Notes From Richard Cate's Presentation to the Staff Council

Hi Everyone,

Here are my "unofficial" notes on Richard Cate's (VP Finance & Enterprise Svcs) presentation to the Staff Council meeting on 10/7/08--the meeting minutes that'll be approved at the November meeting are sure to be more complete, but these can serve as an early draft.

Also, kudos to Michael Breiner for attending and asking what turned out to be an important question, and many thanks to anyone else present from the Libraries unit (in case I missed seeing you while writing so fast!).


Richard Cate:

He began by speaking about UVM's current financial situation: UVM's operating money, held in the Common Fund that is backed by Wachovia, was frozen along with all the rest of Wachovia's assets. Common Fund investors are gradually being allowed to withdraw their funds but under very restricted terms and amounts. UVM was able to find other back-up sources for daily operating cash, so our day-to-day operations & payroll are being covered for now. Future incoming funds (tuition, etc.) will be placed into more, smaller, nearer, more accessible accounts.

For the Future:

Short term: he has made a new budget cutting over $2 mil., none of that from academics, and hopefully with no impact on running the university.
Good: fuel costs are not as bad as projected, incoming student tuition is more than expected, and cuts have been concentrated in central administrative costs.
Bad: the current budget is not as balanced as it could be; UVM had to use one-time funds to balance this budget. Those monies are not going to be available next time around, so we must find other sources of revenue.
Long term: budget hearings are slated for December to make new plans that address these concerns.

He also briefly mentioned PeopleSoft issues-- everyone is working on improving them. Reporting, budgets, and retros have all been a challenge, but all functions are getting better and more timely. The improvements are a combination of learning the program better and changing old accounting practices to match the PeopleSoft preferences and defaults. For retros, they're trying to find either a programming or an operational answer.


Q & A Period:

Q- Our Vice President asked him first to tell the Council about his personal history, as a way of understanding his depth of knowledge on financial and management subjects:

A- He was grew up in Calais VT, attending schools so tiny that sometimes there were only 2 students in his grade. He graduated from UVM in Civil Engineering, served in the ROTC, and worked after that in the state and private sector. He was city manager for Barre, VT, and earned a degree in public finance from SUNY Albany. He worked in the NY Education Department, and was VT's Commissioner of Education for 4.5 yrs. (There was even more, but this was the most that I could get written down)
His talent is that he likes to tackle things that others don't care for, especially fixing problems.


Q- Since only a percentage of UVM's operating funds were held by Wachovia, where are the Rest of the liquid assets?

A- He moved them, hopefully with the least amount of penalties, into shorter term, more accessible funds and treasuries. We will get less ROI this way, but the principal is protected.


Q- Why weren't our investments more diversified in the first place?

A- That previous strategy was not of his choosing; he would have selected resources that are less diversified but have a shorter maturity term along with greater accessibility. Currently he's sticking to more treasury-backed funds.


Q- What is the role of the Board of Trustees in oversight & strategy?

A- They have the say/advisement over endowment funds; they support the actions he's taking.


Q- How will UVM meet the challenge of the next 3 years; are downsizings or freezes planned?

A- He can't promise, but downsizing is not in his strategy for saving money. We need to maximize our use of people, be careful with money, and not price the university out of the market by raising tuition too high; he wants to stabilize the university fiscally to be able to ride out bad times without having to shed people to economize.


Q- Before the current financial problems began, a letter from President Fogel mentioned substandard returns on short term funds--will it be a problem that he's now going to funds with even lower returns?

A- In planning the new budget, he isn't factoring in returns any higher than the current low level, making it so that fluctuations wouldn't have an impact--ROI here is not something he wants to bank on, so there'll be no bad surprises if returns are not increasing to a projected level.


That was all there was time for--we thanked him for coming and explaining so clearly and with such candor. The minutes that come out in November will certainly be more comprehensive, but I hoped this early overview helped!

More later-

Have a Good Weekend,

Joanne