Report recommends closer EERC tie to UND: Fired director guarded facility’s independence
GRAND FORKS -- A consulting firm is recommending the University of North Dakota's Energy and Environmental Research Center become a more integrated part of the university after the school fired the center's director, who fought for the center's i...
GRAND FORKS - A consulting firm is recommending the University of North Dakota’s Energy and Environmental Research Center become a more integrated part of the university after the school fired the center’s director, who fought for the center’s independence for decades.
The EERC’s lab on the east side of UND’s campus employs 235 people and does research focusing on efficient energy and environmental technologies, working mostly for federal and private entities.
A report by Huron Consulting Group, obtained by the Grand Forks Herald, recommends reevaluating organizational structure and governance and recommends redefining the historically independent EERC as a “traditional university center or institute.”
“From our perspective, the report recommends finding a structure and operating model that preserves important aspects of autonomy/responsiveness while establishing collaboration and coordination with UND as a whole,” UND spokesman Peter Johnson said in an email. “We will seek an organizational structure that combines the benefits of both.”
Following the money
The EERC has carried a budget deficit of about $1 million annually back as far as 2008. In March, UND Vice President for Finance and Operations Alice Brekke said in a memo that if nothing changes, UND will carry a total projected deficit for the EERC of about $3.75 million by the end of fiscal year 2015.
But Interim Director Tom Erickson told the Herald in July that things were looking up at the center and that they had submitted about $12 million in proposals over the summer. The new report projects a $539,025 estimated deficit for fiscal year 2014, down $525,774 from the previous fiscal year.
The report also blames the deficit from 2012 onward on administrative expenses.
“Salaries are benchmarked to regional and/or national market data,” Johnson said. “In order to be successful in recruiting and retaining individuals with the skills and talent necessary, EERC must pay a salary that is competitive.”
This comes after former director Gerald Groenewold sent a memo penned by Erickson to UND President Robert Kelley in January blaming the EERC’s financial problems on an uneven distribution of income that comes from the center’s research contracts. That income is split between UND and the EERC because of indirect costs incurred for research activities.
“This is a power struggle between Bob Kelley and me for control of the EERC and control of the money,” Groenewold said in a June interview with the Herald.
Groenewold was fired in early June after a Minnesota-based law firm interviewed employees who said Groenewold displayed unprofessional behavior at work. The law firm’s report also said he reportedly disparaged the EERC’s relationship with UND frequently and described his interactions with the university as “combat.”
The Huron report recommends the EERC embrace a closer relationship with UND.
“The center currently enjoys a high degree of research and operating independence; however, there may be additional revenue opportunities by associating more closely with the rest of the university,” the report said.
It’s still unclear what the Huron report means for EERC employees.
“As reasonable opportunities to reduce costs are identified, they certainly will be considered,” Johnson said. “We do not yet know what the cost reduction opportunities might be.”
The report recommended the EERC focus its energies on going after bigger contracts because most proposals are currently worth less than $100,000. A space utilization study could also be on the horizon to find out whether the center is using its space effectively.
The report also recommends analyzing administrative staff to comprehensively plan staffing in conjunction with UND faculty.
“We view this to refer to a broad range of possibilities for collaboration,” Johnson said. “Examples include research partnerships, shared services, coordination of marketing efforts, holistic approach to planning etc. As we go forward, each opportunity will be evaluated, and, if viewed to contribute to the long-term collective good, will be implemented.”