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University of Montana President Royce Engstrom smiles on the sidelines during Saturday's game. Montana defeated Florida Atlantic 83-69 in Dahlberg Arena on Saturday.

MISSOULA — University of Montana President Royce Engstrom said Wednesday he will dedicate his recent raise — $6,093 approved by the Montana Board of Regents — to a second leadership scholarship at UM.

The president made the announcement at the end of his midyear update to the campus, and it was the only item he mentioned that elicited applause.

"I am totally committed to this exciting future that we have before us," Engstrom said.

On Jan. 19, the seven-member Board of Regents approved increasing Engstrom's salary to $309,207, from $303,144, with one dissenting vote.

In November, Engstrom announced a proposal to cut personnel, and Wednesday was his first public forum since UM announced its plan in January for the cuts. At the meeting, he talked about the difficult budget work, announced a new UM initiative in medicine, and shared recent positive results of a legislative audit and credit ratings.

In a new twist on the midyear presentation, the president also invited a student, faculty and staff member to speak briefly.

He also took questions from the audience, including a couple about UM's investments in fossil fuels.

At his update, the president announced the launch of UM Health and Medicine, an initiative that aims to nurture the "amazing array" of biomedical and health care research and clinical applications taking place on campus.

He said a group on campus came together to work on the effort, and its members are coordinating UM's work in health and medicine across campus, from education, humanities and sciences, and other disciplines, with a goal in mind: "We're going to make this a hallmark of the University of Montana."

He also touted recent independent ratings that show UM is in good standing financially. A recent legislative audit had no recommendations for UM.

"We came through that audit perfectly cleanly," Engstrom said.

The audit compared UM to campuses in Montana and to outside institutions, and it showed UM spends less of its money on administrative costs, he said.

Engstrom said UM is lean compared to Montana State University in Bozeman and also compared to schools outside Montana evaluated in the audit.

"We are being responsible as a university community making sure that our resources are dedicated to the functions that they should be, primarily instruction," Engstrom said.

He also said vice president of finance Michael Reid recently told him UM has received strong credit ratings from two independent agencies, an A-plus from Standard & Poor's and AAA from Moody's.

"Both of those ratings are very high, very favorable, and both of them are unchanged from what we have seen in the past several audits," Engstrom said.

The president also dedicated a portion of his talk to "excellence" on campus, citing professors who have received a Fulbright award, a Harvard University fellowship, a career achievement recognition from the National Science Foundation and other honors.

Last year, he said, UM set a record for research funding at $83 million, and he believes it likely will exceed the amount this year.

The president started off his talk by acknowledging the stressful work the campus went through in cutting its budget by 192 FTEs, or full-time equivalents, including 23 layoffs.

He said the cuts amount to some $8 million out of the $12 million UM needs to eliminate in its upcoming 2017 fiscal year budget. The university plans to make up the rest of the dollars through savings in utilities and benefits costs, as well as other reductions.

With the cuts, Engstrom said, the university is now in line with faculty- and staff-to-student ratios that are considered the norm across the nation. But he said the task was "painful, no question."

"This has been a very difficult thing for all of us to go through," he said.

Engstrom also said UM will update its strategic plan, a task he plans to complete by the end of the summer.

"We are on a relentless pursuit of becoming one of the most effective and one of the most respected flagship universities in this nation," Engstrom said.

Toward the end of his presentation, the president took questions, and two members of the audience asked him about UM's investments in fossil fuels. Some other universities have divested their investments in nonrenewable resources, and students at UM have wanted to go the same direction.

"How is making decisions contrary to student opinion going to help encourage students to come to UM?" asked one participant.

Engstrom said the matter was an ongoing conversation, and students are one of UM's many constituents. Others include alumni and donors, such as professionals who earn a living in the energy sector.

He also said he wants to make decisions that allow UM to financially support more students. Plus, he sees challenges in making a decision about UM's future based on an issue tied so closely to federal policy.

"Up until this point, I have not come to my own conclusion that that is the right thing for us to do, and neither has the University of Montana Foundation," Engstrom said.

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