Minutes of May 20, 1994 Meeting

      The meeting convened at 10:00 a.m. in room 2428 Cathedral of Learning.
      UPBC members present were: Thomas Anderson, Nitin Badjatia, Toni Carbo
Bearman, George Chambers, Thomas Detre, Darlene Harris, James Holland, Carol
Kenderes, Peter Koehler, Franklin McCarthy, Richard Nelson, Sharon Nelson-Le
Gall, Mark Nordenberg, Jack Ochs, Ben Tuchi, Philip Wion, Julius Youngner, and
Judith Zimmerman.  Also present were: Rhonda Gross, Jeffrey Liebmann, William
Madden, and Robert Pack.
      UPBC members not present were: Jacob Birnberg, Ronald Gardner, Randy
Juhl, Michael Kurela, Dennis McNair, and Jeffrey Romoff.

Approval of Minutes

      The UPBC approved the May 10 minutes.

FY 1995 Operating Budget Parameters

      The most recent draft of the FY 1995 operating budget parameters was
distributed including:


Tuition -- Increase of 4.5% to 5.0%

University-wide Fees -- No increase

Commonwealth Appropriations -- Increase from $124.8 million to $128.9 million

Unrestricted Endowment Applied -- Increase of 3.0%

Income from Sponsored Projects -- Increase of 8.0% (subject to change due to
possible indirect cost rate "pause"

Short-Term Investment Revenue -- Increase of 3.0%


Faculty and Non-Faculty Salaries -- Increase of 2.7% for maintenance and
current estimates of $1,738,625 for merit, $434,655 for equity, and $86,931
for market

Student and TA/TF/GSA Salaries -- Increase of 4.0%

Union Salaries -- Increase of 3.75%

University Funded Financial Aid -- Increase with tuition

Debt Service -- Increase of $1.5 million to $10.2 million

Programmatic Increases -- Constant at $1.25 million

Library Acquisitions -- Increase of 1.95%

Operating Expenditures -- Increase of 1.95%

Renewals and Replacements -- Increase of $750,000 to $1.65 million

Research Development Fund -- Increase of 8.0%

Utilities and Insurance -- Increase of 3.0%

Required Budget Reduction -- $4.0 million

      Koehler explained that only maintenance of real salary was expressed in
terms of a percentage increase.  He stressed the importance of preventing
misunderstanding that could arise relative to the new compensation policy if
faculty and staff simply compare their salary increase to the sum of the
University-wide increases for maintenance, merit, equity, and market.  Wion
clarified several points, emphasizing that the parameters are not the actual
budget.  He called for evaluation of the appropriateness of the current
parameter structure to eliminate any areas where inadequate budget control
      Koehler asked how the compensation fund pools would be distributed to
departments, so that faculty and staff would not feel that deans were
inappropriately distributing increases, especially those due to promotion. 
Wion suggested that an earlier draft of the compensation policy called for
units to have a written policy explaining the use of merit funds for
promotions.  He added that units have some financial flexibility relative to
unfilled positions and the difference between actual and budgeted positions. 
McCarthy responded that any such funds are generally used to make up for
shortages in operating funds.
      Gross clarified that the proposed budget parameters are best estimates
and that salaries will be verified in the coming weeks.  Wion stated that the
UPBC must be clear that approving the parameters means approving the
percentage increases to salaries, not the current estimates of actual
increases.  In response to McCarthy's question, Gross explained that FY 1995
capital project rankings will be completed in June.  Madden added that capital
expenditures will be funded from Plant Funds with a $1.5 million increase to
Debt Service and a $750,000 increase to Renewals and Replacements.
      Koehler moved that the UPBC adopt the proposed FY 1995 operating budget
parameters.  Bearman seconded.  In response to Ochs' questions, Tuchi stated
that the University would probably not refinance any debt this year and that
the $1.5 million increase to Debt Service could support approximately $10.5 to
$12.0 million in capital projects.
      Wion suggested that the proposed increases to Library Acquisitions and
Operating Expenditures of 1.95% be altered to give the former a higher
priority.  He distributed information detailing FY 1994 Operating Expenditures
and suggested that this $73 million is a very mixed group of expenditures, not
all of which support academic units and called for a detailed examination. 
Wion moved to amend the motion by raising the increase in Library Acquisitions
from 1.95% to 3.00% and lowering the increase in Operating Expenditures from
1.95% to 1.85%.  Nelson-Le Gall seconded.
      Zimmerman and Bearman supported the amendment.  Koehler cautioned that
some items within Operating Expenditures, such as postage, are not in the
University's control.  Tuchi suggested that total library expenditures should
be examined, cautioning that the desire to improve the libraries does not
necessarily make them deserving of a permanent budget reallocation.  He warned
that adding to the Library Acquisitions budget will increase the need for
staffing and space.  Pack agreed that the library personnel budget is
constrained.  Youngner suggested that the UPBC identify areas in need of
further study and assign the work to smaller groups.  The motion to amend the
FY 1995 operating budget parameters was approved 8 to 4 (with two
      Tuchi distributed detailed debt service information based on approved FY
1995 capital projects.  He explained that the recently approved building for
the School of Health and Rehabilitation Sciences creates a need to raise the
Debt Service increase, although the project expands both debt service and
revenue.  Alternatives, such as leasing, have been examined but would result
in no net savings.  Tuchi moved to amend the motion by raising the increase in
Debt Service from $1.5 million to $2.0 million and reducing the increase in
Renewals and Replacements from $750,000 to $250,000.  McCarthy seconded.
      Anderson reminded members that SHRS is keeping incremental revenues
generated to fund the building, which he suggested was an insidious practice. 
Detre stressed the grave need to relocate the School into a new facility. 
Ochs stated that funding an emergency from Renewals and Replacement was poor
policy.  Gross suggested that Debt Service and Renewals and Replacements
should be viewed together as the University has committed significant funds
toward preservation projects, classroom improvements, and ADA compliance. 
Ochs suggested that the proposed balance of preservation projects to E&G
Renewals and Replacements was fiscally imprudent.  Tuchi disagreed, suggesting
that funding reconstruction from debt is logical until more information is
available.  The motion to amend the FY 1995 operating budget parameters was
approved 12 to 2.
      The motion to adopt the amended FY 1995 operating budget parameters was
approved unanimously (with one abstention).  In response to Anderson's
question, Tuchi stated that renovations to the facilities for the new
basketball coach would probably be included in FY 1995 private or auxiliary
funded capital projects.  In response to Ochs' question, Tuchi added that
inclusion of the $18.8 million financing for the College of Business
Administration in the distributed materials did not imply that the funds had
been pledged, adding that he believed approximately $1.3 to $1.5 million had
been raised to date.  Tuchi added that approval of the Commonwealth budget is
not likely to occur before mid-July, but that there were no indicators that
current assumptions relative to impacts on the University were not accurate.

      The meeting adjourned at 11:59 a.m.