Legislature(2011 - 2012)SENATE FINANCE 532
02/16/2011 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Presentation: University of Alaska Fy 12 Budget (subcommittee of the Whole) | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 16, 2011
9:02 a.m.
9:02:55 AM
CALL TO ORDER
Co-Chair Hoffman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lesil McGuire, Vice-Chair
Senator Johnny Ellis
Senator Donny Olson
Senator Dennis Egan
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Patrick Gamble, President, University of Alaska; Michelle
Rizk, Associate Vice President, Budget, University of
Alaska; Wendy Redman, Vice President, Statewide Programs,
University of Alaska
PRESENT VIA TELECONFERENCE
Kit Duke, Associate Vice President, Facilities, University
of Alaska
SUMMARY
^Presentation: University of Alaska FY 12 Budget
(Subcommittee of the whole)
9:03:46 AM
Co-Chair Hoffman announced that Pat Gamble would present
the University's FY 12 budget.
PATRICK GAMBLE, PRESIDENT, UNIVERSITY OF ALASKA, introduced
the testifiers. Mr. Gamble presented the PowerPoint
Presentation: "University of Alaska: FY 12 Budget
Presentation" (copy on file). He stated that he would be
happy to answer any questions related to the capital
budget.
Mr. Gamble discussed slide 2: "State Policy Guide." He
stated that fiscal restraint, strategic program investment,
student success, and service to the state were the four
main factors when creating a budget.
Mr. Gamble presented slide 3: "Performance Measures: FY 09-
FY 10." He explained that the University of Alaska (UA) was
still growing. He stated that physical growth and expansion
was not a priority. He understood that there was a
possibility of the budget flattening. He said that the
governor would like a budget that reflected general
maintenance, rather than expansion. He stated that the
displayed chart was an example of growth since the two
years prior.
9:08:14 AM
Mr. Gamble displayed slide 4, and stated that the UA Fall
Enrollment at an all-time high: 34,000 students.
Mr. Gamble showed slide 5: "FY 12 Operating Budget." He
stated that there was a recent raise in tuition. He
stressed that UA had one of the lowest tuitions for a four-
year degree in the United States. He felt that the tuition
should remain relatively low.
Co-Chair Hoffman wondered why the numbers were different
from the budget book. MICHELLE RIZK, ASSOCIATE VICE
PRESIDENT, BUDGET, UNIVERSITY OF ALASKA replied that the
difference was that the presentation reflected the UA Board
of Regents budget, and the budget book represented the
governor's request.
Co-Chair Hoffman stressed that the presentation should be a
reflection of what the governor requested, not what the
Board of Regents requested. Mr. Gamble noted it.
Mr. Gamble presented slide 6: "FY 11 Legislative Intent."
He mentioned that there was guidance from the legislature
that UA intended to comply with.
Ms. Rizk stated that the second bullet displayed in slide 6
was intent language that was added by the Senate, and was
in response to the multiple appropriation structure to help
UA provide some level of flexibility. She stated that the
intent language was helpful, and the General Fund amount
equaled $10 million to distribute to each campus. She
furthered that $1 million remained, and the campuses were
determining the priorities to allocate the $1 million.
9:16:51 AM
Mr. Gamble discussed slide 7: "University Revenue." He
stated that the graph gave a comparison between FY 10, FY
11, and FY 12 budget authorizations.
Co-Chair Hoffman queried the tuition increases. Ms. Rizk
replied that the University Board of Regents approved the
budget with a 7 percent increase at the undergraduate level
and a 3 percent increase at the graduate level.
Mr. Gamble displayed slide 8: "FY 12 Notables." He stated
that there was the average compensation increase from FY
08-FY 11 was approximately 4 percent. He furthered that he
expected an increase of about 2 percent in FY 12.
Co-Chair Hoffman wondered if the compensation increases
were supplemental requests. Mr. Gamble replied that
negotiations were not complete, so when they completed they
would be inserted into the budget.
Mr. Gamble continued to discuss FY 12 notables on slide 8.
He stated that the fixed costs had decreased by $3.4
million or 60 percent. He shared that the program requests
were down at $8.6 million or 78 percent.
Mr. Gamble presented slide 9: "UA's FY 12 general fund
budget request is the smallest in 5 years."
9:21:33 AM
Mr. Gamble discussed slide 10: "Operating Budget Request
(increment) vs. State appropriation FY 09-FY 12 (in
thousands)." He pointed out the far right bar of the graph,
and noted that the fixed cost of program dollars were
significantly down.
Co-Chair Hoffman noted substantial increases to the
University's budget, and felt that the governor's
recommendations were unsustainable. Ms. Rizk noted that the
chart compared the governor's requests to the governor's
appropriations.
Co-Chair Stedman requested an explanation of the
fluctuating fixed-cost changes, and include comments
including the report on the University's systems and
overhead. Mr. Gamble replied that most of the fixed costs
were travel costs, reduction in services, reduction in
utilities, and reduction in contracts. Ms. Rizk furthered
that the new Health Sciences Facility was scheduled to come
online in FY 11, and the organization of costs:
programmatic and operating.
Co-Chair Stedman remarked that travel did not seem like a
fixed cost. Mr. Gamble replied that he was focusing on
discretionary costs.
Co-Chair Stedman would like to hear more about the Fisher
Report. Mr. Gamble stated that there were some helpful
items in that report, but some findings did not fit for
Alaska.
9:29:42 AM
Mr. Gamble displayed slide 11: "Example of Pro-Active Cost
Savings." He stated that the bullets were representative of
some of the areas where savings could be found. He noted
that $43,000 was not much, and he stated that the boiler
meltdown increased the cost at $27,000 a day.
Co-Chair Stedman queried the overall cost of energy. Mr.
Gamble agreed to provide that information, and stated that
the plants had the capacity to add up spending in real
time.
Co-Chair Stedman clarified that he would like a comparison
of cost related to each energy source.
Co-Chair Hoffman stated that the coal plant was in
disrepair.
9:33:16 AM
Mr. Gamble presented slide 12: "Capital Budget." He
remarked about a consultant who looked at the University's
health care cost growth. He remarked that health care costs
were unsustainable costs.
Mr. Gamble continued to discuss slide 12, and stated that
he hoped to simplify the deferred maintenance costs. He
stated that he hoped to propose a way to find a sustainable
point in the capital budget.
Senator Thomas referred back to slide 11, and wondered if
the $43,000 savings was attributed to the Community
Technical Center. Mr. Gamble confirmed that it did refer to
the Community Technical Center.
Senator Thomas requested a comprehensive look at full use
of the power plant.
9:38:18 AM
Senator Ellis looked at slide 12, and wondered how it
related to the need for engineering programs at the
Anchorage and Fairbanks campuses. Mr. Gamble recognized the
need for engineering programs. He stated that he had a
conversation with the engineering advisory board, and
planned to address the board the following day. He stated
that there were some counter-cyclical demands that would
accrue, even with a flattening of the budget. He expressed
that Exxon had expressed the need for more engineers.
Co-Chair Hoffman queried when the discussion with Exxon
occurred. Mr. Gamble replied that the industry would say
that they have a hard time hiring post-graduate engineer
program graduates.
Co-Chair Hoffman wondered if Exxon was requesting engineer,
because Exxon was looking for new engineers in the field.
Mr. Gamble replied that Exxon had made requests for
engineers, because they were looking for new engineers.
Co-Chair Hoffman stated that the Senate Finance Committee
had added $1 million that was not requested by the
University and the Administration.
Co-Chair Hoffman looked at page 29 of the blue book report,
and remarked that there was a demand for degrees. He
specifically pointed out the nursing program, and felt that
there was an overabundance of applicants. WENDY REDMAN,
VICE PRESIDENT, STATEWIDE PROGRAMS, UNIVERSITY OF ALASKA
remarked high priority programs specifically regarding the
native nursing program.
9:45:55 AM
Senator Egan stated that there was a similar issue with
nurses in Southeast Alaska.
Senator Egan queried new housing for freshman students, and
wondered if there were any construction plans to fill that
need. He specifically queried efforts related to Banfield
Hall. He felt that the Deferred Maintenance request for the
Southeast Campus was too low. Mr. Gamble replied that he
saw that the housing was at capacity. He explained that
there was an opportunity for a public-private partnership.
KIT DUKE, ASSOCIATE VICE PRESIDENT, FACILITIES, UNIVERSITY
OF ALASKA furthered that there was evidence of successful
use of public-private housing in a difficult economic
climate.
9:50:26 AM
Senator Egan requested further information regarding the
public-private housing partnership.
Senator Thomas stated that the Department of Labor (DOL)
was doing some training of nurses, and stated that he hoped
that University and DOL would work together to create and
urgent supply in the rural areas. He stated that in the
year prior there was support for a capital budget of $35
million in deferred maintenance for the University. He
wondered if the local contractors would be given the work.
Mr. Gamble replied that he was working to ensure local
contractors were given the work.
9:56:29 AM
Co-Chair Hoffman wondered how the decisions were made to
campus priorities. Mr. Gamble replied that over the ten
years prior, most of the money had gone to new
constructions and renovations. He stated that many
decisions were based on risk.
Co-Chair Hoffman wondered how the $37 million would be
divided. Mr. Gamble replied that each project would be
covered, so there would be no need to pick and choose.
10:01:20 AM
Co-Chair Stedman remarked that there should be discussion
regarding using bonds for maintenance. He queried the back
of the blue book, and pointed out that there was a 4.5
percent rate of change. He specifically pointed out page
55, and looked at Ketchikan and Sitka. He noted that the
lowest numbers were Ketchikan and Sitka. He pointed out
that revenue is in decline, but enrollment is growing. Ms.
Rizk agreed to provide further information.
10:05:42 AM
Co-Chair Stedman understood that the Ketchikan and Sitka
campuses were small, so they were not considered high
priority.
Co-Chair Hoffman furthered that areas with higher native
populations get federal funds, but they should not be
exempt from state funding. Mr. Gamble expressed gratitude
for his experiences meeting the faculties and staff
throughout the state. He felt that the community campuses
were very helpful in solving some financial issues that the
University faced.
Co-Chair Hoffman remarked that the native communities would
respond positively to federal input, but there would be
additional needs from the state of Alaska.
10:09:23 AM
Ms. Redman stated that there was a competitive quality in
defining what the individual campus needs are, and to be
sure that they are given their fair share. She continued
that Southeast Alaska's nursing programs funding occurs in
the University of Alaska Anchorage budget, because the
programs are delivered from the Anchorage campus. Co-Chair
Stedman felt more clarity would inform a better decision.
Co-Chair Hoffman thought that all campuses should be
treated equally. Mr. Gamble replied that campuses were
always in need in one area or another. Co-Chair Hoffman
argued that campuses receiving Title 3 federal funding
should not be penalized for doing so.
Co-Chair Stedman pointed out the rates of change from 2005-
2010. He asked for clarification on the 2005 numbers. Mr.
Gamble replied that it would take time for the answer to be
delivered to the committee.
Mr. Gamble discussed slide 13: "Concerns." He stated that
the main concern was student success, specifically student
retention and completion.
10:16:55 AM
Senator McGuire wondered if there had been exit interviews
with freshmen who were leaving the UA campuses. She
remarked that many students were using UA as a stepping
stone to other universities. Mr. Gamble remarked that the
acquired data regarding student retention was inaccurate.
He stated that when a student enters the school system,
they were given a student number; but when they enter the
university system, they were given a new number. He
stressed the importance of tying the K-12 student data with
the University data. He pointed out that the data does not
include non-standard students.
Senator McGuire stressed the importance of an exit
interview for students, and wondered if rural students feel
welcome in the urban campuses.
Co-Chair Hoffman referred to page 27, specifically the
chart related to high demand jobs. He wondered what the
percentages for graduation related to high demand jobs; and
he also queried the success of the rural campuses. Mr.
Gamble agreed to provide that information.
Co-Chair Hoffman stressed the importance of the rural
campuses inclusion in the discussion. Mr. Gamble stressed
that the e-courses and distance learning would complicate
how to report attendance, especially because of the lack of
bandwidth in rural areas.
10:27:35 AM
Co-Chair Stedman remarked that Ketchikan, Wrangell, Sitka,
and Juneau were all connected through the fiber optics. He
wondered if there were bottle neck issues, slowing the
bandwidth. Mr. Gamble agreed to provide more information
regarding slowing of bandwidth.
10:28:41 AM
Mr. Gamble displayed slide 14: "Opportunities." He stated
that there were still many students who were eager to be a
part of the UA program. He stressed understanding student
needs and desires. He remarked that preservation of student
success, Alaska native support, teacher education,
secondary school cooperation, community campuses,
health/biomedical focus, e-learning, research,
commercialization, and UA system strategic plan. He
stressed that UA was not at a place to continually raise
tuition, and he hoped that would not be a future issue. He
stressed that they would rather focus on cutting programs.
Co-Chair Hoffman wondered if research dollars would be cut.
Mr. Gamble replied that research money mostly came from the
federal government. He stressed that he would like to put
more money into research. He stressed focusing on high
demand job programs.
Mr. Gamble presented slide 15: "Commitment to a Maintenance
Budget." He stressed the maintenance budget focused on
maintenance of momentum, quality programs for students, and
service to the state.
10:33:07 AM
Co-Chair Hoffman wondered why ANSAP funding was only a one-
time increment. Ms. Rizk understood the ANSAP funding was
intended to be ongoing funding, but agreed to provide more
information.
Co-Chair Hoffman wanted more information on where the
stimulus money was spent, and wondered where the health-
science building construction was implemented in the
budget. Mr. Gamble stated that the opening of the science
building was on schedule.
Senator McGuire queried page 53 in the blue book, and
pointed out FY 09, and wondered what the comparison was for
administration related to education. Mr. Gamble replied
that he had not looked closely at that comparison.
Senator McGuire pointed out page 26 of the Fisher Report,
and wondered what the university system was doing to
respond to those findings. Mr. Gamble stated that it was
difficult to measure efficiency in technology.
10:41:36 AM
Senator McGuire queried the licensing and patenting of
intellectual property development and technology. Mr.
Gamble replied that ten years prior, the university was not
in the business of commercialization. He stressed that he
was currently interested in commercialization, and felt it
was a system wide responsibility.
Co-Chair Stedman queried some deferred maintenance
specifically pages 61 and 58. He would like a head count
comparison to building square footage. He wondered if there
was efficiency in the building, and wondered if there could
be consolidations. Ms. Redman replied that they look at
head count comparison related to classroom usage. She
surmised that Co-Chair Stedman had requested a comparison
related to classroom space versus non-classroom space
usage.
Co-Chair Stedman clarified that he would also like an
evaluation of the total space usage, because he wanted to
know if the older buildings should be used. He was looking
to see if there was efficiency in all building use. Mr.
Gamble replied that buildings were hardly ever torn down,
even if they were very old and dilapidated.
Co-Chair Hoffman stressed the importance of nuclear power
research at the University.
10:53:13 AM
Senator Thomas queried deferred maintenance and the high
percentage of contractors, and requested a debt load
evaluation of graduates. Mr. Gamble agreed to provide that
information.
Mr. Gamble thanked the committee for their support, and
agreed to deliver requested information.
ADJOURNMENT
The meeting was adjourned at 10:55 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2011 02 16 UofA Sustainment Funding Plan Graph.pdf |
SFIN 2/16/2011 9:00:00 AM |
University Overview |
| 2011 02 16 University FY12 Budget Presentation.pdf |
SFIN 2/16/2011 9:00:00 AM |
University Overview |
| 2010 02 16 UA Response to SFC.pdf |
SFIN 2/16/2011 9:00:00 AM |
University Overview |