Minutes of April 22, 1994 Meeting
The meeting convened at 10:04 p.m. in room 2428 Cathedral of Learning.
UPBC members present were: Thomas Anderson, Toni Carbo Bearman, Jacob
Birnberg, Ronald Gardner, Darlene Harris, James Holland, Randy Juhl, Carol
Kenderes, Peter Koehler, Franklin McCarthy, Richard Nelson, Sharon Nelson-Le
Gall, Mark Nordenberg, Jack Ochs, Ben Tuchi, Philip Wion, and Judith
Zimmerman. Also present were Lisa Fiorentino (speaker phone), Rhonda Gross,
Jeffrey Liebmann, William Madden, Margaret Peaslee, Robert Pack, Lawrence
Weber, and Michael Worman.
UPBC members not present were: Nitin Badjatia, George Chambers, Thomas
Detre, Michael Kurela, Dennis McNair, Jeffrey Romoff, and Julius Youngner.
Approval of Minutes
The UPBC approved the April 5 minutes.
Report of the Attribution Methodology and Cost Study Subcommittee
Koehler summarized revisions to the Subcommittee report submitted for
action. He stated that former line item appropriations to Bradford and
Titusville, which represented additional University revenue when instituted,
were now listed as a separate line on their pages in the report. A similar
budget designation currently under discussion for Johnstown, which did not
represent new money but rather a commitment from Educational and General
Funds, was noted but not included in the report. Koehler cautioned readers to
pay close attention to the text preceding each section of the report,
emphasizing that the document is not intended to serve as a bottom-line
analysis. He credited the Subcommittee and staff for the tremendous effort
that went into producing the report.
Bearman seconded the warning not to take data in the report out of
context. She stressed that the report analyzes financial data alone and that
additional qualitative and quantitative analysis is needed. Nelson called for
a systematic method for deliberating on future improvements to the
methodology. Juhl moved that the UPBC authorize the Provost to distribute the
Subcommittee report with a cover memo explaining cautions regarding its use
and inviting suggestions for further improvements. McCarthy seconded. The
motion was approved unanimously.
Nelson asked about future directions and uses of the report, expressing
the hope that units will use it to review their financial performance. Pack
stated that the Provost's Office will use the report to review the
appropriateness of long-range plans submitted by units. Koehler expressed
concern that the report may distract from current planning efforts. McCarthy
reiterated that units must be encouraged to compare their financial
performance not with other units of the University, but with peers in other
institutions.
Proposal to Establish a Baccalaureate Nursing Program at Bradford
Fiorentino answered several questions about the proposal, submitted for
UPBC review at the previous meeting. Bearman suggested that the proposed
equipment budget was low considering the need for replacement of computers and
increased use of multi-media equipment. In response to Koehler's questions,
Fiorentino explained that the program targets Registered Nurses who lack the
bachelor's degree and that a wide variety of regional hospitals and nursing
homes will support the program.
Anderson asked whether the projected students would be new to the campus
or if they were students currently enrolled. Nelson responded that there is
high demand within the region for the program from those not currently
enrolled at the campus. Pack added that the proposal is part of a long-term
strategy to increase Bradford's enrollment to 2,000 students. This program
targets nontraditional students and provides them the opportunity to further
their education without leaving the region. Gardner asked about the
possibility that the program would saturate the market for graduates in the
long-term. Fiorentino replied that this has not happened with the current
associate degree program. Koehler moved that the UPBC recommend that the
proposal be approved. Nelson seconded. The motion was approved unanimously.
Proposal to Establish a Physical Therapist Assistant Program at Titusville
Worman discussed the role of the proposal as part of the overall
strategy of the campus to increase enrollment and revenues by carving an
identity as a regional gateway to health related education. He stated that
this strategy fits national strategic trends, is attainable with current
resources, and has been discussed with faculty from Titusville and the School
of Health and Rehabilitation Sciences and the Hospital Council of Western
Pennsylvania. He cited significant interest from students as the proposed
program would be the only one of its kind north of Butler and support from
donors as the program has already received a $100,000 gift to fund start-up
costs.
In response to Koehler's question, Worman explained that the program is
aimed at nontraditional students, including those who are unemployed and
seeking retraining, as well as those currently in the field but lacking the
newly required state licensure. Worman stressed that this program is distinct
from the physical therapist curriculum in SHRS, although some articulation
will be possible. Bearman cautioned that equipment cost estimates appeared
understated. Worman responded that regional hospitals have committed to
donate some equipment to the program upon approval.
Anderson questioned the impact of the proposed program on campus class
sizes and faculty workloads. Worman discussed similar programs at other
institutions which were analyzed. Nelson-Le Gall emphasized that
accreditation boards require certain class size and teaching load levels and
that candidates for the proposed director position would be familiar with
these. Peaslee confirmed that the proposal is within realistic guidelines of
accreditation requirements.
Juhl asked if the program will be held to the projected positive balance
of revenues less expenditures. Worman affirmed that the program is expected
to produce revenues that will allow the campus to build on new programs, such
as one for occupational therapist assistants. Bearman moved that the UPBC
recommend that the proposal be approved. Koehler seconded. The motion was
approved unanimously with one abstention.
Process for Reviewing Proposals for New Programs
Zimmerman asked who was currently responsible for reviewing the
philosophy behind proposals, assessing whether an otherwise rational proposal
was appropriate for the University. Nelson commented that the long-range
plans currently being prepared would be useful for framing proposal
submissions. He approved of the discussion held regarding the Bradford and
Titusville proposals, but suggested that more attention be paid to timing of
proposal review, thus reducing bureaucracy. Bearman recommended paying
particular attention to how proposals fit into the unit and University long-
range plans, the demand for projected graduates, and proposed budgets
including attribution of indirect costs.
Gardner recommended providing the UPBC with an executive summary as well
as full proposal documentation. Juhl suggested more coordination between
units, senior vice chancellor areas, and groups such as PACUP, UCGS, and the
UPBC. Harris added that the process should be outlined, perhaps in a
flowchart. Birnberg suggested creating a better audit trail of proposal
approvals.
Anderson expressed discomfort with voting on proposals immediately after
they are presented with the initiators of the proposal still present. He also
cautioned that units may feel that a UPBC recommendation for approval may be
viewed as support for the program to grow or add further modifications in
future years. Ochs emphasized that approval implies a two-way commitment,
that is, a University commitment for funding with a corresponding unit
commitment to deliver projected outputs. He suggested that language be
written explaining that proposals which fail to meet projected goals should be
revisited and the institutional commitment to that program examined.
Zimmerman recommended adding some flexibility when reviewing programs which
meet academic goals, but not financial goals.
Bearman warned against the UPBC micromanaging units. Pack agreed,
stating that proposals include the most reasonable estimates of costs and
revenues. He added that reviewing individual programs inflates their costs
and that unit budget processes are too dynamic for such review. Pack
cautioned that unit level resource allocations must be examined, not the type
of program level review that leads to incrementalism.
Anderson responded that the UPBC cannot allow the dynamic nature of
budgets to obscure unit agendas. He recommended considering for approval only
those new programs which project an excess of revenues over expenditures.
Koehler stated that profits should be assessed relative to responsibility
centers and not programs, and that the UPBC should monitor units via the
attribution methodology. Zimmerman stated that the regional campuses have
fallen victim to pursuing cash-oriented programs. Harris expressed concern
about evaluating proposals solely on their ability to make money, citing the
need to hold units responsible for justifying proposals relative to the
mission and goals of the unit and the University and for addressing budgetary
concerns.
Wion agreed that attribution-related components should be included in
the budgets of program proposals. McCarthy disagreed, stating that proposed
budgets should address only direct costs. Pack agreed, stating that the
relevance of attribution declines as one goes below the responsibility center
level. He asked if the UPBC would review all current programs retroactively
in the way being recommended for new programs. Birnberg called for some
consideration of indirect costs. McCarthy responded that certain "indirect"
costs, such as space and marketing, are really direct costs.
Nordenberg suggested that the Provost's Office draft a review process
procedure, including the bases for approval, and coordination and timing among
various bodies.
The meeting adjourned at 12:11 p.m.
Minutes of May 10, 1994 Meeting
The meeting convened at 10:00 a.m. in room 2428 Cathedral of Learning.
UPBC members present were: Thomas Anderson, Toni Carbo Bearman, Jacob
Birnberg, George Chambers, Darlene Harris, James Holland, Randy Juhl, Carol
Kenderes, Franklin McCarthy, Dennis McNair, Richard Nelson, Sharon Nelson-Le
Gall, Mark Nordenberg, Jack Ochs, Ben Tuchi, Philip Wion, and Julius Youngner.
Also present were: Rhonda Gross, Jeffrey Liebmann, William Madden, Robert
Pack, and Lawrence Weber.
UPBC members not present were: Nitin Badjatia, Thomas Detre, Ronald
Gardner, Peter Koehler, Michael Kurela, Jeffrey Romoff, and Judith Zimmerman.
Approval of Minutes
The UPBC approved the April 22 minutes.
Summer Session Task Force Recommendations
Pack explained how the Task Force report was distributed for review and
summarized the proposed implementation process. The recommendations consist
of several sequential steps beginning with the recruitment of a qualified
director of the Office of Summer Session, Continuing Education, and
Conferences and initiation of procedural mechanisms. Anderson asked whether
hiring a director was essential given the University's financial difficulties.
Pack responded that some internal reorganization will occur but could not
speculate whether the necessary leadership could be found within the
University. Gross added that long-term revenue enhancement will more than
justify the initial short-term investment.
In response to Juhl's question regarding a business plan, Pack stated
that the next step is to estimate resource needs once UPBC endorsement of the
recommendations occurs. Wion stressed the importance of examining the
proposed budget within the context of the FY 1995 University budget. Ochs
moved that the UPBC commend the Task Force for its efforts and accept the
ideas in principle contained within its report with the provision that the
Provost's Office produce a business plan as soon as possible for UPBC review.
Bearman seconded. Nordenberg emphasized the need to focus attention on
implementing the Task Force recommendations given that summer 1994 has begun,
and suggested that certain actions with no cost implications be taken. The
motion was approved unanimously.
Fringe Benefits Task Force Recommendations
Gross explained how the Task Force report was distributed and summarized
responses, including: Faculty Assembly (rejection); Council of Deans
(acceptance); Senate Budget Policies (rejection); Senate Benefits and Welfare
(mixed acceptance and rejection); Business and Finance senior staff (suggested
other recommendations); Staff Association Council (mixed acceptance and
rejection). Subsequent to receiving this input, the Task Force met again to
discuss possible revisions to their recommendations. Gross distributed a May
9 memo resulting from that meeting which included the following revisions.
Tuition for Employees -- The revised recommendation calls for employees
enrolled in undergraduate courses to pay 3% of the tuition charge with no
salary criterion. Employees enrolled in graduate courses would pay 10% of the
tuition charge. The current $5 per credit rate would be grandfathered for
those employees currently enrolled in graduate courses only.
Tuition Remission for Spouses and Registered Domestic Partners -- The tuition
charge would be 10% for all courses. The current $5 per credit rate would be
grandfathered for those currently enrolled.
Physical Examination for Faculty -- Continuation of this benefit would be
referred to the Medical Rate Review Committee for review and recommendation.
Holland explained that Senate Council had not yet acted because the
Chancellor had requested that consideration of the Task Force report be
removed from the May 9 agenda. He expressed concern that the University
planning and budgeting process becomes ambiguous when constituencies disagree
with recommendations resulting from actions of the UPBC or bodies constituted
by the UPBC. He stated that the clear feeling exists that the budget for
compensation should not be reduced unless all other options have been
exhausted. He stressed the importance of UPBC acknowledging faculty
sentiment.
In response to Ochs' question, Gross explained that the Task Force
shared its recommendations with University Counsel who expressed no concern
that would delay their implementation. Gross expressed concern about calls to
reject the recommendations, stating that the Task Force used the UPBC's FY
1995 budget parameters as a basis for analysis and that compensation
represents 80% of the University budget. Holland responded that the UPBC has
also resisted across-the-board budget reductions and suggested examination of
program changes.
Wion stated that, while Senate Budget Policies Committee rejected the
Task Force report as a total package, there were varying levels of agreement
with certain recommendations. He explained that the Committee recommended
that compensation should not be the first place examined for budget reductions
given the University's rankings below the AAU median in salary, compensation,
and fringe benefits. He warned that the strong negative impact on faculty and
staff should the recommendations be implemented would offset much of the
positive activities of the UPBC. In response to Ochs' question, Wion
responded that implementation of the recommendations would help unionization
efforts.
Juhl stressed that the UPBC approved the recommendation to seek $1
million in cost savings from fringe benefits as part of the FY 1995 budget
parameters. Nelson suggested that the recommendations may not be politically
viable and that implementation for FY 1995 may represent poor timing.
Birnberg responded that the UPBC would be remiss if it did not act now since
many of the recommendations require several years to generate projected
savings.
Tuchi criticized efforts to delay action on necessary budget
reallocations, stating that the UPBC recommended a salary increase for FY 1995
and must find a way to fund it. He stated that significant savings cannot be
found in other areas of the budget, such as utilities and debt service. He
warned against allowing the permanent cost structure of the University to
become imbedded as a result of temporary decisions. Wion responded that
certain areas of the University budget had not yet been thoroughly analyzed,
such as the $73 million in operating expenditures. He added that compensation
rates and the number of employees are not the only personnel variables. He
suggested that areas such as employee turnover may offer sound, albeit complex
solutions to budget problems.
Ochs agreed that now is the time to put the University on a fiscally
sound path, but that the Task Force recommendations were not the way to do it.
He called the original charge to the Task Force misplaced, citing the need to
examine the number of employees and refocus University activities. Juhl
responded that the UPBC, which is educated in University budget matters, needs
the courage of conviction to stand by its decision to respond to FY 1995
budget concerns. Gross added that the Task Force did not seek to cut $1
million from fringe benefit costs. Rather, the Task Force carefully examined
the entire benefits package, compared benefits with those offered at peer
institutions, and assessed the impact of any changes.
As a member of the Task Force, Holland recommended rejection. He stated
that the report as a whole was not good and that more money can be saved from
medical rate review. Harris, who also served on the Task Force, stated that
while many staff oppose certain recommendations, that now is not the time to
question the original charge to the Task Force. Bearman suggested that the
UPBC could choose to approve only selected recommendations. Youngner
suggested that rejecting the report would reduce the UPBC's credibility.
Nelson stated that credibility will be affected if the UPBC acts to reduce
compensation before allowing the long-range planning process to address
budgetary concerns.
Pack reminded members that they agreed not to spend as much time
debating small changes to the budget for FY 1995 as they spent for the FY 1994
budget. He added that the reactions to the Task Force report should come as
no surprise. Anderson suggested that pursuing reductions in benefits is
taking the easy way out. He called for making the difficult decisions to cut
budgets in units known to be losing money. Wion added that simply because the
charge to the Task Force seemed like a good idea in fall 1993 does not mean
that better places cannot be found for budget reductions today.
Juhl moved that the UPBC accept and endorse the Task Force report, as
modified by the May 9 memo from the Task Force. McCarthy seconded. Birnberg
stated that many of the recommendations should have happened last year and
cited the importance of the amendments to the tuition remission
recommendations. Holland noted that the recommendations must still go before
Senate Council for action at its next meeting. The motion was approved 12 to
2.
The meeting adjourned at 12:08 p.m.