12/10/2015 8:03:27 AM JAC index 121015am1 University of Wyoming Agency 067 Chairman of the day: Co-Chairman Ross Richards: Roll Call Ross: Introductions -President McGinity, Bill Mai McGinity: Introductory remarks. Presidential Search, Current Biennium Accomplishments, Budget. Presidential search is going well. Trustee’s goal is to name the next leader on December 18. NLT July 1st to have the individual in place. Accomplishments: Fiscal and budgeting system receiving attention from us and you. Plan is advancing well. Engineering project is going along very well and has benefited greatly by the Dean Pishko. Science initiative, mandate from legislature, has advanced very well. Planning and programmatic; significant new science facilities. Governor’s initiative to improve graduates of college of education ties into the science initiative. Facilities: Enzi Stem Building is being occupied by departments. Classes will begin 2nd session. High Plains Facilities – Research into extraction of minerals. Work is revolutionizing minerals extraction around the world. Engineering Building related to engineering initiative – planning is going along well. Possible groundbreaking may be late in the calendar year. Vet lab –Constructions documents are well along. There are no appropriations for this project as funding is coming from the state risk pool. Legislative mandate to fix the transfer of credits from the junior colleges. 17 degree programs at UW that account for half of the transferees from the community colleges. 119 different degree programs need to be articulated, about 100 are done. Primary purpose is to enable a high school to see exactly in what order classes must be taken at community college followed by UW to get a bachelor’s degree in 4 years Athletics: Goal is to compete at highest levels in the mountain conference. Summary: We have come a long way in the last two years. It would not have been possible without the VP, staff, deans. A year ago at this time, we had 4 interim deans. In 2015 we hired business, education, engineering, x deans. 12/10/2015 8:16:42 AM McGinity: Budget. We think the Governor’s recommendations are fair. 5 M reduction in block grant. We will cope with that. We are looking at ways to be more efficient. VP’s and Deans are working more closely together than they have in the past 9 years I have been working at UW. We have work to do on the academic and administrative side of the house to respond to the state’s fiscal situation. Ross: Harshman: Student Housing Update McGinity: It is a significant need. We will talk in more detail as we go on. Burns: Is it finals time? McGinity: next week Burns: Capitol construction for arts center? McGinity: Completed, dedication in October and in use for this semester Ross: 12/10/2015 8:21:41 AM Mai: Page 19 – Standard budget reduction of $5 million biennial to the block grant. It does not impact SER, Tier 1 engineering appropriations. Ross: Why? Mai: Target set for overall budget reductions. Ross: Earlier budget cuts, the University was the only one who really did the 10% cut. You have not recovered and it has not been backfilled? Mai: We were part of the state pay raises. Two tuition increases of 4% each year. Lion’s share went to compensation to the faculty side. I think staff has been on the short side. AandI human resources evaluation of UW staff. We compared to state employees and we are significantly below market in some areas. $ given for recruitment and retention was huge for me. I don’t think we have enough resources for critical areas: IT, HR, Accounting. The front range takes most of the qualified people. Burkhart: Definition of staff? Mai: Anybody that is not an administrator or faculty. Stubson: Tuition increases. 4% for in-state and out-of-state? What is dollar amount? Mai: 1st 2% goes to academic affairs for mandatory raises associated with promotions. Funding challenges among the colleges. Arts and Sciences has new Dean who inherited a situation where in her budget was 3 M in the red. 1% of Tuition increase goes to academic affairs to address those issues. Yes the tuition increase applies to both in-state and out-of-state. Harshman: 100 section funds, historically, up or flat? Mai: 200 M GF appropriation by year into that section 1. We have tried to organize our data so it makes sense to other users, JAC and Governor’s office. In revamping we summarized the revenue streams. It is online. Section 1 is the operations of the university. Section 2 is everything else. We broke out into a section 3 which is the research enterprise. Dr. Gern VP of Research. Section 2 biggest chunk is student housing and dining. It also includes motor pool, bus transportation system which are largely self-funded. Burns: ? Mai: Physical plant falls into both budgets. Connolly: Where is foundation money in here? Mai: The majority is in section 2 – the revenue piece. Some foundation employees are in section 1. Ross: it needs to be fixed 12/10/2015 8:34:43 AM Burkhart: detail on section 3 Mai: Research enterprise, federal, state or private grants for research will flow through that. Some is federal student loans. Moniz: What is the revenue source for section 2? Mai: Primarily fees. Student fees to live in dorm and eat at dining hall, parking permit fees and specific student fees. Revenues from the University bookstore. Moniz: Federal grant money? Mai: Used to be lumped into section 2 but it is all in section 3 now Harshman: Federal mineral royalty fees? Mai: FMR under 200 M, x% Harshman: divided between section 1 and 2? Mai: Bond portion repayment flows through section 2. Harshman: You can pledge that FMR stream for bonding purposes? Mai: FMR stream and bonding capacity that goes along with it. It is in the high 90’s now. Biggest pieces committed now is for student housing. Life health safety. Perkins: page 10, section 2, FMR. Looks to be roughly half of mineral royalty streams. Other half? Mai: Reported submitted to JAC should correlate to page 10. Visual Arts, Downy Residence Hall, Half Acres performing hall, White resident hall. Other is in section 1, plant operations, Perkins: $ 7 is in section one, $6 in section 2? Mai: Another need for UW is property acquisition. Property north of Lewis street. We are hoping to spend the remainder of the money for Lewis street block for engineering building Perkins: may vary between section one and two? Mai: yes. Money freed up is primarily earmarked for property acquisition. Greear: accuracy of prices? Mai: our cut is based on the 2 M. It is steady 12/10/2015 8:44:10 AM Ross: Have we fixed the wireless problem? Mai: Section 1 piece of fees. GF dwarfs the tuition side. Harshman: Are we getting more research grants? Mai: You will see it more clearly. I think it is steady. I think 95M this year. Perkins: Do you trace the students receiving Hathaway? Mai: We do. We can provide reports. Perkins: a % Mai: 50% of the resident students Burkhart: Annual report that summarizes it. Is that report out? Report to legislature Mai: Report sent over last week, which summarizes Hathaway. Aylward: IT- wireless RFP just went out, will update system in the next few months. Burns: length of time to implement it . Aylward: Current system will be upgraded easily. Some requires new wiring so 4 – 5 months. 12/10/2015 8:50:57 AM Mai: compensation Ross: We have been just going through them Mai: page 19, priority 1, request for UW to be treated in the same manner as overall state employee compensation. Governor denied request. Greear: Creep due to insurance costs and salary increases in the past. Other agencies have been showing reduction. Rationale of $5 cut? Hibbard: Community colleges about same % as UW. 17 M std. budget cuts for other agencies. 2.3M in budget was savings, after salary increases. There are increases to the benefits package. Connolly: I am dept. head at UW. I declared a conflict last year, may do so this year. Priority 1 and 2 – Failure to give dollar amount to employee raises. Governor quote : No dollar amount given, no fiscal recommendation. Question of market pay. Staff salaries 17% below state salaries. Faculty in the x% range. Actual dollar figures? Mai: University’s rationale; 1% increase overall requires 2 M per year, biennial cost of 4M. Discussions with the governor – deferred to him but made it our number 1 priority. The political climate that we are sensitive to is that it is not just us but all state agencies. Hastert: $5 M off of block grant is a carve out? What does the cut mean for the university? Narrative talks about closing salary gaps. Regional gap. Reductions by Governor of 34M in several areas. Mai: The 5m$ reduction – direction and discussion with all of the Dean’s and main players about program prioritization, including the academic enterprise. I told the Deans we have other places to concentrate significant funding amounts so focus on where we can find $20M GF come from. Report submitted to legislature regarding market pay. Faculty side – 87 or 88% of market. Ross: That is 89% of the comparaters that we revamped and used in the audit. It is not across the nation? Jones: Correct. Information for land grant universities west of the Mississippi. Connolly: We are at about the 44%. Ross: correct – move to priority 2 Mai: There is a report on the recruitment and retention. VP Jones. On staff side, we are in scramble mode for fiscal, IT and HR. Jones: It worked as far as I know. Faculty not looking to leave UW Mai: salary discussion. We requested another 2 m for the biennium. Ross: You are only asking for 2M? Mai: 2 M is in the std. budget to pay for raises. 2 M requested for biennium to do 1M per year. Ross: go to staff? Mai: 60/40 split faculty/staff 12/10/2015 9:06:17 AM Mai: Priority 3 – Trustee John McKinley McKinley: I would like to go back to priority 1 and 2. A 1% salary increase across section 1 and 2 results in a 2M annualized cost, which becomes $6 Million for the biennium. Mai: a 1% salary increase in each year of the biennium McKinley: That will cause a $6M. Recommend continuation of retention and recruitment program Priority 3 – Inefficient system at UW. Original estimate of 15M for implementation of new system. New update is $30+M for new fiscal system. Funding: 1M recurring, 5M one-time. We would like to accelerate the implementation. Increase to 10.5M one time with 1M recurring . Block grants. 22M total. Leaves us 8M short. Come back for 3.5M. For that item we would request that the one- time $5 million would be increased. Greear: Question on figures. The recurring $1M is for staff and support, you are using it in this? Mai: Majority of $1M given last year was for consultant. Detail of the 30M. There is a component each year. Additional software licensing costs, some small personnel costs. The $1M figures into that. Consultants have worked quicker than expected to. Some complete system overhauls have cost over $60 M at some institutions. Systems that communicate with student data, grants data. It will tie this whole university together. HR component is a small cost. UW is a personnel intensive place. System needs to be comprehensive. 1st level is 23M occurring in 17-18. If we can allocate this money, 11.5 executive half, UW finding the other 11.5, that is the 23. Implementation begins in March. Greear: I understand the 1M was staff. How are we saving 8M towards the second level? Mai: 1M biennial. 3.5 GF from legislature side and our side, systems money. WE are factoring all the money into it, the one time and recurring. Harshman: You are asking for this $5M and an additional 5.5M. We all get concerned about large tech projects that pull everything together. Is this cutting edge? Buy modules and pull together? Mai: Correct. We selected consultants that have done this kind of work at other schools. Three viable options for systems. We have not decided yet. IT opinion is different from my opinion on the system. We have a woefully inadequate budgeting process. Accounting system in place by July of 17 then other components integrated over time. Harshman: Mai: Half a billion per year enterprise Harshman: The goal is to gain efficiencies. What is the cost savings? Mai: We are looking for efficiencies. Potential savings of 3 to 5 million per year of savings once fully implemented. More important is to have qualified people doing job with information needed. Fiscal people are highly sought after at UW. I pouched from the state budget office. We put advertisements for CPA’s for $35,000. CPA’s in Ft. Collins make twice that. We pouch from other staff on the campus. Significant component of $30 M is backfill. Stubson: How can we have confidence that you can find the money to get the project done? Mai: Critical changes. 1st I have been there for two year. We have funds set aside for reserve. I am talking about taking some of that money. Resident Life Dining Service reserve fund for emergency maintenance, disaster contingency, sewer line failure, broken pipes. Folks believe it is a necessary funding level. We have a risk management system. I think the bigger risk is with the finances. I want to tap some of those funds. 10.5 is seed money from legislature 2nd: Board of trustees that have prioritized this and back me. Ross: Will you start using the 10.5 or hold it? Mai: 10.5 per year and we want to start in March. Greear: If we just stuck with Governor recommendation of 5M, how does it impact? Mai: It would hurt a lot. The $5M hit is really a $20 M hit because we do not have money for projects we want to do. I sit on CREG and told people to brace for impact. Greear: if only $5 approved, time line impact? McKinley: It leaves us 5.5M to complete the project for this biennium which is the roll out. Greear: Do you cancel or postpone project? McKinley: Cut back on part of project and push it back. Burkhart: Total cost Mai: $30M over two bienniums Burkhart: When would system go obsolete? Mai: It would not. Going to cloud system Burkhart: 10 yr breakeven Mai: It is not about breakeven. It is about protection, doing things legally (efficiencies) Connolly: Cutting programs at the university. What will we cut to pay for this fiscal system? We will need to keep programs going to get students through the program Mai: Program prioritization – better spoken to by trustees. Savings from program elimination will not produce financial savings for several years, answered by the trustees. I am talking about all reserves, whether they are viewed as legitimate or not. The highest need right now for that money is this. I have spoken to Transpark and Resident Services about this need. Harshman: Number of programs. Time for evolution and reorganization. It would be helpful to see these reserve accounts. How many are out there? Same for the state. We watch and appropriate out of them. Mai: Less than 10, majority is concentrated in 4 or 5. Burns: Why did you only ask for $6? Mai: Consultants said it would take a year for evaluation. We thought we could not start implementation until 2016. They skipped an entire step. Burns: You know our finances better than we do. What do you want from each fund? Mai: The way it is broken out. We anticipate the $5M will get us started and carry us through the supplemental. No we do not have that time luxury. Received estimate this week Burns: WE have moe money now thatn we will in a year Mai: 10.5 M one time gets us through 17-18. 19-20 we come back for 3.5M Burns: one time from LISRA. 12/10/2015 9:49:10 AM McKinley: We are not looking at cutting majors or programs to fund the fiscal system. Preliminary discussions to begin process to determine if certain majors or programs are no longer viewed as necessary by the college, the faculty or the students. Update the programs and majors offered in addition to streamlining programs. UW policies must be followed. Looking for efficiencies within the progams or majors. Ex: Ag communication course, communication course within the business college. Connolly: Mai said two places would be coffee-can reserves and program elimination. Where is the money coming from? Cuts before, reduction now, fiscal situation. Mai: It is not $7M from the block grant. We laid out with the Deans the overall situation. As a University, you as Deans running the majority of this university, we have to work together. No talk of block grant cuts, specific college cuts. $10.5 coming from University will not happen by next year so the 10.5M from legislature is what funds it until July of 17. Connolly: Ability to implement over years in terms of modules. Can we get a module each year? McKinley: This is not a one-of-a kind specialty system. Parts of it are built unique to UW. It takes 4 years to implement this system. 10.5 through 17, the next 10.5 through the next year, then into the next biennium. If 5.5 is taken off, it postpones so it becomes longer than a 4 year roll out. Fiscal part up and running by 17 – the entire system 12/10/2015 9:57:17 AM Break. Nicholas: synopsis of what you laid out, Bill Mai Mai: I can leave a preliminary copy with you. By session start, will have a new Nicholas: Information from other schools Mai: Cost of system and ongoing? They did not give us that in writing. I will give you all documentation at this point. Nicholas: public info from other schools. 12/10/2015 9:59:45 AM Break.