02-03-95 Trustees Hear Budget Report, Etc. GOVERNOR'S FUNDING HELPS, BUT REGENTS DISTRIBUTION HURTS OHIO STATE UNIVERSITY COLUMBUS -- William J. Shkurti, vice president for finance at The Ohio State University, told the Board of Trustees Friday (2/3) that higher education would receive increases in instructional subsidies of 4.9 percent in 1996 and 3.8 percent in 1997 under the budget submitted by Gov. George V. Voinovich. However, under the Ohio Board of Regents distribution formula, Ohio State's Columbus campus would see increases of just 2.6 percent in 1996 and 3.4 percent in 1997. "We're very pleased with what the governor has recommended, but we're very displeased with the way the Board of Regents is distributing it," Shkurti said. "The governor's recommendations put enough money into the system to allow Ohio State to continue to improve our academic programs and student services while maintaining financial stability," he added. "But, the Regents' distribution undermines our ability to achieve these goals." Richard Sisson, senior vice president for academic affairs and provost, said: "Earlier discussions with the regents and the regents' staff gave me a sense that we were moving toward defining and funding institutional missions. I am genuinely disappointed that the budget numbers reflect little progress in that regard." The statewide funding levels recommended by the governor provide for an increase in state support above inflation, financial stability, and an opportunity to reward academic excellence and improved services to students. "Unfortunately, the funding distribution recommended by the board of regents in fiscal year 1996 rewards increased enrollment only," Shkurti said. "For Ohio State, which has a stable enrollment, this means inadequate state support, more pressure for tuition increases and special fees, and financial penalties for moving towards academic excellence and away from warehousing students. For all Ohioans, this means a missed opportunity to move from business as usual to performance oriented funding -- unless the current distribution mechanism is modified." The governor's budget also calls for increases in 1996 and 1997 of 3.4 percent and 3.5 percent, respectively, for research challenge funds, and 3 percent each year for other line item funds, including agriculture and medicine programs. Under the governor's proposal, state funding for labor education and the Arthur G. James Cancer Hospital and Research Institute would be reduced and funding for the Institute for Japanese Studies would be eliminated. Shkurti also noted that the budget language calls for a total tuition cap of 6 percent per year. No instructional subsidies would be provided for increased enrollments in the state's doctoral and law degree programs. The budget also proposes shifting the funding of debt service for capital construction projects from the state to individual campuses. Ohio State saving $7 million for next year's budget Shkurti announced that the university's Columbus campus budget for the fiscal year starting July 1 will include $7 million in subsidy distributions saved from the current year. The money represents subsidy distributions received in December that were higher than projected last summer. Of that amount, $3 million was earned primarily from increases in the number of graduate student credit hours taken and $4 million came from a supplemental distribution created when enrollments dropped below system-wide projections. The money, equivalent to about 1.3 percent of the General Funds Budget, is being invested and held until a determination has been made on how to spend it in next year's budget. CAPITAL BUDGETING TO FOCUS ON RENOVATIONS Renovations and replacement projects will receive priority in determining what goes into the university's capital budget plan for 1997-2002. Sisson and Shkurti reviewed the procedures for submitting projects for the six-year capital improvements plan. The first two years of the plan will form the 1997-98 capital budget request that Ohio State will submit to the Board of Regents in June. The Regents recommend capital projects for higher education to the governor for inclusion in the state's biennial capital budget. As a general rule, central university funds will not be made available to build or operate additional space, according to Sisson and Shkurti. They expect no additional state support to build new space for universities with stable enrollments. Thus, Ohio State, which has a stable enrollment, plans to hold increases in the cost of facilities to no more than the rate of inflation unless sources other than central general funds can be found to support them. The vice presidents noted that Ohio State must provide more money to care for and improve existing space because deferred maintenance has continued to grow. In addition, Ohio State is committed to moving toward an incentive budgeting program in which units will be expected to share in the costs and revenues attributed to them. Two projects -- the second phase of the Fisher College of Business complex and the Food Science and Technology building -- have been previously approved and Ohio State intends to request $15.4 million and $9.9 million, respectively, for them in its 1997-98 capital budget. Ohio State also is committed to requesting $20 million for funding smaller basic and supplemental renovation projects. According to the report, other commitments may emerge from projects which have received planning money from the Ohio General Assembly. They include the Austin E. Knowlton Architecture Building, the Heart and Lung Institute, and Life Sciences Lab Building on the Columbus campus and the Life and Physical Sciences Building on the Lima campus. BOARD APPROVES HOME HEALTH CARE AGREEMENT, AMENDS BYLAWS The board authorized the university and its medical center to enter into an agreement with MedOhio Health Inc. to provide patient access to home health care programs and services and to loan MedOhio Health up to $900,000 as the initial capital for the program. Trustees nominated for membership to the MedOhio board of directors John Kessler, chair of the university board of trustees; William Shkurti, R. Reed Fraley, associate vice president for health services and executive director of University Hospitals, and William Bennett, vice chair of the University Hospitals Board and vice chairman of Bank One, Columbus. The board amended the Bylaws of the Medical Staff to change the procedures for appointment and reappointment, change the responsibilities of the chief of the clinical department, and to add grounds for removal of officers of the medical staff. Trustees also amended the Rules and Regulations of the Medical Staff to clarify who may give and receive telephone and verbal patient orders. CONTRACTS APPROVED FOR EQUINE CENTER CONSTRUCTION The board approved contracts for constructing the Equine Center, a 44,200-square-foot addition to the west side of the Veterinary Hospital. The Equine Center will house horses used in the College of Veterinary Medicine's academic programs, patient horses, and intensive care facilities. The $6.4 million project is being funded by the state and from private gifts. The estimated completion date is June 1996. Receiving contracts were Settelin Construction of COLUMBUS, general, $3,835,000; J.A. Croson Co. of COLUMBUS, plumbing, $428,338; Kirk Williams Co. Inc. of GROVE CITY, heating, ventilating and air conditioning, $704,300; and Buckeye Electric Co. of DAYTON, $425,800. A 5 percent contingency allowance was established. Trustees also authorized university officials to request construction bids to enlarge and remodel the Emergency Department at University Hospitals. The size of the department will double with an addition to the west side of the building and renovation of the existing department. Total cost of the project is estimated at $5 million. University Hospitals will provide the funding. BOARD APPROVES CONDOMINIUM PURCHASE, EASEMENTS The board authorized the purchase of a first floor business condominium in Riverwatch Tower, 364 W. Lane Ave., from The Ohio State University Foundation, at a price not to exceed $463,000 plus the foundation's expenses in acquiring and holding the property. In December, trustees authorized the foundation to accept the condominium, subject to an indebtedness of about $527,000, from Ronald S. Ohsner of Upper Arlington. The 9,604 square-foot office space is occupied by the offices of the Treasurer and of Equipment Inventory and has been appraised at $552,500. Funds for the purchase will be provided by an internal loan, to be repaid from rental income. An analysis of expenses and income showed that owning versus leasing the space will save Ohio State at least $40,000 a year, according to Treasurer James L. Nichols. Trustees also approved three easements: -- A 25-year easement of land to the City of Columbus for constructing a bikeway along the Olentangy River north of Dodridge Street. The path will be part of a regional bikeway that will serve bicyclists and pedestrians traveling to and from the campus. -- A 15-year easement to the Ohio Department of Natural Resources for installing an underground propane gas line across university property on Peach Point, South Bass Island. The line will provide service to the department's fish hatchery. -- A 15-year easement to Ohio Bell Telephone Co. to install an underground fiber optic cable on university property along West Ninth Avenue near Perry Street on the Columbus campus. RESEARCH CONTRACTS ACCEPTED The board accepted 141 research contracts totaling $15,482,651. Singled out for special mention were: -- The Environmental Scholarship/Fellowship and Grants Program, funded with $1,298,819 by the Uniformed Services University of the Health Sciences, Bethesda, Md. The funds will benefit students studying environmental sciences to develop an expertise in soil and water remediation, according to a research report summary. Franklin W. Schwartz, Ohio Eminent Scholar and professor in the Department of Geological Sciences, is heading the project, which is funded through June 1999. -- A project to discover and analyze anticancer drugs through a mechanism group-based strategy, funded with $200,000 from the American Cancer Society Inc. The study will use an analytical system called simian virus 40 DNA replication which can be used to understand mechanisms of new cancer drugs, according to the report. Sources of new drugs will be plant groups with historic or folkloric antitumor activity from Ohio State's collection of more than 1,700 species and from the National Cancer Institute's Natural Product Repository. R. M. Snapka, associate professor in the Department of Radiology, is the principal investigator. -- A sabbatical award to evaluate a psychosocial intervention for women with breast cancer, funded with $86,896 by the U.S. Army Medical Research and Development Command. Barbara L. Andersen, professor in the Department of Psychology, is conducting the study on the hypothesis that women treated with the psychological intervention regimen will show "lowered stress, increased quality of life, more positive health behaviors and fewer negative ones, greater compliance with prescribed medical treatment, and an increase in immune functioning." The study was funded earlier by a grant from the American Cancer Society. -- A project to develop a dystrophin-containing adenoviral vector system that could be used clinically for treating Duchenne Muscular Dystrophy, funded by $77,971 from the Muscular Dystrophy Association Inc. (MDA). Arthur H. Burghes, associate professor in the departments of Medical Biochemistry and Neurology, is conducting the study along with another to clone and characterize the spinal muscular atrophy gene, funded with $82,494 from the MDA. -- A project to provide a method for documenting and preserving dance through the use of multimedia software, funded with $50,000 from the National Initiative to Preserve American Dance. Vera Maletic, professor, and Scott Sutherland, systems analyst, both in the Department of Dance, planned the project. MISCELLANEOUS ACTIONS In other matters, trustees: -- Received the annual report on capital improvements projects from Jill Morelli, assistant vice president and university architect. In 1994, the Office of the University Architect and Physical Planning worked on 273 projects costing an estimated $669.1 million, completing 67 of them worth $129.5 million. -- Discussed amendments to the Medical Practice Plan with Reed Fraley and Richard Sisson. -- Heard about the Arthur G. James Cancer Hospital and Research Institute's membership in the National Cancer Care Network, from Dennis Smith, the hospital's director of administration. -- Heard a report on the Administrative Resource Management System by John Ellinger, a report on the College of Law from Gregory H. Williams, dean; and an update on university restructuring from Sisson. -- Heard from Martha Garland, associate dean of the College of Humanities, and Eric Busch, assistant vice president for student affairs, regarding the work of the Committee on the Undergraduate Experience. -- Received reports from officers of the InterProfessional Council and Undergraduate Student Government. -- Held a discussion in the Investments Committee with Richard Hill, dean of the College of Optometry, and James Garland, dean of the College of Mathematical and Physical Sciences, concerning whether to lower the amount of money distributed from endowments from 5.5 to 5 percent and to increase the amount reinvested in the endowment. # Contact: William J. Shkurti, (614) 292-9232. Written by Tom Spring, (614) 292-8309. [Submitted by: REIDV (reidv@ccgate.ucomm.ohio-state.edu) Fri, 03 Feb 1995 16:41:45 -0500 (EST)] All documents are the responsibility of their originator.