September 30, 2002
University of Illinois
SC.03.03 Report of the Board of Trustees' Meeting, Chicago Illini Union, September 12, 2002
Meeting of the Board of Trustees, 8:00-10:15 a.m.
Executive Session, 8:05-9:20
In the public comment period, UIS Professor Patricia Langley urged adoption of domestic partner benefits (an item not on the agenda) arguing it was a matter of justice and fairness with cost an insignificant factor. She referenced the 9/11 plane crash in Pennsylvania as evidencing unity in purpose and action with the nation honoring all who acted rather than dishonoring some on the basis of sexual orientation. She noted morale issues and the impact of health costs in her own partnership as evidence for needed changes.
Trustees Plummer, Gravenhorst, and Schmidt noted their report on the role of the Trustees in governing the University distinguished policy setting by the Board and implementation and management by the University administration. Conflicts over issues are inevitable but the question is the process used to resolve them. They argued against micro management. The discussion will proceed in future sessions. Chair Shea suggested public hearings on the issue. The committee suggested discussions with faculty senates or executive committees.
Trustee Lamont reporting on behalf of the ad hoc external affairs committee (also Eppley and Vickrey) indicated they will likely recommend that this be made a permanent committee.
Meeting of the Committee on Finance and Audit 10:30-11:15 a.m.
The real growth of the University endowment (not the Foundation's) over the last ten years is 2% net after payouts, fees, charges and inflation. Two fund managers that had under-performed were recommended for replacement. Also, recommended was moving a small amount to private equity investments: greater volatility but also the chance of above average return. Finally, Richard Traver reported briefly on the work of his office, which is in charge of University internal auditing and noted the issuing of a new guide on ethical practices for university staff.
Meeting of the Committee on Building and Grounds, 11:15-11:30 a.m.
A design presentation on the proposed Campus Recreation Center East at UIUC was the major item. Students were heavily involved in the planning. The design is an effort to promote more social interaction of students, faculty, and staff; offer a diversity of facilities; and meet the increasing demand for late night recreation activities. The work will include some renovation and changes in Freer.
Meeting of the Academic Affairs Committee, 11:30-Noon.
Bill Jones of UIC noted its senate has revised its bylaws and now has fewer committees. Tom Conry reported the Senates Conference has been active and stressed the importance of faculty involvement and the urgency of strong faculty governance. Patricia Langley, UIS, noted their focus on academic and personnel issues. Also, the addition of a new freshman class brought a problem of computer capacity in that students' downloading of music caused a computer jam.
Immediately after lunch Trustee Lamont asked the UIS Chancellor Ringelsen to comment on the Lincoln Library and Research Project saying that erroneous material had been appearing in the press. The chancellor noted that the funds had been severely cut, that the academic research center and the library had always been a part of the project, and both had to share in the cuts.
Meeting of the Committee on Economic Development, 1:15-1:50 p.m.
Vice President Chicoine stated the goal of economic development is "to provide every opportunity for research outcomes with commercial potential to be quickly and effectively developed." The presentation noted the growth in number of building and occupancy in the UIUC Research Park and the trend in filings of discoveries and patents issued. Stress was given the role faculty play in bringing in research grants and contracts and potentially viable commercial applications.
Meeting of the Board of Trustees as a Committee of the Whole, 1:50-2:45 p.m.
The focus was the budget for Fiscal Year 2003 and the proposed budget for FY 2004. The session opened with note of the agreement that the president had authority to reallocate up to $2M in budgeted lines with quarterly reports to the Board of anything over $1M. The FY03 budgeting was characterized as a paradox of highs and lows: a good capital budget, a very bad operating budget with a decline of 6% in state funding--an 8% cut with health costs included.
The presentation on the FY04 budget noted the issue of "reasonableness" of the request. If there is $1B of new revenue for higher education, SURS and ISAC will take up most of the money leaving perhaps $10-20M for all the rest of higher education. Funding of four-year institutions has fallen 6.5% in constant dollars since FY90. The University faces several urgent issues: we, particularly UIUC, have problems in faculty salary competitiveness. (Observer's note: if compensation were considered, the gap becomes even greater.) Funds are needed to restore programs, respond to our multiple missions, meet top-priority state needs, and maintain quality. Hence a request for 4.9% increase in salaries, and a total increase $91.7M or 8.4%. (See attachment.) The capital request has repair and renovation at the three campuses at the top with UIUC Lincoln Hall remodeling second.
Meeting of the Board of Trustees, 2:45- 4:05 p.m.
Among reports by chancellors, the addition of 250 FTE students at UIS was noted as well as increased on-line enrollments. Trustee Lamont indicated the renovation of the UIUC Assembly Hall is less costly than replacing the building. Discussions are under way about how to move forward. Trustees also noted the value of visits with the senate executive committees.
The entire agenda was adopted without discussion except for the FY 2003 operating Budget. Trustee Shay proposed that faculty and staff be given a pay raise of 3% on the first $100Kof salary with no raise for those earning over $150K, arguing the money could come from "carry-over funds." This evoked a stream of concerned responses. Most of this money is ICR (Indirect Cost Recovery) from grants. While it appears to be uncommitted actually it is actually being used for a wide range of items at the unit level and is impossible to "sweep up" without great disruption. If the change were implemented, the chancellors in responding noted the necessity of sharply cutting faculty and staff. This year we had the largest reduction in our budget in 50 years. With regard to making cut cuts necessary to fund the proposed raise, it is hard to estimate the impact of such a "precipitous act on two days notice." A great amount of work by staff and faculty have gone into working out the present budget and the change would negate that work and impact different units and campuses quite differentially. Salary increases are the key focus for next year and it is best not to disrupt the process of consultation and decision-making that have occurred. Trustees in speaking in opposition noted that is an example of micro managing that the Board must avoid. The ultimate vote was 9 to 1 in opposition.
N.B. Materials from the Thursday meeting including a copy of the slides used in the budget presentation are on file at the Senate Office.