Minutes of April 5, 1994 Meeting

       The meeting convened at 3:07 p.m. in room 2428 Cathedral of Learning.
       UPBC members present were: George Chambers, Thomas Detre, Ronald
Gardner, Darlene Harris, Randy Juhl, Carol Kenderes, Peter Koehler, Franklin
McCarthy, Mark Nordenberg, Ben Tuchi, Julius Youngner, and Judith Zimmerman. 
Also present were Rhonda Gross, Jeffrey Liebmann, William Madden, Jeffrey
Masnick, and Robert Pack.
       UPBC members not present were: Thomas Anderson, Nitin Badjatia, Toni
Carbo Bearman, Jacob Birnberg, James Holland, Michael Kurela, Dennis McNair,
Richard Nelson, Sharon Nelson-Le Gall, Jack Ochs, Jeffrey Romoff, and Philip

Approval of Minutes

       The UPBC approved the March 25 minutes and the appended postscript
containing the UPBC motion regarding the stadium upgrade proposal.

Program Proposals at Bradford and Titusville

       Pack distributed copies of program proposals to establish a Physical
Therapist Assistant associate degree program at Titusville and a Nursing
baccalaureate degree program at Bradford.  In addition to the full proposals,
he also distributed executive summaries of each.  He asked members to review
the proposals for discussion at the next UPBC meeting.  Pack also asked
members to prepare to articulate their desired format (full proposal or
executive summary) for receiving such documents in the future.

Staff Early Retirement Proposal

       Gross detailed the proposal's history, from Chancellor O'Connor's
arrival and early conversations with the President of the Staff Association
Council to his subsequent request of Senior Vice Chancellor Tuchi to examine
the issue.  A committee met for nine months and prepared a draft proposal
which was circulated to various groups for input in November 1993.  This
initial distribution to approximately 200 individuals generated 17 responses
which were, for the most part, not critical of the program.
       Gross explained the details of the program which provides eligible staff
members the opportunity to leave the employment of the University prior to age
62 while preserving their retirement benefits.  Eligible employees include
regular, full-time staff members at least 59 years old as of June 30, 1994 who
have completed at least 10 years of continuous service with the University. 
The program excludes staff covered by collective bargaining agreements,
librarians eligible for the Faculty Early Retirement Program, and contract
faculty outside the tenure stream.  The annual retirement payment will equal a
predetermined percentage of the staff member's salary (limited to $50,000)
paid for two years.  The percentage will be based on years of service,
beginning at 25% for 10 years of service and increasing to a maximum of 50%
for 20 years of service.  The plan would have a three month window for
participation and the planned entry date will be September 1, 1994.
       Gross estimated that the program would create a deficit of $291,689 in
the first two years and would recapture $1,339,074 in year three, based on a
projected 50% participation rate among the 200 eligible employees (excluding
staff in the School of Medicine, Auxiliaries, and those supported with non-
University funds).  She estimated that the average salary of participating
staff would be $29,452, the average replacement cost would be $18,468, and the
average plan payout would be $12,990.
       Harris noted that the proposed plan reduces University salary costs and
provides opportunities for internal promotion.  She added that, given the work
put into preparing the proposal and the expectations it has generated in the
University community, the plan should not be delayed for inclusion in the
University long-range plan.  Nordenberg noted that the latter concern had been
voiced by the Dean's Council and that it was unfortunate that discussion of
the proposed plan had given many the impression that it had been approved.
       Detre stated that the ongoing strategic planning effort should not deter
the UPBC from making recommendations.  He expressed concern about the
unfairness of delaying action on a plan which has raised expectations among
eligible staff.  Koehler discussed the concerns of the Dean's Council
regarding the process by which the proposal had been advanced, but cited the
opportunity people had to respond last fall.  He expressed further concern
about the unrealistic assumption that units receive replacement funds equal
only to entry level, but that such implementation details could be refined
later.  Juhl stated that early retirement incentive plans are a management
tool that require a specific goal, which is lacking in this proposal.  Harris
affirmed the desire that the plan be equitable to all parties, including the
       Detre moved that the UPBC accept and recommend approval of the proposal. 
Koehler seconded.  Koehler suggested amending the recommendation to include
further discussion of a more mutually acceptable solution to the proposed
recapture of funds and returns to units prior to implementation.  Chambers
seconded and Detre accepted the amendment.  The motion was approved by a vote
of 9 to 1.  Youngner suggested two steps: (1) informing staff of the plan
appropriately; and (2) deciding on final financial mechanisms.  Nordenberg
stated that he would communicate the UPBC's recommendation to the Chancellor. 
Juhl moved that no further early retirement plans be considered outside of the
institution's long-range planning efforts.  Detre seconded.  The motion was
approved unanimously.

Discussion of FY 1995 Planning Parameters

       Koehler summarized the recommendations of the FY 1995 Planning
Parameters Subcommittee, changing the originally proposed salary increase from
4.25% to increases of 4.00% for continuing faculty and staff based on actual
payroll, 2.7% for part-time and other employees, and 3.75% for employees
covered by collective bargaining agreements.  In addition, the $200,000
originally budgeted for the minimum increase salary pool would be eliminated
as this need will be addressed with funds included in the equity portion of
the general salary increase pool.  The $1,287,00 savings generated by these
actions would be applied to increased library acquisition and operating
expense budgets.
       Zimmerman expressed concern about the low increase for part-time
employees, suggesting that salary increases to highly-compensated individuals
be limited.  Detre agreed with the suggestion, but warned that the financial
impact of the action would be negligible.  Pack explained that the salary
increase for part-time faculty mostly reflects market, rather than other
salary components such as merit, and that part-time salary levels should be
reviewed every few years.  Pack explained that, once the UPBC approves the
recommended figures, the salary budget will be divided into separate lines for
each pool, that is, 2.7% for maintenance of real salary and the remainder for
equity, market, and merit.  Pack added that, while Wion had largely suggested
this structure, he had also recommended maintaining the originally proposed
4.25% overall increase. 
       Tuchi cited a federal action being considered that would freeze FY 1995
payments for sponsored research indirect costs at FY 1994 levels, regardless
of an institution's research activity.  Such an action would produce an
additional $2.1 million shortfall based on current FY 1995 operating budget
assumptions.  Nordenberg stated that the draft parameters are subject to
further revision should such an action at the federal level occur.  Koehler
moved that the UPBC accept the present FY 1995 operating budget figures as the
most current working draft, with the understanding that further revisions may
be needed and that salary increments should be replaced with dollar amounts
for each component of the salary increase.  Youngner seconded.  The motion was
approved by a vote of 9 to 1.
       Tuchi expressed concern that the current FY 1995 operating budget does
not address necessary structural change in University finances.  He
recommended using more realistic projections, thus reducing the need for
future contingencies, and reducing permanent salary costs rather than one-time
reductions.  Youngner added that all budget items, such as capital projects
and buildings, must be included in budget reduction discussions.  Tuchi
agreed, but cautioned that eliminating salaries reduces the permanent budget
base, while eliminating capital projects does not.  Nordenberg stated that the
perception of many is that all budget items are not treated equally when
discussing reductions and that salaries have traditionally been the mechanism
by which the University addressed deficits.  Zimmerman cautioned that as long
as the University pursues large capital projects, people will not understand
the financial difficulties it faces.
       McCarthy discussed the lack of structure to examine budget reductions. 
He cited statistics that capital expenditures at the University will grow from
4% to a projected 9% of total revenues in coming years while the comparable
figure at peer AAU institutions is between 2% and 3%.  He suggested examining
such ratios and discussing setting limits for certain types of expenditures. 
Juhl suggested a contingency fund as part of the initial planning parameters
each year.  McCarthy responded that such a line item in the budget merely
taxes the units.  He added that the budget should not drive the University's
direction.  Koehler agreed, stating that the long-range plan should determine
whether the University should downsize or rightsize.

Senate Bill Authorizing Capital Projects

       Gross distributed pages from a Commonwealth Senate bill being considered
in the Appropriations Committee that would authorize capital projects.  She
clarified that the projects on the list (including many University projects)
would not necessarily be funded, but rather approved for consideration for
future Commonwealth funding.

       The meeting adjourned at 4:52 p.m.