minutes of 09 december 2015 arizona state university ... · interests and general education support...

1

MINUTES OF 09 DECEMBER 2015 ARIZONA STATE UNIVERSITY RETIREES ASSOCIATION

BOARD MEETING

Board Members Present: Barry Bruns, Bev Buddee, Jim Fordemwalt, Joyce Hartman Diaz, Karen Hammann, Jo Madonna, Larry Mankin, Trudy Perez, Jeannette Robson, Barbara White, Hal White Board Members Absent: Larry Carlson, Bob Francis, Glenn Irvin, Ruth Kingsley, Jan Thompson Ex-Officio Members Present: Katie Aguilar, Abby Polito Committee Chairs Present: Sue Blumer, Joan Leard, Barry McNeill, Connie McNeill, Jeri Meeks, Dave Scheatzle, Dave Schwalm Executive Staff Present: Guests Present: Kevin Salcido, VP of HR and Chief Human Resources Officer I. CALL TO ORDER

Jim Fordemwalt called the meeting to order at 10:05 AM

II. INTRODUCTIONS AND WELCOME TO GUESTS Jim introduced Kevin Salcido, ASU Vice President of HR and Chief Human Resources Officer, and then turned the meeting over to Kevin to speak about the University’s proposal to move from a defined benefit program to an optional retirement program. Kevin began the presentation with a brief tutorial on the ASRS defined benefit program (ASRS) and the Optional Retirement Program (ORP): ASRS: No choice of investment options by employee – money managed by ASRS; 10 year vesting period in ASU portion of contribution for participants who want to withdraw at termination - no refund of ASU portion if hired after 2011; 11.5% contribution rate for both employee and University; Contribution rate subject to change at ASRS’s discretion; Both the employee and ASU begin contributing their funds upon eligibility; If employee terminates ASU employment before becoming vested in ASU portion (or is hired after 2011) and elects to withdraw, employee gets their money (plus interest) but not unvested ASU contributions which stay with the ASRS and are not returned to ASU; No risk factor to employee as state agencies manage the funds;

2

Guaranteed retirement income based on formula; If funds remain in the account at the demise of the retiree (and beneficiary, if one is designated), some actuarially determined balance will pass to the beneficiary; Additional cost to ASU for portion of state retirement fund unfunded liability, as with recent early out incentive program ORP (401A): Employee has choice of University approved investment providers; 5 year vesting period; 7% contribution rate for both employee and University; Employer has option to increase contribution rate; Employee begins contributing funds on day one of employment; ASU accrues matching funds liability but does not fund until employee is vested If employee terminates ASU employment prior to vesting, employee gets their money but ASU keeps its money Employee bears the investment risks/rewards Retirement income direct result of employee’s investment success; ASU provides no cost investment consulting; If funds remain at demise of plan participant, remaining funds pass to participant’s beneficiary or estate; No additional plan cost to ASU beyond the 7% contribution ASU currently offers: University staff and faculty have a choice between ASRS and ORP participation (60% of new staff choose ORP participation – 70% of faculty choose ORP) Proposed ASU changes: All new employees would be offered University approved ORP plans – ASRS would not be available to new hires; Current employees with less than a certain number of years of service in ASRS would have the option to be moved to ORP plans Change justification: Fiscal responsibility - 15% of ASU operating income comes from state funding, balance generated from student tuition, research grants and donations. ASU asked to pass on costs to students. Move to ORP reduces the cost of contributions to retirement because of the difference between 7% and 11.5% and the way the plans vest. These savings run into the millions of dollars over time. New employee trend is 2-5 years and then move to new jobs, ASRS costing ASU valuable resources by keeping all employer contributions when employees leave before vesting; Employees in this workforce want flexibility and portability of retirement benefits;

3

Industry move away from defined benefit programs The Arizona State Legislature must approve this proposal. Kevin gave the bill about a 30% chance of passing this year. When asked how this bill would affect current ASU retirees, he said that there were no apparent impacts as benefits are guaranteed by state law but promised to research more deeply and report at a future ASURA Board meeting.

III. ADOPTION OF TODAY’S AGENDA MSPassed to adopt the 09 December 2015 Agenda

IV. REVIEW AND APPROVAL OF THE MINUTES OF 09 SEPTEMBER, 2015, AND 14 OCTOBER 2015 BOARD MEETINGS MSPassed to approve the 09/09/15 Minutes MSPassed to approve the 10/14/15 Minutes

V. FINANCIAL REPORT / TREASURER’S REPORT – BARRY BRUNS, CAROLYN MINNER MSPassed to approve Treasurers report

VI. EX-OFFICIO REPORTS • Emeritus College Liaison – TBD

No report • Human Resources - Sheree Barron or designee

No report • University Club Liaison – Jim Fordemwalt

Jim reported that the University Club Christmas party will be coming up soon. He reminded the Board of the reasonable cost of membership.

• University Liaison – Barbara Shaw-Snyder or Abby Polito Abby reported that state appropriations to public university performance continue to be based on a clear set of education performance metrics and long-term goals against those metrics. The FY2016 state budget appropriated $660.8 million to the public university system to fund both specific state interests and general education support for resident students. The Arizona Board of Regents (ABOR) recommends the state’s on-going financial relationships with the university system be based on per-resident-student funding. Other state interests in the university system should be adjusted according to specific needs and justifications. The average annual per-student cost of education is approximately $15,550. In FY2016, the state will provide $5,302 per resident student. Through tuition and fees, resident students contribute an average of $6,554. Universities cover the balance of costs, losing approximately $3,694 per student. The university system is requesting the FY2017 state investment increase resident student support to 50 percent of the cost of education ($7,775). ABOR is requesting a 2-part restoration of budget funds cut in FY2015. 1) FY 2016 supplemental reduction restoration of $24M, bringing the state’s per-resident-student support to $5,552, and 2) FY 2017 request for additional

4

reimbursement of $33.4M. The combined effect of the restored funds would raise the state’s per-resident-student support to $5,900 or approximately 38%. Other FY 2017 budget requests include $10.4M for student growth, $19.2M for facility maintenance and operations, a one-time capital request for $75M for unmet renewal needs and other specific needs, and other smaller requests. (See included report for full details.) ASU looking at restructuring proposals for retirement and health care packages. Not applicable this year as this change would require legislative mandate. The goal is better fiscal responsibility.

• University Senate – TBD No report

• University Staff Council – Katie Aguilar Katie reported that the various campus staff holiday parties have just successfully concluded. Harkins tickets are being sold again this year to raise funds for the Staff Helping Staff program, an emergency financial assistance fund for staff in need on all campuses. The link for more information is: http://staffcouncil.asu.edu/harkins

VII. STANDING COMMITTEE REPORTS A. Community Outreach Committee - Subcommittee Reports

• Adopt-A-Family - Joan Leard Joan reported that 2 families have been selected for this year’s ASURA Adopt-a-Family Program.

o Family #1 is an ASU student identified through the Community Services office. He is a returning service man working on degree, with a wife and 2 daughters;

o Family #2, identified through Tempe Community Services, includes a mom, dad and 5 boys.

o Joan received an outside donation of $115 for the Adopt-A-Family Program. Sue requested Board approval to add that $115 to the $2,000 already appropriated in the budget. A motion was made to approve the request, seconded and passed unanimously.

• Scholarship Committee - Sue Blumer, Joy Shearman Sue noted that the 2016 ASURA scholarship is being advertised.

• Video History Project – Dave Scheatzle Dave reported that Carolyn Minner is helping upload interview files to the University Library archives. To date 46 interviews have been uploaded and are available for viewing to individuals with ASU accounts. The files will be made available to the general public at a later date.

B. Events Committee and Subcommittee Reports • Events Committee Coordination – Barry McNeill

Barry noted that there are a number of events coming up with the next one being the 2015 Holiday Potluck and Bake Sale. That event is

http://staffcouncil.asu.edu/harkins

5

scheduled for December 18 in room 330 at the Community Services Building. Bake sale proceeds go to ASURA. Barry noted that room 330 has a capacity of 45 and there are already 40 registrants for that event.

• Luncheons & Special Events – Joyce Hartman Diaz Joyce reported that the Fall Luncheon was a huge success with 54 ASURA members and guests enjoying the ambiance at the Shalimar Country Club, good food, and delightful entertainment by Mike Chamberlin.

• Seminars – Jan Thompson Barry McNeill reported for Jan Thompson. There are 4 seminars coming up in Spring 2016:

o Jan 14 is a Volunteer Fair, 6 organizations are confirmed with 4 additional organizations possible;

o January 28 is the Sleep seminar; o February 18 is a seminar on Arizona Wills, Trusts and

Probate; o March is a seminar on Scams and Schemes.

• Travel – Gary Kleeman for John Brock Bev Buddee reported for Gary Kleeman that the December event was a success; there is currently 1 vacancy left for the trip to Cuba; and there are several fun events planned for the spring, including a visit to the Tovrea Castle in April.

C. Finance Committee – Barry Bruns

Barry noted that the Finance Committee met in early November with Jerry Snyder. A result of that meeting will be brought to the Board at the January 2016 meeting.. • Book Collection – Mary Stevens

No report.

D. Government Liaison Council • ASRS General – Larry Carlson

Bev Buddee reported for Larry Carlson that he held a “brown bag” insurance seminar at the ASU West campus for the Staff Council. Twenty people attended the event.

• Legislature – Hal White or Jeri Meeks The 53rd Legislative Session begins January 11, 2016. Jeri has attended a couple of ASRS committee meetings and the Tri-University Retirees Association meeting. Jeri has initiated a working group of Government Liaisons (Retiree Association Government Liaison Coalition) from different retiree associations – NAU, UofA, AZ Education Association (AEA), and the City of Mesa. Other organizations will be added as they are identified and contacted. The goal of the group is to keep all informed as they

6

move forward into the new legislative session. Jeri has agreed to write an article for the next Prime Times on legislative bills of interest to ASURA. She hopes to have a list of bills for consideration at the next ASURA Board meeting on January 13th.

E. Health Insurance Liaison Council

• ADOA – Larry Carlson No report

• ASRS – Joyce Hartman Diaz No report

F. Membership and Communications Committee – Subcommittee Reports

• Membership Update – Dave Schwalm Dave reported that membership has increased to 523 though that number is down 38 from this time last year. Dave was asked to submit a short article on the benefits of ASURA membership for publication in the January issue of Prime Times.

• Prime Times – Wilma Mathews or Jeannette Robson Jeannette reported that Jan. 18 is deadline for the next Prime Times.

• Obituaries – Becky Reiss No report

• Web Site and Database – Connie McNeill No report

VIII. UNFINISHED BUSINESS • Keynote speaker at Annual Meeting -

Jim shared his short list of potential guest speakers for the annual meeting with the Board and sought the Board’s input. The list includes Dr. M. Zuhdi Jasser, the founder and President of the American Islamic Forum for Democracy; ASU President’s Professor Randall Cerveny; and Colleen Jennings-Roggensack, Executive Director of ASU Public Events. Following discussion, Jim was asked to extend an invitation to Dr. Jasser to speak at the April 16, 2016 Annual Board meeting.

IX. NEW BUSINESS • Jim Fordemwalt reported that he had met with representatives of the ASU

Alumni Association who expressed an interest in partnering with ASURA to jointly promote events and travel. Jim will extend an invitation to the January ASURA Board Meeting to Alumni representatives..

• Jim Fordemwalt was requested by the Board to invite ASRS to speak at a future Board meeting about ramifications to retirees if ASU moves from ASRS to an optional retirement program.

• Jo Madonna reminded the Board that several Board terms will be expiring in April and requested names of potential nominees be sent to her. The names will be vetted and the process of filling those vacancies will begin. Jo will

7

work with Connie McNeill to upload nominating information on the ASURA website.

X. ANNOUNCEMENTS

• NEXT MEETING – Wednesday, 13 January 2016, Room 330 at the Community Services Building

XI. MEETING ADJOURNMENT Meeting adjourned 11:40

ASURA Financial Report

7/1/2015 - 11/30/2015

Account CategoriesApproved

Budget

Actual YTD

AmountCOMMENTS

25,548 25,548

Event Registration Fees & Donations Collected 2,000 1,233

Membership Dues 12,000 6,000

General Operations Donations 1,500 480

Holiday Bake Sale 2015 100 0

Transfer in from History Book 444 0

5% Gift Assessment -750 -320 Based on total donations cleared

13,294 7,394

Annual Report 100 0

Bylaws & Ballots 200 0

Member Survey Report 0 0

Membership Drive 1,000 754

Prime Times Summer 2,000 0

Paid Events 2,000 1,154

Meet & Greet 360 417

Seminars 250 120

Annual Meeting 600 0

Holiday Potluck & Fundraiser 50 0

Other Operations Costs

Scholarship Award 10,000 10,000

Business Luncheons & Service Appreciation 550 283 Tri-University Luncheon Meeting

Technology Services 1,500 240 Pantheon Web Hosting

Office Equipment & Supplies 3,000 1,356

Marketing Tools 550 510

AROHE Membership Dues 120 0

Lobbyist Registration Fee 25 0

Foundation Transaction Fees 170 35

22,475 14,869

-9,181 -7,475

16,367 18,073

Total donations cleared - $6,390

Increase (Decrease) in Fund Balance for Current Year

Printing and Mailing Costs

ASURA Operations

ASURA Operations - Income

Balance Forward

Current Year Revenue

Total ASURA Operations Current Year Revenue

ASURA Operations - Expenses

Event Costs

Total ASURA Operations Expenses

Uncommitted ASURA Operations Funds

Page 1 of 4


7/1/2015 - 11/30/2015

755 755 For marketing tools

Current Year Allocation 7000 7000

Total Human Resources Current Year Revenue 7,755 7,755

Office Supplies 1,200 0

Transfer out to Public Affairs 672 672 Marketing tools

Prime Times Fall & Spring 2,100 607

Room Fees 100 100

Copier/FAX Equipment Annual Lease 1,200 1,203

Membership Drive 1,883 205

8.5% Administrative Service Charges 600 180

7,755 2,967

0 4,788

1,508 1,508

Friends/Phx Library Book Sale Net Income 1,500 345

Transfer In 0

5% Gift Assessment 0

1,500 345

Transfer out 1/2 of Book Sale Income to Scholarship 750 744 $571 from FY 2015 income

Transfer out 1/2 of Book Sale Income to Video History 750 744 $571 from FY 2015 income

Foundation Transaction Fees 17

1,500 1,504

0 -1,159

1,508 349

Transfer in from Public Affairs

Uncommitted HR Funds For Operations

Special Projects - Income

Balance Forward

Human Resources Income

Special Projects

Expenses Charged to Allocation

Total Special Projects Current Year Revenue


Total Subsidized Expenses

Special Projects - Expenses

Total Special Projects Expenses


Uncommitted Special Projects Funds

Page 2 of 4


7/1/2015 - 11/30/2015

1,151 1,151

Adopt-A-Family Donations 1,200 420

5% Gift Assessment -63 -21

Transfer from Special Projects

1,137 399

Adopt-A-Family - Expenses

Adopt-A-Family 2,000 401


2,015 401

Increase (Decrease) in Fund Balance for Current Year -878

273 1,149

6,173 6,173

Video History Donations 1,200 240

Transfer in 1/2 of Book Drive Proceeds from Spec Proj 750 744


1,890 972

Production 5,600 0

Equipment 990 119


6,690 119

-4,800 853

1,373 7,026

Uncommitted Adopt-A-Family Funds

Uncommitted Video History

Total Video History Current Year Revenue

Total Video History Expenses

Video History - Income


Video History - Expenses


Balance Forward

Video History

Adopt-A-Family

Balance Forward


Total Adopt-A-Family Expenses

Total Adopt-A-Family Current Year Revenue

Adopt-a-Family - Income

Page 3 of 4


7/1/2015 - 11/30/2015

444 444

History Book Donations 0 0

5% Gift Assessment 0 0

0 0

Transfer out to Operations 444 0

Foundation Management Fees 0 0

444 0

-444 0

0 444

Endowment Balance July 1 53,428 53,428

Invested Funds Gain (-Loss) 600 -1,549

Transfer to Scholarship Endowment - Spending -1,500 0

Foundation Management Fees -600 -672

Transfer from Spending Account 1,785 193

Current-Year Contributions 2,200 665


55,803 52,032

Scholarship Endowment - Spending

Balance July 1 1,785 1,785

Transfer in 1/2 of Book Drive Proceeds from Spec Proj 750 551

Payout from Endowment 1,500 0

Reinvest in Endowment -1,785 0

Management Fees 0

2,250 2,336

58,053 54,368

Total Scholarship Endowment Spending

Total Scholarship Endowment


History Book - Expenses


Scholarship Endowment - Principal

Total Scholarship Endowment Principal

Scholarship Endowment Fund

Uncommitted History Book

History Book

Balance Forward

Total History Book Current Year Revenue

Total History Book Expenses

History Book - Income

Page 4 of 4

REGENTS

Chair Jay Heiler, Paradise Valley • Mark Killian, Mesa • Ram Krishna, Yuma • LuAnn H. Leonard, Polacca • Rick Myers, Tucson

Greg Patterson, Scottsdale • Bill Ridenour, Paradise Valley • Ron Shoopman, Tucson • STUDENT REGENTS: Mark Naufel, ASU •

Jared Gorshe, NAU EX-OFFICIO: Governor Doug Ducey • Superintendent of Public Instruction Diane Douglas

ENTERPRISE EXECUTIVE COMMITTEE

Eileen I. Klein, Board President • Michael M. Crow, ASU President • Rita Cheng, NAU President • Ann Weaver Hart, UA President

Item 5: EXHIBIT B

Proposed State Investment Model and FY 2017 Budget Proposal

For the last decade, Arizona State policymakers have struggled to define the financial relationship between the state and public universities. With diminished public resources the state chose to reduce its investments and place additional emphasis on ensuring state dollars produce maximum results. Recent efforts to link state appropriations to public university performance have successfully produced a clear set of education performance metrics and thoughtful long-term goals against those metrics. While those metrics and goals continue to be updated, the state can use them to define its interest in higher education and measure the outcomes the state receives from its investments.

In FY 2016, the state of Arizona appropriated $660.8 million to the public university system. This appropriation funds both specific state interests and general education support for resident students:

FY 2016 Total Appropriation $660,845,100

UA Medical School $68,393,500

Research Infrastructure Debt Service $26,512,900

UA Agriculture $20,266,500

UA Cooperative Programs $14,507,200

AFAT $10,041,200

WICHE Subsidies $4,094,000

NAU TGEN $3,000,000

Regents System Office $2,793,200

ASU Bio Informatics $1,931,000

UA Freedom Center $500,000

Resident Student Support $508,805,600

All funding not specifically allocated by the Legislature is used to offset resident student costs. In FY 2016, with an expected 95,969 resident students, the state is on average providing $5,302 per resident student.i

2

The Arizona Board of Regents recommends the state’s on-going financial relationship with the university system be based on per-resident-student funding. Other state interests in the university system should be adjusted according to specific needs and justifications.

Per-resident-student Funding

On average, the annual per-student cost of education is approximately $15,550. This figure includes costs of instruction and public service including academic programs, support services and operations and maintenance. Research and capital expenditures are not included in this figure.

In FY 2016, the state will provide $5,302 per resident student. Through tuition and fees, resident students contribute an average of $6,554. Universities cover the balance of costs, which means they are currently losing approximately $3,694 per resident student. In FY 2016, the estimated total system-wide loss will be $355 million.

Average education cost: ($15,550) State funding: $5,302 Tuition and fees: $6,554 Net loss per resident student: ($3,694)

The university system requests the FY 2017 state investment be based on a goal of the state increasing its resident student support to 50 percent of the cost of education ($7,775). The university system is not requesting a new statutory funding formula. The request instead asks the state to view university performance and outcomes and align state support with its defined benefit. The 50 percent of resident student costs is a way to define and track state investment against university performance.

While the state cannot currently fund all students at the 50 percent level, the university system requests the following investment to move the system toward that goal.

FY 2016 Supplemental

Reduction restoration – Increasing the state share ($24 M): The conclusion of the FY 2015 proved that some of the base budget assumptions for FY 2016 were incorrect. Most notably, actual revenues exceeded the forecast by nearly $400 million. Increasing the university reduction from Gov. Ducey’s original proposal of $75 million to the enacted $99 million was unnecessary and should immediately be reversed. Restoring this $24 million would increase the state’s per-resident-student support to $5,552.

FY 2017 Request

Reduction restoration – Increasing the state share ($33.4M): After the FY 2016 supplemental and impacts from the Health Insurance Trust Fund (HITF) changes, the remaining cut will be $67 million. The universities request the state restore half of this remaining reduction in FY 2017. Including the FY 2016 supplemental, this will raise the state’s per-resident-student support to $5,900, or approximately 38 percent of the university system’s cost per resident student and reduce university operating losses to about $3,096 per resident student.

REGENTS






Item 5: EXHIBIT B

Proposed State Investment Model and FY 2017 Budget Proposal

For the last decade, Arizona State policymakers have struggled to define the financial relationship between the state and public universities. With diminished public resources the state chose to reduce its investments and place additional emphasis on ensuring state dollars produce maximum results. Recent efforts to link state appropriations to public university performance have successfully produced a clear set of education performance metrics and thoughtful long-term goals against those metrics. While those metrics and goals continue to be updated, the state can use them to define its interest in higher education and measure the outcomes the state receives from its investments.

In FY 2016, the state of Arizona appropriated $660.8 million to the public university system. This appropriation funds both specific state interests and general education support for resident students:

FY 2016 Total Appropriation $660,845,100

UA Medical School $68,393,500

Research Infrastructure Debt Service $26,512,900

UA Agriculture $20,266,500

UA Cooperative Programs $14,507,200

AFAT $10,041,200

WICHE Subsidies $4,094,000

NAU TGEN $3,000,000

Regents System Office $2,793,200

ASU Bio Informatics $1,931,000

UA Freedom Center $500,000

Resident Student Support $508,805,600

All funding not specifically allocated by the Legislature is used to offset resident student costs. In FY 2016, with an expected 95,969 resident students, the state is on average providing $5,302 per resident student.i

2

The Arizona Board of Regents recommends the state’s on-going financial relationship with the university system be based on per-resident-student funding. Other state interests in the university system should be adjusted according to specific needs and justifications.

Per-resident-student Funding

On average, the annual per-student cost of education is approximately $15,550. This figure includes costs of instruction and public service including academic programs, support services and operations and maintenance. Research and capital expenditures are not included in this figure.

In FY 2016, the state will provide $5,302 per resident student. Through tuition and fees, resident students contribute an average of $6,554. Universities cover the balance of costs, which means they are currently losing approximately $3,694 per resident student. In FY 2016, the estimated total system-wide loss will be $355 million.

Average education cost: ($15,550) State funding: $5,302 Tuition and fees: $6,554 Net loss per resident student: ($3,694)

The university system requests the FY 2017 state investment be based on a goal of the state increasing its resident student support to 50 percent of the cost of education ($7,775). The university system is not requesting a new statutory funding formula. The request instead asks the state to view university performance and outcomes and align state support with its defined benefit. The 50 percent of resident student costs is a way to define and track state investment against university performance.

While the state cannot currently fund all students at the 50 percent level, the university system requests the following investment to move the system toward that goal.

FY 2016 Supplemental

Reduction restoration – Increasing the state share ($24 M): The conclusion of the FY 2015 proved that some of the base budget assumptions for FY 2016 were incorrect. Most notably, actual revenues exceeded the forecast by nearly $400 million. Increasing the university reduction from Gov. Ducey’s original proposal of $75 million to the enacted $99 million was unnecessary and should immediately be reversed. Restoring this $24 million would increase the state’s per-resident-student support to $5,552.

FY 2017 Request

Reduction restoration – Increasing the state share ($33.4M): After the FY 2016 supplemental and impacts from the Health Insurance Trust Fund (HITF) changes, the remaining cut will be $67 million. The universities request the state restore half of this remaining reduction in FY 2017. Including the FY 2016 supplemental, this will raise the state’s per-resident-student support to $5,900, or approximately 38 percent of the university system’s cost per resident student and reduce university operating losses to about $3,096 per resident student.

Efficiencies Eliminate state tuition remittance process and maintain transparency by modifying reporting requirements to align with ABOR business cycle Remitting tuition to the state is an inefficient process leading to administrative costs, loss of university investment interest and cash flow flexibility, and affects credit ratings.

3

Student growth ($10.4 M): The state should cover 50 percent of the educational costs for anticipated student growth. To calculate this number, the universities propose using actual growth for the year preceding the budget year, in this case FY 2016 growth over FY 2015. For the FY 2017 request, the system will report this number by mid-September. Currently, the universities forecast growth of 1,339 new resident students.

Facility maintenance and operations ($19.2 M): In addition to operating costs, Arizona’s public universities have significant capital costs. In FY 2014, the university system spent $159 million on capital renewal projects. The universities request the state include $200 per resident student on an ongoing basis to help offset resident student’s impacts on university capital.

One-time capital request ($75 million): The university system is facing a capital crisis with over $652 million in unmet renewal needs including high priority items such as fire alarms, roofs, and asbestos abatement. Further, student growth continues to create needs for additional square footage. The university system will provide a specific project list as part of this request and will provide matching dollars to further leverage the state funding.

Decision Packages

The University of Arizona is requesting $8 M to fund the Veterinary Medicine program at Oro Valley initiative. The request is for temporary capital funds that will enable 60 high paying jobs, establish a $24 million program in Oro Valley and develop well trained and much needed veterinarians for the state. They anticipate additional capital requests in FY 2018 and FY 2019. In total, the renovations are estimated to cost about $15 million over three years.

Summary

FY 2016 FY 2017

Operating Funds

FY 2016

Supplemental Appropriation $24.0

FY 2017

Base Adjustment* $33.4

Resident Student Growth $10.4

Resident Student Facility Maintenance $19.2

Subtotal FY 2017 $63.0

Capital Outlay Funds

FY 2017

One-Time Matching Monies** $75.0

UA Veterinary Medicine Renovations $8.0

* Base adjustment represents a partial restoration of the

FY15 budget cut directed at increasing state support of

Arizona resident students to desired level of state support.

** One-time state funding of $75M would be matched dollar-for-dollar

with university funds to address the most critical capital projects.

4

Performance

While the universities will no longer pursue state funding directly based on performance, the system does intend to monitor and report on key university performance metrics. These metrics include qualitative, quantitative, and efficiency metrics. All university investors including students, the state, donors and other parties should have clear data on university performance and student outcomes. The universities fully understand that future state investment is contingent on university performance meeting and exceeding the state’s expectations. The board is currently in the process of reviewing university performance metrics and anticipates updating those metrics at its September Board meeting. New Long-term goals will be set after the metrics are in place.

Statutory Formulas

In addition to the Arizona Board of Regents budget request, the budget request will report the results of two preexisting funding formulas.

Building Renewal: A.R.S. §41-793.01 requires the JLBC to establish a building renewal funding formula for the state building systems, including the ABOR building system. That formula is based on age, replacement value and expected useful building life. For FY 2017, the formula calculation equates to $129.9 million

Arizona Financial Aid Trust: A.R.S. §15-1642 established the AFAT fund consisting of student fees and state appropriated funds. This trust fund is used to: (1) provide aid to students with verifiable financial needs, including students who are underrepresented in the population of the university; (2) assist students who, by virtue of their special circumstances, present a unique need for financial aid; and (3) create an endowment for future financial aid. The surcharge fee applies to all university regular, summer, and off-campus courses offered for credit regardless of whether the course is taken for credit or not-for-credit (audit) purposes.

The established formula calls for the state to provide a two-to-one match of the collected student fees. For FY 2017, the calculated state matching funds is based on actual student fees collected during FY 2015.

ASU NAU UA Total

FY 2015 student fees $8,131,900 $1,902,800 $3,806,300 $13,841,000

FY 2017 AFAT GF calculation $16,263,800 $3,805,600 $7,612,600 $27,682,000

FY 2016 appropriation $10,041,200

Other Budget Elements

The state also provides funding for the following ABOR programs. The current budget proposal

does not include additional resources for these programs.

WICHE student subsidies (current appropriation is $4,094,000): The Western Interstate

Commission for Higher Education (WICHE) provides partial financial support and preferential

5

access for Arizona residents who choose careers in certain health professions, which are not

available at Arizona’s three public universities. The current appropriation level supports 171

students. At its peak (FY 2008), the program supported 203 students.

Arizona Transfer Articulation Program (current appropriation is $213,700): Established by A.R.S.

§15-1824, ATASS is a joint initiative among public community colleges and universities to

facilitate the efficient transfer of course credits.

Arizona Teachers Incentive Program (current appropriation is $90,000): The Arizona Teachers

Incentive Program (ATIP) is a forgivable student-loan program for students of deaf and blind

education. Students may earn forgiveness by teaching in an Arizona deaf and blind program

post-graduation. In FY 2014, ATIP distributed loans to 10 students and provided program

support to UA College of Education.

i *Support per Resident Student and the numbers in the Per Resident Student Funding section are based on

estimated FTE counts and an allocation of resources between cost centers. Once final fall 15 FTE counts are in the calculated per resident FTE costs and support levels will change.

FY 2016 & FY 2017 University System Budget Request

FY 2016 SupplementalRestore the legislative reduction to the Governor's budget proposal that increased the total

university cut from $75 million to $99 million

Budget Units

ASU Main $10,962,279

ASU Poly $872,073

ASU West $1,075,733

NAU $4,194,788

UA Main $6,773,600

HSC $121,527

Regents $0

Total $24,000,000

FY 2017 RequestBase funding for operations will be calculated on a resident full‐time student basis

Description

Restore 1/2 of

Remaining Reduction

Resident Student

Growth

Per Resident FTE

Capital Total

Budget Units

ASU Main $15,255,838 $4,361,775 $10,162,800 $29,780,413

ASU Poly $1,213,635 $0 $0 $1,213,635

ASU West $1,497,062 $0 $0 $1,497,062

NAU $5,837,746 $5,520,250 $3,740,000 $15,097,996

UA Main $9,426,593 $528,700 $5,291,000 $15,246,293

HSC $169,126 $0 $0 $169,126

Regents $0 $0 $0 $0

Total $33,400,000 $10,410,725 $19,193,800 $63,004,525

FY 2017 Capital One‐Time RequestsOne‐time appropriation would be matched with university funds on a dollar‐for‐dollars basis and would be

used for capital projects

Budget Units

ASU $30,548,727

NAU $14,944,755

UA $29,506,518

Total $75,000,000

University of Arizona Vet Med. $8,000,000

Other Statutory Formulas

FY 2016 Appropriation FY 2017 Calculation Shortfall

Building Renewal: $0 $129,900,000 $129,900,000

AFAT $10,041,200 $27,682,000 $17,640,800

REGENTS






Item 5: Exhibit C

2016 Legislative Agenda Enterprise Regulatory Reform Initiatives

High quality and accessible higher education options are essential for Arizona’s economic vitality and quality of life; however, resource constraints and state regulations challenge the universities’ ability to serve their critical public mission. Arizona’s universities are seeking additional regulatory relief to become more agile, more adaptable, and more entrepreneurial.

The proposed initiatives allow the universities to remain committed to their public mission while cultivating the growth and innovation necessary to meet strategic goals. These initiatives also consider multiple aspects of governance and operations to promote greater growth and innovation, reduce costs, and ultimately, assure the longer term success of each university and the university enterprise while still protecting the public interest. Finance Authorization to issue commercial paper and obtain commercial lines of credit Commercial paper is an ordinary tool of entrepreneurial businesses that provides a lower cost, short term method of financing that provides flexibility to manage cash flow and bridge financing for capital projects.

Operations/Administration Permit the enterprise to develop independent benefits programs Arizona universities must move toward a more sustainable, competitive and cost-effective benefits program to provide total compensation programs that appeal to a high-quality university workforce.

Healthcare -The Health Insurance Trust Fund must be reformed to prevent university employees from paying an unfair share into the fund. -ABOR should be given authority to determine benefits-eligible status of employees to align with federal rules and realize cost-savings. -The university enterprise should be granted full relief from the state’s healthcare system through a strategically planned withdrawal.

Property/Casualty/Worker’s Compensation Insurance The state’s programs are designed and structured for typical government entities and no longer meet the unique and changing risk exposure profile of higher education.

Retirement Arizona’s universities must be able to offer competitive, flexible, and cost-effective retirement programs in order to attract and retain quality faculty and staff.

Efficiencies Eliminate state tuition remittance process and maintain transparency by modifying reporting requirements to align with ABOR business cycle Remitting tuition to the state is an inefficient process leading to administrative costs, loss of university investment interest and cash flow flexibility, and affects credit ratings.

ASURA Event Report

10/31/2015

Event Date

Collected Refunded

Travel &

Related

Food,

Entertainment &

Related

Lodging &

Related Other Net Gain/Loss

Meet & Greet Luncheon 09/09/15 0.00 0.00 0.00 417.27 0.00 0.00 -417.27

Canyon Lake Cruise 10/06/15 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Fall Luncheon 11/13/15 1,188.00 0.00 0.00 1,154.00 0.00 0.00 34.00

Spirit of Phoenix Chorus 12/05/15 45.00 0.00 0.00 0.00 0.00 0.00 45.00

*Fundraiser Holiday Potluck 12/18/14 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Cuba 03/05/16 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Tovrea Castle Tour 04/01/16 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Net gain (loss) - all completed non-fundraising events -383.27

Net gain (loss) - all non-fundraising events -338.27

*Proceeds from Bake Sale

Registration Fees Event Costs

ASURA Fall Luncheon Recap..

54 ASU retirees and guests attended the [ASURA] Fall luncheon at the Shalimar Country Club on November 13th. Mike Chamberlin [local television news personality, now retired] entertained the group with songs from WWII in honor of Veteran’s Day, Christmas songs, and old favorites along with his ever interesting stories. All enjoyed the event and especially Mike’s performance.

Joyce Hartman Diaz/ Chair, Luncheon Committee

ASURA MEMBERSHIP TOTALS2016 Membership Year

CountsAs of

12/4/2015

As of

12/7/2014

This Yr

-Last Yr More Counts

As of

12/4/2015

As of

12/7/2014

This Yr

-Last Yr

Current-year Members 523 561 -38 By Former Employment CategoryRenewals from prior years (any prior year) 478 517 -39 Faculty and Faculty w/ Admin Appt 242 261 -19Introductory members 45 44 1 Academic Professional 32 37 -5Paid for the current year, now deceased 3 4 -1 Staff 149 160 -11

University Staff (Service Professional) 70 74 -4Last Year's Members - Not Renewed 83 111 -28 Administrative 30 29 1

Members last year, now deceased 13 8 5Having an Arizona Address 476 513 -37

By Retired-from OrganizationRetired from ASU 509 542 N/A Level of ActivityRetired from another university 0 0 N/A Checked at least one volunteer area 105 97 8Former ASU employee, retired elsewhere 4 3 N/A Attended at least one event this year 114 131 -17Still employed at ASU 10 16 N/A Attended an event ever 279 280 -1

Logged in to Members-only Site (ever) 117 96 21By (Approx.) Time Since First Joining Made an additional donation this yr 149 164 -15

Members for 0-2 Years 64 76 -12Members for 3-5 Years 84 85 -1 Non-members in DatabaseMembers for 6-10 Years 170 186 -16 Was a member at some time 229 298 -69Members for more than 10 Years 205 214 -9 Never a member 675 728 -53

By Communications They Want to Receive1

Upcoming Event Announcements (e-mail) 391 409 -18Obituary Notices (e-mail) 319 330 -11Prime Times (US Post) 464 522 -58Other ASURA Communications (e-mail) 340 378 -38None of The Above 10 11 -1

1All members receive the annual Board of Directors ballot, and membership renewal notices. Those with e-mail addresses also receive confirmation notices (by e-mail) about

renewal, event registrations, and donations.

Note: Since membership enrollment forms are mailed in May, we begin processing them, with associated dues and donations, before the start of the membership/fiscal year.

Therefore it is not possible to use these counts to determine the correct dollar value of membership dues in the current fiscal year.

12/4/2015 1 of 1

2016 PRIME TIMES DEADLINES

(Submitted by Jeannette Robson & Wilma Mathews for December 2, 2015 ASURA Board Meeting) SPRING 2016 January 18 submit articles to Wilma Mathews for editing ([email protected])

(please copy Jeannette Robson [email protected])

January 25 final copy to Alpha Graphics for printing & delivery to ASU Mail Services SUMMER 2016 May 16 submit articles to Wilma Mathews for editing ([email protected])

(please copy Jeannette Robson [email protected]) May 23 final copy to Alpha Graphics for printing & delivery to ASU Mail Services

FALL 2016 September 19 submit articles to Wilma Mathews for editing ([email protected])

(please copy Jeannette Robson [email protected]) September 26 final copy to Alpha Graphics for printing & delivery to ASU Mail Services Revised: 11.30.2015

mailto:[email protected]

minutes of 09 december 2015 arizona state university ... · interests and general education support...

Documents