The Board of Trustees University Resource Committee meeting focused on an initiative to consolidate software services under the Responsibility Centered Management budget model and how to handle the debt that Ohio University will undertake in the six-year Capital Improvement Plan.
Controller Julie Allison presented the Ohio Service Alignment Initiative, which will require updates in interface services, such as Oracle and Workforce, in order to facilitate the RCM budget model that OU will adopt in fall 2013.
“RCM is really much more than a new budget model, it really is a management philosophy,” she said.
The SAI initiative will require an initial investment of $28.1 million, which will be spread over a six-year period to break the cost into manageable pieces.
Allison said they plan to reallocate base funding in order to cover SAI costs as it transitions into a top priority under the RCM model.
The initiative will improve customers’ technological interface with OU because they would not have to navigate as many different programs, Allison said.
“This is a big effort, and I think it’s one that’s most definitely worth undertaking,” Allison said.
The Board also readdressed the debt it will incurred from the six-year Capital Improvement Plan after some member expressed concerns at the February Board of Trustees meeting, said Steve Golding, vice president for Finance and Administration.
Because of the CIP Update, OU found a need for $735 million because of additional debts, so OU will take on a debt of $535 million in order to support the six-year plan, said Beth Greene, director of debt management.
Interest rates will fall at about 3.89 percent, but they would cap that interest rate at seven percent.
Greene said a lot of the debt will be manageable because some improvements will be self-supporting, such as the regional Heritage College of Osteopathic Medicine campuses in Dublin and Cleveland and the Multipurpose Center, which will be completely funded by donations by its completion.
The only major concern that Greene has is OU’s credit rating, which will look bad when the rating company is not looking toward the university’s future.
She and Golding plan to visit a credit firm in New York after the resolution is approved to negotiate credit ratings, and the six-year debt plan should be prepared for the next Board of Trustees meeting in June.
“We’re actually in a very good position,” Greene said.
The Resource Committee concluded with a list of the next constructions underway from Associate Vice President for Facilities Harry Wyatt, including five renovations to the Athens campus and three to regional campuses.
The Committee consented to the Ridges Advisory Council, bid limits, construction projects and naming of a room in Snyder Hall all to be voted on during Friday’s general meeting.
