RES-1464 RESOLUTION TO ADOPT GENERAL FUND

OPERATING BUDGET FOR FY2001-2002

APPROVED 1
 

BM- 952 MOTION TO MOVE TO INFORMAL SESSION

TO DISCUSS PERSONNEL MATTER

APPROVED 6
 

BM-953 MOTION TO RECONVENE IN FORMAL SESSION

APPROVED 6
 

BM-954 MOTION TO ADJOURN

APPROVED 7

Present: Braun (via conference call)

Gilbertson

Kelly

Law

Sims

Vitito

Walpole

Yantz
 

Absent: Escobedo

Others

Present: M. Coffey

W. Head

C. Jerome

R. Maurovich

J. Muladore

R. Payne

J. Stanley

R. Thompson

J. Woodcock

R. Yien

G. Zimmerman

Press (2)

I. CALL TO ORDER

Chairman Vitito called the meeting to order at 8:02 a.m. with Board members Braun (via conference call), Kelly, Law, Walpole and Yantz present. He asked that the Information and Discussion Item be moved ahead of the Action Item.

II. INFORMATION AND DISCUSSION ITEM
 

1) Staff Members of the Month
 

Marsha Coffey, Staff Member of the Month for May, and Walt Head, Staff Member of the Month for June, were presented to the Board. (See Appendix One: Coffey, and Appendix Two: Head)

(Trustee Sims joined the meeting at 8:08 a.m.)

III. ACTION ITEM

2) Resolution to Adopt General Fund Operating Budget for FY2001-2002

RES-1464 It was moved and supported that the following resolution be adopted:
 

WHEREAS, The Administration and Board of Control of the University have analyzed the level of General Fund expenditure allocations required for personnel, services, supplies and equipment to maintain the quality of instructional and support services provided to students;

NOW, THEREFORE, BE IT RESOLVED, That the attached General Fund Budget Summary, including the Tuition and Fee Schedule to be effective beginning with the Fall Semester 2001, be adopted as the General Fund Operating Budget for Saginaw Valley State University's 2001-02 fiscal year. (See Appendix Three: Budget)
 

President Gilbertson reminded the Board that the University has three major budgets: the Capital Budget; the Auxiliary Budget; and the General Fund Budget, which is the core of the institution's operations.

President Gilbertson stated: "We are asking the Board today to approve the General Fund Budget in the amount of $58,425,000 for the fiscal year that began July 1, 2001. Typically, we come to the Board with a slightly clearer sense of what our revenue sources will be, but this year there appears to be some softness and unpredictability in State revenues. The State Legislature has not yet acted on our appropriation for the fiscal year. In June the Board approved a continuing resolution which permits us to carry forward expenditures past July 1^st, but as of this point we are still required to predict what the State Legislature will do. The current bill - this last iteration - provided for a 1.5% increase in our base appropriation from a year ago. Given the absence of any further action by the Legislature, we have to assume that increase for purposes of building our budget and going forward with the fiscal year that began nine days ago."

President Gilbertson noted there are three categories of expenditures in the General Fund Operating Budget. The first includes incremental and inflationary level expenditures for the ongoing operation of the institution. The second includes those expenditures that relate directly to enrollment growth, which is being projected at 3% for the coming year. The third category includes program related new outlays which are directly related to various aspects of the Board-approved Five-Year Plan.

As part of the incremental expenditures, adjustments to the base budget were necessitated by inflation. Approximately 70% of the overall General Fund Budget relates to employee compensation. Certain required cost increases are built in because of collective bargaining agreements. An increase of $1,232,000 has been projected for various compensation groups and other miscellaneous compensation.

An inflationary increase of 3% is being assumed for general departmental budgets - this includes most supplies and equipment. An increase of approximately 7% is being predicted for utilities. The inflationary increase on major equipment acquisitions and Library resources is 3%, or $65,000.

Total inflationary increases to continue to operate the institution at current levels amount to $1,715,000.

A 3% enrollment growth is anticipated in the coming year, compounding upon a 5.8% increase in the past year. Consistent with the Board-approved Five-Year Plan and in an effort to maintain a stable student/faculty ratio and class size, eight new faculty positions have been budgeted. Due to significant enrollment growth in the Macomb Center and the University's investment in an instructional facility for that operation, a Director of Off-Campus Programs position will be established.

Increases above normal departmental increases are being proposed for the University's fastest growing unit, the College of Education, because of the particular costs associated with student teaching, travel and other expenses related to the supervision of student teachers. The budgets of various other departments that have experienced extraordinary stress generally related to enrollment growth will also be augmented by a relatively minor sum.

In response to the larger numbers of students coming to the campus who qualify for the various merit-based scholarship programs, student financial aid will be increased by $237,000 in excess of inflation.

President Gilbertson noted that in spite of the relatively lean budget year, the University wanted to make progress toward the goals set forth in the Five-Year Plan, which includes a step increase in technological capability and the goal of a three-year rotating cycle of constantly upgrading and refurbishing student computing labs. The amount of $225,000 is projected to be added to the budget for this program.

The Honors Program is being redeveloped to provide more opportunities for exceptionally good students. The SVSU Foundation has contributed $50,000 and committed $50,000 per year to a Foundation Scholars Program through which students will take honors sections courses and participate in a number of extracurricular activities. In their junior year, if they have completed the program up to that point, they will receive a $1,000 grant to fund independent study or study abroad. Forty thousand dollars has been proposed for new program development, which would essentially permit the seeding of initiatives across the campus.

The proposed budget indicates that the annual contribution to the Deferred Maintenance Account would be increased from $300,000 to $400,000. Two hundred and six thousand dollars would be allocated for the base budget for the operation of the new Science Building. Debt service for future capital projects including short-term financing of the University's matching requirement for the new College of Education and Library expansion are projected at $350,000.

In response to one of the key elements of the Five-Year Plan, five distinctive academic programs have been developed: the Graduate Program in Early Childhood/Elementary Education; the Social Studies Institute; the SVSU Environmental Research Science Program; the Center for Global Studies; and the Health Education and Athletic Training Major. The proposed budget includes $200,000 in support of these programs.

President Gilbertson then reviewed the University's three major sources of revenue. He noted that at this point in time a 1.5% increase in State appropriations was being projected. Miscellaneous income, which comes primarily from investments on cash balances and indirect cost recoveries, is being projected at a 1.32% increase.

The University's third major source of income is from tuition and fees. A 3% growth in enrollments is being projected for the upcoming year, and a 6.75% base rate increase in mandatory tuition and fees is being recommended, with slightly larger increases on the professional and graduate programs. Even with this increase, SVSU will have the lowest tuition and fee charges of all the public universities in the State of Michigan. The actual dollar increase on tuition will also be one of the lowest rate increases in the State.

President Gilbertson added: "I wish we didn't have to raise tuition, but I don't think we have to apologize for it, because this institution has been run lean, and I think that we have been successful in our efforts to be fair and moderate in the rates we charge our students. However, given the leanness of our other sources of revenue, I think this increase is necessary to . . . maintain the institution's operations at an inflationary rate, to cope with enrollment growth, and to continue making at least modest progress on the goals the Board has approved for support."

He noted that given the relatively small growth in the State appropriation, the University has come to a point where, for the first time in its history, student tuition and fees revenue exceeds the State appropriation.

The administration will come back to the Board in September or October with various budget changes. At that point the exact State appropriation and the fall semester enrollment numbers will be known, and the Board can then act in response to that information. However, as tuition and fees statements must go out today, this budget is being recommended at this time.

Chairman Vitito asked for questions. Hearing none, he called for the vote.

The motion was APPROVED unanimously.

3) Motion to Move to Informal Session to Discuss a Personnel Matter

BM-952 It was moved and supported that the Board move to Informal Session to discuss a personnel matter.
 

The motion was APPROVED unanimously.
 

The Board moved to Informal Session at 8:45 a.m.
 

4) Motion to Reconvene in Formal Session
 

BM-953 It was moved and supported that the Board reconvene in Formal Session.
 

The motion was APPROVED unanimously.
 

The Board reconvened in Formal Session at 8:59 a.m.
 

IV. ADJOURNMENT
 

5) Motion to Adjourn
 

BM-954 It was moved and supported that the meeting be adjourned.
 

The motion was APPROVED unanimously.
 

The meeting was adjourned at 9:00 a.m.
 

Respectfully submitted:

________________________

Robert J. Vitito

Chairman
________________________

D. Brian Law

Secretary

________________________

Jo A. Stanley

Recording Secretary