Ohio University’s Board of Trustees met Friday in committees to discuss, among other things, the fiscal year 22 budget and to hear from OU President Hugh Sherman before the start of the semester.
The Resources, Facilities and Affordability committee met Friday morning to discuss findings in fiscal year 21 and forecasts for fiscal year 22 and beyond.
Senior Vice President for Finance and Administration Deb Shaffer outlined the impacts of the pandemic on the university’s revenue, estimated to be approximately $84 million. Incremental expenses associated with the pandemic, which include categories related to testing and public health initiatives and cleaning and facility protocols, are estimated to have had just under a $43 million impact.
Funds from external agencies, primarily from federal CARES funding and the state, are estimated to equal approximately $80 million. That leaves the final impact of the pandemic at around $47 million.
Among other factors, the operating model of the university during FY21 will offset the impact from the pandemic, Schaffer said.
“Although we have that projected expense directly related to changes we made for the pandemic, because we were in the operating model we were, we’ve talked about the fact that we had … significant savings over what we budgeted and over prior years, related to institutional expenses,” Schaffer said.
With these saved expenses taken into consideration, the university should expect a $38 million surplus from operations. However, as the university enters the year-end close process, these numbers could see some adjustments.
In future fiscal years, OU tuition is assumed to have a 2% growth. Financial aid, Shaffer said, will likely grow at the same rate as tuition. Multiple assumptions for the upcoming fiscal years have varying levels of probability and impact. Assumptions that have a high probability of changing and carry a large impact include net tuition, salary and wages and healthcare inflation.
A resolution to approve the FY22 budget was sent to the full Board, with a recommendation for approval, where it passed with a unanimous vote.
The Board discussed the six-year capital improvement plan, or CIP, estimated for FY22 through FY28. Included within this plan is the university’s approach on deferred maintenance. Chief Facilities Management Officer Steve Wood introduced the top ten projects that hold the highest deferred maintenance priority, including various roofing projects, work on the college green tunnels and renovation of Gamertsfelder Hall.
Other areas of focus that the six-year CIP covers are projects related to airport operations, transportation and parking.
A resolution for the approval of the $66 million FY22 annual CIP and the $336.9 million FY23 to FY28 six-year project priorities was sent to the full Board, where it was passed with a unanimous vote.
The Board approved two more resolutions, the first detailing the $10.6 million century bond funding for the FY22 CIP, and the second detailing additional capital projects such as class gate tunnel rehabilitation, steam repairs, energy efficiency improvements and Peden boiler and domestic hot water tank replacement.
Governance and Compensation
The Governance and Compensation committee met Friday to discuss adding another trustee to the Board.
OU President Hugh Sherman said the additional trustee will have the same voting right as a national trustee and will provide better representation for the university’s Southeast Ohio region. He also suggested the trustee be from outside the Athens community because of the university’s existing connections to people within the community.
“We suggest that the individual should be somebody who's shown leadership and being involved with local community activities,” Sherman said. “Some of the people that might be considered might be somebody who represents nonprofits, or a health organization might be some examples.”
In order to select this new trustee, there will be a list of qualifications that candidates must meet. Additionally, Sherman said he is looking at possibly asking a group of mayors of cities where OU’s campuses are located to solicit a list of potential candidates and plans to bring a formal proposal to the Board’s October meeting.
The committee then agreed to bring two resolutions forward in October regarding the position. The first will be to change bylaws governing the appointment of the position and the second will be to add a new board member.
Following this agreement, the full Board voted to approve the election of the Board treasurer and the meeting was adjourned.
State of University Address
OU President Hugh Sherman spoke to members of the university community in a formal State of the University address.
Sherman said he wanted to prioritize student competency, technological advancement and financial health during his term at OU.
Board Chair Cary Cooper administered the presidential oath of office alongside Secretary to the Board David Moore. After Sherman was sworn in, he spoke about his excitement for the semester.
“When I was just driving back to the campus from the east side of town, it was so exciting to see all the students and everybody moving in,” he said. “And I saw the perfect scene that you always see, just down here by the South Green, where a mother was hugging her child and not letting her go.”
All students were invited back to campus this upcoming school year, which has not been the case since Fall Semester of 2019. Former OU President Duane Nellis resigned on May 13, two years before his contract officially ended, according to a previous Post report. The Board selected Sherman on May 27.
“The problem is really simple, and I think we all understand,” Sherman said. “The revenues are flat … and they’re predicted to be flat … if you take all the universities across the country.”
Sherman said he wants to recruit and retain faculty and staff by offering competitive wages, salaries and benefits.
“I know this is achievable, but it does require financial discipline,” Sherman said.
Additionally, Sherman said he wants students to be equipped with skills like communication, data and technology literacy, critical thinking and systems thinking to adapt to developments in artificial intelligence and its role in the workforce.
Anna Millar, Jack Knudson, Abby Neff and Maya Morita contributed to this report.
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