EXECUTIVE COMMITTEE MINUTES

Present: Aguilar, Bender, Bryant, Humes, Latta, Scheideler, Siekman, Zorn

Absent: Bender, Ford, Mayo, Miller, Prochaska-Cue,Whitt

Date: Wednesday, June 23, 1999

Location: 116 Varner Hall

______________________________________________________________________________

1.0 Call to Order (Latta)

Latta called the meeting to order at 2:32 PM.

2.0 Announcements

2.1 Campus Master Plan

Latta stated that she has suggested to the Chancellor and John Benson that there be an open forum for Senators and other faculty, on the campus master plan. She announced that she and Scheideler will be meeting with the Chancellor to discuss this further.

2.2 Freshmen Year Experience Task Force Report

Latta announced that she has received a copy of the Freshmen Year Experience Task Force Report and that a copy of the recommendations section of the report will be distributed to the Executive Committee. The complete report will be kept in the Senate office.

2.3 Parking Plans

Latta reported that she is receiving feedback from faculty that they do not want the first parking garage erected until all other options have been explored. Humes asked about the length of the bond to build the first garage? Latta stated that it is unclear at this time but that discussions were continuing on the parking plan.

2.4 Diversity Plan Report

Latta reported that she received a draft copy of the Affirmative Action and Diversity's Office report on the recommendations made by the Office of Civil Rights and that additional revisions were to be made before it is finalized.

3.0 Lee Jones, Executive Vice President & Provost

3.1 NU Budget Process

Latta thanked Executive Vice President Jones for meeting with the Executive Committee and asked him to explain the budget and planning process at the Central Administration level. Jones stated that the budgeting and planning process is a two year process. He noted that discussions will begin again this fall and will involve the Board of Regents. He stated that at one of the monthly President's Council meetings, the Chancellors will be asked to begin thinking about identifying what the priorities are for each of their campuses. He pointed out that they will talk about two or three different aspects, such as salaries and where we are with them in comparison with our peer institutions and what strategies we need to take to improve them. Jones stated that they then look at what are the campus priorities. Scheideler asked if any guidance is given to the Chancellors on how to determine the priorities for each campus? Jones stated that to his knowledge the priorities are all tied to a campus plan. Scheideler noted that IANR does strategic planning for five years rather than two. Jones stated that most campuses make long range plans. He pointed out that plans should be changed periodically since things are not static. He noted that they have opted to provide an overarching general framework document of the entire university rather than each individual campus to the Board of Regents for approval. He stated that this overarching document is drawn from the campus plans which may or may not be modified this fall. Jones stated that next they compile the list of priorities from the campuses and then they work with the President's Council and the Board to come back with a plan that the Board can support. He noted that for the most recently approved budget, President Smith had discussions with members of the Appropriations Committee and the Governor to determine what aspects of the budget were likely to have the strongest support. It was determined by President Smith and others at Central Administration that the legislature favored the core support (salaries, inflation, new building openings) with the understanding that the University would attempt to find other or new resources to support the programmatic side of the budget. He noted that the President's Council agreed to focus on the core support for the budget request but with the understanding that resources would be found to support the academic initiatives. He pointed out that even with paring down the budget, it was still too large and that they needed to ask the Board to approve a tuition increase in advance rather than to wait until after the legislature had given us an appropriation and then go to the Board for a tuition increase. He stated that the Board approved a 5 ½ % tuition increase. He pointed out that 1 ½ % of this tuition has to be set aside to pay off the bond for the deferred maintenance. He noted that this helped to reduce the budget request to $24 million which was almost enough to meet the salary commitments. Through further negotiations with the Governor and the Appropriations Committee, the University received a 4.5% increase in the first year, and between 4.1 and 4.2% increase in the second year. He noted that the average total increase for most state agencies increased by 3.4%. Latta asked if they subtracted from the total rather than subtracted individual items and that this is why it appears that they were funding more items than they did? Jones stated that there is an understanding with the Appropriations Committee and the Governor that they provide information on how they compute the percentage of increase but that it is given as a lump sum allowing the University to decide how the funds will be spent. Latta asked if, from the legislature's perspective, they were not adjusting us for the tuition increase? Jones stated that they were not and that the bottom line is that they gave us an amount that they could sustain. He pointed out that we received one of the largest increases in recent years. He stated that he looked back over the past 20 years to see how the University's general fund has increased from year to year. He pointed out that there has only been only about three times in the 20 years when the University has received better than the average state appropriations. He stated that the budget recently presented to the Board closely follows the budget requested, minus a number of items. He noted that there are expenditures that we are required to make such as salaries and the 2% deferred maintenance assessment. He stated that these deferred maintenance dollars will be transferred by state law from our budget to an account at DAS. Latta asked why the 2% does not come out of the funds used to build these structures? Jones stated that we do not have the authority to co-mingle those dollars and that they are kept in separate accounts by the state. He pointed out that the 2% assessment is ongoing while capital construction dollars are one-time funding. Scheideler asked if endowment money, which is used to construct the building, can be used for the 2% fund? He replied that this is a possibility. He pointed out that the deferred maintenance fund is to ensure that we do not run into a maintenance problem again. Latta asked if this is an ongoing, increasing cost for the university each year? Jones stated that it does not inflate but that the amount will go up if additional buildings are constructed. Latta asked if the money will become available after 5 years? Jones stated that it will be, but it will be under the auspices of some subcommittee as to how those dollars are expended. Zorn pointed out that the deferred maintenance fund is logical but that endowment funds should be examined when a gift is made to construct a building. Jones stated that they are working on gathering information on what the on-going costs are of these buildings. Bryant asked what other universities are doing to resolve this problem? Jones stated that he has not heard of a plan on the scale of ours. Zorn suggested that an impact study should be done on any sizeable gift that is given to the University for construction of new buildings. Scheideler pointed out that there are indirect costs that need to be considered. She noted that priorities should be set regarding new purchases and spending that we have to reallocate for. She said it is very painful for UNL in the way that it is carried out, particularly when large purchases are made and the faculty are not provided with information on how the decision process was made, even though those purchases will have great impact on the faculty. The results she says is a lot of distrust on how decisions are made. She pointed out that many of these new large purchases, such as LotusNotes and ASP, are resulting in a secondary cost of people having to upgrade their equipment in order for these programs to work. She asked how faculty can be more involved in the decision making process on these purchases? Jones stated that there was pressure from campuses to get one system that will interface with all campuses. He pointed out that it was a group of people who reviewed the ASP software program. Bryant asked if bids were made? Jones stated that a number of bids and demonstrations were made by various vendors. Bryant asked who were involved in the decision making process? Jones stated that actual users of the system were involved in the decision process. Scheideler pointed out that the Executive Committee was informed by Kim Phelps and Alan Moeller that no faculty were involved on the committee from UNL. Executive VP Jones stated that they tried to insure that a broad spectrum of people were represented. Latta pointed out that some of the expenses for paying for the system, its implementation and the ongoing costs of maintaining the system, have been described as a permanent reallocation. She asked if it is not possible that this will change in the future? Jones stated that eventually the system will result in savings which should go back to the academic core, although he is not able to give a timetable as to when this will occur. Latta asked if we can talk about the reallocation as other than a permanent reallocation? Jones pointed out that the reallocated technology fund indicated in the budget was not for the purchase of these software systems but for upgrading hardware and software for faculty, technical support for faculty, networking, and Internet II. He pointed out that these are ongoing funds that will be needed but the cost of ASP has been spread out over a five year period. Bryant asked if the reallocated funding that Central Administration is taking away from the departments will be coming back to them in the form of computer and software upgrades? He stated that if this is the case then it is really designated dollars and not necessarily reallocated dollars. He suggested that they be called designated dollars rather than reallocated. Latta pointed out that the way the message is being conveyed is creating problems. Scheideler noted that timing is crucial because of the deadline for people to move to LotusNotes by July 1^st.

Aguilar asked how distance education fits into the budget? Jones reported that the university is under a great deal of pressure to serve the state via distance education. He noted there is a commitment to move a substantial number of courses to distance education courses. He pointed out that the Board feels that the cost of distance education courses should be the same as on-campus courses. He stated that a problem is that we do not have the subsidy for these courses. Bryant pointed out that the current system of registering and taking distance education courses is bizarre and asked whether anyone has spoken to the students? Associate Executive Vice President Burns stated that they tried to give the Board a breakdown on the cost of offering these courses but he pointed out that this is difficult to do. Bryant noted that the market indicates that people are willing to pay higher prices for the advantage of taking these courses. Burns stated that people out in Scottsbluff lobbied against it. Latta asked if the Board understands fully the nature of course fees and realizes that there are substantial fees placed on campus courses separate from the tuition cost? She asked if the Board could agree that there are some additional fees that are needed for distance education courses? Jones stated that there is no problem in attaching individual course fees but stated that there are problems in accepting a blanket distance education course fee. Burns asked why a particular course, which is delivered exclusively via distance education, should cost more when in fact it costs less because you don't have to do all of the things that you need to do for on campus courses. Bryant pointed out that you need to look at the delivery side because most people do these courses as an overload. He noted that the institution is not providing any resources to accomplish this mission. He stated that they should look at the needs of the delivery system. Burns pointed out that there is difficulty in justifying the costs of these courses. Bryant noted that the Class Project is an example of how distance education can be done moderately well. Aguilar asked if there are regents who are looking at distance education as a way of expanding the market to outside Nebraska? Jones stated that they understand that we would have programs that are attractive to people outside of Nebraska. Aguilar asked if a program similar to the University of Phoenix is a vision of the Board? Jones responded that some of the Regents are aware of it but that there are no plans. Burns pointed out that as elected representatives, the Regents are concerned with providing better service to the people of Nebraska and anything else that would help us to accomplish this, we should do. Bryant asked if the Board's vision conflicts with President Smith's vision of a national or international school? Jones stated that there is no conflict because the Regents want the university to be competitive but they want to ensure the same rate of tuition for in-state students. Latta stated that one view is that the cost of distance education for in-state students can be offset by tuition from out-of-state students. Jones noted that the plan is to take back to the Board a revision of the Board's tuition policy for distance education. Zorn pointed out that the Board does not seem to understand that adding students off campus is not the same thing as adding students in the classroom. He noted that distance education students require much more time on the part of the faculty and that there are substantial startup costs. He pointed out that if the fee limits on distance education courses go through, it could have damaging effects on the MBA program at Offutt. Jones stated that this program is a contractual relationship that must be kept. Siekman pointed out that where the course is delivered, whether its in the home or in a specific location, raises concerns on how it is being monitored and it can create additional costs. Bryant asked why the mechanism for departments receiving direct funds for distance education courses has been changed? Jones noted that the impact of this change was greater at UNL because of a base adjustment to the UNL budget. He stated that the funds are available in the base budget but he does not know how UNL plans on getting those funds to the department. Burns pointed out that if distance education is part of the core mission of education of universities, than the funding is going to have to be done in a fashion that is understandable to everyone. He noted that up until now, it has been largely entrepreneurial.

Latta asked about the assumptions that have been built into the proposed budget and the University's long range plan. Jones stated that the salary plan that was put together a year and a half ago was based on the premise that 3% was needed per year to maintain where we presently are in relation to our peers. He stated that today it has probably changed and that UNL and UNMC would probably not catch up to their peers by the end of the four year salary plan. He noted that this will have to be discussed when they look at the next biennium. Latta stated that she is concerned that the legislature will lose trust in us if they hear in four years that we are still not caught up in salaries. Jones pointed out that they made it clear to them where our assumptions come from. Latta asked if his model uses different assumptions for each of the campuses? Jones stated that the overall budget request is 4.625% but that this does not mean that UNL's shares is 4.625%. He stated that what they do is take 4.75% times UNL's salary base. This computes to the dollars for the UNL campus. This is then put into a pool and then the percentage is relative to the total base of the university. Jones stated that the legislature provides a lump sum and then the funds are allocated on each campus' individual four-year plan. He noted that these are clearly assumptions and that they can be adjusted as needed. He stated that the Governor has been consistent in his view that he was elected by the people as an alternative to Measure 413 and that Governor Johanns will act as an informal lid. He pointed out that the Governor's goal is to constrain state spending to 3%. Jones noted that this is where the 3% comes from in the budget model of the University. He pointed out that every percentage of increase is equivalent to $3.7 million. He stated that there will be all out efforts to get more from the legislature, drawing on support from across the state. Bryant noted that at the department level they have been experiencing reallocation in operating each year with fewer dollars and that it will be exacerbated in the future. He pointed out that the plan is a worse case scenario and that it is having serious negative effects on the departments.. Jones asked what a better assumption is for now? Scheideler noted that faculty are discouraged because they are seeing new items of priorities that are being paid out of academic programs and that items are being approved when there are not sufficient funds to cover the costs. Siekman pointed out that we are being told to do more with less but that the faculty are saying that the less has come to the end of the ropes. Latta stated that while the assumptions may be defensible, there may be a benefit to presenting the other university needs that were not incorporated into the budget plan. Zorn pointed out that the budget decreases are not coming from the overall budget which has actually increased, but from internal reallocations that may be due to things such as information technology. He noted that we have to look internally to address this problem. Latta asked if there are ways faculty could be helpful to Central in the planning process? Jones stated that a lot of this planning occurs on each of the campuses through interfaces with the Chancellor and other committees. He pointed out that President Smith meets with each of the Academic Senates each year. He noted that we have to collectively determine which are the priority items to be funded. Bryant pointed out that if the institution's administration is really interested in having faculty's voice in the planning process than they need to allow this to happen. He stated that he does not see this happening. Latta stated that at the last meeting of the Senate a resolution was passed calling for a revisit of the campus master plan that would allow more faculty input. She noted that there are some outlying concerns of faculty that they need to express. Jones pointed out that the facilities plan will be presented to the Board for acceptance conceptually but that this does not mean that every item in the plan will be approved. He noted that each item has to be approved individually. Latta stated that the parking issue has distracted attention from some of the more conceptual issues regarding the plan. Zorn noted that parking really does impact the nature of the campus because if parking is inconvenient, expensive, or unavailable then faculty will not be available as often for students.

Jones stated that they have been hearing from the campuses the importance of retirement and fringe benefits. He pointed out that state law prohibits state agencies from contributing more than 8% and that we are currently at 7.5% for the higher option. He noted that it is difficult to get the legislature to approve any increases because the government gets pressure from all other state agencies to increase their percentage which would result in a significant cost. He stated that another approach may be to offer a number of fringe benefits via a cafeteria style approach whereby people can choose their particular benefits. Jones reported that he formed a committee to assess what options there are to this approach. He stated that the committee felt that the cafeteria style approach may result in higher premiums for some benefits. Burns noted that a number of federal laws prohibits flexibility in how benefits can be given. Scheideler asked about the transfer of tuition remission benefit? Jones reported that it has been discussed at a number of meetings, including the President's Council. He noted that many employees do not list this as a high priority in terms of fringe benefits. Scheideler pointed out that it is a benefit that is not costly and could help in the retention and recruitment of faculty and staff. Jones stated that they can look into it again.

Latta asked if he could provide some insight regarding the tuition shown in their budget? Jones pointed out that it is clearly an assumption. He noted that the Board has already approved tuition at 4% and that it is unlikely that we will be able to increase it further. He pointed out that 1% of tuition increase generates approximately $900,000 and that it takes almost 4% tuition to equal 1% of general funds. Latta asked if the tuition is a projection in the budget? Jones replied that years 3 and 4 are more planning and that there will be adjustments should we receive more money. He stated that it is important for the legislature to know that we are willing to do some things internally to help cover our costs. Latta asked if it would be helpful for us to show where reallocated dollars have come from and the impacts of these reallocations? Jones stated that having data available can frequently be helpful.

4.0 Approval of 5/26/99 and 6/9/99 Minutes

Approval of minutes postponed due to the lack of a quorum.

5.0 Unfinished Business

No unfinished business.

6.0 New Business

No new business.

The meeting was adjourned at 5:07 pm. The next meeting will be held on Wednesday, July 7^th at 2:30 PM, in 201 Canfield Administration Building. Respectfully submitted, Miles Bryant, Secretary.