University of North Florida
Board of Trustees
Finance and Audit Committee
February 24, 2004
University Center at 12:00 Noon
Committee Members Present
O’Neal Douglas, Wilfredo Gonzalez, Steve Halverson, Wanyonyi Kendrick, and Judith Solano
Committee Members Absent
Other Trustees Present
Trustee Kendrick called the meeting to order stating that she hoped everyone had an opportunity to review the minutes and asked for a motion to approve them. Trustee Douglas moved to approve the minutes and Trustee Gonzalez seconded the motion. The minutes were approved unanimously.
Approval of Increased Parking Fees
Vice President Shuman introduced Mr. Vince Smyth, Director of Auxiliary Services, and asked him to discuss the recommended parking increase. Mr. Smyth stated that a new garage would be needed by 2008 due to the need for more parking spaces on campus. The thousand spots created by the new garage should be sufficient until 2013. At issue was the need to raise revenue to build the garage, estimated at $11.5 million, while maintaining specified fund balance levels and a 1.25 debt coverage ratio. Four significant possible projects were covered under fund balances thus far: replacement of the west entry building ($250,000), construction of the north entry building ($250,000), garage lighting ($100,000), and an additional eight hundred spaces in the north lot ($1.6 million). Mr. Smyth said it was also preferable to try to have consistent annual increases rather than a major jump in one year and to keep pricing together on set percentages above the general price.
The recommendations for next year (2004-2005) were to keep first floor and designated spaces the same, keep the discount lots (14, 14t, and the north lot) the same, and add covered parking as a premium designation. Premium percentages for upgraded designations would be set according to the following: covered at 1.25 times the general price, designated at 1.50 times the general price, first floor garage at 1.75 times the general price, and reserved at 2.50 times the general price. Discount designations would be set at .60 times the general price. The discount rate for 2004-2005 would be set at $50. The per day rate would increase from $2 to $3. After next year, there would be an 8.5% increase to the general decal rate each year until 2008-2009 to raise the revenue necessary for construction of the garage.
Trustee Kendrick asked if there were any questions. Trustee Gonzalez asked if any thought had been given to excluding certain groups from parking. He gave Virginia State as an example, stating that freshman were not allowed to bring vehicles to campus and must live in dorms and sophomores were required to park in satellite areas. Trustee Solano answered that the parking committee had recommended moving some students to remote locations based on class standing, but the recommendation had not yet been approved. She added that students on the committee had agreed with the recommendation as it was standard practice in the high schools as well. She said it would be difficult to prohibit students from parking on campus as the location was so remote.
Vice President Shuman stated that the parking committee had made some recommendations to the President, which were currently under consideration. She and Ms. Karen Stone were researching whether tuition and state funds could be used for parking under devolution. The committee had proposed that decals be sold in April rather August when faculty were on campus. A transportation stipend for lower paid employees was also under consideration, though Ms. Shuman could not give much information on this issue due to collective bargaining efforts currently under way. Trustee Douglas asked if such a discount to employees would affect the amount of revenue collected toward the new garage. Ms. Shuman replied that it would not. President Delaney added that the transportation stipend being discussed was to fund lower paid employees at the discount parking lot rate. Employees eligible for the stipend would be responsible for any additional cost should they choose to park elsewhere. This would not account for a significant amount out of payroll budgets and would dramatically improve the cost of parking for these employees. Trustee Gonzalez stated that in Washington, D.C. discounts were given to employees who carpooled in areas where parking was a premium. Metro transit was also subsidized. He asked if the concern about the spaces that would be taken by the student union would be resolved if a garage was built beneath the new building. Trustee Solano said that might help over the long term, but there would still be an issue during construction.
In a related matter, Trustee Gonzalez noted that there was only one emergency phone located at the north lot. He said that one phone was not sufficient for that area. Vice President Shuman agreed. She said five emergency phones were to be installed in the area. Ms. Shuman said she would check into the matter immediately to find out why there was a delay.
Trustee Kendrick asked for a motion to recommend the parking rate increases. Trustee Gonzalez moved to recommend; the motion was seconded by Trustee Douglas and unanimously approved.
Approval of UNF’s Transition Plan
Vice President Shuman stated that the transition plan was required by the state to indicate how the university planned to devolve procedurally. She added that there was a time constraint as the Board of Governors wanted all transition plans by their next meeting. She said there were only a few changes since the trustees had last seen the document. The changes were highlighted in red for easier visibility. Trustee Kendrick asked for a motion. Trustee Douglas motioned to recommend approval of the transition plan. The motion was seconded by Trustee Gonzalez and approved unanimously.
Preliminary Audit Report on Florida Bright Futures Scholarship Program
Vice President Shuman reported that the Auditor General audited all universities each year on Bright Futures. There was only one finding in regard to an untimely return of undispersed program funds. UNF had responded, indicating that it was a one-time situation. The Financial Aid office had been understaffed and procedures were not fully in place at the time. The issue had been addressed and Ms. Shuman did not believe there would be another such occurrence.
Report on UNF’s Financial Statement Audit
Vice President Shuman said that the financial audit provided the financial statements of the university and would be added to the state financial report. Trustee Gonzalez asked if the audit looked at the processing time for union agreements. Ms. Shuman answered that it did not. President Delaney noted that UNF was far ahead of the other state universities in addressing collective bargaining agreements.
Athletics Audit Report
Vice President Shuman said she was pleased to report that Athletics had a clean audit and that the department’s fund balance appeared strong. There were no questions or comments related to the Athletics audit report.
Trustee Douglas addressed a question to Vice President Shuman. He stated that it had taken some time for him to adjust to dealing with university financials from his background in business. He felt that the Finance and Audit Committee was exercising its fiduciary responsibility, but asked that Ms. Shuman discuss her view of the financial status of the university. Ms. Shuman said she felt very comfortable with the financial position of the university, that it was considerably better than she had expected due to what she had heard about state budget cuts. She said the past two presidents had done a remarkable job keeping the university in good shape. She also complimented Mr. Ricky Arjune for putting together the budget and maintaining university operations.
Vice President Shuman remarked that she and Mr. Arjune planned on more frequent reporting to the Board during the year, at least quarterly she hoped. Trustee Douglas agreed that more frequent reporting was very important. He said it was crucial that the committee be kept posted on cash flow, budgets, and reserves. Such information would give the committee an idea of patterns and trends. He added that the more easily understandable the reports were to committee members, the more helpful it would be in decision making. Ms. Shuman offered that though it had been said that universities could not be run like businesses, parts of universities were businesses and should be treated as such. She added that, in regard to devolution, it would be critical to be aware of cash flow as the university was now responsible for paying its own bills. Trustee Halverson commented on the importance of the discussion as well, stating that he felt very confident about the university’s position financially due to the strong leadership and stewardship of university resources. He asked Ms. Shuman to come up with a procedure for reporting that was simplified so the group could easily understand the budget process, adding that he knew the task was somewhat daunting due to the multiple revenue sources. He asked that the reports include an executive dashboard of indicators to assist in tracking. He said his concern was not with the University’s current financial situation but more to help the Board understand the variables more clearly in the event of a budget issue in the future. He noted that there were not any examples for the Board to follow in creating such a process. Vice President Shuman agreed strongly. Her plan was to change the internal budget processes, requiring justification of each year’s budget rather than a set budget amount plus additional monies added as available. President Delaney said the process probably would not go as smoothly this year as it would next year. He said he had created a vacancy pool so that vacant positions would have to be justified prior to filling them. He said the internal processes were much healthier than he had expected, though not as transparent as he would have liked. The only possible problem he’d noticed was that the University may have clamped down more than was necessary for the budget cuts.
Trustee Solano had a question about the implementation of the ERP system. She asked if the University was on schedule in transferring to the system. Vice President Shuman answered that all of the dates thus far had been met and she expected to continue to be on schedule. Mr. Scott Bennett reported that they had hit all of the milestone dates and were very comfortable with the system’s implementation.
President Delaney added that it appeared that things were going so well there would be a 2 percent reduction in this year’s budget and an increase of 1 percent in administration.
Trustee Douglas stated that he had attended a number of social events over the previous weekend and had heard a great deal of positive feedback about the presidential inauguration. Almost everyone he spoke with had seen the event on television or in the paper if they had not attended it in person. He was very pleased with the inauguration, stating that it was a tremendous event and he felt that everything had gone beautifully. Chair Thompson added that the press coverage had been very good. After the discussion about the inaugural events, Trustee Kendrick adjourned the meeting.