Meeting via telephone Wednesday, the state Board of Regents gave board executive director Robert Donley the green light to negotiate a third contract with Deloitte Consulting, the firm coordinating the board's Transparent, Inclusive Efficiency Review (TIER) of the state's three public universities. The new contract, subject to board approval, is for the first (of a proposed three) six-month "wave" in a business case aimed at finding savings and efficiencies in the three regent universities' purchasing operations.
Deloitte defines a business case as an analysis of "an opportunity, how much value it will create (costs and benefits) and what it will take to implement." Deloitte team director Rick Ferraro called a business case "another stage gate toward implementation."
The Deloitte team has projected a potential $16 million to $40 million savings in the universities' purchasing/sourcing units. In response to a regent's question, Deloitte team lead for sourcing and procurement Gary Sutton said the wide range reflects two uncertainties: the competitiveness of the market in any given geographic locale, and the amount of progress toward efficiency already achieved by the universities.
As outlined to the board, the three-wave business case would begin yet this month. Purchasing categories that could be included in the first wave include office supplies, temporary labor, lab supplies, and small package shipping, for example UPS or FedEx.
Noting that a big chunk of Phase 2 – that of reviewing academic programs at the three schools – is just getting underway, regent Larry McKibben said there's also some urgency to move toward implementation. Because the sourcing/procurement business case is ready to go, he said there's no reason not to begin it.
Board president Bruce Rastetter also announced that, going forward, Deloitte team members will provide expense receipts related to their work on the regents' project. Rastetter noted that not providing receipts is, in fact, standard procedure on consulting projects. News coverage and several newspaper editorials in eastern Iowa this week were critical of the lack of specificity in more than $220,000 worth of Deloitte expenses billed to the regents.
"We said we'd be open and transparent in this study," Rastetter said.
FY15 budget approved
The total Iowa State budget for the fiscal year that began July 1 is a proposed $1.3 billion. This includes a $655 million operating budget and a $670 million restricted budget, which includes sponsored research, private gifts, endowment income, sales and services, and auxiliary units such as athletics, residence, printing, parking, bookstore, Reiman Gardens and the Memorial Union.
In his presentation to the board, president Steven Leath outlined Iowa State's plans to use $32.4 million in new revenues. Supplemented with nearly $25 million in internally reallocated dollars, a total of $57.2 million will be invested in the university's top priorities and other commitments this year.
Predicting a student body in excess of 34,000 this fall, he said, "We will give our large student body a great experience as we go forward."
FY15: Spending commitments for new, reallocated funds
|Maintain academic excellence|
|Improve the student experience||$8.3 million|
|Keep college affordable||$10.5 million|
|Recruit/retain faculty in key areas||$14.7 million|
|Maintain a pay plan that rewards performance||$7.6 million|
|Enhance research footprint||$4.7 million|
|Promote economic development||$3.7 million|
|Improve the campus environment||$1.6 million|
|AFSCME contract||$1 million|
|University buildings, infrastructure||$4.7 million|
|Contracts, compliance, inflation||$0.4 million|
Green light for gerontology graduate programs
The board approved the College of Human Sciences' request to offer interdepartmental master's and doctoral degrees in gerontology to meet the growing societal demand and student interest in careers focused on older adults. The master's program, with both thesis and project options, would be offered in addition to the college's current Master of Family and Consumer Sciences with a specialization in gerontology. Both programs can begin accepting students this fall.
In other Iowa State-related business, the board approved:
- An increase to the boiler replacement budget of $4 million, to $42 million, due to higher-than-anticipated costs to purchase the three new boilers, redesign ISU's electrical distribution system and remodel the power plant. The alternative, reducing the project scope to stay within the current budget, would have a negative impact on the operational reliability of the power plant.
- The sale of $16.3 million in academic building revenue refunding bonds to save $1.9 million in interest on the 2016-27 payments on 2005 bonds that financed improvements to the veterinary teaching hospital, veterinary diagnostics lab and Coover Hall. The savings is due to lower interest rates; the rate on the winning bid was 2.276 percent.
- A new title for Michael Crum, from senior policy adviser on economic development to the president, to vice president for economic development and business engagement, effective July 1