Minutes of January 12, 1995 Meeting

     The meeting convened at 10:09 a.m. in room 817 Cathedral of Learning.

     UPBC members present were: Toni Carbo Bearman, Jacob Birnberg, James
Cassing, Darlene Harris, James Holland, James Isaacs, Peter Koehler, James
Maher, Franklin McCarthy, Michael Stuckart, Ben Tuchi, and Philip Wion.  Also
present were: Ann Dykstra, Jeffrey Liebmann, William Madden, Jeffrey Masnick,
Robert Pack, and Lawrence Weber.
     UPBC members not present were: Thomas Anderson, Nitin Badjatia, George
Chambers, Thomas Detre, Ronald Gardner, Randy Juhl, Glenn Nelson, Jeffrey
Romoff, Joan Slezak, Bruce Williams, Julius Youngner, and Judith Zimmerman.

Approval of Minutes

     The minutes of the December 22 meeting were approved.  Maher stated that
the Task Force on "Make or Buy" Decisions was being formed this week and would
begin working soon.

FY 1995 Enrollment Shortfall

     Maher reported that an unexpected enrollment shortfall has created a
deficit situation this year.  Tuchi added that the impact of the shortfall
could be as large as $3 million and that the total FY 1995 deficit may be as
high as $5.7 million.  He stated that possible areas in which to address this
deficit include: health insurance premium recovery; graduate and undergraduate
scholarships; construction project delays; and unexpected revenues in areas
such as over recovery of fringe benefits.  He cited the need for improved
financial information systems and more effective financial action plans.
     In response to McCarthy's question, Tuchi replied that the University
has little flexibility at this point in the fiscal year to address unexpected
deficits, except in Plant Funds.  He added that, despite the current
situation, the general financial condition of the University relative to other
institutions of higher education is good.  Wion requested more detail, such as
that available from the Controller's quarterly reports, on the possible $5.7
million FY 1995 deficit given past efforts to budget conservatively and the
realization of a surplus in compensation funds in FY 1994.  Tuchi responded
that, in addition to revenue shortfalls, the University was also experiencing
increases in expenditures and increases in accounting entries, such as the
staff early retirement plan.
     Tuchi added that information on a possible bond issue will be available
in February and that without a bond issue, many planned capital projects will
not occur as scheduled.  In response to Harris's question, Maher explained
that faculty salary compression increases are not driving the deficit as these
funds were held back in July.  In response to Bearman, Tuchi replied that the
University relies on Plant Funds to support the operating budget and that the
contribution last year was $1.3-$1.9 million.
     Pack cautioned that many assumptions made about the FY 1996 budget are
already inaccurate.  For example, the proposed FY 1996 tuition increase does
not account for the FY 1995 tuition shortfall and the increasing resistance
among Trustees to any tuition increase.  Koehler agreed that more assessment
of real fluctuations in the budget during the year and their effect on budget
parameters must occur.  He emphasized that this examination should be at the
institutional and not the unit level.  Pack added that the need exists for a
policy to reduce the budgets of units that fail to meet income targets.  Maher
stressed the importance of revenue enhancements as a real money incentive for
units to fund new initiatives.
     Tuchi expressed concern that the tracking of financial problems may be
too slow to be of effective use.  He emphasized that the only resources with
significant impact on the operating budget are space and people.  Wion agreed
that personnel data tracking must improve if the University is to plan
effectively.  In response to Bearman's question, Tuchi stated that Information
Architecture Project recommendations will be presented to Executive Staff
soon.  He added that savings can be realized, but only after some initial
expenditures, such as up to $1.3 million on new Human Resource systems.
     Maher stressed the importance of the concept of "net" tuition.  He
stated that decision makers must be acutely aware of the financial
implications of their decisions.  He specifically cited the need for
information to assess real space needs.  Maher stated that in an environment
of distributed decision making, responsibility must also be distributed.

Revised University Mission Statement

     Pack presented a revised University Mission Statement, prepared after
the review of the current statement (approved in 1976) by the Board of
Trustees last fall.  He explained that there was interest in submitting the
revised statement for Board consideration at its February meeting.  Members
discussed the contents, specifically the bulleted items referring to
undergraduate and graduate education.  Pack explained that the contents were
consistent with the Chancellor's vision and goals as articulated in "The
University of Pittsburgh: 1993 and Beyond".  After editorial changes, the
draft statement reads as follows:

          The University of Pittsburgh, founded in 1787, is one of the
     oldest institutions of higher education in the United States.  The
     quality resources of the University provide an important local asset for
     the intellectual, economic, and social enrichment of Pennsylvania, while
     the national and international prestige of the University enhances the
     prominence of Pennsylvania throughout the world.  As one of the nation's
     distinguished comprehensive public universities, the University's
     mission is to:

     --   provide high-quality undergraduate programs in the arts and
          sciences and professional fields, with emphasis upon those of
          special benefit to the citizens of Pennsylvania;
     --   offer superior graduate and professional programs that respond to
          the needs of Pennsylvania, as well as to the broader needs of
          national and world society;
     --   engage in research, artistic, and scholarly activities that
          advance learning through the extension of the frontiers of
     --   cooperate with industrial and governmental institutions to
          transfer knowledge in science, technology, and health care;
     --   offer continuing education programs adapted to the personal
          enrichment, professional upgrading, and career advancement
          interests and needs of adults; and
     --   make available to local communities and public agencies the
          expertise of the University in ways consistent with the primary
          teaching and research functions that contribute to the social,
          intellectual, and economic development of the Commonwealth, the
          nation, and the world.

          The trustees, faculty, staff, students, and administration of the
     University are dedicated to achieving this mission, to which they pledge
     their individual and collective efforts, determined that the University
     shall remain among the most distinguished institutions of higher
     education in the world.

     Bearman moved that the UPBC accept the revised University Mission
Statement with the editorial changes.  Wion seconded.  The motion was approved

Activities of the Provost's Area Planning and Budgeting Committee

     Pack reported that the Provost's Area Planning and Budgeting Committee
will soon begin to review the long-range plans of the units that report to the
Provost.  The Committee will divide into four subcommittees that will review
the plans of the arts and sciences, professional schools, regional campuses,
and centers/libraries.  Upon receipt of the unit budget plans, the
subcommittees will lead detailed discussions with the entire Committee.  A
final meeting will provide the Provost with the Committee's perceptions,
priorities, and issues for further consideration.  The timing of this input
will allow the Provost to incorporate it into his draft plan, which is due to
be submitted to the Chancellor on April 15.
     Members expressed concern that the UPBC may not get sufficient time to
review the plans of the Senior Vice Chancellors and the Vice Chancellors who
report to the Chancellor.  Maher explained that the budget process does not
allow for more review time, given the deadlines faced by the Board of Trustees
and the need to address unforeseen issues.  He suggested that the FY 1996
Parameters Subcommittee examine the schedule of University planning and
budgeting activities and suggest ways to maximize UPBC review and input.  Pack
added that the charge of the Parameters Subcommittee should be expanded each
year to follow the University budget from initial planning stages to Board
approval to a review of changes in the final budget.  Wion suggested that the
Subcommittee present a recommended timetable and process for UPBC review and
approval at its next meeting.

     The meeting adjourned at 12:04 p.m.
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