Minutes of August 31, 1995 Meeting
The meeting convened at 10:07 a.m. in room 817 Cathedral of Learning.
UPBC members present were: Thomas Anderson, Toni Carbo Bearman, Jacob
Birnberg, James Cassing, H.K. Chang, Richard Colwell, Ronald Gardner, Brian
Hart, Randy Juhl, Peter Koehler, James Maher, Franklin McCarthy, Keith
McDuffie, Glenn Nelson, and Philip Wion. Also present were: Ann Dykstra,
Michael Gaber, Jeffrey Liebmann, William Madden, Jeffrey Masnick, Robert Pack,
and Arthur Ramicone.
UPBC members not present were: John Brice, Thomas Detre, Darlene Harris,
Jeffrey Romoff, Michael Stuckart, Ben Tuchi, Bruce Williams, Julius Youngner,
and Judith Zimmerman.
Approval of Minutes
The minutes of the July 31 meeting were approved.
Status of Legislative Hearings
Maher reported on his appearances before the legislative committee
examining higher education issues. He reported on hearings held on
sabbaticals and on scholarship benefits for employees. Maher explained that
some committee members were very receptive to the examples provided on
successful sabbaticals and the defense of employee tuition benefits. He
expressed concern that institutions should be prepared for some recommended
changes that may be undesirable. The next committee hearing will deal with
faculty workloads and travel budgets.
FY 1996 Budget Parameters
Koehler reported that the FY 1996 Budget Parameters Subcommittee met and
reconciled the numbers presented in the document approved by the UPBC and that
submitted to the Board of Trustees. He stated that any differences between
the two documents are the result of formatting, as the Board document includes
funds other than Educational and General. He reported that the Subcommittee
(henceforth to be known as the FY 1997 Parameters Subcommittee) has laid out a
timeline of activities that will result in recommendations within the next
three months.
Maher suggested that the Subcommittee utilize the Board budget format
from the beginning of its deliberations this year. He also recommended that
the Subcommittee give priority to considering a reasonable salary raise target
early in the process. Masnick recommended making the document easier to
understand by breaking parameters into their various components when other
funds, such as Auxiliaries, are added. Wion expressed hope that the
Subcommittee will soon receive information on actual versus budgeted
expenditures. Maher agreed, stating that "off-budget" spending is an issue
worthy of study. He requested that the Subcommittee receive five-year trend
data in order to assess the magnitude of the problem.
Bearman asked that consideration be given to allowing units to carry
over funds past the end of the fiscal year for equipment purchases and certain
other specific budget line items. Maher responded that ways currently exist
for units to carry over equipment funds but that the larger issue is being
examined. He added that a review showed much of the University's year-end
spending patterns to be understandable, such as facilities management
equipment and frugal departments that have saved funds throughout the year for
specific purposes.
Update on Capital Priorities
Pack reported that the Capital Projects Committee is now considering a
series of recommendations regarding the University's building program, usage,
and renovations. In addition, the Committee is examining the standing list of
Commonwealth-funded capital project requests in an effort to make them more
consistent with current priorities. Pack stated that the emphasis is
currently on identifying funding sources for projects, purging the list of low
priority projects, and assessing long-term financial impacts.
Update on Make or Buy Task Force
Birnberg stated that the deliberations of the Task Force have focussed
on two critical issues.
1. How should the University make decisions regarding the kinds of
businesses it operates?
2. Once a decision has been made to operate a service internally, how can
the University regulate the relationship between the service provider and the
user, thus ensuring mutual satisfaction?
Relative to the first question, criteria being discussed include required
resources and length of commitment, the ability to consolidate existing
services, and the assessment of real gains and flexibility. Regarding the
second question, the Task Force is considering recommending the creation of a
Board to review charges and pricing structures and to serve as a recourse for
users experiencing problems. In response to Cassing's question, Birnberg
stated that the Task Force is focussing on institutional criteria rather than
proposing unit-specific suggestions. McCarthy expressed concern over new
federal accounting regulations that may require increases to certain budgets
to allow for needed costing systems.
Report of the Task Force on Duplicated Services
Pack discussed the report of the Task Force, which includes a
recommendation that the University adopt a set of management principles to
guide service providers and those involved in service processes. This
philosophy is organized under the acronym "SERVICE," which stands for
Satisfaction, Empowerment, Reengineering, Value Added, Integration, Cost-Benefit, and Enhancement. Central to the recommended principles is the belief
that process improvement can only be done by those involved in the process.
Pack stated that implementing the SERVICE principles will encourage a long
overdue transformation in the service culture of the University and will
facilitate ongoing information architecture and reengineering projects.
Pack explained that the Task Force recognized a number of specific areas
of concern and that a systematic process was needed to evaluate and improve
University processes. The Task Force report recommends the creation of
Process Evaluation Teams as an agent of service unit review, and action on a
set of priority areas. These target of opportunity areas were identified in
an extensive survey on services conducted earlier this year. Pack emphasized
that the recommendations of the Task Force do not emphasize cost reduction
strategies. Rather, they focus on improving the quality of products and
freeing units from unnecessary bureaucracy so that they expand their range of
outputs.
In response to Koehler's question, Pack stated that the senior
management of the University must set the cultural tone required to implement
the SERVICE principles, committing the necessary staff and other resources.
He explained that each Vice Chancellor area could designate a person to
monitor the activities of the Process Evaluation Teams. Hart stressed the
importance of examining the relationships between the University and UPMC.
Masnick agreed, citing as recent examples of decisions made regarding service
provision the transfer of the Student Health Service and the opening of the
Employee Assistance Program.
Attribution Methodology Report
Copies of the Revenue and Cost Attribution Methodology and Study for FY
1994 were distributed to members. Wion discussed the important differences
between this study and previous studies, including:
-- the step-down of support unit costs to other support units;
-- refinements of several significant cost attributions (CIS, University
Library System, Institutional Advancement, and Facilities Management);
-- initial efforts to fully incorporate capital-related costs;
-- attribution of services provided by/to UPMC;
-- an expanded method for attributing the Commonwealth appropriation; and
-- expanded information on restricted funds versus sponsored project
(research) activities.
Wion added the caution that the report provides important financial
information, but cannot be used to drive planning and budgeting decisions in
the absence of qualitative considerations.
The meeting adjourned at 12:02 p.m.