Missoula College will lose $200,000 in funds in the upcoming fiscal year because of poor performance, according to a presentation Thursday to the Montana Board of Regents.

The university system distributes a portion of funds — some 8 percent — to campuses based on their abilities to hit targets such as graduation and retention rates.

At Missoula College, a 20 percent drop in degrees or certificates awarded and 19 percent decline in remedial success compared to recent three-year averages are partly responsible for the loss of funds, according to the presentation. 

Thursday, though, regents and higher education officials discussed whether it's time to reevaluate "performance funding."

Tyler Trevor, deputy commissioner for budget and planning, said the model has been in place five years total, although it weighed only a couple of data points in its first year.

Regent Martha Sheehy said she wanted to consider whether the appropriate "carrot and stick" were in place to motivate campuses. In particular, she wanted to know if the model had been effective for struggling schools.

"Has this really helped? Or has it hurt them disproportionately to the amount of money that's at stake?" Sheehy said.

The formula is complex, but one of the weighted measures is a school's performance with under-represented and at-risk students. Regent Casey Lozar again observed that those students were performing "drastically" below targets, and he and student Regent Chase Greenfield said the university system needs to help.

"I think we could do a little bit more on that front, and I hope we can look at that in May," Greenfield said.


At the meeting, regents heard overviews of campus budgets.

University of Montana President Seth Bodnar discussed the roughly $10 million hole the flagship needs to fill in the next four years, and the plans to increase revenue and reduce expenses. Bodnar, who has shared the budget picture at presentations in Missoula, said the situation at UM is not ideal, but it's also not a crisis.

He also said some of UM's efforts to increase student success will lead to additional revenue. For example, Bodnar, who wants to increase retention, said if UM ups retention just 10 percent for students going from their first to second year, the revenue increase will be $3.5 million.

Generally, he said UM is squarely focused on reinvigorating the flagship with its plan for the next four years.

"It will result in a University of Montana that is both fiscally sound, but just as importantly, delivering the best possible education for the students of Montana," Bodnar said.

Regent Sheehy thanked Bodnar for the diving into the job, which he started in January, and for presenting the overview to regents: "I know that you'll be providing more details. We're hungry for this information. We're thirsty for this knowledge."

Regent Bob Nystuen wanted to know if UM had been limited in its ability to help drive revenue through through recruitment. In 2016, UM brought on enrollment vice president Tom Crady and his "secret sauce recipe" for increasing enrollment, but Nystuen said he was concerned that UM did not have adequate financial resources to boost student numbers.

"Are you foregoing opportunities because the budget is too tight and you can't do what you need to do in the areas of enrollment?" Nystuen said.

At an earlier budget presentation on the UM campus, the vice president for finance said the flagship had eliminated $1 million for enrollment several years earlier. It plans to restore that money, but Thursday, Bodnar was blunt in response to Nystuen's question.

"The short answer is yes, opportunities have been foregone. There have been budget constraints," Bodnar said.

Nystuen also said Bodnar's success as a leader would depend partly on his ability to coalesce a cabinet, and he asked how the new president was pushing the institution forward. UM has had a slate of interim leaders, including the president until January; currently, the second-in-command provost and vice president of finance are serving in interim capacities.

Even before he took the helm, Bodnar launched a search for provost. Thursday, he said the campus was on the brink of announcing three provost finalists, and he hoped to select a candidate for the job around spring break. A search for a finance vice president is also underway. 


Thursday's meeting took place at UM Western in Dillon, and in communications to the board, presenters noted the campus has a close relationship with the business community.

Regent Paul Tuss wanted to know the skills business leaders wanted to see more developed in graduates, and the business leaders did not equivocate.

Cal Erb, chairman of the Bank of Commerce, said inadequacies with so-called soft skills "drive me nuts." For instance, he said a quick phone call might be better than a 30-minute text exchange at times.

"If somebody calls you, return the call. Show up on time. Dress appropriately," Erb said.

Campuses do well teaching students direct job skills, but employees also need to know how to behave and communicate effectively in the workplace, said business leaders.

"It's tough to teach kindness, but I think that's big," said Beth Sullivan, of Patagonia.


Kevin McRae said at the meeting that union negotiations were moving slowly for some 25 labor agreements that cover 4,000 faculty and staff of the university system. McRae, deputy commissioner for human resources, said he had predicted in January that he would be able to bring the regents contracts this month, but discussions were still taking place.

Topics included not only compensation, but also working conditions and terms that weren't financial, he said.

In its most recent session, the Montana Legislature approved smaller budgets for state agencies, and a special session in the fall further reduced funds. McRae said the result is "a degree of austerity" in conversations about pay.

"When wages and salaries within a two-year period are not projected to grow fast or often under the employer's proposals, you usually find that the dynamics don't result in a lot of settled contracts very quickly," McRae said.

Regent Bill Johnstone said the contracts represent "a significant component of our budget," but it also remained "a bit opaque."