Minutes of November 20, 1995 Meeting
The meeting convened at 2:06 p.m. in room 817 Cathedral of Learning. UPBC members present were: Thomas Anderson, John Brice, James Cassing, Richard Colwell, Ronald Gardner, Randy Juhl, Peter Koehler, James Maher, Franklin McCarthy, Keith McDuffie, Glenn Nelson, Michael Stuckart, Ben Tuchi, Philip Wion, Julius Youngner, and Judith Zimmerman. Also present were: Jerome Cochran, Kevin Evanto, Oval James, William Laird, Jeffrey Liebmann, Robert Pack, Joseph Phillips, and Arthur Ramicone. UPBC members not present were: Toni Carbo Bearman, Jacob Birnberg, Marjorie Carlson, H.K. Chang, Thomas Detre, Brian Hart, Jeffrey Romoff, and Bruce Williams. Approval of Minutes The minutes of the October 30 meeting were approved. Presentation of Athletics Budget Information Maher explained that this was a preliminary presentation of information being prepared in response to federal guidelines requiring colleges and universities to submit athletics budget information as of January 1, 1996. Cochran provided historical context, describing the manner in which the University treated the budget of the Athletics Department in the past. He stated that by handling Athletics as "off-budget," there had been control of expenditures but no formal budget in past years. Cochran noted the University's historical commitment to compete at the highest level of intercollegiate athletics and to pursue some level of excellence in all athletic activities. Such a commitment is intended to provide valuable positive exposure for the University. Jaynes added that the commitment to competing successfully at the highest level is part of the mission statement for the Department as approved by the Board of Trustees. Cochran provided statistics comparing the budgets for athletics at the University to the average expenditures at CFA (College Football Association) and Big East institutions. These comparisons show that the University's expenditures are average among its peers, but that revenue production is below average. As a result, the institutional support of athletics at the University is higher than average among comparable institutions. Cochran pointed out, however, that most of the institutional support of athletics goes to non-revenue generating sports (i.e. sports other than football or basketball). He added that a goal of the Department is for the revenue generating sports to become self-sufficient. Cochran also discussed student athlete participation and graduation rates at the University. There are 149 student athletes participating in the revenue generating sports, 288 participating in non-revenue generating sports, and another 302 students involved in band, sports information, training, and other athletics-related activities. Student athletes participating in revenue generating sports have a 65% graduation rate and an average grade point average of 2.75. Youngner suggested that this graduation rate could be improved given the academic support provided to student athletes. Laird presented the direct and indirect actual financial data for FY 1995 and budgeted revenues and expenditures information for FY 1996. Institutional support for Athletics is budgeted to decrease by $1.2 million from FY 1995 to FY 1996. Jaynes added that a recent agreement with the Big East conference guarantees a minimum amount of revenue per year as of FY 1997, even if the University has no television appearances. Wion emphasized the importance of the UPBC monitoring the use of funds derived from further reduction in the amount of institutional support of Athletics. Laird also informed members that the FY 1995 data represents eleven men's and eight women's sports, while the FY 1996 data represents nine of each, reflecting changes implemented to meet Title IX requirements. Jaynes explained the process used to collect information on student interest and ability in various sports and the input of administrators and various committees that led to the decision to drop men's gymnastics and men's tennis and to add women's soccer. Members suggested that the Department of Athletics examine the University's standard procedures for reviewing program proposals and submit any future proposals regarding specific sports through those procedures. Zimmerman expressed concern regarding the need to examine the University's commitment to Division IA football. In response to Anderson's question, Jaynes indicated that restricted gifts will likely exceed $1 million in FY 1996 and that the long-term goal is to raise $1.5 million per year in gift revenues. The meeting adjourned at 4:10 p.m.Minutes of December 7, 1995 Meeting
The meeting convened at 2:07 p.m. in room 817 Cathedral of Learning. UPBC members present were: Thomas Anderson, Jacob Birnberg, John Brice, James Cassing, H.K. Chang, Richard Colwell, Ronald Gardner, Brian Hart, Randy Juhl, Peter Koehler, James Maher, Glenn Nelson, Ben Tuchi, Philip Wion, and Julius Youngner. Also present were: William Laird, Jeffrey Liebmann, William Madden, Jeffrey Masnick, Robert Pack, Richard Pratt, and Arthur Ramicone. UPBC members not present were: Toni Carbo Bearman, Marjorie Carlson, Thomas Detre, Franklin McCarthy, Keith McDuffie, Jeffrey Romoff, Michael Stuckart, Bruce Williams, and Judith Zimmerman. Activities of the Ad Hoc PBS Evaluation Committee Pratt discussed the recent formation and meetings of the Ad Hoc Committee charged with the evaluation of the Planning and Budgeting System. He explained that the Ad Hoc Committee was meeting with individuals involved in planning and budgeting at all levels of the University and would soon distribute a request for input from the University community. This request for open-ended input would help the Ad Hoc Committee develop a more detailed questionnaire that would validate the extent to which views on PBS are held. Pratt added that the opportunity for meeting with various constituencies and testimony before the Ad Hoc Committee would also be made available. In response to Koehler's question, Pratt indicated that targeted interviews with key individuals are also being planned. Format of FY 1997 Budget Parameters Laird distributed income and cash flow statements for FY 1994 and FY 1995, explaining the categories of information and line item revenues and expenses. The information displayed various University funds, including Educational and General Operations, UPMC, Insurance Companies, Student Loans and Endowment. Laird explained the restrictions on the use of different fund categories and how depreciation expenses are used in the cash flow statement to show capital expenditures. Wion added that the attribution study is a third dimension to these data and that depreciation expense will be included in the study produced this year. Pack emphasized the importance of expanding the development of budget parameters for FY 1997 to include all of the Educational and General Operations, which includes E&G, Auxiliary, and Restricted Funds. Laird stated that the format of the information distributed is the one preferred by the Budget and Audit Committees of the Board of Trustees, thus making it important for the UPBC to understand and utilize a similar format in developing its parameters. Maher summarized by recognizing that no comprehensive measure will carry all of the relevant information, but that the general satisfaction with the parameters produced this year should increase, particularly due to the inclusion of Auxiliary, Restricted, and Plant Funds. Wion expressed concern about the need for a description of the financial relationship between the University and UPMC, especially relative to the attribution study. Anderson emphasized the importance of developing a fully integrated capital projects process, including a schedule of annual activities, that would display how specific projects will affect costs and cash flow. He added that the current list of capital projects should be reviewed and discussed. Maher suggested that the Capital Priorities Committee convene in January to provide recommendations to the Parameters Subcommittee on Debt Service for FY 1997. The meeting adjourned at 3:57 p.m.Minutes of January 11, 1996 Meeting
The meeting convened at 2:12 p.m. in room 817 Cathedral of Learning. UPBC members present were: Jacob Birnberg, John Brice, James Cassing, Richard Colwell, Ronald Gardner, Brian Hart, Randy Juhl, Peter Koehler, James Maher, Ben Tuchi, Bruce Williams, and Philip Wion. Also present were: Jeffrey Liebmann, Jeffrey Masnick, and Robert Pack. UPBC members not present were: Thomas Anderson, Toni Carbo Bearman, Marjorie Carlson, H.K. Chang, Thomas Detre, Franklin McCarthy, Keith McDuffie, Glenn Nelson, Jeffrey Romoff, Michael Stuckart, Julius Youngner, and Judith Zimmerman. Approval of Minutes The minutes of the November 20, 1995 and December 7, 1995 meetings were approved. Maher stated that the Capital Priorities Committee will soon prepare a draft recommendation that will, at the request of the Board of Trustees, include auxiliaries, recreation space, and the regional campuses. The preparation of the draft document now awaits completion of a necessary engineering audit. Report of the FY 1997 Parameters Subcommittee Koehler reported on discussions held at the last meeting of the Subcommittee. Members examined auxiliary budgets at all five campuses and discussed the nature and use of surpluses created by auxiliary enterprises. The Subcommittee also looked at FY 1995 actual and FY 1996 budgetary information in revised formats. Wion added that recent changes in the reporting format requested by the Board of Trustees still do not allow for timely preparation of information needed by the Subcommittee to compare budgets to actuals for a given year. He suggested that a periodic report of budget modifications be made available. Discussion of the UPBC Agenda Pack presented a summary of the discussion of the Agenda Subcommittee, which includes the following recommendations. -- UPBC's primary focus should be long-term issues. Operational subcommittees and task forces should be empowered whenever needed to examine issues and submit recommendations to the UPBC for review and action. -- The UPBC must focus on Senior Vice Chancellor and University level budgets. The historical division of the University budget should be examined and recommendations made for changes in base funding by major division, if necessary. Indirect changes in budgets, through transfers and charge backs, should be studied. The "Make or Buy" Task Force should finish its work, the Parameters Subcommittee should address issues related to the Auxiliaries, and the UPBC should explore ways to review how the University budget should best be allocated to address expressed University priorities. -- Specific data should be requested in a number of areas, such as: a) A description of the current budget distributed by Senior Vice Chancellor area and by major expenditure type should be compiled, including relevant ratios that may help the UPBC understand differences among divisions, or recommend funding changes. Historic perceptions, such as the underfunding of the Student Affairs division, should be analyzed. b) Management ratios, such as those indicating various personnel and non-personnel support levels, could indicate areas for potential resource reallocation. Specifically, historic tables on numbers of employees should be produced, indicating employee type and full-time vs. part-time status for the past 10 years so that the UPBC can review staffing levels, particularly in nonacademic and middle management functions. c) Ratios of capital to operating budget could help determine future directions for funding capital project development and renovations. -- Efforts to benchmark University data with similar data from comparable institutions should increase. The short-term goal is to produce budgetary, personnel, and capital targets for FY 1997. In the long-term, the UPBC should consider what the optimum size of the University should be five years from now. Such a discussion would likely occur in a revitalized Strategic Issues Subcommittee. -- The UPBC agenda should include a "Matters Arising" item at each meeting to cover general information items for the benefit of the Committee. -- UPBC should move away from formal presentations, and encourage the submission of documents before scheduled meetings so that members have a chance to read materials prior to discussion. -- UPBC should have a Web page discussion group to facilitate ongoing discussion of issues.Wion supported allocating time each meeting to a "Matters Arising" discussion for items of general interest to the members, such as the status of standing requests for information. Maher expressed concern that such discussion must be focussed with a clear resolution as a goal. He emphasized the importance of the UPBC providing the Chancellor with more clear, succinct advice. Members discussed the merits of a standing Agenda Committee and the need for the UPBC to provide structure to the ambiguous and unstructured kinds of issues it must face. Wion suggested a process wherein the UPBC would raise questions, presentations or responsive documents would be prepared, the UPBC would conduct structured discussions -- forming subcommittees or task forces when necessary -- and submitting formal recommendations to the Chancellor. The meeting adjourned at 3:58 p.m.