Report



Minutes

The University of Toledo Board of Trustees

Finance Committee Meeting

February 21, 2011

|Committee Chair William C. Koester was present along with Committee members Ms. Linda N. Mansour, Mr. John S. Szuch,|ATTENDANCE |

|Faculty Representative Dr. Bina Joe, and Community Member Mr. James Shrader. Other Trustees attending included Mr. | |

|Carroll L. Ashley, Mr. C. William Fall, Mr. Joseph C. High, Dr. S. Amjad Hussain, Ms. Susan Palmer, Ms. Sharon | |

|Speyer, and Mr. Baldemar Velasquez. Committee Administrative Liaisons Mr. Chuck Lehnert and Dr. Scott Scarborough | |

|were present. Others attending the meeting were Dr. Jamie Barlowe, Dr. Frank Calzonetti, Dr. Terry Cluse-Tolar, Ms. | |

|Lauri Cooper, Ms. Meghan Cunningham, Mr. David Cutri, Mr. David Dabney, Mr. Bob Demory, Dr. Mike Dowd, Ms. Esther | |

|Fabian, Mr. Ron Goedde, Dr. Jeffrey Gold, Dr. Lloyd Jacobs, Dr. William McMillen, Dr. Walter Olson, Mr. Pete | |

|Papadimos, Dr. Mary Powers, Dr. Alice Skeens, Mr. Vern Snyder, and Ms. Joan Stasa. | |

|The meeting was called to order at 2:10 p.m. by Committee Chair Koester in the Driscoll Alumni Center Board Room on |CALL TO ORDER |

|the Main Campus. | |

|Mr. Koester requested a motion to waive the reading of the minutes from the December 13, 2010 Finance Committee |APPROVAL OF MINUTES |

|meeting and accept them as written. The motion was received by Trustee Mansour, seconded by Trustee Szuch, and | |

|approved by the Committee members. | |

|Dr. Scott Scarborough, Sr. VP Finance and Administration/Interim VP and Executive Director UTMC, provided the |SECOND QUARTER FINANCIAL RESULTS FY|

|Committee with FY 2011 Second Quarter Financial Results. For the Academic Enterprise, a 0% operating margin was |2011 |

|budgeted but -0.5% is projected. For FY2011, the budget was amended due to reduced SSI of $7.9 million and an | |

|increased Athletics budget of $2.9 million. For the Clinical Enterprise, a 3.1% operating margin was budgeted with a| |

|projected margin of 3.8%. Dr. Scarborough also reviewed long-term funds from FY2008 through FY2011. | |

|Dr. Scarborough presented information regarding UTMC capital investments and bond financing. Today’s presentation |HOSPITAL CAPITAL PROJECTS / |

|is Part II of a conversation on this topic which took place at the October 18, 2010 Finance Committee meeting. He |FINANCING |

|stated that UTMC is the primary teaching site for the UT College of Medicine and many other academic programs. He | |

|also mentioned that UTMC is an aging facility of 34 years. As stated in Directions 2011, Goal V, Health Care Access| |

|and Delivery, UTMC will be a top-tier academic healthcare delivery system. Sub-goal 4 states that UTMC will continue| |

|to use state-of-the-art information technology with a metric of satisfying “Meaningful Use Guidelines” by 2015. | |

|Sub-goal 5 states that UTMC will expand its inpatient and ambulatory clinical base with a metric that they will | |

|achieve a market share of 15% by 2014. Investment will need to be made in UTMC to reach Directions 2011 goals. Dr.| |

|Scarborough reviewed the multivalent decision tree that he shared with the Committee at the October Committee | |

|meeting which displayed different investment scenarios and results. He provided the Committee with a recommendation| |

|between a minimal and moderate investment totaling $25 million. He reported that we could obtain $50 million with a | |

|new bond issuance even though only $25 million is requested for this project. Trustee Ashley suggested that we | |

|should seek the $50 million since the cost to obtain the additional $25 million would be little to none. Committee | |

|Chair Koester requested a motion to forward this request for the $25 million for the hospital capital projects, and | |

|hold the additional $25 million for undefined future expenditures, to the Consent Agenda at the March 21 Board | |

|meeting. A motion was received by Trustee Szuch, seconded by Trustee Mansour, and approved by the Committee. The | |

|Committee requested that an update on bond financing be provided to the full Board at their meeting on March 21. | |

| | |

|Dr. Scarborough reminded the Committee that the newly renovated Intensive Care Unit would be unveiled at a ceremony | |

|on March 8 at 10:00 a.m. and invited all Trustees to attend. | |

| | |

|Approval was also requested for UTMC to enter into a ten-year contract to partner with OxyHeal Health Group, Inc. | |

|Dr. Scarborough informed the Committee that OxyHeal manufactures and clinically operates hyperbaric medical systems.| |

|Our obligation to OxyHeal would be to only provide the space for a hyperbaric system. The revenue sharing | |

|arrangement that the hospital will net is $450,000 a year. Dr. Scarborough indicated that this partnership would | |

|provide new opportunities for our physicians. The investment to contract one of these hyperbaric chambers is quite | |

|expensive -- financing is done through a ten-year bank note, which is a standard operating procedure with all the | |

|facilities that OxyHeal contracts with. A motion was requested from Committee Chair Koester to forward this | |

|contract request to the Consent Agenda at the March 21 Board meeting. A motion was received from Trustee Szuch, | |

|seconded by Trustee Mansour, and approved by the Committee. | |

|Dr. Scott Scarborough provided the Committee with an outline of the FY2012 budget process from December 2010 through|BUDGET DEVELOPMENT PROCESS FY 2012 |

|April 2011. In preparing for the FY2012 budget, he reviewed a slide shown previously to the Committee outlining | |

|areas to be examined for cost savings. These included: | |

|Support Staff Benchmarking | |

|VP Realignment | |

|Outsourcing | |

|Faculty Workload | |

|Reorganization of Colleges and Departments | |

|Center, Institute, and Program Elimination | |

|Virtualization | |

|Student Community Service as a Condition of Financial Aid | |

|Furloughs | |

| | |

|At the request of Committee Chair Koester, Dr. Scarborough reported on the progress of reviewing faculty | |

|compensation savings in tenured/tenured track, lecturer, visitor, and part-time positions to understand how UT is | |

|approaching faculty workload from a financial perspective. He discussed variables that determine cost savings and | |

|showed examples of faculty teaching productivity. Estimates show that there is potential cost savings ranging from | |

|$3 to $17 million by increasing teaching productivity either by reducing the number of teaching offsets and/or to | |

|increase the standard teaching load from 12 credits per semester to 15 credit hours per semester. All agreed that | |

|savings in this area will be dependent upon answers to many questions. Going forward with this will require cleaner | |

|data and systematic analysis and active management in every college. A major factor will be the size of the State | |

|of Ohio FY2012 budget cut. Dr. Scarborough stated that cost savings in many areas will require difficult choices. | |

|With no further business before the Committee, Chair Koester adjourned |ADJOURNMENT |

|the meeting at 4:10 p.m. | |

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