A meeting of the Finance Committee of the Board of Trustees convened at 10:29 a.m. on Friday, June 10, 2022, in Room 326 of Stewart Center on the campus of Purdue University in West Lafayette, Indiana.
Committee members present: Sonny Beck; Malcolm DeKryger; and Michael Klipsch. Don Thompson, chair, was not present due to illness. All other trustees were present: Michael Berghoff; JoAnn Brouillette; Vanessa Castagna; Theresa Carter; Mark Gee; and Gary Lehman. Duly noted that the Committee was chaired by Mike Klipsch in Don’s absence.
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; Steve Schultz, general counsel; Janice Indrutz, corporate secretary and senior executive assistant to the Board; and Ron Elsenbaumer, chancellor, Purdue Fort Wayne.
I. APPROVAL OF MINUTES
Upon proper motion duly made and seconded, the Finance Committee voted unanimously to approve the minutes of its meeting convened on April 8, 2022.
II. APPROVAL OF FY23 BUDGET*
Trustee Klipsch shared that we have a budget that produces a positive operating result despite freezing tuition again, despite the compensation increases previously approved, which are well above the norm in the Big Ten, and continued substantial strategic investments in a variety of areas. He welcomed Ms. Eva Nodine, associate vice president for Finance, who respectfully requested approval of the fiscal year 2023 operating budget for the West Lafayette, Northwest, and Fort Wayne campuses. She reminded everyone what is and what is not included in the operating budget. She stated that goals and objectives have stayed pretty steady with previous years with regard to student affordability, fiscal responsibility, strategic investments, and transparency. Ms. Nodine noted small tuition increases at Northwest and Fort Wayne campuses, 1.45% at each campus consistent with ICHE recommendation. She noted with the increase to over 38,000 students there was a need for instructional enhancements in both classrooms and lab space so that is reflected in the budget. Compensation increases totaled $13M total for the 1% compensation pool for target market adjustments to ensure competitive salaries for faculty, staff, and graduate assistant stipends. Ms. Nodine provided a brief overview of the FY23 Key Assumptions- West Lafayette. Trustee Klipsch asked for a dollar amount of how much we have saved students in tuition with the freeze. President Daniels noted the amount as upwards of $1.2B. Trustee Brouillette asked for more details regarding the growth of Purdue Online. Ms. Nodine spoke about the 7% increase in revenue noting that it is spread across the colleges as they all have their programs within Purdue Online. President Daniels commented about their tremendous work and the broad span of audience they attract.
Ms. Nodine shared how Purdue compares within the Big 10 on several key metrics; tuition, room and board, and salary merit. She commented that we should be proud of the investments we are making in our students, faculty and staff. Purdue distributes about $100M off our endowment into the operating budget. She noted we don’t take distributions on everything, we only take them if needed so the funds continue to grow. Strong market value gains in the last fiscal year along with strong fundraising have been key to helping grow that endowment. This is how we keep the effective spending rate down. President Daniels asked how many universities do we know have a lower percentage than we do? Ms. Nodine noted not many if at all. President Daniels noted probably zero. Trustee Castagna shared that the number one question she gets from people is since we aren’t raising tuition, where and how are you getting the money. President Daniels clarified what it’s not; not more state money, not the endowment since we take out less than other universities do, it’s not that we have cheaper salary expenditures (we pay them more), or any of the suspicions that people have. The growth of the student body is huge which is related to affordability. A lot of students choose Purdue because they thought they would get more value for their dollar. In addition, a great job by everyone on campus to keep it accessible and affordable, little things add up. Trustee Beck noted that President Daniels should take some credit for running the university like a business. Chris Ruhl, CEO noted we should appreciate the efforts from Purdue for Life. There is another metric that looks at outflow compared to inflow. Discussion about the many ways the university has worked to decrease spending. Ms. Nodine shared Operating Budgets by campus noting $84M across the board with West Lafayette at $80M, Northwest at $5M and Fort Wayne at ($1M). She shared details about risks and opportunities. Trustee DeKryger thanked Ms. Nodine and her staff for the fiscal work that they do and noted how much it is appreciated. He also noted appreciation for the way it is presented makes it easy to understand. Upon proper motion duly made and seconded, the Finance Committee voted unanimously to recommend full Board approval of the FY23 operating budget. Supporting materials were filed with the minutes.
III. APPROVAL OF CONTRACT IN EXCESS OF $2,000,000: PNW CAMPUS CLINIC VENDOR*
Candace Shaffer, vice president for Human Resources respectfully requested approval of a three-year contract amendment with One to One Health to operate the on-site health clinic for Purdue Northwest located on the Hammond Campus. She noted that having an on-site clinic available to employees and students would be both beneficial to the PNW population, as well as create savings, over time, for the university’s medical plan. Ms. Shaffer shared that one of the things they hope to achieve with the PNW operation, is that on average individuals who are better engaged with the Center for Healthy Living spend $2,000 less than those who are not. She shared those annual costs before student insurance and patient collections are estimated to be $814,170 with annual costs increasing due to inflation and anticipated salary increases for staff. The contract would be a three-year amendment to the university and One to One Health’s current agreement, with a total value of $2,554,072. She noted the request for full Board approval of the three-year contract amendment beginning 7/1/2022 with One to One Health. Trustee Klipsch asked for further explanation of compliance mentioned in Ms. Shaffer's report. Ms. Shaffer explained that it refers to the percentage of employees and students that utilize included services such as wellness screenings, mammograms, skin checks, flu shots etc. It was noted that Purdue's compliance percentage is not as high as desired and presents a significant opportunity to improve the health of the Purdue community. Upon proper motion duly made and seconded, the Finance Committee voted unanimously to recommend full Board approval of the contract. Supporting materials were filed with the minutes. Supporting materials were filed with the minutes.
By consent, the meeting adjourned at 10:57 a.m.