Approval of the Minutes: Minutes of the meeting of November 3, 2004 were approved as distributed.

FEDERAL and STATE ISSUES

Ms. Linda Robertson, Vice President of Government, Community and Public Affairs, discussed with the Committee federal and state issues facing the institution. She commented on some of the different perceptions of Johns Hopkins in Annapolis, both positive and negative. She proceeded to discuss the various issues facing the University at both the state and federal level. Many of these issues revolved around funding of various initiatives and programs, the uniqueness of academic medicine, scientific research and general medical related issues such as patient safety, access to care and medical liability reform.

FISCAL 2005 QUARTERLY KEY INDICATORS

The Committee reviewed the University's financials which show an operating surplus of $41.7 million, higher than the budgeted surplus of $33.4 million. In the aggregate, four of the five revenue indicators tuition, organized research, other sponsored and F&A recoveries are ahead of budget at this time; only clinical revenues are a bit behind ($500,000), and it is early in the fiscal year.

Tuition revenue is $4.3 million higher than budgeted. The largest increases compared to budget were at the Schools of Public Health and Medicine. The "All Other" category also reported higher revenues compared to budget led by the Center for Talented Youth and Continuing Medical Education. The School of Professional Studies tuition revenue is lower than budgeted. Overall, tuition revenues are 9.9% higher than last year at this time.

Organized research revenues are $1.4 million (1.4%) greater than budgeted. The School of Medicine exceeded budget by 3.2% through September, led by growth in the department of Medicine. Organized research revenues were down $588 thousand (10.9%) in the School of Engineering with activity below budget in the Computer Science and Chemical Engineering departments; delay in the receipt of a grant in the Center for Medical Robotics also contributed to this shortfall. The Schools of Arts and Sciences and Public Health are slightly below budget through September 2.6% and 1.8%, respectively. The "All Other" category is $430 thousand over budget, led by the Schools of Nursing and Professional Studies. Growth is 7% above last year.

Other sponsored revenues are $1.2 million (3.4%) above budget and 14.1% higher than last year. With the exception of the School of Engineering, the research divisions are over budget.

Facilities & Administrative cost recoveries are slightly more than budget ($598 thousand) but are $4.0 million (7.5%) higher than last year at this time. The School of Medicine reported the largest increase in recoveries from budget ($1.0 million.) The School of Public Health is experiencing modest excesses in recoveries as well. F&A revenues for the Schools of Arts and Sciences and Engineering are below budget.

Clinical services revenue is 0.7% lower ($0.5 million) than expected.

OPERATING RESULTS AS OF SEPTEMBER 30, 2004

Total revenues received through September were $769.9 million, $33.0 million (4.5%) more than anticipated for this period. Most revenue sources were at or over budget. Through the first quarter of FY 2005, revenue growth over last year stands at 12.9%.

Total expenditures through September are slightly over budget for the period. Total expenditures for the first quarter are $730.4 million compared to a budget of $702.3 million (4.0%). Total expenditures are up over last year by 12.3%.

Revenue growth, year-to-year, exceeds expenditure growth. This trend is consistent with the 5-year plan.

BUDGET & PLANNING ASSUMPTIONS FOR FISCAL 2006 - 2010

The Committee reviewed budget and planning assumptions for fiscal 2006 through 2010:

Maryland State aid continues to be at risk. As a result, the divisions will continue to budget this revenue source conservatively. The divisions will reduce their operating revenue from this source by 25% per year and add an equal amount for one-time uses as a hedge against further state budget cuts.

Facilities and administrative cost recovery rates have been negotiated through FY 2008. On-campus organized research will be budgeted at 63.0% for FY 2006, 63.5% for FY07 and 64% for FY 2008. For planning purposes, FY 2009 and FY 2010 rates will remain at 64%. Other rates will be 25% for off-campus organized research, 32.3% for on-campus other sponsored activity and 18.8% for off-campus other sponsored activity.

Subject to approval by the Investment Committee, endowment payout assumes a decrease of 3% in FY 2006 and no growth in FY 2007. The payout for fiscal 2008 through fiscal 2010 is projected to increase by 2.0% annually.

Salary budget increase guidelines are 3.0%, up from 2.5% in FY 2005.

Fringe benefits are negotiated at a rate of 33% for FY 2006, up from 32% in FY 2005. Planning rates for FY 2007- 2010 are also 33%.

BENEFITS COMPARATIVE DATA

Ms. Charlene Hayes and John Welsh from Mercer Human Resource Consulting presented the Committee with data on the University's benefits and how they rank against its peers. Johns Hopkins was compared to other institutions in the private sector in pay and benefits. Two benchmarks were used to compare total benefits. Faculty and senior staff were compared to other institutions of higher education and support staff was compared to the local market. The faculty and senior staff benefits ranked 4th amongst its peers, driven primarily by the University's retirement plan. The support staff benefits ranked 2nd amongst its peers, strongly driven by the tuition remission. The benefits that were found to set Hopkins apart from its peers are the retirement package, tuition remission and tuition grant and good, quality healthcare. These are used as key recruiting tools.

A motion was made and approved by the Committee to post on the website the charts showing faculty data for tuition benefits, retirement benefits, healthcare benefits and total benefits. Before they are posted to the website, Mr. Welsh will work with Ms. Hayes to compose some explanations for these charts for further clarification to the viewers.

HOPKINSONE UPDATE

Ms. Lynne Lochte presented an overview of the HopkinsOne project. The project is projected to cost $200 million, which includes $14 for contingency. Financing is to be split 1/3, 1/3, 1/3 between the Health System, School of Medicine and the University. This split is tied to revenues, (excluding the Applied Physics Laboratory and Howard County General Hospital) which is roughly split one- third between the three groups. Senior management agreed to keep the cost allocation simple versus a complex allocation.

The project will affect the faculty in many ways. The sponsored projects module will allow grants and budgets to run in real time, providing prompt information for improved decision making and reporting to sponsors. Additionally, it will provide electronic proposal development and automated document routing and review for approvals and submission. The finance module will reflect real time data with more timely distribution of scheduled reports and will provide accurate and timely expenditure data so investigators have accurate information. Real time purchasing will minimize late payment of bills in the supply chain module. In the human resources/payroll module, the new hire process will be expedited and there will be a decrease in the time it takes to process payroll changes.

The HopkinsOne faculty subcommittee is being formed and future meetings are being scheduled. They hope to have a report at the March 2005 Faculty Budget Advisory Committee meeting.

OTHER ITEMS

Items to be discussed at the March 2005 meeting aside from the second quarter financial update include a presentation on capital projects by Dr. McGill, a report from the HopkinsOne faculty subcommittee and Dr. Cathy Lebo will present her findings on faculty stretch.

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Last updated 17Mar05 by dgips@jhu.edu