, and technology transfer. Leveraging USG’s role in the community and connection to

13
industry, relationships should be enhanced between USM institutional research programs and
regional industry.

4.2. Opportunities should be encouraged and provided for faculty at USM or USM-affiliated
research institutions/entities in the County or region (e.g., IBBR or NCCoE) to teach at USG or
other sites in the County, and for USG undergraduate or graduate students who wish to
participate in internships or research experiences hosted by faculty working at USM or USM-
affiliated research entities in the County.

4.3. See the USG transportation-related recommendations 8.1.-8.10., below.

Finding 5: Also with respect to the Chancellor’s charge to explore and evaluate any additional or
expanded missions for USG, beyond its current education workforce/training and community support
missions, the Commission found the following:

USMO, USG, and USG’s partnering institutions should work with the Montgomery County Economic
Development Corporation (MCEDC) and other institutions and agencies in the County as needed to
further investigate, and where appropriate develop, strategies for addressing, the workforce and
economic development-related findings presented by Avalanche Consulting and the Council for Adult
and Experiential Learning (CAEL) in the Montgomery County Talent Gap Analysis and Strategies report
commissioned by MCEDC and USMO as part of this study.

Under contract with MCEDC (with USMO as a subcontractor to MCEDC), Avalanche Consulting and CAEL
conducted a multistage analysis of the current and projected workforce supply and demand for
Montgomery County and the wider metropolitan DC region (as defined by USMO and MCEDC). A
primary goal of the analysis was to help USMO, USG, USG’s partner institutions, and Commission
members understand the projected workforce requirements of the County and region and how well
those requirements align with the education degree offerings currently available in Montgomery County
and the wider region (whether through USG, Montgomery College, or other two-year and four-year
institutions). Such data and information are key elements of the process by which USMO, USG, and USG
partner institutions can identify and plan which academic programs to bring to or expand in
Montgomery County. In addition, Avalanche and CAEL were also tasked with developing a broader set
of recommendations by which USG, USG’s partner institutions, USMO, MCEDC and other academic and
economic development-focused entities in the region could work collaboratively to address the County
and region’s workforce preparation and related economic development needs more holistically.

Data provided by Avalanche/CAEL to the Commission as a result of the study indicated the following:
• Montgomery County’s jobs base is projected to grow at just 4.8% over the coming decade
(2018-2028), which is 3.4 percentage points less than the rate projected for the metropolitan DC
region as a whole (7.2%), and 4.7 percentage points less than the rate projected nationally
(9.5%).
• Healthcare and Government (including all federal, state, and local agencies, but not including
the military) will continue to be the two largest employment sectors in Montgomery County
over the next decade and will dominate job creation in the County. Healthcare, which
accounted for 60,517 jobs in Montgomery County in 2018, is projected to grow by 12,164 jobs
(22.1%) between 2018-2028, slightly faster than for the region as a whole, as well as the nation.
Government jobs, which account for 66,452 jobs in Montgomery County, will grow more slowly

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(6.1% or just over 4,053 jobs) but will more than double the rate of growth for the sector in the
region (1.7%) and almost double it for the nation as a whole (3.2%).
• Although the overall number of jobs in the County is significantly less than in Healthcare and
Government, Montgomery County will see double digit growth in jobs in the Biomedical field
(both manufacturing and research, which will grow by almost 26% to almost 6,900) and
Transportation and Logistics field (which will grow by 25% to 5,582).
• Finally, though the Avalanche/CAEL data require adjustment to account for degree level and the
production capacity of other institutions in the region, they indicate that the gaps between the
number of degrees produced within the greater region versus the projected number of degrees
needed are likely to be greater in the following fields:
o Healthcare,
o Business,
o Science and Engineering, and
o Information Technology/Software.

In addition, based on an analysis of the alignment between the County’s workforce needs, as reported
by employers in the County, and the array of programs and services available through Montgomery
County’s education and workforce training providers (P-20), the Avalanche/CAEL study identified 19
strategies by which education institutions, employers, and economic development agencies could work
together to expand and improve the Montgomery County talent pipeline. These included such strategies
as--
• Developing specialized for-credit and not-for-credit post-baccalaureate certificate programs
aligned with employer needs,
• Creating a hub for robust professional development and networking in Montgomery County,
• Establishing a broker or central entry-point for connecting students and employers through
internships,
• Establishing a convener role to connect employer engagement dots across partners and
aggregate skill development needs across sectors, and
• Creating pipeline development programs for high demand fields that leverage skill sets
developed through other occupational areas.

Commission Recommendation(s):

5.1. The USMO, USG, USG partner institutions or agencies, including MCEDC as appropriate,
should continue to work with the data and information provided by Avalanche/CAEL to help
identify and target new or expanded academic programs and other workforce development
strategies that can be implemented at USG to help address Montgomery County’s economic
development needs.

5.2. The USM, through USG, USG’s partner institutions, and all the USM programs and activities
operating in Montgomery County, should continue to support the County in the development of
its economy. This includes development of programs to address relevant workforce preparation
and skill development needs in the County as the County seeks to develop its economy.

Finding 6. With respect to the Chancellor’s charge to evaluate the funding models currently operating
at USG, and develop recommendations for a new model that will provide adequate and sustainable

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funding for programs and services delivered at USG, in order to ensure USG’s long-term fiscal viability
and operational effectiveness, the Commission found the following:

USG’s financial model should be adjusted to reflect and support the educational mission, focus and
resource needs identified in this report. Statutory and budgetary changes, as well as realignments
necessary to help ensure the long-term health and viability of the model, reduce friction between
partners, and improve the ability of USG to carry out long-term planning for growth should be
undertaken at the State, System, and institutional level.

Data reviewed by the Commission showed that USG operates on a “blended” financial model in which
some costs are paid for by partner universities (the costs of instruction directly associated with each
institution’s academic programming at USG), some are paid for through State appropriations (the shared
costs associated with USG’s on-site operations and activities, which are not specifically attributable to
any individual institution or its academic programming) and some, though a relatively small part, are
paid for through student and institutional fees (such as instructional technology fees, and classroom
rental charges). The complexity inherent in this model – which includes negotiating and agreeing on who
is responsible for covering which costs, how costs are assessed and calculated, and when and by what
mechanism payment is made -- has contributed significantly to friction between USG and its partner
institutions and has created operational uncertainty that inhibits USG’s ability to plan for long-term
growth in support of the County’s needs.

USG’s total operating budget in FY 2020 was approximately $30.6 million, which included $2.1 million in
such self-support or auxiliary services functions as parking and conferences, which are required to pay
for themselves. If the self-support and auxiliary services are subtracted, the vast majority of USG’s
remaining budget -- 89% of the remaining $28.5 million budget – comes from State-supported fund
sources. These State-supported funds (which include both General Funds and those tied to the State’s
Enrollment Funding Initiative), totaled $25.4 million in FY 2020. They go to cover USG’s critical on-site
operations and activities, and, importantly, they provide USG with a relatively stable source of funding
that it can use to efficiently plan for and manage its operations. (See Appendix 5 for a copy of USG’s FY
2020 budget.)

Of the remainder of USG’s budget once State appropriations are subtracted, approximately $2 million
($1,995,000 in FY 2020) comes via fees paid by the students and institutions to USG on the basis,
primarily, of enrollment, classroom, or office space and office services utilization. Because these fees
are subject to university actions and enrollment fluctuations that are frequently beyond USG’s ability to
control and plan for, they create disproportionate amounts of uncertainty within USG’s budgeting
process and contribute heavily to friction between USG and its institutional partners.

Commission members heard testimony from both USG and USMO officials that removing the
uncertainty and friction created by this relatively small component of USG’s budget – which accounts for
less than 7% of the Center’s total budget -- that is paid for through student and university fees, and
replacing it with a more secure State appropriation would simplify governance, reduce unnecessary
friction between partners, and ensure USG a stable source of funding by which it could more efficiently
and effectively plan and manage its operations. The cost, USMO has assessed, would be relatively
modest – approximately $2 million in additional State funds in USG’s FY 2020 budget – but the return in
operational efficiency and planning capability for USG would be significant.

Commission Recommendation(s):

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6.1. The University System should adopt and implement a financial model for USG that is based
on the findings and principles presented to the Commission by USM’s Vice Chancellor for
Administration and Finance in the document: “Regional Higher Education Center (RHEC)
Financial Model.” (The full document is included as Appendix 6.) These principles envision a
funding model for USG that ensures adequacy of support for its mission and goals based on a
realistic, sustainable enrollment range and shared decisions on support to be provided by USG;
assigns appropriate responsibility between USG and partnering institutions for activities and
their related costs; requires identification of necessary resources prior to development of new
programs or services; and seeks to reduce or eliminate the budget and planning uncertainties
created by variable costs.

6.2. The above model should support the ability of USG to serve the needs of Montgomery
County and the greater region, both current and future, in line with the expectations and
requirements for governance and strategic planning laid out in Finding 7 below.

6.3. To boost the ability of USG to more effectively plan for and manage resources, a separate
budget agency code should be assigned, which would cover the operations of USM’s regional
centers generally, but with a sub program identifier assigned to USG.

6.4. The USMO should work with USG to establish an internal budget process and timeline to
allow for input as appropriate from the participating USM institutions and the USG Board of
Advisors. The budget process would follow the standard USM process for review by USMO staff
and approval by the Chancellor and the Board of Regents.

6.5. To reduce operational complexity and enhance USG’s ability to adequately respond to the
education and support needs of its students (as recommended in section 1 above), the USM
should request an increase at the appropriate time in its annual State appropriation sufficient to
cover the fees paid to USG by the institutions under the current model.

6.6. Finally, as a key part of the revised funding model the USMO, USG, and USG’s partner
institutions should work to explore new sources of revenue that can be used to support USG
students and programs, including funding available through local and regional industry partners,
as well as other strategic relationships developed by USG and its partner institutions.

Finding 7. Leadership and Governance. With respect to the Chancellor’s charge to evaluate the
leadership and governance models currently operating at USG and develop recommendations for a new
model that that would ensure greater operational effectiveness, Commission members diligently sought
to find agreement on a consensus recommendation that would address the Chancellor’s call for a
clearer, more streamlined model of leadership and governance yet at the same time respect the
differing needs, interests, and points of view the Commission heard expressed from the various parties
that by necessity must be involved in USG’s highly-collaborative leadership and governance model.

In the public testimony and in their own internal discussions, Commission members heard how USG had
started as a non-traditional institution within the USM, created by the State’s public university system at
the urging of business and political leaders in the County to respond to an identified need for upper-
level undergraduate, graduate and professional training in a region that had no public four-year

17
institution. The Commission heard testimony on how USG developed – that it was a compromise
solution to what the County wanted and what the State and its public university system were able to
accomplish within the authority and resources available. The Commission heard testimony that the
unique solution the University System, Montgomery County, and the State came up with allowed the
USM to stand up in less than 20 years an array of workforce-oriented programs unmatched within any
single Maryland institution and comparable to those typically found in much older, much more
established research universities outside the State. The Commission heard testimony that because of its
unique structure and mission, trying to assess USG’s leadership, governance, and decision-making needs
through the lens of a traditional institution, with control over its own programs, faculty, students, and
degrees was neither accurate nor useful. Instead, the Commission heard, USG’s leadership, decision-
making and governance structures must be viewed through a collaborative lens or framework.
Universities at USG clearly have oversight responsibility over their degree programs and how onsite
services are delivered to support their students and faculty. Therefore, by necessity each university’s
leadership must also be given final responsibility for, and oversight over, how the institution’s resources
are used to support its academic programs and services at USG. But of equal importance, the
Commission heard, is the need for decisions on how USG’s resources are used to advance USG’s mission
and services to be vested in its Executive Director, along with the clearly articulated authority,
accountability, and tools that allow him or her to exercise leadership and assume appropriate
responsibility for setting the direction of the organization. Responsibility for making decisions with
respect to USG’s resources, the Commission heard, must be vested in the USG leadership and not that of
any single university or collection of university partners.

In the end, the Commission was unable to reach complete consensus on a set of recommendations that
would fully address these issues. However, it was able to reach agreement on a set of operating
principles by which decisions on the leadership and governance model should be made going forward.
These principles are as follows:

1. USG works when the leadership at USMO, USG and the participating universities are in accord
on strategy and major goals. Accordingly, governance should support shared decision making
on strategy and major goals.
2. Clear roles and responsibilities, authorities and accountabilities (RRAA) are necessary for
effective and efficient management. Accordingly, the USMO, USG and participating universities
should work together to document RRAA for each group.
3. Development and tracking of annual goals with measurable plans and outcomes is a best
practice. Accordingly, USMO, USG and the participating universities should set annual plans
with clear, measurable goals and milestones with accountability by each party clearly
documented.
4. Finally, USG serves the region. Therefore, governance should include regular, frequent input on
community needs to and feedback from USMO, USG and the participating universities. The USG
BOA is the most effective channel for community needs to be communicated and followed up
on.

Further, based on the testimony heard and information collected, the Commission was also able to
identify and agree on a number of critical needs or issues that should be addressed by the USM, USG,
and USG’s partner institutions following the principles set out. These included:

1. The need to clarify and streamline the reporting authority of the Executive Director;

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2. The need for an executive council made up of senior leadership within the university partner
institutions to improve decision-making, accountability and support for USG, based on duties
and responsibilities identified by the Chancellor;
3. The need for an overarching strategic plan for USG, which would include an academic master
plan, and would serve as a roadmap for the development of program priorities, services, and
initiatives that support USG’s access and affordability mission and help address the workforce
and economic development priorities of the County and region;
4. The need to simplify and streamline the process for bringing programs to USG in order to
shorten the lag time between the identification of an agreed upon need and the stand up of a
program in response to that need;
5. The need for a formal system of community input into regional center decision making that
helps to maintain and strengthen the feedback loops that are critical to USG’s success;
6. The need for a more clearly articulated role and set of expectations for the managing institution;
7. The need to provide for greater integration of USG’s leadership into the formal communication
and decision-making mechanisms the USM has established (e.g., the vice president and provost
councils, Chancellor’s council, etc.);
8. The need for USMO, USG, and USG’s partner institutions to engage Montgomery College (MC) in
a review of USG’s current relationship with MC with the goal of developing recommendations to
strengthen planning and coordination among the partner institutions in order to provide even
greater access to affordable higher education to County residents and promote the County’s
workforce and economic development.

Finally, the Commission debated at length a number of recommendations that were put forward at
various points in response to the leadership, governance and decision-making needs and issues
highlighted above. While Commission members were not able to reach complete consensus on these
“potential” recommendations in the time allotted, there was significant support for and agreement on
the appropriateness of many of them. The nine potential recommendations put forward and debated
extensively by the Commission are below. They are included as recognition of the hard work done by
the Commission under Finding 7, and as a potential starting point for additional work that USM has
committed to doing once the USG JCR study is concluded. The nine “potential” recommendations
debated by the Commission are-

1. USG’s decision-making framework should be reconstituted and include an executive council to


improve decision-making, accountability and support for USG. The executive council will bring
together senior leaders from USG partner institutions, the Office of the Chancellor, and the USG
Executive Director, with duties and responsibilities identified by the Chancellor. The executive
council will advise the Chancellor and Board of Regents on USG operations and policies. Beneath
the executive council, the important advising and program coordination roles and
responsibilities current performed at USG by the Academic Program Advisory Committee (APAC)
should continue.

2. USG’s Executive Director should be given the responsibility and authority to lead, direct, and
manage the development of USG, working within the governance and leadership framework and
parameters outlined in this document and established by the Chancellor. The Executive Director
should have agreed upon, defined responsibilities for helping to identify, advocate for, invest
resources in, and facilitate coordination among university partners at USG to help achieve
greater efficiencies and effectiveness in educational delivery, ensure the overall quality of the
student experience, and adequately address the higher needs of the County and greater region.

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Resources should be provided to facilitate these activities across institutions and with other P-20
partners in the County and region. The title of the Executive Director should be changed to
reflect the range and level of responsibility and authority of the position, as determined to be
appropriate by the Chancellor.

3. USG’s Executive Director (or whatever title is determined to be appropriate) should report to
the Chancellor, or his/her designee within the Chancellor’s office. The Chancellor, or his/her
designee, is responsible for holding both the Executive Director and the USG’s partner
institutions accountable for establishing, tracking, and reporting progress on key goals,
outcomes, and commitments.

4. To help guide and inform the degree, workforce programming, and other mission-driven
priorities and programs offered there, USG should undertake the development of an
“overarching institutional strategic plan.” Responsibility for the plan’s development, including
the planning process framework and engaging the appropriate stakeholders in that process,
should be lodged in the Executive Director. The planning process should include broad
participation from partner institutions, the USM Office, and other regional stakeholders. It
should be prepared in close consultation with the Board of Advisors and updated at regular
intervals. The plan should serve as a roadmap for the development of USG over the next five
years, including program priorities, services, and initiatives that support USG’s access and
affordability mission and help address the workforce and economic development priorities of
the County and the greater region. The plan should seek to identify and align, as appropriate,
the long-term education and workforce preparation needs of the County and the region with
the degrees, certificates, and credentialing programs needed to support regional workforce
needs, and should align closely with County, regional, and statewide economic development
priorities and initiatives. While program planning should take into account regional workforce
and industry analyses, such as that conducted by Avalanche and CAEL on behalf of USMO and
MCEDC, the plan also should be responsive to and facilitate, as appropriate, USG’s participation
in initiatives that assist in refocusing efforts to build the economic capacity of the County and
region, and delineate how USG’s resources and capabilities can be so used. The plan should
include timelines for implementation, and the financial and facility resource expectations and
requirements needed to support the plan and its priorities. The plan should be presented to the
Chancellor.

Where documented needs cannot reasonably or willingly be addressed by USM institutions, the
plan should include mechanisms whereby USG, its partner institutions, and the System
leadership work together to develop and implement alternative strategies. These must be
recognized as including the authority granted to the regional centers under Board Policy III –
9.00 “Guidelines on Non-USM institutions offering programs at USM Regional Centers,” and a
mechanism for formally invoking and implementing this authority developed and agreed on by
USMO, USG, and USG’s partner institutions.

5. As part of the above reporting realignment, UMCP’s role and responsibilities as the “managing”
institution for USG should be clarified to reflect that of an “administrative” institution, and the
services it provides in that role negotiated and monitored through contract.

6. Because strong community input and support is critical to USG’s success, it is important that a
strong, formal process for providing the Executive Director and the USM leadership with

20
feedback, advice, and support be maintained. The USG Board of Advisors must continue to
serve as USG’s direct link to the community, independently representing the needs and interests
of Montgomery stakeholders to the leadership of USG and the Chancellor, and advocating on
USG’s behalf within the County and the State.

7. USG’s leadership should be better integrated into, and participate as part of, the USM’s formal
communication and decision-making systems, as administered by the USMO. This would include
the monthly meetings of the provosts/academic vice presidents, the vice presidents for
administration and finance, the Chancellor’s Council, and other communication structures as
appropriate.

8. USMO, USG, and USG’s partner institutions will work to identify and implement as appropriate
mechanisms by which the process for identifying and bringing programs to USG is simplified and
streamlined in order to shorten the lag time between the identification of a need and the stand
up of a program in response to that need.

9. USMO, USG, and USG’s partner institutions should seek to engage Montgomery College (MC) in
a review of USG’s current relationship with MC with a goal of developing recommendations to
strengthen planning and coordination among the partner institutions in order to provide even
greater access to affordable higher education to County residents and promote the County’s
workforce and economic development. This review may include considerations of formal
mechanisms for encouraging and promoting a stronger partnership between the MC, USG, and
the USM institutions operating at USG, should the President and Board of Trustees of
Montgomery College and the Chancellor and Board of Regents of the USM believe it to be
warranted.

With the above potential recommendations recognized as “yet to be agreed upon,” the Commission’s
final recommendations under Finding 7 are below.

Commission Recommendation(s):

7.1. The principles agreed on by the Commission and enunciated above should be used by the
USM, USG, USG’s partner institutions as the basis for developing a new model for USG’s
leadership and governance, including its decision-making framework.

7.2. In developing the model USM, USG, and USG’s partner institutions must consult with the
leadership of the USG Board of Advisors.

7.3. The model developed should seek to respond to the needs identified by the Commission, as
appropriate. In addition, the nine potential recommendations listed above should be
considered as a starting point for additional work USM on USG’s leadership, governance, and
decision-making framework that the USMO has committed to undertaking once the USG JCR
Report is concluded.

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Finding 8. With respect to the charge to evaluate the transportation enhancement needs, both current
and projected, of USG students, faculty, and staff, and to provide a cost/benefit analysis associated with
addressing those needs, the Commission finds the following:

A more dependable and accessible system of transportation is critical for USG’s continued growth and
expanded impact. USG must continue to work with its partner universities, Montgomery County, and
other stakeholders to evaluate a range of transportation options that facilitate maximum ease of
access for its students, faculty, staff, and community stakeholders.

USG has a diverse student population with an average age of 28. 1 Seventy-five percent of students hold
jobs, many participate in internships, and many are parents – reinforcing the need for flexible, reliable
transportation options. 2 Nearly 60% of USG students report home addresses in Montgomery County,
Maryland and of those living in Montgomery County, 60% commuted from Silver Spring, Gaithersburg or
Rockville. 3 Over 40% of USG students purchase USG parking permits. More than 50% of permit holders
commuted from either Silver Spring, Gaithersburg, Rockville or Germantown. The remaining students
either drive and pay an hourly parking rate, or get to the campus by carpooling, ridesharing or public
transportation. Better public transportation service to the campus has been identified by students as an
important need.

Early in its development, USG worked with USMO to construct a parking structure on campus to
accommodate projected enrollment growth and deal with surface parking limitations. The Traville
Gateway garage was built in 2005 and supported with USM bonds which are being paid off by parking
revenues at USG. The Shady Grove Garage was opened in 2018 and was built from revenues provided by
Montgomery County in support of the state-funded construction of the Biomedical Sciences and
Engineering Education facility, which was built on surface parking. Importantly, despite generous
allowances from USMO, given current enrollment projections, USG will not generate sufficient revenues
from its parking fees to cover debt service payments on the Traville Garage by 2022.

USG staff and those from the partner universities travel to the campus from across the region and State
and some from adjacent states. Travel time to USG is cited as a constraint in encouraging tenured and
tenure track faculty from partner universities to teach onsite courses. Many faculty and staff
particularly, from Baltimore and College Park, use the Intercounty Connector (ICC) because it cuts travel
time to and from the campus.

Currently, fewer than 2.5% of USG students use the three Montgomery County Ride On bus routes
between Shady Grove Metro Station and the Traville Transit Center, which is a 3-minute walk from
campus. These services end at 8:30 pm. The travel time from the Shady Grove Metro station to USG
using public transportation ranges from 50 to 80 minutes depending on time of day. In addition,
University of Maryland, College Park students, faculty, and staff benefit from the Shuttle-UM service
that travels between USG and the UMCP campus. The weekly ridership for the Shuttle-UM is less than
4% of the USG population. This includes faculty and students who work at the Institute for Biosciences
and Biotechnology Research (IBBR), located adjacent to the USG campus.

1
University System of Maryland Data, Fall 2018
2
2018 Student Satisfaction Survey
3
University System of Maryland Data. Some students did not report a zip code so the number of Montgomery
County residents is presumably higher than reported.

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USG has participated in County and State transportation planning and was successful in securing a stop
on campus as part of the planned Corridor Cities Transitway (CCT) development. The CCT would connect
the Shady Grove Metro Station to the Shady Grove Life Sciences Center and up into Clarksburg and
could cut the travel time from the metro to USG to less than 15 minutes. More importantly, the CCT is
currently planned to be the primary connector to the Bus Rapid Transit (BRT) system currently under
development to other neighborhoods and business centers across the County. USG is participating in the
I-270 Corridor Transit planning that will study the viability of all transportation options along the I-270
corridor including the CCT and connections to the County BRT system.

Expanded educational offerings, increased enrollments, and new public services (e.g. clinical health
services) that are planned for USG heighten the concern about the limited transportation options to get
to and from the campus. USG is in discussions with partner institutions to learn more about their
utilization of various commuting platforms to help users make better use of smarter, more efficient
transportation modes. USG has initiated discussions with various partner institutions to determine if
there are opportunities to pilot shuttle services between campuses to include various Park and Ride
locations and Metro Stations in and around the surrounding Maryland counties.

USG also is exploring piloting shuttle services to and from various locations within the County and
linking to other shuttles that are current being operated by Montgomery College as well as large
employers in its service region. However, more and better information is required about USG
ridership. Expertise is also needed to refine projections to plan shuttle services and routes. USG has
contracted with the Maryland Transportation Institute to provide better ridership analytics and is
working with the transportation offices of its university partners to use their planning expertise as
well, including exploring options for the shared support of expanded services. To date, USG has
received a few estimates of the cost of services. They are as the follows:
Shuttle Service – UMCP - $50,000 Annual Cost (currently in operation and shared
expense between USG and UMCP)
Shuttle Service – UMBC - $300,000 (AM & PM Service)
Reston Limo Shuttle – Shady Grove METRO - $116,000 (AM & PM Service)
Uptown Bus Service – Shady Grove METRO - $143,000 (AM & PM Service)
Shuttle Service –UMCP Shady Grove METRO - $143,000 (AM & PM Service)
USG has a commitment to maintaining a data-driven mindset that allows for routinely tracking trends in
parking, bus, train, and carpool usage, and matching those trends against the geographic location of
USG students, faculty and staff, to assist with identifying gaps in service and making recommendations
that have the most significant impact. More data, analysis and expertise are required to develop a
comprehensive plan for expanding transportation access to the campus.

Commission Recommendation(s):

Short Term
8.1. USG should develop mechanisms and strategies to engage both internal and external
audiences to begin collecting and communicating data about transportation needs and
transportation options at USG.

23
8.2. USG should promote commuting alternatives that support ridesharing by developing a
program that broadens USG’s transportation offerings without creating a need for additional
infrastructure.

8.3. USG should explore a pilot shuttle service to and from the Shady Grove Metro Station during
AM and PM rush hours to decrease travel time to campus.

8.4. USG should work with UMCP to expand the current UM Shuttle Service to the Purple Line
Metro Station on campus to provide additional access to any student that utilizes the metro in
that region.

8.5. USG should work with partner universities to evaluate the pilot shuttle service options to
and from USG that provides additional access to students, faculty and staff to forge
collaboration across institutions.

8.6. USG should continue to work with the Maryland Transportation Institute to identify specific
solutions that meet the needs of the USG population.

8.7. USG should work with USMO to evaluate the current debt service payment schedule for
its existing parking infrastructure and determine revenue sources to support alternative
transportation options such as shuttle services within the County and between campuses.

Long Term
8.8. USG should continue engaging Montgomery County Transportation Planning Team to
discuss ways for USG to remain involved in the County’s Master Plan update. USG will become
part of the pre-planning efforts for the I-270 Corridor Transit Plan to explore various alternatives
along I-270 including the Corridor Cities Transitway (CCT), if funded, and a proposed monorail
project.

8.9. USG should explore Ride On Flex demand transit service and advocate for USG to be within
a future flex zone.

8.10. USG should work with inter-campus Montgomery College Shuttle and other businesses
which operate shuttle services to explore the possibility of adding stops at USG.

Ongoing and Continuing Work

In over 13 hours of hearings and debate, the USG Commission was able to reach consensus on seven
important findings, and 33 follow-on recommendations associated with the tasks assigned it by the
Chancellor in his charge. At the same time, as it listened to the variety of stakeholders and their points
of view – some diametrically opposite and passionate in that opposition – about the needs of USG, its
partner USM institutions, and Montgomery County, and the best path forward for addressing these
needs, the Commission recognized that on some issues or tasks a consensus position would not be
achievable in the time available. For these, the Commission’s recommendation is that the USMO, USG,
and the USG partner institutions continue to work over the coming months to achieve a resolution and
identify solutions. These follow up issues or tasks include the following:

24
1. The USMO should undertake with USG, USG’s partner institutions and the USG Board of
Advisors a “Roles, Responsibilities, Authorities, and Accountabilities” (RRAA) analysis. The
analysis should be completed prior to the launch of the search for a new Executive Director
at USG. Responsibility for completing and implementing the RRAA analysis should be
assigned to the USMO.

2. As part of the RRAA analysis, the USMO, USG, USG’s partner institutions, and the Board of
Advisors should continue to review and discuss the leadership and governance principles
and needs outlined in Finding 7. The list of nine potential recommendations included under
Finding 7 should serve as a starting point for this follow up work. Any recommendations
emerging from this follow up review should be finalized prior to the hiring of the new
Executive Director.

3. The USMO should seek the USG Board of Advisors’ input as it develops and refines the
position description for the new Executive Director. This input should include any change to
the title of the Executive Director position seen as appropriate based on the outcome of the
RRAA. The Board of Advisors should be represented on the search committee for the new
Executive Director (or whatever title is determined to be most appropriate for the position).

4. Once the new Executive Director (or its replacement title) has been hired and is on board,
the USMO, USG, and USG Board of Advisors should develop an overarching strategic plan for
USG in line with the principles and issues discussed.

5. The USMO should work with the Department of Budget and Management (DBM) and the
Department of Legislative Services (DLS), as appropriate, to explore the options and
requirements for assigning a separate budget agency code to the operations of USM’s
regional centers, with a sub program identifier assigned to USG.

6. The USMO should work with USG to establish an internal budget process and timeline to
allow for input as appropriate from the participating USM institutions and the USG Board of
Advisors. The budget process would follow the standard USM process for review by USMO
staff and approval by the Chancellor and the Board of Regents.

The USMO commits to working with USG, its partner institutions, and the USG Board of Advisors in a
good faith effort to fully implement all the recommendations contained in this report. In addition, it
commits to developing and implementing a process and timeline for carrying out the important “follow
up” tasks outlined in the Ongoing and Continuing Work section above.

25
Appendix Document 1

Charge to the Commission Developing the Report on Ensuring the Fiscal Viability
of the Universities at Shady Grove
July 19, 2019

Context:
The “Report on the Fiscal 2020 State Operating Budget (HB100) and the State Capital
Budget (HB101) and Related Recommendations,” submitted by the Joint Chairs of the Senate
Budget and Taxation Committee and the House Appropriations Committee on March 25,
2019, contained the following:

Report on Ensuring the Fiscal Viability of the Universities [at] Shady


Grove: The committees request the University System of Maryland Office
(USMO) to submit a report detailing a plan to position the Universities at
Shady Grove (USG) for future development to promote regional and
statewide interests and advance competitiveness. USMO will undertake a
study in partnership with the University of Maryland, College Park, as the
managing campus, the other constituent institutions offering programs at
USG, the Executive Director of USG, and the Chair of the USG Board of
Advisors. They shall evaluate (1) leadership and a new funding model that
better ensures [the] long-term fiscal viability USG; (2) additional missions
for USG based on economic development needs of the region and State; and
(3) current and planned transportation enhancements to USG and a
cost/benefit analysis of the plan. The report shall be submitted by December
1, 2019. (p. 154)

As the only public institution providing onsite upper division baccalaureate and graduate
level instruction in Montgomery County, and the largest comprehensive regional higher
education center in the state, the Universities at Shady Grove represents one of the
USM’s core strategies for addressing the postsecondary education access, professional
development, and workforce training needs in the economically vital Montgomery
County region. To this end, the State of Maryland and the USM have invested significant
resources in both operating funds and capital construction to develop USG (over the last
four years USG has received $46.3 million in state-supported operating funds, not
counting the additional millions in student tuition and fee revenues collected by its
partner institutions, while the state has invested almost $218 million in capital
construction at USG since 2007). Montgomery County and local private supporters have
made strong investments in USG as well, specifically helping to support capital
construction and scholarships and services support for USG students.

The investments made by the State, the System, Montgomery County, and local
supporters have allowed USG to develop into the USM’s largest and most comprehensive
regional center. From just 200 students (headcount) enrolled in a handful of programs in
fall 2000, its first year of operation, USG has grown to over 3,000 students studying in 80
different upper level undergraduate, graduate/professional degree and certificate
programs offered by nine USM partner institutions. In close partnership with
Montgomery College (MC), Maryland’s largest community college with more than
20,000 full-time students, which serves as USG’s primary feeder institution, USG draws

1
Appendix Document 1

almost three quarters (71%) of its undergraduate students from Montgomery County,
while approximately nine out of ten USG undergraduates (87%) come from one of the
following four counties: Montgomery County, Prince George’s, Frederick, or Anne
Arundel (for all students combined—undergraduate and graduate—two-thirds of USG
students come from Montgomery County and 85% from Montgomery, Prince George’s,
Frederick or Anne Arundel). Close articulation between the academic programs at MC
and other Maryland community colleges and those at USG’s partner four-year institutions
has helped push graduation rates for students enrolling in programs at USG among the
highest within the USM (75% of undergraduate students who transfer to programs at
USG graduate within four years, compared to just 57% for transfers at all USM
institutions combined within the same period).

However, USG’s success, in combination with the growth that has accompanied it, also
has led to a concomitant increase in the number and severity of the challenges facing the
center, and its partner institutions operating there. With 3,000 students enrolled there,
USG is now comparable in size to several of the System’s traditional four-year
institutions. The complexities associated with planning for and managing that size of an
operation under such a uniquely collaborative format – each of the nine partner
institutions has its own mission, institutional culture, and system of operating -- has led to
a significant increase in the number of issues and challenges those students, institutions,
and even individual programs bring to USG, partner institutions and the USM. At the
same time, the county’s population and workforce needs also have changed, with
Montgomery County citizens and businesses having become significantly more diverse
since 2000 in their demographic makeup, their professional/occupational focus and areas
of interest, and their postsecondary education access and workforce development needs.
Finally, USG’s financial model, though larger in terms of the total dollars managed, has
remained basically unchanged in terms of its underlying structure and sources of funding
since USG’s creation. It is more reflective of a small startup than a mature and
comprehensive postsecondary education institution. The center’s financial model needs to
be updated to reflect and be able to accommodate USG’s expanded size and mission, as
well as the expectations and needs of the region and populations served.

The desire of the USM going into this study is that the outcome will lead to a fiscal and
leadership/governance model for USG that not only addresses the center’s current
operational needs but provides the foundational springboard and framework for future
growth at USG in response to emerging county and regional needs.

Charge:
In line with the intent of the JCR, the Chancellor charges members of the Commission
with the following:

• Evaluate the leadership, governance and funding models currently operating at


USG. Develop recommendations for a new model(s) that will 1) clarify, facilitate
and streamline leadership and governance-related roles and responsibilities, and
2) provide adequate and sustainable funding for programs and services delivered

2
Appendix Document 1

at USG, in order to ensure USG’s long-term fiscal viability and operational


effectiveness;
• Explore and evaluate any additional or expanded missions for USG, beyond its
current education workforce/training and community support missions, that are
needed in order to address the economic development needs of the Montgomery
County region and the State, both current and projected;
• Evaluate the transportation enhancement needs, both current and projected, of
USG students, faculty, and staff, and provide a cost/benefit analysis associated
with addressing those needs.

In responding to these issues, the Task Force should consider these questions:
• What is the appropriate role of each stakeholder group? What is the role,
responsibility, authority and accountability of:
1. The USM System Office
2. The partner universities
3. The managing institution
4. The USG executive director
5. The USG Board of Advisors
• Who should USG’s executive director report to (and how does his/her roles and
responsibilities differ from those of any traditional institutional executive)?
• How can USM, USG, and USG’s partnering institutions ensure that an
appropriate balance exists between USG’s mission to represent and respond to the
needs of Montgomery County and the region while also addressing the needs and
interests of USG’s institutional partners in meeting their USM and specific
institutional missions? How should conflicts between these competing
missions/needs be resolved? What is the process for receiving and incorporating
input from the community on an ongoing basis?
• Given the bifurcation of roles and responsibilities at USG (i.e., institutions are
responsible for academic programs, faculty, program staff, and some program-
specific support services and instrumentation; USG is responsible for facilities,
general equipment and instrumentation, center-wide staffing and student support
operations, etc.) and USG’s lack of tuition support, how can USG’s ability to
successfully meet student needs, and manage and grow its operations be fiscally
sustained?
• What are the areas of critical workforce and economic development need in the
county and region (currently and in the future)?
• How well are the workforce and economic development needs of the county and
region being served, and by whom?
• What critical workforce needs areas are not currently being adequately served and
what future needs are anticipated?
• What are the areas of projected need and what should USG and its partner
institutions be doing to prepare to support those?
• What additional mission-related economic needs exist in the region that USG is
not presently but should be positioned to address?

The committee should consider the following in making its decision:

3
Appendix Document 1

1. USG’s existing mission statement, structure, and effectiveness documentation as


informed by the findings and recommendations of the USM’s ongoing work
group on regional centers, the findings and recommendations of UMCP’s 2018
JCR report, and more current detailed data and information provided by USM
staff or other organizations (e.g. JFI).
2. The organizational structure that would be most likely to maximize the impact
and effectiveness of USG’s resources;
3. The impact of the BSE and any future construction on the financial viability of the
regional center and the fiscal model that would be most likely to ensure an
appropriately sized and stable base of support for USG to maintain its facilities
and level of services moving forward.
4. The views of the USG leadership and staff as well as the views of the partner
institutions’ leadership, faculty and staff working at or with USG.
5. Input from County and regional stakeholders, including government officials,
Montgomery College, Montgomery Public Schools, and health providers,
businesses, and stakeholders.

Task Force Composition and Report:


The Task Force will be chaired by Ellen Herbst, USM’s vice chancellor for
administration and finance, and Michael Knapp, chief executive officer of SkillSmart,
Inc., and chair of the USG Board of Advisors. Membership will be drawn from USG and
its Board of Advisors, USM partner institutions, Montgomery College, and county and
regional officials and stakeholder groups. The Task Force is asked to complete its report
by October 31, 2019. The Commission leadership is asked to be “on call” to testify or
support on behalf of USM and USG to any follow up
questions/recommendations/legislation by the General Assembly and Administration.

4
Appendix Document 2

USG JCR Commission Membership List

Ms. Ellen Herbst (co-chair)


USM Vice Chancellor for Administration and Finance

Mr. Mike Knapp (co-chair)


Chair, USG Board of Advisors
President and Cofounder, Skillsmart

Dr. Stew Edelstein


USG Executive Director and USM Associate Vice Chancellor for Academic Affairs

Mr. Upneet Atwal


Student alumnus, Robert H. Smith School of Business (USG)
Candidate, Georgetown University’s Master’s in Urban and Regional Planning Program

Mr. Kevin Beverly


President and CEO, Social Scientific Systems, Inc.

Dr. Joann Boughman


USM Senior Vice Chancellor for Academic and Student Affairs

Ms. Belinda Coleman


President, The Coleman Group

Dr. Stephen Fuller


Director, Stephen S. Fuller Institute, George Mason University

Dr. Bruce Jarrell


Executive Vice President, Provost, and Dean of the Graduate School, University of Maryland,
Baltimore

Delegate Marc Korman


House Office Building, Room 210

Mr. Isiah (Ike) Leggett


USM Board of Regents

Dr. DeRionne Pollard


President, Montgomery College

Mr. Mike Priddy


President and CEO, Intervise

1
Appendix Document 2

Dr. Mary Ann Rankin


Senior Vice President and Provost, University of Maryland, College Park

Mr. Dusty Rood


President and CEO, Rodgers Consulting, Inc.

Dr. Philip Rous


Provost and Senior Vice President for Academic Affairs, University of Maryland, Baltimore County

Dr. Darlene Smith


Executive Vice President and Provost, University of Baltimore

2
Appendix Document 3

USM Institutions Participating at the Universities at Shady Grove


and Year Operations Began

2000

• University of Maryland University College (now University of Maryland Global Campus)


• University of Baltimore
• University of Maryland, Baltimore
• Bowie State University

2001

• University of Maryland, Baltimore County


• University of Maryland, College Park
• University of Maryland Eastern Shore
• Towson University

2008

• Salisbury University

Note: No USM institution has withdrawn from USG since operations began in 2000. The University of
Baltimore suspended offering programs in 2004 and 2005 but re-started programs in 2006.
Appendix Document 4
Appendix Document 5
USG Operating Budget by Major Function
FY 2020 Working Budget (Scenario #2)

Facilities
Full Time (as of 3/25/19) Renewal Total FY 2020 FY 2020 Full Time
Authorized Vacant Salaries & Object 02-13 & Transfers Expense/ Reduction Final Authorized
Revised
State Supported Budget Positions Positions Fringes Operating to Plant Revenues Target (10.45%) Budget Positions
Expenditures:
Executive Office 5 1 782,901 296,038 - 1,078,939 (98,232) 980,707 4

Finance & Administration 13 3 1,488,057 244,679 - 1,732,736 (126,892) 1,605,844 11.5

OIT Department 16 1 2,175,948 705,727 135,000 3,016,675 (198,575) 2,818,100 15

Student and Academic Services 24 3 2,856,359 437,885 - 3,294,244 (17,299) 3,276,945 24

Advancement and Community Engagement 10 2 1,143,001 431,981 - 1,574,982 (207,667) 1,367,315 8

Plant Operations 10.75 0 1,211,991 2,812,621 300,000 4,324,612 (328,250) 3,996,362 10

BSE Facility 7 6 805,000 3,661,619 - 4,466,619 - 4,466,619 7

Library 7 1 734,035 148,340 - 882,375 - 882,375 7

Workforce Development Initiatives


2017 Funds 0 0 - 1,098,539 1,098,539 - 1,098,539 -
2018 Funds 0 0 - - - - - - -
2019 Funds 0 0 - 2,000,000 2,000,000 - 2,000,000 -
2020 Funds 0 0 - 4,955,185 - 4,955,185 - 4,955,185 -

Dep Exec Dir - Academic Pgms 2 2 354,500 39,700 - 394,200 (205,055) 189,145 2
-
UMCP Management Fee 0 0 - 519,705 - 519,705 - 519,705 -

Total State Supported Expenditures 94.75 19 11,551,792 17,352,019 435,000 29,338,811 (1,181,970) 28,156,841 88

Revenues:
State Appropriations (COLA&BONUS) 9,571,473 - 9,571,473
State Appropriations - PE/PD 1,098,539 - 1,098,539
State Appropriation - BSE FY19 4,035,516 - 4,035,516
State Appropriation - BSE FY20 431,103 - 431,103
State Appropriation - WDI FY19 2,000,000 - 2,000,000
State Appropriation - WDI FY20 4,955,185 - 4,955,185
Share of Enrollment Funding 3,262,848 - 3,262,848
Institutional Partner Classroom&Office Fees 675,000 67,500 742,500
Student Technology Fees 258,907 - 258,907
Student Activity Fees 1,206,218 (225,329) 980,889
Student Facility Fees 87,160 (4,358) 82,802
Other Revenue 72,720 - 72,720
Transfer to /Use of Fund Balance - Operations 664,359 664,359
Transfer to /Use of Fund Balance - PE/PD - -
Total State Supported Revenue 28,319,028 (162,187) 28,156,841

Revenue/Expenses (1,019,783) 1,019,783 0

Non-State Supported Budget


Parking Expenses 0 0 421,712 304,700 339,588 1,066,000 - 1,066,000
Parking Revenues 1,066,000 - 1,066,000

Conference Center Expenses 5 0 507,907 795,661 0 1,303,568 - 1,303,568


Conference Center Revenue 1,303,568 - 1,303,568

Other Auxiluary Expenses1 1 0 99,748 826,210 925,958 - 925,958


Other Auxiliary Revenue 925,958 - 925,958
Subtotal Non-State Budget 6 0 1,029,367 1,926,571 339,588 3,295,526 - -

100.75

1
Move 1 FTE from Auxiliary to Operations - Senior Director of Operations
2
Does not include contracts and grants
Other Revenue
281305 0903 Photo Copy 18,176
281305 0904 Phone 10,800
281305 0917 Other sales 2,000
281301 0699 Internal Sales 32,000
281301 0903 Photo Copy 23,000
-
85,976

Other Auxiliary Revenue


336002 0784 Other Auxiliary 600
336001 0831 Fee for Service 12,500
281307 0699 Internal Sales 650,840
281307 0949 Rebate 20,000
281312 0903 Copy Center 77,000
760,940
Appendix Document 6

Regional Higher Education Center


(RHEC)
Financial Model
Presented by
Ellen Herbst, USM Vice Chancellor for Administration and
Finance Ellen Herbst

11/13/2019 1
Regional Higher Education Center Financial Model

• Principles
• Financial model should support RHEC goals
• Access and affordability
• Student success
• Workforce development for region
• Shared resources, activities, assets
• Decisions on what can and should be shared to be made through shared
governance of universities and RHEC
• Those assets, resources and activities that can and should be
shared should be funded once through USMO/RHEC budget
• Those assets, resources, activities that are unique to individual
programs should be funded through partner university
• Investments required to bring new programs and source of
funding will be identified prior to program approval
• Costs that are variable with enrollment ranges should be identified
• Most costs incurred at USG will not vary significantly within a given
enrollment range

11/13/2019 2
The USG “Start-Up” Funding Model
• USG operates on a blended financial model
• Some costs paid for by partner universities (cost of instruction)
• Some costs paid for by state appropriations (cost of onsite activities
and resources)
• Minimal funding through student and institution fees
• Expanding curriculum offerings has been difficult—
institution partners face funding constraints and competing
priorities for program development.
• Tuition is often not enough for investments in tenure-track
faculty or more costly program development.
• Uncertainty in projecting enrollments present additional
challenges, particularly in more expensive STEM-related
fields and professional programs.

11/13/2019 3
The USG Current Financial and Funding Model
• Total USG expenditures divided into “self support” functions
and all other functions
• Self support functions
• Parking, conference center, other auxiliary functions
• Must “pay for themselves”
• Total $2.1 million for FY2020
• All other functions
• Total $28.5 million for FY2020
• 89% funded by state appropriations
• 7% funded by fees to partner universities and students
• Balance covered by accumulated savings (fund balance)
• USG does not pay for cost of instruction – these costs
(faculty and other instructional costs) paid for by partner
universities...though USM shares cost for some programs
11/13/2019 4
The USG Stable Funding Model
• Costs at USG are almost entirely fixed over a given
enrollment range
• Majority of costs are salaries and benefits of employees,
who are providing administrative, managerial and student
support
• Should entire budget for USG expenditures be state
appropriations?
• Current state appropriations support 89%
• Simplified governance – less administration of fee arrangements
and collections
• With a base budget built on realistic, sustainable enrollment range
and shared decisions on support to be provided by USG, would
provide stability of funding and ability of Exec Director to operate
within appropriation

11/13/2019 5