Meeting minutes, July 25, 2006
1:30 p.m., IHETS boardroom
 ***APPROVED 9.5.06***

Present:
Jeff Pittman, Ivy Tech Community College
Laurie Antolovic, Indiana University
Keith Fowlkes, Saint Mary’s College
Phillip Jankowski, Purdue University North Central
Anthony Lorenz, WFYI
Diann McKee, Indiana State University
Frank Sabatine, Ball State University
Bryan Spetter, Franklin College
Tim Eaton, Vincennes University
Robert Holmes, Ivy Tech Community College

IHETS staff:  Dave King, Tim Fisher, Kevin Siminski, Susan Scott, Virginia Beyer, Julie Wheeler

Pittman called the meeting to order at 1:35 p.m. Introductions were made and Pittman noted that since this is the first meeting of this new committee he thought it beneficial to start with some background information on the IHETS organization. 

Following an organizational review of IHETS in the fall of 2005, a new governance structure was suggested. From that a new Board of Directors has been established as well as three operating committees, of which the Finance Committee is one. Pittman reported that he sits on the Board of Directors and they are currently engaging in strategic planning, looking at the mission, and setting the long range vision and mission for IHETS. 

Fisher gave an overview of IHETS history, the governance structure and reviewed an organizational chart showing how the new Finance Committee fits in with the other two operating committees. The operating committees will meet a minimum of six times per academic year with three individual committee meetings and three joint meetings with the other operating committees. Fisher continued his report with an overview of the voice, video, education networking, and research and development programs and services offered by IHETS. Pittman encouraged the group to review all this information which is available at http://www.ihets.org.

Pittman stated that one of the new criteria established in the review was an expanded or increased fiduciary control and involvement by the consortium members. With that in mind, the Finance Committee has a critical role to the future of IHETS and the first task is to review the IHETS biennium budget request for 2007-09. He noted that the deadline for submitting the budget to the Commission for Higher Education has been extended to August 15, 2006. 

King added that we were allowed a 15-day extension to the deadline to allow for adequate time for the Board of Directors to review the budget on July 27th and for the incoming interim executive director to have sufficient time to review and sign off on the 2007-09 biennium budget request. It would be useful at the Board meeting to present a draft recommendation of what we discuss today.  That will allow them to see it and be prepared to approve it prior to the August 15 deadline.

Pittman reviewed the documents that were sent prior to the meeting. In addition to the 2007-09 proposed budget, the documents also included the 2006-07 revenue and expense budget, a history of IHETS’ appropriation from 2001 to present, which outlines state appropriation and other revenue sources.  He noted the columns which indicate expenses and services as well. 

King noted that with a 32 percent appropriation reduction over the current biennium, the Senate Appropriations Committee felt it was important that the member institutions begin paying a greater percentage of the operating expenses, as modeled in other consortia around the country. The review process that we went through was designed to begin the process of figuring the most appropriate way to shift that balance. Finishing out this fiscal year we will begin looking at service by service to see how we might balance some of the other expenses. King noted that we have not seen any concern or expectation that would be any additional cuts from the legislature in the coming years. In essence we are suggesting a “status quo” budget going into the next biennium, and then any shifts in additional services will be done service by service. 

Fisher added that with our biennium budget proposal we have included a three percent increase for personnel and other operating expenses, which is in line with what our fiscal agent (Indiana University) is recommending and most likely what other higher education institutions will propose as well. 

Scott noted that for the last three years we have been planning to discontinue satellite service and switch to a Web-based system (IHETS Interactive) for delivery of distance learning beginning July, 2006. IHETS Interactive is being funded in part by the reduction in satellite fees. With the appropriation expected to stay the same, user fees will be reviewed service by service and there will likely be some adjustments. IHETS will attempt to maintain all services but will also be looking at more cost effect ways to offer them. 

Fisher noted that King prepared a brief Executive Summary for the Biennium Budget submission which would provide a summary review in support of the budget request.  It is important to recognize that we have a newly constituted Board and that they are going through a strategic planning process that will be in line with the budget request.  The appropriated budget is flat at this point and will grow from there. 

Staff addressed questions and provided clarification on various areas related to the budget, including IHETS’ fiscal relationship with Indiana University. IU is IHETS designated fiscal agent. IHETS pays an administrative systems fee to IU for its services as most IU departments do, and IHETS staff are IU employees. King added that the state has decided to privatize network operations. As a result of K-12 schools and public libraries already moving off the network, it was necessary to reduce overall full-time staff by 18 positions as of June 30, 2006. Additional cuts were made across the board in 2006-07 to address the 20 percent reduction in appropriation during the second year of this biennium.  He added that the 2006-07 budget is very lean and does not allow for much flexibility.

Fisher agreed to provide additional detail about the budget upon request.

McKee moved that the 2007-09 biennial budget request prepared by the staff, be recommended to the IHETS Board of Directors for approval. Bob Holmes seconded the motion and it was unanimously approved.

Pittman reported that he will work with Fisher and survey members to identify a regular meeting schedule for the committee.  He thanked everyone for their participation and with no further business to discuss, the meeting adjourned at 2:25 p.m.