Okay, if everyone could get seated. We brought some nicer weather in today, which is great. I see spring right around the corner here. And thanks for everyone on Zoom as well and our guests. So good morning, ladies and gentlemen. I'm Terry Kelly, chair of the Board of Trustees. And it's a pleasure to convene this meeting of the University of Delaware Board of Trustees. And we'd like to extend a special welcome to our guests in the community as well, faculty students as well. And just to remind you, this is a, we call it a special meeting because typically we have our spring and our fall meetings, and I think we've learned that that's a pretty long stretch. And with all that's going on, certainly in higher air, there's not anything going on, right guys, that really timely to get an update from the leadership team and just, and I would just encourage, again, questions, and we're going to have our speakers stay up there. So we'll have a chance to ask some questions and try to make it as interactive as possible. So with that, I think I'm going to turn to our Secretary-Treasor, Kathleen, to give us attendance report for today's meeting. Good morning. Madam Chair, we have 24 trustees in attendance today, which is a majority of the voting members of the board and constitutes a quorum for today's meeting. Those members who are unable to be here today have all asked to be experienced. Yeah, and great. I really appreciate the attendance both here and virtually, so thank you everyone. So we're going to move to public comment, and today we have, I think we're going to hear from some individuals who wish to address the board. Each speaker will be called to the podium by Vice President Ms. Brandt, and each speaker will have two minutes to present their comments. Thank you, Madam Chair. This morning we have two individuals registered for public comments. comment, Nithila, Christostom, and Emma Abrams. You will have two minutes to deliver your remarks to the board, and there will be a timer displayed for your information. First, I'd like to welcome Nethila. I don't believe she is here. And we will move on to Ms. Abrams. And I don't see Ms. Abrams either. So Madam Chair, that concludes the public comment section of today's agenda. Okay, well that was short. Okay, so we're going to shift to our program and I'd like to invite Dennis, Sassanis, to give us a kind of update State of the Union and maybe give a little bit of context for the speakers for this morning. Thank you. Oh wait, hold on, I'm out of order. You can stay there, Dennis. But I do first need to approve the minutes of our meeting of December 10th of 24th. This was our last semi -annual board meeting, and meeting materials are provided beginning on page 2. If there are no revisions to the minutes, may have a motion to approve them as presented. So moved. A second? Second. All in favor? Aye. Anyone opposed? Anyone abstained? Okay, thank you, and thanks for the minutes there, and I apologize for that. Okay. Now, Dennis. All right. Thank you, Chair. Good morning. everybody and thank you for being here today for our special meeting clearly we have meetings in December semi-annual and May and in between we always use this opportunity as an update and there's certainly a lot to update you on because we are living in very challenging times in the world of higher education and this world is currently confronting many uncertainties and so I will try to give you an executive summary of some of those and then I will rely on my great leadership team members who each one will give about a 15 minute overview of their topic and then at the end we'll have a panel discussion so each one of the four presenters and myself could be at the panel to address any questions of the whole if you have anything that is suppressing in your mind immediately after one of the presenters we will of course allow you to ask maybe a couple of questions but if they're specific to that presentation in top of your mind. But overall questions, overarching questions, please hold till the end and note them down. So I'll start by saying, almost daily, as you read in the news, we have various executive orders and federal actions which are changing the landscape for all of us in higher ed. There have been a lot of changes, as well as there have been a lot of proposed changes that might or might not actually see the light of day and become a reality. In many cases, it's a matter of how federal agencies that are directed to apply them, how they interpret them, and in also some cases, how the legal system helps interpret those and implement those executive orders. So that can take time, as you all understand, but in the meantime, we live for today and we are educating students every day. So the leadership team and I are doing everything we can, in our powers to minimize disruption to the University of Delaware students, our faculty and staff, while always being in compliance and remaining in compliance with the federal law. That's critical for institution that is federally funded for research and so many other activities, Pell programs for student support and the like. So through frequent meetings and each one of us divides labor. I tend to attend many meetings and conversations with people outside. and as much I can inside UD, so I talk with other presidents, I talk with the American Association of Public and London Universities, the American Council for Education, friends that I have from the AAU. So we're trying to understand that part of the landscape, and of course, internally, we're interpreting constantly and we are issuing guidance as we can so that our faculty, students, and staff can best comply with this situation. We have a federal actions update web page that is updated. I think it's an excellent asset, and people can always and should always refer to it for the latest. I'll give you one example of our response, and that is, as some of you know, the National Institute of Health started directing people on a Friday evening that the FNA rate, which is the indirect cost for facilitation administration, is going to be capped. to 15%. Just for those of you who are not as aware with it, this is reimbursement for course that we've already incurred in the process of doing research, and our auditable rate right now is at 60%. So we are at risk of losing up to 45% on every grant that we're conducting for NIH. While this policy change has been temporarily restrained, we remain concerned about the devastating impact that it can have on all biomedical, health, life science, and human condition research. So just to give you a sense in dollars, if that NIH were to be lifted, we would, the restraint if it were to be lifted, we would stand to lose about 12 million a year on all our NIH currently funded contracts. And if other agencies followed, we would stand to lose 40 million a year. So these are significant dollars, you know, obviously, because, again, we critically depend on those to recoup expenses on our operating budget for federal administrative expenses. Other updates, you're going to hear a lot more details from Miguel, our vice president for research science and innovation. But I'll tell you that people are also asking, what's happening currently? How much funding have you lost already on your current grants and contracts? And I will say, without saying that too loud, so far so good. You know, we have hundreds of contracts funded, and we have received stop work orders on five of those hundreds of contracts. And the loss in unobligated funding balances are estimated to be under $2 million. dollars. We probably do a quarter billion dollars of federally funded research and instruction and service work. So, you know, that's to give you perspective. However, my team and I are concerned and investigators are very concerned that there are considerable delays with respect to pending applications and even awards that we've been notified that we'll be receiving, but the money is not showing up. So there's tremendous delay in the system has become quite viscous. And also several agencies have said that they will not be funding certain areas of research that are of keen interest to the community. So we're obviously concerned about what the future would bring. Also another concern is, as you all know, there has been a budget passed through a continuing resolution for this fiscal year of the government. But obviously in that environment, there'd be some shifts as some agency budgets might be readjusted slightly. But more importantly, we also rely on funding that we get for congressionally directed spending, earmarks and plus ups. And I think we have close to zero chance of seeing that through this year. So as we navigate this rapidly evolving landscape together, I want to emphasize that our values will continue to be at the heart of our community. We're committed to and celebrate the success of every student at the University of Delaware. That's the foundational pillar for us. We promote academic freedom and the free exchange of ideas and opinions. And we'll continue to welcome and value people of all backgrounds, perspectives and learning experiences. And we will continue to encourage respect and civility towards all the people here at the university. And as a highlight of our efforts, I will share with you that in the most recent Anti-Defamation League's 2025 Campus Antisemitism Report Card, the University of Delaware received a grade of B. This is the second year in a row that they're doing it. So again, we have received a grade of B. There are eight institutions that have received a grade of A, so that grade of B means that were better than most of the 135 institutions rated. And of course we'll continue to strive to get an A. That's what we all do. So you'll hear more from Miguel Garcia -Diaz with a deeper dive about how we're working with our research community. I'll now pivot to academics, and I would say that many institutions, currently are struggling in this environment and they're struggling to maintain enrollment to start with even before the impact or potential impact of executive orders because of the shifting demographic and so many other factors I do feel firmly that we are fortunate to be receiving this year again a record number of applications this is the sixth year in a row so we're going to get 41,000 applications. Last year we were almost at 40,000. So obviously those numbers are impressive and it shows a tremendous interest in our university for our bid size that we have nationwide. I mean institutions that are three times our size perhaps get 60 or 70,000 applications. So I think we're doing really, really well. And obviously I think we've worked hard to create our luck, if you will. The investments in academic excellence, investments in research and innovation, the Star Campus, you know, everything we've done is really driving that interest. You know, so I do believe we have established a national brand and we will continue to get the applications. Of course, the effort now is on yield. Last year, our yield was hurt from FAFSA and other challenges that we faced and the melt was close to 9%. This year, we're hoping they'll get back to melts of around 5%, which has been our traditional, and hopefully that'll help us with the class. You'll hear much more from the provost, so I'm not going to get into the projections of what is that size of the class, but again, I hope that everybody appreciates how uncertain the environment is, so Provost Carlson is working with our faculty and staff to support and continue to support the programmatic and financial growth and sustain our enrollment momentum. Now I'm going to shift to another topic. So you see, it's quick, but it's the right kind of theme here. Health care. So I'll start by saying that UDs, faculty, staff, and retirees are at the heart of the institution. We're here for our people. And everyone, my administration and myself and the Board of Trustees are committed to continue providing a competitive package to our employees in terms of their benefits. We want to continue to care for our retirees that we value. They invested their lives in our community and our university. And to retain our position as a top employer in the state of Delaware. As you know, after considerable process in deliberation, we announced that the University of Delaware will begin to manage our own health insurance coverage for employees and retirees directly, rather than through the voluntary participation in the state plan that we've done for years, effective July 1, 2025. I'm proud of how we've reached this very hard decision after consult. with multiple constituencies and experts throughout the past year. One of the key groups that helped us achieve this is the Benefits Cost Containment Committee, which is a joint committee with the AAP and representation from retirees and staff. To help guide the future employee benefits selection and coverage, the University will establish a benefits advisory committee now on a permanent basis, versus the ad hoc nature of the previous committee, with representation from unionized and non -unionized employees. So I feel we'll have a path forward, how to march together. Now, as I said, we lost a lot of nights of sleep in making this decision. I feel it's a right decision for our institution. It will provide some financial stability in our balance sheet for years to come. And our goal, as always, is to be fiscally responsible while providing excellent health care options. It is a big change administratively, but it's really no change to the coverage of the people that we have because at least initially for the next three years, our plans will be exactly the same through exactly the same providers, High Mark and ETHNA. And I do want to recognize our Vice President for Human Resources, Melissa Bart, who is sitting somewhere there, who basically worked with me hand-in-hand and many other members of the team for months now, and you'll hear directly from her, but let's give her some recognition. Now I'm going to pivot to finances. So the health care is just one of the levers that we have, how to navigate the financial challenges that we're experiencing in this highly uncertain environment. So beyond that, there's many others, unfortunately, like every household. in every business we've been experiencing record high numbers in inflation for example everything costs more and it looks like inflation is coming right back up you know its ugly head has resurfaced so obviously that's one concern because the cost of doing business has gone up construction daily operations and so on the other piece is of course we continue to see a greater need from our students for financial aid because all these families operate in that exact same environment as us. So what we have been doing is we've been working very hard to trim our expenses and grow our revenues. Some of the people who are in industry probably recognize that with it. And that's part of it. And we've also worked to become even more transparent in our disclosure of the financial statements with the members of our community, which I think is actually. in building trust and working together. As you know, we have worked very, very hard to empower the academic sector at all levels, in partnership with the Provost and the Deans, made the budgets transparent and available to every individual in the academic sector, both academic and administrative budgets. We've also disclosed quite a bit about what are our processes for investing in capital, not just operating expenses. And we'll continue to have productive meetings with the Faculty Senate, and we're also working to continue to improve the presentation of the financial information so that it's understandable and useful by everybody. Our senior vice president and CFO Mary Remler who has been a key partner in these activities to myself, the provost, and all the other members of the team, is going to provide you with a deeper dive both as an update on the current budget status as well as an early projection on next year's budget. And the last topic that I want to hit, as I said, it's going to be quick, but hopefully informative. I'm going to hit about capital. So as our grounds and buildings committee knows very well, a guy yourself obviously is the prime mover in this, the University of Delaware has more than 460 buildings, 10 million square feet of space, and this capital plan is worth approximately $8 billion. So just the upkeep of it and addressing the deferred maintenance that we have, particularly along the green, you know, would require an investment if we do 2%, which is rule of thumb, of your value of your capital plan, we should be investing $200 million a year. We just can't do that, you know, right now. And so 160 is the more approximate number, but, you know, it's just very difficult, 2% of $8 billion. In some cases, I have to add that it makes much more sense to build a new facility to meet their needs than actually continuing to try to throw good dollars after bad dollars. And that's because the modality of education, the nature of collaboration, of how we do research and this, that has changed dramatically over the decades. So we have developed and continued to develop constantly a capital plan, which is a list of short, medium, and long-term projects and opportunities, and this list I have to emphasize is dynamic. It depends on the environment, depends on funding sources, and many other parameters. So when deciding on priorities specifically for capital projects, we have to always keep in mind how do you best serve the mission of a college and the broader universities? What is the condition of existing facilities? What is the projected need to grow and continue to meet this way the evolving needs of that profession? What are the new modalities for education, as I was saying, and research. And last but not least, what are the funding sources? The ability to finance the bulk of a project through fundraising is a major factor in prioritizing a given project among many worthy possibilities on the capital plan. And this is because fundraising can greatly reduce and ideally eliminate the needs, need for the institution or the unit that would benefit from a facility to have to borrow funds and serve the debt. And our chair of finance, Don't Puglisi, I'm sure appreciates that last part. So, planning big capital projects and raising the money for those projects, both have a very long time horizon, and often that is, a decade or more. to proceed with construction of the projects all funds need to be available in cash or five -year pledges for sure by the time the project is completed and ideally by groundbreaking fundraising needs to be happening even when and especially when our finances may be constrained in moments like this fundraising is so critical and you often hear me say that philanthropy is the margin of excellence. And I also say philanthropy is a Greek word. So both of those are very important. So philanthropy can play a catalytic role during difficult times. It can help us absorb external impacts and enable us to continue providing unparalleled educational and research environments for our students and our faculty. As you know, yesterday we announced a very generous gift, the largest in our 282-year history, from Rob and Kathy Zickfried and their company, $71.5 million for Lerner College. While I know that Rob and Kathy aren't here today, that definitely deserves a loud round of applause. Let's thank them. Now, had they given us $75 million, just rounding error, this would have been among the top 20 largest gifts to business schools ever. The way it stands is among the top 25 gifts. It's still very significant, and I can tell you, there is a 300 million dollar gift and a 200 million dollar gift, booth in University of Michigan, and then the rest are in the 100 million dollar range, and 75 is several institutions with a 75 million dollar gift as a tie. So we're an excellent company, probably one of the best companies that you can be, and that's really very aspirational. And it doesn't really stop there because as part of that generous gift, they've issued a challenge. So we're going to engage in a fundraising campaign for learner so we can raise the rest as quickly as we can through fundraising. And I know we can. So this gift will help create Ziegfried Hall, a state-of-the-art student-centric learning space with modern classrooms with research and teaching labs, a student-run cafe, and an auditorium. This hall will maximize student services, experiential learning, collaborative programming, and community connection. It will also house the new Ziegfried Institute for Leadership and Free Enterprise, an idea lab that will contribute developing the capabilities and characteristics of effective leadership and facilitate this course on economic policies. Even more, the Zickfried Gift Agreement is a model of how the flow funds are synchronized with the various phase of construction. It incorporates provisions for adjustment of the time schedule based on the changing business conditions. And above all, it creates an endowment that will support the building and the Institute in I want to recognize, obviously, the individuals who work hand in hand with me for a long time. And when I say a long time, I've been working on this for nine years. People say, wow, it's very convenient that it's dropped from the sky. You know, and I say, well, it started the first day I was hired as president. You know, that's when Zickford visited my office. Actually, about three months before that. So that's when I first met him as chair of the advisory board of Lerner. We started talking about things and big ideas. So, obviously, it's a lot of effort, but particularly in the last year, I want to recognize Jim Decker, our vice president for developing alumni relations, Mary Remler, our CFO, and Angie Downing, our general counsel, for working on different aspects of this agreement, which I think is 12-page. Usually our gift agreements are page and a half. Let's give them a hand. So, where are we now? Schematic design, which is the first part of the design phase. Typically, design phase is 10% of the budget of a project. Schematic design is 10% of that 10% or 1% of the project cost. We're now in schematic design to conceptualize more what this dream space will be, and it's commissioned for Zickfried Hall this spring. What is important here is remember that, again, And this capital project, I keep saying that, was identified as a priority when I started my term as president. And it was in our campus master planning process since 2018. Seven years already, and if we're lucky, we'll have the building, and I know we will be lucky, around 2030. So it's a 12-year span. But that's what it takes. And I hope that Palm is hearing about engineering, because that's next the line pump we need to raise a hundred million dollars let's get going with that so the other is the clear point i made already that planning and far raising are long -range activities and they're the only way forward and the only way that big ideas become a reality now i'll just say very quickly that the impact of this transformational gift on our learner students faculty and staff will be immense. Our Dean of Lerner, Oliver Yao, and I want to acknowledge him because he had a big role in raising the gift. Let's give Oliver a hand. So since Oliver, you don't have a speaking role today, let me brag a little bit about learner. So this building will prepare our students for the skills of tomorrow. It will marry the digital transformation with the human experience in highly collaborative learning environments, that's very critical. And it will propel learner to excellence among its peers, a path that we're destined for. And I'll just give you some highlights. Our online MBA has been ranked by US News, a World Report, to be top 20 nationwide. That's a pretty big deal. Our Horde entrepreneurship program is recognized as top three in the Big Atlantic. That's also a big deal. And I'll tell you the latest, because the embargo got lifted at 7 a.m. today, so I'm not breaking any confidence here. So Poets and Quants, which is a very reputable ranking agency for business schools, has just ranked us as number 52 in the nation for our entire undergraduate program. That's our highest ranking ever in 282 years. Let me also mention, you know, what the ranking is is impressive, but what the trajectory, is it's even more impressive. We are one of only six schools that has a double -digit growth last year and the year before. Actually, in 2023, we're ranked 73. In 2024, we're ranked 65, and today we're ranked number 52. That's unbelievable, unprecedented. Let's give a hand to the business school. So I'll conclude by saying, Thank you deep from my heart for your engagement and support now and all these years. UD is a strong institution and however the landscape continues to evolve. We will continue to be strong by focusing on our mission and the needs of our students, our faculty, our staff, and our community now and in the future. And with this, I'm going to call all the panelists to take your seat, so please move forward While anybody wants to ask me any questions, before we transition to panelists, so Miguel, Laura Carlson, Mary Remler, and Melissa Bart, please take your seats. Any questions for me? Just to remark, Dennis, those that got to go to the event yesterday with the Ziegfriedz, I know they were there virtually, but it was really heartfelt just to hear them speak about their journey with the university and their commitment to the institution. So I think it was a proud moment, and as you said, I think the temperament, of how we want to structure deals like this, not just the magnitude, but just how it's, I think it was a lot of great work that will serve us, serve us well. I had one challenging question, Dennis, with the changes in the Department of Education and kind of the idea of gutting that department, what does that do, like we've already struggled, maybe this is a question for law, we've already struggled with some of the financial aid and getting the right, do we have any early indication of how that might, the implications even going into this year, or is it going to be, take a lot of play out? Yeah, I'll take a very high-level crack at it, but we have here, obviously, Laura Carlson, and Rina Halam, who is the dean of the culture education and human development. I think hours and hours of sleep about that. We've been talking since December about it. So we haven't necessarily seen the brunt of all the changes now. there is concern about the Pell Program in the future, particularly because there is early reports that there is an underfunding, significant underfunding in that program and might not have the ability to support you at the same level, also where it's administered longer term. It's not clear. I do believe that there will be a push to see a few more of the programs that are currently other than the Federal Department of Education move to the states. But I'm now going to transition to Laura and Arena to give us more, whoever wants to go first. Maybe right not. Yeah. Can you hear me? Okay. Yeah, financial aid, of course, we're looking at that. There have been some articles out that have projected a potential deficit in the Pell packaging. Not sure it'll impact this year, but for current year. So we obviously have our eye on that and are really working very carefully around what our packaging strategy is. Rina, do you want to say anything on the research front? Sure. It's also very uncertain on the research front. We know that the vendor who kind of coordinates the reviews of all educational research has been cut. So the grants that we submitted earlier in the year have not been reviewed. And although we are submitting grants right now, sorry, also no process for review. So we're very concerned about a disruption in educational research. Any other questions for trustees and we'll have an opportunity at the end when we hear from the rest of the leadership. Okay. All right, thank you and Miguel, you're here. He stole some of your thunder, Miguel. He would never do that, right? He's highly agile and flexible. The federal actions on research and and more broadly sponsored activities. So as President of the Senate just told us, there's been a number of executive orders that have a direct impact on institutions of higher education, and most of them also have had a direct or indirect effect or impact on research, be it because they target a specific area of research that might now be under threat, like for instance, things related to clean energy or energy justice, or because they impact components of awards like, for instance, DEI activities that up till now have been not only funded by the federal government, but in fact required of grantees. So that has generated a considerable uncertainty. So the first action that really had a widespread impact on research was a memo by the Office of Management on Budget. This was a week after the inauguration. And that called all agencies to freeze a reimbursement for all federal awards. So that will have essentially paused our research activity until agencies had decided to resume our ability to invoice costs. Luckily, there was an immediate reaction by 22 Attorney Generals that sued and Judge McConnell in the U .S. District Court for the District of Rhode Island. immediately issued a temporary restraining order, and this is right now that actually led OMB to rescind the memo. That was then followed by agency-specific memos that essentially mirror the OMB memo. Judge McClellan again told the agencies not to do so, and so that they've actually, after that, they resume operated. normally. So there was a period of time. There was about three, four, five days where we were actually unable to invoice and the payments systems for the various agencies stopped working. But again, after this court action, they resume operating normally. However, there was also a freeze on federal aid, sorry, foreign aid, and that was actually unchallenged. So that actually has had some impact at the university because some of the terminations that President Assanis referred to earlier, had to do with programs that had a four and eight component, and again, those have been terminated. After this, there's been a number of agencies' specific actions. So as President Assanis also mentions, we have received a number of stop work orders, which are essentially requests from the agencies to principal investigators to stop activities or a subset of activities within a grant or contract. Some of those have been rescinded, some may perhaps have been the fact of rescinded in the sense that the reasoning for them had to do with executive orders that are now subject to temporary restraining orders. As has been already mentioned, we've received five terminations, and again, as President of Sallis also said, of course, it's a tragedy for those involved, but it is really a very small fraction of our total number of awards. And as also, as President Dessen has also mentioned, there's been widespread delays in funding. We just heard about Department of Education. They're very pronounced for the National Institutes of Health, where basically the award issuance have become almost non-existent. There's just a very handful of awards that have been awarded, but the new award activity is essentially zero. And so we do expect that for the NIH specifically, it looks like there's some signs that a grant review and is resuming, and so we expect that new awards will be forthcoming, but we do expect at the very least a six -month delay at least in the issues of an award. So that is going to mean that some of the funds that we expected to come to replace awards that were terminating will be hopefully coming, but at least six months late. So there will be some gap in funding. And then there's also been a number of certification requests that agencies have come up. And those, in their milder versions, consist of agencies asking principal investigators to certify that none of the funds for the award are going to be used on things like DEI activities. And the problem is that they have not defined exactly what DEI means. And so that has caused some concern and fear and confusion as to exactly what PIs can do. and what they can. They have also started requiring institution -wide certifications that the institution as a whole does not operate what they consider illegal programs, for instance, related to the EI. That is very concerning because you might have followed the news what happened to Columbia University where the administration decided to pull a substantial amount of funding because of the perception that they had failed to respond. or they had failed to adhere to the terms of an executive order. So we are really monitoring that with concern. Something else that has transpired is that, and this is thanks to leaks that have come from various agencies, is that all agencies are implementing this keyword approach to flag awards for secondary review. These are very broad lists of terms, and they include things that often have nothing to do with the intent of executive orders. So as an example, clinical trials might include the word inclusion, inclusion of a subject participant, and that has nothing to do with the context of diversity equity and inclusion. But nevertheless, these awards are flagged and then subject to additional scrutiny, and that also contributes to delays in funding. This also suggests that there is going to be, as President Assange has also mentioned, specific areas of research where our faculty might be hard -pressed to be able to secure federal funding. And so this leads to concerns because these faculty are going to have a hard time pursuing the research that they have been working on up till now. And there's going to be, of course, some consideration about how we ensure that they are able to pivot into related but more fundable areas. And this, you know, it's very relevant to the earlier conversation about the Department of Education. There's been widespread staffing cuts at most agencies, and again, subject to court actions. There's been some rehiring as well, and that it's a clear where things are going to settle. But at the very least, what is certain is that this is creating some confusion and chaos at the agencies, and that is again contributing to delays in proposal review and issuance of finding decisions. And then so the second, and again, President of the Senate has already sort of covered this, but the second area of concern has to do with this discussion about FNA or indirect cost rates. And again, this came up on February 7 when the NIH issued this notice that they were decided, that had decided to cap the reimbursement rate to 15%. And this was meant to be retroactive, meaning that it was not just for new awards, but for existing awards as well. And so you heard from President Assange's what the impact on the institution will be. We're not alone in that. Most universities in the country will be affected, so much more than us, especially institutions with the medical center. And I just wanted to address this because there's a lot of confusion out there related to what this illusive indirect costs are. And so I don't want to make it clear that these are not arbitrary costs, they are real costs, and the FNA rate is a reimbursement for costs that have been already incurred by the university. So when an agency provides a grant to fund specific research, there are direct costs, and those direct costs are things that are directly attributable to the project. For instance, paying a graduate student that is working on it or purchasing a piece of equipment that is necessary or consumables that are necessary to carry out the research. But there are also the indirect costs. The indirect costs are things that are not necessarily easy to attribute to a specific project. Those could be things like the utilities bill, how much of the electric bill actually is attributed to a particular project within the entire bill of the university, right? So things like maintenance of research facilities, research equipment, large research equipment that the university maintains, administration that is necessary for a research. administering and managing grants or for complying with the strict regulatory requirements that come to us from the federal government and for the various agencies. And so, and these rates, again, are not arbitrary. Essentially, periodically, institutions provide a federal government with an accounting of all the costs that they have incurred in support of research, and the rate is directly calculated from that on the basis of the amount of federal dollars that the institution receives, with the idea that on average the reimbursement will basically match the expenses that the institution incurs for it. It's a difficult to understand, but nevertheless fairly pragmatic system. So any cut on this rate is really truly going to impact the ability of the institution to support the research that our faculty conduct. So again, for the moment, as President Astana said, this is subject to a nationwide injunction, meaning that the agency continues to reimburse us at our federally negotiated rate, but obviously we monitor this with extreme concern. So the one thing that the research office has been doing, we've set up a system to monitor all of these delays and terminations, so we want to make sure that we hear from faculty widely all of awards that are perhaps pending review or that have received fundable scores, but nevertheless have not yet been awarded, stop work orders, terminations, and we are communicating, this information with our congressional delegation, as well as with the Delaware Governor's Office to keep our Attorney General informed. And so as a sort of summary, so the current landscape is really that our researchers are able to continue submitting proposals. So all the federated agencies accept proposals and the systems are operational, although as we have heard, in some cases, we have concerns about whether the proposals will be reviewed or not. And again, as President of Sanis mentioned, despite all of this uncertainty, and there's been some significant psychological harm, I would argue, but in practice, it's a relatively few number of awards that have been directly impacted. And we have some of these executive orders that are subject to temporary restraining orders, so the impact is not yet being felt. And finally, some of the agencies are starting to acknowledge something that has been our guidance from the start, which is that the terms of condition of an executed award are enforceable. That means that, The agencies do not have the ability to refuse to reimburse us for costs that we have incurred as long as those costs are consistent with the terms of the award. And there was some confusion initially at the end, and luckily we're, I think, were reaching a point where there's at least some clarity and agreement on this point. And again, President of the Senate has already mentioned this, but the other thing that happened after these slides were prepared is that the Congress approved this, this continuing resolution, which has this impact on congressional -directed spending. And of course, we continue to monitor the situation with concern, because in part because of all of this staffing issues, agencies were receiving limited communications and limited guidance from federal agencies. And as I've mentioned already many times, review panels are being delayed, and we do expect, I mean, in fact, we know it's already having an impact on timeline for a fact. funding. We've continued to receive some stop-porchordes, especially terminations slowly, but they continue to come. And then, as I said, there are areas of research that are under threat, be it related to climate, arts, certain energy sources, et cetera. And the other thing that has been apparent also since these slides were made is that they relate to immigration actions. And so you might have seen some concerning news in the press, but there's also some rumors about an impending travel ban, and we monitor that with concern again, because this impacts some of our foreign graduate students that are here doing research, but also our ability perhaps in the future to attract talent from certain countries. So the research office, just like the university, has a created a webpage that's dedicated to research-related. news to try to keep the community informed. We have, we include guidance as well as agency specific actions. And we send out an email every week on Fridays with the news of the day. We thought we might only need to do it for a few weeks, but I guess we'll have to continue. And we have an email where we monitor questions that the community might have. And last thing, I wanted to, I wanted to leave you with something a little bit more. optimistic and positive is that thanks to our excellent Associate Vice President for further relations, Angie Anderson, in collaboration with the Research Development Office and the Office of Communication and Marketing, we are putting together UD Day in D.C. We kind of discussed internally whether it made sense to continue, given the circumstances. We concluded that there is not never a better moment than now to actually go to the Hill and advocate for the importance and the impact that our research has, not just for Delaware, but also for the country. And so one of the things that we are trying to do is highlight projects that involve collaborations with Republican government states, so to show that science is bipartisan, and that again, the impact is seen beyond the state of Delaware. It's also an opportunity to engage with federal agencies, as well as with our alumni in the DC area. And I'll conclude here. If there's any burning question, I'm happy to answer otherwise. So you've been busy, Miguel. Unfortunately, yes. So I had maybe a tough question, but if we look at the uncertainty going forward, you know, we have obviously the faculty, we have the students now. Are we changing our strategy on a forward looking just with the uncertainty about programming and research? How are you going about the kind of the whole idea of resourcing? So, well, so we have, I'm sure somebody else will address this. but we have no less than, I think, six different meetings related to federal action a week between the senior leadership team with the deans. And it's all about trying to develop scenario planning and try to come up with ideas for mitigation strategies. I think one of the problems that we have is the uncertainty. If we know exactly what the future is gonna look like, it will be so much easier to plan for it. Right now, there's a huge difference between agencies going down to a 15, just focusing on the FNA problem, there's a huge difference between agencies going down to 15 percent, or if things end up settling at, say, 45 percent, the sort of the type of transformational mitigation strategy that we'll need to develop will be really, really different, right? So we certainly have been looking at all these scenarios, we have some ideas of how we could react. Obviously, you know, there are things that are going to require certain sacrifices because obviously if the amount of resources decreases by that much, we'll have to make cut somewhere. And again, we will really only want to do that if it's really necessary. But there's also, I mean, we also have been going with Provost Carlson. We've had lots of conversations at the more sort of individual level with colleges, department chairs, in part to try to discuss local strategies that can also be adopted, especially in departments that focus on areas that are probably under threat. Any other questions for good? I guess just further to that, if we've seen an effect on PhD candidates applying in certain areas where it may be highly dependent upon grant money? So Laura would have a better, I think, certainly foreign students. Maybe the foreign is a sort of, it has a double sword there. I'm just wondering, even domestic. So we've been looking very carefully. It is PhD admissions season right now. In fact, we're hosting a number of visits in our departments and so on. And so we had a three hour meeting with the deans where we talked about, what are the How are we going to grapple with thinking both about how many students we admit? In some colleges, letters went out in January, for example. Others are still waiting on students to accept, and other places have sort of put limits on their graduate admissions, as you may have seen in the news. And we have not made that as a university -level decision. So the deans are working very carefully, department-by -department looking at what are our financial obligations to our current students. How do we make sure we can cover those? And then what's left that we can feel like we can mount for a class. So in some cases, that is putting contingency funding language in the letters, for example. But it is the case that we're looking at reduced admissions into our PhD programs. If you look kind of college by college, that's a strategy that some are adopting, in part because we also think we might over yield. And so, yeah, it's a dynamic time. But we're looking at all of these mitigation factors that you're seeing elsewhere. You're not going to hear, I think, a university level, the University of Delaware is doing X because it is very much a local unit decision based on what their budget is and what their resources are, how they can cover their students, and so on. I think you did. You had a question. Sure. Miguel, thank you for that overview. Two questions. One, have you talked to some other universities about what their definition of FNA is? Seems like 60 to 65 percent is a pretty high number. Just, I mean, looking at it from an industry perspective, not from an academic institution perspective. So perhaps there is a chance to have a common understanding of what that is and what should be included in overhead, what should not be included in overhead. That's part one of the question. And the second one is, I mean, there's so much coming at you, how do you triage what is specifically relevant to the University of Delaware in the current time as opposed to sort of generally having so many different initiatives coming at you from the government? Okay, so let me start with the FNAE. So, again, it's the federal government that tells us what is an entire cost. And so this is, it's not, it's not. It's not. It's not. the scheme that the universities created. It's the federal government that told us, here's how we're going to do this. And again, it's a pragmatic system, because if one had to try to figure out exactly how to charge specific amounts for a particular project, it will be really, really hard. I mean, just imagine we'll have individual metering for each piece of lab equipment, right? So every university includes exactly the same cost. I would also point out that indirect cost rates are way higher if you look at federal labs, way, way, way higher. It's the same cost that a defense contractor will incur, and they charge similar rates or higher. The difference in rate is simply because there are economies of scale that are not necessarily equally realized at all universities. And so, again, on the one hand, you put all of the costs that you incur, and then all of the federal funds that come in. If you're receiving relatively small amounts of federal funds, there's less economies of scale. And so that tends to result in a rate that is a little bit higher. If you have a lot of federal funding, then you can affect some of these economies of scale and end up with a smaller rate. I mean, a slightly different question is, can we do better? And can we figure out how to be more efficient? And absolutely we can. And I mean, that's part of what we're trying to do. every day. But again, it's how the federal government asks us to do. But there must be a theoretical limit to that if the definitions are mandated, right? And it can't go from 65 to 15, which is what it appears to be is the limit. And that, of course, is motivated by Bill and Melinda Gates Foundation's idea. And I don't know if the definition is the same in that 15% versus the 65%. Yeah, not exactly, so sometimes foundations, well, so foundations prefer not to have to pay these costs, and so then what happens is that the university has to absorb them. To an extent, again, because of economies of scale, the university has an easier time absorbing this costs when there's a healthy amount of federal funding that comes in that actually pays for it. I would argue that maybe the problem is more with the foundations than with the actual system. But it is true that some foundations do allow for different costs to be included. I mean, it varies per foundation. In some cases, they just have a flat rate on every kind of . For instance, the federal government does not provide indirect reimbursement for equipment purchases. Some foundations do allow that. So it's not necessarily an apples -to-apples comparison. But it is absolutely true that when, you know, if the rate, when you know, if the rate, when you to 15 percent, if we continue operating as we are, universities will have to provide a massive subsidy to research. And the other question is, well, unfortunately, most of what the federal government is doing either has a direct impact at the University of Delaware or has potential to result in impact. So I think there is triaging only on the sense of what seems. to be more likely to create impact and perhaps slightly more urgent because it might, you know, have a direct impact on a specific, you know, set of constituents on a particular project or something like that. And obviously the amount of impact. So there are some of these, some of the concerns that might, you know, I was mentioning this certification, so that's obviously something that keeps me up at night because, depending depending on what the administration does with that, that could affect all of our grants and our entire federal funding, right? So in that sense, I would prioritize that a little bit. But again, I think there's very little that we're not monitoring or following. Again, it's not just me, but luckily I have a fantastic team that helps me do that. And the whole senior leadership team is, as I said, we have these constant meetings where we keep each other informed. And I think we can't really afford not to keep informed of everything that's going on. One quick thing, Oudit, is it's particularly challenging for the University of Delaware right now because, as you know, in the past nine years, we've tripled our research expenditures and volume. And we've geared up for performing at this level with new facilities that we've added, but even more importantly pertaining to FNA with investments in areas like compliance, human subjects research, all of those kinds of things, which obviously now they're like invested to be at this new scale and, you know, how do you trim down this in a hurry and do you need to trim it down? So that's just a major worry we have. I think we have one last question, Donna, on the screen. Did you have a question? Oh, you're mute. No sound. There she is. Donna, you're muted. Yeah, no, you unmuted me, thanks. I was just wondering for Laura, and I know that not only five of the projects have been canceled, but is this going to have an impact for professors who are on their way to getting tenure like are we going to have to re-look at the fact that some people have been affected because their research projects have been not funded and will we end up having to give them more time kind of what we did during COVID how we extended that yeah it's a great question we have formed a task force to look at exactly this during COVID time you all had an impact statement that candidates for a promotion and tenure would put in their packets to indicate how the pandemic impacted their work. And we're sort of working our way through the process to identify all the different ways in which this could halt career paths for our faculty. It's more than research. I just want to make that point. It is also curricular. It is also service and community engagement. And so we're building kind of a big group to look at all aspects. aspects of that, and we do think it will have a long tail, right? So even if this is a simple fact of grant reviews being delayed six months or so, that's difficult. So I fully expect that we will need to be thinking about those impacts and needing to mitigate them in the tenure and promotion process. Madam Chair, if I could follow up for Laura and for Miguel, then with these public facing websites that you've created, which I think are really helpful to keep everybody informed, as these six different task force and meetings happen, will you be posting information on those websites to keep not only us informed, but more importantly, faculty and students? We are, I mean, we keep them updated. It's not that we created them once, and so every time there is something new that happens, and we post an update to the website, yes, absolutely. Thank you. There's another mechanism that I think is actually quite important too. And so as Miguel referenced, we as a leadership team meet three or four times a week and we're meeting with the deans and from that meeting, so from the leadership meetings we come up with talking points that we give to the deans, the deans give to the chairs, the chairs give to their faculty and that's been a really effective way, I think, to make sure that the communication is flowing. And then I do think it is quite important that the work that Miguel and I are doing going kind of college by college or department by department, whoever wants us to come in. And it's not that we have answers. We're not going with answers. It's very much like this conversation here. It's just here's how we're thinking about things. Here's what we're doing kind of behind the scenes, the scenario planning and letting everyone know that this is all happening to all of us together. And we all need to be part of figuring out how to adapt. Okay, I think we need to move on good questions. Thank you. And Laura, I think you're up. So you all may remember that I'm a psychologist as my home discipline. And so in a time of uncertainty, I think it's really important that we think about what are the things that we can control when we feel like we're in a world where there's a lot of things coming at us that we can't control. And so the way I've sort of started trying to think about this is what are the potential impacts on our people. And what are the impacts on our kind of budget and our ability to do the things that we want to do to complete our mission as a university? And so the impacts on the people, you know, this P&T impact statement is an example of that. You know, I would say Jose in Student Life and Michael Chagos and undergrad and Lou Rossi and the grad world and Rabi Amagan and International are doing a really great job doing outreach and thinking very carefully for our students. So in terms of our people, it's very individual, lots and lots of conversations. What I thought I would share with you is also the efforts that we're doing to try to mitigate and prepare us so we can continue to do the work that we think is critical in terms of research, teaching, and service at the university. And so there I would want to take a moment to just thank the deans. I thank you for being here, and I thank them for their partnership, all of the work that I'm going to show you is a reflection of their leadership and their chairs work and their faculty work in the departments. And there's some bright spots to be really happy with and that's always good to hold up the places of hope when we can do that. So the first thing I'll do is ask Pam Norris, our new chair of Dean of Engineering and Caleb Everett, our new dean of arts and sciences to just wave because I'm so happy they both started March 1. Okay, and thanks for all the other deans to be here as well. So I've segmented this in two ways. The first thing is, what can we do right now to affect the financial impacts of the year that we're in right now? And you remember I talk a lot about kind of breaking the calendar and breaking space, and by breaking the calendar, I mean, let's think beyond what we do in the fall, but how do we leverage our winter session, which is such a unique aspect of this university, and how do we impact students who might want to join us in the spring who weren't able to join us in the fall. So I'm going to tell a good story about winter and spring trends. This reflects a phenomenal amount of work from the deans and their teams and the colleges and departments, really focusing on ways in which we can leverage winter. So that's the first place I'll start. So what you could see is an incredible growth in the number of sections that are offered. This is interesting to me and powerful because it means people are thinking. thinking about new ways to think about winter session. Those sections are not all full, which also means we have great capacity to grow enrollments in those kind of new sections. So you both want to expand the offerings and then fill the offerings. Consistent with last year, about 64% of those sessions are online. That seems to be kind of where we're landing between online and in-person format. We had pretty aggressive targets for winter, and we've exceeded those targets. by a healthy amount and that healthy amount means that any additional revenue we got from posting summer one and summer three is all additional on top of that. So that's a really good new story with a lower enrollment class this year. We put out the call to the deans and the departments and the colleges to really work on winter and that really you can really see an impact there. Our student count remained stable relative to last year and that's important because there was a tuition change adjustment that we needed to go in place and we want to make sure that it wasn't going to hurt the interest that students had in winter and absolutely not the case. So that's good. The second mitigating factor that we really worked on was spring, so admitting students to the spring, both transfers or new students. These slides tell an interesting story. if you look on the left side the new spring domestic students you see the three categories undergrad transfer spring admits or grad spring admits and the red is 2025 relative to blue last year so the story in the domestics is we're all up that suggests a lot of really important work on yielding those students and so on spring admits you know that's that looks like a pretty small number of 20 but it's out of something like 48 applications so it's a very ridiculously high yield. What that tells me is we really need to be, you know, announcing to the world, hey, we would love to have you come join us in the spring and really boost applications up. But the yield strategies seem to be working. The slide on the right, the right half shows for our international students, and that does show some concerning trends that probably will forecast into fiscal year 25, 26. Numbers seem to be down, particularly on the grad side for spring admits some of that is visa related and so you know for those folks we're intentionally reaching out to them and saying hey you can come join us in the fall if that's possible and so on but that is one of the troubling trends that we are watching for coming up so I would like to now spend a little time talking about the next year 25 26 and there's a number of initiatives the first one I want to do is a shout out to the faculty or developing programs. So this is a plot that represents proposals that go through the faculty senate. So a big shout out for the amount of work the faculty senate does in terms of their faculty governance process in approving these programs. And so you can see by category at the bottom, you have some associates, new associates programs, bachelor's programs, dual degree bachelor to masters. Those are like four plus ones. grad, new grad programs, and then for the first time, the non -credit certificates are going through the faculty senate. That's why there's only one bar there. And clearly, the takeaway message on here is the high volume of the dual degree programs, the 4 plus 1s. These are really great opportunities because the 4 is the undergraduate part, an undergraduate major that's already on the books. The 1 is the master's program that usually is already on the books, and what's required is the connecting of the – of the two. So in our March meeting of the Senate, for example, 10 of that 37 were approved. So that's really great. Some of the strategies you can think about to drive traffic to those graduate programs. If they know they're coming in for a major, like a four-year degree, we should be telling them from the beginning, hey, you can also add on a plus one and auto enroll you into a graduate program. That's a strategy, for example, that are online master's in nursing is using to great effect. So this enables a lot of great possibility. Our enrollment trends, so as of the 11th, number of applications is over 40,000. I think the number this morning was 4884. We may get to the 41,000, Dennis. That is continued year-over-year growth, suggesting really strong, strong interest in the University of Delaware. The second kind of box is a round of our target for first-time, full-time students that typically have been at 42 or 4,300. We're aiming for that again this year. That's really important. Back to your question, Madam Chair, about Powell, we want to make sure that the financial packages that we provide that we're not overextending. And so keeping it to a smaller class, we did all kinds of scenarios. What does it look like? We do a 4,600 class, for example, and so on. We feel pretty comfortable with this. That scheme assumes a 9% melt, so it's quite likely. Actually, we'll end up quite with more than that, because right now it's forecasting maybe back to the normal 5 % to 6% melt, although it's hard to know with any certainty. World Scholars applications are up, and our target is up for that as well. That's a good news story. World Scholars is such a unique program here. It's celebrating its 10th anniversary this fall. One fun fact that I learned about, which I want to share just to brag about those students, is there's been at least one recipient of a prestigious Department of State Fulbright Award out of each class in those 10 years. And this year we have six semifinalists as they're working through that process. That's incredible. That suggests that that is such a formative. transformative experience to go abroad kind of in your first year here and then the continued engagement with international throughout your time applications are up and about 20% of them are for the new site in engineering in Newcastle and that's that's an exciting opportunity that for our engineers a number of honors college admits is up and interest remains continues to grow in the honors college and then number of associate students saw a huge increase in the number of direct applications particularly up our non-residents Georgetown and education and nursing I think we do a phenomenal job Rodney Morrison is here and his team with decision days so we get people to campus you've heard us say you bring him to campus and they fall in love so these numbers we've had two decision days we We have one more to come. Those numbers are over 20% more over time than last year. At each of those events, we had two times as many students deposit at the event. That's a great image. Like they leave and they're like, here's the check. We're coming here. So that's exciting. And then March 8th also included our disco weekend. This is where we invite our distinguished scholars. And we had 89 of them with us. trends are also show a mostly positive story so certainly the circles represent that that data point is compared to point in time comparison so acceptances are point in time to this time last year up 45 percent master's program acceptance is up 45 percent international acceptances are up although I'm worried I don't know how reliable that is based on visa and yield for international last year is really where we were hurt. It was upwards of above 50% melt. So quite worried about that. And then on this slide, too, we talked a little bit in response to Ed's question about doctoral program acceptance is that is sort of an intentional compression. It hurts our hearts to have to do this. But it does reflect kind of it going down, although we will be admitting new students this year, unlike other places, and I'm very grateful for that. Some of the good story here is, oh, sorry, let me go back. Some of the good story here is reflected on some of the efforts that the graduate college has done in terms of enhanced marketing. So as one example, our MS program in computer science has an 80% growth in deposits based on kind of a really focused marketing campaign that they did in partnership with the grad college. The MS and finance went up from 8 to 15 deposits this spring alone so far. The MPH in epidemiology more than doubled their number of acceptances and so on. Programs are really thinking hard about their modalities, whether they do online or hybrid or in person. The virtual open houses are also being redesigned to great effect. So a good example of that is the data analytics open house. six colleges were represented, 16 programs, 120 students attended. That's two times more than last year. We expect to see a great yield for that data science program. Okay, and the last thing I'll just summarize for you is where we stand on faculty hiring. So we are in a lighter year this year, last year, over the course of the year, we ended up with about 90 new faculty who joined us, have about 63 approvals. this year so that's a pretty big reduction then you can just see 55 of those 63 have been posted 38 interviewed 26 offers made 21 offers accepted of that 63 13 were conversion from temporary positions to CT positions which suggest I think is actually quite important because long-term temporary positions reflect a real need in the curriculum and so that we should be bringing in CT faculty it's hard to project what things will look like next year certainly we'll have some retirements and there are certainly some colleges that absolutely need to fill those positions so I can't imagine a world in which there's not when there's no faculty hiring but again it's the same answer to the grad admission story it's an individual department to by department college by college basis so I'll stop there thank you thank you Provost Carlson I had one question on the honors We talked about implementing a differential. Did that go through and we're still seeing the uptick or is that? So that is a proposal that will sit in the spring meetings here. It won't go into effect if it's passed by you all until the fall. Okay. So that doesn't reflect the number of the uptick you already have? Anything else? All right, great. Thank you, Laura. Good morning, everyone. I wanted to give you an update of where we are in our benefits optimization project this morning. And I want to start by answering the question of, for those of you who don't know, is why did we decide to do this? So this is something that's been talked about for several years about our benefit strategy going forward. Historically, we have participated in the state health plans, insurance plans for medical and insurance and prescription insurance. And we were talking about our claims experience and our financial status and also our ability to influence what those plan designs look like. And I'm pleased to tell you that we've decided to move to managing our own plans, effective July 1st. And we think that the evolution of our benefits, philosophy, and strategy is crucial for maintaining our competitive edge as an employer of choice. And ensuring that our employees, our retirees, and their families continue. to have rich benefit options that are also adaptable and fiscally sustainable in the future. We recognize the need for a more flexible approach to decision-making, especially given the challenges posed by rising premiums in the last few years. Our year-long review process, which included diverse perspectives from faculty, staff, and retirees, through our benefits and cost containment committee that I co-chaired with the former president of the AAUP, DennyuP, Gallo enabled us to be inclusive and transparent in our process. And we decided that by managing our health and prescription plans directly will be better positioned to manage our expenses and also tailor solutions in the future that better meet the changing needs of our employees and our community. Some positive outcomes that we expect include autonomy, control over our plan design, financial benefits, and improved employee experience, and future opportunities such as diversifying our plan offerings, and perhaps new wellness offerings and programming, and also a potential partnership with U.D. Health as a plan enhancement. So where are we today? On February 28th, we notified the state and also the UD community that we were going to begin managing our own health and welfare plans in July. And then immediately we moved into implementation. Many people had reached out to me at this time and said, you know, congratulations, great effort. And I said, thank you, but really the work now begins because we have open enrollment in May with a plan effective date in July, and there is a lot to do. And so I won't bore you with our project plan, which would take most of the day to get through. But I wanted to give you a slide that shows some key activities of where we're at now and the things we're working on. And this includes the final vendor negotiations and contracts, budget planning, staffing planning, technology updates, and a robust communication and change plan. And I think that's really critical because the communication around this, I believe, has been solid. And we have all kinds of activities and programs ahead to educate the faculty, the staff, and the retirees on this change. So I'll take a moment to give a plug for our frequently asked questions page. It's a dynamic page. We populated it with questions that we wanted to answer, and as they're coming in, we're updating it. So please take advantage of that. Open enrollment is May 1st, and it's going to be a really significant milestone for us. And our goal over the next few months is to ensure a seamless transition. If you ask me what my definition of success here would look like, it would be two things. things, it would be some realization of savings financially, but it would also be an uninterrupted employee experience, where ideally the employee, their families would seek their medical attention they need, just as they always had, and not even noticed that a change happened in the background. So what can employees expect in FY26? As promised, we can expect continuity and our benefits, which is vital for everyone's peace of mind. The medical insurance options will remain unchanged, ensuring that employees can continue to access the same quality care through Highmark and Aetna through the four plan options available. Additionally, the continuation of our supplemental benefits, our employee assistance program, as well as new wellness programs, demonstrates our ongoing commitment to employee well-being. As part of the campus announcement, President Asana, established a Benefits Advisory Committee that will launch in the fall, and he mentioned that earlier in his opening remarks. This is a significant step for us to continue the effective collaboration that we had in the benefits and cost containment committee. That committee will now start to focus on other topics of interest, including dependent care, and then we'll transition away with the inclusion now of the BAC. This committee will have a vital role in shaping our future benefits, our future benefits, benefits philosophy and ensuring that faculty and staff continue to have a voice in decisions. We have representatives from various groups. There will be nine voting members, including representatives from human resources, each of the unions, and also a couple of nonrepresented employees. We think that that's really important, that they can review options, offer their opinion, offer feedback from their peers and help us shape what might change in the future or what might continue to stay the same and this will be vital feedback for all of us in administration that's the overview of my update you want to take a couple moments though and thank everyone that's been involved in this my colleagues in finance o gc ocm all of you that either volunteered or volunteered to join the implementation process we have probably about 50 people working on the implementation teams, plus our Siegel partners, and they've been really effective and are doing a great job. Every Friday afternoon, I get an update from my project manager of all the things that were done that week and the important milestones for the following week. I'm pretty surprised at everything that's being done, and it's been great, so I also want to thank my staff. We've been tremendous work here. And so that's my update, and I'm happy to answer any questions now or at the end. Great, Melissa. That's been a wonderful accomplishment. Do we have any questions? Madam Chair, this is Claire. I have a few questions. Melissa, congratulations. This is a significant lift in a very condensed amount of time. And thank you for your leadership on that. Can you share with the board the amount of money that university spends on health care? As I understand it, there's three groups, your active employees, your pre-Medicare retirees, and then the Medicare retirees. What does that cost and what percentage of the budget is it, please? 24 it was 88 and a half million for FY 25 the budget was 112.7 and year to date projections are 107.5 and that's broken down with 78 million for active and then also 11ish million on the retiree side which equates I believe to 6% overall of the budget but my colleague Mary Romler can correct me if I'm not accurate on that but I believe it's about 6% of the budget it? It's 8.5. 8.5. Thank you. And then with this change, will University of Delaware now have to bargain with each of our unions who represent faculty and professional staff every three years for health care benefits? No. It's a great question. I've been asked this several times. It won't change our bargaining obligations. Benefits in general are a bargainable item, and if there are significant changes that we are proposing to the plans or we want to revisit our cost share with our employees or something like that then yes that would involve our bargaining but for moments where we're not going to anticipate or make any changes it wouldn't require us to do anything new from bargaining perspective thank you you're welcome i think terry murphy my question was answered thank you right great hey terry this is mike i did have a question sure go ahead mike yes this is a big a big move and i think a very important critical move for the university but It's our first time to actually take this step. What do we think are going to be some of the biggest challenges from an implementation standpoint that we need to keep our eye on it? So I think the biggest challenge is just the timeline. We knew this was going to be compressed. It's a lot to do in a relatively short time. And while the plans don't go into effect until July 1, open enrollment is May 1. And six -ish weeks away, I'm about to put an advent calendar in the hallway so we can count it down. But I think we were well set up. up for that because we knew in advance with SQL's help the type of implementation teams we would need around technology and communication and open enrollment and whatnot and so I think we're really in a good place but the other piece I would say is you don't we don't know what we don't know and what what unusual questions might come up or hurdles we might have to navigate but it's it's going well so far so I remain positive thanks appreciate that just picking up on Mike's question I have I know we have some additional resources hires that have specific they've been posted or they how are we doing on the fill in those roles yes so just last week we posted a couple of positions in the hr office to do planning and administration and analysis um it's important that we get the right people and and vast experience in this um and so obviously those individuals are not here now to help with the implementation so it's really everyone in addition to their day job pitching in and getting things set up and then hopefully over the summer we'll have those positions filled for the ongoing administration. Terry, can I ask a question? What's that? Oh, they're Beth. Melissa, can I just ask you? I know there's an expectation, you know, we're going to have savings coming from this. And so how are we insuring from a stop loss perspective that we're protecting that? Can you just speak to that for a minute? Sure, that's a great question. We are working with Siegel on our stop loss insurance to protect us from catastrophic. claims and looking at what the different deductible levels could be for that. We also recognize that while there's indications that will have savings because our claims experience has been less than what we've paid in premiums before, we do need to build up reserves of around $20 million for two different types of reserves. And so that savings, if you will, would help to establish that. But the stop loss piece is going to be critical. And I also am pleased that both carriers are offering us a fairly significant amount of money each year to do wellness programming and things to enhance wellness as well. And so I'm hopeful that that will help. Thank you. Thank you, Melissa. You're welcome. Okay, I think Mary you're up. So I was asked to give an update on our fiscal year 25 budget and also some early indicators of fiscal year 26 in 15 minutes. So that's actually a fairly tall order. But I'm going to try to keep it simple. If we just go to the first slide, this is a waterfall that actually shows the changes from the condition that we posted based on the budget that was approved by the trustees in May. Just for clarification, we have a 1 .3 billion operating budget. The board approved us having an up to $54 million all funds operating deficits. understanding that we're facing some headwinds related to an estimated 14 million impact due to the Fair Labor Standards Act and what that would cost us, as well as headwinds related to increase in our health care costs. Since that time in fall, we updated the trustees to tell them that we had additional headwinds related to falling somewhat short of enrollment and having increased financial aid pressures. But over the course of the year, as is the case, the senior leadership team worked together. And I would give a big shout out, actually, to the provost team because we had fallen short of aggressive targets for our entering class at 4,300, came in at 4075, and had increased financial aid needs, partially due to increased retention, which is always a good thing. But working with her team, you heard that our winter numbers were higher, that 27 million impact to budget was brought down to a 17 million impact to budget. So although our total revenue is 11 million less than budget, it's because of the work of several incredible individuals. We also had increases to our state allocation versus budget and gifts, which lessened the decline from budget. Our expenses are also better by 35 million versus budget, and a lot of that is 20 million savings from not having the 14 million impact related to FLSA, but it's also due to the measures that were put in place at the end of fiscal year 24, which resulted in compensation reduction that has continued through fiscal year 25. So we were looking at a 54 million operating gap. We're now looking at mid-year at 30 million, but as Provost Carlson pointed out, doing better in things like summer and continued cost compression because folks are clearly being even more fiscally prudent in the uncertain environment that we're facing. We're looking at all funds operating condition of 30 million. In addition, our non-operating spend, that's the capital When we look at the capital expenses, the anticipated amount that we were looking to spend out of our own resources to support the capital plan is actually less than anticipated. And that is mostly related to the timing of invoices and spend on Building X and also deferral of some projects like the federally funded project, Sabre, that you've heard about at different meetings. This is a very high -level slide. In general, slides like this, I'm uncomfortable presenting as a budget person. I love graphs and grids. But when we talk about planning for next year, it's in these major categories. So when we think about enrollment management, it's we look at the size of the entering class target. Is it aligned with our revenue needs? Is it aligned with multi-year enrollment goals? Because there's no time that we plan for a year in advance without thinking about what we're carrying from previous years and the impact on our multi-year plan. We look at the institutionally funded discount rate. You all are experts almost on our discount rate now and understand that we look at our overall discount rate, currently at about 33%, but we also look at our institutional discount rate because that is actually what's putting pressure on the budget. If we can grow the externally funded discount rate, that is what we're going to be. what we're shooting for, so we're trying to plug in those numbers for next year. We're also obviously looking at graduate growth, and that is an interesting mix because we both have the funded PhD students, so that's a cost, but it supports research, but we also have master's students, which in many cases generate net tuition for the institution. And so planning for that is a combination of talking to stakeholders like Provost Carlson and Dean Rossi, but also looking at the headwinds. we're facing externally. When we look at tuition, fundraising, and revenue, we look at levers like the tuition rate. And we're committed to the affordability to our students. We look at what our peers are doing. We, of course, look at our costs, but that's all part of the calculation. We also plan, when we're thinking about external, is how we look at our fundraising goals. And so while we think about an externally funded discount rate, in some sense, that is funded by the work of Jim Dicker, working with the deans and others, to come up with a multi-year fundraising plan to support our scholarship growth. Some of our external funding for scholarship is, of course, provided by the state of Delaware. Every year, for the last several years, the state has increased our budget to support the first state promise program. We are mid-year and working with the state in the normal budget cycle, so we know that the governor's recommended budget was flat, did not include an increase for this. We presented our case, essentially, to the Joint Finance Committee, and that work is not done. We're fortunate to have a really strong government relations team led by Rhett Ruggiero, and also I have to call out Albert Shields because he's a really good partner in this. And so every year, we seem to do better than the governor's recommended budget. So I'm confident that we'll continue to make that case. I also would be remiss if I didn't talk about the F&A, because it's part of every one of these conversations. F&A is certainly the indirect cost that we bring in, and it is part of our budget. It's embedded in unit budgets, in support of research, and it's supportive, their budgets. So when we think about this, we're trying to project the potential impact of this on our budget moving forward. And so that is a challenge. When we think about the cost increases, they're the ones that you can imagine. It's how do we ensure competitive compensation for employees. We're looking at the salary increases planned for next year as well as the benefits costs. So one of the things that you just heard my colleague Melissa talk about is that we're looking to control our health care costs. While this move certainly allows us to have some more control, we're cognizant of the fact that cost increases could still be faced and how are they managed within the total benefits rate. Because health care is the most significant part of our benefits costs, but our benefits total cost are about $251 million, of which the health care is a little less than half. So it's just one of the factors that we plan and mitigate for. And then when we think about cost compression, we all know that we're facing continuing inflation, right? So how are we managing that, estimating the impact of that on budgets, but then how do we advise units about how they're going to have to compress their budgets and the choices they're going to make? So we're already having conversations with units about what these things look like and what the impact statement would be. With capital planning, I'm sure you're aware of this, but we still want to continue progress in our capital planning. We prioritize deferred maintenance. I'm happy to say that 20 million is in the governor's recommended budget to support deferred maintenance. But we also spend every year from our reserves for deferred maintenance. on projects as well so this year for instance 71 million is being spent on deferred maintenance even during these times and then finally a big one it should be in the biggest font is the external factors because while we're certainly concerned about a flat state budget the the reality is the state has been an amazing partner especially when considering looking at our peers we have had increases from the state for the last nine years. I have been here, whether it is the base budget or increases related to strategic initiatives that benefit both our students and the state. So the concern is the state is facing these similar external challenges. How might that impact the University of Delaware? And of course, the federal executive order impact. I probably won't belabor that at this point, but the level of uncertainty, related to this means that we spend a lot of our time running scenarios. We've shifted gears basically to make sure that there's all sorts of information in dashboards for senior leadership so that they can run some of these scenarios, whether it's something simple as saying if we go from a 60% to a 15% but also helping evaluate our cost share for research because the impact of these is going to be related to not only what the federal government does, but what we choose as an institution to continue to support. So these are the factors that go into the planning. So obviously people are going to look for a number from me. So at mid-year to tell you where we're going to be next year is certainly premature. It's not that we're not doing this on a daily basis, but if I had to give you numbers based on where we are in the current spreadsheet with about 50 different parameters, it's about a $30 million operating deficit for next year. But I caution folks not to think that's the number because that's the number in March as we continue to plan because we actually bring the operating budget for the board to approve May 1st. And we're clearly driving to a balanced operating budget within these parameters, but just for to understand some of the volatility, if our 1.3 billion operating budget, if about 40% of it is related to tuition, it's the volatility on the margins of those numbers that actually impact us the most. And so when we think about 100 freshmen enrolled, 100 more freshmen enrolled than the 4200 brings us in another 2 million in net tuition revenue, assuming the same discount rate, 3 .2 million in gross tuition revenue. So you can do the math that if we had 300 more students, we'd certainly bring that gap down. If we look at a 4% tuition rate increase, it's coming up with that 30 million, but an 1% increase in undergraduate tuition is another 4 million in net tuition revenue. I highlight these only because there's multiple levers at this point that we are looking at to come together with the senior leaders asking these tough questions, what can we do, what are the choices we're willing to make, and what are the impact of those choices, not just on the finances, but our long-term resilience, because a short -term decision now that might help fiscal year 26 can have impacts in the out years. So this is where we currently are, but the senior leaders, team that this is when we go into action and demonstrate our partnership and resilience because we're working through all these different scenarios I do obviously I already talked about the headwinds external the potential for the declining enrollment and increased student need we know that we we fell short of aspirations this year but the truth is the The combination of the provost leadership and the dean's strategy to increase yield makes me actually feel confident that the 4200 is at the lower level. As Provost Carlson indicated, we're actually doing better at this point in time last year than this year, that the melt seems to be less. But I don't want to be too positive. I guess what I would say is I'm not positive about the external impacts, but I'm confident in the senior leadership team and their ability to react and partner to manage these. I do want to say it should be obvious, but we're not alone in managing the impacts of enrollment challenges and the external challenges. Other institutions are actually implementing hiring freezes, looking at cost containment, travel restrictions. We certainly did that last year, and it is absolutely successful to achieve the financial gains that we are hoping to get. But our experience last year, combined with the continued fiscal prudence, means that having areas manage these at the local level while being informed by the strategic things we're seeing seems to be the best approach. So we're seeing the cost containment and the concern and the planning without having to impose institution -wide alternatives. We are, of course, also seeking faculty and staff input. A lot of the budget materials, the mid-year, the huge amount of detail that we have, was actually shared with our partners in the Faculty Senate, specifically the Faculty Senate Budget Committee for their input. So I'm grateful for their continued partnership and thoughts on this as we move forward. And the thing I want to leave you with once again is that that this is a process and a timeline. We're actually in the mid-year part of this arrow, and so this is the part where we start plugging in numbers and looking at impacts so that we can drive to the final all-funds operating budget for a May 1st approval. And it's also directly related to things that we will understand externally during that time, but also as we see how enrollment pans out. and what the final state budget looks like. So I think that's where I'll leave it and take any questions you have. Thank you, Mary. Any questions? Don, you must have a question. We clearly have our challenges, and I think Mary has laid them out well. The estimate of the 30 million operating deficit for next year, it's anybody's guess at this time. There are considerable headwinds, but we'll just have to see how this all evolves. Yeah, I think what's important, as you said, is that we all understand the trade-offs, right? With each of these choices and which ones may have long-term implications versus short-term, and I think we kind of all share that burden of trying to make sure we have that complete picture. So thank you. Anything else? Okay. So before we dismiss our esteemed panel, any other questions? because we're going to move on to other business. Did it have all our questions get? And again, you'll have another bite at the apple since we have our standing committee meetings coming up in the spring. And so we'll be continuing, obviously, these important conversations and discussions. So with that, I think I'm going to hand it over to our nominating committee chair. Is that correct? Terry? Madam Chair, thank you. The nominating governance committee has identified three individuals for election to the Board of Trustees at the University of Delaware, whose names may be found on page 48 of today's materials. The nominee committee recommends the election of Dr. Jeremy Axe to serve a term of six years. Dr. Axe's nomination is recommended to replace the prior election of Mr. Eric Fearwald, and the committee also recommends the re-election of the following two individuals to serve also a term of six years. That would be Mr. Christopher Baker and Mr. Guy Marcosi. Madam Chair, on behalf of the nominating governance committee, I'd like to move the election of these individuals at... Great, thank you. And I understand Tom Horne has been approved or affirmed by the legislature, which is great. So thank you. Do we have a motion? Mm-hmm. Second? Second. All in favor? Aye. I think we have a call. couple that must abstain and any opposed okay congratulations you're you're still a guy going to be in Chris very busy abstain but thankful thank you madam chair that concludes the report of the nominating governance committee thank you okay and I think I don't know if we're on time but we are going to conclude this portion of the public session today and if there's any additional business, unless there is any, I'll entertain a motion to dismiss. Madam Chair, I'll make a motion to dismiss the public session and convene in executive session. Thank you. Second. All right, great. Thank you. Thank you, everyone. Thanks for everyone in attendance, and thank you for the leadership team for putting this together. I think it was very informative for everyone at such an important time, so appreciate it. Thank you all for your support. All right. If the trustees present could find me in my bright red blazer and follow me to, we'll relocate for the executive session. Thank you.
03-18-2025-Recording
From Jason Kramer March 19, 2025
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