University Senate, November 9, 2015 October 26, 2015 Meeting Minutes - - PDF document

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 6

I.

General Budget Overview

II.

Education & General Budget – What has changed?

III.

Staffing, Faculty Compensation and Employee Benefits

IV.

Reserves – How much and why?

V.

Questions

2

The presentation is primarily: Oxford Based Faculty Focused

22 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 7 E&G Unrestricted

$491.4M

71% Restricted

$48.3M

7% Auxiliary

$156.6M

22%

Miami University - Oxford Campus Why are there three distinct budgets?

E&G includes unrestricted and designated funds.

* Legislative, grantor, and donor limitations restrict movements across categories.

1) An example of an auxiliary is Housing and Dining

• Generates own revenue
• Operates within that budget

2) Restricted funds are sponsored funds, grants, gifts, endowments; these funds have stipulations on them. 3) E & G Unrestricted is the Education and General Budget

• No stipulation by donor or external agencies

23 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 8

IT $15.4M- 2% Institutional Support, $50.3M 8% Student Services, $23.0M 3% Instruction and Other Academic Activities $249.7M 38% Scholarships & Fellowships, $95.7M 14% Auxiliaries, $139.8M 21% Plant O&M, $31.,3M- 5% Debt Service, $48.1M- 7% Other General Fee Transfers $13.4M- 2%

FY 2016 Oxford Total Expenditure Budget = $666,774,290 How is the budget allocated across the major university functions?

TOTAL ACADEMIC/STUDENT $368M 55%

[ICA = 26.5M, 4% of total budget]

Institutional Support (8% of expenditures): includes services that support the academic mission, but are not involved in the direct delivery of the mission, e.g. Accounting, Police, Human Resources, Provost’s central office Intercollegiate Athletics (ICA) Budget (4% of expenditures): Only 2% of expenditures for the sports programs are provided by the University because ICA supports the rest their expenditures. Other academic activities include the Library, Graduate School, center and institutes, International Program Office, MUDEC administration,etc.

$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 Residence & Dining Halls Shriver Center Intercollegiate Athletics Recreational Sports Center Goggin Ice Center Transportation Services Student Health Service Marcum Conference Center Millett Hall-Student Facilities Aviation Services Armstrong Student Center

Millions

FY2016 Expenditure Budget

Oxford Campus Auxiliary Operations

How much is spent on Intercollegiate Sports?

General Fee Scholarships and Student Support Services Funded by General Fee (advising, etc.) Auxiliary Funded Activities

7

24 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 9

Support Costs $68.5M 21% Debt & Other Transfers $14.6M 4% FY2016 OXFORD E&G BUDGET BY EXPENSE CATEGORY

(Excludes scholarships, fellowships waivers & general fee)

How is the Unrestricted E&G budget spent?

*Greatest Expense Category is Personnel

NB: Every 1% growth in salary = $2.5 Million What has Changed?

25 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 10 Tuition & Fees $402.3M 82%

Appropriations $61.0M

12%

Other Designated $15.5M

3%

Sales, Grants & Contracts $4.1M

1%

Investment, Endowment & Gifts $8.5M

2%

*Unrestricted E&G includes designated funds.

FY2016 E&G Unrestricted Revenue Budget

NB: All of “Tuition & Fees” and most of the Appropriations portion of the revenue budget is enrollment dependent. This results in 93% of MU’s revenue budget being enrollment dependent. **** MU is in the top 5 among public universities nationally that are dependent on enrollment and tuition for support.

CPI HEPI

$0 $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Trends in State Appropriations (SSI)

(SSI not adjusted for inflation: SSI annual rate of growth 0.75%; CPI rate of growth 2.3%; HEPI rate of growth 3.2%)

SSI SSI @ CPI SSI @ HEPI

Over the last 25 years growth in state support (appropriations) has been almost nonexistent, while at the same time, price indices have continued to rise. CPI – Consumer Price Index HEPI – Higher Education Price Index

26 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 11

5,058 11,994 14,233

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

Fall 1996 Fall 2006 Fall 2016

Undergraduate Resident Tuition Trend

137.9% increase from 1996-2006 Annualized rate of 9.0% CPI was 2.5%. 18.7% increase from 2006-2016 Annualized rate of 1.76% CPI was 1.79%

12

Largest tuition increases occurred between 1996 and 2006

Significant growth in resident tuition once more than adequately replaced state support but not in the last

• decade. With increasing emphasis on affordability means our ability to raise tuition is more controlled and

limited, e.g. the state has frozen tuition for 2015-16 and 2016-17. Fall 1996 – Fall 2006: 137.9% overall increase in tuition. Fall 2006 – Fall 2016: only 18.7% overall increase in tuition.

20.0 21.0 22.0 23.0 24.0 25.0 26.0 27.0 28.0 29.0 30.0

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Cohort Average ACT Score Cohort Enrollment Cohort Year

Trends in Oxford 1st Time Enrollment by Residency With Average ACT Score

In State Out of State ACE MU ACT pre 2006 MU ACT 2006 to present OSU ACT

Enrollment growth has been the primary source of new revenue growth over the last five years but is this sustainable? Note: Blue portion of the bars represents the number of in-state students Orange section of the bars represents the number of out-of-state students

27 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 12

Green portion of the bars represents the number of students in the ACE (American Culture and English) Program.

• 10,000,000

20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Trends in Undergraduate Financial Aid Budget

(Not adjusted for inflation)

Financial Aid increased by ~400% while tuition rose by less than 19%

14

Complex financial aid strategies are enabling more academically talented students to be enrolled but at a much larger share of the budget.

• 10,000,000

20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 70,000,000 80,000,000

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Trends in Undergraduate Financial Aid Budget

(Not adjusted for inflation)

Financial Aid increased by ~400% while tuition rose by less than 19%

Endowment needed to offset the cost of financial aid

$352M $613M $1.59B

15

Distribution from endowments is about 4.5%. Therefore, it would require a $1.5 Billion endowment to distribute $70 Million in financial aid.

28 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 13

$198.6M $148.5M $154.5M $135.1M $202.2M $210.2M

$- $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 $350,000,000 $400,000,000

FY2007 FY2015 FY2016

Trend in Allocation of E&G Budget (Net of Scholarships)

Other Divisions and Unallocated Revenues Academic Colleges and Schools

40.5% 59.5% 42.3% 57.6% 42.4% 57.7%

16

RCM is leading to more resources being assigned to colleges and schools. However, the colleges and schools face greater volatility in funding as well as added funding responsibilities for classroom and building projects.

$300,000,000 $320,000,000 $340,000,000 $360,000,000 $380,000,000 $400,000,000 $420,000,000 $440,000,000

FY16 FY18 FY20 FY22 FY24 FY26 Revenue Expense

Assumptions

• Classes of 3650, 44% non-resident
• 300 American Culture and English

Program

• Resident tuition frozen through

FY17, then 1.75 inflationary increases

• SSI grows 4% in FY16 & FY17, no

growth in FY18, then 0.75% increases

• Financial aid at FY16 discount rate

with added investment for diversity thought FY19

• 3% Salary increment pool
• Benefits grow no more than

salaries

• Increases for new faculty lines,

per credit hour rate, and market adjustment

Long Range Budget Forecast

(Revenue Net of Scholarships)

While revenues are exceeding expenses today, this quickly evaporates once the growth in enrollment ends. The assumptions that are made in our long range budget forecast are as listed.

29 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 14

• 1. 3 parts to MU Budget: E&G Unrestricted, Restricted and Auxiliary

(These are Fixed Funds- cannot move them)

• 2. 93% of E&G revenues are dependent on enrollment
• 3. Miami increased financial aid by ~400% while tuition rose by less

than 19% between 2007-2016 (versus 138% tuition increase between 1996-2006)

• 4. 58% of total expenditures are in academics
• 5. 75% of total expenses are for personnel

6. Support for ICA is 2% of the Oxford budget and supports 18 competitive sports (11 women’s and 7 men’s teams)

18

Point 2: In addition to 82% of the E&G unrestricted revenue budget coming from tuition and fees (see Slide 10), a portion of the appropriations is also enrollment dependent. This results in 93% of the E&G revenues being dependent on enrollment. Point 6: While 4% of the total expenditure budget is for ICA (Slide 10), when we take out what ICA provides, only 2% of the University budget supports sports.

30 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 15

20

Preliminary Faculty and Staff Changes for Fall 2015 Fall 2008 to Fall 2015 (Preliminary 10-1-15)

Fall 2008 Fall 2015 Prelim Change from Fall 2008 to Fall 2015

Faculty (FT only) 867 949 82 Tenured/Tenure-Eligible 667 610 (57) Lecturer/Clinical Faculty 34 102 68 Not-Tenurable Instructional Staff 166 237 71 Non-Instructional Staff 2,839 2,233 (606) Total Oxford 3,706 3,182 (527)

Rapid growth in enrollment and an unusually large number of retirements has led to short-term growth in non-tenured positions that is being addressed through increased hiring authority for tenure track positions. The reduction in non-instructional staff following the economic crisis won’t be fully corrected given the political focus today on affordability and efficiency.

21

* % of T/TT Faculty ** % of Total FT Faculty 75%

FULL TIME FACULTY

As of Oct 21, 2015

675 681 669 672 667 676 659 633 599 580 592 610

10 13 30 34 37 48 70 81 95 102 102 174 141 131 126 138 114 143 148 153 168 213 232

• 100

200 300 400 500 600 700 800 900 1,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Tenured/Tenure Eligible Lecturer/Clinical Faculty Visitors

16.7% * 65% **

Incremental decline in T/TT lines following the severe economic downturn in 2008-2009; reversed that trend starting in 2013 as economy recovered and security about resources increased. Growth in lecturers and clinical faculty rank occurred. This helped to maintain instructional delivery by permanent, full time faculty. Full – time visiting faculty provide flexibility.

31 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 16

22

20 32 42 58 43 9 23 10 12 7

10 20 30 40 50 60 70 80

2012-13 2013-14 2014-15 2015-16 2015 -16 Searches

Tenured/Tenure-Track Lecturers/Clinical Faculty

Permanent Faculty – Hires and Searches

The trend is toward increased number of T/TT hires as economy improved and the deans became more comfortable committing permanent dollars.

23

[VALUE] $90,774 $115,038 $77,971 $91,063 $101,468 $74,652 $87,997 [VALUE] $74,438 $87,925 $97,884 $60,000 $80,000 $100,000 $120,000 2005 2010 2014

Assistant Professor Average Salary + Benefits

Miami is above all other categories

$57,721 $64,016 $81,878 $60,440 $69,777 $77,446 $56,338 $66,710 $74,338 $56,091 $66,507 $74,032

$20,000 $40,000 $60,000 $80,000 2005 2010 2014

Assistant Professor Average Salary Comparison

MU-Oxford Nat'l Doc Public Ohio Doc Public Ohio 4 Year Publics

Miami is above all other categories

Source: IPEDS Data

Upper graph: Average Assistant Professor salaries are above other categories, i.e., the national public doctoral institutions and are above the Ohio public doctoral and 4 year public institutions. The cost to MU for benefits coverage is also shown on the lower graph. Salary + Benefits at MU are the highest compared to the other groups.

32 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 17

24

$93,553 $104,550 $120,329 $91,126 $105,667 $115,948 $88,749 $102,360 $111,966 $88,639 $102,214 $111,754 $60,000 $80,000 $100,000 $120,000 2005 2010 2014

Associate Professor Average Salary + Benefits

Miami is above all other categories

$69,335 $73,731 $85,643 $70,952 $81,266 $88,716 $68,042 $78,356 $84,949 $67,905 $78,090 $84,673 $20,000 $40,000 $60,000 $80,000 $100,000 2005 2010 2014 MU-Oxford Nat'l Doc Public Ohio Doc Public Ohio 4 Year Publics

Associate Professor Average Salary Comparison

Miami is above other Ohio Institutions

Upper graph: After only one year of the market adjustment, the average Associate Professor salaries are above the Ohio public doctoral and 4 year public institutions. We will know the impact of the second year next year, which is when the data will be reported and available. The cost to MU for benefits coverage is also shown on the lower graph. Salary + Benefits at MU are the highest compared to the other groups. NB: Since 2014-15, when faculty are promoted to Associate Professor, there is an automatic increase of $6,000. Previously, it had been $5,000.

33 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 18

25

$125,386 $144,128 $156,552 $127,535 $149,643 $165,888 $122,268 $141,329 $153,559 $121,935 $140,951 $153,044 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 2005 2010 2014

Professor Average Salary + Benefits

Miami is above OH Publics $93,175 $101,642 $111,425 $101,620 $118,054 $130,039 $95,964 $110,952 $119,490 $95,663 $110,538 $118,953 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 2005 2010 2014 MU-Oxford Nat'l Doc Public Ohio Doc Public Ohio 4 Year Publics

Professor Average Salary Comparison

Miami is below other OH and National Publics

Upper graph: Average Professor salaries are below the National public doctoral, the Ohio public doctoral and the 4 year publics. **** These data reflect salaries after only one year of market adjustment for full professors. The impact of that adjustment was that full professor average salaries increased by ~$4700. The cost to MU for benefits coverage is also shown on the lower graph. Average MU Salary + Benefits are higher compared to Ohio public doctoral and the 4 year public institutions. NB: Since 2014-15, when faculty are promoted to Professor, there is an automatic increase of $9,000. Previously, it had been $7,000.

• Employee share of healthcare premium has increased

to 19.7% (from 6.8% )

• Average increase per employee is $80 per month -

withheld prior to tax calculation rate (actual out of pocket is reduced by the employee's tax rate)

• Consistent with directive from Board of Trustees to

increase premium to statewide average for public universities in Ohio

The recommendation from the Board of Trustees was also adopted by the Strategic Priorities Task Force.

34 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 19

• Reached goal for employee share, so no increase in

employee contribution planned for new benefit year in January

• Implemented plan design changes to lower employee's
• ut of pocket cost by:
• Reducing co-pay to 90/10 when certain providers are used
• Benefits Committee exploring other cost reduction ideas

for employee's when high performing, lower cost providers are selected

• Health Center is available to employees with no co-pay or

deductible

The Benefits Committee continues to explore ways of lowering out of pocket costs for employees through high performing providers. Legislative mandates on employee benefit programs are also having an impact on benefit decisions.

• 1. We are steadily increasing T/TT faculty while keeping

L/CPL at < 20%, per Senate

• 2. Faculty salaries are:
• Above average at Assistant Professor Rank
• Above average in Ohio at Associate Professor Rank
• Below average at Professor Rank
• 3. Increasing faculty salaries across all ranks
• Continuing market adjustment with focus on

associate professor and professor ranks

35 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 20 1. Healthcare premium is now consistent with statewide average

• 2. To offset previous increase:
• MU Health Center is free for all employees
• Reduce co-pay for certain providers
• Benefits Committee exploring how to
• ptimize benefits for employees

(One-time monies) How much and why?

36 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 21 Unrestricted Net Assets $210,714,144 Restricted Net Assets 176,555,228 Value of Buildings 564,091,473 Total Net Assets $951,360,845

(University Balance Sheet - June 30, 2015)

31

NB: Net assets are NOT Reserves, BUT Reserves are a part of MU’s net assets. Unrestricted Net Assets = University Savings account; these are one-time monies Restricted Net Assets = Value of the endowment and unspent restricted funds

$0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 $350,000,000 $400,000,000 $450,000,000 $500,000,000 FY2007 FY2008 FY2009 FY2015

Change in Net Unrestricted Assets

How do these resources benefit the University in difficult budgetary times?

Net unrestricted asset balance Reduction for required pension liability reporting

From FY2007 to FY2009: net unrestricted assets declined $76.1 mill (37.1%.)

The Pension Liability (red bar) is a potential, future obligation. We are required to show this amount in our listing of unrestricted assets because it is mandated by the Governmental Accounting Standards Board (GASB 68) and the state of Ohio requires MU to follow these standards in its financial reporting.

37 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 22

33

Net Assets

Description Amount (6/30/15) Purpose or Planned Use

Central Reserves $67,120,694 Economic stability and

• emergencies. Only two months of
• perating reserves.

Quasi-Endowment 74,891,377 Augment the endowment primarily for scholarships. Academic Colleges and Schools - Dean 67,439,566 Local funds for six year capital plan ($40 million needed), classroom improvements, and financial stability. Academic Departments 17,023,795 Course fees, faculty start-up, etc. Provost and Other Academic Units 18,710,325 Investment in academic initiatives, equipment, and academic needs. Regional Campuses 34,349,907 Financial stability, capital projects, and new academic programs.

The majority of these funds are controlled by colleges, schools and departments.

34

Net Assets

Description Amount (6/30/15) Purpose or Planned Use Other Departments 33,554,014

Major software and technology replacements, self-insurance, and

• ther major purchases.

Capital Projects Authorized / Not Expended 52,791,669

Capital projects approved but not completed.

E&G Capital Projects / Not Authorized 10,035,313

Unmet needs and facility emergencies.

Auxiliary Operations 109,827,563

$340 million dollars in planned residence hall improvements and conversion from coal to more environmentally friendly sources.

Net Assets (without pension liability) $485,744,223

38 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment B Power Point Slides and Notes: University Budget Explained: Reality and Priorities 23

• 1. Reserves are NOT net assets
• 2. Reserves are one time monies
• Most designated for specific purposes, e.g. renovations,

capital projects

• Provide financial security, especially in uncertain economic

times

• Necessary for longer term and larger projects
• 3. More than $130 Million are in academic divisions and

department (carry forwards)

• Meet divisional, department, and program needs and

initiatives, local match for classroom improvement projects, and local match for Pearson and Bachelor Hall projects ($40 million)

35

39 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment C University Budget Explained: Reality and Priorities: Summary of Terms 24

Terms for 10.26.2015 - Budget Presentation to Senate Designated funds- Are revenues of the University that have been assigned to the control of a

• department. The most common examples of designated funds are course fees and indirect cost

revenues. Institutional support- A functional expense category that includes expenses for the day-to-day

• perational support of the institution. Includes expenses for general administrative services, central

executive-level activities (including the office of the provost and the regional campus administrative functions) concerned with management and long range planning, legal and fiscal operations, space management, employee personnel and records, logistical services such as purchasing and printing, and public relations and development. Restricted current funds- Funds available for financing operations but which are limited by donors or

• ther external agencies to specific purposes, programs, departments, or schools. These funds are

subject to externally imposed restrictions which are different from the internal designations imposed by the governing board on unrestricted funds. Restricted net assets - Assets held by the institution upon which restrictions have been placed by

• donors. These restrictions may be temporary or permanent. They restrict the institution in its use of the

assets and/or the period of time for which the restriction applies. Restricted-expendable (net assets)- Net assets that are expendable but subject to imposed restrictions. Restrictions exist when constraints placed on use are either (a) externally imposed by creditors, grantors, contributors, or laws and regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation. Restricted-nonexpendable (net assets)- Net assets of Governmental Accounting Standards Board (GASB) institutions subject to restrictions that prohibit the expenditure of the net assets in

• perpetuity. Restrictions exist when constraints placed on use are either (a) externally imposed by

creditors, grantors, contributors, or laws and regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation. Permanent endowments are the most common example. Unrestricted current funds- All funds, including institutional funds, received for which no stipulation was made by the donor or other external agency as to the purpose for which the funds should be expended. Unrestricted net assets- The net assets of the University that do not fit the definition of other categories

• f net assets. These are net assets held by the institution upon which no restrictions have been placed

by the donor or other party external to the institution. ENDOWMENTS: Endowed funds- Funds whose principal is nonexpendable (true endowment) and that are intended to be invested to provide earnings for institutional use. Also includes term endowments and funds functioning as endowment (quasi-endowments). Funds functioning as endowment (quasi-endowment funds)- Funds established by the governing board to function like an endowment fund but which may be totally expended at any time at the discretion of the governing board. These funds represent non-mandatory transfers from the current fund rather than a direct addition to the endowment fund, as occurs for the true endowment categories.

40 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment D AAUP Chapter: Questions for Senate Budget Meeting

Questions for Senate Budget Meeting, October 26, 2015

• 1. What is the justification for shrinking the tenure-line faculty while growing the number of

students and administrators? (In Oxford, NTL faculty have doubled since 2010 while TL faculty have declined by 12.5%.) In what way does the increase in non-tenure-line and non- permanent faculty benefit students? Why aren't we turning VAP positions into tenure-line positions?

• 2. 2. The university has overshot its Strategic Task Force target for cuts in benefits. At a time

when the university has nearly $1/2 billion in reserves, what is the financial rationale for continuing to shift costs to the staff and faculty to such an extent that there is now no out-

• f-pocket maximum in our current benefits package for out-of-network care, leading to

some members of the faculty and staff incurring tens of thousands of dollars in health costs?*

• 3. The University has nearly $1/2 billion in unrestricted reserves. We accept that you have

budgeted for their expenditure. But those budgets are choices: plans that can change with conditions and with changes in priorities. Only about 1/4 of all Miami expenditures are on instruction, and the trend is downward. Yet Miami expenditures for senior administrators, non-instructional buildings (including Phase II of Armstrong and another 300-person auditorium in Shriver) and Inter-Collegiate Athletics are up. The argument is often made that cuts in tenure-line hires are necessitated by the desire to keep student tuition costs

• down. What evidence is there that the university has sought to keep tuition costs and fees

down by addressing these other areas?

• 4. 4. The Athletic Director, in his summer presentation to the Board of Trustees, presented

data showing that the average pay raise for staff in the Athletic Department is over 5% while the average pay raise for faculty has been just over 2% and for staff under 2%. This disparity has not been publicly discussed or justified. Especially given the department's $20+ million annual loss (a loss subsidized primarily by student fees), how can it be defended?

• 5. At the summer meeting of the Board of Trustees, it was announced that a large number of

unrestricted endowments were being stripped and redirected to Stage II of Armstrong. These endowments could have been used for many other purposes. Why did the Board of Trustees decide that, having failed to raise the necessary monies for Stage II, using these endowment funds for Stage II was a higher priority than, say, using them for scholarships?

• 6. We now have a much higher number of Visiting Assistant Professors than we did ten years

ago (a 98% jump since 2010), and fewer tenure-line faculty (a 10% drop). We must be very close to the MUPIM cap on lecturers. Our lecturers, clinical faculty and VAPs are valuable colleagues, and many are qualified for tenure-line appointments: what can we do to allow more opportunities for them?

41 of 49

University Senate, November 9, 2015 October 26, 2015 Meeting Minutes Attachment D AAUP Chapter: Questions for Senate Budget Meeting

• 7. What methods have the Fiscal Priorities Committee and Dr. Creamer established to learn

about faculty and students' views on the university's financial priorities? Does the input of the Fiscal Priorities Committee have an influence on final budget recommendations, or is its role simply to report decisions downward to Senate? Assuming reliable information on faculty and student priorities is gathered, is that information communicated to the Board of Trustees when budget recommendations are made? If not, why not? Can communication be improved?

• 8. What research has been done that suggests the university needs another auditorium in

Shriver Center as opposed to, say, another real theater, or a dedicated faculty space like the

• ld 1809 Room? How much are faculty, staff, and students being consulted as these

decisions are made?

• 9. To what extent is a competitive effort to make Miami look posh interfering with the core

educational mission and experience? The $2 million directed toward raises last year is chump change compared to the surplus ($136.5 million in 2014, $85.5 million in 2013) and to what is being poured into reserves. Could we reprioritize to allow the percentage of funds directed toward instruction to increase beyond a quarter of the total budget, or consider reducing spending elsewhere, so that we can (1) reduce a dependence on contingent faculty that is widely understood to be detrimental to students and (2) provide a more serviceable benefits package to faculty and staff?

• 10. Move that the Executive Committee of Senate charge the Fiscal Priorities and Academic

Policy Committees to investigate the nine issues raised above and to report their conclusions to the Senate and the Board of Trustees.

*Note shared with AAUP leadership by Prof. David Walsh (MGT, FSB), former chair of Faculty Welfare Committee: There are out-of-pocket maximums for in-network benefits. However, there are no out-of-pocket maximums for

• ut-of-network benefits. Thus, if one of us gets treatment from a doctor or hospital that is not within United

Healthcare's established network of providers, the bills are potentially unlimited. This goes well beyond just providing an "incentive" to use providers that have agreed with United Healthcare to charge less for their services. The established network of providers is reasonably large, and plan participants can avoid problems by verifying whether providers are in the network. But it is not that simple. You or a family member might have an unusual condition and the acknowledged expert on treating that condition not happen to be in the network. Your choice then is to go to a less competent person or accept unlimited liability. Or, since the providers included in the network are subject to change, you might have an established relationship with a doctor and that doctor suddenly no longer be in the network. Your choice then is to end the relationship and go with an unknown quantity or, again, accept open-ended financial responsibility. Last, and most insidious, you might be taken to an in-network hospital, but be treated there by contract physicians who are not part of the network. You might not even be aware that this has happened until after the fact. The New York Times ran an interesting piece on this problem about a year ago (Elisabeth Rosenthal. 'Costs Can Go Up Fast When E.R. is in Network, But the Doctors Are Not.' New York Times (September 29, 2014), A17).

42 of 49