The meeting convened at 9:00 a.m. in room 2428 Cathedral of Learning.

     UPBC members present were: Thomas Anderson, Jacob Birnberg, George
Chambers, Ronald Gardner, Darlene Harris, James Holland, James Isaacs, Randy
Juhl, Carol Kenderes, Peter Koehler, Franklin McCarthy, Richard Nelson, Jack
Ochs, Ben Tuchi, Philip Wion, and Judith Zimmerman.  Also present were: Glenn
Avick, John DeVitto, Michael Gaber, Rhonda Gross, Ana Guzman, Jeffrey
Liebmann, William Madden, Jeffrey Masnick, Dennis O'Connor, Paul Stieman, and
Lawrence Weber.
     UPBC members not present were: Nitin Badjatia, Toni Carbo Bearman,
Thomas Detre, Dennis McNair, Sharon Nelson-Le Gall, Mark Nordenberg, Jeffrey
Romoff, and Julius Youngner.

Approval of Minutes

     The UPBC approved the June 8 minutes.

Magellan Telescope Project

     O'Connor stated that astronomy will be at the intellectual forefront of
the next century.  He explained his assumptions regarding the project,
including: astronomers need guaranteed access to telescopes to do their work;
the University has astronomers and plans to have more in the future; and the
University will not recruit individuals into an environment in which they
cannot perform their work.  He expressed concern over the increasing
competition for telescope time, the loss of telescopes due to urban sprawl,
and the number of new telescopes that are proprietary in nature.
     O'Connor explained that the Magellan project will provide the University
guaranteed time on both of the planned Magellan telescopes in Chile, as well
as time in Arizona and a new telescope being built by the Mexican government
in Baja California.  Involvement in such a consortium has been a goal of the
Department of Physics and Astronomy for many years.  He stated that University
participation will promote increased collaboration and provide a vehicle for
undergraduate education.  O'Connor compared the estimated cost of between $5
million and $10 million to University investments in start-up costs for
science faculty, adding that the telescope will be available as a resource to
faculty for many decades.
     In response to Ochs' question, O'Connor stated that the proposed project
is an investment in the future of both current and anticipated new
astrophysics faculty.  Birnberg expressed concern that the Department has been
unwilling to commit to the project as its top priority.  He added that the
projected operating costs of $326,000 per year equated to approximately $8
million in required endowment funds, which would raise the total project costs
to $16 million.  O'Connor responded that the University may respond to other
initiatives from the Department as needed in the future.
     Ochs affirmed the Chancellor's role in pursuing academic initiatives
that promote excellence.  He added that a role of the UPBC is to select
existing activities for reduction or elimination in order to maintain the
financial integrity and quality of the University.  He supported the active
participation of the Chancellor in helping identify such activities. 
Zimmerman stated that a commitment to a single department of the proposed
magnitude is inappropriate given the state of overall research facilities.  In
response to Chambers' question, Gross replied that the original contract,
which is still being finalized, called for two payments, one to be made in
1996 and one to be made between 1997 and 1998.
     Koehler called the scientific nature of the project sound and worthy. 
He expressed concern over the state of existing undergraduate physics
laboratories and inadequacies in the current Department budget.  He stated
that science faculty are expected to raise money from research projects to
repay the University's investment in start-up funds in four years, but that
astronomers have not historically raised that level of funding.  Koehler asked
how the project would be funded if sufficient private funding could not be
raised.  O'Connor responded that the University must position itself for the
future, making itself more competitive for both faculty and students.  He
stated that lack of guaranteed telescope time has hampered the ability of
astrophysics faculty to generate research funding.  He added that, should
private funding not materialize, the Chancellor's current discretionary fund
of $4 million could pay half of the projected cost.
     Wion stated that the UPBC should not act on the proposal until cost and
debt service estimates were more complete.  Nelson stated that this visionary
research project was obviously a top priority of the Chancellor.  He expressed
concern over the subsequent lack of priority being received by undergraduate
education, an activity that is not as exciting or dramatic as the proposed

FY 1995 Capital Budget

     Gross presented the FY 1995 Proposed Capital Budget, consisting of a
list of proposed capital projects totalling $119.3 million.  Recommended
projects include the following:

UNFUNDED PROJECTS ($27.5 million) -- Those without identified funding sources,
most of which will be funded through the E&G operating budget, ranked
according to institutional priority.

1.  Compliance with Americans with Disabilities Act (ADA) - $800,000
2.  Classroom renovations - $1.0 million
3.  School of Health and Rehabilitation Sciences building purchase - $13.2
4.  Masonic Temple renovations - $970,000 (phase 1) and $6.9 million (phase 2)
5.  Admissions related renovations - $2.6 million
6.  FAS new hire renovations - $575,000
7.  Space management system - $130,000
8.  Utility study update - $100,000
9.  Salk Hall security system - $150,000
10. Engineering calculus lab - $115,000
11. New ventilation for Dental Medicine labs - $70,000
12. Physics lab upgrades - $70,000
13. Nursing Learning Resource Center equipment - $216,500
14. Engineering distance learning classroom - $130,000
15. Public Health Infectious Diseases and Microbiology autoclaves - $140,000
16. Varsity sports/intramurals renovations - $50,000
17. Learning Skills Center expansion - $183,900
18. Bradford gymnasium renovation design costs - $50,000

FUNDED PROJECTS ($70.4 million) - Those that have either cash in hand or
identified funding sources, such as private giving.

--  Medical Research Facility State funds - $5.1 million
--  College of Business Administration - $18.8 million
--  Magellan Telescope Project - $8.0 million
--  Athletics renovations, phases 1 and 2 - $7.1 million
--  Athletics renovations, phases 3-8 - $12.3 million
--  CIS projects using student computing fee - $6.2 million
--  Telecommunications switch - $6.0 million
--  Scaife Hall Cell Biology and Physiology - $1.0 million
--  Bioscience Tower Neurobiology Shell Space - $900,000
--  University Printing five-color press - $800,000
--  Field House renovations - $775,000
--  WPIC interior building improvement - $1.1 million
--  Transportation Office vehicle replacement - $441,000
--  Parking Lot A repairs - $340,000
--  Food Service cafeteria renovations/equipment - $300,000
--  WPIC adolescent residency program - $300,000
--  Johnstown parking lot/roadway restoration - $250,000
--  Cell Biology and Physiology equipment - $250,000
--  Johnstown low tension conduit (CIS) - $190,000
--  Iroquois site renovations - $150,000
--  Johnstown residence facilities renovations - $125,000

PROJECTS UNDER $50,000 EACH ($500,000)


     Gross explained that the proposed capital budget contained $64.8 million
of recommended projects to be funded during FY 1995, of which $22.3 million
were from funded projects and $42.5 million were from unfunded projects.  The
proposed budget defers a total of $90.1 million in capital projects to future
years.  Wion moved that the UPBC strongly recommend that final action on the
FY 1995 Capital Budget be deferred until such time as the major parameters of
the long-range plan and budget have been sufficiently developed to provide a
sound context for FY 1995 capital commitments.  Anderson seconded.  Wion
stressed the importance of reviewing topics being addressed by the Strategic
Issues Subcommittee, as well as procedures for prioritizing projects whose
funding is expected to be raised through gifts and projects indirectly funded
by revenues generated by academic units.  He stressed the need to update the
long-range planning parameters produced in December 1993 to include new
projects approved subsequently as well as more recent cost estimates.
     Ochs stated that the long-range planning parameters did not take account
of a number of projects included in the proposed capital budget and that the
originally projected University deficits are almost surely understated.  Gross
disagreed, stating that the impact on the E&G budget through FY 1999 was not
significant.  Ochs also expressed concern that the long-range parameters were
used in the debt capacity study that revealed the University's relatively high
ratio of debt service to operating budget.  Tuchi reaffirmed his commitment
that no capital project to be funded from gifts will proceed until the pledged
funding is in hand.  Tuchi clarified that the Board of Trustees will not vote
on the FY 1995 Proposed Capital Budget on June 30.  Rather, the Board will
vote on the FY 1995 Proposed Unrestricted Operating Budget that includes a
$2.7 million debt service placeholder that cannot be spent until the Board
approves a new bond issue.
     Koehler expressed concern about whether the University could finance the
proposed capital project list without sacrificing academic programs.  In
response to Ochs' question, Stieman explained that the proposed $6.0 million
telecommunication switch project was a technology upgrade that would provide
the means of enhancing service.
     Tuchi cited several problems associated with deferring action on the
Proposed FY 1995 Capital Budget, including: a master plan must be presented to
the City of Pittsburgh by October 1, 1994 for the purpose of obtaining
continuous use allowances; certain proposed capital projects are already
proceeding; and certain buildings require immediate attention.  He recommended
forming a subcommittee with the charge of examining the capital project list
and bringing recommendations for appropriate action to the UPBC within 30
days.  Specifically, the subcommittee would review the method of financing,
impact on operating budget, and format of previously-approved projects and
projects proposed for FY 1995.
     McCarthy agreed that the UPBC should not examine individual projects,
but rather design the policies that drive capital decision making.  Ochs
suggested that the subcommittee also draft such policies.  Birnberg supported
the concept of a subcommittee to assess consistency of capital projects with
long-range institutional goals.  McCarthy moved to amend the motion, changing
references to FY 1995 to FY 1996.  Juhl seconded.  Wion expressed concern that
the amendment would reduce the impact of the original motion extensively.  The
amendment to the motion was approved 7 to 4 (with one abstention).  Wion
withdrew the motion.
     Birnberg moved that the UPBC form a subcommittee to examine the capital
project list and bring recommendations for appropriate action to the UPBC
within 30 days.  McCarthy seconded.  The motion was approved unanimously.
Anderson, Gardner, Harris, Kenderes, Wion, and Zimmerman volunteered to serve
on the subcommittee.

     The meeting adjourned at 11:40 a.m.