Budget Planning Council

January 19, 2007

M I N U T E S

 

 

Present:  Bill Decatur, Kathy Krendl (co-chairs), Darrell Winefordner, John Day, Gail Houlette, Dominic Barbato, Richard Irwin, Greg Shepherd, Gary Neiman, Wendy Merb-Brown, Morgan Vis, Joe McLaughlin, Phyllis Bernt, and Aimee Howley

 

Absent:  Rich Carpinelli and David Thomas

 

  1. Discussion of Budget Hearing Guidelines for Planning Units

John Day distributed the attached handout with Instructions for Planning Units outlining the guidelines for a 15-30 minute presentation addressing five (5) specific questions.  John will provide the appropriate materials from the unit to be interviewed to the committee on a CD at least two days prior to their hearing.  Proposals should be limited to 3-5 pages commensurate with the size of the unit.

 

  1. State Budget related items – Setting the context for the Budget
    1. University of Toledo fee announcement---University of Toledo has announced a 0% increase in tuition for Fall Semester which could lead to a lower fee cap from the state; this action will be reviewed for Spring Semester.  Miami and BGSU are currently modeling a 6% increase.
    2. Governor Strickland Press Conference regarding “Upcoming Budget Challenges” ---The Governor states that “if we reach the spending limits, they will exceed the dollars this budget can produce”.

 

  1. University Budget Model
    1. Summary of preliminary budget scenario---Darrell has refined the budget model to three columns which correspond to totals found in the budget book.  Only a one-year look is provided here; however, a three-year look will be provided later.  Reminder:  this is only a “planning tool” and is subject to change.

 

  1. The “Resources”—For FY 2007, the model reflects the budget not the actual amount spent.

 

    1. Tuition and Fees are based on the preliminary undergraduate and graduate enrollment estimates provided by Mike Williford and Mike Mumper.  In this version of the model it is based on a six percent instructional fee and the general fee for both undergraduate and graduate students, and no increase to the non-resident surcharge. 1% of the 6 % undergraduate instructional fee increase is earmarked for Student Financial Aid.
    2. State Funding Appropriations---Enrollments are based on a 2- year and a 5-year average lagged one year.  For example, assuming that we will be on the 5-year average in FY 2008, our reimbursement will be based on the average enrollments for FY 2003, FY 2004, FY 2005, FY 2006, and FY 2007. 

 

                                                               i.      Stop-Loss / Guarantee--- We discussed the history of this component of the SSI (being changed to SII).  There used to be a guarantee amount and then 5-6 years ago it became a stop loss.  We are assuming the Ohio Board of Regent request level to OBM (98.5%).  This is higher than the current 97% to reflect model structure (taxonomy) changes that have occurred at the State level.

                                                             ii.      State has currently run three scenarios: (1) 4% appropriation increase, (2) fund enrollments and inflation and (3) the flat model.  The scenario selected for this version of the model is midway between the “flat” and the “enrollment model”.  Future models will reflect the flat model at the request of Vice President Decatur.

                                                            iii.      We discussed the new taxonomy, with weights for STEM² and how it will create winners and losers.  Ohio University is a slight loser.

    1. Investment Income – Vice President Decatur explained that while investment earnings are up in FY 2007, we have not continued this increase to the future.  Rather, because of the volatility of this revenue category we have kept the estimate equal to the conservative FY 2007 budgeted amounts.   We discussed the Board of Trustees suggestion that we review how our fund balances are invested.  Vice President Decatur pointed out that these decisions needed to be made balancing the amount of risk that we are willing to take against the possibility for higher returns.
    2. We discussed that some time prior to finalizing the budget we would be adding the University’s Land Lease account (currently in the Plant Fund) to the University’s Current Fund budget.   This revenue source is lease and rental contracts for the University’s East State properties.  This account also has expenditures that will offset the revenue for the most part.  However, we fee that it is important to move this to the General Fund for transparency purposes.
  1. Expenditures---major expenditure assumptions and drivers include:
    1. 3% for salary increases and benefits applied for all categories of employees.  Note our methodology is simply to multiply budgeted amounts by 3 %.  We will refine the estimates later to include a “snapshot” of filled positions.
    2. PERS rates have been increased both for the 3% salary increase and the increase in contribution rates that have been announced.
    3. Health Benefits – Reflect UHR’s Fall estimates (10.1 % increase, with no change in employee / employer shares).  We will need to update this estimate in March.
    4. Tuition Waiver discussion
    5. Workers Compensation – increase of $250,000 (for Managed Care Organization).
    6. Other Benefits includes Medicare, ERIP, etc. 
    7. Maintenance Operations

                                                               i.      Utility Estimate is calculated according to space usage and utility rates

                                                             ii.      POM – online/off line/construction analysis

    1. Miscellaneous $28.6 includes many of the Reserve accounts that will be transferred as the year progresses (Instructional Capacity, Opportunity Hire Program, Academic Investments, and University reserves).

 

  1. Recommendation from GERB was distributed by Provost Krendl