Murray State Regents Approve Contract For Pension Analysis, Plan For Year Ahead
Murray State Univeristy’s Board of Regents on Friday voted to work with a firm to analyze options for how to proceed with a beleaguered pension system. They also approved a capital plan to address maintenance needs and authorized demolishing another old building on campus. Enrollment this fall is up and finances at the end of the last academic year were relatively positive. Regents also met for their annual retreat on Thursday. Here’s a recap of some of the highlights from both meetings:
Regents approved a contract with Dean Dorton and Allen Ford to conduct a financial analysis of HB1 and the various pension scenarios. University officials are considering a difficult, multi-million dollar decision on whether to stay in or exit the Kentucky Employee Retirement System. The board approved work to not exceed $25,000.
Murray State now contributes about $6.1 million to KERS Non-Hazardous. That could go to $10.4 million next June. Regents discussed on Thursday staying in the system and potentially outsourcing positions, or paying out through financing over a 30 year period with university assets as collateral.
As of last June, Murray State’s KERS Non-Hazardous pension liability is more than $142 million.
Regent Chair Dan Kemp said the board needs to adequately review options with a consulting firm. President Bob Jackson said working with a firm is the next step. “It forces us, as we voted in June, to look at every possible option to mitigate our exposure to KERS. That’s really where we are. And that’s probably the best option,” he said.
The university has to submit a change by April 30th. June 20th is the effective date of “cessation” for an employer opting-out of KERS.
ACADEMIC PROGRAMS, ETC.
Regents voted to establish a Center for Economic and Entrepreneurial Development. This involves an administrative restructuring and new learning opportunities for students and tools for local businesses. For instance, a company further developing a prototype in a classroom or with students that may go to market.
Regents approved piloting an eCampus Program. Murray State is in negotiations with a vendor to conduct market research, advertising, recruiting and student and faculty support. The five master’s degree programs in the pilot include Business Administration, Public Administration, Cybersecurity, Public Relations and Business Analytics. The MBA program is projected to see between 350 to 500 students by the seventh year of the pilot. The plan is to begin in Fall 2020.
Accelerate U! Will be discontinued for financial reasons. The one-year program was a partnership between Murray State and WKCTC that offered course credit from both institutions to students who didn’t meet the university’s admissions standards but wanted to attend the university. Jackson said while the program will discontinue, it’s important to continue to assist at-risk and at-need students. The discontinuation is effective June 30, 2020.
New undergraduate programs this fall include Civil and Sustainability Engineering, Culture and Language Studies, Human Services. A graduate program in Cybersecurity Management is coming in Spring 2020, upon CPE approval. Other programs on the horizon include computer engineering, respiratory therapy and expanded offerings in criminal justice and social work.
Regents voted on Friday to demolish the "Old Richmond" Residential Hall. Richmond was built in 1961. The building is 45,231 square feet and has 238 beds. The facility is not occupied. The next steps are to proceed with a bid for contractors and to develop plans for the project. The projected cost is around $400,000. The location will become green space.
The university is in the process of evaluating renovation or rebuilding various dorms on campus as well as public private partnership options with an emphasis on considering trends for what students want in a living environment when they choose to live on campus.
The current residential college occupancy rate is 80%. There are 2,466 students living on campus. The capacity is 3,075 (assuming Old Richmond has a rate of 0).
Regents approved a six-year capital plan on Friday. Officials will request about $33 million in the next biennium. The request involves a potential 2-1 match, where the legislature would provide either $11 million or $22 million and the university would match the rest through bonding the asset preservation fee. Jackson emphasized the need for addressing steam and energy efficiency projects. He said the university is working to get buildings off of the old steam and electrical systems. There won't be any new buildings in that capital request.
Breaking down the numbers, $5 million would go to the campus electrical grid, $5 million to the campus steam distribution system, $10 million to building systems and energy efficiency pooled projects, $3 million for Curris Center deferred maintenance and needed updates and $10 million for historic building preservation.
Murray State University has $326 million in deferred maintenance needs.
On another facility-related update, 25 projects were completed over the summer, with a total scope of $18 million. These projects range from renovating office space to replacing roofs and boilers and the completion of the J.H. Richmond rebuild. 15 projects are still being completed with a total scope of $5 million. 30 projects are in the design or planning stage with a scope of more than $12 million. 70 projects with a scope of $35 million are administered by facilities staff.
REPORT OF TREASURER
In the report of the treasurer, Vice President of Finance and Administration Jackie Dudley said spring and summer enrollments contributed to a lower-than-projected shortfall last year, to a total shortfall of about $2.2 million. Dudley said most of that would be offset by a $2 million contingency.
“We did end the year in a much better situation than we had anticipated early on," she said.
The university generally broke even on net assets, Dudley said, with a gain of around $1 million. The overall net position changed by $3.4 million, due in part to having a good earnings year in investments at the state level. Auxiliaries had a shortfall of $2 million. This is not a loss, Dudley said, but involves the Sodexo contract. In explaining other aspects of the financial statement, Dudley said an added issue in entails making a year-end adjustment for pension liabilities and how that factors into the numbers.
“We had a good year compared to some of the challenges we have to face,” she said.
Murray State recently unveiled an uptick in enrollment this fall, based on preliminary data. As of September 1, the percentages are up for first time freshmen, transfers, graduates, Racer Academy and international students. The latest numbers show a total headcount of 9,466. Final numbers will be released at the end of October. Summer 19 enrollment also saw a total increase of 2.7% from the previous year.
Three new regents were sworn in on Friday: Leon Owens, faculty regent Melony Shemberger and student regent Trey Book. They all vowed they have not fought in a duel.
Regent Jerry Rhoads was elected Vice Chair. Jill Hunt was elected Secretary. Jackie Dudley was reappointed as Treasurer.