Finance and Facilities Committee Meeting June 9, 2023

The Finance and Facilities Committee met on Friday, June 9, 2023 at 9:15 a.m. in the David Student Union Boardroom, with Chairman Robert R. Hatten, Esq. presiding.

Present from the Committee

Mr. Robert R. Hatten, Esq.
Mr. John Lawson
Mrs. Terri M. McKnight, CPA (remote participation)
Ms. Kelli Purdy Meadows
Ms. Christy Morton
Mrs. Lindsey Carney Smith
Mrs. Judy Ford Wason

Ms. Terri McKnight participated remotely by phone from Mexico. Remote participation permitted due to personal travel to Mexico pursuant to Code of Virginia § 2.2-3708.3(B)(4).

Other Board Members Present

Mr. C. Larry Pope
The Honorable Ronald Tillett
Ms. Lee Vreeland

Others Present

Mrs. Adelia Thompson, Interim President
Mr. Quentin Kidd, Provost
Mrs. Jennifer Latour, Vice President for Finance and Planning/Chief Financial Officer
Ms. Christine Ledford, Vice President for Administration and Auxiliary Services
Mrs. Lisa Duncan Raines, Vice President for Enrollment and Student Success
Other CNU faculty and staff members

Chairman Robert Hatten called the meeting to order and welcomed everyone in attendance.

Approval of Minutes from the April 14, 2023 meeting

Chairman Robert Hatten asked for a motion to approve the minutes from the April 14, 2023 meeting and Mrs. Lindsey Carney Smith made the motion for approval that was seconded by Ms. Christy Morton, with all in favor.

Chairman Robert Hatten introduced Mr. Tom Kramer, Executive Director of the Wason Center for Civic Leadership and Legislative Liaison to provide the following report:

2023 General Assembly Update

Mr. Kramer reported there has been no budget update from the General Assembly and no new budget action will occur until early-mid July 2023.

FY2023-24 Budget Presentation

Mrs. Jennifer Latour, Vice President for Finance and Planning/CFO presented the Operating Budget for FY 2024.

The $187.8 million operating budget for FY 2024, up 2.3 percent from FY 2023, recommended to the Board of Visitors for approval is based on 2022 Special Session I Virginia Acts of Assembly Chapter 2, the anticipated transfer of general funds from central appropriation accounts (e.g. 5 percent salary increase), and a modest decline in projected enrollment levels. The operating budget includes a slight increase in general fund support for the Community Captains program, a significant increase in general fund support for need-based student financial aid, increases in tuition and fees rates, and more than $6 million in cost reductions.

The estimated total state general fund contribution to the Education & General (E&G) budget is 52.7 percent, and 30.5 percent of the total budget. At this time, the state has not amended its 2022 - 2024 biennial budget that was approved in Spring 2022, which reflected level state base operating general fund support from FY 2023 into FY 2024.

Mrs. Latour reviewed expenditures, faculty and staff salary increases, reserve funds and other operating expenses.

Mrs. Lindsey Carney Smith and Chair Robert Hatten thanked everyone for their hard work in making the more than $6 million in budget cuts across the university.

Resolution 1: FY 2023-2024 Operating Budget

At the conclusion of the budget presentation, Mrs. Latour presented Resolution 1: FY 2023-2024 Operating Budget.

Mrs. Judy Ford Wason made the motion for approval that was seconded by Mrs. Lindsey Carney Smith, with all in favor.

Chair Robert Hatten introduced Ms. Christine Ledford, Vice President for Administration and Auxiliary Services to provide the following report:

Capital Projects Update

Ms. Ledford reported the Integrated Science Center Phase III is underway and the building should be complete between June-August 2025 and ready for the Fall Semester of 2025. The revised cost of this project is $90.7 million dollars, the original cost was $58.5 million. A supplemental request for $32 million had been sent to the Commonwealth for consideration and they have only authorized $85.4 million which leaves a $5 million gap in cost. The university is looking for savings in the maintenance and design of the building, while also not sacrificing the integrity of the building. So far, $3 million in savings has been discovered but there may be a need to utilize Capital Reserve funds to cover the increased cost of the building.

The new Administration Building/CNU North will replace the existing CNU North Building and will house the offices of Procurement, Capital Outlay Management, Human Resources, Advancement, CNU Foundations, and Communications and Public Relations. Completion is expected in September 2023 and a temporary Certificate of Occupancy will be issued until the full certification arrives in Mid-October. Once the building is complete, employees will move to the new building and the existing building will be demolished prior to the Spring semester.

Infrastructure Repairs and Improvements that have been awarded and underway are:

Central Chiller Plant-installation of a new 650-ton chiller to replace the existing 320-ton chiller
Plant Operations Roof Replacement- began in January 2023 and is substantially complete
Ratcliffe Boiler and Water Heater Replacement- replacing two existing 54-year boilers and two existing gas fired water heaters that are over 20 years old

Two projects that are under review are the Ferguson Center Roof Replacement and the Ratcliffe High Roof Replacement.

A future project will be the Plant Operations Warehouse Renovation and Expansion.

New Business

Mrs. Jennifer Latour reported that the six year plan that is submitted bi-annually to SCHEV (State Council of Higher Education) will be a different submission process this year and the Governor’s office has assigned consultants to work with us on this new process. The preliminary six year plan will be submitted on July 17th, and be brought to the September committee meeting for review. The final plan is to be submitted October 1st, so there will be time for discussion and changes to the plan by the Board of Visitors if needed. President Kelly will be a part of this planning process.

There being no further discussion the meeting was adjourned at 10:37 a.m.