The MU Finance Committee held a public meeting to discuss and approve financial plans for a variety of areas in the university system, while establishing an overall updated method of financial planning.
The need for change was decided to keep up with the rapid changes in higher learning in order to meet the financial performance goals set for the next few years.
“We clearly know the pace of change is only going to accelerate as we think about the environmental factors that we face in higher education, just like any other industry,” Vice President for Finance Ryan Rapp said. “As we discussed, there really is a shift in the financial model that’s fundamentally changing for higher education, and the financial model is what underwrites our mission, so the things that we resorted to in the past will not work as we start to look moving forward.”
The board is collaborating with financial consultant company Kaufman Hall to help reach their goals for financial performance as well as using the university’s credit rating, according to Moody’s Investors Service, to establish their targets. Comparing the rating, which signifies credit worthiness to those of other institutions, there are hopes for improvement.
“I think when we’re talking peers, we’re really talking about our peers in terms of a credit rating and that gets back to us taking this financial markets approach to looking at where we want to be,” Rapp said. “It’s not to say that we couldn’t look at this and strategically make a choice and say because of the strategic importance of something we want to do, we would intentionally be okay with moving to an Aa2 rating. But I hope we can see through this process, that would be something that we actually discuss and would intentionally decide.”
Actions were also approved, including revised 2020 student housing rates and the budget for the Sinclair School of Nursing building renovation, which is part of the five-year capital plan for the entire UM System.
There were no changes to previously approved housing rates but four new rates of $9,995, $6,550, $5,999 and $4,150 were added. The School of Nursing renovation budget was also increased from $20 million to $30 million.
The reconstructed building will feature larger, active learning classrooms and more simulation space. The school believes this change will contribute toward meeting academic goals for research and reducing the shortage of nurses in Missouri and across the country.
“A [new] building will allow us to increase our class size and work with MU Health and try to increase the production of graduates and nurses that will stay in this area and help with their patient care and recruitment and retention of nurses,” School of Nursing Dean Sarah Thompson said.
Board members and other attendees communicated optimism for the new financial plan and its broad implications for the UM System.
“I think what we’re doing here is pretty leading edge in higher education. I think as we work around the country a lot of institutions are still focused on the annual operating budget as the foundation for decision-making,” Kaufman Hall consultant Charles Kim said. “I think taking a long-range view, all funds, including capital, debt, investment decisions into a holistic platform that allows you to really see the impact of your strategic decisions and tradeoffs, it’s certainly leading edge.”
_Edited by Emily Wolf | ewolf@themaneater.com_
