ASC—Docket October 16, 2014 Board of Trustees Finance & Administration Committee Thursday, October 16, 2014 Docket October 16, 2014 The Board of Trustees of Oregon State University Finance and Administration Committee Meeting October 16, 2014 1:00-4:30 pm Robert Family Event Room, 126 Austin Hall Agenda 1. Call to Order/Roll/Declaration of a Quorum (Schueler) 2. Consent Item a. Approval of Minutes of July 8, 2014 Finance and Administration Committee Meeting (Schueler) ...................................................................................................... F-2 3. Action Items a. FY15 and FY16 Committee Work Plan and Meeting Schedule (Schueler) ................... F-4 b. Proposed Acceptance of Matteson Property Gift (Ford, Pawlowski) ............................ F-6 i. Attachment A: Matteson Property Location ................................................ F-8 ii. Attachment B: College of Forestry General Plan for Matteson Property ..... F-9 c. Proposed Public University Fund Investment Policy (Ford, Green, Spyke-PFM) ....... F-11 i. Attachment A: Public University Fund Investment Policy .......................... F-13 d. Proposed University Treasury Management Policies (Ford, Green, Musselman-PFM) ...................................................................................................... F-18 i. Attachment A: University Internal Bank Policy (Green, Musselman-PFM) F-23 ii. Attachment B: University Investment Policy (Green, Spyke-PFM) ............ F-26 iii. Attachment C: University Debt Policy (Green, Musselman-PFM) ............. F-31 e. FY14 Q4 Operating Management Report (Ford, Green, Bloomer) ............................. F-41 4. Discussion Items a. FY15 Operating Budget (Ford, Bloomer) ................................................................... F-42 b. 2015-17 State Funding Process (Ford, Lewis) ........................................................... F-44 c. State Treasury Managed Endowment Fund Verbal Update (Ford, Green) ................. F-52 5. Education Items a. Bond Rating Process – “Bonds 102” (Ford, Green, Musselman-PFM) ....................... F-53 b. Long-range Capital Plan Development Process – “Capital 102” (Ford, Pawlowski) ... F-62 6. Adjournment OSU Board of Trustees F&A Committee Page F-1 AGENDA Docket October 16, 2014 The Board of Trustees of Oregon State University Regular Meeting of the Finance & Administration Committee July 8, 2014 President’s Conference Room, Kerr Administration Building Oregon State University, Corvallis, Oregon DRAFT MINUTES Committee Members Present: Mark Baldwin, Darry Callahan, Elson Floyd (vice chair), Laura Naumes, Taylor Sarman, Kirk Schueler (chair), Mike Thorne, Pat Reser (ex officio), Glenn Ford (ex officio) Other Trustees Present: Michele Longo Eder, Brenda McComb University Staff Present: Sherm Bloomer, Mike Green, Mark Huey, Jan Lewis, Kirk Pawlowski, Linda Powell, Meg Reeves, Melanie Rose, Patti Snopkowski, Marcia Stuart, Ryan Winklepleck 1. Call to Order Committee Chair Kirk Schueler called the meeting to order at 9:01 a.m., asked the Assistant Board Secretary to call the roll, and noted a quorum. 2. Review and Approval of March 12, 2014 Meeting Minutes On a motion made and seconded, the Committee approved the minutes of the March 12, 2014 meeting of the Finance and Administration Committee as presented. 3. Information Items a. 2015-17 Legislative Operating and Capital Funding Request Submittals to the Higher Education Coordinating Committee Vice President for Finance and Administration Glenn Ford reported that a few minor adjustments were made to the funding request following the March 13, 2014 Board Meeting in order to comport with additional information requests from the HECC. The Executive and Audit Committee reviewed and approved the changes at the committee’s March 28 and April 22 meetings. Approval by the Executive and Audit Committee followed Board approval of that committee’s actions at the Board’s March 13, 2014 meeting. b. Financing Capital Investment—“Bonds 101” At the request of the Board Chair, Associate Vice President for Finance and Administration Mike Green presented an overview of financing capital investment in order to give trustees a better understanding of bonding options that exist for the University. c. “Capital Planning 101” University Architect and Executive Director of Capital Planning and Development Kirk Pawlowski presented an overview of capital planning at Oregon State. He summarized the major capital investments that have been made between 2004 and OSU Board of Trustees F&A Committee Page F-2 CONSENT ITEM Docket October 16, 2014 2013 and noted the major capital investments for 2015-17 the Board approved at its March meeting. d. Quarterly Management Reports The committee discussed the importance of quarterly financial management reports that will assist the Committee, the Board and the University in tracking performance of the University’s annual operating budget. In addition, the committee reviewed the proposed format and topics for the reports. e. Audit RFP Process Chief Audit Executive Patti Snopkowski informed the committee that the University will be issuing a Request for Proposal for an external audit firm to perform the annual financial statement and federal compliance audits. Ms. Snopkowski noted that the Executive and Audit Committee will approve the selection of the firm and that the Finance and Administration Committee will be kept informed of the firm’s activities. 4. Action Item a. Review and Approval of the OSU Fiscal Year 2014-15 Operating Budgets Following a presentation by Director of Budget and Fiscal Planning Sherm Bloomer on the University’s proposed FY 2014-15 operating budgets, the Committee unanimously approved a motion to move the item forward to the Board for its review and approval at the July 18, 2014 Board Meeting. 5. Other Items Staff was asked to continue to develop a long-range capital plan aligned with the University’s strategic plan and to seek Committee and Board approval of that capital plan. The Committee requested staff to develop debt strategies and policies for the Committee’s review and approval. The Committee recommended that staff develop some initial financial targets, such as fund balance as a percent of revenue, which the Committee and Board could use to communicate policy and direction. The Committee noted that the evolution of its and Board’s budget review and approval process should include additional detail and trend and forecast information in order to create over time more context for trustees’ review, discussion and decision-making. 6. Adjournment There being no other business, the meeting was adjourned at 12:02 p.m. Respectfully submitted, Mark Huey Assistant Secretary to the Board OSU Board of Trustees F&A Committee Page F-3 CONSENT ITEM Docket October 16, 2014 FY15 and FY16 Committee Work Plan and Meeting Schedule October 2014 Review and Approve Minutes of July 2014 Committee Meeting (*) Review and Accept the FY15 Committee Work Plan and Meeting Schedule (*) Receive Briefing, Accept and Recommend to the Full Board: Matteson Property Gift (*) Review, Accept and Recommend to the Full Board: Public University Fund Investment Policy (*) Review, Accept and Recommend to the Full Board: University Treasury Management Policies (*) • University Internal Bank Policy (*) • University Investment Policy (*) • University Debt Policy (*) Receive an Update on the Bond Rating Process (Bonds 102) Receive an Update on the Long-Range Capital Plan Development Process (Capital 102) Review and Accept the FY14 Q4 Operating Management Report (*) Receive an Update on the FY15 Operating Budget Receive an Update on the 2015-2017 State Funding Process Receive an Update on State Treasury Managed Endowment Fund Mid-Period (date TBD): 1-Hour Telephonic Meeting Review and Accept the FY15 Q1 Operating Management Report (*) Review and Accept the FY15 Q1 Investment Report (*) January 2015 Review and Accept the FY14 External Auditor Annual Report (joint 1-hour meeting with Executive & Audit Committee) (*) Review the FY14 Financial Statement Analysis Discuss Budget Detail, Trends, Financial Targets and Metrics March 2015 Review and Approve/Recommend to the Board FY16 Tuition Rates & Mandatory Student Fees (*) Review the FY16 Operating Budget Outlook Preliminary Review of the FY16 Capital Plan Review the Long-Range Capital Plan Review and Approve Financial Targets and Metrics (*) Review and Accept the FY15 Q2 Operating Management Report (*) Review and Accept the FY15 Q2 Investment Report (*) May 2015 Review and Approve/Recommend to the Board the FY16 Capital Plan (*) Review and Approve/Recommend to the Board the FY16 Operating Budget (*) Review and Approve/Recommend to the Board the Long-Range Capital Plan (*) Review the Long-Range Operating Budget Forecast Review and Accept the FY15 Q3 Operating Management Report (*) Review and Accept the FY15 Q3 Investment Report (*) Mid-Period (date TBD): 1-Hour Telephonic Meeting Develop and Accept the FY16 Committee Work Plan and Meeting Schedule (*) Review and Accept the FY15 Q4 Operating Management Report (*) Review and Accept the FY15 Q4 Investment Report (*) OSU Board of Trustees F&A Committee Page F-4 ACTION ITEMS Docket October 16, 2014 October 2015 Annual Review of University Investment Policy Annual Review of University Debt Policy Receive an Update on the FY16 Operating Budget Mid-Period (date TBD): 1-Hour Telephonic Meeting Review and Accept the FY16 Q1 Operating Management Report (*) Review and Accept the FY16 Q1 Investment Report