Minutes of December 22, 1994 Meeting The meeting convened at 2:09 p.m. in room 817 Cathedral of Learning. UPBC members present were: Thomas Anderson, Toni Carbo Bearman, Jacob Birnberg, James Cassing, Thomas Detre, Ronald Gardner, James Holland, Randy Juhl, Peter Koehler, James Maher, Sharon Nelson-Le Gall, Joan Slezak, Michael Stuckart, Ben Tuchi, Bruce Williams, Philip Wion, Julius Youngner, and Judith Zimmerman. Also present were: Jeffrey Liebmann, Jeffrey Masnick, Robert Pack, and Lawrence Weber. UPBC members not present were: Nitin Badjatia, George Chambers, Darlene Harris, James Isaacs, Franklin McCarthy, and Jeffrey Romoff. Approval of Minutes The minutes of the December 8 meeting were approved. Status of Attribution Methodology Wion discussed recent activities of the Attribution Methodology Subcommittee that should result in a final report by the end of February 1995. The report will include a revised attribution methodology applied to FY 1994 data. It will have the same basic format as the methodology used in 1994, but will attribute support costs (such as Facilities Management, Computing and Information Services, etc.) not just to academic units, but to all University units. The 1995 methodology will also move as many costs as possible associated with support units out of the General category and into the Traceable and Assignable categories. In addition, the attribution of the Commonwealth appropriation will involve more student credit hour weights than in the past. Another analysis, requested by the Provost's Office, is also being conducted comparing FY 1993 and FY 1994 data using the previous methodology for comparison purposes. University Planning and Budgeting Activities Maher distributed a memo sent to the members of the Council of Deans describing the implementation of a focused and programmatic budget process for FY 1996. Each academic unit reporting to the Provost will be asked to establish short-term and long-term goals and priorities with well articulated relationships to the strategies outlined in Toward the 21st Century. In addition, each unit will prepare a five-year financial plan that includes the following for each year. -- A reallocation of 2.5% of its base budget from programs and activities of lesser priority to those of higher priority; -- A reduction of an additional 2.5% of its base budget, with a detailed assessment of its impact; and -- An increase in the base budget of 2.5%, with an explanation of the resulting benefits. A central pool of resources to provide funds for unit-to-unit reallocations will then be created from the second 2.5% reduction to provide necessary resources to units. Maher explained that units will be encouraged to pursue goal attainment through internal reallocation of funds, increases in revenue, and cost savings. Maher stressed the importance of units articulating an image of what they are and how they can best meet University goals. He explained that units' plans must be submitted to the Provost by March 1 and that the Provost's area plan must be submitted to the Chancellor by April 15. Maher stated that each Senior Vice Chancellor and Vice Chancellor reporting to the Chancellor will be asked to provide the UPBC with a similar explanation of planning and budgeting activities for the coming fiscal year. Detre expressed concern that planning for the health science schools is very different given the volatile environment within which the schools operate and generally cannot exceed a horizon of more than one year. Wion stated that in a period of declining revenues, a longer planning horizon may be necessary to support decisions related to downsizing. Wion agreed that the UPBC has a role in examining priorities and providing meaningful input to the Chancellor relative to reallocation of funds across senior vice chancellor areas. Anderson expressed concern that the need to offset a University deficit may consume the 2.5% fund for reallocation. Maher agreed that this was possible, but added that the combination of a 2.5% budget reduction and a 2.5% budget reallocation over five years was as much as any unit could be expected to accomplish. Maher stressed the importance of units enhancing revenues from activities such as summer term and distance learning courses and the application of a net tuition approach to scholarships to offset budget reductions and fund new initiatives. In response to Anderson's question, Maher emphasized the need to encourage the creation of opportunities not included in the long-term budget projections produced by the Strategic Issues Subcommittee. He reiterated the importance of the University maintaining its current array of schools. Wion stressed the need, given that the Provost's units are doing so, for all University units to create contingency plans that include budget reductions over the next five years. Bearman agreed, stating that the academic units must now turn away revenue opportunities for lack of resources. She requested that nonacademic units be asked to submit the documents they have sent requesting plans for reallocations over the five-year period to the UPBC for its January meeting. By consensus, the UPBC agreed to this request. She added that the UPBC should examine the reallocation targets being set by nonacademic units. Detre and Weber discussed the recent budgetary history of the health science schools and Institutional Advancement. Members discussed the need to examine the recent history of budget reallocations for all University units. Birnberg stressed the need for quantitative criteria based on the strategies and objectives outlined in Toward the 21st Century. Maher responded that informal checkpoints will occur in the coming months, including the revised attribution study, that will provide needed guidelines. He cautioned, however, that quantitative information must be augmented by qualitative judgments of unit centrality and strength. The meeting adjourned at 4:03 p.m.