Minutes of April 4, 1995 Meeting

       The meeting convened at 10:05 a.m. in room 817 Cathedral of Learning.

       UPBC members present were: Thomas Anderson, Nitin Badjatia, James
Cassing, Thomas Detre, Ronald Gardner, Darlene Harris, James Holland, Randy
Juhl, Peter Koehler, James Maher, Glenn Nelson, Michael Stuckart, Ben Tuchi,
Philip Wion, Julius Youngner, and Judith Zimmerman.  Also present were: Joseph
Gil, Jeffrey Liebmann, Dennis O'Connor, Kathy Tosh, Thurman Wingrove, and
Douglas Wylie.
       UPBC members not present were: Toni Carbo Bearman, Jacob Birnberg,
George Chambers, James Isaacs, Franklin McCarthy, Jeffrey Romoff, and Bruce
Williams.

Approval of Minutes

       The minutes of the March 16 meetings were approved.

Discussion with the Chancellor

       Chancellor O'Connor discussed the House and Senate Appropriations
Committee hearings.  He indicated that, if Commonwealth revenues continue to
exceed estimates, the University could receive $1.5 to $2 million in
additional funding over FY 1995 levels.  However, this funding is likely to be
one-time funding directed at a specific line item.  O'Connor expressed concern
that the National Institutes of Health are facing their first actual dollar
funding reduction in history.  At the same time, national and local pressures
to keep tuition increases down are further impacting the University's revenue
outlook.
       In response to these and other concerns, the Chancellor discussed
several initiatives that he plans to implement, including: a review of all
University-funded capital requests; a serious examination of administrative
expenditures; a review of tuition policy; a comprehensive enrollment study;
and revenue enhancements and cost reductions in Athletics.
       Anderson expressed concern about the University's exposure to external
forces impacting the University of Pittsburgh Medical Center.  Wion discussed
the assertion that UPMC provides $100 million in support of the six health
science schools annually, asking for details on this support.  Wion moved that
the Senior Vice Chancellor for Health Administration be asked to provide as
soon as possible (1) his best description of how UPMC supports University
activities (specifically relative to the $100 million figure), and (2) a more
detailed accounting for the five health science schools, excluding Medicine,
that will eventually be agreed upon by the deans.  Zimmerman seconded.  The
motion was approved unanimously.
       Maher suggested revisiting the compensation policy to include a
distinction between cost of living increases for highly-paid versus other
employees.  Wion stated that the Senate Budget Policies Compensation
Subcommittee had recently considered this question, but had made no
recommendation.  He noted that the current salary policy had been drafted by
the Chancellor's Ad Hoc Salary Policy Committee.  Harris suggested that if
reconsideration of any aspects of the poicly is desired, that the Committee
might be reconvened.  Maher agreed to discuss the matter with the Chancellor.

FY 1996 Budget Parameters

       Koehler discussed the latest draft FY 1996 budget parameters.  Draft 15A
includes a 4.5% tuition increase for all students and balances the E&G budget
by: decreasing Debt Service by $2 million; reducing Program Enhancements from
$1.25 million to $821,000; and reducing Technology Enhancements to $1.5
million.  Draft 15B includes no tuition increase for undergraduate, in-state
students, which creates the need to reduce costs or increase revenues by $5.1
million.  This was accomplished by further reducing Programmatic and
Technology Enhancements, eliminating inflation increments in Operating
Expenditures, reducing Nonmandatory Transfers by $500,000, and reducing the
Compensation budget by $3 million.
       Members discussed the need to emphasize that the scenario behind Draft
15B (zero tuition increase for undergraduate students) has many serious
consequences.  Maher and Tuchi responded that they would convey the UPBC's
concerns to the Trustees.

       The meeting adjourned at 11:59 a.m.