BUDGET AND FINANCE COMMITTEE. November 13, Minutes

Transcription

1 BOARD OF GOVERNORS BUDGET AND FINANCE COMMITTEE November 13, 2002 Minutes The meeting was called to order at 12:20 p.m. by Governor Washington in the Alumni Lounge. Secretary Miller called the roll. A quorum was present. Committee Members Present: Governors Atchison, Massaron, and Washington; Michael McIntyre, Faculty Representative; Charles Elder, Faculty Alternate Representative, Taras Kurtas, Student Representative Committee Members Absent: Governors Hillegonds and Kelly; Barbara Flis, Student Alternate Representative Also Present: Governors Dunaskiss and Miller and President Reid; Provost Bantz and Executive Vice President Gibbs; Vice Presidents Brown, Dambach, Davis, Johnson, Lessem, Nelson, Rounding; and Secretary Miller APPROVAL OF THE MINUTES, SEPTEMBER 18, 2002 ACTION: Upon motion made by Professor Elder, and supported by Mr. Taras Kurtas, the Budget and Finance Committee approved the minutes of the meeting of September 18, 2002 as presented. RESEARCH EXCELLENCE FUND CENTERS AND INSTITUTES PROPOSED BUDGET, FY 2003 Vice President George Dambach presented the proposed budgets for the Research Excellence Fund for FY 2003, and asked if there were any questions. Professor McIntyre asked how the 2.5% across the board cuts affected these funds, and whether the cuts were substantial. Vice President Dambach affirmed that a portion of the budgets were subject to the cuts. Professor McIntyre asked for revenue information on each of the Centers. Vice President Dambach 2534

2 2535 Budget and Finance Committee Minutes November 13, 2002 indicated that revenue information is not always clearly attributable, but gave the following as a summary from the reports provided: Center for Molecular Medicine Environmental Health Sciences Institute for Manufacturing Research Approximately $35 million in external funding $6-10 million $2-3 million Vice President Dambach talked about some of the issues related to identification of revenue streams in research, and an upcoming review in Molecular Medicine and Manufacturing Research. Professor McIntyre asked why the budgets for these particular funds are listed with the auxiliary budgets rather than general fund, and hence, come to the Board for consideration several months after the general fund budget does. Vice President Dambach indicated that this was a decision that was made several years ago, in light of the special allocations that were made to create these centers. Professor McIntyre also asked whether the review for Molecular Medicine mentioned by Vice President Dambach would happen under the normal review process, with the same standards and guidelines used elsewhere for centers and institutes. Vice President Dambach indicated that this is an interim review, and will follow the same formal structure. Governor Massaron asked why these centers and institutes would not be subject to the 2.5% cut that occurred elsewhere across the campus. Budget Director Vanessa Rose indicated that state appropriations are not the primary source of revenue for the Research Excellence Fund. The General Fund was the most directly affected by reductions in state appropriations, and the university s mandated reductions were applied to general fund budgets. The Joe Young Psychiatric program, for example, has its own earmark from the state, separate from general fund allocations. Governor Massaron also asked about the timing of the presentation of these budgets. Meredith Gibbs indicated that the administration will examine the issue of the timing of the submission of the Research Excellence Fund budgets to the board in the upcoming year. Governor Miller added her personal thanks that the administration did not reduce the Environmental Health Sciences budget this year, particularly in light of what s happening in the country. She believes more money should be put into understanding the impact of the environmental contamination upon health. ACTION: Upon motion made by Governor Massaron and supported by Governor Atchison, the Budget and Finance Committee recommended that the Board of Governors approve the proposed FY 2003 budget for the following allocations for the Research Excellence Fund (REF) Centers and Institutes:

3 Budget and Finance Committee 2536 Minutes November 13, 2002 FY 2002 Approved Budget FY 2003 Proposed Budget REF Administrative Support $ 363,916 $ 363,916 Center for Molecular 2,351,899 2,351,899 Medicine and Genetics Institute of Environmental 1,517,435 1,517,435 Health Sciences Institute for Manufacturing 1,926,092 1,926,092 Research TOTALS $6,159,342 $6,159,342 The Budget and Finance Committee also recommended that the Board of Governors authorize the President or his/her designee to evaluate performance of each of the REF centers and institutes on a continuing basis and make such adjustments as deemed necessary in the distribution of FY 2003 funding to these programs. The motion carried. JOSEPH F. YOUNG, SR. PSYCHIATRIC RESEARCH AND TRAINING PROGRAM UNDERGRADUATE LIBRARY Provost Bantz reviewed the budget for the Joe F. Young, Sr. Psychiatric Center, which has a long history at the university, and reiterated that this center has its own funds earmarked from the State. Governor Miller asked about recent reports that DMC planned to sell many outpatient clinics that were providing service to patients formerly seen at the Lafayette Clinic, and whether there was a plan to accommodate those patients. Vice President Dambach indicated that it is his belief that none of the clinics that the DMC plans to sell provide psychiatric services. In fact, the university is increasing its involvement in this area, as seen by the recent report on Wayne County Mental Health services. ACTION: Upon motion made by Governor Massaron and supported by Governor Atchison, the Budget and Finance Committee recommended that the Board of Governors approve the proposed FY 2003 budget for the Joseph F. Young, Sr. Psychiatric Research and Training Program to be allocated to program areas as follows:

4 2537 Budget and Finance Committee Minutes November 13, 2002 Program Area FY 2002 Approved Budget FY 2003 Proposed Budget Research $ 3,815,802 $ 3,667,083 Public Service 748, ,249 Instruction 828,878 1,155,568 Facility Cost 964,250 1,196,000 TOTAL $ 6,357,900 $ 6,357,900 The Budget and Finance Committee also recommends that the Board authorize the President and his/her designee to evaluate the performance of each program area of the Joseph F. Young, Sr. Psychiatric Research and Training Program on a continuing basis and make such adjustments as deemed necessary in the distribution of FY 2003 funding to these programs. The motion carried. PROPOSED AUXILIARY ACTIVITIES BUDGETS, FY 2003 Executive Vice President Gibbs indicated that the university has nine auxiliary operations. She called upon Vanessa Rose to present the highlights of the budgets, and indicated that she would be talking separately about Parking and Transportation. Vanessa Rose indicated that these nine operations are fairly self-contained. Together total expenditures for these operations are about $14.3 million, and total budgeted revenues are $17.4 million. For the most part, revenues generated by the operation are then used to cover the cost of the operations. Four auxiliaries account for roughly 90% of the total dollars represented above. Those are: the University Press, Parking and Transportation, WDET-FM Radio Station, and the Student Center and Dean of Students program. Ms. Rose described the proportions of budget expenditures and revenues for each of these units, how student fees account for a portion of the revenues for the Student Center and Dean of Students budgets, as well as internal transfers and the reduction of General Fund subsidies to these units over time. Subsidies have been eliminated for the McGregor Memorial Conference Center and for WDET- FM Radio and reduced for the University Press. Professor Elder asked about the consequences to these operations if, due to economic constraints, subsidies to them were cut off. In addition, Professor Elder asked about subsidies provided to university presses at other institutions across the country. Provost Bantz indicated that university press operations do normally receive subsidies there are very few presses which are truly self-supporting, due to the nature of the type of books that are published, the markets which are interested in them, and the level of commitment to scholarship. The Provost indicated that the university press is much more like an academic unit than a unit where the revenue stream

5 Budget and Finance Committee 2538 Minutes November 13, 2002 coming in can be controlled. The key to success at a university press is acquiring good books and journals. Professor McIntyre added that he believes it is important to understand the budget for press operations as a whole, including indirect costs, which have now been included with the WDET-FM budget, and should be for the rest of the units. Units that receive subsidies do so because of their contribution to the university as a whole, and Professor McIntyre believes that it is important that the Press get input from the rest of the university on its basic policies. Professor Elder asked how the Press would respond if a portion of the subsidy was taken back temporary to respond to an immediate budget need elsewhere. Provost Bantz indicated he would work with the Director directly, but also indicated that their budget is fairly small. A large portion of their budget is contained in commissions to bookstores and fees to reviewers. All of these areas would be examined. Provost Bantz then introduced Jane Hoehner, the new director of the University Press, who had previously served as the director of acquisitions since Governor Dunaskiss asked what the University Press could do to become selfsufficient and self-sustaining. Provost Bantz indicated that those university presses elsewhere that are able to be self-sufficient have high volume sales, and are at extremely wealthy universities. At some of these presses, there are advances given to authors that are greater than the WSU press budget for the entire year. Governor Miller asked if the WSU Press is fulfilling a specific niche, in that we have a number of books on the history of Detroit or Michigan. Provost Bantz indicated that the WSU Press is famous for the Great Lakes series, for its series in Judaic studies, and Ms. Hoehner added that the press has a large series in critique on German culture and literary theory, as well as a series on African American life that is performing well, and a series on cinema studies, TV and film studies. Provost Bantz added that the WSU Bookstore has a section dedicated the WSU press. Professor McIntyre asked about the use of surplus funds in auxiliary budgets, and why those surplus funds cannot go to the general fund instead of residing in auxiliary budgets that do not receive the same type of review as the general fund does. Vice President Davis indicated with auxiliary funds, practice has been not to transfer money from outside the general fund back to the general fund. It has happened from time to time, with small transfers to the plant fund for capital projects and equipment. Executive Vice President Gibbs then provided the Board with an overview on the university s Parking and Transportation unit. She walked the board through several documents that outlined planned improvements over the next five years in terms of capital improvements to current operations. Some are in progress, including paving projects at a number of surface lots. Over the next five years, planned improvements include upgraded lighting, enhancement of security

6 2539 Budget and Finance Committee Minutes November 13, 2002 cameras, purchasing additional cleaning equipment, paving unpaved lots, and making structural and lighting repairs. Pictures of a number of the university lots requiring repair were included in the presentation, and the maintenance requirements to a number of these areas were described. The number one issue that was heard in campus forums and in talks with various constituencies on campus was that of heightened or improved security. Based on those concerns, some of the first projects are lighting projects, an additional patrol vehicle, police costs, and public safety cadets. This includes a 24/7 roving patrol staffed by cadets, who will be dedicated to parking facilities and parking operations. Executive Vice President Gibbs talked briefly about the rate increase enacted earlier in the year. For the parking operation to sustain itself, it has to run as a self-supporting operation with sufficient revenue. Parking rates remained the same for more than 11 years if, when the increase was taken, the administration had recommended a $.25 or $.50 increase, the operation would have been in deficit, and would have been unable to do the planned improvements. It would have been possible to do fewer improvements or stretch them out over time, but this plan represents a comprehensive review of the operations as well as an action plan for much needed improvements. The general fund subsidy to Parking was reduced by $250,000 last year, will be reduced by the same amount this year, and will continue until the debt on the 1999 bonds has been paid out. Parking operations should assume the payment for indebtedness on bonds issued to fund the construction of parking facilities and for improvements to those facilities. Governor Miller asked whether Public Safety still parks behind Chatsworth and whether they are taking spaces assigned to people who live in the building? Vice President Brown indicated that 15 spaces behind Chatsworth were set aside for elderly residents in the building, and another 7 spaces are used by individuals who have meetings and/or perform service operations in the Student Center, where they bring in items and leave. Professor McIntyre served on the Parking Taskforce, and indicated that the issue of the rate increase is a complicated one. Parking is a university strategic issue WSU may be competing with other schools that provide free parking. This may be an issue in the future if additional increases are contemplated. It is also part of the strategic plan in that when new buildings are constructed, decisions made about parking availability may include the construction of a structure over the paving of a surface lot, and payment for the debt on bonds for that type of project is not one that the Parking and Transportation office has any control over. Professor McIntyre also asked whether any of the projects could be deferred to another year when the budget situation isn t as challenging. Professor Elder supported the concept of the parking office as a self-sufficient operation, especially given the other problems in terms of the University Budget. Professor Elder questioned whether some of the $4.7 million in paving projects could be deferred for a year or two. Governor Massaron asked about the $915,000 in paving projects, and whether those projects were already underway. Executive Vice President Gibbs indicated that the $915,000 figure mentioned

7 Budget and Finance Committee 2540 Minutes November 13, 2002 represents debt service on previously issued bonds, which were issued in 1999 to fund upgrades to Parking Structure No. 1. Parking and Transportation is now budgeting the assumption of this debt. Governor Atchison asked about cadet patrols, how they will be patrolled, whether they will have radios and/or weapons. Executive Vice President Gibbs indicated that these are criminal justice students. They have radios, but are not armed. If they identify a problem, they radio for assistance, and the police come. They wear uniforms and do patrols. With no further comments, the following action was taken. ACTION: Upon motion made by Governor Atchison and supported by Professor McIntyre, the Budget and Finance Committee recommended that the Board of Governors approve the following proposed FY 2003 Auxiliary Activities expenditure budgets: Division Description FY 2002 Approved Budget FY 2003 Proposed Budget Academic Affairs University Press $ 2,743,000 $ 2,698,800 Executive Office of the President Parking and Transportation Services 3,162,200 4,999,300 Finance and Administration Auxiliary Services Bookstore Business Services 247, , , , , ,000 University Advancement McGregor Memorial Conference Center Radio Station WDET-FM 1,692,100 2,572, ,900 2,945,300 Student Development and Campus Life The South End Student Center and Dean of Students 341,600 2,219, ,200 2,322,800 Totals $13,418,300 $14,288,300 The motion carried. CONSTRUCTION OF ACADEMIC SUCCESS CENTER Vice President Davis outlined the proposed recommendation for the construction of the Academic Success Center in the space previously utilized by Barnes & Noble Bookstore in the Undergraduate Library. There were no questions.

8 2541 Budget and Finance Committee Minutes November 13, 2002 ACTION: Upon motion made by Governor Massaron and supported by Professor McIntyre, the Budget and Finance Committee recommended that the Board of Governors authorize the President or his designee to design, solicit bids, and award contracts for the renovation of the space vacated by the bookstore in the Adamany Undergraduate Library for the expanded Academic Success Center, and renovation of fifth floor space in the Student Center Building for the relocation of the Academic College Enrichment Services (ACCESS) for a cost not to exceed $3,000,000. Funding for the project will be provided from bond proceeds from the General Revenue Bonds Series 1999, which when originally approved by the BOG included a provision for the construction of this proposed project. The motion carried. PAINTING OF PARKING STRUCTURES 1, 2, 3, 4 AND 5 Vice President Davis provided an overview of the recommendation for the design and awarding of contracts for painting five parking structures. Professor McIntyre asked, in light of other repairs performed on Parking Structure #1, whether the painting of the structure was cosmetic, or if there were further issues. Vice President Gibbs indicated that there have been many structural repairs and improvements to that structure, but it would cost approximately $30 million to replace it. Painting the structure is needed. ACTION: Upon motion made by Professor McIntyre and supported by Governor Atchison, the Budget and Finance Committee recommended that the Board of Governors authorize the President or his designee to design, solicit bids, and award contracts for the painting of stair towers and offices at Parking Structures 1, 2, 3, 4, and 5, at a cost not to exceed $313,000. Funding for this project has been provided by the Parking Department. The motion carried. RENAMING OF FACILITIES Vice President Davis indicated that this recommendation asks for authority to rename two university buildings. The College of Pharmacy and Health Sciences moved last year into its new facilities, vacating Shapero Hall. The Shapero name did not follow the college. Prior to being used as the name of that building, 1400 Chrysler, the Shapero Hall designation was used on the Natural Science building on the main campus. After speaking with the Shapero family, the administration is recommending that the Natural Sciences Building be renamed Shapero Hall. ACTION: Upon motion made by Governor Massaron and supported by Governor Atchison, the Budget and Finance Committee recommended that the Board of Governors authorize the renaming of two university buildings as follows:

9 Budget and Finance Committee 2542 Minutes November 13, Building at 1400 Chrysler from Shapero Hall to 1400 Chrysler 2. Building at 5501 Gullen Mall from Natural Science Building to Shapero Hall It is also recommended that these names be reflected in WSUCA , the Board statute that list the names of all University facilities. The motion carried. FY 2004 CAPITAL OUTLAY REQUEST AND FIVE-YEAR CAPITAL OUTLAY PLAN Vice President Davis presented the proposed request and five-year capital outlay plan. Beginning in FY 2001, the university has been required to submit a fiveyear capital outlay plan in conjunction with the capital outlay request. The plan is very explicit, and includes sections on the University s construction projects, research programming, staffing and enrollment, facility assessment and the proposed implementation plan for construction projects over the next 5 years. The university s number one project remains the renovation of Purdy-Kresge Library. Professor McIntyre indicated that the Senate did not receive a copy of the plan in a timely manner, and felt that strategic issues such as increasing faculty to support expanded undergraduate student enrollment as outlined in the plan should have been included in the document. ACTION: Upon motion made by Governor Atchison and supported by Governor Massaron, the Budget and Finance Committee recommended that the Board of Governors approve the FY2004 Capital Outlay Request and Five-Year Capital Outlay Plan and authorize the President or his designee to submit this documentation to the State of Michigan, Office of Management and Budget. The motion carried. GUARANTEED OPERATING LOAN FOR WAYNE STATE UNIVERSITY RESEARCH AND TECHNOLOGY PARK Vice President Davis outlined the pertinent issues related to the request for the University to guarantee a line of credit for the Wayne State University Research and Technology Park. The Park will soon have an Executive Director in place, and will need operating funds to begin working on its many projects. Because the Park does not yet have the ability to obtain a line of credit on its own, this request has come before the Board. The Park will have operating money that will flow in over the next year from the Detroit Business Initiative, the City of Detroit, and from the state through the MEDC (Michigan Economic Development Corporation). Until the Park is up and running sufficiently to generate enough money to cover all administrative and operational costs, they will need some operating cash.

10 2543 Budget and Finance Committee Minutes November 13, 2002 Professor McIntyre asked whether this would be just the first in a series of similar requests needed to get the Park operational, or whether this would be the only request. Vice President Davis indicated that it would be likely that the University will have to guarantee construction funding as well, because the tax increment financing funds allocated to the Park will come in over a period of time. In new construction or in renovating a building, cash is needed up front. Professor McIntyre asked the magnitude of funds needed for construction; Vice President Davis estimated anywhere from $6 to $8 million. Governor Massaron indicated his support for this project, and his understanding that these guarantees would be needed in order to move the Park forward. ACTION: Upon motion made by Professor McIntyre and supported by Governor Atchison, the Budget and Finance Committee recommended that the Board of Governors adopt the resolution authorizing the President and/or the Treasurer to cosign an operating loan or to sign documents for the University to guarantee a line of credit and/or an operating loan an amount up to $500,000 for the Wayne State University Research and Technology Park in the City of Detroit (the Park), conditioned upon the University s approval of the Park s operating budget, the execution of an agreement between the University and the Park regarding security, and approval and review of drawdown and disbursements of the loan and uses thereof. The motion carried. ELECTRICAL UPGRADES TO PRIMARY SERVICE Vice President Davis indicated that this recommendation concerns the administration s recommendation to convert electrical service at 12 buildings connected to the Detroit Public Lighting Department from secondary service to PLD primary service. By switching to primary service, the university will pay a lower rate, but will be responsible for the equipment and transformers. This program is projected to pay for itself within 1.4 years. ACTION: Upon motion made by Professor McIntyre and supported by Governor Massaron, the Budget and Finance Committee recommended that the Board of Governors authorize the President or his designee to design, solicit bids, and award contracts to convert electrical services at twelve buildings from the City of Detroit s Public Lighting Department (PLD) General Service (Secondary Service) rates to PLD s Primary Service (Primary Service) rates, in an amount not to exceed $654,000. Funding for this project will be provided from two sources including $576,000 from the Reserve for Energy Related Projects for seven General Fund buildings and two parking structures and $78,000 from Housing Authority reserves for one housing facility. The motion carried.

11 Budget and Finance Committee 2544 Minutes November 13, 2002 PURCHASING EXCEPTIONS Vice President Davis presented the quarterly informational report on Purchasing Exceptions for the quarter ending September 30, ADJOURNMENT There being no further business, the meeting was adjourned at 1:28 p.m. Respectfully submitted, Julie H. Miller Secretary to the Board of Governors dlh