MIami University Budget Forum 10/26/2015

MIami University Budget Forum 10/26/2015


PROVOST CALLAHAN: Remember that everything
we post online needs to be remediated, so we need to take care of that. But I think
we’ll make it available for individuals who ask. And before we start, I wanted Rob to
go through how this session will work because this is an open session of Senate, so he’s
going to summarize for us what the process is, what the governances are that regulate
this meeting. ROB: Ok, so some of you are familiar with it either as former guests or
in some cases former members of Senate. With the fact that we do have guests show up to
Senate meetings, what’s different about this one is we now have a larger room. These are
very spacious accommodations compared to our normal meeting place. There are a few items
of business to be taken care of at the beginning, and that’s going to be the approval of minutes,
receiving the consent calendar, and I believe we have a degree to approve. That will be
for elected and appointed senators only. I’m guessing it’s unlikely that any of you who
are not on Senate right now will want to comment on the minutes, but we will have those items
just for people currently in the room. When we move onto the discussion, we’re going to
anticipate questions. We’re going to try to take questions in as open a manner as possible.
Please be mindful there’s a high turnout, so we’re going to try to give everyone a chance
to ask questions as we move about the room. SENATE MEMBER: Good afternoon Senators, and
good afternoon guests. I’d like to take just a few minutes to highlight the Executive Committee
meeting on October 7th. The Executive Committee met on October 7th, and there were three things
that we did that I wanted to highlight. One is that we actually approved the final charge
to the Academic Policy Committee. The goal of the Academic Policy Committee is actually
to take a few minutes to consider the feasibility and implications of revising our Miami graduation
credit hour requirement from 128 to 120. During that Executive Committee meeting, we also
reviewed a draft of the charge to the Governance Committee, and the charge of the standing
committee, and we actually had Jim come to our October 19th meeting. And I’ll talk a
little bit about that in just a few minutes. One of the other things that we did on that
October 7th is that we also made committee appointments, and we’re still working on getting
those rosters filled. We also met on the 19th, and some of things that we talked about during
the Executive Committee meeting, we discussed how the Faculty Assembly works along with
the University Senate, and a number of options were proposed during that meeting for increasing
awareness to faculty about a clearer understanding of how the Faculty Assembly and University
Senate work together. Our goal is to increase the participation of faculty at future meetings
of the Faculty Assembly. We also reviewed the charge of the Governance Committee with
Jim Kipper, and, specifically, the Executive Committee would like the Governance Committee
to work with each standing committee in the Senate to examine activity, number of meetings,
work product and historic documentation of the committee, and actually benchmark our
committees with other institutions. You can find those minutes, Senators, on Attachment
D page 56 and Attachment E page 57. In terms of new business, there’s a proposed Bachelor
of Science in Applied Science with major in Applied Social Research, and Marianne Cotugno
is going to talk with us a little bit about that degree. MARIANNE COTUGNO: Thank you very
much for welcoming me back to Senate. I served here
for a number of years, and I know you do important work. So I appreciate being able to come to you to ask for your support. So, this is the
degree that we are seeking your support for. It’s a Bachelor of Science in Applied Social
Science with a major in Applied Social Research. So, what does an applied social researcher
do. Essentially, applied social researchers use quantitative and qualitative data to look
at complex social phenomena in both the public and the private sector. So, they can work
in health care. They can work in industry. They can work in business. They can work in
government. And they can work in education. Graduates of our program, you can see, hopefully
(I know there are many people in the back), but we have the student learning outcomes
for our major up here. We believe these leaning outcomes describe transferable skills that
graduates of our program will be able to use in a variety of professions. So why Applied
Social Research now? Well, first is that, and you may be aware of this, when we develop
a degree, it goes through a long and extensive process, and part of that process is speaking
with local leaders and community and government and business through our advisory boards,
and also through the work
that the development team does. And I can tell you that both the
advisory board, both in Middletown and Hamilton, were really excited about this particular
degree. When they looked at the degree and the skill that it provided, they felt that
this could speak to a regional market as well as a state market. A couple of things I want
to talk about specifically up here, there’s a lot of statistics, but if you see at the
top, it talks a little bit about growth areas in very large fields. There’s health care
for example, community and social services, etc. I also want to talk or mention more specifically
a particular area that is a high growth area both in Ohio (It’s one of the top ten growing
professions here in Ohio.), but also nationally. And that’s market research or social research,
survey research. Prior to my life in academia I worked for the Gallup organization for a
number of years. They’re a very well known market and public opinion research company.
This is the kind of degree that somebody who is interested in going into survey research
where there is market research and opinion research could complete and be employable.
In the Cincinnati Middletown metro area, there are more than 100 polling companies that are
here and looking for graduates. So we think that’s one area that might be a market for
these graduates. But generally, talking to employers, they’re interested in having graduates
who can look at a complex problem whether it’s in the public sector, in the private
sector, design research that helps to understand and provide new responses to that particular
problem, and then implement solutions. So we again see this as a degree that’s applicable
to many, many different areas. Also, it’s a degree that draws on our existing resources.
We have a variety of highly qualified social science researchers at the regional campuses.
You may be familiar with our Applied Research Center, which does a lot of very notable work
in the state. So, this is again a degree that we are drawing on existing resources at the
regional campuses. In terms of looking at the actual requirements for the degree, I’ll
just talk very briefly about the curriculum. There’s 27 to 29 hours of core courses in
Geography, in various social sciences, Statistics for example is required. It’s organized around
three seminars: ASO 201, 301, and 401. This is similar in structure to our Bachelor of
Integrated Studies program, which also has a series of three seminars. The idea of this,
again, is to give building blocks to these students as they proceed through the program,
to give them guidance from when they initially start in this degree to when they complete
this degree. There’s also a required internship or independent study experience. What our
our research found was that for graduates in this particular kind of field, they’re
much more employable if they’ve had that internship experience, and we think we can provide those
experiences, whether it’s through our Applied Research Center or through the other connections
we have in the community. And I’ll also mention just as a side note, this is a cutting edge
degree for this particular area of the state, southwest Ohio. If you were looking for similar
degrees, you’d have to go to University of Wisconsin Stout, Colorado State University
has a program like this online, or Hofstra University. So this is not a
degree that we feel that local students can get easily. They also have advanced electives, 15 hours, Anthropology, Black World Studies,
CIT, which is a department we have over at the regionals, English, Geography, Psychology,
and Sociology. And again, part of one of the goals of 201, 301, and 401 is to help student
think about how these electives work together in a coherent unit. I’ll also mention too
that the courses that we would be offering for this degree are courses that we are already
offering. So these are our courses that, I believe (with exception of a couple Anthropology
courses), these are course that we’re already enrolling students. So, I want to mention
again, the team members, as I said, this is a broad spectrum of faculty at the campus.
I am not a subject matter expert in this. I was essentially the facilitator for a very
hard working group of folks, so we have John Cinnamon from Anthropology. We have Byron
Miller from Sociology and Gerontology. We have Barb Oswald who’s here with me today
from Psychology. Liza Skryzhevska from Geography, who I know is a Senator here. I believe she
is unable to be here today, but she also worked on this degree. We have Bob Seufuert from
Sociology and Gerontology and, of course, the applied research center. I believe he
is here today. I haven’t seen him yet, so hopefully he’s here. And then we have Sree
Subedi from Sociology & Gerontology. So these are the team members that worked on the degree.
Again, it’s a long process. We’ve been working very hard on this. We’re happy to answer questions.
I’m joined today by Dean Michael Pratt as well as Associate Dean Cathy Bishop-Clark.
So with that, if there are questions, I’m happy to answer them, or defer to my more
knowledgable subject matter experts. Thank you. AUDIENCE MEMBER 1: This is great. I saw
it on the University Curriculum Committee, and I support it. But we had mentioned also
thinking about WGS and Gerontology classes as part of the degree, so, I’m just going
to comment, I hope that you take into consideration those suggestions that we made about a month
ago at that meeting. MARIANNE COTUGNO: Yes, we did. Thank you. Yes? AUDIENCE MEMBER 2:
And as long as your doing that, Latin American Studies would also be a good area to have
courses in. PROVOST CALLAHAN: This is Senate business, so for those of you that came in
late, we have an extended session here. This is Senate business, so Senators speak, Senators
vote, Senators comment, and then when we have the presentation, we’re open session. I’m
sorry, but we have to keep to the business as Senate. AUDIENCE MEMBER 1: I add Latin
American Studies to my comment. PROVOST CALLAHAN: That’s fine. MARIANNE COTUGNO: Alright, well,
thank you very much. I appreciate it. SENATE MEMBER: Ok, Senators, as you can see here
is the resolution here. “Be it hereby resolved that the University Senate adopt the proposed
degree Bachelor of Science degree in Applied Science with major in Applied Social Research,
College of Professional Studies and Applied Sciences. And furthermore, that the endorsement
by the University Senate of the proposed degree will be forwarded to the Miami University
Board of Trustees for consideration. Do I have a motion, Senators? Second? I’s Please The Is have it then. Senators, you’ve had the opportunity to read the consent calendar. Do I have a motion to
approve the consent calendar? Ok, this consent calendar is actually approved. Senators, you’ve
had the opportunity to read the University Senate minutes from the October 5th meeting
and its attachment A2. Can I have a motion to approve the minutes? The minutes have been
approved . There are no items of old business. We do, in fact, have a special report. And
I’d like to take just a few minutes to introduce our Provost Phyllis Callahan, Provost of Executive
Vice-President Academic Affairs and David Creamer, Vice-President for Finance and Business
Services, and they’ll talk a little bit about the University budget, University budget explained.
PROVOST CALLAHAN: I’ll remind anybody who came in late, this is being videotaped. We
will make it available in some way. We just have to be sure that it’s accessible before
we put it out publicly. SENATE MEMBER: In an effort to ensure that everyone is given
equal opportunity to ask questions while keeping the process moving forward, Rob will keep
track of who, and in what order, has requested time to speak. Senators and guests are asked
to keep their comments and questions to two minutes, and only speak to an individual issue
twice. PROVOST CALLAHAN: Ok, so while David’s getting mic’d, let me just say a couple words.
We are trying to get through some material on the University budget. There’s a lot of
information here, and we’d really like to get through at least this part of it. We are
happy to come back and do more, so we’re asking that you hold questions until the end. And
we’re going to make sure that we have questions at the end, even if we have to cut the presentation
short. This is organized in a way that we hope will give an overview, will address some
of the issues around faculty salary and faculty configuration, and we want to be sure that
we can share that with everyone and everyone has a chance to hear it. A lot of this came
out over the summer. I was collecting some data on faculty salaries for this semester.
At the same time, one of our members of Executive Committee was asking OIR for similar data,
so I asked to just wait and let us talk about what data Senators wanted. Executive Committee
can ask for whatever data they want. They can have whatever presentations they want.
There’s nothing to hide here. We’re happy to share the data. So, having said that, I
have our CFO with us, so that we can walk through this in a significant way and he will
provide a good number of the details. DAVID CREAMER: Good Afternoon! Can you hear me,
am I on? PROVOST CALLAHAN: Can everybody hear David in the back? Is he actually.. is it
on? CREAMER: Ok then I’m going to have to speak up which isn’t what I usually do so,
hopefully you’ll be able to hear me in the back. I apologize when I stood up I didn’t
realize how many people we had in the room. Thank you for being here. There we go. What
are going to cover today? We’re going to do just a very brief general budget overview
to give you a sense of some size and scale of the budget. The major budget of the university
is something we refer to as the E&G or, Education and General Budget. One of the significant
issues we want to cover here is what has changed and I’ll spend a good bit of time talking
about how different things are today versus what they looked like prior to, say the ’07,
’08, ’09 period. PROVOST CALLAHAN: Can I just interrupt for a minute, there are seats down
here, I don’t think these senators are coming. If you have a seat open next to you, would
you raise your hand? People, there are seats you can fill in. Ok, especially by the exit.
CREAMER: We have some that can’t even see the screen so.. PROVOST CALLAHAN: Come forward,
take a seat. There is a seat here, there’s three up here, there’s two on the side. CREAMER:
Thank you. We’re also going to spend some time very briefly on staffing. The Provost
will discuss faculty compensation and we’ve had a number of questions about employee benefits.
We have the issue of reserves that seems to generate a lot of conversation. I’m going
to try to cover that particular issue and hopefully explain some contradictions and
some of the terminology that gets used. And then, as the Provost indicated, our goal is
to leave time at the end so we can take as many questions today and also figure out what
other things we can do to be more open and sharing about the information on campus. So,
with that, one of the emphasis points, this particular discussion will focus almost exclusively
on the Oxford campus. We’ve already spoken to the Dean of the regional campuses about
how we could reach out to that audience with a presentation that is more specific to their
issues. What you have on the screen today, we have, what, in general for operating purposes
are three distinct budgets. We have what I mentioned which is the primary budget of the
university, what we call the E&G, which is the general budget. I do note that this general
budget includes something that some of you will be familiar with, that we call designated
funds. Designated funds are revenues that we dedicate to a particular department. The
biggest example of designated funds are course fees, so, a department that sets a course
fee, well, it’s a part of the overall E&G budget. It’s not centrally managed, it’s managed
by the department. Any funds that are unspent are retained by the department. Another major
component that is primarily the activities of what we have in E&G budget, is something
we refer to as the restricted budget. Two main areas make up the restricted budget.
Sponsored funds, so, any grants, contracts, state federal funds that come in fall into
this category. The sponsors of those grants dictate how those funds are used and any funds
that are left over from those, how those are to be employed. This also includes our fundraising
gift, endowment and other activities related to philanthropy at the university. Those funds,
again, are determined by the donors, how they’ll be used, unless the gift is unrestricted or
given some breadth to the institution about how those funds will be employed. A term that
some you may be familiar with, but probably most aren’t, what do we mean by our auxiliary
budget. We have several, what we think of as business enterprises on the campus. The
largest and most significant being our Housing and Dining program. Those operations generate
their own revenue and they operate within the budget that that revenue allows them to
accomplish. And the major issue that I’ve tried to note down here at the bottom, historically
we’ve always had a lot restrictions about anything going between these other sources
in here. Again, donor control.What we are increasingly now experienced because the legislature
for a number of years has restricted what we can do with tuition. We’re also finding
that we can’t do things between these budgets. Funds that come in for these purposes in general
need to be used for those purposes. We can’t raise room and board to get around the tuition
limitation so that we can do something with those room and board revenues. This gives
you a sense of where that budget is being spent for the entire institution. We tried
to summarize some of the things to give you a sense of what is more directly connected
to the academic or student functions of the institution. You’ll see that’s by and far
the largest portion of our overall spend. You’ll see that the next largest are again,
as noted earlier, is expenditures directly related to those auxiliary activities. It’s
broken into the plant. Institutional support – various ways of describing this that I’ve
heard in recent. These are where the activities that support the mission, but aren’t directly
related to the delivery of the mission. So, most of my functions fall in here. Finance,
accounting, human resources. We also have, in this area, the provost office, which, central
administrative operations fall into this category. We have things called the general fee a portion
of our tuition is dedicated to certain student activities and that’s what comprises the general
fee. That service is what it describes. We have debt, we issue bonds to do certain projects.
This is what is spent annually for debt service. Where does most of this come from? All but
$6 Million of this come from here. The primary source of funding for this is for residence
and dining halls. Today, I’m trying to remember the precise amount on our balance sheet this
year. But, we have about $620 million in debt. All but about $60 million relates to these
auxiliary activities. Primarily the residence and dining halls. I spoke a little about the
auxiliary operations, what I wanted to give you was some sense there are a number of activities
that are embedded in that auxiliary budget. This is a list of those. It’s intended to
give you some size and scale of where those monies are generated, as well as how they
are spent. By are large you can see the largest operation within that category is our residence
and dining hall programs. It makes up more than 2/3 of what we generate and spend related
to these activities. The next largest is the Shriver Center which is primarily the book
store, our catering, some of our other dining activities and that operation. And then we
get a lot of questions about intercollegiate athletics. I noted earlier that I didn’t mention,
that it makes up about 4% of our overall institutional spend. And what we try to do here was break
down how that spend gets funded. Intercollegiate athletics generates this portion in the red.The
rest of this is generated from the general fee and you can see we’ve heard a good bit
of conversation. The largest spend of our general fee is in regard to intercollegiate
athletics. But, we also broke down for you so you can see – functions that normally would
be in E&G budget are also embedded in intercollegiate athletics. This is for scholarships for those
athletes. This is for student support services related to their academic initiatives. The
amount that actually goes on the sport is this portion right here – the red plus this
blue area. About $11 million in general fee goes in support of the sports themselves within
intercollegiate athletics. That supports 18 sports – 11 Women’s and 7 Men’s. And as a
note, this entire budget is probably about a little less than a fourth of what OSU spends
on football alone. Obviously, they sustain those programs on their own, they generate
a huge amount of revenue. But, understand this is what we’re spending on 18 sports versus
four times that on a single sport. Where does most of our funding go when it comes to the
E&G part of the budget. Not surprisingly, when you thing of our institutions, we are
largely people and buildings. So, we spend the majority of our funds on salaries and
benefits. It takes about, for every one percent growth in our salaries, it takes about two
and a half million dollars. So, what has changed, and a lot has changed. This is what our budget
looks like for the current year how its proportionally broken out by the sources of revenue that
generate that budget. You can see, the vast majority of that comes from tuition. The point
that I tend to make over and over again in PEC and other conversations is, don’t be mislead
in this is the only thing that’s enrollment driven. If you go into this state appropriation
budget, over 90% of it is enrollment based. So, we’re very, very dependent upon enrollment
at the institution. When we look and compare ourselves nationally to public universities,
we’re going to be in the top 5 in regards to dependence on enrollment
and tuition. When we look at those private institutions of $100 million or more, more than half of them are less dependent on tuition and enrollment than we are. And that is one of the significant issues that we have been facing
and continue to have to deal with. So, did that picture look like that always? No. If
you go back into the 60’s and 70’s, the balance between tuition and state support was much more even. Ohio has always been a
high tuition state. I’ve been doing this for a long time. If you go back into the 60’s
and 70’s, Ohio has always been in the top ten states in regard to tuition. It’s just
been a value that has carried through the decades. This began to get a lot more significant
though following the FY91 year. This is a 25 year scan of what’s happened with what
we call our basic support for students. We get, occasionally, some other dollars. We
get capital appropriation that are restricted for that purpose. We occasionally get appropriations
specific to some activity on the campus. But, the portion that is available for that E&G budget is shown here. You can see
what’s happened since since 1991. We did pretty good. These two indexes running up here. Here’s
the Consumer Price Index, most of you are probably familiar with. There’s also Custom
Index for Higher Education, and that’s what that index is reflecting. This custom index
reflects the fact that our compensation is much more personal in
nature, human resource in nature, so, our costs tend to rise at a rate faster than the general market basket.
You can see what’s happened, we’ve seen a lot of volatility going clear back to ’91, these
dollars are not adjusted for inflation, these are nominal dollars. So, these are actual
dollars that came in. We were almost back here in FY12 to the amount we were appropriated
in 1991. The gap, as you can see as we’re going out here, continues to widen. And what
is pretty consistent with the state appropriation is that while it goes up, it almost will certainly
come down in the next negative economic cycle. If you look at most of the long term projections,
this volatility is going to continue to be there. We’re an aging state. There are economic
issues of aging states besides the cost of taking care of those aged persons. Our revenue
outlook for the state relative to its spending is not very positive. So, this trend is going
to continue where we may make improvements. We’ve been gradually bumping up but you can
see, we’re just about where we were a decade ago. That while we had the declines in here
we’ve had a more positive appropriation cycle for FY16, but also a cycle accompanied by
the fact that tuition was frozen. But, this has become almost a static source of funding
for the institution. In essence as I have noted here, over this 25 year period the average
rate of growth from here to here is less than 1% per year. So, how did the university fund
its budget if state support has not been a source of funding. This is what it looked
like from going from Fall 1996 to Fall 2006. Tuition went from $5,058 to $11,994 or, an
increase in almost 138%. That was the annualized rate of increase of 9% a year. What has happened
since the fall of 2006? We’ve grown by a total of 18.7%, which works out to less than 2%
per year. So, our growth in not only state support has been almost static but now we’re
seeing very modest change in tuition. Balancing budgets – I’ve been a CFO in this state since
1992 – this is how budgets were balanced. If we had an enrollment problem, tuition went
up. If the state cut our support, tuition went up. That is not the environment we are
in today. Affordability, if you read anything of what’s going on nationally, affordability
is the exclusive and primary issue that federal government as well as state governments are
trying to address. And we continue to receive mandates on how we can accomplish this type
of situation going forward. So if our revenue has slowed down from both state support and
tuition, because we had no growth in this decade for the state appropriation and very
modest grown for tuition then how was the budget balanced? Let me try to explain the
chart that has probably got too much information on it. So, what am I trying to convey here?
Let’s go back and look at was going on in this period of time here. We had very good
increasing demand for the university. You’re seeing the quality of our academic entrance
scores going up, sizes of classes were reasonably predictable, overall enrollment up until about
2002 was up – this was prior to, I believe, ’12 or ’13, our largest enrollment for undergraduate
enrollment at Miami was back in here. Very predictable. Kinds of situation in regard
to that enrollment. And then obviously we had the annual increases in tuition. You’ll
start to see more volatility in this period right here. This was a period in which we
moved to the single rate of tuition that used the non-resident tuition with combined scholarships
to effect enrollments here for Ohio residents. What we began to see in that period of time
was more volatility around the enrollment. The overall enrollment in this window of time
declined with the most negative impact going back to the fall of 2009. PROVOST: Can you
explain all the colors of all the bars? In state, out of of state.. CREAMER: Ok, thank
you. So, the provost reminded me that the instate enrollment is in this bluish shade,
the tan color is the non-resident enrollment, the green reflects our ACE – a portion of
our international enrollments. The black line is our major competitor in Ohio for selective
enrollments is Ohio State and it shows what happened in this window of time for their
ACT score, and this line reflects the ACT score for Miami University. Here’s where the
dramatic change began to occur, we’ve had two things occurring with both our enrollment.
Tuition now is rising much more slowly. How do we achieve our revenue targets? This is
the period of time in which we had the strategic priorities conversation on campus because
this is the issue we were trying to address. In a very slow revenue growth period, how
do we continue to manage your budget? Largely in this window of time it’s been managed through
unexpected enrollment growth. We had projected some enrollment growth in this period because
of changes we made, recognizing we were more enrollment driven we began to make significant
changes in our mission activity and as you’ll see in a minute, our scholarship approach.
The result was more demand than we expected that has helped to produce surplus revenues
that weren’t anticipated in this window. Without this we were on a trend that was unsustainable.
No growth, very slow growth in tuition, no growth in state support and declining enrollments
which would have made it difficult to sustain service levels that we’ve historically been
able to provide our students. So, what was another element of change in this element
of time? Not only has the rate of tuition been slowing but, our appropriation for scholarships
has dramatically increased. You can see in this window of time while we had risen to
while we had risen to only about $16 – $17 million in financial aid available to undergraduates.
We’ve grown that over 400% since 2007. Again, helping to meet the affordability expectations
we’re facing today, but also, helping us to better shape the nature of the classes that
we have been enrolling. And, to help us encourage the additional demand and enrollment that
we’ve experienced during, especially, this period of time right here. One of the questions
we often get is, well, instead of funding it this way, could we fund this additional
financial aid through endowments. And obviously that is one of the priorities that we want
to achieve. Unfortunately the magnitude and size of doing to that, to replicate what we
are doing here in 2016, would require an endowment that would be available for this purpose of
almost $1.6 billion. Part of what came out of out of the strategies priorities recommendations,
and even before them was, a faculty committee that looked at the way budgeting occurred
at the university and suggested that the old incremental budget approach, that is more
associated with a much more predictable revenue generation by the institution that we move
to something that some of you have probably come to understand as Responsibility Centered
Management or the RCM approach. Part of what this is intending to do is give you a sense
of how prioritization and control over resources has changed since back here. Here’s the level
of funding – the red reflects the academic colleges and the amount allocated in the budget
for their purposes. This reflects everything else, including any surplus revenues during
the year that were managed centrally. What has changed here is that both the proportion
because there has been more cost reduction down in this area, but also any surplus revenues.
So, as we have exceeded our enrollment targets, this year being a good example. The goal that
we set for admissions that we set for this class was 3,550. The actual enrollment was
3,806. All of that additional resource has been allocated into the academic colleges
and schools. Now, with that hasn’t just been revenue sources. There are also additional
expectations. They are much more accountable for the decisions here including their own
enrollment and their targets. The other piece that has come with this is that we have continuing
issues with academic facilities and space. We’re being under appropriated enough to keep
up with that. There is more and more responsibility for funding capital projects occurring in
this area as well. But, this is another significant shift in the way budgeting is done today,
is that in order to be closer to the decision makers that impact both faculty and student,
more and more control of the resources are located here. I think this is an issue that,
as we’ll talk a little bit later about the reserve question, is that I think there is
still some challenge with the deans and trying to absorb all this responsibility, understand
what the long term budget outlook looks like, and how to properly manage these additional
duties that they have. So, what are we paying attention to? One of the problems with becoming
more enrollment dependent, more dependent upon enrollment growth is enrollment growth
is not a sustainable approach. This chart tries to show you what we projected. The broad
asks us to project out regularly what we believe based on current trends our budget outlook
looks like. This is where we are today. Again, a larger class than expected, our expenditure
line is here, our revenue line is here. We are currently operating this year with a surplus
that will be allocated into the academic colleges and schools. But part of the problem is that
when we look at the trends, we’ve now looked and said that we’ll try to set enrollment
targets at 3,650, 44% not-resident. We know what is going on with recent tuition trends,
it’s frozen for resident tuition for the next year, but then we’ve assumed 1.75 rate of
increase which is what’s happened in the last decade. We looked at the recent trend and
our state appropriation built that into the model. We’re actually assuming no continuing
growth in the scholarships that are provided although that is probably optimistic. We’ve
looked at an ongoing salary increment pool with comparable growth in our benefits, but
with some increased spending credit hour faculty, as well as, market adjustments for associate
and full professors. When we run the model, this is the problem you have when we’re enrollment
dependent and have become accustomed in the last three or four years to enrollment growth,
is eventually the expense line begins to cross the revenue line. This is the very problem
I presented to strategic priorities. Our overall rate of increase in revenue from those traditional
sources of tuition and state support won’t keep up with the expense line that is outlined
here. So, we face the difficulties you do, we continue to grow. Do we look for alternatives
such as greater endowment and philanthropy support. But, we do still have this long term
problem. And this is affecting today’s decisions because we’re not anxious to make commitments
that only a few years out, we may not be able to fund. So, I’ve covered a lot, there is
still some more to come, but let me just recap some of the issues. We have three major parts
to the budget, again, the major issue there is the size, but also the difficulty of moving
funds between these three primary areas. When you look at our enrollment dependence on the
E&G budget it’s over 93%. This is affecting many decisions we make on what types of things
we need to be doing, how we fund scholarships and other issues associated with that enrollment
dependence. Significant growth in this period of time in amount of student financial aid
that’s improving our affordability for students, but also having impacts for our budget. 58%
of everything we do inside the university is tied directly to academics and student
support. 75% of what we spend in the E&G budget is on staff and faculty. And, when you look
at what we spend on intercollegiate athletics today in support of 18 sport – 11 women’s
and 7 men’s – 2% of our budget goes directly in support of those sports. We’re going to
move and we’re going to cover some additional issues that there is a lot of interest in.
I’m going to do this chart and then I’m going to ask the provost to take over. Here’s what’s
happening with staffing. Each fall, and we did this a little bit early, so, I always
worry when we take the snapshots out of sequence we might get some issues with the data. But,
typically each October 31st we take a snapshot to give us a sense of how staffing looks today.
This is back before many of the staffing changes occurred back in the fall of 2008. And you’ll
see the trends that have occurred since then. Obviously, with the growth in enrollment,
there has been a growth in the number of faculty. One of the issues that the provost is going
to address is that when we look at the mix, there is a decline in the number of tenure,
or tenure eligible faculty. Some of this relates to the difficulty of anytime we are in an
enrollment growth period – something that I’ve dealt with elsewhere but I don’t believe
Miami has ever experienced as much growth as they are in this recent period. But, there
is always a lag in filling these positions versus other more temporary ways of dealing
with that enrollment growth. And then we’ve seen a considerable reduction in non-instructional
staff. PROVOST: Ok, thanks. So, these are data that are provost website that I shared
at the opening of the administrators breakfast with the chairs and program directors. So,
I want to walk through it a little bit because I think it shows some important trends. So,
these are from 2004-2015. The red section of the bars are always the tenure/tenure eligible
sections. The blue sections of the bar, which are a little obscured by the numbers but you
can see the second piece of the bar, are lectures and clinical faculty. And the green section
of the bar are visitors. So, in 2004 before lectures were on campus, you can see the was
675 … 174 visitors. 2008-2009 major economic downtown. So, yes, that trend started to decrease.
659 went to 633, went to 599, went to 580. As we start to get a handle on where the economy
is, and the deans and I start to get a handle on how our budgets fall out and how our class
comes in. You start to see that come back up. So, from 2013-14, 12 additional tenure
track faculty from 14-15, 592 to 610. At the same time, the instructional capacity is what
I think a lot of the chairs and program directors need to pay attention to, and do pay attention
to in their conversation with the deans. And so, although there has been this decline in
tenure track faculty which we are now reversing, and are committed to reversing, you’ll note
that the permanent faculty numbers have increased, in large part due to the hiring of lecturers
and clinical faculty. As has the visiting assistant professors and visiting faculty
– full time visiting faculty – because they give flexibility to the chairs as they’re
trying to adjust to the differences in the demographics of the class. And so, when we
look at this – so this right now, we stand at 16.7% of total tenure line faculty are
in lecture or clinical faculty line. We do monitor that very carefully and 65% of the
total full time faculty are tenure/ tenure line faculty. So, our permanent faculty are
75% of our instructional full-time faculty. 75% of our full time faculty are in tenure/
tenure-track line or, in lecturers or clinical position. And again, as David pointed out,
one of the things, we date the date, I always date the – this is as of October 21st. If
you compare it to what’s on the provost website, it’s going to look a little bit differently
because this is a dynamic process. So, the other piece is salary – is the hiring plan,
the hires and the searches. This is to give you an idea of where we’re trending. This
was in 2012-13 again – the red are tenure / tenure track, the blue are lecturers / clinical
faculty – Oxford only. 20 – with 9 lecturers. Up to 32 in 13-14, 23 lecturers, clinical
facility – up to 42. In 14-15 up to 58, 15, 16 hires. Searches are currently at 43 for
tenure track and 7 for lecturers/ clinical faculty. And that changes somewhat throughout
the year as we go through the search process. But again, the trend is up. I want to go through
the salaries by rank – assistant professors, associate, full professors. These are all
IPED’s data. I wanted to be very careful to match the data from what we report to what’s
reported nationally. So, what is done here is the red bars are always Miami-Oxford salaries,
the rank is always here. The next bar are national, doctoral, public universities. Then
the blue bars are Ohio doctoral publics. And the the other dark bar at the end are the
Ohio 4-year publics. And you can see for assistant professors, Miami’s average salaries is actually
above all the other categories, because I think we’ve paid a lot of attention in hiring
assistant professors to be as competitive as we can be. And those of you who have been
chairs or are chairs or have been associate deans, you know that is something we really
try to make sure we bring in faculty at very competitive levels. And then this is with
benefits. Because the other piece to consider what kind of costs there are for benefits,
and again these are IPED’s data, same thing. And when you add our benefits to this, assistant
professors are well above the average for all other categories, and have been for a
while. These are the associate professor salaries, and i’ll remind yo now, associate professors
have had the benefit of two years of market adjustment, with a third year coming next
year. These data only report the impact of one year because the reporting cycle is always
a year behind. The other thing ill remind you is that we have increased the bump from
assistant to associate professor to $6,000, and from associate professor to full professor
to $9,000 to try to deal with any compression or inversion issues. So, again, when you look
at these salaries – 2005 – it’s the same scheme right. And what you can see is that Miami
is above other Ohio institutions, that $85,643 and the next highest one is $84,949 and when
you add benefits, again, associate professors are above. This is again, the impact of only
one year of that market adjust, we’ll see the impact of the second year next fall. The
professor salary is here, same arrangement. 2005, 2010, 2014. Our salaries for professors
lag behind, they absolutely do. We have one year of market adjust on here, in that one
year, average salaries for professors rose $4,700. So, we made an impact but obviously
we have to do more. This is with benefits. And when we add benefits, Miami is still above
the Ohio publics but, we have to do more and we’re in the midst of doing more. Second year
market adjustments been done, 3rd year is coming. So, this section we want to talk just
a bit we want to remind you we understand the employee share of healthcare premium has
increased. It’s increased to 19.7%. That average increase per employee amounts to $80 per month
withheld. That’s prior to tax calculations, so the actual out of pocket is reduced by
the employee’s tax rate. And this is consistent with the directive from the board of trustees
to increase premium to state-wide averages. And for those of you who were on senate at
the time you’ll recall that the benefits committee came to senate several times to talk about
the change of the cost of the benefits to align Miami with state-wide averages. And
this was also endorsed by strategic priorities. We reached the goal for employee benefits
so that we all are on par with the state-wide average. So, there is no increase in employee
contribution planned for the new benefit year that starts in January. And there are certain
other changes that have been implemented to try to offset the change in the cost of benefit.
And that includes reducing co-pay to 90/10, when certain providers are used and those
providers are available online through the benefits page. The benefits committee is continuing
to explore other cost reduction options for employees and the other thing – which I personally
like a lot – is the health centers available to employees for no cost, no co-pay or deductible.
You can go to the health center and get some care without cost. So, the recap here is that
we’re steadily increasing the tenure/ tenure-track faculty while keeping the L/CPL at less than
20% as mandated by senate resolution. The faculty salaries are above average at the
assistant professor rank, above average in Ohio at the associate professor rank, below
average at the professor rank – I’ll remind you again, this is the target of the market
adjust, associate and full professor ranked, to make those salaries more competitive. We’re
increasing faculty salaries across all ranks with the market adjust. Healthcare premium
is now consistent with state-wide averages. And to offset the increases, these are the
kinds of programs that have been implemented: The health center free, reduce the co-pay
for certain providers, and the benefits committee continuing to explore options. David’s going
to go through reserves. CREAMER: Right, and I believe this is our last section and we’ll
get to your questions which is where I know you want to get. One of the things that we
wanted to just stress here, and we’ll mention this, remember this is like your bank account
at home where your savings account is. So, we want to deal with some definitional issues
but, keep in mind that these are not necessarily able to be replicated each year. We do have
those balances that are available. So, if you want to, we just are finalizing, the state
has just ratified our balance sheet. These are the amounts that show up in something
that’s called “Net Assets”. This is the true term for what has been referenced as reserves.
This is an accounting term, it’s a balance sheet term for those who know a bit about
financial statements. This is the amount in three specific categories that we’re required
to report. So, we have something that is called unrestricted net assets – that really aligns
back with that E&G unrestricted budget as well as our auxiliaries. We have restricted
net assets – that aligns with those endowments, with restricted gifts, with sponsored funds
that we’ve received. And then there a component that is called Value of Buildings or investment
in plant. This is net of the amount that is associated with both the original value of
the building, less the depreciation, also less debts. You have to remember that up in
this category, debt is not offset in here. We may have a balance sheet that’s up here
and still have significant debt that is due by the university. So, this is what is at
June 30th, 2015. Part of the reason I stressed the fact that this is an accounting statement
– we don’t control the accounting rules. We have certain standards that the state requires
us to report under, they’re national standards. The state then sends auditors in to make sure
that we’re reporting under those. Here’s what happened with those categories back in ’07,
you’ll see as the provost mentioned this is a period of time that we faced financial issues.
We saw a $76.1 million dollar, almost 40% drop in that. I believe – I arrived here just
as this is occurring, I got here in June of 2008. There were a number of questions I remember
at a particular faculty forum about the overall drop in our net assets during that period
of time. What has happened since? If you looked at without accounting rule changes, this is
what it would have looked like today. Why is this big red bar in there now? we had an
accounting change, we are now required at the institutional level to reflect that portion
related to our employees that resides with the two retirement boards, the deficit that
they
have in funding their pension liability. So we’ve had about $270 million of what’s called
a liability come down here. Technically, if that hadn’t occurred, we would have seen those
net assets grow to about $480 million. So, if you’ve heard a reference about half of
a billion dollars, that reference without this, is actually correct. So, what makes
up this and why is there so much in regards to reserves. Well, here’s what the board,
I think of as our reserves. This is the amount that is there for those central emergencies.
This is the amount we use for economic stability in some sort of a crisis – about 2 months
of operating reserve to get through those issues. What happened to this back in that
period of time here? It went red. We had a $77 million it was only at $37 million at
that time so, we had technically a deficit in that area, that we have gradually been
regrowing because it’s served its purpose during that window but we can’t deal with
future issues if we can’t rebuild it. What else makes up what we call net assets? Several
years ago the board looked at the balances that were there and decided that would be
a better purpose to create a quasi-endowment. So, whenever you hear a report of our endowment,
I think it’s roughly $480 million now. $75 million of that was created by a board action
primarily for this purpose of supporting student scholarships. This does provide us additional
protection because the reality is the board could redirect that in some sort of a financial
crisis. But it’s intent was to say that these funds should be used for future purposes to
better serve our students. The one thing that I should also mention about this. We’re not
a corporation. Every dollar in here ends up in some way benefitting the university and
our students. They’re no distributions that are done for any other purpose. So every dollar
eventually is available there to be spent. Where this is what we think of as being primarily
our central funds and this is only roughly $140 million then where is the the other $340
million? Well, it’s broken up. In essence, one of the things I maintain – it’s almost
like a bank. We have funds that are out there in other units that we monitor, we track,
but those funds are largely are under the control in use of other parts of the institution.
Where are the primary area where those funds are located? Well, as a result of our new
budget approach, if there are any surpluses at the end of the year they’re being swept
up into the academic colleges and schools. As that’s occurring, they’re looking out long
term as to what types of needs they’ll have. I’ve noted in here – if you’ve looked at our
recent 6-year capital plan – it calls for the spending of $40 million in local funds
in order to execute that plan. That’s one of the areas. we also have ongoing classroom
improvements. We’ve started now for, I believe this is the third year, of setting aside $5
million each year that the deans must match that allow us to do classroom improvement
projects. Hopefully most have some experience with some of those improvements. In addition
to what is in the colleges and the schools at the dean level, there’s $17 million out
there in academic departments. A lot of this is related back to course fees, faculty start
up funds, other things that have been set aside there. The provost also retains an amount
that’s used at her discretion in conjunction with the deans to look at academic initiatives,
equipment needs, other things to invest in our academic programs. A portion of those
funds reside with the regional campuses – almost $35 million. We don’t allow other academic departments
to retain any salary vacancy that they have but, any other funds that they don’t spend
they retain that. We have associated with balances in non-academic departments about
$34 million. The board authorizes capital projects. Capital projects take anywhere from
12-24 months to accomplish. Projects then have funds that while they’ve been sitting
there, they’ve been committed, have not yet been spent. There’s been about $53 million
in that category. There’s also for possible facility emergency and other needs about $10
million sitting there that I manage for any particular unknown facility need that might
arise. The other besides the largest growth has occurred back in our academic departments.
But the second largest growth has occurred here with our auxiliary operations. Let me
spend just a few minutes before I wrap things up here. This has grown quite a bit. When
I arrived in 2008, we had a set of residence and dining halls that the average age since
any improvement had been made in those was 61 years. We had a number of issues with code
problems that, in today’s world, you couldn’t construct buildings of that nature and we
were rapidly heading towards a point where we were concerned that we could no longer
sustain those facilities and it takes years to make this size of an investment. We estimated
15-20 years to execute the plan. Normally what happens – those buildings initially were
built by the state in the 1950’s – anything that was built since then was based on student
fees. Typically when the debt on those students fees has been retired, you begin to reinvest
in those buildings.. That didn’t occur. The estimate when I got here, with the plan, which
calls for $900 million in spending with $7 million in the bank. That was unsustainable.
We had to revisit that plan and we’ve substantially revisited. That’s why you’re seeing buildings
renovated instead of new buildings being constructed. We had to construct some new buildings because
we need swing space. Otherwise, we would have to reduce enrollments because we didn’t have
any place to put the students while we were remodeling the existing facilities. There
were also some buildings that we were not going to be able to retain, it’s too costly
to improve them. We have taken on since then $475 million dollars of debt to help us accomplish
that. It won’t accomplish the entire project. We have gradually, because we’ve used the
debt to this point in time to make those improvements, we have tried to accumulate
monies because the next phase of this is $340 million and I have $109 million today. So
I have to still figure out how we’re going to close this particular gap. There are other
major needs. We’ve made a major commitment to get away from coal. You don’t do that without
an investment. One of the other things that these funds, we’ve got a $40 million investment
we still need to make to move away from coal and to move into more efficient, environmentally
sound types of approaches to heating and cooling our buildings. So, when you get done, if you
don’t back out that pension liability, here are the funds that we’re tracking for the
institution and how they’re being identified for the purposes that they will be used for.
So, to recap, one thing that I hope you will stress is that, while we have this category,
it allows us to look at our financial performance. It’s really not reserves. Many of these funds
are controlled by other units other than mine and the reality is, we have tried to always
make sure we have identified purposes. The other thing I’ll stress, we operate much like
we did back in ’08 and ’09 in a much more volatile period. We were much more susceptible
to enrollment declines today than we’ve ever been. We are susceptible to further reductions
in state support. We still have the need to continue to address the affordability issue.
Reserves are one time monies it’s for the bank account. That charted I showed that did
the future trend looks like. You can’t sustain spending off of your bank account for an indefinite
period. Much of the allocation, about 30% of those funds, resides in the academic divisions
of the university. One of the things that throughout here that I think is prevalent,
because of the ’08, ’09, ’10 period, everybody has become much more conservative in their
spending. More funds have been accumulated. I think the RCM budget approach. The deans
are still trying to grasp how much and how quickly can we commit funds. We’ve been in
this enrollment growth period that produced positive surpluses but there are also needs
to add faculty and positions in response to the additional enrollment growth. Finally,
I’m sorry. PROVOST: I do want to point out about your tables, you have these terms and
there will be other glossaries of terms. We want to be sure, these are government accounting
… board terms. Go ahead, sorry, go ahead. QUESTION: Yes, I was hoping we could go back
to the slide that showed the part time faculty. PROVOST: It doesn’t include part time it’s
all full time. Those data are all full time and there’s a reason for that, and that is
– and I’ll get those data to you as soon as I have them available. They’re all full time
visitors. So, everybody on that graph are full time faculty. The green bars, oh, ok,
so, that slide I need to take out because the IPED data, well there’s a reason. The
IPEDs data, people report in different ways. I have to determine if those are body counts
or FTE’s. So, before we make comparisons across universities, and across institutions, I need
to be sure that those comparisons are similar. Now, the one that we walked you through in red, blue and green, those are all, by definition, full time faculty. Universities report data in
different ways and I want to be sure that the data the we report are accurate. QUESTION:
Would you have some ballpark figures, without comparing to other institutions for example
– what percentage of faculty here is not only contingent full time, but contingent part
time – which would mean adjuncts paid on a per minute basis? PROVOST: I can’t answer
that directly but I can tell you this. That most divisions, a lot of our part time faculty,
I think are teaching one or two courses. In general, when a part timer gets to three courses
or twelve credit hours, so it could be four courses, which is the same load as our regional
campuses carry – then they are put, usually, on a full time line. QUESTION: What is the percentage
of salary that goes to these people? PROVOST: So you want to know what’s payout in vacancy?
QUESTION: I want to know what.. PROVOST: I’m sorry I’m saying I can’t answer that. I have
to get that data for you. Im happy to get it. I don’t have it right now. CREAMER: And
anything we don’t have today we will provide, we will share in any form you would like,
as well as we’re willing to come back in more depth on a particular issue. PROVOST: And
the part time issue is one. QUESTION: This is a budget talk, I don’t understand why it’s
not part of the budget. PROVOST: Well because there is a lot of parts to the budget and
a lot of components and we tried to give you as good.. CREAMER: We started out with sixty-some
slides that still didn’t cover everything. We didn’t want to spend all the time talking
at you. QUESTION: You didn’t talk at me, I was very much connected. PROVOST: Ok, so we
will do a part time, I will get that analysis for you. I want to be sure that those analyses
are accurate before we put them out. And I will be happy to do that. SENATE MEMBER: Ok,
for the sake of time let’s see, who is next? Behind [name]. QUESTION: I’m concerned that
when you showed the slide about … on benefits for premiums for insurance. That didn’t look
too bad. But, if you factor in the increase in copayments and other kinds of out of pocket
increases. I think that we all feel that we end up bearing much more of the burden of
our healthcare than we did ten years ago. CREAMER: And that’s absolutely true. QUESTION:
I’ve been hearing from people who, for one reason or another, are coming up against the
fact that there isn’t really an out of pocket maximum. Even when you use in network providers.
You still end up with some costs that you can never spend to a point where you’re no longer liable. I know
of a family that has apparently racked up thousands of dollars, $40,000 in medical expenses
this year that were not covered. And I don’t know the details about how much of that was
in the network or not. But when you consider that the hospital five minutes from my house
is more expensive to use than a hospital that is 30 minutes away – I think we have some
real serious concerns. PROVOST: So are you talking about the tiering of the providers
and that McCullough-Hyde is tier 2 and not in the 90/10 QUESTION: Exactly. And many of
us have run up against the problem of going to healthcare providers in network, but the
tests they order turn out not to be, or they can’t do a procedure because the hospital
is not in network or vice versa. So I think we really need to pay more attention to the
loop holes and the ways that we can fall into very bad financial trouble because of cost
you’re paying on insurance. PROVOST: Thank you for your question. QUESTION: Thank you
very much for the hard work that you have put into this presentation. I’m concerned
about the ratio of tenure line faculty to the non tenure line faculty. If I may digress
– a mathematician told me there is something called an imaginary number, it doesn’t show
up – and for us, the imaginary number is the quality of instruction. So, how does the increase
in non-tenure line and non permanent faculty benefit students overall quality of instruction?
PROVOST: So, I would say this. When visiting faculty are hired they are betted through
their department in most cases. Chairs are making recommendations. These are full time
almost all terminal degree faculty. And in fact, some of them are so good that many of
you have argued that they should be permanent faculty. We have recently started to try to
get around our own five year rule at the request of chairs by making appointments 75%-25% so
we can retain people. I think one of the issues we probably do need to discuss as a community
is what our faculty configuration needs to look like, in light of the fact that we need
to have flexibility. We need to have visitors because of the way a class comes in and where
they settle. I think chairs and deans always need to have that flexibility. My argument
would be that I think the quality of our faculty is very high. Including our visiting faculty
who, by and large I think, do a very good job. They’re evaluated annually by the chairs.
They are, you know we started giving them the – in most divisions I think this is true
– they get the increment pool that’s available to the rest of the faculty, it’s on vacancy
dollars, they’re not permanent positions. So, I think we would have to be careful about
jumping to the conclusion that because somebody is not on a permanent line, that they’re not
delivering quality instruction to a class. I would really want to examine that carefully
and I think that’s the job of the chairs and the directors in the programs as they evaluate
their own curriculum. QUESTION: Where as I completely agree with the need for flexibility;
I think the question is – if you are not on a tenure track, can you spend a great deal
of time, as you should, looking for other jobs? And that does take away. So, my question
is, I didn’t say that we shouldn’t have flexibility, the question is that the ratio of tenure track
to faculty. PROVOST: I completely agree, and I think what you saw was that we are trying
to go back to a time when we had a larger proportion in this tenure track. But
I don’t think we can deny the reality of the
economy that occurred in this country just 6-7 years ago. So I think, I can tell you
as the former dean of the College of Arts and Sciences and many of you chairs who are
sitting out in the audience, it was a frightening time. So, to commit resources to permanent
lines at a time when we weren’t really sure when what was going to happen, and we also
missed our class in 2009. So, we had several issues conflate at once that I think made
people take pause. And I think now, as David pointed out as there is more confidence in
the economy, as we have more confidence in our ability to attract and retain students,
you’re starting to see that trend go the other way. We got here incrementally, we got there
incrementally, right. We’re going to have to get back incrementally. And as we do that,
the ratio of the visiting faculty will shrink. But there will always be some, it’s just the
reality. QUESTION: Can I just ask a follow up, then I just have a follow up for Creamer.
On the issue of whether, the impact of the lifting of out of pocket maximums on benefits.
This is something that was brought up by many people in our preparation for this meeting,
and the impact of it. I assume that this is unintended and so I would request that the
faculty welfare and benefits committees of senate be asked by the executive committee
to examine this and bring a report to the senate. PROVOST: That’s fine. So, I want to
state this that you bring these kind of actions, let your executive committee know. That’s
all you have to do. Anyone who wants senate to look at something, you have representatives
who are senators, ask your senators to please do that and if you want to come to executive
committee, you can directly bring senate to executive committee or bring it to your senator.
We wanted to avoid having this at this talk so this is time for people to ask questions.
QUESTION: But Dr. Creamer, question. I appreciate your very detailed analyses, and I look forward
to seeing the slides up close because we can’t always see them. So, one of your trend lines
suggested that FY20 expenditures would outstrip revenues, according to some assumptions. CREAMER:
Assumptions, that’s right. QUESTION: If this is the case, and your recommendations are
important for the board of trustees, why in the June meeting of the Board of Trustees
we’re unrestricted quasi-endowment funds redirected for the funding of phase 2 of the Armstrong
Student Center to cover the $20 million that was not reached by the development, and why
is Shriver now going to receive an additional auditorium. In addition, why is the athletic
department salaries average, as presented in the June meeting in the Board of Trustees,
on average for the last 10 years, over 5% per year, as compared quantified as 4.7% for
staff, and 2.Something% for faculty. If we have one time monies, and we’re looking at
2020, then why was the choice made to redirect $20 million dollars to phase 2. Why isn’t
this put on hold? CREAMER: The phase 2 project is being funded in 2 components, and this was a part
of the original plan. There was a commitment to redirect dollars from the Rec Center fee
to the Armstrong Student Center. That was a major part of that because the debt on the
Rec Center was expiring in 1994 and that fee wasn’t eliminated, but a part of the agreement
that was reached with the student government, is that it would be redirected to allow for
financing to occur for a major portion of that second phase. The other part of that,
there’s $6 million that was targeted for fund raising as a part of that project. Of that
$6 million, I believe there was $1 million that was unrestricted gifts that the vice
president for advancement and the president determined that the most appropriate use of
that was for the second phase of the student center. I know that there are differences
of opinions of whether that was a priority or not. I will say that our enrollment strategies
have benefitted by that facility. It’s one of those things that was a high priority for
students, it continues to be a priority for students. The types of things, the career
offices that will be going in there are things that today, are difficult for students to
access but very critical to their outcomes following their time at Miami. But that is
a priority that the board has agreed in and the president and the vice president for advancement
had determined the most appropriate use of those funds. We continue to advocate for gifts
going into scholarships. I think that long term is the most important thing that we can
do. In regard to Shriver, there are multiple things going on in that building. The $20
million project is dealing with infrastructure and other issues. There’s also on the 3rd
floor, the Renella and Disabled Services offices will be relocated there because they don’t
have adequate space today. The lower level that is today a vacant dining facility will
be remodeled to serve as a welcome center primarily for prospective students. Like it
or not, trying to stress earlier on, 93% of that budget is dependent on our enrollment
and our success in doing that. We have made additional expenditures, increased budgets
in areas and admissions and made that a priority because we believe that, long term, that will
help us to sustain enrollments. If we sustain enrollments, we will be able to do other things
with the institution that are also critical. The salary issue is a very legitimate point.
I know the thinking that went in to those decisions between the board and the president.
When we began that period our athletic coaches in football and men’s and women’s basketball,
were at the bottom of the conference. During that period of time, much like we’re doing
with faculty salaries, when we identify a non competitive situation, resources tend
to get directed there. We are attempting to manage the athletic budget much like any other
budget and I tried to point out, as a percentage of what we spend at the institution, it’s
very small. If you look across the nation – University of Alabama Birmingham – just
attempted to eliminate intercollegiate athletics, I should say football. That decision lasted
two or three weeks because it’s still a major part of our institution, it’s a part of the
experience that students have here. We certainly have not done well, but it remains a commitment
on the part of the board, of others, that this, for the institution to be able to offer
an entire experience for students, it needs an intercollegiate athletic program. We need
to be responsible in the way we allocate resources for. And we need to set expectations for them. But it is an important part of the student experience. QUESTION: Thank you so much for
all your hard work. I know it’s not easy. I have one suggestion, actually there are nine
questions that my colleagues have listed, can I just ask, and I think Karen asked about
five of them, but that’s if they be read into the record. Oh, ok, I sent them to Stacy already.
PROVOST: You want them entered into senate minutes? QUESTION: Yeah, just for the sake
of time because I think, rather than speaking them out. I sent them to Stacy, I think it
just says that collegiate thing that’s important. I have two specific questions. The first one
is – I don’t want to open up a can of worms but I am concerned about the alternative retirement
plan and what is going on in there. CREAMER: And that’s a legitimate concern. QUESTION:
Ok, so, but I’m also – just from a moral and ethical standpoint – I do think we need to
tend to how we treat our part time faculty. And I understand why you have to be flexible
in the campaign and all the graphs and everything but, we are one of the best undergraduate
teaching institutions in the nation. I think we can do better by our part time faculty.
I think as a moral and pedagogical and ethical imperative, the university that we should
really be attending to that. So, I look forward to the further information that you give to
us on that issue. SENATE MEMBER: So was that a comment question? QUESTION: The question
was yeah the question was, the comment was about adjunct faculty. The motion or whatever
or recommendation was to read the nine questions into the minutes. And then, my question is,
what the “h” is going on with alternatives. PROVOST: Can we address alternatives, can
we do that at another session? QUESTION: Yes. PROVOST: Because I think it’s a different
topic and we’re happy to do another time. CREAMER: And we’ll provide information, we
need to do that university wide, but you have to remember, we’re not controlling the decisions
about that. QUESTIONS: So, I’d recommend that to the … CREAMER: But we do need to get
information out about it. SENATE MEMBER: Thank you. QUESTION: My question is pulled off my list
of questions. Since lecturers and clinical faculty are used a part of full time faculty
but all the discussion about comparing salaries between institutions and their faculties,
is there any interest in harmonizing? PROVOST: I’m in the midst of trying to do that. So,
one of the things that I really want to be careful about. QUESTION: Can we repeat the
question please? PROVOST: So the question was about all the data applied, the salary
data are for assistant, associates, and full professors. What about the salaries for lecturers
and clinical faculty? And I started to answer, for the process of doing that. I want to be
sure that the comparisons are the same because clinical faculty at different institutions
mean different things. And so, I need to understand what’s in each data base and get a reliable
data base. Or, at least understand what the comparisons are before. I can tell you that
on average at Miami our lecturers/ clinical faculty are now at about the $52-$55,000 range
– that varies across divisions but that’s an average across institutions. But I will
definitely organize these other data and I’m again happy to share them. QUESTION: I want
to thank you for the presentation as well, I know that’s a crazy amount of work there
as well. One thing though that I didn’t see details about in the slides are about is the
growth in numbers and salaries for administration and administrative budgets. I would also like
to know what is being done, and if you could work on your projections 15-20 years out for
faculty needed and students may or may not have what you’re projecting by way of needs
for future administrative supports in the terms of numbers and in the terms of cost.
PROVOST: Ok so, did everybody hear that? And let me make sure, I want to repeat it. So
it’s interest in understanding the projections related to the growth in the number of salaries
for administrative costs. QUESTION: I’d also like to see the history of the growth and
the number of positions, we have a lot of vice presidents now that we didn’t use to
have. And I’d also like to see their growth in the salaries compared to faculty and staff.
That would be a nice slide. PROVOST: OK. [LAUGHTER] PROVOST: Nothing to hide here. Other questions?
QUESTION: I’d just like to pursue a little further the issue of the university’s thinking
about expenditures on health plans. PROVOST: Can you speak up a little bit I’m sorry. QUESTION:
I’d like to get some more information on the university’s thinking on expenditures on the
health plans. There’s a slide which talked about wanting, or projecting that, expenditures
on benefits would grow no faster than salary expenditures, I believe. CREAMER: That was
the assumption built into there. QUESTION: That was tying to that’s a hopefully optimistic
view that there be pre descending year increase in salary, while medical and healthcare cost
inflation under the most optimistic estimates certainly be more than previous years. So
what you’re saying there basically is pertains some kind of continue cause shifting, cuts,
something has to happen. CREAMER: And, I think part of what get’s lost in here is the benefits
committee that, the benefits committee and senate spends a good bit of time looking at
these issues. Let me just observe a few things. And so we built assumption. We tried to be
somewhat optimistic because we have maintained that the last few years through some cause
shifting. The cause shifting is not a long term strategy that the benefits committee
is looking at. There will be some natural cause shifting because if the share for faculty
and staff is 20%, if the overall cost of our benefits rise, that share will rise – not
in percentage but in dollars contributed. So what are the strategies long term and there’s
one other limitation we have today, I don’t think it’s well understood. We are precluded by
2018 when the healthcare law requires a penalty tax for what they call cadillac plans, I guess
nobody in the room would agree what they have determined to be a cadillac plan. But that’s
the requirement. The law says that we cannot pay that tax. That is one of the restrictions
we are under as we go in to that process. So we have to figure out how to manage this
both in the healthcare law as well as what the state is saying we can and can’t do. Are
the strategies playing out in the benefits committee is probably to do, what I heard,
what is not acceptable. Looking at high performance providers and creating incentives for the
use of high performance providers. One of the very strange things about healthcare is
that the best care occurs at the institutions. Those providers that are also the most efficient.
And so I would expect one of the things that the committee is looking at today is creating
incentives to using those more efficient providers. While I understand the convenience of McCullough-Hyde,
and I’ve had several conversations with Tri-Health about some of our benefit policies that have
come out of the benefits committee. The reality is, many of those services are three times
the cost of what we can get in the Cincinnati area for something similar. There is restriction.
If you’re going to be 20% of this cost, the reality is if we’re doing things that drive
that up further, your share is going to rise as well and we will be forced into more situations
where dollars can’t go into salaries because they’re going into our benefits bin. Can we
make that work? Your concerns are very legitimate. This is a really challenging issue for the
country as well as for organizations but the benefits committee has really spent a lot
of time trying to map out strategies that will allow us to preserve, in some ways – if
you choose the right providers, to improve, reduce the out of pocket cost that goes with
it. But this is an ongoing issue that we’re going to have to wrestle with and I wish I
had better answers today. QUESTION: Mine is very simple, don’t go to Cincinnati because
my healthcare will not recognize any of UC’s doctors, I had to change all of my providers.
So, I don’t think it’s going to be any better for incentives. SENATE MEMBER: There’s a question
I think. QUESTION: When you compared the Miami faculty salaries to other universities, what
benefits do we get that other do not get? PROVOST: I believe it’s our contribution to benefits, it’s higher, it’s greater. So, I believe that’s what it is. I’ll check on that exactly because I don’t have. I’d have to
look at the… CREAMER: And part of that depends on what the cost of the healthcare spend is.
That’s the greatest variable in there because we’re fully self insured so the cost that
goes through that benefit rate is what we’re actually incurring. QUESTION: Could you please
share if there are any guidelines that the department chairs of deans have in hiring
part time faculty and whether or not the standard in the past has been at least to have a masters
degree but, I think that has shifted. PROVOST: We’ll there’s always, you’re supposed to have
the degree above the level at which you’re teaching. Or, some kind of comparable experience.
In fact, we just had a discussion, are there any deans here? We just had a discussion in
co-ed and we’re putting together guidelines now for chairs. Because today it’s always
been – the chair makes a recommendation to the dean, the dean reviews it, and we’ve always
thought that that’s best happening at the local level. But, because there is disparity
across the divisions we’re trying to set guidelines. It’s always been the case, you’re supposed
to have the degree above the level that you’re teaching in. So we do have clinically licensed
faculty with a tremendous amount of experience, including professional experience, I’m looking
at Steve M. Because you take a field like architecture, the practice of that field is
extraordinarily valuable. So, somebody with a bachelor’s degree we might have approval
for. But, we are writing up guidelines. QUESTION: Yes. I want to sort of reiterate my colleagues
appreciation for all the hard work and the detail that you put into this. It is greatly
appreciated. Since the requests to include the questions that were submitted into the
minute. I would like to make a motion at this point, that the executive committee of the
senate charge the appropriate committees to investigate the issues raised in those questions
and to report there conclusions to the senate and the board of trustees. ROB: We’re outside
of new business, we’re in a presentation, we’re outside of new business. PROVOST: Just
do it at the next set meeting. ROB: Yes. QUESTION: I’m sorry I couldn’t hear you PROVOST: Ok
so Charles D. was making a motion to charge executive committee with investigating these
issues and report back to senate. We’re outside of senate.. ROB: New business. PROVOST: New
business. Just bring it to the next senate meeting and make the same motion and we’ll
vote on it with the senators and we can do it from there. Ok? QUESTION: I have a general
question and then a couple of quite specific questions. And thank you so much for doing
this, I hope that we can do this every year, much appreciated. I wanted to ask about the
methods… I know you worked with fiscal priorities committee and I’m curious about what method
fiscal priorities committee has established for finding out about faculty and students
priorities on financial issues at the university. CREAMER: The attempt to do that through PROVOST:
Sorry David. So the question was, what does fiscal priorities committee do to ensure that
they’re hearing the concerns of faculty and students as they work with administration.
Is that correct? QUESTION: Yes. CREAMER: And part of what they do is they schedule persons
to come in and speak. Now to make up the committee’s partially they do that. There are two student
members, a graduate and an undergraduate student there to help ensure that those issues are
there. Obviously the dominance of faculty in the make up of the committee is another
part to ensure that faculty voices are there. But then, they determine who they will ask
come in and present on a particular issue. So, each year, inter athletics is an issue.
They have presentations from the athletic director on, so they can probe more deeply
in regard to that particular budget. Regional campuses have been an issue that they have
tried to follow and Dean Pratt has presented each year in regard to his information. The
deans typically report. There will be student presentations on particular topics that are
of interest. QUESTION: Would you say that the input of fiscal priorities committee has
a significant impact on final budget recommendations. CREAMER: We consult with them throughout the
year. One of the things that you have to understand about the new budget model – most of the determinations
are actually made out in those academic units. The only thing that is recommended today,
if there is a change in what is allocated for the administrative purposes. And so, that
will go through the fiscal priorities committees as well. As we have what we call an RCM committee
that’s made up of representatives from each of the academic colleges and schools to make
sure that there is consideration of what it is that’s being proposed as a change. QUESTION:
Thank you, I have a couple questions about.. SENATE MEMBER: You’re at the limit, we said
just two. Sorry. PROVOST: I think [name] was next. QUESTION: Just a quick comment, I never
thought that we would see the day that the University of Alabama football team be mentioned
in the same context as Miami. [Chuckles] CREAMER: It’s a big difference. QUESTION: Were all
the slides nominal or real dollars? I just wanted to.. CREAMER: They were nominal. QUESTION:
All of them? CREAMER: All of them . QUESTION: Ok, thank you. CREAMER: We did put the, as
you saw, there were, to give some context and what trends there were some comparisons
to other changes but they’re all in nominal dollars. QUESTION: I know there’s this kind
of national trend in scholarships, but there’s been a shift in the scholarships for merit,
in a sense for producing more revenue, but discounting tuition for out of state students.
So, I’m wondering in that statistic, the 400% increase that you also have statistics on,
how much has shifted therefore, there has to be .. merit based scholarships.
CREAMER: And merit based aid has gone up here. This last year we made a specific new commitment
to need based aid. But we can get the data and. PROVOST: The question was about the scholarship
dollars for merit scholarships versus need based scholarships. And you want some comparison
through relative amount, or relative ratio? QUESTION: The relative ratio and whether need
based has gone down. Because I know that scholarships are now in use to generate revenue by bringing
you more out of state. It seems that a lot of institutions have some data on how the
scholarships get here. PROVOST: Sure. SENATE MEMBER: Yes. Yes, you. QUESTION: The category
that you emphasized the most was instruction and other activities. Now i’d like to know
what “other activities” are. I understand what instruction is but it would be helpful
maybe if we could get a more detailed breakdown at some point in the future what other activities
are. CREAMER: If you would like. The question was in regard to how do we provide additional
information about where the budget is spent? If you go to the budgets office website, there
is a set of detailed charts and data there, exactly what every unit is allocated. PROVOST:
Might I just offer that you know, you think about support units right? So the Howe Writing
Center, the Honors program, e-Learning. You think about those areas that are not providing
classroom directly, but they’re providing a kind of academic support and infrastructure
for academic equality that the university has to support. And those are not in-classroom
dollars but, they’re dollars that provide support for the academic mission. QUESTION:
The only thing that is related to that, when we count full-time faculty and tenure-track
faculty. Are we counting people who are doing administrative work example, for example,
are you counted as.. PROVOST: No. No, in fact thank you [name] is sitting right next to
you, she provided the data. Yeah, we tried to be as clean as possible with comparisons
because you have to have clean data. So, we tried to, and it’s actually pretty difficult
to do when you look at national data sources because universities don’t all report the
same. So, I tried to be as clear and consistent as possible. If they were in administrative
roles they were not counted in the faculty ranks. QUESTION: There are 34 tenure administrators.
SENATE MEMBER: Any other questions. QUESTION: One more question. PROVOST: Student! QUESTION:
Yes. Do you ever break it down by college or even by division by the face to face faculty
to student ratio. Because I’m assuming some divisions are operating in the red and some
of them are in the black. Is that true, are there some in the red and some in the black?
And if so, do you put emphasis, I mean, seeing that expenses are going up, do you pressure
those divisions that aren’t operating effectively, more so to make that balance? PROVOST: Can
I answer this one? CREAMER: Go ahead. PROVOST: I would really like to answer this question.
So, the question was about, are there units that don’t make money? Yes, there are units
that don’t make money. And as a university, we accept that there are, and will be, units
that don’t make money. And there’s a process embedded in the RCM model, it’s called subvention.
And what it does, is it’s set at the beginning of the implementation, and here you can correct
me if I say anything wrong. What it does, is at the beginning of the implementation,
it set every body at zero. So that if you were a division that is not “making money”,
we said, we’re going to subvent you. We’re going to take money from that revenue, we’re
going to take revenue from the academic units that are making additional revenue and we’re
going to make everybody even. And then from there, we all start at the same level playing
ground. So that, yes, there are individual. If you give, it doesn’t work at and individual
department program level. It can’t. And so, that’s one of the reasons why these kinds
of discussions are so important. We have an academic mission primarily. We area an academic
research university and so, we want to make sure that quality is maintained. And we use
our revenues, hopefully, in the most effective and productive ways we possible can. So, that’s
my little schpeal. I always want to remind everybody about that. We want to focus on
our academic quality and I think we’re making decisions and we’re trying to make choices
to ensure financial security but also our primarily goal. Which is always academic quality.
So now, add whatever I left out. CREAMER: You did great. The only other part there,
we do have student-faculty ratios by different parts of the institution. PROVOST: And we
can get whatever you want. I mean, honestly these data can put together data. The executive
committee is a good avenue to direct this. QUESTION: This is kind of related. For the
salaries, for assistant, associate and full that we’re comparing to other Ohio institutions
and national averages. Is it possible to get that breakdown by college. Because there’s
a little bit of a sticker shock for someone in CAS. Nobody I know is making that. PROVOST:
Right. So, I absolutely have it for Miami. I’m not sure I can get the comparison. So,
we can get it by divisions. We can get it by cognate area. We can get it by department.
Our own data, our internal data we can get. It’s when we try to make comparisons. So,
in some departments, what faculty have done is; some areas have very good national data
for their fields. So, I know psychology for example, APA puts out annual reports on their
own sort of, “state of the profession”, and then by clinical psychology, behavioral..
They give that kind of data. If we have that data out in departments or in your professional
society provides it, that would be really helpful to share. SENATE MEMBER: We’ll take
on more question. QUESTION: I have a question about the really big red portion of the, almost
half a billion dollars. So those reserves were for this year, that’s what we have in
the bank right now right, like $475 million or whatever. The pension liability, the reduction
for pension liability, is that for this year, we’re going to shove out $275 million this
year? Over how long of a period are we talking? CREAMER: Those are set over a 30 year window.
The amount that’s not there today is reflected in that entire liability. But the current
portion of it is not going to come today. That’s the reason why it’s much taller. Because
we really believe we could spend the full $485 million that is available. QUESTION:
And we’re also guessing that we would remain flat, that we wouldn’t have any more money
going into reserves in that period of time. I’m just confused about, you know, if it’s
30 years versus just what we have in the bank right now. CREAMER: That number will continue
to change. PROVOST: So your question is, we have that $275 million- $285 million red part
of the bar that’s the pension liability, over what period of time is that. QUESTION: Are
we going to be reliant on that. PROVOST: The liability over what period of time QUESTION:
Because from the slide it looked as if we were liable for it. PROVOST: Ok. CREAMER:
And technically the liability exists today. The payout of that could only occur over a
very long period of time. Because the shortfall would occur as people are retiring. The hope
that that will never be an expectation of the institution but, we’re required to show
it even though it’s unlikely that we’re going to have to make that payment in that form.
However, if the state could shift and say that responsibility is ours and that we would
have to annually make up an amount that would allow that to be eliminated over time. QUESTION:
I have an off the.. SENATE MEMBER: Well it’s going late. QUESTION: Ok but I have two questions
don’t I? SENATE MEMBER: Ok. QUESTION: Ok so, about the 400% rise in scholarships and financial
aid, that figure really surprised me and I’m curios as to where it comes from. Because
when I look at the financial statements there’s a line for financial aid and scholarships
and for 2009 it said about $17 million and for 2012 about $22 million. This year about
$17 million so what, how come.. CREAMER: You have to, there and again we get caught into
accounting rules. If you go up to the tuition number, you’re going to see a number in there
that’s reduction for aid. Certain types of student aid get directly offset against student
tuition. You have to add those two numbers together. So if you go to the budget.. QUESTION:
So you’re talking about a discounted tuition. CREAMER: That’s right. QUESTION: Which is
not a number, so if the student hadn’t received the discount then they would be paying that
larger number, but it’s not actually money that we’re paying out of our expenses? CREAMER:
We’re reducing the amount of tuition that we receive from that student. QUESTION: We
get less tuition and we’re counting that as an expense. CREAMER: But the same thing is
true of a scholarship. What we’re doing is taking less money because that scholarship
gets directly offset against the bill that that student has. It’s just that accounting
rules. QUESTION: It’s also a discount isn’t
it it to attract the students to come here..
CREAMER: It’s a part of the packages. They decide on how much aid they’re receiving in
comparison to other institutions. Whether we are more attractive. There are other options.
QUESTION: So, just to be clear. We spent $4 million less on scholarships and financial
aid technically this year than we did last year. According to the the financial statement.
CREAMER: I can’t believe that’s true. So, I’ll have to.. QUESTION: I just looked at
the financial statement. CREAMER: If you could email me the question I’ll actually pull the
pages out and send it to you because our aid has been on this growth and, it depends a
lot on the size of the incoming class. QUESTION: Thank you. SENATE MEMBER: Well I’d like to
thank everybody for coming. I’m sure that the Provost.. PROVOST: Thank you very much.
I just want to say one last thing. If there are things that you want to hear from us,
from David, David S., from out intercollegiate athletic director, from Michael K. our enrollment
VP, you have a process through your senators to bring it to executive committee, please
do so. I think this is great that we shared this information and hear your questions. And
we are more than happy to do it. We do need time to prepare information but we’re happy
to share it. SENATE MEMBER: Thank you all. Senators we need a formal motion. PROVOST:
Senators wait! SENATE MEMBER: Senators wait. We’re doing senate business. We’re done so,
we’ll have to make a motion to.. whoa, whoa, whoa, excuse me ma’am, ma’am, excuse me, excuse
me ma’am. We can’t entertain individuals now. Ok senators, I need a motion for adjournment.
CROWD: Motion. SENATE MEMBER: Ok, can I have second. CROWD: Second. SENATE MEMBER: Ok can
I have a vote? CROWD: I!

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