Budget/Finance Committee Meeting

May 2, 2006

Regents Present: Maggie Warren, chair, Nancy Paul, Ben Blair, Karen Lee, Bob Storey, Mayor Bill Bunten

Staff Present: Jerry Farley, Wanda Hill, Al Dickes, Donna Lalonde, David Monical, Russ Jacobs, Ron Wasserstein, Rhonda Thornburgh, Chris Leach, JuliAnn Mazachek, Duke Divine, Melodie Christal

Minutes of the January 31, 2006 meeting were approved as printed.

Debt Retirement and Construction Fund FY 06 Allocations for FY 07 Capital Projects, Other Equipment and Technology Equipment -

Vice President Hill outlined the requests for capital projects and equipment. Of the original $7.9 million requested for capital improvements, $2,234,866 is being recommended for funding. Of the $912,000 in other equipment requests, $501,890 is being recommended.

Technology requests were handled differently this year using a new method to allocate ETC funds. A planned replacement cycle has been put in place for desktop equipment and other servers. Of the $1,235,082 in requests, $399,957 is recommended from the DRC Fund along with a one-time allocation of $200,000 from the General Fund.

This leaves a balance of $331,000 in the DRC Fund.

President Farley indicated the total outstanding debt will be just under $31 million at the end of the fiscal year. Bond payments are being made for the LLC, Stauffer Commons, Washburn Village, Union renovations, KTWU improvements, a portion of the Bianchino Pavilion, and the Student Recreation and Wellness Center.

President Farley explained the process used to purchase equipment and fund capital projects.

Regent Blair asked why the Benton exterior stairs were being removed. Vice President Hill said the stairs were installed when the building was used for residential living and they are in need of repair and are no longer required

Regent Blair asked about the campus way-finding project. President Farley explained this is a piece of a multi-year project to improve and coordinate signage on campus.

It was moved and seconded to recommend Board approval of the projects and equipment for FY 07 funded by FY 06 DRC Fund revenues and the transfer of $200,000 from the General Fund for technology requests. Motion carried.

FY 07 General Fund Budget -

President Farley outlined the budget. Expenditures include the performance-based 5.5% salary increase previously adopted by the Board of Regents, along with increases for scholarships, the library, internet connections, utilities, classroom renovations, and the transformational experience. He noted this is the first year in several years new faculty positions have not been added. Twenty-eight faculty positions have been added in the previous three-year period.

Regent Lee asked if funds should be set aside for a campus disaster plan. She said the advice from the AGB meeting she attended was to plan for the worst. Vice President Hill indicated a crisis management plan has been in the works for the past two and a half years and will hopefully be finished this summer. Business continuity, including the ability to communicate with students and employees, is crucial. The new technology security officer position and a generator for the Bennett machine room are part of the disaster plan. Computer data is backed up daily and one copy is taken off premises. Washburn will be the site for a mock disaster drill this Fall. President Farley noted this summer KTWU will be airing a 40th anniversary program about the 1966 tornado.

Revenue assumptions include a $173,187 sales tax increase from FY 06 and an increase in tuition of $11 per credit hour or 6.71%.

President Farley said every year a Regents contingency reserve amount is budgeted. This year the contingency fund is $1,800,000. He indicated a portion of the fund has been used two or three times since he has been at the University, but it is never used without approval of the board.

Mayor Bunten asked if expenditures are interchangeable between budgeted line items and if expenditures are analyzed every six months. President Farley indicated departments can request funds be transferred, however, transfers are not made between salary and operating accounts. He said the budget is reviewed every quarter and will be reported to the Board at the next meeting. Regent Warren noted the detailed budget is always available for Board members to review.

Regent Blair asked about tracking of sales tax collections. President Farley said he and Vice President Hill review the collections every month to see if the projections are in line with actual collections. Projections are done using the five-year moving average.

Mayor Bunten moved to recommend Board approval of the FY 07 Budget. The motion was seconded and carried.

Recommendations to Award Contracts -

Bond Counsel - Vice President Hill said bond counsel presentations were done in March and the evaluation committee reaffirmed its previous recommendation to award a contract to Hinkle Elkouri LLC to provide bond counsel services. It was moved and seconded to recommend approval of Hinkle Elkouri LLC for bond counsel services for a five year period. Motion carried.

Outsource Dining Services - Vice President Hill said an RFP was sent out in February to twelve firms. Five firms attended a mandatory pre-proposal conference and proposals were received from three of them. The proposals were reviewed, references were checks, and site visits were conducted. All three firms will be on campus May 3 to do presentations. It is hoped to have a changeover on July 1. Regent Paul asked if student groups were represented on the committee. Vice President Hill said two representatives from WSGA were on the evaluation committee. Regent Lee asked for reasons to contract out Dining Services. Vice President Hill said reasons included the inability to attract and retain qualified directors, lack of purchasing power, and the inability to maintain a qualified labor pool. She indicated any of the three firms could do a quality job for the University.

Greek Village Architect Selection - Vice President Hill said four architect firms were interviewed this week. A recommendation for selection will be presented at the May 12 Board meeting. Regent Lee asked what would happen if the fraternities could not reach their fundraising goals. President Farley said the fundraising goals would have to be met prior to proceeding with the project. WEA will assist each organization with the fundraising.

Meeting was adjourned.

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