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Trustees in the Minnesota State Colleges and Universities system extended its top leader’s contract through July 2023 — a move they said will allow Chancellor Devinder Malhotra to see through a push to spur innovation in the system.

Malhotra, a former St. Cloud State University provost, stepped out of retirement to serve in an interim role after a 2017 search for chancellor failed. He committed to stick around as permanent chancellor when a second national search failed last year. He said Wednesday he put much thought into his decision to stay after his current contract expires in 2021, thus “completely failing retirement.”

In announcing the contract extension, Michael Vekich, who chairs the system’s governing board, cited the “Reimagining Minnesota State” initiative, in which the network of seven universities and 30 community colleges has enlisted business, philanthropy and other leaders to help brainstorm ideas for innovation. System officials have said Minnesota State, which grapples with declining enrollment and other challenges, needs bold change, but the push has drawn skepticism from faculty unions and others.

Malhotra now earns a base salary of $390,000, with another $117,000 in annual benefits. His new contract will be negotiated in coming weeks.

“Devinder has proved himself in this role as a gifted, inspirational and effective leader,” Vekich said, adding that the system needs continuity in coming years.

Vekich also noted Malhotra’s recent “partnership tours” of system campuses across the state, designed to highlight the relationships they have cultivated with local employers, nonprofits and others in their communities.

The system is in the midst of lobbying the state for an ambitious request to hike its funding by $246 million over two years, or more than 17% for the biennium. The money would fund employee pay raises and other operational costs, as well as a new information management system, new scholarship programs and an effort to address workforce shortages.

The request has gotten a mixed reception at the Capitol. Gov. Tim Walz, whose budget proposal would fund a fraction of the system’s request, recently told the Bemidji Pioneer’s editorial board that Malhotra and his University of Minnesota counterpart, President Eric Kaler, failed to make strong cases for significant increases in funding and to explain the rise in higher education costs.

Kevin Lindstrom, who heads the system’s college faculty union, said Malhotra’s contract extension brings stability to a system that badly needed it. Lindstrom and others have credited the chancellor with rebuilding ties with faculty and other employees, which had become strained under Malhotra’s predecessor, Steven Rosenstone.

“He’s done a tremendous amount of relationship repair,” Lindstrom said. “He’s a good guy. He’s engaging in a way anybody can appreciate.”

Now, Malhotra will fully own the “Reimagining” initiative, Lindstrom said, and it is time for him to spell out clearly his thinking and goals for the effort and the future of the system more generally. Faculty — wary after an earlier reinvention initiative under Rosenstone devolved into acrimony — say questions persist about the direction of the effort and the role of students and employees.

Malhotra said Wednesday that after the final of five forums with national education experts, the system is wrapping up the initiative’s phase of “crowdsourcing of ideas.”

“I know we stand at the edge of a critical opportunity to lead the change in higher education,” he told the board of trustees.