Meeting Minutes
Meeting Minutes October 12, 2006
Members Present: John Frendreis, Cindy Gonya, William Honig, William Laird, Wayne Magdziarz, Tim McGuriman, David Slavsky
Resource Persons Present: Eugene Grotbeck, Thomas Kelly, Carolyn Wright, Thomas Hickey
UPC Governance:
A discussion was held around the recommendations from the Report of the Task Force on Shared Governance System Evaluation, the reconstitution of the Budget and Finance UPC committee, and the election of a new chair by committee members, excluding administrators. One additional staff and two student committee members are needed for a complete Budget and Finance UPC committee. Election of a chair will be held after new staff and student representatives are appointed to the committee by Staff Council and Unified Student Government respectively. Governance discussion will continue after governance rules are modified and accepted by the President.FY 2006 Results of Operations:
Eugene Grotbeck reported that the University received a clean opinion from Deloitte & Touche for this year’s audit. University Academic FY 2006 operating revenues in excess of operating expenses shows an operating surplus of $43.1 million. Non-operating revenues were $18.5 million and included investment earnings and insurance recoveries. Unrestricted assets also increased for: defined benefit pension accounting rules required the University to record a $25.3 million increase in net assets because of the plan’s improved financial position and new accounting rules required a decrease in net assets of $7.2 for recording potential asbestos removal costs. Temporarily restricted net assets increased by $19.4 million due to investment performance and gifts, and permanently restricted net assets increased by $4.2 million due to permanent endowment gifts. The total increase in net assets for the year ended June 30, 2006 was $103.2 million for a total of $570.3 million at June 30, 2006. This is a 22% increase in net assets since June 30, 2005.Bill Laird explained that the $43m results of operations was due to the University’s budget planning including financial policies, conservative budgeting and favorable operating variances (principally fringe benefits and vacant salary dollars). It is the University’s practice to invest unrestricted operating earnings in capital asset reserves, SSOM incentive savings, housing auxiliary operations, and the Rome Center. Additionally, the President has allocated the remaining operating surplus of $20.6 million to the following (dollars in thousands):
FY 2008 Budget Assumptions:
As part of the University’s participatory budget process, the operating and capital budget assumptions supporting our proposed tuition rate increases in FY 2008 were developed. More significant assumptions used in this determination for FY 2008 are:- 4% tuition and salary increases for Lakeshore Campuses; 3% tuition and salary increases for SSOM.
- Total fall 2008 enrollment of nearly 15,200, including new freshman of 2,100, undergraduate transfers of 650 and new SSOM(M.D.) students of 140.
- Tuition discount rates of 40% for freshman and 30% for transfers; overall discount rate of 36.96% is expected.
- Residence Hall increases of approximately 3.0% for traditional rooms except for Regis (6.6%) and Coffey (4.9%); apartment style rooms ranging from 5.2% to 8.2%.
- Basic meal plan increases of 4.0%.
- New investments for academic operations of $18.6 million and $.5 million for housing.
- Endowment effective spending of 3.3% with an assumed investment return of 8.5%.
- Capital expenditures budget of $55.8 million (mostly, Information Commons Building, Mundelein renovations, Santa Clara renovation and information systems).
Tom Hickey explained that a conservative FY 2007 budget is expected to produce an additional $10m at the end of the year, which includes $6m in salary savings and operating gifts reserves of $3.5m. A $24m result of operations from Lakeside in FY 2007 is forecasted. Tuition is expected to generate an additional $6m in revenue.
The preparation of the operations piece of the FY 2008 Budget is in process. 224 new students are expected to generate $21m in tuition revenue. The FY 2008 preliminary budget to support rates will be presented to the Board of Trustees in December and final budget approval from the Board will be requested in June, 2007.
Cindy Gonya reported that the SSOM FY 2008 budget includes a 3% tuition increase, 3% merit increase. While Stritch is expecting less grant funding this year, Bill advised that a fringe benefit rate for research grants and contracts will be lower than the budget amount for all other funds because of the over recovery of fringe benefits in FY 2006 that will be paid back to the federal government in the FY 2008 fringe benefit rate.
New Short Term Disability Benefit Under Discussion:
In preparation for a more detailed review by the UPC at a later date, Carolyn Wright of Human Resources provided an overview of the current short term disability benefit, a salary contingency for staff at the Director’s level and above, providing for 100% of salary for 6 months. Ms. Wright noted that the salary contingency is not currently a line item on the fringe benefits budget. The Budget and Finance UPC is being asked to review a plan to extend a short term disability benefit to all staff and faculty for a consistent benefit across the board. HR is currently benchmarking information from various other institutions, including AJCU schools and local LUC competitors. Most schools provide a benefit for salary continuance integrated with sick time.
There being no further business the meeting was adjourned.