Temple will pay off the debt of the university’s Japan campus, shift a small pension plan from monthly payments to one final lump sum and give the president more spending power, the Board of Trustees announced at two committee meetings on April 10.
Temple Japan owes $6.3 million on a loan that could be paid off now since the U.S. dollar’s value is high, Chief Financial Officer and Treasurer Ken Kaiser explained to the trustees. Paying off the loan immediately would save the university about $1.6 million, he said.
Kaiser later said that the loan was a consolidation of all of TUJ’s loans. The consolidated loan also converted all TUJ dollar debt into yen, which enabled the university to take advantage of current exchange rates. One dollar is currently worth about 100 yen.
“This seems like a no-brainer,” Chairman Patrick O’Connor said. The recommendation was passed with one motion to abstain from trustee J. William Mills, who is PNC Bank’s regional president for Philadelphia and South Jersey. The loan in question was a PNC loan.
The executive committee also agreed to terminate the Interest Pension Plan, a plan started in 1946 that gives retired employees annuity payments. MetLife, the disperser of the payments, informed Temple that it would no longer send out the payments.
“They thought it was too much of a hassle,” Kaiser said.
Of the initial 200 signed up, 28 retired employees still draw from the fund. The rest have died. Those remaining will be given a lump sum that can be reinvested into another retirement plan, Kaiser said. The fund’s total value is $185,000.
“Personally, if I was an 80-year-old that was retired, I’d be thrilled to get a check for about $7,000,” Kaiser said later. “I’d probably spend some of it.
“It’s important to note that this is their money, not Temple’s money,” Kaiser added.
The third recommendation was to amend the Approval of Capital Expenditures Policy. Under the old provision, projects costing more than $300,000 required approval of the trustees’ Executive and Facilities committees. The president or a representative could authorize spending less than $300,000.
Under the amended policy, the president can authorize up to $500,000 of spending without seeking trustee approval.
“I think this is a good policy,” O’Connor said. “But what are the limits on non-capital expenditures? What if I wanted to buy $500,000 worth of envelopes for my office?” he asked. Kaiser then explained the separate university policy for non-capital expenditures. Office supplies such as envelopes are under a different policy. The introduction to the ACE Policy explains that it defines spending for “furnishings, fixtures, equipment or construction contracts.”
The Budget and Finance Committee met first in executive session before moving to public session, and made one recommendation to the executive committee concerning TUJ’s finances. Then the meeting shifted to casual chatting, where Provost Hai-Lung Dai and President Neil Theobald, when asked about the current state of admissions, announced that 28,000 students were competing for 4,700 undergraduate seats.
The executive committee met next and passed the three recommendations. The public session meeting, which consisted of many of the trustees from the Budget and Finance Committee, including Christopher McNichol and Lewis Gould Jr., lasted for about 15 minutes.
While other committees are required to have their recommendations approved by the full board, the executive committee “has the full power to act for the board in between meetings of the full board,” Interim University Counsel and Trustee Secretary Michael Gebhardt wrote in an email.
“So when the Executive Committee makes a decision, it is generally final,” Gebhardt said.
The Executive Committee last met in executive session on Feb. 6. The Budget and Finance Committee last met on Jan. 23, also in executive session.
The next trustee committee meetings are April 23, when the Investments Committee and the Audit Committee are scheduled.
The trustees’ general body will meet on May 13 at 3:30 p.m.
Joe Brandt can be reached at firstname.lastname@example.org or on Twitter @JBrandt_TU.