Approval of the Minutes: Minutes of the meeting of December 13, 2004 were approved with changes.

Fiscal 2005 Second Quarter Operating Results

The Committee reviewed the University's FY 2005 second quarter financial results showing an operating surplus trailing slightly behind budget through December. The total operating surplus through the first quarter is $130.3 million compared to an anticipated surplus of $132.8 million. Revenues were $24.5 million (1.6%) greater than budget and expenditures were $27.5 million (2.0%) over budget. A portion of this operating surplus ($30.4 million) was transferred to fund capital projects or to the endowment (non-operating activity). This was $10 million more than expected. As a result, net assets increased by $99.9 million through December, compared to a budgeted increase of $112.4 million.

Tuition revenue is $2.0 million (0.5%) higher than budgeted and 9.6% higher than last year. The increases against budget were at the Schools of Public Health, Nursing and Medicine. The School of Professional Studies and the Center for Talented Youth experienced decreased enrollment compared to budget. Also, Continuing Medical Education has experienced a drop off in funding of education programs and reports tuition revenue $1.9 million below budget.

Organized research revenues are $6.7 million (3.2%) lower than budgeted. All divisions are below budget but organized research revenue has grown 5.6% from last year, led by increases in the Schools of Medicine and Engineering. Dr. Townsend asked about the future of grant funding University-wide and Mr. Puddester relayed anecdotal evidence that investigators are having budgets cut and no- cost extensions denied.

Other sponsored revenues are above budget ($2.9 million, 4.1%) through December, representing a 10.0% increase over revenues from prior year.

Facilities & Administrative cost recoveries are $12.9 million (11.2%) below budgeted levels through December. Much of this shortfall was anticipated due to the FY 2005 impact of the settlement with the federal government of $11.2 million attributable to over-recoveries in FY 2004. Adjusting for the repayment, F&A recoveries will end the year at budget.

Clinical services revenue for the School of Medicine is higher than budgeted ($3.4 million, 2.6%) through December. To date, clinical revenue is $140.6 million, 4.9% above the prior year's revenues.

Total expenditures through December are higher than budget for the period. Total expenditures for the first half are $1.402 billion compared to a budget of $1.375 billion. Research spending at Applied Physics Laboratory and clinical expenses are responsible for most of this variance from budget.

Compared to FY 2004, the total operating surplus is $130.3 million; $55.7 million lower than this time last year. The variance is attributed to the repayment of F&A over- recoveries ($11.2 million) and two large gifts, totaling $43.4 million received by the School of Public Health in the second quarter last year. Adjusting for these items, revenue grew 6.9% compared to expenditure growth of 7.2%, essentially even growth rates. Dr. Hough suggested that large, one-time transactions occur each year and that an alternative analysis should be done to take those events into account.

Capital Projects

Dr. McGill highlighted a few of the capital projects that are in development. The Library is building a remote shelving facility on the APL campus and will be funding it in part through a state grant and the sale of the Moravia facility. The Charles Village Development project has a revised budget of $67.5 million, up from $62.0 million mainly due to a sharp increase in the cost of steel, concrete, and drywall and an increase in the cost of site foundations and site utility work due to significant amounts of subsurface rock and related site work. The facility will open in August 2006, and in addition to undergraduate residences, it will house the University Bookstore and dining and retail space.

The School of Nursing and the Berman Bioethics Institute are building an academic building on the East Baltimore Campus. The project will be financed primarily with gifts and possibly $3 million in state funds.

The Homewood South Quad Development is scheduled to begin construction in summer 2005 following completion of the San Martin Center. This project will include a donor-funded visitor's and admissions center and a donor-funded computational science building. The project also includes underground parking funded by debt and parking revenues with parking rates expected to increase $5 per month each year in coming years. Dr. Hemker questioned whether the increased fees were all going to be put into parking infrastructure or whether such fees were viewed as a source of revenue by the University. Dr. McGill said that all revenues go back into the parking program and that parking is not viewed as a revenue source for the University. Dr. Hemker also asked whether faculty and staff needs were being considered in the planning of the South Quad parking structure and cited issues related to proposed nighttime closures, pedestrian exits in the direction of the campus, the capacity of vehicular flow into and out of the garage and on Wyman Park Drive, and the placement of faculty and staff spaces. Dr. McGill responded that they were.

Enrollment Pressure Study

Dr. Lebo presented a status report on her enrollment pressure study. She has held discussions with the Dean and Interim Dean of the Krieger School of Arts and Sciences as well as the Whiting School of Engineering. She has identified data available for the past ten years. The study will focus on instructional effort. Dr. Townsend expressed concern that a 10 year retrospective look would not be adequate as enrollment growth preceded that period. It was noted that similar issues have been addressed in recent studies at the Bloomberg School of Public Health and the Peabody Institute. Dr. Lebo will present a full report of her findings to the Committee at the May meeting.

Update on Salary Studies

Dr. Lebo provided an update on the logistical and legal issues related to the collection of data for faculty salary studies. The primary legal issues affecting the studies are anti-trust regulations and confidentiality. The University currently participates in COFHE and AAU Data Exchange studies. AAU is moving to a structure with an independent third party handling the information and many private colleges and universities are switching to AAU. The future of COFHE data exchanges is less clear. Dr. Lebo is weighing the University's options and will formalize a plan to collect, process, and interpret comparative faculty salary data for the Committee's annual reviews.

Dr. Lebo noted that salary data will be made available in July or August of each year, which does not coincide with the Committee's current practice of conducting and discussing these salary studies in the spring meetings. She proposed that the Committee studies be moved to the fall and that salary presentations be made at the December meeting in lieu of the May meeting as in currently done. It was noted that this proposal has the added advantage of providing the Dean's with the most current data at a time that is more convenient for decisions on faculty raises.

Dr. Hemker commented that the structure and the resources that Dr. Lebo has brought to this process are extremely valuable and asked for a motion to adopt the proposed schedule change. The change was discussed, moved, seconded and approved.

Dr. Lebo may bring AY 2003/2004 data to the May meeting for the Committee to discuss, but the next formal round of presentations on faculty salary studies for each division will be conducted in December 2005.

HopkinsOne

Dr. Hough reported to the Committee on the inaugural meeting of the HopkinsOne Faculty Advisory Committee (HOFAC). Though questions arose about training on the new system and on compliance issues, the overriding questions were on the value-added by the purchase of the $200 million system. In addition, a message that came out at the meeting was a need for greater faculty involvement. Dr. Links indicated that the message to the faculty is not being well-delivered or well-received and suggest that HOFAC be a focus group to review information before it get presented to the faculty at large.

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Last updated 16Nov05 by dgips@jhu.edu