Minutes of the
Board of Governors Finance and Facilities Committee
Missouri State University
Thursday, December 10, 2020, 9:15 a.m.
https://us02web.zoom.us/j/81378303024
Present
Ms. Carrie Tergin, Committee Chair
Ms. Amelia “Amy” Counts, Committee Member
Mr. Briar Douglas, Committee Member
Mr. Craig Frazier, Committee Member
Mr. Gabriel Gore, Committee Member
Ms. Beverly Miller Keltner, Committee Member
Ms. Lynn Parman, Committee Member
Ms. Carol Silvey, Committee Member
Mr. Chris Waters, Committee Member
Absent
Mr. Jay Wasson, Committee Member
Also Present
Mr. Clifton Smart III, President
Ms. Donna Christian, Director of Internal Audit and Risk Management (via webinar)
Mr. Jeff Coiner, Chief Information Officer
Mr. Ryan DeBoef, Chief of Staff and Assistant to the President for Governmental Relations
Ms. Rachael Dockery, General Counsel and Chief Compliance Officer
Mr. Brent Dunn, Vice President for University Advancement
Dr. Frank Einhellig, Provost
Mr. Steve Foucart, Chief Financial Officer
Dr. Dennis Lancaster, Interim Chancellor of the West Plains Campus
Ms. Natalie McNish, Senior Auditor (via webinar)
Mr. Matt Morris, Vice President for Administrative Services
Ms. Suzanne Shaw, Vice President for Marketing and Communications
Dr. Dee Siscoe, Vice President for Student Affairs
Ms. Rowena Stone, Secretary to the Board
1. Roll Call – Ms. Carrie Tergin, Committee Chair, called the Finance and Facilities Committee meeting to order at 9:12 a.m. on Thursday, December 10, 2020, in the Bond Learning Center Ballroom at the Missouri State University Darr Agriculture Center. The meeting was livestreamed via Zoom webinar.
2. Approval of Minutes – Ms. Tergin stated that the first item of business was the approval of the minutes from the October 16, 2020, meeting. Ms. Carol Silvey made a motion, receiving a second from Mr. Craig Frazier.
Motion passed 8-0.
3. Review of CARES Act Funds – President Smart provided an overview of CARES Act Funds awarded and received by the university. The university was awarded grant funding from all three levels (federal, state, local) which totaled $28,668,545 ($11,523,508 system, $15,943,846 Springfield, $1,201,191 West Plains) as of November 30, 2020. President Smart shared that the university has been able to draw down $25,331,750 of the funds with $3,336,795 remaining. He stated the university should be able to meet the deadlines to draw the rest of the funds down.
President Smart called upon Ms. Natalie McNish, Senior Auditor, to provide an overview of the audit process for the CARES Act Funds. Ms. McNish reviewed the report that outlines the sources, restrictions, use, and remaining amounts for each award and explained what qualifying expenses the university has claimed for each award. She highlighted that most of the qualifying expenses included technological improvements in classrooms and to facilitate the work from home model, cleaning supplies, personal protective equipment, quarantine and isolation costs, payroll expenses, and medical services.
Ms. McNish reviewed the two grants the university has not yet drawn down that include funds from the Department of Economic Development (DED) and a portion of the Greene County funds. These remaining funds are pledged to health and safety upgrades at JVIC and the efactory. The university is working with state and county officials to draw down these funds. She concluded her report by sharing the Department of Higher Education and Workforce Development allowed all universities to apply for additional grant of monies on December 1. She called upon Mr. Steve Foucart, Chief Financial Officer, to provide additional information on the university’s proposal for these funds.
Mr. Foucart shared that the university applied for an additional $1.8 million dollars. The state awarded the money to the university and the first draw of funds has been completed. The university has submitted $1 million of these funds and are on track to submit for the remaining funds by the deadline. President Smart commented that this $1.8 million is in addition to the other funds the university was already awarded, bringing the university’s total to over $30 million of funds awarded.
Mr. Foucart discussed the federal compliance review. He shared that the university has been very transparent throughout the process. The state allowed for reimbursement of eligible costs starting March 1. Although the university received the funds in FY2021, the university was able to use these funds to reimburse costs incurred in FY2020 since the state awarded the funds after the end of the fiscal year.
President Smart shared that of the $30 million received, roughly $10 million was paid to students directly or indirectly through refunds and credits. The remaining funds have gone towards reimbursement of expenses and allows the university to set aside funds to assist in the next semester.
4. FY2021 Budget Update – President Smart and Mr. Foucart presented a FY2021 Budget Update. Due to Governor Parson’s release of withheld appropriations, cost saving measures that have been implemented, and fall enrollment numbers exceeding projections, the Springfield operating fund is $5.5 million ahead of budget and the West Plains operating fund is $300,000 ahead of budget. These totals include more than $4 million in university reserves that were allocated when the board originally approved the FY2021 budget in June.
President Smart shared that there will be a resolution for approval of the budget adjustment in order to award all full-time employees a $600 across the board raise increase, make salary range adjustments, and to increase repairs and classroom upgrades. This resolution will be presented at the full board meeting later in the day.
5. Year to Date Financial Review – Mr. Foucart provided an overview of the university’s year to date financials through October 2020. He shared that even though operating revenue is down, the university has had less in operating expenses. He stated that overall, the university has an improved financial position from a year ago and it is in a strong financial position.
6. New Tuition/Student Fee Model Discussion – President Smart presented a new tuition and fee model for discussion. The university currently charges in-state undergraduate students $228 for seated classes and $299 for online classes. The university has developed a plan to charge the same tuition rate for seated and online classes. He shared that charging one rate will be fairer and more transparent for students. It will eliminate financial impact on students when the decision is made for a particular class to be online. It also recognizes that the line between “online” and “seated” classes has become blurred.
President Smart presented a proposal that would change the tuition rate for all in-state undergraduate students to $250. Students taking at least one seated class would be charged fees for all of their classes that are consistent with the current fee schedule. Students taking only online courses would be charged a new fee that is substantially lower. The proposal will have minimal impact on most students. Under the new model, the average in-state undergraduate student would pay $50 less than under the current tuition and fee model.
President Smart stated that the proposal is revenue neutral on tuition, meaning it would net the university the same tuition revenue as the current model. The new online student fee generates some additional revenue, but it recaptures only about half of the fee revenue that has been lost over the past two years as students gradually migrated to online classes. The proposal would also keep the university’s cost advantage by continuing to price tuition and fees below its major competitors.
Mr. Foucart provided additional information on the fees portion of the proposal. He shared that the task force met with many student groups for feedback to come up with the recommendation in the board materials. President Smart added that the university will have to navigate a statute regarding limits on tuition increases at the state level. He shared the proposal on a Council on Public Higher Education in Missouri (COPHE) call and there are six other universities exploring a similar model for the same reasons Missouri State is.
President Smart concluded his report by stating that tuition and fees for the 2021-22 academic year will be voted on by the board in the spring. The committee discussed and provided feedback on the proposed model.
Ms. Tergin called for a motion to approve the approach and to provide a resolution to the board in the spring semester. Ms. Lynn Parman provided a motion, receiving a second from Ms. Silvey.
Motion passed 8-0.
7. Foundation Review – Mr. Brent Dunn, Vice President for University Advancement, provided an update on income and gifts for the Missouri State University Foundation. Mr. Dunn shared that gifts are up $3.5 million through November 2020 from this time period compared to last year. He shared that several large gifts have been received in December and he anticipates more by year end. He concluded his report by stating that the Onward, Upward Campaign is on target with over $208 million and the endowment is at a record high of $95 million.
8. Adjournment – With no further business needing to be discussed, Ms. Tergin moved to adjourn the meeting at 10:32 a.m. Ms. Beverly Miller Keltner provided a motion, receiving a second from Mr. Frazier.
Motion passed 8-0.
Rowena Stone
Rowena Stone
Secretary to the Board