October 24, 2000 – 1:00 P.M. (approved 03/05/2001)
Dixon Conference Center – Ballroom A
Kevin Robinson, Past-Chair, called the meeting to order. Assembly members present were: Joe Aderholdt, John Asmuth, Dennis Block, Stacey Bozeman, Amy Douglas, Ralph Foster, Kathy Harmon, Ellyn Hix, Greg Lund, Ed People, Miriam Brown Pepinsky, Kevin Robinson, Linda Sayers, Janine Slick, Mary Lou Smith, Anne Smyth, Martha Taylor, Kim Trupp, and Teresa Vest.
Robinson introduced the new Chair, Ellyn Hix.
Review and Approval of Prior Minutes. The minutes from the August 2, 2000, Assembly meeting were reviewed. Janine Slick moved that the minutes be approved. Kevin Robinson seconded the motion.
Introduction of New Assembly Members. Ellyn Hix introduced and welcomed the new members to the assembly. They are Dennis Block, Stacey Bozeman, Amy Douglas, Ralph Foster, Harriette Huggins, Linda Sayers, Martha Taylor and Kim Trupp.
Nomination Committee Appointments. Hix informed the Assembly of the members who have been appointed by the executive committee to serve on the Nominations and Elections Committee for the term ending 2003. These members are Lisa Fleming of Housing and Residence Life, Cathy Ramey of Information Technology, and Betty Reese of Engineering Administration.
Grievance Committee Chair. All standing committees will be meeting and electing a new chairperson. The Grievance Committee, which has already met, elected Susan Noble to serve as Chair.
Hix introduced Senator Lloyd Barron, who has served on the Auburn University Board of Trustees since 1993. Senator Barron addressed the assembly concerning the position of the State of Alabama regarding the recruiting major industries to Alabama.
Concerning Auburn University, Barron stated that he felt the University was in a better position than when he came on the Board in 1993. Barron discussed several building projects and other plans to improve the facilities on campus. He commented on how the Board of Trustees is trying to be financially responsible; therefore assisting in saving the University money that could be channeled into other projects.
Barron also discussed the benefits of passing Amendment 1, which will be on the ballots November 7, 2000. Passage of this Amendment would allow 35% of the fund’s growth to be used to repay a bond issue, while 65% will continue to go into the trust fund. Auburn’s College of Agriculture and Agricultural Experiment Station would receive $15 million to construct a poultry science building, a beef teaching unit, a meats lab, a swine research center, and experiment station facilities. The College of Veterinary Medicine is to receive $7.5 million to leverage $33 million to construct a teaching hospital for large-animal veterinarians. The School of Forestry and Wildlife Sciences will receive $7 million toward a new building to replace one built in 1948. The remainder of the $52 million bond issue will go to build a state agricultural diagnostics lab at Auburn and agricultural facilities at Alabama A&M and Tuskegee University.
The passage of this amendment will also allow for changes in the management and investment of the trust funds, which should allow for a greater yield.
Concerning Amendment 5, Barron stated that the trustees do support this amendment and urged people to vote for it. Amendment 5 proposes to restructure the Board of Trustees. It would create a board of five people who will select the nominations of trustees to be sent to the Alabama Senate for confirmation (two alumni members, two trustees, and the Governor). Also, the terms for trustees would be shortened from twelve to seven years and a mandatory retirement age of 70 would be set.
The floor was opened for questions to Senator Barron.
Question: (Wanda Keown, Information Technology) As you talk about building, I’ve heard rumors for the last fifteen years that computer programming would be getting a building somewhere on campus. Have you thought about it?
Barron: Ellyn Hix made me aware that you are spread out in six locations. But since the trustees do not micro manage, there are a lot of things that I do not know about. I was not aware of that. We are doing some long range planning, and I assure you that this will be discussed.
Question: (Ed People, Auxiliary Services) On Amendment 1, that takes 35% of the trust fund growth and channels it toward these projects, will that 35% revert back to the trust fund once these projects are completed?
Barron: No. Some of the projects will be funded by a bond issue, and part of this 35% will be pledged against this 20 year low yield bond issue. Some of the funds will be used to improve roads and bridges throughout the state.
Question: (Ed People, Auxiliary Services) Those projects that will be done in the future, how will they be considered?
Barron: That is already set up in the 35%. Each county already knows what monies that they are going to get.
Question: (Dennis Block, Environmental Institute) As a number of projects have gone on in the Opelika-Auburn area, environmentally that have brought bad publicity to ADEM (Alabama Department of Environmental Management) and some folks have called for restructuring. What do you see coming out of the State Legislator in regard to that particular organization?
Barron: It would take legislation to restructure. I have not been pleased with ADEM and it needs restructuring.
Question: (Dennis Block, Environmental Institute) How do you see Alabama coming out in the water war with Georgia?
Barron: This is a very complex question. We are fighting Atlanta. But you are looking at powerful political figures on the national level and this is a national issue. We are now locked up and we will have to have national pressure to break this down. It is vital to Alabama, that we not allow an inordinate amount of water to be pumped into Atlanta. We need to be environmentally sensitive here.
Question: You mentioned PEEHIP (Alabama Public Education Employees Health Insurance Plan). What is the advantage of the University staying self insured as opposed to moving to PEEHIP?
Barron: I do not think I am knowledgeable enough about self-insured verses PEEHIP. At the last Board meeting, we asked Don Large to do a comparison and assessment.
Question: (Robert Gottesman, Office of Planning and Analysis) We hear every legislative term about the K12 needs, and the issues of getting them back up to the national average. Three to four years from now, when K12 teachers are at or above the regional average, how are we at the university level ever going to get better salaries when the region is moving faster than what the Alabama Legislator has to offer?
Barron: Politically K12 is much stronger than higher education. Higher Ed politically is not organized. We need to figure out ways to cooperate with Troy, Alabama, Huntsville and UAB and come together. Until we do, we will not get what we need. I am concerned that since we passed the bill to bring K12 up to certain national standards, that the pot would be slim when we need to go back for additional funds for higher Ed. We can only get there by being more efficient with redirecting monies to the Peeks of Excellency. The things that are out-dated or not needed, we are going to have to cut. But the Board is committed to bring your salaries to the national average.
Question: (Kevin Watson, Information Technology) I have noticed that in the past ten years that many curriculums have been cut from the University. What exactly is the mission of the school to be now? Is it engineering, agriculture, or business?
Barron: It’s not my job to determine the mission of the school, but to try to tighten up the programs and be more efficient. We do not need to have the same services offered at every university in Alabama. We have got to be willing to make way for progress.
Ellyn Hix introduced Don Large, Vice-President of Finance. Large discussed the reasons for the 15% increase in health insurance premiums. The University is self-insured and Blue Cross Blue Shield (BCBS) is the administrator. He discussed how the reserve would be depleted unless there is an increase to build up the fund.
Addressing the earlier question put to Senator Barron concerning the issue of being self-insured verses an alternative, Don Large stated that there really is not a good alternative with a plan this big, particularly in Alabama. BCBS plans cover the majority of Alabamians. PEEHIP is a self-insured plan, just like Auburn. The people on PEEHIP pay the same negotiated prices as BCBS comes up for charges (allowable charges) as opposed to what the doctors and hospitals charge. Should an insurance company take over our plan, they are going to look at our expenses and charge a premium that will cover these charges. So there is not an easy out. If costs go up, an insurance company raises your premium. As custodians of the fund, we have to do the same.
Don Large stated that there is a concern that with the way cost are going up, it is bigger burden on the staff with lower incomes and will force them to drop from the insurance program. We are looking at ways we can assist them in making insurance more affordable.
Question: Do you see our health care plan covering preventive measures (i.e. physicals)? If I wait to get a symptom, seems it would be more costly.
Large: We depend heavily upon the Insurance and Benefit Committee to bring forward suggested changes. Some are additions to benefits; some are changes in benefits to make it more efficient or less costly.
Question: The School of Pharmacy opened a Pharmaceutical Care Center at the first of the year. We have pharmacists who specialize in a given area. If you look at the chronic conditions and the cost of it, this Center will help you maintain your condition. They evaluate your meds and work with your doctor. Being forewarned is forearmed, and there is not a pharmacist on the Insurance and Benefits Committee, or a specialist who can assist this committee. Why do we have a preferred drug list? Did we ask for a preferred drug list or is it a part of the package that BCBS offered?
Large: No, we did not ask for it. It is what BCBS negotiated around the state.
Question: It is not for our benefit to have a preferred drug list. Do we know why? We need to have more knowledgeable people on the committee.
Large: I appreciate your bringing that up. I will talk with the Chair and Ron Herring to see if we can get someone appointed to this committee.
Question: Concerning the $20 million increase that BCBS anticipates our cost to be, are these cost based on the pre-negotiated rates or the after negotiated rates? Have we looked to see if BCBS negotiated rates have changed dramatically? Are our costs going up because BCBS has not negotiated as well as they did in the past?
Large: These estimates are based on the trend rates of health care cost. It appears that the rates are consistent with what is happening across the country. I do not think that BCBS is giving up that much more. But it is more utilization, more technology, and availiabity of services and price increase of doctors that are allowed.
Question: So the Insurance and Benefits Committee plays a strong roll in what in recommended. Is there a benefit specialist on the committee?
Large: Ron Herring is a continuous member as well as Darwin. The rest of the members turn over on two-year terms.
Question: You indicated that what we pay BCBS is small. How small is it? Has it gone up?
Large: 3.5% of the total cost. We used to pay a percentage of our cost. If our cost went up, our fee would go up. Now we pay on a per hit basis.
Question: Has Auburn ever looked at diversifying the plan other than single or family? A family might be two people or eight people.
Large: You can calculate charges various ways.
Question: Has the University thought of offering a cancer policy? I would think that cancer would be a large part of the cost. Have we looked at buying drugs in bulk?
Large: I am assuming that the Insurance and Benefits Committee has looked at a lot of options.
Question: I see premiums rising each year, but I do not see Auburn University implementing a wellness program. Why do we not have a wellness program? And in flex spending, I would like the ability to put my health club on it.
Large: I like the idea.
Ellyn Hix commented that the Assembly has a standing Welfare Committee and has representatives on the Insurance and Benefits Committee. We can be involved and help in researching this. We can make recommendations that can help us and the other employees.
Use of E-mail. The Chair for each employee area is responsible for deciding if mass e-mails are to be sent out to their respective employee group. Barbara Royster from Information Technology reviewed the current e-mail use policy and gave examples of the type of e-mails that were in question.
Hix asked that feedback be sent to her or to the Assembly via e-mail at assembly.auburn.edu.
Adjournment. The motion to adjourn was made by Ralph Foster and seconded by Joe Aderholdt.
Respectively submitted
Kathy Harmon