Finance and Facilities Committee Meeting September 14, 2023

The Finance and Facilities Committee met on Friday, September 15, 2023 at 11:00 a.m. in the David Student Union Boardroom, with Lindsey Carney Smith. Presiding as Acting Chair due to Mr. Ron Tillett’s absence.

Present from the Committee

Mrs. Lindsey Carney Smith
Mr. John Lawson
Mr. C. Larry Pope
Mrs. Terri M. McKnight, CPA
Ms. Kelli Purdy Meadows
Ms. Christy Morton
LTC (R) Boris Robinson

Other Board Members Present

Mr. Brent Archer
Mr. William Estrada, Esq.
Mrs. Judy Wason

Other’s Present

Mr. Quentin Kidd, Provost
Mrs. Jennifer Latour, Vice President for Finance and Planning/Chief Financial Officer
Mrs. Adelia Thompson, Vice President for Advancement, External Engagement and the Arts
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

Acting Chair Carney Smith called the meeting to order and welcomed everyone in attendance and reviewed the committee charge for all new and existing members of the committee.

Approval of Minutes from the June 9, 2023 meeting

Acting Chair Carney Smith asked for a motion to approve the minutes from the June 9, 2023 meeting and Mr. John Lawson made the motion for approval that was seconded by Ms. Christy Morton, with all in favor.

Acting Chair Lindsey Carney Smith 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 groundbreaking ceremony will be held today. The building has a 25 month construction period and should be complete in the October of 2025 and ready for the Spring 2026 Semester.

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. A temporary Certificate of Occupancy should be issued at the end of next week with a final Certificate of Occupancy thirty days later, move-in date is set for the first part of November, 2023. 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 – 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 – substantially complete.
Ferguson Center Roof Replacement-reroof the old Ferguson High School sections of the building. Currently under review with the DEB.
Ratcliffe High Roof Replacement-reroof of the area consisting of the High Roof over the second floor and the Low Roof that surrounds it. Currently under review with the DEB.

Future projects will include:

Replacement of the Plant Operations Building-replacement of the existing plant operations and warehouse building.
Laboratory/Classroom-Fume hood and Pressurization Valves/Controls-this project supports the replacement of 77 obsolete fume hood air valves and controls and the corresponding 234 room air pressurization valves/controls which are critical to the safe operation of the building.

SWaM Report as of June 30, 2023

Ms. Ledford reported that the State Goal for SWaM is at 42% and Christopher Newport University is at almost 53% so we have passed our goal of 42% for this reporting period. Chair Carney Smith thanked Ms. Ledford and her team for surpassing the SWaM goal.

Ms. Ledford noted that the SWaM Fair will be held this year on November 16th and this is the 12th year we have participated. There will be two training sessions offered which will provide credit hours with the Virginia Association of Government Purchasing.

Chair Lindsey Carney Smith introduced Mrs. Jennifer Latour, Vice President for Finance and Planning/Chief Financial Officer and Mr. Tom Kramer, Executive Director of the Wason Center for Civic Leadership and Legislative Liason to provide the following report:

2023 General Assembly Status

Mr. Tom Kramer, reported that President Kelly, Mrs. Latour and Mr. Kramer met with Senators and Delegates to introduce President Kelly to them within his first one hundred days of office.

Mrs. Latour reported on the new actions of the 2023 General Assembly and that Governor Youngkin signed the budget yesterday and for higher education, $158 million will be designated. Governor Youngkin approved a 2% salary increase effective in December for faculty and staff. Raises are funded by the state at 60% and the University funds the additional 40%. The amended budget includes $2.3 million in operating costs for Christopher Newport University, which will help to fund our 40% share for salary increases and will help to offset the cost increases for operating the new CNU North building.

Mrs. Latour noted that the University implemented $6 million in budget reductions. The bulk of these reductions were in Academic Affairs at $2.5 million. These cuts were made by not filling vacant faculty positions for one year. There were other budget reductions University wide.

Acting Chair Carney Smith discussed the increase in tuition and fees and stated that we had made an increase this year in tuition and fees but also made budget reductions. The September Tuition and Fees Resolution included a provision to lower tuition based on funding received by the Commonwealth. It is not recommended to lower tuition and fees at this time.

Mr. Ben Lynerd, Faculty Senate Representative, stated that the cuts in Academic Affairs will affect not only staff but students as well. These cuts will drop the collaboration efforts between faculty and students and will not be without impact.

Mrs. Latour introduced Mrs. Sarah Herzog, Director of Planning and Budget to provide the following report:

Governor’s Budget Requests (Operating and Capital)

Mrs. Herzog presented the Operating and Capital Budget requests that have been submitted to the Secretary of Education to be approved to move forward to the Governor for consideration, this is a new 2-step process that has been implemented when submitting requests. The Operating requests include Student Financial Assistance, Virginia Military Survivors Dependent education program, Safety, Security and Compliance and other programs that will need funding. On the Capital side, requests have been made to replace the Plant Operations Building and for the replacement of 77 obsolete fume hood air valves and controls.

Review of 2023 Six Year Plan for 2024-2030

Mrs. Herzog gave an overview of the 2023 Six Year Plan for 2024-2030. The Six Year Plan Components include the CNU Mission, Vision, Strengths and Strategic Priorities, Enrollment Projections and Strategy, The Virginia Plan for Higher Education, Policies, Trainings on Freedom of Expression and Inquiry, Future Operating and Capital Budget Requests, Financial Effectiveness and Sustainability, Academic Program and Workforce Alignment and Performance, Economic Development and Impacts. The plan was due July 1st and an in person meeting was held on August 10th in Richmond to present the plan. Recommendations will be forthcoming and then the plan will come before the board for final approval at the November meeting.

President Kelly thanked everyone for their hard work on bringing this plan together. He reported on the need to bring more students in to try to get our freshman class back to 1,200 students. He also mentioned Brand Awareness and Branding for the University to help attract more students. A consulting service, ADV was brought in to do an analysis of who we are and to get a perception of how other people see us. The University learned a lot from them and we are working on a Strategic Compass. An Athletic Committee has also been formed and we have a committed team and dedicated board to work with.

Mrs. Latour introduced Provost, Quentin Kidd to provide an overview about Academic Programs. Provost Kidd discussed ways of trying to attract new students and mentioned the possibility of bringing back undergraduate programs. There are also new programs that are being developed. Another idea is to do micro-credentialing where students can earn a certificate for certain programs. He is also exploring graduate level programs other than programs already being offered. Mrs. Latour said we are now waiting to hear back from SCHEV (State Council of Higher Education for Virginia) regarding the 6 year plan and any questions or recommendations they may have. A resolution for the 6 year plan will then be brought before the Board for approval at the November meeting.

Statement of Revenue and Expenditures for the Twelve Months Ended June 30, 2023

Mrs. Latour presented the Statement of Revenue and Expenditures and noted that $4 million had been allocated by the State and helped with inflation and tuition mitigation money. There was a decrease in revenues due to COVID stimulus funds no longer being received. The University received a $1 million increase in revenue from the Foundation to help with operational costs.

Expenses have increased largely due to salary increases in FY23. Auxiliary services has had more expenses due to an increase in needing to use temporary services for dining. Expenses also increased due to inflation for food costs, electricity and general operating.

Annual Debt Service Report

Mrs. Latour reviewed the annual debt service report which includes the summary of all debt bond series. This is 100% of all debt including principal and interest. She noted that FY29 will be the first year that any debt will come off of record and to be mindful of this as we move forward.

Acting Chair Carney Smith thanked Mrs. Latour and staff for their hard work.

There being no further discussion the meeting was adjourned at 12:15 p.m.