Oct 25, 2011
General Faculty Meeting Transcription
Bill Sauser, chair-elect: I’d like to welcome everyone to the fall 2011 meeting of the Auburn University General Faculty. My name is Bill Sauser, chair-elect of the University Senate and I am filling in today for Ann Beth Presley. Ann Beth is resting at home today under orders from her doctor, she has been having a lot of difficulty with back pain and has been ordered to rest at home. I told her I’d like the name of that doctor. Let’s think of Ann Beth, she wanted to be here today.
We don’t have any action items on our agenda today other than ratification of our minutes, but we do have a number of interesting reports from various university offices. We look forward to hearing what they have to tell us. Also I want to let you know that if you have a question following any of the presentations please go to either of the microphones and wait to be recognized, I’ll recognize you, then you can state your name for the minutes if you would and then ask your question.
Our first order of business is approval of the minutes of the March 8, 2011 General Faculty Meeting. The minutes were distributed along with the agenda. Do I hear any corrections or concerns with respect to the minutes? Hearing none then I would like to forward those minutes as approved.
Now I would like to call the President forward for some remarks, Dr. Jay Gogue. [2:05]
Dr. Gogue, president: Delighted to be with you today. I have just a few comments to share with. First of all I want to say how much I appreciate the faculty and their involvement in shared governance. From rough numbers that we have been able to put together, about 80% of our faculty are involved in some way in the shared governance process. You either serve on the university senate, you serve on university wide committees, college wide committees, departmental committees, or search and screen committees, and I am appreciative.
In the past year there were 29 academic resolutions that came through for us to look at, they were all approved in our office, and those that required approval by the Board of Trustees; all those were approved relative to academic issues.
In the past year you created 17 new graduate certificate programs. I don’t know if they will be as successful as we hoped, but many of those are very much employment and skill related, so we are seeing some interest in those and particularly appreciative of that.
I wanted to mention and I think you have probably read that the freshman class this year was the strongest again that we have ever had, the average ACT was over 27. We did admit 4,200, the goal was about 4,000 students, so we did exceed what we had hoped. Wayne Alderman tried to make up the difference with the number of transfer students that we allowed to come–still puts pressure on the core, but at the same time trying to keep that number very close to 25,000.
Private giving to the university was at an all-time high, we had slightly over 290 million in giving to the university last year. You do need to know that one of those items was a major software contribution in their charitable gift, so the numbers in real dollars are not that high, but at least the value that was placed on it was 290 million total.
Last month we awarded the second round of the endowed professorships. I think you’ll recall we had 96 of those that we actually receive the money for or commitments in pledges. We are up to about 65 of the 96 that have been awarded at this point. Some of the pledges are being paid out over the next several years. They all have to be paid out within 5 years, I think is the rule.
Facilities on campus, I wanted to mention a few of them. It has been a big year for facilities, I will call your attention to several. We had the Small Animal Teaching Hospital groundbreaking, we had the Kinesiology building groundbreaking, we opened the Aquatic Research Building out on North College, the MRI facility opened, funds are available for the third building at the Research Park and there will be a groundbreaking for that particular building in November at the Board of Trustees meeting, we completed the new IT building and the parking deck next to it. We received as a gift the Cary Pick home that is primarily the beneficiary of the College of Human Sciences, they are dealing with non-profit studies and philanthropy at that particular program. Shelby II is near completion, we think it will be open for the January class sessions spring semester. We also got the resources for a new feed mill in Agriculture, a number of building upgrades and a lot of discussion right now that has been approved by the Board of a new central classroom facility.
On November 1 the faculty lounge will open in Foy. I think you will begin to see the flyers in the next day or two, we’re excited about that.
With respect to the budget I wanted to mention that you may have seen in the paper that the tax revenues are up in the State of Alabama. Personal income tax was up about 5 or 6%, corporate tax was down and so forth, when you look at the taxes that feed into the educational trust fund the net increase was about 3%, so it’s good news but I need to tell you that there was a bill that was passed in the last session. That bill basically creates an additional rainy day fund. They are trying to take the peaks and valleys out of funding in education. Even though more money coming in it doesn’t mean we are going to get any more money. So we are hopeful that they will revisit that rule and maybe peg it to 2008 revenues for both public education and higher education.
Provost search is underway. The committee has provided two names to me both of those individuals will be back on campus in the next couple of weeks; one tomorrow and the other in about 10 days. So we will keep you posted on the Provost search.
On Healthy Tigers, and I think you will hear a bit more about that this afternoon, the Healthy Tiger program remember if you go through the screening you get a $25 reduction per month in your health care cost. It’s a good number, we had 74% of our people that took advantage of it, but I’m still concerned, 26% of the people decided to forgo the $600 [$300] or so dollars a year.
I would tell you the one area in the university that is still a concern. It’s the one that probably affects our perceptions of quality and our reality of quality more than anything else that we do, that is our graduation rate numbers. We are still in the 60% range. A couple years ago we were 62%, Drew, I think we’re 66% this year, we are down 1% from last year when we were 67%. Schools like us, schools that would have similar quality are going to be 75%, 78%, 80%, 85%. So that’s an area that we’re still working on and I know you are working on, but it’s an area that we have to figure out how to improve.
The final thing I would share with you is that is certainly a real pleasure to work with the leadership, the executive committee of the University Senate. We spend time together and I have to tell you that all of us; the provost, Dr. Large, myself, and others that are involved in it, we learn a great deal and it’s very helpful to us so I appreciate it. Be happy to respond to questions. [8:54]
Rebecca Pindzola, communication disorders: (asked a question not at the microphone, so cannot hear it) What is the ___?__ funds?
Dr. Gogue, president: We received 14.1 million dollars from the national bureau of standards, it’s referred to as casic, not sure what that stands for, and we received 14 million from the state. It’s to be used for multidisciplinary lab type of facilities. Dan can you amplify on that?
Dan King, facilities: (no microphone here) …and ah, In total about a 29–30 million dollar building [9:40] it will be out at the Research Park, so interdisciplinary research. The College of Ag was the one that got the first grant with the Federal funds and then they got state funds on top of that. [9:51]
Bill Sauser, chair-elect: You asked your question but could you state your name for the minutes?
Rebecca Pindzola, communication disorders: (states her name)
Bob Locy, department of Biological Sciences: Dr. Gogue, with respect to our graduation rate, you know as Senate chair I had something to do with a committee to look into that one once upon a time and I sort of been paying attention more to my advisees since I have been on that committee for a couple of years here and it’s really, really hard at least in the discipline that I’m in to get students to get over about 12 hours. They sort of feel like they have to go 12 hours a semester in order to get decent grades and if they go up to 15 or 16 hours, they just complain a lot that they cannot get as good grades as they feel they have to have. All of that aside, the question I am asking is, are we doing better if we looked at an 8 year graduation rate rather than a 6 year. I realize the statistics we have to have are the 6 year, but I’m just wondering if we’ve made progress to make sure we get people degrees, maybe they just don’t get it done in 6 years.
Dr. Gogue, president: Drew Clark, do you know?
Drew Clark, institutional research: …have additional graduates after the 6th year obviously and when you talk about an 8 year rate you are looking far back into the past, so 2002 cohort I think this last time that we figured it one or two more percent graduated by the 8th year. The big change for us is between the forth and fifth year. The fifth year graduation rate is essentially equivalent to the 6 year graduation rate so on the other hand the forth year rate is a lot lower than the fifth year rate. Yes we do have graduates beyond the 6th year, those aren’t reported federally so we don’t have a good way to benchmark against others.
Connor Bailey, Ag Econ and Rural Sociology: Drew this may be a question that you may want to help answer as well. On the graduation rate you say that we’re looking at comparable institutions Dr. Gogue, and I’m sure there are academically comparable institutions, but I want to know something more about the demographics of the student body and particularly relative income and wealth and whether or not the income and ability to pay tuition is a factor that may also be contributing to a lower graduation rate than that 6 year window? I don’t know if you or Drew have an answer.
Dr. Gogue, president: First I make some comments and then Drew. We have the lowest Pell Grant rates of any public university in the country. You only have about 11 or 12% of the students that are eligible for federal aid. I went through a list of universities recently, schools like ours in terms of aid is somewhere between 25 and 28% of their students. Cornell is about 11 or 12%, so if you look at the income level of our students, which we don’t talk about very much, a couple of years ago for instate students that came here the estimates that we had were about 140 thousand family income. For the out-of state it’s about 340. So I’m not sure the economics has much to do with it. We do know that the out-of state students graduate quicker. Isn’t that correct Drew? They graduate quicker, but obviously a higher tuition rate.
Connor Bailey, Ag Econ and Rural Sociology: The aggregate statistics often tell us some things but don’t tell us other things and of course there may be a substantial fraction of students who are at lower incomes and do face financial challenges.
Dr. Gogue, president: I don’t disagree that some kids do.
Connor Bailey, Ag Econ and Rural Sociology: I had another question. Can you tell us some more about the process from here out in selecting the provost, you said that you had 2 people coming in the near term, will there be public opportunities to meet these candidates for further discussion, will the search committee be involved, who else will be involved, can you tell us more about that process, please.
Dr. Gogue, president: Really, no one else is involved in the process. Search and screen committee, the open campus meetings have all been done, search and screen committee came back with two names out of the four candidates. Basically it is about a 4-hour interview for each of those candidates, primarily with me. [14:42]
Bill Sauser, chair-elect: Any questions? No then let’s thank Dr. Gogue. Thank you Rebecca and Bob and Connor for your good questions.
Ann Beth Presley did not send me some comments, but I would like to make a comment or two on her behalf. First I’m certain that were she here she would like to thank Larry Crowley and Robin Jaffe and Claire Crutchley for their great assistance this year, they are the other members of the University Senate Executive Committee. They are very hard working and very much appreciate their work as well as our fine staff and Parliamentarian, thank you both very much. We also would very much like to thank Dr. Tim Boosinger and Dr. Emmett Winn. Dr. Boosinger and Dr. Emmett Winn meet with us every week, the executive committee gets to meet with the provost and associate provost to discuss any issues that are on our mind from. Those discussions are very open, very respectful and very, very helpful. So we have a great relationship right now between university Senate leadership and the Provost’s Office. I also want to thank as he thanked us, Dr. Jay Gogue and Dr. Don Large, they meet with us with the Provost and Associate Provost on a monthly basis and again a very free and open exchange, a lot of good information goes in both directions and I can assure you that any faculty or general faculty issues that have been brought up are shared during those meetings. We very much appreciate your willingness. I think we have a fine working relationship right now between the University Senate and the faculty and the administration. I would say we are currently experiencing shared governance at it’s best. We want to thank the university officers for that and again I’d like to join in thanking all of the faculty members who serve on committees and do various parts of the shared load, if you will, to see that shared governance is conducted properly at this university.
We have a budget update and to provide that update we have Marcie Smith, associate vice president for business and finance. Marcie thank you for being here.
Marcie Smith, associate vice president for business and finance: You say update, I’m not sure how much update I can really give less than a month into the current fiscal year, but from my standpoint right now we’re actually working on the FY13 legislative budget request, which is due next week and we are closing out the financial statements and audits, and those will go on for the next 3 months or so on the FY11 budget year. At any point the state examiners could come in and want to start their audit at the FY10 year so I never really know what fiscal year I’m in. We’ll concentrate on 12 today. Some of you have seen some of these slides as we presented them to the Board and to some other groups across campus. Basically I’ll give an overview and bit of discussion on state appropriations since those are so important to the whole budget right now. Then we will go into a little bit of detail on the allocations in the FY12 budget and the outlook.
When anybody asks me about the budget I always have to say it depends because we can slice the pie in so many different ways. I’ve got a few slides. On that is the total university budget all divisions, basically our operating budget is centered around the unrestricted funds because those are typically the recurring funds each year. I’m sure you are all familiar with auxiliaries, athletics, housing, dining, and some of the other self-supporting operations that we have on campus. Then the restricted are typically gifts, grants, contracts, federal appropriations go into that piece of the pie too so when we are talking about the Experiment Station and Cooperative Extension we do actually have recurring funds that are budgeted in those units that fall into the restricted funds.
This is how it shakes out by division, 80% is main campus. Then on our main campus budget we go further into the restricted funds that we budget, the $556 million. When we talk about some of the allocations that we do on the budget, not all of the allocations relate to all of the unrestricted budget because there are self-supporting or generally self-supporting operations that are part of the unrestricted budget. Examples of that would be the Vet med Clinic fees, the abroad programs, things like that that fall into unrestricted funds too.
Then, I think this is a little bit skewed when I looked at it later on the rotation of it but it is kind of important in that later I have a slide that shows the history here, but you can see the reliance right now on tuition and fees and very little in terms of other sources of revenue. This again is main campus, on the expenditure side roughly 63% or o in salaries and wages and employee benefits and the rest other operating. If you look at the academic units, generally salaries/wages and benefits are north of 80%, so when you through facilities and other things into the whole budget picture the other operating takes a little bit different percent of the pie, but primarily does limit our opportunities in budget allocations and reallocations and give backs.
We’ll jump over to stat appropriations now and we’ll go back to FY12 budget. Because of the impact and understanding where we have been and where we are going especially in a 5-year lookout we really need to look at this a little bit more. We consider this year a good year, we weren’t cut we got almost 5 million in new appropriations from FY11 to FY12. If you go back and look at the FY08 you can see a lot different picture there, a decrease of almost 90 million dollars. And then one of the things that we’re tracking right now is just the cuts since FY08 and in addition to that permanent reduction of almost 90 million we’ve got 64 million in one-time proration cuts that we faced. And the cumulative effect of those one-time and the continuing decreases is 366 million now, which exceeds our appropriation in FY08 as high as it was. [22:42] So a pretty drastic story there and how we dealt with that, we’ll talk a little bit about that in a minute.
This is when I talked about the skewed, rotated graph of the percent of tuition to total budget this is what it looks like since 2007, probably even more dramatic if we go back in further years, but heavy reliance now on tuition revenue in our operating budget and a much decreased reliance on the state appropriations and I think we all feel like we will be lucky to keep at the 30% mark. We think that’s going to further erode too.
How we’ve dealt with all this, this is a summary of the base budget reductions that we’ve had in the last several years, last 3 years really. We’ve had the one-time decrease where we’ve taken money from the reserves based on a percentage of a units base budget and where you see the two percentages at the top that’s primarily academic is the lower percentage and then administrative. And that can be academic administrative also but the higher percentage we took from administration. Then at the bottom, the permanent reductions. If you total all of these up it’s like 45 million so obviously as painful as those cuts have been, they are relatively small in relation to the magnitude of the cuts that we’ve incurred. [24:21]
Another way we’ve managed to get through the last couple of years is with the stimulus funding. This is main campus only over all divisions we received about 52 million in the state fiscal stabilization funds which is the SFSF funds and we also have some stimulus in contracts and grants that are out there so I need to distinguish. This is the money that flowed through the state. And this is the allocation, primarily went to the colleges, big emphasis on graduate student stipends, I think we did as best we could with the funds. There were a lot of restrictions on the funds a lot of reporting requirements, but I think we made some progress in some key areas. Just in OIT in the wireless and the classroom upgrades we had a big push there so those funds were well used at OIT.
Now I’m going to go back to the FY12 budget. These were the priorities for the main campus going into the FY12 budget preparation. Actually salary increases I would say is the highest priority and priority might not be a good word to describe it, some of these are just mandatory, we have no choice at this point in time and so we had to fund the increase in debt payments, those might have been priorities from a previous year and certainly the scholarship issue and some of the related Honors College funding, some of the things related to the scholarship programs. Here’s where the dollars fall out on that, 44.5 million in basically new allocations, we’ll talk about that, it doesn’t necessarily mean new money had to be used to fund those allocations, but we were fortunate to be able to do the salary increase in this year and it will continue to be a priority. The funding sources for those, I’ve got them categorized as continuing, that may be a little bit optimistic on my part to think that the increase in State appropriations will still be there. Continuing budget savings from the fringe rate; we got a one-time one-year boost on that and what I think we’ll see is a continuing increase now in the fringe rate after that one-time savings. That was primarily the teacher’s retirement change, the university’s portion went from about 12.5 to 10% and of course the employees now are paying for that boost, but here are the dollars that match up to our allocations. You can see continuing tuition increases is really a low amount and part of that is because the scholarship programs that we have in place, we are trying to make some adjustments now and get to the point where we are actually getting more tuition revenue on increases. The proration fee is another part of that, we are calling that a one-time source of funding and we’re not sure what will happen with that in the next couple of years. The budget reallocation, I do want to mention that because we had to take 13.7 million of allocations are made elsewhere in the budget and reallocate those. Most of it came out of Dan King’s pocket for deferred maintenance on the buildings and we would like to be in the position to replace that, it’s needed, but we had to reallocate it to a higher priority this year.
Then the proration reserve; we have a proration reserve that’s accumulated in years past, but this is the continuing allocation (3.7 million) for the proration reserve in the years. So we would like to replenish that too to be positioned in case there are future prorations.
To wrap it up, the good news is we were able to put together a budget that balanced and give salary improvement in that budget with minimal tuition dollars. The proration fee was, I don’t want to say it was popular, but it wasn’t as unpopular as you might have thought and the relatively low percent of tuition increase. But beyond that the news is not particularly optimistic. I don’t think any of us think that we will be back in the days of 8–10% State appropriation increases. As Dr. Gogue mentioned we did have a net growth in the special education trust fund, but that net growth was 1%. We will be monitoring the effect of this rolling reserve on our budgets. Right now I don’t understand it enough to know what the impact might be, but generally thought not to be a positive thing for us.
I mentioned that we are making scholarship changes and those have already started and we are meeting with Academic Affairs tomorrow to talk about some of the waivers associated with those, but in an effort to lessen the impact of the significant tuition discounts that we’ve done in the past several years without taking a hit on the quality of students I think is everybody’s motivation. It’s going to take at least 3 or 4 years before we see the impact of significant fiscal impact from those changes. Hopefully we’ll be better positioned in 2016 to handle that.
That’s all I have are there any questions?
Bill Sauser, chair-elect: Thank you Marcie. If you have a question for Marcie please come to the microphone. There are no questions, thank you so much Marcie we appreciate that. I’d like now to call forward Karla McCormick, Karla is executive director of employee benefits and she has some important information to share with us. Karla McCormick. [31:13]
Karla McCormick, executive director of employee benefits: Good afternoon. I appreciate the opportunity to be able to get out and talk with you guys about what’s happening with employee benefits for 2012. Got lots of changes, we sent out lots of communications and we just want to make sure that you receive the message and know what you need to do to be ready for 2012.
All of our employees should have received these two packages in the mail; one with a big yellow dot and one with a big blue dot. These are your benefit packages and they contain important information. Please if you haven’t looked at them pull them back out, open them, read them, and contact us if you have any questions. We’re going to talk a little bit about what’s in here right now.
The package with the big blue dot is the open enrollment material. In years past we sent out two open enrollment packages, one was for the health and welfare benefits and the other was for the flexible spending. This year we combined those so you only got the one package, so if you were looking for a separate package for the flexible spending accounts, please know that all of that information was in with your open enrollment materials. As for the changes for this year the big news is that we have added coverage tiers to your health insurance. Currently we offer our insurance on a single basis and on a family basis, going forward in 2012 we are adding two new tiers. The first one is going to be employee plus spouse and the second is employee plus child or children. The logic there is that it allocates the cost for the benefits out according to the way our employees use that coverage. The number of people you have covered on your plan or the number of adults that you have covered. So that was the logic behind this. this was the number one requested benefits change that we had and we wanted you to know that we listened, we heard that and we are making this change, so we’re really excited about it.
In terms of what you need to do or if you need to do anything to make sure you are placed in the right coverage tier, there is nothing for you to do. For the health insurance it’s going to be a passive enrollment and that means if you don’t want to make a change there is nothing for you to do. We are going to work with BlueCross/BlueShield to make sure based on the people you have enrolled, the dependants that you have under your coverage BlueCross will allocate you to the right plan whether it’s single, employee plus spouce, employee plus children, or family. They will work with us then to make sure we have the right benefits deductions in the system so we can take them from your paychecks and you need to look at your very first paycheck in January 2012 to make sure that’s correct. Everybody knows how to look at you pay stubs out through AU Access and self-service, please remember to do that in January and make sure that we placed you in the right tier. For now there is nothing for you to do, we’ll take care of that for you.
In addition along with the annual increases that were given this year we took a look at the salary brackets. Your insurance premium is based on your salary. We adjusted those this year to take into consideration the impact of those annual increases and what it might mean, which bracket you would be in. You can see the new levels there. This was also communicated in your open enrollment package.
I said that the enrollment for the health insurance was going to be passive. As always if you participate in the flexible spending accounts and you want to continue to do that next year, you are going to have to actively enroll, you have to do that every year. And we have some new cancer coverage that I’ll talk about in a second. When I talk about that remember that you’ll have to enroll in that separately if you want to continue, but for all of your other benefit plans there is nothing for you to do if you don’t want to make any changes.
As for the cancer insurance, currently we have available to you two different individual products. One is through Colonial and one is through AFLAC. Going forward into 2012 we are offering a new group product. It’s going to be offered on a guaranteed issue basis, which we are very excited about. What that means is if you want to enroll in this coverage, they are not going to ask you any health questions, they are not going to hold you subject to any preexisting condition exclusions, for the most part they are going to give you access to that benefit and that’s huge. That’s a really big deal with insurance companies. So we’re excited about that. If you want to enroll you need to fill out the application during the open enrollment period and the coverage is yours. The one caveat to that is they have something called a 12/12 look back clause. [35:49] That means you can enroll in the coverage, but if you have been treated for cancer in the last 12 months they are going to make you wait 12 months before you draw a benefit, so that’s important to know. You still have access to the coverage and once you have been on the plan for 12 months it will immediately start paying a benefit to you if you’ve had a cancer diagnosis. So it is guarantee issue you can get the coverage but there is going to be that 12/12 look back clause.
There are two levels of benefits that we are offering through the cancer plan. To help you understand a bit about the differences there is a wellness benefit associated with this coverage. That means for the ladies in the family if you have a mammogram or a pap smear, the men in the family if you have your psa test each year, you can file a claim and immediately receive a benefit. Under the lower level it’s a $50 benefit for the wife a $50 benefit for the husband, under the second level or the higher level it’s a $75 benefit for each person that goes and is screened. Essentially depending on which option you choose, that benefit alone can pay anywhere from 3 to 5 months worth of your premium for you. So that’s a huge benefit, it’s a pretty big deal. In addition there is an initial diagnosis benefit. As soon as you are diagnosed with cancer this is going to pay either $1,000 or $3,000 directly to you. Has nothing to do with whether or not you have insurance coverage, whether or not you have any outstanding claims or anything like that, once you are diagnosed it pays this benefit directly to you. So these are great policies. What I do recommend that you do, If you have the Colonial product today or if you have the AFLAC product those individual policies, take a look at those compare them with what’s available through the new plan because I cannot tell you with 100% certainty that the new plans will be better for you. It’s going to be individual choice based on your current circumstances.
What we recommend is that you grab your policy, we are going to have a benefits fair in November with our Colonial representative on site, they can sit down with you compare the plan you have today with the plan that’s available through our new group product and help you make those decisions. Going forward if you want to keep the Colonial product that you have today you can do that. The individual product, we will continue to payroll deduct. If you have the AFLAC product, we sent you a letter that explained that you can continue with that product as well, you can keep it, but we will not payroll deduct. That will be paid for with whatever basis you set up with AFLAC. So you can keep the individual Colonial but not the AFLAC or choose to go on the new Colonial group plan.
To enroll in those benefits again you can come to a benefits fair that I will tell you about in a second or you can call Johnson Sterling. There’s their contact information and it’s also on our Web site.
Healthy Tigers. Dr. Gogue talked about this briefly a while ago, essentially if you are one the health insurance plan and you go for a screening at the pharmacy or through your doctor you are eligible for a $25 per month discount on your insurance premiums, that amounts to $300 per year and that’s a lot of money. [39:09] In the past including this year for 2011 you had to be screened as an employee, but the spouses did not. For 2012 if you want that Healthy Tigers discount you and your spouse have to be screened. So you had to be screened for 2011–12 and your spouse did as well. We are offering some additional screenings that are after hours and Saturday screenings. We’ve heard people say it’s hard for my spouse to take off work to go and be screened, so the School of Pharmacy is going to offer a Saturday screening and some after hours. The Saturday screening will be on November 5 from 8–11 a.m. at the School of Pharmacy and the after hours screening will be on Wednesday November 9 from 3–7 p.m. All of that information is available on the School of Pharmacy’s Web site when you go to the Healthy Tigers Web site you can register for the screenings. And those are listed there as well.
The benefits fair that we are going to have is on November 7 and 8. We are also doing Healthy Tiger screenings there. You do have to preregister and you do that again through the School of Pharmacy’s Web site. If you are unable to come to the School of Pharmacy you can go to your doctor and your doctor can fill out a health care provider screening form and send that in and that will suffice as well.
The one thing I do want to make sure that you realize is that if you choose to go through your doctor under our insurance plan certain screenings are only covered once every 5 years. So if you choose to go to your doctor for these screenings you may have some out of pocket expense. To avoid that you can come to the School of Pharmacy, but we do want to make sure that you know that if you go to your doctor there may be some out of pocket expenses associated with those screenings.
That’s associated with the health and welfare changes. We also have some changes that we communicated in the package with the big yellow dot. These are the voluntary retirement plan changes. When I say voluntary retirement plan I’m talking about changes, not teachers’ retirement, these are your 403B and your 457B. If you are contributing money and sending it to VALIC, TIAA-Creff. Lincoln, or Fidelity those are the plans we are talking about. Going forward the big changes; we are going to be taking TDA or that 403B and your 457B from more compensation sources in 2012. For this group probably the thing that is most significant is that this contribution is going to come out of your summer pay. If you are 9-month faculty and you also work in the summer, this contribution will come out of your summer pay. If you have a second job, something outside of your base position these contributions will also come out of that second job. Supplemental pay like we are getting this December won’t affect this year’s supplemental pay but going forward in 2012 or beyond these contributions would come out of that supplemental pay as well. When asked why we are doing that. Essentially we are trying to find ways to help you in every way that we can to make sure you are building that nest egg for retirement. You hear all the conversations about what’s happening with social security and whether or not social security will be available when we are all ready to retire. We’re thinking about that and trying to make sure we are doing things to make it easier for you to contribute more and make sure that you have your retirement secured. That’s why we are doing that.
Whole percentages, we are going to be deducting or asking you to fill out new salary deferral agreement forms for 2012 and your contribution will need to be made in whole percentages. The matching: we are no longer going to have the per pay period cap. Currently we match up to $1,650 and it’s done on a per pay period basis, so if you’re paid 18 times a year then you get that $1,650 divided out over 18 pay periods. Going forward we won’t cap the match per pay period so you could actually get that match going forward a lot earlier in the year. So if you contribute 10% of your salary to your 403B and you have contributed $1,650 by March or by May or by June, then you also will have received the match by March or by May or by June.
We just found out from the IRS that the contribution limit for 2012 is being increased, this year it’s $16,500 for next year it’s 17 thousand, so that’s the maximum amount you can contribute to the 403B and the maximum amount that you can contribute to the 457B. The catch up contribution is not changing it’s going to stay at $5,500. But for your regular contribution 17 thousand dollars is the max.
The other big change is when you contribute to the 403B or the 457B in 2012 you will only be able to submit those contributions to one vendor at a time within each plan. So if you are someone today having your deduction for your 403B come out and sending it to TIAA and VALIC, or TIAA and Fidelity, going forward in order to be able to contribute to both of those providers, you may want to consider having one deduction going to one in the 403B making sure you do enough to get that match and then if you want to contribute to another provider, do that in the 457B. We’re o
Going to put some information up on our Web site that helps you understand the differences between the 403b and the 457B, it’s not up yet but it should be by the beginning of November. [45:07] So if you have questions about what the differences are, please take a look at our Web site and that information will be there shortly.
In terms of our vesting, today our vesting is what we call 5-year cliff vesting, that means you have to work with the university for 5 years continuously before you are vested in the university’s portion of contributions to your accounts, so that means the money and the match. You have to work here 5 years continuously, then if you leave the university and come back later then that vesting of the 5-year period starts all over again. Going forward once you are vested you are always vested. So if you work here 10 years, your vested, you leave the university and then you come back later if you want to contribute to the plan again when you come back you are immediately vested.
Because these plans are meant to help you save for retirement we are limiting the number of loans that are available from your plan to one at a time. So if you take a loan from the plan and you need money again from your plan you will have to pay off that first loan before you will be able to borrow from your account again. So we are limiting that to one at a time. Like I said before this doesn’t affect you teacher’s retirement or the investment options that you have available through the different providers that you might be participating with. That’s the summary of the changes.
Now what do you need to do? You need to complete a new salary deferral agreement. You need to do that by November 30 in order for us to make sure that we can start those deductions again in January 2012. If we don’t have your salary deferral agreement by the end of November we’re not going to be able to take a deduction out of your check in January so it’s very important, there is something you need to do to continue your deductions for 2012.
We are encouraging everyone to use the calculator that’s on the Web site in order to fill out the salary deduction agreements. If you go to the same Web site where you go today to get your paycheck stub, going through AU Access using your user ID and password to login, going to self-service banner and log in on the same menu where you choose to look at your paycheck stub there is a 403B or a 457B calculator. It’s great. Pull it up, once you’ve logged in it pulls your salary information from banner it pulls your current contribution to your TDAs, 403B or a 457B, and it populates it in that calculator so you can see what your current percentage is. Then it gives you a block where you can play around with it. You can say I want to take 3%, I want to take 5%, whatever you are interested in, you plug in that percentage and calculate at the bottom of the form and it recalculates your contribution and the university’s match for you. It does it automatically, it’s very easy to use once you are able to navigate to it.
Once you decide on the percentage that you want to contribute, you select a provider that you currently contribute to, one of those 4, and then you click on the next step button at the bottom of the screen and it will bring up a summary for you that shows everything that you have elected. Click next step if you are happy with what you see there and it will bring up that salary deferral agreement for you and all you have to do is print it out sign it and send it to us. So it can be much more simple. To get to that calculator, if you don’t remember how to get to your paycheck stub, go to the payroll and employee benefits home page Web site and under the picture of Ingram Hall, our building, there is a retirement changes form deadline paragraph. Click on that and on that page you can see the instructions to the page where the calculator is. If you don’t want to use the calculator you can also fill out paper forms and we have those you as well. So remember fill those out and get them to us by November 30 so that we can make sure that we start your deduction in January. If you miss that deadline you can fill it out later and we will start those deductions at the first of the next month as early as February. We cannot get them in we don’t think with all of the other changes going on to make a January deduction if you don’t have them in to us by the end of November, but they will certainly start at the beginning of the next month. You can do that make changes at any time through the year and we will get those changes in for the first of the next month.
If you never participated before you can go through all of this as well. You can go through the calculator, it won’t bring up a current deduction because you won’t have one, but you can certainly use it to determine how much you might want to contribute. You can print out your salary deferral agreement the same way as those that are already participating, sign it and send it to us, but you also need to fill out an application with the TDA provider that you want to participate with, TIAA-cref, VALIC, Fidelity, or Lincoln in order to be able to participate.
I mentioned that we are going to be having a benefits fair, calling it getting ready for 2012. [50:12] it’s going to be on November 7 & 8, pretty much all day starting from 8:30 a.m. going until 4:00 p.m. on both of those days. Visit the OIT building on Lem Morrison Drive, there’s a parking deck there, which is great. So you can drive over and go in and participate. All of our benefits vendors are going to be there including our TDA reps 403B and 457B providers. Colonial is going to be there to help with the cancer product as well. Members from my department will be there, so pretty much anything that you need to do, everything you need to do from a benefits perspective you can take care of on that date.
Members of the School of Pharmacy are going to be there, they will be doing the Healthy Tigers screenings, so if you haven’t had those please take advantage of the opportunity to do that. You do need to preregister on their Web site. They are also giving flu shots while they are there so if you haven’t already had one and you want to you can have that while you are there. We are giving away door prizes and we are considering this once again a one-stop shop. Everything that you could possibly need to do to make sure you are ready for January for benefits you can do at this benefits fair.
We are sending out invitations, you should be getting those within the next week or so, bring that with you and that’s what you’ll use to enter the drawings for the door prizes.
Finally I’ve talked a lot about open enrollment. We haven’t really talked about the dates other than to day that November 30 is the deadline. Open enrollment runs the whole month of November, it always has and will again for this year. The benefits will be effective January 1, so you are enrolling in November for January, it’s passive for everything except the Flex and the cancer policies if you want to enroll in the group product. For the FSA for sure if you want to participate you need to reenroll and you need to make sure you have the Healthy Tiger screenings done. We had someone who spoke with us and said she was having trouble getting her spouse to go to have the screenings so she held out her hand and said, “well then give me $300” and he said “why” and she said, “Because that’s what it’s going to cost me if you don’t go.” And he went, $300 is a lot of money.
Then remember to complete your new salary deferral agreement and get that in to us. That’s pretty much it. Are there any questions?
Bill Sauser, chair-elect: If you have any questions please come to the mic, I’m sure you’re available along with you staff to answer individual questions.
Karla McCormick, executive director of employee benefits: Absolutely, we’ve actually gone out around campus and met with individual groups. If you’ve got a group of 5 or 6 people that have questions about some of these changes we are more than happy to come and sit down with you and go through them with you. Or we’ll talk you through it on the phone.
Roy Knight, mechanical engineering: Could you explain why we are restricted, why contributors to the TDA plan will be restricted to whole percentage contributions please, integer percentages contributions please? [53:03]
Karla McCormick, executive director of employee benefits: We are with the pension protection act and some of the changes in the laws the regulatory requirements in our plans are increasing so as a result we are going to be using what’s called a master record keeper who will help us with a combination with all of our plans and we e require you to have those deductions taken in a whole percentage basis. That’s why we are doing it.
Roy Knight, mechanical engineering: You’ve repeatedly said here that $300 is a lot of money. You are requiring people to make choices between saving 1% or 2% or 3%. I understand that one of the goals or these changes is to increase participation at the low salary end. You’ve told somebody who makes $30,000 that they may save $300 or $600 or $900, $300 is a lot of money, but you’re telling them that they can’t save $350 or $375? Many of us have dollar goals that we like to hit, whether it’s the $17,000 for the maximum or the $1,650 for the matching. That’s impossible with integer percentage deductions. And in addition I think if one calculates 5%, you multiply by 0.05, if you deduct 5.1% you multiply by 0.051. I don’t understand how this is any increase in difficulty of administration, how anyone could possibly justify saying that it would be simpler or easier or required to make it more difficult for folks at the low end of the salary to participate at the level that they want, to make it more difficult for anyone anywhere in salary to participate at the level that they want, and to tell people for example at the high end of the salary that you have to increment your savings by $1,000 a year or $1,500 a year or $2,000 a year. I strongly request that someone reconsider this. That whoever has enforced this has suggested this be somehow a simplification of administration to the detriment of everyone participating in the plan. I strongly request that you reconsider this and allow us to do either tenths of percents or dollar deductions from our salary, as we’ve been able to do all along.
Karla McCormick, executive director of employee benefits: I hear what you are saying. The good news is that the money that’s being taken out of these checks always belongs to those employees. So I understand what you are saying and I do understand that it can be a hit in the pocketbook, the good thing is this is their money it is money that’s being put back for retirement and will be available to them when they are ready to retire.
Roy Knight, mechanical engineering: But you’ve given the participants a very limited choice of where they can put the money. Even those of us that participate in Fidelity, now we have a greatly reduce set of funds we can choose which is far less attractive than the ones that we used to have. It is certainly true that it’s our money and we get it back, but we don’t get to choose where to put it. We get a very narrow choice. I strongly request, again I will repeat to anyone listening, anyone who can do anything about this, I strongly request that this be reconsidered because it is at the possible slight increase in simplicity for some level of administration, it’s a significant hardship on the participants in the program. Thank you. [56:42]
Marcie Smith: I’m actually a member of the retirement plans committee, but I think that was weighed pretty heavily in the retirement plans committee which is a group with representation from all employee groups, and because of the fiduciary requirements that are now on the university we’ve got to track these contributions, and we’re not going to be able to do it it’s going to have to be outsourced and that’s the master record keeper and the university will pay for that service. The closer we can align the plan to other plans and the systems that are built to handle the master record keeping the less expensive it is for the university. So I know what you are saying and I heard that from a couple of different people but the decision it was weighed pretty carefully and because we have responsibilities for fund performance and I forget how many funds we started with, but hundreds of funds, and we’re supposed to review quarterly the investment performance of all those funds or we could be subject to federal penalty. I think we went through all those decisions and points and came up with the conclusion that in order to be able to fulfill the fiduciary responsibilities at a cost that didn’t break the bank we were going to have to make those changes. I don’t know if that helps any, I understand what you are saying and I’ve heard it from others but that was kind of the thought process behind many of these changes that Karla presented on the 403B and 457B plans. [58:29]
Bill Sauser, chair-elect: Other questions for Karla? (pause) Thank you very much Karla, we appreciate you sharing that information with us. I would like to call to the podium Dan King, our assistant vice president for facilities management. Dan has an update on facilities for us.
Dan King, assistant vice president for facilities management: Good afternoon, thank you for giving me the opportunity to come speak to you.
I’d like to start with the big picture first and show you some pictures and then we’ll talk about some more pictures. This is the campus objectives, we presented them to the Board there kind of set of overall things we think the university should try to achieve in the next 10 years or so. We took them to the Board of Trustees, they approved them and some of the highlights on there are to improve or replace the older deteriorated academic buildings in the core of campus, construct a new student wellness and sustainability center, create a health science campus, replace the small animal teaching hospital, improve some student quality of life issues, there’s some athletic facilities stuff up there, do something with the coliseum site, improve parking. Below the line is renovate some architecturally significant academic buildings, construct some college or departmental specific research facilities, and construct other facilities as funding may allow. That’s kind of the overall set of general things we would like to achieve over the next ten years.
The next slide. The red ones show the elements of that that were actually making some progress on, including a central classroom facility, the student wellness center, small animal teaching hospital, you’ll see in a little bit more about housing and things like that, increasing parking. We’re not doing too bad, we’re off to a reasonable start. The big one and the expensive one is going to be the older deterioriated academic buildings in the core of campus and trying to replace those over the next decade or so. The first step of that is really the central classroom facility and we’ll talk more about that. We’re not off to a bad start quite honestly. We’re in fairly tight financial times there’s not unlimited dollars to do all this, I wish that there would be but we’re making some progress and moving ahead, so that’s kind of the bigger picture of what’s going on.
Here are some specific pictures. I have a couple of slides here that Dr. Gogue mentioned. It was a busy year and the university really did bring online some very significant facilities that I think will enhance the campus. Shelby Center II, $40 million engineering facility completes that complex, just a beautiful complex, tremendous capabilities, I think really ramps up the College of Engineering in a major way. Most of you I’m sure if you’ve driven down West Samford can’t help but notice this indoor practice facility. If you’ve been on Lem Morrison you’ve seen the new parking structure as well as the OIT building. We need to get OIT out of the Parker and Allison complex because of flooding and the potential to put our IT infrastructure at risk. We did a small project for the band out at the west campus area so they have some shelter in their new practice field. Out at the Research Park the MRI Research facility came on board, not quite complete yet the building’s done it been occupied for quite a long time. But the large tesla-magna is going to come in the spring at some point.
A couple of projects you may not have seen but I think are pretty important to research oriented project. One is up in Anniston, some dog kennels for some of the special dogs that they are training up there for multiple purposes. The College of Agriculture just completed an Aquatics Research Center out at the north Auburn campus. It gives them a lot more room and a lot more capability for fisheries type research. A number of major projects were completed in 2011. A couple of mega projects are underway as we speak. The student wellness center I think it’s a $72 million facility. The small animal teaching hospital is overall a $74 million facility. We’ve got phase one underway which expands the classroom capacity, phase two will come after the new year and that will replace the small teaching hospital itself. Out at north Auburn, College of Ag project for a poultry and animal feed mill and way up north, I can’t think of the name of the town offhand, but our research education center up in the Tennessee Valley for the Extension Service. So a couple of projects going on.
I’ve got some pictures so I want to tell you hey what’s currently the focus at the moment, what’s being looked at, what are we bringing to the Board, what did we just bring to the Board what are we about to bring to the Board of Trustees. So we will cover these in a couple of slides here shortly.
First is a central classroom facility. It would have a tremendously positive impact, I think, on academic capability on Auburn University. The thought is to replace the provost academic space in Haley, Funches, Parker, Allison, Spidel, and Upchurch. You add all that up it’s about 77,000 square feet of classroom space, rounded out to a building in gross square feet it’s about 128,000, the difference between the two is the gross is the size of the building, what’s inside the 4 walls, the difference between gross and net is hallways and bathrooms and mechanical space and stuff like that. We have to build the gross to achieve the net. We estimate it roughly in the $35 million vicinity, certainly not a cheep facility but again a very important one.
The Provost has commissioned a committee to figure out what will go in that central classroom facility. What types of classroom space will go in there? Will it be large lecture halls, will it be small team rooms, will it project rooms, some kind of group learning things? The Provost is going to help us figure that out. That process is underway and going strongly the thought is that we’ll take the rest of this year and well into 2012 if not all of 2012 to figure out what the facility program is and design it and hopefully begin to build it in 2013 and finish it in 2014. Dollars willing and we hope they will be, we currently have enough money to do the design not necessarily to build the building at the moment.
So a big question comes up, everyone wants to know where is it going to go? Where will you put it? That diagram shows pretty much the core of campus at least the eastern side of the campus. On the far right hand side is College Street, you can see the library and the stadium–a couple of landmark building there. Each of those dots represents a potential building site on the campus. Some of the building sites are better than others. If you can see the colors there we have green, red, and blue. Green means it is on an open space, blue means it takes a parking lot, and red means you have to tear down a building to use that site. So where is the central classroom facility going to go? I don’t know probably one of those dots. Maybe there’s some more that we haven’t quite figured out yet.
Generally speaking the very core of campus the better it is, the more students will be able to get to it and get from that building to their next class wherever that might be. I don’t know where it will go, hopefully in the next few months we will figure that out.
A couple of slides to follow here on individual projects that we are about to start. The first is really a repair project it’s not a new project in any way, we are going to start it here shortly. We just bid it today as a matter of fact. We got good bids which is good to hear. Lowder Hall, the business building has leaked for around 20 years and it’s caused all kinds of problems. It has somewhere in the vicinity, and I might be off by a percentage point or two but it has almost 20% of the provost classroom space on campus. Haley is the number one it’s got 27%, then Lowder Hall which is next and the building has water issues where the two building connect to each other, some of the flashing doesn’t appear to be designed right for reasons that I can’t explain, 20 years ago the art of flashing and waterproofing a building seems to have been lost. We’re paying a price for it and Lowder is one the buildings where that is occurring. We will eventually re-skin this building and waterproof it an flash it. We really have to protect those classrooms because it’s a huge part of our inventory and makes Lowder a hugely important building to the campus. We need to invest the repair money to make that work, that’s coming up we are going to start this late winter early spring, go about a year and a half, one football season and hopefully we’re done.
The building we talked about earlier, the center for advance innovation and commerce, it’s split funded, half of it came from federal funds, College of Ag got a grant from NIST. State funds were obtained. It will go out in the Research Park, a multi-disciplinary facility. A great looking rendering, hopefully it will turn out that nice, I am sure it will. The Kinesiology facility we’ll start construction on this spring. There was a groundbreaking and will go out for bid in a month or so here. That allows the Kinesiology Department to move out of the Coliseum to be adjacent to the new Wellness Center because they share space with each other. The physical education classes that Kinesiology teaches will be taught in the Wellness Center and this building will largely be for their research, labs, faculty offices, and specialty instruction.
This slide shows the site plan, at the lower part of the picture is Samford Ave., the street to the right of center is Donahue, so the C shape orange building that says residence hall, that’s where Sewell Hall is which we are in the process of demolishing as we speak. What will go there is a residence hall of 420 bed plus or minus a few, for students, there will be a parking structure across the street. The concern was that if you load 420 students with cars and a lot a residents get to park on campus here you will congest that area worse than it was, so the thought was that there should be a parking structure with that so the Biggio parking facility is a 600 car structure. It looks like we will probably build a dining facility that will be open to all students adjacent to the parking structure and across the street from the residence hall. So that area of campus, West Samford, South Donahue will have a lot of development here in the future. That’s what the building will look like if you are at the Telecom building looking kitty corner. This is from the coliseum parking lot, so it will look kind of like the Village from an architectural standpoint. [1:12:30]
The parking garage, the Biggio parking facility will look somewhat similar to the other two structures. Prepared this slide just to show that on the South side of campus southwest particularly, there’s been a lot of development over the last two years, the residence hall, the parking facility, this is the indoor practice facility which is already complete, This is the wellness center, and that’s Kinesiology, so this area of campus will undergo a lot of transformation in the next couple of years. Then the big question will be what do we do with the coliseum? Do we tear it down? The answer will be yes we will probably tear it down, for maintenance reasons and energy conservation reasons. What are we going to put there? The thought is a parking garage is probably good, will we get the money for it? Not sure time will tell, 2 or 3 years that decision will be made. It would fit there and it would help commuter students during the day, special event at night, basketball or game day or whatever else. That area of campus will have a lot of development in the next couple of years.
Project that is on the books and being pursued that I think would be a great interest to you all is this northeast quadrant parking facility. The thought on that is–this is Samford Hall and this is Toomer’s Corner. This area of campus really [1:14:12] as you all probably have to live with daily has a real deficit of parking, difficult to park there. So the thought is that if we can get these buildings out of here we’d build a 600 car garage cost about $14 million, the critical path to get there is we have to relocate a couple of engineering labs a couple of wind tunnels out of the engineering shops in the “L” building and then pharmacy care and natural history collection we’re going to try to move into Foy. There’s some projects in the works to do that to be done in the next 6–8 months. When we demolish all those then the site’s cleared to build a parking facility, we’ve got to get the money for that, take it to the Board and get all that. Thats being actively pursued and certainly understand the need for parking in that sector of campus. That concludes my presentation. I’d be glad to take any questions and tell you what’s going on for anything I didn’t cover.
Bill Sauser, chair-elect: Thank you very much, we appreciate that informative presentation. I would like to ask is there any unfinished business? Seeing none is there any new business? Seeing none we can declare this meeting adjourned.