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July 6, 2000

Compensation pool hiked 4.5%; size of raises to be determined

Compensation pool hiked 4.5%; size of raises to be determined

Tuition for Pitt students will increase by 5 percent this fall, and the pool of money for faculty and staff salaries will go up by 4.5 percent (with raises showing up in employees' end-of-September paychecks, retroactive to July 1).

The increases are included in a fiscal year 2001 operating budget that the Board of Trustees approved June 29. The budget includes projected revenues of $1.1 billion and projected expenses of $963 million.

Also at its July 29 meeting, the board approved a $58.6 million capital projects budget for FY 2001, elected and re-elected trustees, heard reports from Chancellor Mark A. Nordenberg on Pitt's endowment and fundraising, amended University bylaws to give clinical faculty more time to earn tenure, elected two assistant treasurers and named a Bradford campus building.

Salaries The 4.5 percent increase in the compensation base will be allocated to cost-of-living and merit raises, as well as market and equity adjustments.

How the 4.5 percent increase will be distributed among those components will be determined by the senior administration later this summer. Pitt cost-of-living raises traditionally have been based on the previous year's rise in the Consumer Price Index. For 1999, the CPI increase was 2.7 percent.

Market raises help to retain personnel who might be recruited by other employers. Equity adjustments address salary compression and other situations in which individuals' salaries are judged to be lower than merited.

The University's salary raise policy is performance-based, meaning that no one whose work is judged to be unsatisfactory is supposed to get even a cost-of-living raise.

Increasing the compensation base was needed to help make the University more competitive with respect to faculty salaries, especially among Pitt's fellow members of the Association of American Universities (AAU), Chancellor Nordenberg told the trustees.

"One of the most important investments we can make is in the people whose work will move us forward," he said.

During the fiscal year that ended June 30, the gaps between Pittsburgh campus faculty salaries and the AAU median ranged from $3,600 for associate professors to $5,800 for full professors. At Pitt's regional campuses, the gaps ranged from $600 for Bradford campus assistant professors to $6,100 for associate professors at Titusville.

Tuition and student fees Tuition for full-time Pennsylvania residents in the College of Arts and Sciences will increase by $304 to $6,422 a year. Out-of-state CAS students will pay $14,104, or $670 more.

Full-time undergraduates outside CAS will pay tuitions ranging from $5,926 for in-state students at the Titusville campus (a $282 increase) to $18,026 for out-of-state students in the schools of nursing and health and rehabilitation sciences (up by $858).

Among Pitt graduate and first professional programs, full-time tuition for Pennsylvania resident students will range from $8,754 in the Faculty of Arts and Sciences and the schools of education, social work, and public and international affairs (an increase of $416) to $22,420 in the medical school (up by $1,066).

Student fees will not increase at the Pittsburgh campus, but trustees approved hikes in fees at the Greensburg, Johnstown and Titusville campuses.

Chancellor Nordenberg called Pitt's 5 percent tuition increase "modest," considering the University's state funding (which will increase by 5.8 percent this year), comparable tuition hikes at other schools, and the millions of dollars that Pitt will spend on student life initiatives and upgrading technology.

The dramatic increase in the number of student applicants and the academic credentials of Pitt freshmen over the last five years "provides continuing evidence that we are recognized as an exceptional value in the higher education marketplace," Nordenberg said.

Capital budget The $58.6 million capital budget includes dozens of construction and renovation projects at Pitt's five campuses.

Among the larger items were $20.2 million for Health Sciences projects (including $7 million for renovations and improvements at Western Psychiatric Institute and Clinic, paid for by the state and sponsored project funds; and $6.4 million for School of Medicine equipment and renovations, with sponsored research funds covering $1.32 million); $6 million for energy conservation initiatives; $6 million for Pittsburgh campus building preservation; $5.5 million for deferred maintenance, and $5 million for the first phase of a Cathedral of Learning renovation (consisting of renovations, upgrades and/or replacement of heating, electrical, fire protection, telecommunications, security, elevators and other building systems on floors ground through three of the Cathedral).

Projects costing more than $1 million are subject to review and approval by the board's property and facilities committee.

Of the total, state funds are expected to account for $21.2 million. Another $13.8 million will come from the budget of the senior vice chancellor for Health Sciences, $11.4 million will come out of Pitt educational and general funds, $10.1 million will be provided by gifts, and $2 million will come out of auxiliary reserves.

Endowment Pitt's endowment now totals $1.02 billion, the first time it has exceeded the billion-dollar mark.

That's a 112 percent increase since 1995, when the endowment was $482 million, Chancellor Nordenberg reported. Last year alone, the endowment grew by $150 million, he said.

Nordenberg attributed the growth to an 83 percent increase in annual giving to Pitt since 1995, the bull market for stocks, and a wise investment strategy.

Pitt's invested wealth is dwarfed by that of the top five endowed schools: Harvard ($14.3 billion), the University of Texas system ($8.1 billion), Yale ($7.2 billion), Princeton ($6.5 billion) and Stanford ($6 billion). But regionally, Pitt's endowment exceeds those of Carnegie Mellon ($870 million) and Penn State ($790.2 million).

According to The Chronicle of Higher Education, only 34 schools nationally had endowments in excess of $1 billion as of June 1999, although other universities (including Pitt) have since joined that group.

Some 87 percent of Pitt's endowment is earmarked for specific purposes. Endowment interest helps to fund scholarships, equipment and some operating expenses, Nordenberg said.

Fundraising Private voluntary support has increased by 83 percent since 1995, from $39.4 million to $72 million, the chancellor reported.

He announced that Bayer Corp. will give Pitt $1.6 million to endow two chairs. Most of the grant will complete the endowment of the Bayer Chair in the Department of Chemistry, held by Dennis P. Curran. The rest will endow the Development Professorship in Chemical and Petroleum Engineering, to be held by Eric Beckman.

Clinical faculty Tenure-stream faculty in the medical school who have clinical responsibilities now will be given 10 years, instead of the traditional seven years, to earn tenure, under a Pitt bylaws revision approved by the trustees.

Given the growing and unpredictable hospital workloads of clinical faculty, a seven-year probationary period for them is no longer feasible, medical school administrators have said.

An overwhelming majority of voting faculty in the medical school had endorsed the change, as had Faculty Assembly and Senate Council.

Assistant treasurers Susan M. Gilbert and Paul Lawrence were elected Pitt assistant treasurers.

Gilbert comes to Pitt after working for nine years at West Penn Allegheny Health System, most recently as senior director of treasury operations. Lawrence joined Pitt in 1996, and has served as assistant manager of Student Accounts and as a senior financial analyst in the Office of Finance. He currently is responsible for analyzing investments in both traditional and alternative asset classes and monitoring asset allocation targets.

Assistant treasurers are elected officers of the University.

Bradford campus Trustees voted to name a planned communication, arts and technology building at the campus Blaisdell Hall, after the Bradford-based family whose $1.5 million matching gift has generated $3.4 million for the new building.

The Blaisdell Foundation also provides scholarships and other assistance to the campus. It was created by George C. Blaisdell, founder of the Zippo Manufacturing Co. The company's world headquarters are in Bradford.

— Bruce Steele

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