Finance and Facilities Committee Meeting June 7, 2024

The Finance and Facilities Committee met on Friday, June 7, 2024 at 9:00 a.m. in the Freeman Center, Room 202 with The Honorable Ronald Tillett presiding as Chair.

Present from the Committee

The Honorable Ronald Tillet
Mrs. Lindsey Carney Smith, Esq.
Mr. John Lawson
Ms. Christy Morton
Ms. Kelly Purdy Meadows, CPA
LTC (R) Boris Robinson

LTC (R) Boris G. Robinson - Remote participation permitted due to distance between the member’s primary residence and the meeting location pursuant to Code of Virginia § 2.2-3708.3(B)(4). Mr. Robinson participated from Round Rock, TX.

Absent from the Committee

Terri McKnight
Larry Pope

Other Board Members Present

Mr. Brent Archer
Mr. William Estrada, Esq.
Ms. Lee Vreeland

Other’s Present

President William Kelly
Dr. Quentin Kidd, Provost, Executive Vice President and Chief Academic Officer
Mrs. Jennifer Latour, Chief of Staff
Mrs. Sara Herzog, Chief Financial Officer
Mr. Chip Filer, Vice President for Facilities and Campus Operations
Mr. William Donaldson, Faculty Senate
Other CNU faculty and staff members

The Honorable Ronald Tillett, Chair, called the meeting to order and welcomed everyone in attendance.

Approval of Minutes from the April 19, 2024 meeting

Chair Tillett asked for a motion to approve the minutes from the April 19, 2024 meeting and Mr. John Lawson made the motion for approval that was seconded by Mrs. Lindsey Carney Smith, with all in favor.

Chair Tillett reported the next two items on the agenda are for informational purposes – the one statement of revenues and expenditures as of April 30, 2024 and the Swam Report, both of which are included in BoardDocs. The Committee will review these two items in detail in the fall.

Chair Tillett then called on President Kelly. President Kelly reviewed both the “water fall” and net price slides to provide background on the FY2025 operating budget proposal. The Committee noted that the university should explore adopting a biennial budget approach as the state does.

Chair Tillett then called on Ms. Sarah Herzog to provide the CFO report.

Final State Budget Actions

Ms. Herzog provided an update on the final actions of the 2024 General Assembly Session via the internal budget tracker.

Net Price Review

Ms. Herzog reported on the net price for Virginia Public Institutions highlighting where CNU ranks amongst the other state universities.

FY 2024-25 Budget Presentation

Ms. Herzog presented the Operating Budget for FY 2025.

The $197.7M operating budget for FY 2025, up 3.7 percent from FY 2024 is based on the 2024 Special Session I Virginia Acts of Assembly Chapter 2, including the anticipated transfer of general funds from central appropriation accounts, another increase in general fund support for need-based student financial aid, increases in tuition and fees rates, a modest decline in projected enrollment levels from the prior year and continued growth in waiver programs.

The estimated total state general fund contribution to the Education & General (E&G) budget is 55.0 percent, and 33.2 percent of the total budget.

The University funding priorities for FY 2025 incorporate selected items outlined in the 2023 Six Year Plan, support initial investments in the Strategic Priorities as defined in the Strategic Compass, and align with President Kelly’s annual goals.

Ms. Herzog reviewed expenditures, faculty and staff salary increases, reserve funds, and other operating expenses.

Resolution 5: FY 2024-25 Operating Budget

At the conclusion of the budget presentation, Ms. Herzog presented Resolution 5: FY 2024-25 Operating Budget.

President Kelly thanked Ms. Herzog for a great job on the budget presentation and commented Information Technology has to be part of discussion on deferred maintenance.

A motion to approve Resolution 5 was put forth by Mrs. Lindsey Carney Smith and was seconded by Mr. John Lawson with all in favor.

Chair Tillett introduced Dr. Chip Filer, Vice President for Facilities and Campus Operations to provide the following report:

Capital Outlay Program Update

Mr. Chip Filer reported on the Science and Engineering Research Center (ISC3)/Luter Hall is on track for substantial completion in November 2025 and potentially ready for classes in Spring 2026.

The replacement of the existing plant operations and warehouse building has funding in the state budget. A decision has been made for architectural services. The design process will be lengthy and hope to begin construction in January 2026. In support of the Going Green Initiative, a project goal is to exceed the requirements of the High Performance Building Act.

A new project in the early stages is the unfinished space in Torggler. An RFP is out for design services for an art exploration space that is funded by donor gifts.

CNU received full funding in the final state budget for the fume hood and pressurization valves/controls project. A proposal has been received for the engineered design necessary to complete the project and would like to start design immediately since it will take approximately 10-12 months. Because of the nature of the project, the work will have to be completed during the summer. Since the state funding has not been received yet, the reimbursement resolution is presented in order to begin prior to the late-July receipt of appropriated state funding.

Facilities and Grounds Update

There are major roof projects at various stages of construction, including Potomac River, Santoro Hall, Ratcliffe, and Ferguson. With the state funding received, we are able to get out in front of the roof projects.

The final adopted budget provided maintenance reserve funds of $2.7M in FY 25 and $3.5M in FY 26. The FY26 budget amount was notable since previous versions of the budget bill had cut funding in FY26.

Dr. Filer reviewed the FY 25 and FY 26 projects and gave an update on the Grounds projects. Interest was expressed regarding the CNU North area after the demolition of the old building. Design will be conducted by a landscape architect, our grounds staff, and a student group led by Dr. Linda Manning. The design will be sustainable to add more areas of sustainable landscape to the campus.

Dr. Filer reported on strategic conversations for FY25 to include forming a 5-year maintenance plan that aligns with forecasted revenues, projects that will save energy over the long-run, and strategically selecting maintenance projects.

Chair Tillet thanked Dr. Filer for a thorough report.

Resolution 6: Declaring the Intention to Reimburse the Cost of Certain Expenditures from the Proceeds of Bonds

At the conclusion of the capital projects presentation, Chair Tillett presented Resolution 6: Declaring the Intention to Reimburse the Cost of Certain Expenditures from the Proceeds of Bonds.

A motion to approve Resolution 6 was put forth by Mrs. Christy Morton and seconded by Ms. Lindsey Carney Smith with all in favor.

There being no further discussion, the meeting adjourned at 10:15 a.m.