A meeting of the Finance Committee of the Board of Trustees convened on Friday, August 7, 2020, at 9:59 a.m. on the Purdue University campus in West Lafayette, Indiana. The meeting was held in Stewart Center, Room 214, to allow for social distancing amid the COVID-19 pandemic. Restrictions were placed on the number of visitors in the room, and members of the media and the public who wished to observe the meeting virtually were provided such instructions. Everyone in the room was wearing a mask.
All committee members were present: Don Thompson, chair; Sonny Beck; Vanessa Castagna; and Michael Klipsch. All other trustees were present: Michael Berghoff; JoAnn Brouillette; Theresa Carter; Malcolm DeKryger; Gary Lehman; and Noah Scott.
Officers and administrators in attendance were: Mitch Daniels, president; Jay Akridge, provost and executive vice president for academic affairs and diversity; Chris Ruhl, chief financial officer and treasurer; Jim Almond, senior vice president, assistant treasurer, and assistant secretary; Steve Schultz, general counsel; Trent Klingerman, deputy general counsel (virtually); Janice Indrutz, corporate secretary and senior executive assistant to the Board; and Ron Elsenbaumer, chancellor of Purdue University Fort Wayne.
I. APPROVAL OF MINUTES
Upon proper motion duly made and seconded, the Finance Committee voted unanimously to approve the minutes of its June 11, 2020, meeting.
II. APPROVAL OF 2021-2023 LINE ITEM BUDGET REQUESTS AND 2021-2023 BUDGET FOR THE ANIMAL DISEASE AND DIAGNOSTIC LAB
Ms. Eva Nodine, associate vice president for finance, respectfully requested approval of the 2021-2023 legislative line item budget requests. She outlined five projects on the West Lafayette campus for which legislative funding would be requested, and she discussed an appropriation for Purdue Fort Wayne which would be requested to fund strategic growth. She informed the Committee that the total amounts the Committee, and subsequently the full Board, were being asked to approve were $30.6 million for FY 2022 and $31.4M for FY 2023. Ms. Nodine also requested approval of the proposed 2021-2023 budget for the Animal Disease and Diagnostic Lab for which legislative funding would also be requested.
In response to questions from the Committee, Chancellor Elsenbaumer clarified the purpose of the $2 million legislative line item budget request for Purdue Fort Wayne. He explained that, during the realignment of the former IPFW, nine gap areas were identified and the appropriation would allow PFW to immediately invest in three critical disciplines in which he anticipated increased enrollment. Chancellor Elsenbaumer further explained how the investment would immediately begin to have a significant economic impact on northeast Indiana. Ms. Nodine answered additional questions from Trustee Klipsch and Chairman Berghoff. Upon proper motion duly made and seconded, the Finance Committee voted unanimously to recommend full Board approval of both the 2021-2023 line item budget requests and the 2021-2023 budget for the Animal Disease and Diagnostic Lab. Supporting materials were filed with the minutes.
III. APPROVAL OF 2021 MEDICAL PLAN
Ms. Candace Shaffer, senior director of benefits, respectfully requested approval of the recommended series of changes to the medical plan for the 2021 calendar year as part of the multi-year plan to improve population health, control overall costs, and achieve the Board’s target of achieving a 70/30 cost share between the university and employees. She provided data about the health plans, indicating that 84% of employees participated in the two current consumer-driven health plans, and she reviewed key changes that had been made to the health plans since 2014. She informed the Committee that, even in the midst of the pandemic being experienced this year, the university continued to make progress on strategic, longer-term initiatives, which included actively participating in a project undertaken by Greater Lafayette Commerce in partnership with local employers to address hospital prices in the Greater Lafayette market. Ms. Shaffer then outlined a number of recommendations for the 2021 health plans, which included replacing the long-running PPO health plan with a third high-deductible, consumer-driven health plan and removing the vision plan’s dependency on the medical plan, and she provided an overview of efforts made to communicate and engage with employees. To conclude, Ms. Shaffer expressed confidence in the recommendations for 2021 and reviewed other changes being considered for the future.
In response to questions from Trustee Thompson and Chairman Berghoff, Ms. Shaffer discussed the amounts which the university contributed to employees’ health savings accounts and how they would offset plan deductibles. Chairman Berghoff recognized that the $185 million total cost to employees and the university had remained relatively flat, which, he said, was not the case for his or other companies, and he commended Ms. Shaffer for that accomplishment. He also acknowledged the collaboration that had taken place to arrive at the recommendations and great outcomes. Trustee Lehman remarked that the Greater Lafayette and Fort Wayne communities still had much work to do to reduce the cost of health care in those communities. Upon proper motion duly made and seconded, the Finance Committee voted unanimously to recommend full Board approval of the 2021 medical plan. Supporting materials were filed with the minutes.
IV. APPROVAL OF CONTRACT IN EXCESS OF $2,000,000
Ms. Shaffer respectfully requested approval to renew the contract with Securian Financial Group for life insurance and accidental death and dismemberment insurance. She informed the Committee that, because the university had successfully partnered with Securian since 2008, Securian had offered the university the opportunity to renew its contract early, through 2024, which, she said, would allow the university to reduce rates internally. Upon proper motion duly made and seconded, the Finance Committee voted unanimously to recommend full Board approval to renew the contract. Supporting materials were filed with the minutes.
V. APPROVAL OF PURCHASE IN EXCESS OF $2,000,000
Mr. Rob Wynkoop, associate vice president of auxiliary services, informed the Committee that, in June 2020, Purdue received a $10 million grant from the National Science Foundation for the purchase and implementation of a high-performance computer cluster. He said it would significantly increase the capacity available to the NSF’s Extreme Science and Engineering Discovery Environment (XSEDE), which served tens of thousands of researchers across the country and with which the university had partnered for the past nine years. Mr. Wynkoop indicated that the grant was very prestigious, with only five other such computer clusters across the country, and he respectfully requested approval to proceed with purchasing the equipment at a cost of $9,952,154, which would be fully funded by the NSF grant.
In response to a question from Trustee Scott, Mr. Wynkoop said the computer cluster would be fully operational in October 2021. Trustee Thompson remarked that receipt of the grant demonstrated the university’s leadership. Upon proper motion duly made and seconded, the Finance Committee voted unanimously to recommend full Board approval of the purchase. A supporting document was filed with the minutes.
VI. RATIFICATION OF COVID-19 TESTING AND HEALTH MONITORING AGREEMENTS
Mr. Ruhl respectfully requested approval of a 12-month contract with Vault Health to facilitate COVID-19 testing of students, faculty and staff on campus and a four-month, renewable contract with CVS Pharmacy to provide COVID-19 testing services at their retail locations across the country to test off-campus students, faculty, and staff. In addition, Mr. Ruhl requested approval of an amendment to the contract with One to One Health, which currently operated the university’s Center for Healthy Living, to expand One to One Health’s services to support efforts relative to mitigation of COVID-19. He expressed his belief that these were good partnerships with the private sector to expand the university’s safety efforts. Mr. Schultz further requested approval of a memorandum of understanding with Tippecanoe County to conduct contact tracing on students, faculty, and staff who live, study, and/or work on the West Lafayette campus and to refer all high-risk contacts who are not part of the Purdue community to the County for further action. Mr. Schultz explained that public health law vested the County with the responsibility to conduct contact tracing, and, to the extent the university engaged in contact tracing, delegated authority to do so must be given by the County. He added that the Board of County Commissioners had approved the MOU at its meeting earlier in the week because the university could offer the County additional contact tracers.
President Daniels remarked that the MOU emphasized that the County and the university were “in this together,” and said making Purdue safe would benefit the Greater Lafayette community, adding that the university had built a great relationship with the Tippecanoe County Health Department. Mr. Ruhl concluded discussion by informing the Committee that the university had committed $7 million to COVID-19 testing and health monitoring. Trustee Klipsch remarked that all members of the Board participated in the university’s testing process and he spoke about his positive personal experience with the process. Trustee Thompson highlighted that these agreements were in addition to the on-campus capabilities the Board had previously approved.
Upon proper motion duly made and seconded, the Finance Committee voted unanimously to recommend full Board approval to ratify the COVID-19 testing and health monitoring agreements. A supporting document was filed with the minutes.
VII. ADJOURNMENT
By consent, the meeting adjourned at 10:40 a.m.