Minutes of February 27, 1995 Meeting The meeting convened at 11:09 a.m. in room 817 Cathedral of Learning. UPBC members present were: Thomas Anderson, Nitin Badjatia, James Cassing, Darlene Harris, Randy Juhl, Peter Koehler, James Maher, Glenn Nelson, Joan Slezak, Ben Tuchi, Philip Wion, and Judith Zimmerman. Also present were: Kevin Evanto, Joseph Gil, William Laird, Jeffrey Liebmann, William Madden, Kathy Tosh, Robert Pack, and Lawrence Weber. UPBC members not present were: Toni Carbo Bearman, Jacob Birnberg, George Chambers, Thomas Detre, Ronald Gardner, James Holland, James Isaacs, Franklin McCarthy, Jeffrey Romoff, Michael Stuckart, Bruce Williams, and Julius Youngner. Athletics Budget Information In response to Wion's request, Tuchi informed the Committee that the delay in presenting detailed budget information on the Department of Athletics was caused by changes in the federal Department of Education reporting requirements and his need to obtain the authorization of the Chancellor to release the information. Maher stated that the Chancellor wants to provide whatever information the UPBC needs. Maher recommended examining the budgets of football and men's basketball separately from other sports. FY 1996 Budget Parameters Two new budget scenarios were distributed based on FY 1996 Parameters Subcommittee input and revised estimates of several revenue and expenditure items. Both scenarios incorporate revised revenue projections based on FY 1995 actual enrollments and hold the total University salary budget constant at FY 1995 levels with fringe benefits adjusted to account for savings produced and required rate increases. The first scenario assumes a 3.5% tuition increase for all students. The second scenario assumes a 3.5% tuition increase for graduate/professional students only and no increase in undergraduate tuition rates. Subcommittee members expressed concern that the scenarios had produced balanced budgets several days earlier and were now showing large negative balances of revenues less expenditures. Koehler listed several assumptions and policy changes that had been adopted by the Subcommittee to achieve a balanced budget projection. Madden explained that several large changes had just occurred to alter previous assumptions, including fully funding the research incentive program, revised enrollment projections, and lower expected savings on health insurance. Members discussed the revised assumptions. Pack emphasized that a $2.4 million decline in revenues projected from enrollment shortfalls should not be included in the FY 1996 parameters as units will be moving to a net tuition model that will hold them, not the University-wide budget, responsible when they fail to achieve targets. Wion stressed that improving control of the compensation budget must be the top priority. Concern was expressed about the ability to provide sufficient budgetary information to reduce ongoing fluctuations in the available projections. Members asked for detailed information on the $18 million surplus in actual over budgeted compensation expenditures in FY 1994. Tuchi responded that the volume of the surplus is likely to reoccur, but that a prediction cannot be made as to how or where it will occur. Koehler expressed concern that the implication of no salary increase is severe, especially since such a parameter does not prevent a projected excess of expenditures over revenues. Tuchi agreed that a top priority must be providing a salary increase if possible. Further discussion was referred back to the FY 1996 Parameters Subcommittee. The meeting adjourned at 12:30 p.m. Minutes of March 2, 1995 Meeting The meeting convened at 10:09 a.m. in room 817 Cathedral of Learning. UPBC members present were: Thomas Anderson, Nitin Badjatia, Jacob Birnberg, James Cassing, Thomas Detre, Ronald Gardner, Darlene Harris, James Holland, James Isaacs, Randy Juhl, Peter Koehler, James Maher, Joan Slezak, Michael Stuckart, Ben Tuchi, Bruce Williams, Philip Wion, and Julius Youngner. Also present were: Ann Dykstra, Joseph Gil, Leon Haley, William Laird, Jeffrey Liebmann, William Madden, Jeffrey Masnick, Robert Pack, and Douglas Wylie. UPBC members not present were: Toni Carbo Bearman, George Chambers, Franklin McCarthy, Glenn Nelson, Jeffrey Romoff, and Judith Zimmerman. Approval of Minutes The minutes of the February 20 meeting were approved. Discussion of Compensation Variance Laird presented a detailed breakdown of the components comprising the $18.4 million variance of budgeted over actual compensation in FY 1994, including the following items: temporary transfers of monies to operating expenses, tuition for teaching assistants, corrections in benefit costs, and cost recovery in service units. Tuchi stated that a surplus will occur this year, though not as large as $18.4 million. Based on a review of expenditures to January 1, he estimated a total surplus of approximately $11 million will likely occur and that, in subsequent years, changes in the way the University budgets could reduce this figure to between 2.0% to 2.5% of the total compensation budget. Maher stressed the need to eliminate recurring discrepancies by putting more realistic figures into the annual budget. Pack expressed concern that several of the items, such as the medical insurance settlements and the renegotiation of the fringe benefit rate for Medical faculty on federal grants, will reappear in subsequent years as charges against the E&G budget. Wion suggested creating a contingency line in the budget based on all past actual expenditures. FY 1996 Parameters Tuchi reported that the Board of Trustees Budget Committee meeting has been postponed for three weeks. Koehler suggested that the FY 1996 Parameters Subcommittee use this time to identify essential policy questions and potential strategies for submission to the UPBC for discussion. Koehler expressed concern that the information provided on the compensation variance may make certain previous parameters infeasible for FY 1996. Maher stressed the positive impacts that moving toward a net tuition model will have in FY 1996. He added that upcoming presentations on the nature of Plant Funds and associated transfers and on the Department of Athletics budget will provide additional useful information. The meeting adjourned at 11:50 a.m.