UNIVERSITY BUDGET COMMITTEE
MINUTES OF JULY 18, 2013 MEETING
I.
II.
Time, Location and Attendance:

10:30AM, Brookside Room at Administrative Center

UBC members present: Provost Gail Hackett (Chair), Dave Donnelly, Gary
Ebersole, Maureen Hannoun, Tony Luppino, Michael Plamann, Mel Tyler,
and Wayne Vaught. Absent: Carol Hintz, Lyla Lindholm, Marsha Pyle, and
Kevin Truman.

Others present: Chancellor Leo Morton, Larry Bunce, Sharon Lindenbaum,
John Morrissey, and Karen Wilkerson.
Preliminary Administrative Matters:

III.
The minutes of the May 1, 2013 meeting were approved in the form last
circulated before the meeting.
Chancellor’s Report on State/System/UMKC Developments:

State Appropriation. Chancellor Morton reported that the final amount of
the State Appropriation to the System for FY 2014 remains uncertain. The
Governor and Missouri Legislature are continuing to deal with budget and
veto issues, as follows:
o Core/Base Appropriation. At the current time the System is subject to a
holdback/reduction compared to last year’s State Appropriation, which
will be implemented pro rata starting with July disbursements—
UMKC’s share of that holdback/reduction is approximately $3 million
for the fiscal year. The hope is that ultimately that holdback/reduction
will be eliminated, so that UMKC’s Core/Base State Appropriation for
FY 2014 will be at least as much as last year’s $75,097,668.
o Proposed Increase for Performance-Based Strategic Apportionment.
The previously proposed increase in the State Appropriation, which
would be approximately $12 million for the UM System, is also in
jeopardy in the State-level debate. If all or some of it is ultimately
appropriated, the Chancellor feels that the Provost and others involved in
the strategic planning work have done an excellent job of demonstrating
UMKC’s performance, strategic initiatives and action plans, positioning
us well to share in such increased funding.
o Timing of Decisions. It seems likely that the two issues described above
will be resolved sometime in August.
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
UMKC Payroll Management Initiative. The Chancellor next addressed the
ongoing payroll management initiative.
o The discussion included noting that as things currently stand UMKC is
budgeted to produce a $19 million operating deficit for FY 2014—
which, if allowed to happen, would cut into our approximately $34
million positive Operating Fund balance to an unacceptable degree. He
emphasized that payroll is by far the biggest component of our operating
expenses, and is presently budgeted for FY 2014 at about $9 million
more than FY 2013.
o These circumstances have led the Chancellor to call for all unit leaders to
participate in a payroll management initiative, as some significant
expense reduction is a must. The Central Administration is currently
reviewing and responding to information received from the units, and
unit hiring plans. While the salary increase initiative previously
announced for FY 2014 is staying in place, the Chancellor indicated that
he will likely, after study of the information being processed, set specific
targets for units to reduce payroll in strategic ways.
IV.

Consultants’ Report on SBS-SOM Merger/Partnership Discussions. The
Chancellor then reported that the consultants engaged to study options
relating to the School of Biological Sciences-School of Medicine merger/
partnership discussions had submitted their report. He explained that the
report is being studied and no decisions have been made. When asked if the
UBC should turn its attention to the comprehensive study of how the Budget
Model operates with regard to SBS, along the lines of the study previously
done with respect to the Conservatory (but previously deferred on SBS
because of the SBS-SOM discussions and the engagement of the
consultants), he said that we should first review and consider the
consultants’ report, and indicated that a copy would be sent to the UBC
members.

System Benefits Task Force. The Chancellor was asked if he had heard
back yet on the composition of the Task Force to study the UM System
benefits (the “Total Rewards” approach as described in a special meeting of
the Curators in May). He said that he had not yet received notification from
the System of the composition of that Task Force.
Provost’s Report

Provost Hackett reviewed the history, status and context of the document
entitled “University of Missouri Board of Curators DRAFT: Strategic
Planning July 19, 2013,” which had been circulated to the UBC July 16. She
explained that the process was not yet complete and that feedback from
various constituencies is still being sought.
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
V.
VI.
During this portion of the meeting it was reiterated that the approximately
$12 million of increased State Appropriation which would help fund
strategic initiatives is not certain to become available for FY 2014 (as
described in III above), but that steps are already being taken at the UMKC
level through internal strategic funding to fuel key initiatives. It was also
noted that the draft document has both short-term and five-year objectives,
and that UMKC has, as noted above, set forth its plans in detail, positioning
us well to demonstrate the appropriateness of our sharing significantly in
performance-based and strategic funding going forward.
Report on FY 2013 General Revenues Not Initially Allocated Out

UBC Secretary Tony Luppino presented a carryover item from FY 2013
UBC meetings—the compilation of a report on the uses of approximately
$7.6 million of FY 2013 budgeted General Revenues which were not
allocated out to units when the FY 2013 GRA apportionment was announced
at the end of April 2012. He explained that this consisted of (i) about a $5
million excess of the 7.8% cut in State Appropriation assumed in the April
2012 Budget Model run over a 1% cut level, (ii) a little under $800,000 from
the 1% cut amount ultimately freed up (with strings), and (iii) a little over
$1.8 million from Strategic Adjustments made by the Chancellor at the end
of the April 2012 Budget Model run that was not then allocated out to units.
He explained that the UBC had previously been given a list of investments
covering about half of the money in question, and that the goal was to put
together a year-end report for the pertinent constituencies showing the
ultimate use of all of the approximately $7.6 million in question.

During related discussion it was noted that it is possible that not all of the
budgeted $7.6 million was actually available or that some may have not been
expended at all (and thus would have wound up in a central reserve), but
agreed that, whatever the detail is, it would be set forth in a report that can
be circulated to interested constituencies.
Overview of Use of FY 2014 State Appropriation

UBC Secretary Luppino then discussed the draft schedule attached to these
minutes as Appendix A. He explained that since the UBC has identified as
an upcoming agenda item revisiting the Budget Model approach to applying
the State Appropriation for future fiscal years he felt it would be helpful, as a
starting place, for the Committee members to review how the FY 2014 State
Appropriation is being utilized.

Ensuing discussion of the draft schedule attached as Appendix A produced
the following points of note:
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o The $773,409 special allocation listed as “Holdback per State” is
actually a UMKC holdback to provide funding to match potential
strategic investment funds expected to be made available by the System.
o The $1,300,000 special allocation listed as “UMKC Holdback/Incentives
Fund” is to support strategic initiatives, including, among other things,
support for early-stage operations of University College (until it becomes
self-sufficient under the Budget Model). There is no formal process of
applying for funding from this holdback—the Chancellor will make the
ultimate decisions on the use of this fund with input from the Provost.
o No decisions have been made yet as to the use of the $3,126,518
Strategic Adjustments Reallocation noted on the draft in Appendix A.
Particularly given the possibility that the State Appropriation may be
$3,000,000 less than the $75,097,668 total shown on the schedule (due to
the Governor/Legislature ongoing debate described above), decisions on
the use of the $3,126,518 in question will likely need to wait until that
matter is resolved at the State level, and until the results of the ongoing
payroll management initiative at UMKC are more determinable.
VII.
Administrative Matters Going Forward

Further discussion (and review of recently completed and ongoing reports)
will be needed before setting a schedule for the comprehensive review of the
operation of the Budget Model in UMKC’s current and projected
circumstances and exploration of possible modifications to the Model.

Schedulers will look into the possibility of making the next scheduled UBC
meeting (August 15) a joint session with the Facilities Advisory Committee.
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Appendix A
APPLICATION OF $75,097,668 FY 2014 UMKC STATE APPROPRIATION Luppino Draft 07-15-13
Strategic Allocations (22% of State Appropriation):
Holdback per State:
$ 773,409
UMKC Holdback/Incentives Fund:
1,300,000
Legislatively Designated:
Conservatory
Dentistry
Medicine
Nursing
Pharmacy
Subtotal:
212,000
970,000
1,234,695
186,000
1,940,000
4,542,695
4,542,695
Chancellor Designated:
Kansas Exchange (Dentistry)
I.E.I. (Bloch)
I.U.E. (Education)
Salary Increase Support
Global Grading Salary Adjustments
Strategic Adjustment Reallocation
Subtotal:
2,283,584
1,329,650
575,000
1,875,500
525,000
3,126,518*
9,715,252
9,715,252
Net Assigned to Schools per Weighted SCH Formula (78% of State Appropriation):
Initially allocated per formula
61,892,830
(Less Strategic Adjustment)
(3,126,518)*
Subtotal:
58,766,312
58,766,312
TOTAL STATE APPROPRIATION:
$ 75,097,668
*The Medical School was assigned $12,962,800 of the $61,892,830 portion of the State
Appropriation initially allocated per the Weighted SCH Formula. In the Strategic Adjustments at
the end of the Budget Model Run SOM’s GRA was reduced by $5,496,088--$2,369,570 of which
was reallocated to other Schools ($2,152,629 to the Conservatory and $216,941 to SBS), and
$3,126,518 of which was not reallocated to other schools in the GRA apportionment announced
in May. In this presentation that $3,126,518 is being treated as State money held for strategic
uses to be designated by the Chancellor, and correspondingly excluded from the amount of
State money ultimately assigned to Schools under the Weighted SCH formula.
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