Approval of minutes Minutes of the meeting of October 13, 1999 were approved as distributed.

Distance learning lessons from the School of Public Health

Dr. Robert Lawrence, School of Hygiene and Public Health, reported on distance education. The School has positioned itself to take advantage of the changing market forces and student populations by adopting new teaching strategies and media. Fiscal 2000 marks the beginning of the School's internet-based Masters in Public Health (MPH) degree. Last June there were 38 students enrolled in the program and the School anticipates enrolling an additional 50 next year. Of the first 38 students enrolled, seven were international students. The School anticipates a larger proportion of international students in the future.

The School became interested in internet-based programs when it recognized that they were at maximum capacity in East Baltimore. There are a total of 188 MPH students and the School cannot expand enrollment due to space constraints. The School also recognized that cost savings for students would be significant due to reduced travel and relocation expenses. Long-term savings are projected in curriculum development because the content of the programs can be adapted as new needs arise.

Encouraging faculty members to participate in the program is of primary concern to the School. The School is considering ways to entice faculty to create new classes and update existing courses. The School does provide a financial incentive for faculty that participate in the internet-based program. This incentive includes $10,000 as start-up funds and an additional $1,000 per course credit.

The Committee asked several questions. Dr. Lawrence stated that the School needs to evaluate how much it really costs to translate face-to-face education into internet-based education. It is a big challenge to identify opportunity costs. The implementation of this new program offers more flexibility than the School's current competitors. None of the School's main competitors currently have internet-based programs.

Operating results through October 31, 1999

The Committee reviewed financial operating results through October 31, 1999. Although the University's October results represent one third of the fiscal year, they show only two months of the academic year. At this time in the year, minor timing variations can cause substantial swings in year-to-date percentages.

The University's year-to-date surplus is $3.2 million, $1.0 million higher than the budgeted surplus. Sources of general funds were 34.0% of budget and uses of general funds were 33.7% of budget. Total sources (which include research, designated gifts and endowment payout) were 33.1% of budget and total uses were 32.9% of budget.

General funds tuition revenue to date is $98.7 million, 35.9% of budget. This figure includes summer session revenue and the first half of the fall semester.

Facilities and administrative cost recoveries were $46.0 million, 32.1% of budget. The pace of F&A recoveries normally increases during the second half of the fiscal year. F&A recoveries are 6.7% higher than last year at the same time, and the research base is 6.2% higher than last year. About $2.4 million of recoveries has been added to reserves for one-time capital expenditures.

In the Clinical Services division, revenues through October are $62.1 million, 34.6% of budget, up 11.2% from this time last year. Expenditures are at $63.1 million, or 37.7% of budget. The division continues to invest in start-up costs for new programs. In addition, most clinical bonuses are paid in October, thereby front loading clinical expenditures.

General funds instruction and research expenditures through October are $74.3 million, 37.8% of budget. The primary cause for the higher percentage is $12.2 million of summer programs for the Institute for the Academic Advancement of Youth, which incurs most of its instructional expenditures occurring during the summer.

Student aid expenditures are $21.4 million, or 28.4% of budget. The percentage is low for this time in the year. However, the School of Medicine has not yet booked most of its aid expenditures.

University endowment

Dr. William Snow, Treasurer, presented a report on endowment management to the Committee. (Several pages of the handout are attached to the minutes: see below.) The Board of Trustees Committee on Investments oversees the investment management of the Endowment Investment Pool. Responsibilities of the Investment Committee include determining asset allocations, establishing endowment spending policies and reviewing strategies and proposals presented by the Treasurer's Office. The University s investments had a market value of $1.5 billion as of September 30, 1999. The University's annualized total return for one year was 17.5%, compared to 27.8% for the S&P 500 Index, and -1.6% for the Lehman Government/Corporate Index. In fiscal 1999, a new spending rule was adopted whereby the annual payout rate is 5% of trailing 3-year average market value. A five-year history of endowment and similar funds is attached (see below). The market value of these funds has grown 91.4% from June 30, 1995.

Form and frequency of communications between FBAC and the divisions

The Chairman asked the Committee for comments on how each division communicates issues discussed at the meeting. Responses ranged from no formal communication methods to occasional communications through faculty assemblies or faculty senates. The Committee discussed the possibility of using internet-based communications via a Hopkins website. In this format a revised version of the minutes (if necessary to delete sensitive information) plus any handouts and tables could be made accessible to all divisions. Another suggestion was the idea that the minutes and tables be e-mailed to the Committee and could then be forwarded to departmental chairs. Dr. Knapp agreed to contact Dennis O Shea to make arrangements for posting the minutes and membership listing of the Committee.

The meeting adjourned at 1:00 p.m.

Attachments to the December 14, 1999 Meeting Documents from the Briefing on University Endowment and Investment March 14, 2000 Responsibilities of the Committee on Investments of the Board of Trustees Investments: Market Value as of 09.30.99 EIP Investment Performance as of 09.30.99 EIP Spending Policy EIP Payout as a Percentage of One Year Average Market Value

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Last updated 30Jan01 by dgips@jhu.edu