Campus Resources and Planning Committee

September 28, 2009

 

 

 

Present:           Pete Wyckoff, Mark Privratsky, Brook Miller, LeAnn Dean, Maddy Maxeiner,

Sara Haugen, Sarah Mattson, Carol Marxen, Sydney Sweep, Dave Swenson,

Lowell Rasmussen, Bart Finzel,

 

Guests:                        Gwen Rudney, Sandy Olson-Loy, Pareena Lawrence, Cheryl Contant

 

 

Minutes from 2/21/09 meeting were approved as presented with an acknowledgement to Kathy Julik-Heine for doing a great job of capturing the discussion.

 

Pete announced that the division chairs will be sending representatives or attending meetings. 

 

There are three items on the agenda today:

  1. Proposal on forming subcommittees to assist in strategic planning
  2. Follow-up questions from the financial information presented at previous meeting
  3. Facilities issues

 

Proposal on forming subcommittees to assist in strategic planning

 

Chancellor Johnson reported that she met with Pete to discuss forming subcommittees, capturing the elements of shared governance, to assist in the strategic planning efforts.  The general purpose is to update the strategic plan and lead the campus in recommendations regarding enrollment, academic, and financial planning for the future.  The chair of CRPC and the Chancellor envision the following groups:

 

      1.   Enrollment:   Chaired by Bryan Herrmann

 

Charge:  Provide alternative models that show how we would maximize enrollment over the course of the next five years, keeping in place the quality metrics/standards for admission that now exist.

 

  1. Financial planning group:  CRPC at large

 

Charge:  Provide alternative financial models, using a Òplug and play modelÓ developed by Linc Kallsen.

 

  1. Academic Staffing group 

 

Charge:  Provide scenarios, working from some amount of money as a fixed quantity for academic salaries that addresses how these dollars would be distributed.

 

Jacquie added we would look at enrollment numbers and make assumptions on financial planning; the academic staffing group would provide alternative salaries.  We need to have better ways of representing information in terms of understanding the student mix along with financial modeling tools.   Bryan, Pete and Cheryl will work together will have a report by mid-October.  Cheryl will include the division chairs to discuss the academic staffing.  Pete said the committee at large might need to have evening sessions or a Saturday session to discuss financial planning.   At this point, the information Robert Jones is asking for is specifically tied to faculty.  Maddy suggested including our commitment to a diverse student body under the enrollment subcommittee charge.  Jacquie also suggested scheduling a planning summit as an alternative way to a more integrated approach to facilitate the dialogue and interaction needed.  She wants to find a way to bring governance in conversations of how we plan, where the money should go, investments, etc.

 

Pete said the subcommittees should do an initial status quo followed up with what would happen if we added or subtracted programs.   He does not want the Admissions staff to feel pressured to make an estimate based on what they are told we need.  He wants an estimate on what we can get.   Bryan said we need to tie to what we do programmatically and not just beef up the majors we already have.

 

Cheryl suggested that the people charged bring in a list of key variables in making their plan happen in the next couple of weeks to get feedback and interactions from the committee and then really identify the groups that need to work together and the key points.  She would resist the notion of an academic staffing plan based solely on resources.

 

Pete said a refined charge would be forthcoming along with a timeline. 

 

Follow-up questions from the financial information presented at previous meeting

 

Lowell answered specific questions from Pete after the last meeting (listed below).  We will get Colleen Miller back to another meeting soon.

 

Earned Revenue

 

1. What sorts of things go into the Òother unrestrictedÓ category? Why do we anticipate a decline of $1 million in this category (compared to 2009 actuals)?

 

All external sales for the campus go into an unrestricted fund.  The Bookstore, Food Service and ORL are the three major auxiliary funds.  Because the Food Service building was renovated this summer as part of our contract with Sodexho, $930,000 went into that account for the renovation.

 

2. Why do we anticipate a decline of $600,000 for Ògrants and contractsÓ? Is this related to the one-time influx of money from Sodexho in 2009 to renovate food service?

 

No.  Will need to get more detail from Colleen

 

3. Does revenue from room and board come in as Òother unrestrictedÓ earned income?

 

Yes.

 

Expenditures

 

1. Not a question, but an observation in case committee members have not noticed: The reduction in workforce at UMM (and the salary freeze) that took place in the spring results in a budgeted salary line for 2010 $1 million lower than in 2009. Nevertheless, even with a reduced workforce, the amount we will need to spend per capita on fringe has risen dramatically (read, mostly, Òhealth insuranceÓ), to the point where although UMM now has fewer employees, our overall fringe expenses have risen. Not to be political, but this line shows why the current system for funding healthcare in the US is really unsustainable.

 

Even though there were no salary increases, the fringe rate went up.  Next year will we need to budget for salary increases although it may be a reallocation of resources on our campus.

 

2. In the 2010 budget, the combined anticipated expenditures on Òequipment and other cap assetsÓ and Òrepairs, maintenance& suppliesÓ rise by $3 million compared to 2009 actuals. Can we get a breakdown to show us what projects and equipment are driving the increase?

 

Part of this is because R&R budgets have stayed the same.  The universityÕs new capital emphasis is to really push the HEAPR side of ledges and what youÕre seeing is the outcome of the HEAPR requests. Some of the HEAPR requests show up on our ledgers and some do not.

 

3. Transfers in and Transfers out: Does this include only money coming into or leaving UMM, or also money internally transferred? Why did we record a net $929,000 transfer out in 2009, and what is different about 2010 that leads us to anticipate essentially no net transfers?

 

This includes all of the money coming in or out and the transfers.  The $929,000 is Sodexho.

 

Bottom line:

 

1. The 2009 net surplus is anticipated to be $582,656. Does this include the one-time cash influx from Sodexho? If so, what would our number look like without the Sodexho money?

 

The Sodexho money is not carried forward at the end of the year.  The surplus is real.

 

2. For 2010, we anticipate a current year deficit of $1,343,628. This is more than offset by all of the carry forwards from 2009 (if we ignore the sequestered deficit), but nonetheless, we expect an overall erosion of our financial position of $1.34 million owing to more current year expenditures than revenue. Is that correct?

 

No, because this is a $1.3M deficit for 2010 that includes our annual budget but it also includes $4.1M of sequestered debt that is still sitting out there.  This gets dumped into the 2010 budget area because there is nowhere to put it.  Period 14 will give us a more accurate look but weÕll need to get more information from Colleen.

 

3.  On top of that, we paid $700,000 in 2010 towards the sequestered deficit, which is why in the ÒUMM excluding sequestered deficitÓ column on the summary sheet, we anticipate a drop of $2.04 million from our beginning balance to our ending balance in 2010. Correct?

 

Need to get more information from Colleen.

 

Other questions:

 

1. What does the term ÒAgencyÓ mean in regards to our income and expenses?

 

Student organizations are defined as an agency if they carry budget amounts in university budgets.

 

2. Have past TIP charges or similar penalties contributed to the $4+ million sequestered deficit owed to central administration? If so, by how much?

 

The university has not reinstated TIP charges with EFS.  Before the phase out of CUFS, we probably did pay TIP charges.  That includes any account that has over $15,000 in dept.   We could get additional info from Colleen.

 

3. Other than the UMM endowment held at the U of MN foundation, are there other pools of money/ reserve funds that donÕt show up on the ÒReview of FY2009 year end balancesÓ and the ÒUMM preliminary budget for FY2010Ó lists?

 

No.

 

4. (related to 3). Does physical plant have major reserve funds other than the $272,000 general maintenance fund and the $540,000 utilities-reserve fund? Are those balances above our mandated minimums?

 

The balances are above our mandated minutes most likely because Period 13 did not hit the transfers. 

 

5. Does residential life have large reserve funds other than the $665,793 balance in one of the ÒRes Life AdministrationÓ funds?

 

ORL typically runs reserves from $1.7M to $500M depending on what they are doing with renovations, etc.

 

6. Will Òperiod 14Ó give us the final 2009 actuals? When? Would it be better for CRPC next year to look at the period 14 numbers rather than the more tentative period 13 numbers?

 

Yes.

 

Facilities

 

Lowell reported on the CARE renovation proposal as part of the concept of the post Gateway study of having a student one stop.  The plan is to start in the library storage room first and pending identification of budgets, work on additional areas next summer.  The projected cost for the initial project is approximately $100,000 and weÕll need to find an additional $100,000 before we finish the project.  The cost to draw up the plans was $12,000.  Lowell said the $112,000 would need to come out of reserves.   Motion to endorse the proposal by Brook, second by Sydney.  So moved.

 

Lowell said we are working diligently to get two additional wind turbines for this campus and we recently submitted our last round of negotiations to OtterTail on power purchase agreements, however, this has been a very difficult discussion.  Once we have the agreements, we are proposing one turbine behind the kiln on campus and one on the hill at WCROC.  Both will provide more power than the campus can use.  We will see approximately $50,000 revenue for the next 15 years.  The revenue should jump to $300,000 once they are paid for.  The proposal is going to the Regents in October with a final vote at the November meeting.  If all goes well, we hope to have the turbines arrive in January.