UNIVERSITY OF NEW HAMPSHIRE
FACULTY SENATE

30 MARCH 1998	MINUTES SUMMARY


I.  Roll - The following Faculty Senate members were absent:  Balling, 
Burger, Ernest, Herold, Lugalla, Morgan, Walsh.  Excused were Greenlaw, 
Guidry, Henke, McMahon and McNamara.

II.  Communications with the President - On April 2, the Board of 
Trustees is expected to take action on the tuition increase and hopefully 
may vote in a 11.7 percent increase for in-state tuition and a 3 percent 
increase for out-of-state tuition.  At the present time, state funding 
plus in-state tuition are far from meeting the costs of a studentıs 
education.  In addition, expected enrollment increases have not occurred, 
and there is a change in the mix of in-state and out-of-state students.  
However, other states are beginning to pump significant funds into their 
public higher education, especially in the south.  At an AAHE meeting 
last week, the chancellor of the University System of Georgia spoke about 
Georgiaıs commitment to higher education, citing a six percent salary 
increase and higher funding from the legislature for technology, the 
library, research, and other projects.  Ninety-seven percent of the 
students there pay no tuition and fees and receive a book allowance.

A professor asked why it is necessary to have a university administrator 
as part of the system bargaining team and suggested that this seems to 
align the administration against the faculty in Durham.  Will the dean on 
the bargaining team help look out for the interests of this campus versus 
the interests of the System?  The President acknowledged that deans have 
always been on this team and said that she will explore this matter 
further.

III.  Communications from the Chair - The chair said that faculty are 
conscious of recent deaths, including that of Neil Lubow, and express 
their concern for the bereaved families and friends.  After this comment, 
she turned to Faculty Senate business.  Todd Gross has proposed to the 
Agenda Committee a new financial aid plan wherein the fifth year of 
university study would be free for certain students who work at least 
twenty hours a week.  The Agenda Committee conveyed this idea to the vice 
president for finance and administration, who will ask the enrollment 
manager to review this suggestion when the manager takes office.

IV.  Minutes - The minutes of the March 9 senate meeting were approved 
unanimously, with amendments to modify the wording of item seven.

V.  Draft Policy on Scheduling of Games and Practices - The preamble only 
of this policy has been revised.  Jim Farrell moved and John Seavey 
seconded that the Faculty Senate endorse the Policy on Scheduling of 
Games and Practices.  The motion passed unanimously.

VI.  University Budgeting, a Presentation by Vice President Candace 
Corvey - In FY 1997, the university's total revenues minus financial aid 
increased 1.5 percent; but the consumer price index rose 2.8 percent, 
while the higher education price index increased by 3 percent.  At the 
same time, our state funding increased only 0.4 percent.  The university 
allocated an increase of 3.5 percent to instruction and an increase of 5 
percent to academic support, while decreasing institutional support and 
administration costs by 7 percent.  In the same time period, plant 
operation and maintenance went up by 6.2 percent; and utility costs rose 
by 6.8 percent, because of an increase in the square footage of 
buildings.  The cost per square foot remained stable.  So the university 
has been trying to reallocate funds to instruction and away from general 
administration, in order to protect the central academic mission.

After this introduction, Vice President Corvey turned to a discussion of 
past actions by the University Planning Council.  The University Planning 
Council had targeted expense reductions of 4.3 million dollars, which 
have been accomplished.  This includes cuts of 1.7 million dollars for 
administrative departments, 1 million dollars for administrative support, 
and 1.6 million dollars for academic and outreach programs.  The revenue 
enhancement target, which was 3 million dollars and included the 
expectation of significantly increased enrollments, now falls short by 
2.2 million dollars, because enrollments have not increased but have 
actually decreased.  The net difference between the University Planning 
Council enrollment target and the likely FY 1999 degree financial 
full-time equivalent enrollment is 772.  However, the tuition rate 
increases have been higher than expected in the UPC projection, and this 
has saved the university from a more severe problem.

As of last year, the university had 3 million dollars in one-time funds 
such as carry forwards and short-time interest funds, but these monies 
will be spent this year to help balance the budget.  Vice President 
Corvey pointed out, however, that using one-time funds cannot be a 
long-term solution to our budget problems.  For example, there is a 
projected 3 million dollar imbalance in the FY 1999 UNH general fund 
budget, which must be balanced.  More indirect cost recovery is expected, 
and tuition may be raised; but a 2 million dollar gap remains, plus 
critical new needs such as library acquisitions and environmental health 
and safety.  Q funds for scholarships that have been unused due to 
restrictive clauses are being targeted, through an effort to find 
students who fulfill the qualifications for the scholarships.  The final 
UNH budget should include contingency funds, so that roll-backs will not 
have to be instituted.  The vice president also spoke of the FY 1999 
budget as a work in progress that is based on assumptions such as a 3 
percent salary increase, with the current level of fringe benefits and no 
increase in the support budget.

As part of this discussion, faculty expressed concern that the university 
not increase enrollments at the expense of student quality.  Will the 
in-state tuition increase reduce the number of in-state students who come 
to the university?  Vice President Corvey responded that, if we consider 
tuition, fees, room and board, the increase for in-state students would 
only be 7.6 percent and that financial aid will continue to be given to 
students using the current need formula.  The applicant pool is 
decreasing 16 percent, which is 20% out-of-state students and 11 or 12 
percent in-state students.  A professor asked if lowering out-of-state 
tuition would improve matters in the long run, and the VPFA said that the 
new enrollment manager will consider that option and others.  This new 
enrollment manager who will be hired will be required to create 
sufficient savings in expenses or enhancements in revenues to pay for his 
salary, after a start-up period.  An increase in high school graduates is 
expected in the next few years.  The vice president said that one 
possibility would be to set up a transfer policy to UNH after study at 
UNH-Manchester or other schools for the first two years.

Professors asked that efforts be made to reduce the transfer of funds 
from the university to the System.  UNH pays 71 percent of the funds for 
the chancellorıs and controllerıs offices at the System and 81 percent of 
the System computing office budget.  The University Foundation will soon 
be self supporting, through an administrative tax on the endowment.  
There is a very realistic hope that fund raising will bring in 
considerable additional funds.  The capital campaign goal is 100 million 
dollars, but half of that would be our normal income from fund raising.  
We should also keep in mind that major donations are often paid over a 
period of years.  The Alumni Affairs Office and the University Foundation 
have as a major goal to build the alumni network and to increase our 
citizensı perception that they have a connection with the university.

A faculty member asked if the entrepreneurial campus will be a financial 
wash or a help to the university.  The VPFA replied that the 
entrepreneurial campus will not get a subsidy from the general fund, and 
building for the entrepreneurial campus will be paid for without monies 
from that fund.

VII.  Responsibility Center Management, a Presentation by Vice President 
Candace Corvey - Responsibility center management is a proposal for a 
decentralized approach to budgeting and is at an exploratory stage at 
UNH.  Revenue streams would be analyzed and applied to each unit, while 
the full costs would be assigned to units, including the cost of space.  
Proponents say that the plan would optimize the right incentives at a 
local level and that each unit would have better control over its own 
destiny.  Also, resource allocation would be in the context of the 
institutionıs values, and so some discretionary funds would be available 
to the president for additional support of certain programs.  Competition 
between programs would need to be minimized.  A number of larger 
institutions currently employ this method.

The principles of responsibility center budgeting are to balance 
simplicity and fairness, to empower local decision making, to match risk 
and reward, to develop clear and stable rules, to match accountability 
and responsibility, to maintain leverage, and to set clear priorities and 
emphasize community.  Many complex decisions need to be made, such as 
whether the cost/revenues formula would be gross or net of financial aid 
and whether a distinction would be made between in-state and out-of-state 
students.  A steering committee of eight people has been formed and also 
a number of working groups, including faculty on all committees.

The time frame would be 1998 and 1999 for information gathering, 
communication and then a decision on whether or not to proceed further, 
followed by development of the model, testing and refining it, and then 
another decision on whether or not to proceed.  FY 2000 could include 
phased implementation, along with refinements.  That year could be run 
with the two systems in parallel.  The FY 2001 budget would be 
constructed in FY 2000, with full implementation during FY 2001.  A unit 
would be a college, but deans could pass the method down if they wished.

Keys to success for responsibility center management are empowerment by 
the Board of Trustees and the state, support by faculty and staff, 
leadership, effective regulatory bodies, strong linkages, clear 
performance measures, open dialogue, good management, individual design, 
and a slow and deliberate pace.  A professor asked if intercollegiate 
athletics would be included in this plan, and the VPFA said that 
everything would be included.  Another faculty member said that it would 
be inconsistent to apply this method here when the System does not use 
the method.  Concern was expressed about competition among departments 
for resources.  The plan is to include effective governance mechanisms to 
adjudicate that.  Faculty are asked to send their concerns and comments 
to VPFA Candace Corvey.

VIII.  Adjournment - The meeting was adjourned.