WASHBURN UNIVERSITY OF TOPEKA BOARD OF REGENTS A G E N D A ___________________________________________________________ DATE: June 10, 1998 Bradbury Thompson Center PRE-MEETING DINNER: - 6:00 p.m. Convocation Hall BUSINESS MEETING: - 7:00 p.m. ___________________________________________________________ I. Call to Order Chairperson Parks II. Roll Call Mr. Craig Mrs. Porter Mr. Dick Mr. Roth Mr. Engel Mrs. Wagnon Mr. Ferrell Dr. Ybarra Mrs. Parks III. Approval of Minutes of May 13, 1998 meeting as circulated. IV. President's Report V. Old Business A. Faculty Compensation Study and Proposal -INFORMATION ITEM ONLY- B. Washburn University Retirement Program C. FY 2000 Budget Request VI. New Business A. Action Items: 1. Expenditures over $25,000 a. KTWU Transmitter Test Equipment 2. Competitive Grant Program 3. Winter Holiday Closing B. Consent Agenda: 1. Revision to Classified Compensation Schedule 2. Faculty Personnel 3. Faculty Personnel - Elrod 4. Public Fund Investments 5. Depository Security Transactions 6. Liquidated Claims Approval - May 1998 C. Information Items: 1. Leadership Program -FOR DISCUSSION ONLY- VII. ELECTIONS VIII. EXECUTIVE SESSION Agenda Item No. V. A. Washburn University Board of Regents SUBJECT: Faculty Compensation Study and Proposal -INFORMATION ITEM ONLY- DESCRIPTION: See the attached "Faculty Compensation Proposal." FINANCIAL IMPLICATIONS: RECOMMENDATION: Information item only. ____________________ ________________________ (date) Jerry B. Farley, President Agenda Item No. V. B. Washburn University Board of Regents SUBJECT: Washburn University Retirement Program DESCRIPTION: Washburn University, through its contributions to TIAA- CREF provides a marvelous program for our employees. This retirement program was established for a number of reasons including three that are very important: 1) to meet our social obligation of providing our retirees with an adequate, secure income during retirement; 2) to provide an incentive for employees to view the University as a long- term employer, and; 3) to view retirements as an integral component of the overall compensation package. Thus, any discussion and decisions about the retirement plan should focus on these longer term outcomes. Often universities tend to look at the inputs to the retirement plan; the annual percentage contributions. Certainly retirement contributions are just another form of compensation and there is often a trade off between current salary and future retirement income. However, our focus should actually be on outcomes, for example, what should retirement income be as a percentage of final salary. This is often referred to as the replacement ratio. The literature would suggest that the appropriate replacement ratios should be in the range of 60-80 percent of current income depending on a number of critical variables. This outcome will then drive the input contribution. In order to arrive at the proper input to achieve the eventual outcome, retirement goals must be adopted, and certain assumptions must be made about retirement age, length of service, investment returns, and investment allocation mixes. Goals for the Washburn University Retirement Program: Washburn University intends to provide all benefit-eligible employees with the opportunity to establish and contribute to a retirement program that will: 1. Provide an adequate level of retirement benefits for those employees with longterm service to the University. 2. Encourage continued service, reward longevity, and reduce turnover. 3. Recognize that the University's contributions to the retirement program are only a part of the employee's retirement planning. Given these goals, we can then focus on assumptions that will enable us to measure how well the University's retirement program meets them. To make this measurement, the following assumptions have been made: Normal retirement age of 65 Average annual salary increase of 3% 25/30 year length of service with the University 7% rate of return on investment of retirement funds Single life annuity at retirement with a 10 year guarantee Maximum social security benefits for age of retiree Worksheet 1 illustrates the expected retirement income of an employee under these assumptions with the University's current 9% contribution. This worksheet also illustrates the expected retirement income of an employee with 25 years of service. The current University contribution results in a replacement ratio, depending on salary level, ranging from 51.8% to 62.6%, below the targeted outcome of 60% to 80%. Worksheet 1 also illustrates the expected retirement income under the same assumptions except with a 1 percentage point increase in the University's contribution from 9% to 10%. With this increase, the expected replacement ratios, again depending on salary level, become 55.6% to 66.4%, slightly improved, but still below our targeted outcome. If our goal is to achieve these outcomes, but require 30 years of service, we can move much closer to the targeted range at the 10% contribution rate. (69.8% to 80.4%) In addition to a possible increase in the University's contribution, there are other changes which we propose. One of the goals is to encourage long-term employment, thus, persons who leave the University after only a short period should not be able to retain the University's contribution. A three year vesting period will achieve this goal. Contributions would begin after the applicable waiting period (one year for employees not previously in a similar plan), but would revert to the University if the employee did not stay for three additional years. It is estimated that the University could recover approximately $40,000 to $50,000 in University contributions with a three year vesting period. Because of our unique funding opportunities and because retirement contributions are actually a part of total compensation, we should be able to improve total compensation and move closer to desirable retirement outcomes by increasing current contribution levels and implementing a three year vesting period without increasing the current benefit fund mill levy. Worksheet 2 illustrates the proposed budget for the employee benefits fund for FY99. FINANCIAL IMPLICATIONS: The University's contribution to the retirement program will increase approximately $225,000. This increase will be funded by an increase in revenue resulting from increases in property valuations assuming a constant mill levy. RECOMMENDATION: President Farley recommends the Board of Regents approve an increase in the contribution rate to the Washburn University Retirement Program from 9% to 10%, and approve the adoption of a three year vesting period for all new employees hired after July 1, 1998. __________________ ___________________________ (date) Jerry B. Farley, President Agenda Item No. V. C. Washburn University Board of Regents SUBJECT: FY 2000 Budget Submittal to the State Board of Regents DESCRIPTION: At the May 13, 1998 meeting, the Regents approved preliminary guidelines for the development of the FY2000 Budget Request for submittal to the Kansas Board of Regents. In summary the guidelines approved by the Regents were: No tuition rate increase or increases in local tax support Salary increase recommendations to be based upon the recently completed salary study. Other operating expense (OOE) increase of 2.4% plus an additional 1.0% for libraries. Campus enhancement requests focusing on: Technology enrichment across the curriculum Specific enhancements in selected programs such as leadership, scholarships, and student life/student services. The administration has prepared the FY2000 budget request to the Kansas Board of Regents following these guidelines. A summary of the request is attached. In addition, each Board member has been provided a copy of the proposed FY2000 budget document in the form requested by the State Board of Regents' staff. FINANCIAL IMPLICATIONS: Total increase in state support of $2,455,074. Increase in Benefit property tax of $459,000 to fund corresponding increase in projected benefit cost. Total increase in operating expenditures of $2,914,074. RECOMMENDATION: President Farley recommends the approval of the FY2000 budget request and the submittal thereof to the State Board of Regents. ______________ __________________________ (date) Jerry B. Farley, President Agenda Item No. VI.A.1.A. Washburn University Board of Regents SUBJECT: KTWU Transmitter Test Equipment DESCRIPTION: Bids were solicited for the following test equipment to be used at the transmitter for KTWU. Item 1. Tektronix 2712 Spectrum Analyzer with the following options: Option 04. Internal tracking Generator Option 10. Video monitor mode Option 15. First LO Output for use with 1405 TV sideband adapter interface Item 2. Tektronix TV 1350 Television demodulator with the following options: Option 10. TV STD M Option 02. No GPIB interface Rack Mount Kit 1350F05 Item 3. Tektronix 1780R video measurement set with 1780F05 Zero clearance mounting shelf. Three suppliers were sent bid requests. Bids were received from all three. The three responses are as follows: Tektronix, Inc., Irving, TX. $49,149.54 Consolidated Media Systems, Olathe, KS $50,040.00 AVI, Inc., Lenexa, KS $50,210.00 This purchase is part of the NTIA/PTFP Equipment Grant for the KTWU Transmitter Replacement project. FINANCIAL IMPLICATIONS: Funds are available for this purchase in account number 13-08-06978. RECOMMENDATION: President Farley recommends purchase of the KTWU test equipment in the amount of $49,149.54 from Tektronix, Inc. ____________________ __________________________ (date) Jerry B. Farley, President Agenda Item No. VI. A. 2. Washburn University Board of Regents SUBJECT: COMPETITIVE GRANT PROGRAM DESCRIPTION: In order for Washburn University to better cope with the opportunities available for universities as we approach the twenty- first century, the Washburn University Board of Regents at their July 24, 1996 meeting approved the Competitive Grant Program "Washburn's Preparation for the Future." This program supports projects by Washburn faculty, staff, departments, schools and other units which have the potential to make a significant change in how the university educates or interacts with its students in the twenty-first century. Attached are the recommended proposals and the funding. FINANCIAL IMPLICATIONS: Expend $137,000. Money provided by WEA. RECOMMENDATION: President Farley recommends that the Washburn Board of Regents approve the Competitive Grant Program awards. _____________________ __________________________ (date) Jerry B. Farley, President Agenda Item No. VI. A. 3. Washburn University Board of Regents SUBJECT: Winter Holiday Closing DESCRIPTION: The time period between Christmas and New Years is a holiday period around which the semester system of higher education is structured. Both students and faculty are generally away for the break between semesters. For the majority of offices and operations at the university, this time is a low productivity period during which staffing is generally minimal. Since many offices are minimally staffed, this creates problems with the functional effectiveness in some areas as well as creating morale problems for those who must be present to provide the skeletal staff. In order to create the opportunity for the implementation of this plan, Washburn would eliminate Veterans Day and Christmas Eve as official holidays. Washburn would continue to observe Veterans Day ceremonially on Veterans Day instead of a day or two later as has been the case in recent years when the campus was closed on the holiday. We would use those two days as official holidays in the week between Christmas and New Years and require all staff to use one required day of personal leave during that same week. New staff would be allowed to "borrow" an accrued leave day. A total of four holidays would be grouped into the period between Christmas and New Years with one mandatory personal leave day. The functional effect would be officially close the university during the holiday period in question. Buildings would remain accessible to staff. Some operations such as Security, some Physical Plant, some Registrar's and Business Office functions may have need to be staffed during this break. Special event facilities may continue to have activities. Any office or operation that must remain open is allowed to do so and supervisors will be authorized to adjust as necessary. All required tasks will be performed. Benefits of this proposal include: extra time off during the holidays for family activities is a morale booster; productivity of some offices and activities during the time is very low because of short staffing; and effectiveness of minimally staffed offices can suffer. Additionally this plan allows some limited Physical Plant maintenance work to occur when an area could be unoccupied, and would allow the concentration of required functions (inter session classes) into one building which could result in some cost savings. This compares with Kansas Regents schedules in the following ways: K- State, Wichita State, and Pittsburg State all close with some offices and operations remaining open as necessary. The Regents do not have Veterans Day as a holiday but the State does. Therefore all staff are given a compensatory day for Veterans day that can be used during the holiday period. Additionally, the state does not give Christmas Eve as a holiday but has one "floating" holiday that can be used anytime. FINANCIAL IMPLICATIONS: Some modest savings in utility costs could be realized because of minimal building activity. RECOMMENDATION: President Farley recommends that the Board approve changes Business and Financial Affairs Handbook that will implement this holiday closing plan. _________________ __________________________ (date) Jerry B. Farley, President Agenda Item No. VI. B. 1. Washburn University Board of Regents SUBJECT: Revision to Classified Compensation Schedule DESCRIPTION: The Regents approved the University's current Classified Compensation Schedule at their November 14, 1997 meeting. This schedule provides for two levels of Library Assistant; Library Assistant I and Library Assistant II. The management of the Library has requested that the addition of the III level is needed for adequate career ladder/promotional opportunities and to provide appropriate classification for required duties and responsibilities relating to the current internal organization of the Library. The University's Director of Personnel and the Vice President for Administration have reviewed this request, and are in agreement that the addition of a Library Assistant III classification to the University's Classified Compensation Schedule is needed. FINANCIAL IMPLICATIONS: None. Classification will be available for use as needed. RECOMMENDATION: President Farley recommends approval of the new classification and the addition thereof to the University's Classified Compensation Schedule. __________________ _____________________________ (date) Jerry B. Farley, President Agenda Item No. VI. B. 2. Washburn University Board of Regents SUBJECT: Faculty Personnel DESCRIPTION: Dr. Gary Schmidt, Associate Professor in the Department of Mathematics and Statistics, requests a leave of absence for the Fall 1998 semester. Hire Bruce Plenk as Visiting Associate Professor in the School of Law on a non-tenure track, three-fourths time contract. Hire the following individuals on non-tenure contracts to teach in the Department of Mathematics and Statistics: Dr. Kenneth Ohm--Lecturer--Full time Dr. Richard Driver--Lecturer--Full time Evelyn Pitts--Instructor--3/4 time William Gahnstrom--Instructor--3/4 time Hire Mark Kaufman, as assistant professor, and Fred Besthorn, as assistant professor, for full-time, tenure-track positions in the Department of Social Work. Hire Gerrald Reed as an Instructor on a non-tenure track contract in the Department of Computer Information Sciences. FINANCIAL IMPLICATIONS: Dr. Schmidt's leave of absence would be unpaid. Mr. Plenk's budget line#, 32500-01-2, currently has the funds for his $54,000 annual salary. Funds to cover the salaries for the following individuals are in the FY98-99 budget: Ohm--line #22500-17-2--$34,776 Driver--line #22500-05-2--$34,296 Pitts--line #22500-18-2--$19,500 Gahnstrom--line #22500-19-2--$18,000* *Funds taken from line#22500-07-2(Schmidt, on unpaid leave of absence) Funds to cover the salaries for the following individuals are in the FY98-99 budget: Kaufman--line #28000-04-2--$36,900** Besthorn--line #28000-03-2--$37,500** **Additional funds, $900 for Kaufman and $180 for Besthorn, from line #29500-21-0, Other Salaries line in the School of Applied Studies. Reed's annual salary will be $30,636 paid from budget line #15600-02-2. RECOMMENDATION: President Farley recommends that the Board approve the above faculty personnel changes. _________________ __________________________ (date) Jerry B. Farley, President Agenda Item No. VI. B. 3. Washburn University Board of Regents SUBJECT: Faculty Personnel DESCRIPTION: Professor Linda Elrod, School of Law, requests a leave of absence for the Fall 1998 semester to be Visiting Professor at Washington University in St. Louis. Washington University will pay to Washburn University Professor Elrod's salary, plus fringe benefits. Washburn will pay Professor Elrod on its regular monthly payroll, but a grant account established with Washington University will be charged for her fall salary and benefits. FINANCIAL IMPLICATIONS: Elrod's budget line (32500-10-2) contains funds for her 1999 Spring semester salary. As noted above, the 1998 Fall semester salary will be paid by Washington University. A contract with Washington University is being prepared. Should the contract not be signed by both institutions, or should Washburn University fail to receive funds from Washington University, then Professor Elrod will be on an unpaid leave of absence for the fall semester. RECOMMENDATION: President Farley recommends that the Board approve the above faculty personnel change. ___________________ __________________________ (date) Jerry B. Farley, President Agenda Item No. VI. B. 4. Washburn University Board of Regents SUBJECT: Public Fund Investments DESCRIPTION: The Treasurer reports the following public fund investments: Amount Investment Period Public Fund Rates T-Bill Rate Successful Bidder Rate $ 400,000 220 days 5.44% 5.42% Kaw Valley 5.50% $ 100,000 141 days 5.44% 5.42% Kaw Valley 5.45% $1,200,000 129 days 5.40% 5.30% Kaw Valley 5.45% $1,225,000 180 days 5.43% 5.255% MIP's 5.43% $ 250,000 70 days 5.10% 5.255% MIP's Variable Bids for investment of the University's public funds are solicited from area financial institutions in accordance with University policy and in conformance with State law regarding public fund investment (K.S.A. 9-1401 et. seq.) FINANCIAL IMPLICATIONS: This investment will generate the following interest income at maturity: General Fund $23,113.97 Agency Fund $13,260.27 Building Construction Fund $34,943.26 Total $71,317.50 RECOMMENDATION: President Farley recommends approval by the Board of Regents of the Public Fund Investments reported in the description above. ___________________ __________________________ (date) Jerry B. Farley, President Agenda Item No. VI. B. 5. Washburn University Board of Regents SUBJECT: Depository Security Transactions DESCRIPTION: Following is a list of the depository security transactions that have occurred. With Kaw Valley State Bank Released 5-11-98 313389LP1 FHLB 5.53% Maturity Date 6-4-98 $250,000 Added 5-11-98 313393ER7 5.75 FHOR 97-01 GY Maturity Date 2-21-01 $500,000 FINANCIAL IMPLICATIONS: The Treasurer believes the University deposits are properly secured. See note on 9-15-82 agenda item VI.J. RECOMMENDATION: President Farley recommends approval by the Board of Regents of the Treasurer's Report that the University funds are properly secured. _________________ __________________________ (date) Jerry B. Farley, President Agenda Item No. VI. B. 6. Washburn University Board of Regents SUBJECT: Liquidated Claims Approval - May 1998 DESCRIPTION: Attached is the list of claims processed for the month of May, 1998 by fund. Following is a capsheet of all claims by fund. The payroll claims will be presented to the Board of Regents for review at the June 10, 1998 meeting through the Chairperson. To the best of my information and belief, I certify that the liquidated claims submitted in this transmittal are in compliance with all applicable laws and University policies. ___________________ _____________ JOHN A. MOORE, JR. DATE Fund # Fund Name Total Claims (1) General Fund ($1,200,000 in public fund investments via wire transfers)* $1,985,567.67 (2) Debt Retirement and Construction Fund 1,647,500.00 (3) Building and Construction Fund ($1,575,000 in public fund investments via wire transfers)* 133,839.68 (4) Endowment Fund -0- (5) Student Loan Fund 600.00 (6) Employee Benefit Contribution Fund -0- (7) Liability Expense Fund 5,107.00 (8) Restricted and Agency Fund ($400,000 in public fund investments via wire transfers)* 361,384.82 (9) Plant Fund -0- (11) Development Fund -0- (13) Government and Research Fund 598,036.04 Sub-Total $4,732,035.21 Payroll 2,013,727.89 Payroll Withholding ACH Transactions 674,626.39 *Wire Transfers (Investments) 3,175,000.00 **Wire Transfers (Bond Payment to State) - 0- Total $10,595,389.49 _______________ __________________________ (date) Jerry B. Farley, President