Minutes of May 2, 1996 Meeting



	The meeting convened at 2:03 p.m. in room 817 Cathedral of
Learning.

	UPBC members present were: Thomas Anderson, Toni Carbo, Richard
Colwell, Ronald Gardner, Brian Hart, Randy Juhl, Peter Koehler, Franklin
McCarthy, Glenn Nelson, Arthur Ramicone,  Philip Wion, and Judith
Zimmerman.  Also present were: Michael Gaber, Darlene Harris, William
Laird, Jeffrey Liebmann, William Madden, Robert Pack, Kathy Tosh, and
Brian Ulery.
	UPBC members not present were: Jacob Birnberg, John Brice,
Marjorie Carlson, James Cassing, Jerome Cochran, Thomas Detre, James
Maher, Keith McDuffie, Jeffrey Romoff, Michael Stuckart, Bruce Williams,
and Julius Youngner.	

Discussion of FY 1997 Parameters

	Koehler presented the final draft recommendations of the FY 1997
planning parameters for transmittal to the Chancellor.  Highlights of the
recommendations include:

-- an increase in tuition revenues of 4.5%;
-- a salary increment of 4.0% applied to a compensation base reduced
   by 4.5%;
-- $1.25 million for FY 1997 education and student life enhancements;
-- $2.0 million for technology enhancements;
-- no increase in non-personnel expenditures; and
-- $2.0 million in FY 1997 capital budget debt service.

The recommendations are based on the assumption that revenues derived from
Commonwealth appropriations will not increase over FY 1996 levels.
	Members asked questions about specific line item details.  Koehler
moved that the UPBC adopt the following proposed language transmitting the
recommended FY 1997 parameters.  Juhl seconded.

The UPBC recommends adoption (subject to refinements in detail) of the
accompanying FY 1997 Proposed Educational and General Operating Budget,
developed by the FY 1997 Budget Parameters Subcommittee and staff of the
Office of Budget, Planning, and Analysis.  We also offer the following
observations and recommendations related to the proposal: 

1.	This recommendation concerns only the Educational and General
portion of the total University budget which must be approved by the
Trustees.  It does not include, most importantly, the budget for the UPMC
Division of the University, which includes the School of Medicine.  

2.	The likelihood that there will be no increase in the Commonwealth
appropriation has made it very difficult to achieve a balanced budget
while simultaneously:

	a.	holding tuition increases to a reasonable minimum;
	b.	pursuing new initiatives to enhance the quality of
education and student life;
	c.	awarding reasonable salary increases (in the year
following a salary freeze for most faculty and staff); and
	d.	continuing implementation of a much-needed information
management system.

3.	Each line of the proposed budget has been carefully reviewed, and
adjustments have been made in several to align them more closely with
actual expenditures.  Considerable effort has been made to bring
"on-budget" items which had not been fully budgeted in the past.  Most
importantly, graduate and undergraduate financial aid is now fully funded.

4.	For most non-compensation expenses, no increase over the past
year's budget is proposed. 

5.	A key element of the proposal is its setting of a target for FY
1997 of a 4.5% reduction in the compensation base.  We wish to emphasize
several points concerning this recommendation: 

	a.	To the extent possible, reductions in faculty and staff
should be by attrition. A new retirement incentive program for faculty
should be implemented as soon as possible, and serious consideration
should be given to designing a parallel program for staff.  Every effort
should be made to minimize layoffs.
	b.	The 4.5% target for reduction in the compensation base
should be regarded as the first step in a multi-year process aimed at
creating an appropriate balance among the size of the University's faculty
and staff, its missions, and its resources.  This process should be linked
to ongoing efforts to eliminate unnecessary duplication, foster
administrative efficiencies, and systematically consider the relative
merits of outsourcing certain functions now performed within the
University.  Other means of realizing some of the necessary economies
should also be explored.
	c.	If realizing a 4.5% saving through reduction in positions
during the first year should prove to be impossible without significant
harm to the University, serious consideration should be given to spreading
this reduction over a somewhat longer period, making up the first-year
shortfall in savings with funds from other sources, on a one-time-only
basis.
	d.	Reductions in positions should not be across-the-board,
but should reflect systematic consideration of academic priorities and
analysis of ways to maximize the efficiency and effectiveness of academic
support units. 

6.	Anticipated increases in Athletics revenues should be used to
reduce the level of support currently provided for Athletics from general
funds. 

The motion was approved unanimously.
	Wion moved that the name of the Subcommittee be changed to the
Planning Parameters Subcommittee and that it be assigned as part of its
permanent charge the task of exploring long-range planning issues and
developing long-range planning parameters, in addition to its current
charge of developing annual planning parameters.  Carbo seconded.
Although members expressed concern regarding the workload of the
Subcommittee, in general, most agreed that the budget process is becoming
more open and reasonable and that lengthy discussions of operating budget
formats are past.  The motion was approved by a vote of 8 to 3.

Discussion of the Draft Attribution Methodology Report

	Wion presented a final draft Attribution Methodology and Cost
Study for FY 1995.  He explained how the report puts the Educational and
General budget in the context of the larger University budget and
explained new elements of the methodology, such as the handling of capital
costs and assignment of Plant Funds.  Anderson expressed concern regarding
the ability to evaluate recent programmatic initiatives, such as those in
Business and Health and Rehabilitation Sciences, through the data in the
report.  Pack explained that the monitoring of such initiatives takes
place in the Provost's Office through the setting of enrollment, faculty
size, and tuition revenue targets for each unit.  Madden and Laird added
that the Attribution Methodology is not an allocation, but a way of
relating support costs to academic units through a method applied
uniformly to all Education and General responsibility centers.  The
consensus was that post-audit reports should be prepared, specifically
relating to the College of Business Administration, the new SHRS facility,
and Phases I and III of the recent Athletics capital projects.

Proposal Transferring Department of Communication Science and Disorders

	Pack distributed copies of the proposal to transfer the Department
of Communication Science and Disorders from the Faculty of Arts and
Sciences to the School of Health and Rehabilitation Sciences.  He
discussed the background of the proposal, wherein FAS recommended
elimination of the Department since its mission had become one oriented
toward clinical training and operation of laboratories and away from
traditional arts and sciences.  However, given the quality of the
Department and its national presence, SHRS expressed interest in
supporting a transfer to the Health Sciences.  Pack explained that the
proposal involves a permanent removal of the hard money budget from FAS in
FY 1997 and FY 1998 and a temporary allocation of an equal amount plus
some allocated tuition revenues to SHRS to support faculty hires.  At the
end of two years, the resources needed to support the program will be
permanently provided to SHRS.

Matters Arising

	Pack explained that the Provost will be making tentative FY 1997
allocations by May 15 and will subsequently provide a report to the UPBC.
Members expressed a desire that the Provost's report include detail on
specific units' allocations and expectations and wished to understand the
criteria Senior Vice Chancellors used to make allocation decisions among
units.

	The meeting adjourned at 4:37 p.m.