April 17-18, 2002 Meeting Minutes In attendance (for part or all of the meeting): J. Angerosa, D. Belt, T. Bennett, S. Brady, D. Bowers, K. Cline, J. D'Aleo, D. Dowd, G. Forman, K. Gifford, C. Groeneveld, W. Harniman, L. Hartmark, J. Homburger, R. Hume, S. Kardonsky, E. Kumar, J. Lambert, G. LaRosa, K. Levison, M. Lewis, I. Lisnitzer, W. Long, N. Lyons, D. Mann, L. Neveu, S. Richards, K. Seitz, P. Shea, C. Smith, H. Snoreck, J. Van Voorst, C. Webb, B. Weigman, and C. Young. Guests: J. Biggane, J. Campbell, D. DeMarco, W. Diesel, M. Ellerman, J. Fazioli, F. Gabriel, R. Haelen, K. O'Donoghue, D. Miller, B. Owad, P. Pileggi, K. Schweigard, and M. Trunzo. Copies of some referenced handouts are not included with these minutes. Anyone needing copies is welcome to contact John Lambert (607 / 255-4425 or jal3@cornell.edu). Opening Session The Finance Committee of SUNY's Board of Trustees meets on Thursday. Our agenda format was altered to accommodate schedules of colleagues from State University Plaza. Reports from the State University Plaza Dick Miller New York State budget - Little news. Some speculation that it may be settled before Memorial Day. There may be some modest enhancement for SUNY. Any enhancement would be run back through the BAP. [See related conversation with Dave DeMarco, below.] Do not plan for "middle of the night" action to increase tuition. Campus-wide resources are limited; we will favor investments that have long-term potential for increasing revenue. Action to withhold salary improvement for M/Cs was politically motivated; we will re-look at that situation once the budget has passed. Recent observations about campus headcounts also were driven politically more than expressing any real concerns for local campus management. Pay attention to HIPPA (Health Information Privacy Protection Act); it is a big deal with implications beyond Health Science Centers. SUP will be pushing the report on campus-related entities (Campus-Related Entities: Enhancing Performance and Accountability) for approval by Trustees in June. [See related conversation with Joanne Fazioli, below.] Is anxious for final copy of Quality Initiative Successes to Date. [Final copy is available. See related QI conversation, below.] Campus endowments will increase in importance. Research Foundation endowment, University endowment, and 64 campus endowments are each managed separately. Need to begin a dialog to optimize the resource. "Policy" will not be legislated. Miller is "a big believer in not imposing restrictions." SUP review of IFR revenues and fund balances is to assess campus flexibility and to ensure there are no negative balances. In response to a question: "No, we are not looking at any ex-appropriation" of IFR balances. SUP is reviewing dormitory and board rates to "drive thinking from the system's level" about this source of revenue. It appears we are far below market at the same time as we scream about tuition. Stemming from the Quality Initiative, SUP has opened conversation with Jim Dillon of the state-wide office of technology, to align SUNY priorities / direction with those of the State. This ends the telecomm project as it has long been perceived. We offered help on networking. We asked for help with PAYSR. Dave Switz has been appointed Assistant Vice Chancellor for Information Technologies. The Board resolution on telecommunications (not entering a long-term relationship without approval of the Chancellor) remains in effect. Waivers have, and will continue to meet local needs. This summer, the Advisory Committee will review possible adjustments to the BAP. Post election and in a soft economy, next year may be an even more difficult budget year. If the state budget does not provide for enrollment and if we get some tuition increase in place, it seems better to have incentives tied to mission, quality, etc. (That does not preclude funding enrollment as a campus priority.) If the model changes, there may need to be a phase-in period similar to "hold-harmless" aspects of initial BAP. It is possible to economically justify a non-ASC campus center through a waiver process. Consult with U Binghamton. Wayne Diesel Stepping from Vice Chancellor for Business and Industry Relations to acting General Manager of the Construction Fund. Working on issues reported by the Inspector General and State Comptroller. In the Fund, there is more right going on than wrong. It has a 40-year history of service to the University. There is no recommendation to change its mission or structure as a Public Benefit Corporation. There is a need to improve customer / provider relations. The IG report highlights the need for additional resources to handle a workload that has quadrupled. Old Westbury: Established procurement process / policy was not followed. SUP will agree with findings and recommendations. The SUNY office of capital facilities no longer exists but procedures still do. Need to re-establish complementary roles for SUNY and the Fund while avoiding parallel tracks. Eight to 10 campuses are involved in pilot efforts to devolve some construction activities, under certain conditions, to campuses. Campuses must have resources and the capabilities to accept the responsibility and accountability for success or failure. Discussion continues; SUP is seeking input from campuses that could be pilots. Benchmarking (very informally) against Hobart, Miller noted Potsdam would need approximately 3 people to manage capital projects. Needs for the next multi-year capital plan total $8 billion (versus $6 billion in needs for the current capital plan). We received $2 billion for the current plan. Whatever we receive for the next multi-year plan, we will get bottom-up help to prioritize its use. Employing a consultant to look at the procurement process. Four campus presidents will serve as an advisory committee. Their careers (2 lawyers, a businessman, and an admiral) were the basis of selection, rather than representation from particular campuses or sectors. Input may need to be broadened. Ken Schweigard Consultants will focus on procurement processes for SUCF A&E and design services. Their work will not include SUNY / campus procurement processes, or campus lets. Their work should conclude within 6 months, but the contract will have provision for a 6 month extension. Follow existing processes / procedures while the ship is being re-designed; we don't intend to slow down waiting for new processes. An emergency appropriation is in place; there should be no interruption in delivery of construction projects and campus lets. Maintenance / Repair funds have expired but problems should be minimal if the budget is approved (relatively) "on-time." Working with SUNY controller's office to eliminate problems experienced in posting appropriations to campus accounts. Our ability to fund our share of municipal projects from state hard dollars no longer exists. Ninety-five percent of our funding is bonded and restricted from use up front. The remaining 5 percent does not go far. Closing in on how to manage NYSTAR projects. Further devolution does not exempt campuses from Wick's Law, where the campus is acting on behalf of the fund. Without help from counsel, unable to answer whether Wick's Law applies to campus lets addressed with a mixture of funds. Bob Haelen Wick's Law applies to construction projects, not design. Entering the 5th year of the capital program. Appropriations are in place. Bond sale slated for September: $15 million hospitals and $224 million other, including NYSTAR and GRI. Distributed capital plan reports to those present. Requested of Bob: add actual expenditures to the report and make them available as an e-mail attachment. Migrating toward a mainframe application. Requested of Bob: Review how projects are funded, e.g. the components of a design budget, project management costs, etc. Jim Biggane o Since 1988, the Fund has awarded 400 construction projects valued at $1.1 billion. Typically, projects have been under budget and change orders have been below average. Currently there are 142 active construction projects with about 100 in design. The bid market remains good. Kevin O'Donoghue Introduced by Dick Miller as the new University Auditor for the system. Invited contact from campuses for counsel and assistance with campus-based problems. Has contracted with Deloitte and Touche to do an institution-wide risk assessment, to be completed by the end of the summer. Michael Trunzo Newly appointed Senior Associate Vice Chancellor for State Relations. Formerly chief executive of the Empire State Petroleum Association, and before that on Governor Pataki's staff and "in and around the executive and legislature since 1982." Working closely with Matt Behrmann of the Research Foundation (federal agencies), with similar responsibilities for state agencies. Legislation is a main mission. Provided a handout to describe a matrix of staff assignments to sectors, regions, campuses, and administrative responsibilities. The matrix provides a "point person" as well as providing for cross-communication among staff. Michael invited comments and suggestions on the staff assignments. There are a number of different proposals floating on early retirement. Losing lines and budget are not acceptable to unions or to SUNY. Some form of early retirement is likely to be in the final budget. Monitoring legislative reapportionment and leadership changes. Trying to keep tuition and fees separate, so that an increase in tuition does not tie our hands on fees. Dick Mann voiced that some limit on fees might be acceptable if tuition were somehow indexed to increase. Michael is visiting campuses - Government Affairs plus others - to learn more about the campuses and their issues. Jim Campbell Monitoring legislation on sweatshops, foreign students (tracking visas and in and out of state issues), use of an alumni escape clause for campus construction, ASC's ability to purchase on state contract. Distributed 2002 Legislative Update. Pete Pileggi Provided copies of his memorandum on Affiliation Liability Insurance, that was sent earlier via the ListServ. A major issue for academic programs. Described substantial increase in premium costs; $376 thousand for the next premium period, double what they have been. Self-insurance is not an option. As a recharge, 4/12th would hit this fiscal year and 8/12th would hit next year. (The premium year is March through February.) Alternatively, campuses could pursue application of a new (system-wide) user fee. Ivan Lisnitzer believes Brian Stenson would support a new fee if campuses should choose that approach. Medical schools and Optometry are subject to HIPPA. Other sectors may be impacted and need to comply, e.g. if student health clinics provide services to employees and their families. HIPPA has benefits in standardization, but penalties are stiff. President Bush may be backing off support of this unfunded mandate. We may need to develop an overall game plan. Pete is contacting campuses. Business officers have not consistently received information that has been directed to campus presidents. Joanne Fazioli We have been without a SUNYCard contract for two years. Citibank has been silent. There was little feedback to Joanne's question whether SUBOA remains interested in the SUNYCard concept. Ivan Lisnitzer noted ASCs should be polled. Individual campuses may contract with Cybermark. A plea from Joanne: If campus officers can document or explain the whereabouts or disposition of SUNYCard equipment, please contact her office. [Subsequently, Joanne shared via ListServ the letter from MCI concerning the contested equipment balanced due MCI. The stated outstanding amounts have not been confirmed.] Cybermark will not provide continuing support without a campus contract. Our request for a Travel Card exemption was denied on the basis that other funding agencies, like SUNY, use multiple funding sources. The Chancellor has it on his "to do" list to appeal, stressing not all SUNY sources (Research Foundation / Grants and Contracts) are on the State accounting system. Consolidated billings take effect July 1. Oneonta has pulled back cards from individuals. Other campuses may follow suit. Caution: OSC also is looking to decrease cash advances. ASC contracts expire for most campuses at June 30. Most business officers were unfamiliar with recommendations (in draft) from the Task Force of Campus-Related Entities. The draft covers Foundations, ASCs, and Alumni Associations. Task Force recommendations on ASCs are contrary to work (over the past year) of SASA and ASC Executive Directors. Efforts need to be reconciled. "Reconciliation" involves those responsible for campus entities, extending beyond business officers. After this session, Joanne provided copies of the Task Force recommendation to those present. [Copies have since also been distributed through the ListServ.] Ivan requested follow-up conversation, by conference call, with Dick Miller, as soon as possible. Business officers do not necessarily disagree with the report, but it has not been on their radar screen. Frank Gabriel Distributed materials from the Foundation's website, featuring their move across the street from the State University Plaza - tentatively scheduled for July 2002. The first three digits of phone numbers will change; their post office box will remain the same. Distributed an organizational chart for the Research Foundation. Highlighted Matt Behrmann's responsibilities for external affairs and philanthropy, and Gerry Drahos responsibilities for information services. Gerry (coming on board in May) inherits Oracle. Provided a status report on Oracle. Dick Mann voiced general sentiment that the system should be fully functional by the end of the calendar year. At 18 months, it is not in reasonable shape. Performance looms largest as a concern. There have been problems with data integrity. Marti Anne Ellerman We have an agreement (with the EPA)!! Marti shared her presentation, from last week, to environmental safety officers. Running through the presentation, she highlighted EPA's obligations, important dates, the schedule for corrective action, scope of the program, etc. Binghamton, Cobbleskill, Fredonia, and Monroe CC will be audited in 2002. Campuses will need work teams; it is not a one-person job. Work with consultants will be privileged. Final reports will be public. From Dick Miller: Campuses are responsible for corrective action. Actions can be part of the capital plan (build in environmental remediation), but most costs are likely to be against operating budgets. Ken Levison was on the negotiating committee and is on the selection committee for the RFP for a consultant to do the audit. Expect that to converge "any day now." Campuses are responsible for paying their share of the consultant. They will not have to pay until the year they are audited. For campuses that went out on their own, the formula gives credit for previous audits. After some initial discussion about examining the basis for this "recharge," most agreed the consultant fees would pale in comparison to the potential cost of remediation. David DeMarco (Thursday morning) The decentralized classification program allows campuses to make local decisions regarding classification / reclassification - all classified service positions are now subject just to the short form process, without justification. However, campuses must maintain supporting documentation. Central / campus representatives will meet soon to frame a process that meets the spirit of agreement with Civil Service. There will be self-monitoring, as there is with purchasing. The Civil Service backlog is expected to be caught up by the first week in May. Recently, OSC has been saying the right things about helping with our interfaces with state systems. David DeMarco, Dick Miller, and Brian Stenson met recently with the new state CIO. David is assembling a working group on the computer upgrade; he needs to recruit a couple more people. Financial monitoring will be reinvigorated … an evolving role for system administration. We went from a highly-bureaucratic process to very little central control by 1995-96. We now have to shore up high-level due diligence to satisfy Trustee's need for assurance: "How do you know other campuses are okay?" On the budget, there is a possibility of receiving a little money, but not to fund collective bargaining agreements and nowhere near the $100 million request. The first claim for use of any extra money would be to reduce the BAP negative pro-ration of $16 to $17 million. Several voiced concern that campus presidents are getting a different message, with a positive spin, e.g. presidents have understood the Chancellor to say they will be a tuition increase this year. Legislators think there is lots of money floating. A "fairy land" for the next 6 months but watch out - right after the elections, there may be "discovery" of a massive shortfall in revenue, with possible mid-year rescissions. Discussions with DOB seem to confirm the hunch. David noted "next year will be worse," pointing for example to this year's flatline budget on collective bargaining -- the cut is permanent. There are no specifics on early retirement. Ivan Lisnitzer noted the subject is back in the news. Dick Mann noted Trustees would not approve any version where money would be lost. Ken Levison requested a campus option if a bill emerged where the money / position remained with campuses. David did not respond. The Finance Committee chose not to regularize technical / associate tuition (at $3,400). The group discussed ways to get campus presidents more involved with finances and management of the institution, e.g. an annual financial reporting package signed off by the president, or reinstitution of "budget hearings." Pat Wiater (Thursday morning) Contrary to SUBOA wishes, Brian Stenson will hold the $10 million reserve from dormitory devolution for low interest loans for emergencies and planning. He will be sending out a set of principles; if demand is low after some pilot period, we may revisit the request to distribute the reserve to campuses. On behalf of members, Ivan Lisnitzer voiced disappointment in the process and conclusion. In parallel, Pat will distribute (on a per bed basis as recommended by the committee) the $4 million in post devolution interest. Among lump sums provided by the legislature are $1.6 million for EOP and $700 thousand for child care centers. It is late in the fiscal year; should we carry it forward for use next year? Jim Van Voorst voiced a preference for application in the current fiscal year. No one dissented. The Campus Entity report is a strawman put together by Brian at Dick Miller's request. "As we speak," the draft (as distributed) is being refreshed by feedback from the Task Force. Several SUBOA voiced concern that items in the report are inconsistent with directions and recommendations of SASA and the business officer's group working on the ASC contract. The group urged that SUP act immediately on the ASC contract, e.g. a two-year extension, and take sufficient time to reconcile aspects of the working group / task force recommendations. The Campus Entity report begs wide discussion. Dormitory programs are being reviewed, marginally in response to what Finance has asked. Negative cash balances? Other weaknesses? There are very few real concerns. SUP will report back to Trustees. May be able to help … with bridge funding, by talking with the dormitory authority, etc. Ditto IFRs. Looking to understand the purpose of accounts, for negative balances, etc. Will pursue exceptions. There are very few cases with real concern. Actual deviations from plan would cause concern only with something ending in negative. David allowed the 80 PSR / 20 OTPS rule is outdated, and that financial plans must change on the front end in order to provide realistic reporting against those plans. The dorm program condition assessment has been helpful in planning for construction and bonding. Needs total ~ $148 million for the next bonding cycle - as soon as the budget is passed. DASNY is amenable to stage borrowing to coincide better with planning and construction. (With all borrowing up front, we are subject to significant debt if a project is delayed.) The task force on fire and safety will share draft recommendations with this group in advance of the Chancellor. A system-wide plan is required to be completed in 10 years. (We are in year two.) Existing dorms without major rehabilitation are not required to be retrofit with sprinklers. Training is a component of the required plan. o Ken Levison voiced concern over DASNY procedure to charge every time an architect is engaged in a particular project. They can show us the hours but there is no control over costs. Advance an alternative charging, say, 3.5 percent (with a possible differential for hospitals)? Dick Miller and Brian Stenson are meeting with DASNY in May. David will seek to add the topic to their agenda - perhaps followed by a working session to understand how / when they do bill. Under current procedures, there should be no billing from DASNY for campus lets; DASNY is supposed to simply sign off. Remarks / President's Report Ivan Lisnitzer noted Paul Stec's departure for Siena College. Kathy Lowery steps in as Interim Vice President. Paul will be missed. We welcome Kathy and are blessed to have her and Leo Neveu providing continuity and representation. We are meeting on Wednesday, June 19. The meeting will be at the Desmond. We will gather the night before (Tuesday, June 18) over dinner to honor our most recent retirees. A number of members plan to attend NABUBO in July. However, our annual meeting has been moved to coincide with EACUBO's annual meeting … October 6 - 8, in Philadelphia. Ken Levison is point person on arrangements; specifics should be available by June. The proposed slate of nominees for the 2002-04 officers and directors, comprising the SUBOA Executive Committee, is attached. Recommendations will be acted upon in June. On behalf of all, Ivan thanked the nominating committee (Leif Hartmark, Ed Kumar, Ken Levison, and Bob Wagner) for their thoughtful and hard work. Minutes and Treasurer's Report Minutes of the January 23 / 24 meeting were approved. (Motion by George LaRosa, seconded by David Bower.) John Homburger reported balances of $19,654.64 in savings and $22.19 in checking. The Quality Initiative Ken Levison distributed final copy of the SUNY Quality Initiative Progress Report / Successes to Date (at April 2002). Moving forward, there will be some restructuring of our working groups, e.g. with decentralized classification in place, Civil Service and GOER initiatives will merge into human resource initiatives. Work on SUCF initiatives has been discontinued, pending effects of changes in leadership. There may be a new group on systems initiatives. Please let Ken know of things that need to be considered as part of the Quality Initiative. On behalf of SUBOA, Ivan Lisnitzer lauded the work that has taken place, thanked Bob Wagner for his leadership, noted that the baton passes to Ken, who has been involved in the Initiative from its beginning, and thanked Dick Miller and Brian Stenson for their support. Great effort. Great progress. Great springboard for continued success. Sector Reports Tracy Bennett reported for the University Colleges. Seeking more direction from SUP on the use of 15 passenger vans. The group "shared notes" on fees and the process for their approval. How to elevate understanding and engage campus presidents on issues related to ASCs? George LaRosa reported for the University Technology Colleges. He stated that the UCT campuses were being particularly impacted by the budget crisis because they were not only losing the value of the negotiated increases, but also the tuition subsidy which compensated for the difference in associate degree tuition ($3,200) versus bachelor degree tuition ($3,400). The UCT campuses had made an appeal to have the tuition regularized at $3,400 for all undergraduate students, which would have offset the loss of the subsidy. However, we have been advised by SUP that this option was not being considered at this time. Brice Weigman and Leo Neveu reported for the University Centers / Health Science Centers / Specialized and Statutory Colleges. The group "shared notes" on local initiatives to deal with budget problems for 2002-03 and beyond. Other topics included (1) the freeze on salary improvement for M/Cs (bad politics / little savings / low morale); (2) utility bond options; (3) "campus lets" under the proposed memorandum of understanding; and (4) travel cards -- a predisposition to drop out, with a residual question regarding the uniform benefit provided to employees. On this day, the University Colleges and University Technology Colleges met in joint session. They share much in common, and those present wondered whether they should continue to meet together. This question was posed toward the end of the second day, when ranks had been thinned. Ivan Lisnitzer invited feedback by e-mail, to him or other members of the Executive Committee. A/B/B Jim Van Voorst (Secretary) and Pete Shea (Recharge Committee) reported for A/B/B: In response to a question, we advised holding off on a proposed A/B/B meeting with DASNY about DASNY charges. DASNY should be making that presentation in joint session to members of SUBOA, A/B/B, and the Physical Plant group. The Recharge Committee continues with its series of reviews. A goal is to have all recharges known in advance of the fiscal year. Investigating charges for police summer training academy (which has been canceled for this year) or its alternate. HIPPA / EPA seem to have strayed from the original concept. The group will provide fast turnaround in its review of the methodology (to be provided by Marti Ellerman) on EPA. Pete (taking over for Bill Nichols) praised Bill's tenure. For presentation to SUBOA in June: A status report on the web interface for SUNY reports. On-going funding for maintenance? Bill Colangelo (who did much of the development) supposedly had worked maintenance out with SUP. Where is SUNY Central going with its monitoring program? Dave DeMarco is expanding the group, which needs appropriate representation from SUBOA and A/B/B. For, and with, Becky Schrenk, George LaRosa stressed the need for more campus-based participation in A/B/B. Ivan Lisnitzer "seconded" that call for volunteers and designees. Other Business Those present strongly favored the normal meeting format, with sector meetings in advance of reports from the State University Plaza. Issues need to be on the table before meeting with system administrators. We may need to narrow the number of "presentations." Wayne Diesel's presence was very helpful. In deference to constraints on time, the Executive Committee did not meet. If necessary, they can "meet" by conference call. Respectfully submitted, John A. Lambert, Secretary Back to Minutes/Reports