Miami University Board of Trustees Finance & Audit Committee Meeting
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Finance and Audit Committee June 27, 2019 Miami University Board of Trustees Finance & Audit Committee Meeting Marcum Conference Center June 27, 2019 9:30 a.m. – 12:00 p.m. AGENDA 1. Approval of Minutes of May 16, 2019 Meeting –Michael Armstrong 2. Tuition Ordinances –David Creamer, David Ellis a. Oxford Undergraduate Tuition Ordinance b. Regional Campus Undergraduate Tuition Ordinance c. All Campuses Graduate Tuition Ordinance 3. Miscellaneous Fee Ordinance –David Creamer, David Ellis 4. Fiscal Year 2020 Budget Appropriation Ordinance –David Creamer, David Ellis 5. Year-to-Date Operating Results Compared to Budget –David Creamer, David Ellis 6. Report on Facilities, Construction and Real Estate –David Creamer, Cody Powell 7. Review of Residence Hall Capacity for Fall 2020 –David Creamer 8. Committee Agenda for Future Meetings –Michael Armstrong Reporting Updates 1. University Advancement Report –Committee Packet 2. Report on Cash and Investments –Committee Packet 3. Lean Project Update –Committee Packet Future Meeting Dates Thursday, September 19, 2019, 1:30 p.m. Thursday, December 12, 2019, 1:30 p.m. Overall Page 1 of 143 Finance and Audit Committee June 27, 2019 Business Session Minutes May 16, 2019 Item 1 BOARD OF TRUSTEES ROUDEBUSH HALL ROOM 212 OXFORD, OHIO 45056 (513) 529-6225 MAIN (513) 529-3911 FAX WWW.MIAMIOH.EDU BOARD OF TRUSTEES MIAMI UNIVERSITY Minutes of the Finance and Audit Committee Meeting May 16, 2019 Room 180-6, Marcum Conference Center The Finance and Audit Committee of the Miami University Board of Trustees met on May 16, 2019 in Marcum Conference Center, on the Oxford campus. The meeting was called to order by Committee Chair Michael Armstrong at 1:30 p.m., with a majority of members present, constituting a quorum. Roll was called; attending with Chair Armstrong, were Committee members; Trustees David Budig, Sandra Collins, Mark Ridenour, and Rod Robinson; and National Trustees John Altman, and Robert Coletti. Also attending were Trustees Thomas Gunlock, Zachary Haines, John Pascoe, and Robert Shroder, along with National Trustees Terry Hershey and Diane Perlmutter, and Student Trustees Megan Cremeans and Will Kulis. In addition to the Trustees, David Creamer, Senior Vice President for Finance and Business Services, and Treasurer; Phyllis Callahan, Provost and Executive Vice President; Tom Herbert, Senior Vice President for Advancement; Michael Kabbaz, Senior Vice President for Enrollment Management and Student Success; Vice Presidents Jayne Brownell, David Seidl, and Michele Sparks; Robin Parker, General Counsel; and Randi Thomas, Director of Institutional Relations, were present. Also present to address or assist the Committee were; David Ellis, Associate Vice President for Budgeting and Analysis; Cody Powell, Associate Vice President for Facilities Planning and Operations; Barbara Jena, Chief Audit Officer; Gary Cornett, Controller; Representatives from independent auditors, RSM; and Ted Pickerill, Executive Assistant to the President, and Secretary to the Board of Trustees; along with many members of the Miami University community who were present to observe or assist. Opening Remarks Chair Armstrong began the meeting, reminding all of the challenges facing Higher Education and Miami University. In particular, the declining international student enrollment, increased discount rates, the continuing need to manage costs, and housing capacity constraints. Executive Session Trustee Ridenour moved, Trustee Budig seconded and by roll call vote, with all voting in favor, the Committee entered into Executive Session to discuss trade secrets, the purchase or sale of property, and to consult with counsel, per the Ohio Open Meetings Act. Following Executive Session, the Committee returned to Public Session. Overall Page 1 of 208 Minutes Page 1 of 6 Overall Page 2 of 143 Finance and Audit Committee June 27, 2019 Minutes May 16, 2019 Public Business Session Approval of the Minutes Trustee Ridenour moved, Trustee Altman seconded and by voice vote the minutes from the prior meeting of the Finance and Audit Committee were unanimously approved. Independent Auditors Mr. Matt Garvey, from the independent auditor RSM, updated the Committee on the audit plan. He walked through the information packet provided to the Board, outlining RSM’s defined responsibilities for the audit, communications, timing, the role of the internal auditor, and the focus of the audit. He was asked if Miami’s hire of Strategic Investment group as OCIO created any changes with regard to the audit, he replied that it did not. Associated materials are included as Attachment A. Budget Planning Senior Vice President Creamer updated the Committee on budget planning priorities. He provided enrollment trends, highlighting the decline in international applications. He stated that while enrollment is up, net tuition revenue is flat, and support from the State of Ohio is also expected to be flat. He anticipates future declines in revenue, highlighting the impact of reduced international student enrollment, and the growth of financial aid. He also expressed that this is especially an issue given the potential for a recession in the coming months. The University would normally expect to operate with a surplus during periods of extended economic growth in preparation for the budget issues that accompany a recession. He next reviewed student housing capacity, which is approximately 8,500, and with the planned future deconstruction of Wells, McKee, and Thompson Hall, that number will be reduced by approximately 400 beds over the next few years. The committee stated that the future enrollment size of Miami should be a topic for the June meeting. He continued the presentation noting that the divisions have identified the budget redistributions for the new year’s budget but they also are ready to implement the reallocations at an accelerated rate, should year-to-date budget reviews dictate. Provost Callahan explained that the academic reallocations, including the reallocation of position lines will allow Academic Affairs to place resources in the areas planned for growth. She also explained that the positons associated with Boldly Creative, which uses one-time Overall Page 2 of 208 Minutes Page 2 of 6 Overall Page 3 of 143 Finance and Audit Committee June 27, 2019 Minutes May 16, 2019 money, are created with an expectation that the new programs will eventually self-fund themselves. Regarding regional campus enrollment, he stated it is more difficult to predict, due to the large number of summer registrations. SVP Creamer then reviewed the budget assumptions, and possible tuition increase bands – with a final decision on tuition being deferred until final approval of the State budget. Associated materials are included as Attachment B. State of Information Technology Vice President and Chief Information Officer David Seidl, reviewed with the Committee the State of Miami University IT. He outlined IT themes, with include: Partnership IT as a multiplier Data accessibility and governance Strategic IT IT and Change He next provided information regarding the size and services provided by IT, summarizing as follows: Staff total: 135 Budget: $16,651,626 Applications supported: over 400 Projects closed last year: 136 Technology Equipped Learning Spaces : 556 Number of computers centrally supported: 2,413 computers – 2,163 Windows, 250 Macs Servers supported: Approximately 850 servers with a 99%+ average uptime. Helpdesk incidents per year: ~25,000, with an 85% overall customer satisfaction rate He then reviewed networking at IT, and major completed efforts during the year, which include efforts and projects in: Core IT Infrastructure Academy Classrooms Overall Page 3 of 208 Minutes Page 3 of 6 Overall Page 4 of 143 Finance and Audit Committee June 27, 2019 Minutes May 16, 2019 Application Development Administration Campus VP Seidl then provided an overview of the TechQual+ survey of student, faculty, staff satisfaction. TechQual provides national data for comparison. The survey found the greatest challenges to be in providing technology support, and working with outsourced service providers. The next steps for IT will be strategic planning, focusing on seven areas – Partnerships, Governance, Cloud, Data, Infrastructure, How we do the work, and Efficiency. Associated materials are included as Attachment C. Facility Condition Index AVP Cody Powell presented the Facility Condition Index, answering any questions. The Facility Condition Index is included as Attachment D. Year to Date Operating Results SVP Creamer presented the year to date operating results. He stated the budget is within the amounts allocated, however health care spending is rising and could become an issue in the future. And a late adjustment in state allocations, caused a reduction of approximately $1million. Associated materials are included as Attachment E. Investment Subcommittee Trustee Ridenour, Chair of the Investment Subcommittee informed the Committee that the investment transition is now 95% complete. He also informed the Committee of the value of the three pools – operating cash ($106 million), core cash ($102 million), and long term capital ($467 million). One resolution was presented, it updated Miami policy regarding investment oversight, so that it aligns with the recent changes to the Finance and Audit Committee charter and the adoption of an OCIO. Trustee Ridenour moved, Trustee Robinson seconded, and by unanimous voice vote, with all in favor, the Committee recommended