UA-R-GC-1914-01-01-1986-02_Page-011

Board of Trustees -11- February 6, 1986 17. Report of the Finance Committee: Mr. Crary. A. Endowment - Mr. Crary reported that there were currently close to $22 million in endowment and similar funds under the management of the University's endowment advisors and another $2 million in FNMA's. The performance on a total return basis of the Board's three investment managers was reported as follows: McConnell & Miller Inc.: $9.0 million Smith Affiliated Capital Corp: $7.8 million The Common Fund: $5.3 million up 110% since 9/82 up 94% since 9/82 up 96% since 9/82 B. 1985/86 Budget - All of the budgets since 1981 have reported surpluses and since that time contributions had increased 42% and endowment 115%. The current-year budget shows a deficit of $500,000. The University's Educational Enterprises (the Social Research Center, the Desert Development Center, the Division of Management Development, the Computer Center, and the Division of Public Service) are expected to be self-financing. While some of these units have covered their costs, trends in the SRC show increasing deficits and over the last few years the ability of this unit to attract funding has been reduced. The Desert Center also was not yet fully covering its costs. It was the feeling of the Committee that the Social Research Center should either be diversified and expanded or a serious consideration of whether or not to continue it should be initiated. The Committee recommended that these units avoid making long-term financial commitments on the basis of short-term contracts. Mr. Kelberer observed that expenses seem to be increasing faster than income and the University would be advised to prepare medium to long-range projections of income and expense levels in order to analyze AUC budget conditions in future years. Mr. Crary reported that the University had $15 million in general endowment and slightly more that $9 million in Plant Funds. The question of how large Plant Fund should be was raised. Mr. Crary presented a resolution to amend the By-Laws by adding a section on directors' and officers' indemnity which would establish a self-financed equivalent of liability insurance for Trustees (Attachment C). He noted that the annual premium on such insurance (if available at all), depending on the amount of coverage, would be in the area of $25,000 to $50,000. He recommended to the Trustees that this By-Law ammendment be presented for approval to the full Board at the May 22, 1986 meeting