Download - Bot Workshop 6 1 09 Final
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The Florida International University
Board of Trustees Budget Workshop
Operating Budget FY 09-10June 1, 2009
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AGENDA
E&G Budget Assumptions FY09-10 (Maidique/Martinez) Legislative Update Gap Analysis
E&G Budget Rolling Reduction Plans (Wartzok/Miller) Budget Cut Methodology Rolling Three Year Budget Reduction Plans
College of Medicine Update (Maidique)
Non-E&G Funds Budget FY09-10 (Miller)
Construction Plan (Maidique)
THE FLORIDA INTERNATIONAL UNIVERSITYBoard of Trustees
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AGENDA
E&G Budget Assumptions FY09-10 (Maidique/Martinez) Legislative Update Gap Analysis
E&G Budget Rolling Reduction Plans (Wartzok/Miller) Budget Cut Methodology Rolling Three Year Budget Reduction Plans
College of Medicine Update (Maidique)
Non-E&G Funds Budget FY09-10 (Miller)
Construction Plan (Maidique)
THE FLORIDA INTERNATIONAL UNIVERSITYBoard of Trustees
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LEGISLATIVE BUDGET UPDATE
General Revenue net 15% reduction
$27.2M recurring reduction after offset of $1.2M non recurring
Lotto funds reduction of $2.5M - uncertainty about future collections
PECO funding reduced by $31.2M over last year
Courtelis Facility and Challenge Grants matching will not be funded
Funding Enhancements
Tuition increase of 8% for undergraduate
Undergraduate differential tuition up to 7% additional
College of Medicine 100% funded
$10.9M additional recurring funds
$0.9M one time Federal Stabilization funds
Additional ONE TIME funding from Federal Stabilization fund $14M
Excluded from 2% state employee salary cut
RESULT : CONTINUE WITH BUDGET REDUCTION PLANS
Unfavorable Impacts
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RESTRICTIONS ON STABILIZATION FUNDSFederal Guidelines
* The list of prohibitions is not meant to be all-inclusive; uses and prohibitions are also subject to ARRA (American Recovery and Reinvestment Act) and other applicable requirements.
Education and General expenditures Modernization, renovation, or repair of instructional, research, or
student housing facilities
Source: Guidance on the State Fiscal Stabilization Fund Program, U.S. Department of Education Washington, D.C. 20202, April 2009 (Page 26-30)
PossibleUses
Prohibitions *
Strategically directed to strengthen FIU going forwardon non recurring critical investments
One Time Funds As Temporary Bridge
Endowments Maintenance of systems, equipment, or facilities Maintenance costs, new construction, modernization of athletic
facilities or religious facilities Restoring or supplementing a "rainy day" fund
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STABILIZATION FUNDS
Non Recurring Critical Investments
ComplianceResearch &
Graduate EducationStudent &
University SupportGreen Efficiency
Initiatives
Example: Research Start-up
Funds
Example: Strengthen library
resources & infrastructure
Example: Strengthen Environmental
Health & Safety
Example: Modernize low efficiency
buildings
MULTI-YEAR OPERATING GAP
(Cumulative amounts)
* FY 09-10 State Cut assumes current cut of $30.4M in GR and Lotto appropriations plus a contingency of $3.9M for possible future reductions. Incremental funding received for new space ($1.5M)and insurance increases ($2.3M) that are directly allocated to the units were excluded** Assumes 8% tuition increase in undergrad, 10% increase in grad, 15% increase in law and 7.6% increase in undergraduate differential tuition (net of 30% need-based Financial Aid allocation)*** Includes carry forward funds and salary float
STATE CUTS
TUITION UNFUNDED
OPERATIONS/OBLIGATIONS
CRITICAL INVESTMENTS
UNIVERSITY MITIGATION
*** NET GAP
UNITS' CUTS 08-09 plan
ADDITIONAL
CUTS
FY 08-09
($13.0) $6.1 ($12.0) ($11.0) $14.9 ($15.0) $15.0
FY 09-10*
($47.3) $18.5 **
($20.6) ($17.4) $32.2 ($34.7) $23.2 $11.4
FY10-11
($51.7) $30.2 ($24.5) ($21.7) $19.0 ($48.7) $35.7 $13.0
FY11-12
($51.7) $43.9 ($26.5) ($29.8) $10.8 ($53.3) $35.7 $17.6
State Cuts are in addition to an $11.3M cut received in FY07-08, which resulted in units’ cuts of $8.1M
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Continued focus on managing undergraduate enrollment while increasing graduate enrollment
FTE24,084
FTE 24,392
FTE 24,758 366, 1.5%
(93), -1%
242, 2%
170, 5%
47, 8%
ENROLLMENT BUDGET ASSUMPTIONSFY09-10
E & G INCREMENTAL REVENUEFY09-10
Net tuition revenue increase of $12.4M (volume and price)* helps make critical investments to close the on-going Budget Gap
$107.1M $109.4M$112.7M
$125.2M
FTE24,637
FTE24,084
FTE24,392
FTE24,758
*Includes the effects of enrollment growth. Revenue amounts are net of Financial Aid and waivers. Excludes College of Medicine Tuition.
Undergrad $5.3M
Grad $3.5M Law $1.0M
Differential $2.6M
$12.4M
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CRITICAL INVESTMENTSFY09-10
Despite financial crisis, FIU continues to invest in quality$17.4M*
Employees
Retain employees
Attract talent
Maintain stability
Teaching
Advisory services
Faculty hiring
Graduate Assistant stipends
Classroom renovations
On-line infrastructure
Improve quality
Increase graduation and retention rates
Research
Faculty hiring and start up funds
Graduate Assistant stipends
Strengthen national research ranking
Increase revenue
*Cumulative investment amount through FY09-10
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AGENDA
E&G Budget Assumptions FY09-10 (Maidique/Martinez) Legislative Update Gap Analysis
E&G Budget Rolling Reduction Plans (Wartzok/Miller) Budget Cut Methodology Rolling Three Year Budget Reduction Plans
College of Medicine Update (Maidique)
Non-E&G Funds Budget FY09-10 (Miller)
Construction Plan (Maidique)
THE FLORIDA INTERNATIONAL UNIVERSITYBoard of Trustees
BUDGET REDUCTIONPlanning Methodology
Multi-year state budget cuts expected
Continue making investments in critical strategic areas
Stabilization funds directed towards one time critical investments
Lessen immediate impact to students, faculty and staff through the use of one time funds
Shared savings from new & replacement positions
Savings and revenues from new university-wide ideas
Units’ Reductions
Three Year Rolling Plans
University Mitigation
Reduction amounts allocated proportionately to executive areas
Reductions distributed to each unit based on strategic prioritization
All units created their own three year plans for submission
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MULTI-YEAR OPERATING GAP
* FY 09-10 State Cut assumes current cut of $30.4M in GR and Lotto appropriations plus a contingency of $3.9M for possible future reductions. Incremental funding received for new space ($1.5M)and insurance increases ($2.3M) that are directly allocated to the units were excluded** Assumes 8% tuition increase in undergrad, 10% increase in grad, 15% increase in law and 7.6% increase in undergraduate differential tuition (net of 30% need-based Financial Aid allocation)*** Includes carry forward funds and salary float
STATE CUTS TUITION UNFUNDED
OPERATIONS/OBLIGATIONS
CRITICAL INVESTMENTS
UNIVERSITY MITIGATION
*** NET GAP
UNITS' CUTS 08-09 plan
ADDITIONAL
CUTS
FY 08-09
($13.0) $6.1 ($12.0) ($11.0) $14.9 ($15.0) $15.0
FY 09-10*
($47.3) $18.5 **
($20.6) ($17.4) $32.2 ($34.7) $23.2 $11.4
FY10-11
($51.7) $30.2 ($24.5) ($21.7) $19.0 ($48.7) $35.7 $13.0
FY11-12
($51.7) $43.9 ($26.5) ($29.8) $10.8 ($53.3) $35.7 $17.6
(Cumulative amounts)
State Cuts are in addition to an $11.3M cut received in FY 07-08, which resulted in units’ cuts of $8.1M
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UNIVERSTIY WIDE REDUCTION PLANS FY08-09 Plan Summary
Incremental Revenue
Initial 3 Year PlanReduces Budget by $35.7M
Allocation to Appropriate Funding
Operational Efficiency
Academic Restructure
Expand Graduate Tuition Plus
Expand Self Supporting Programs
Increase Private Support for Museum Operations
Reconfirm E&G funds not used to cover expenses of other funds such as Contracts & Grants, Construction, and Auxiliaries.
Lower operational costs: (revise processes, redefine service model, renegotiate vendor agreements, create partnerships, leverage purchasing)
Consolidate operations: increase internal shared services
Reduce non-critical support services
Curriculum changes
Degree program closures based on sustainability criteria
Center & Institute closure and reductions based on approved policy
Generates $2.8MSaves $13.9MSaves $6.9MSaves $12.1M
ACADEMIC AFFAIRS GROUP STRUCTUREFY09-10 Incremental Reduction Plan
Strategic to FIU
Return on Investment
Cost
Faculty Investment
PhD Production
Criteria Relative Importance / Definition
10
7
5
3
2
As defined in FIU strategic plan
Total of all funding divided by E&G support – tuition, research, gifts, and auxiliaries
College level analysis using Delaware study benchmark
Faculty cost plus startup dollars expectation
Three year average PhDs awarded divided by Tenure-Tenure track faculty
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ACADEMIC AFFAIRS BUDGET REDUCTION PLANFY09-10 Incremental Reduction Plan
Group 1 (overall score > 60) 3.3% 3.6% 5.0% Arts & Sciences (64), Business (61), Engineering &Computer Sciences (64), Public Health & Social Work (66)
Group 2 (overall score 40 – 59) 4.1% 4.6% 6.2%Hospitality (54), Nursing & Health Sciences (54),Education (49)
Group 3 (overall score < 39) 5.1% 5.6% 7.7%Architecture & the Arts (38), Journalism (37), Law (38)
Group 4 (overall score not applicable) 5.3% 5.9% 8.0%Library, Honors, Museums, Student Affairs andall other Provost areas
ADDITIONAL BUDGET REDUCTION PLAN
Cumulative Percentages
09-10 10-11 11-12
Reductions for planning purposes, subject to change
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Shift to Other Funding/Revenue Sources
Incremental Multifaceted 3 Year Plan to Reduce Budget by $13.7M
ACADEMIC AFFAIRS CUT STRATEGIESFY09-10 Incremental Reduction Plan
Lower Operational Costs
Private support for museum operations
Reallocate operating expenses to grants, overhead and fees
Reallocate operating expenses to auxiliary funds where appropriate
Consolidate or reduce administrative functions – Eliminating Continuing and Professional Studies; 4 Vice Provost positions
Consolidate six departments into three
Reduce library purchases, reduce travel, service hours in enrollment services, convert print materials to library on line access, computer replacements, marketing in select programs, recruitment events, permanent and temporary staff
Change instructional mix of summer courses, decreased use of adjuncts by increasing class size, and eliminate faculty through vacancy/attrition
Saves $3.4MImpacts 66 Positions: Saves $9.3M
Attrition 25, Vacancy 19, Elimination 22 17
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Incremental Multifaceted 3 Year Plan to Reduce Budget by $13.7M
Degree Program Closure
ACADEMIC AFFAIRS CUT STRATEGIESFY 09-10 Incremental Reduction Plan
Education Arts & SciencesRecreation &Sports Management ( B-62, M-19) Religious Studies (B-87,M-33) English Ed MAT (M-6) Mathematical Sciences (B-24)French Ed (B-0)French Ed MAT (M-2)Mathematics Ed MAT (M-4) Nursing & Health SciencesScience Ed MAT (M-2) Athletic Training (M-25) Social Studies Ed MAT (M-5) Occupational Therapy (B-0) Spanish Ed (B-0) Physical Therapy (M-0)Spanish Ed MAT (M-0)*Adult Education (M-9)*Adult Education & Human Resource Development (D-27)*Higher Education Administration (M-82,D-53)*International Education (M-19)*Urban Education (M-11)
Impacts 20 positions: Saves $1MElimination 20
Bold text = Faculty Senate opposition to closureNormal text = agreement by the Faculty Senate with the proposalItalicized text = administrative agreement with Faculty Senate recommendationsDegree level: B – Bachelor ; M – Master; D - Doctorate
*Degrees will be subsumed under existing degree program
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NON- ACADEMIC AFFAIRS OPERATIONSFY09-10 Incremental Reduction Plan
Budget of $83M, or 24% of Total E&G Budget
Implications:
Utilities account for 17% of total budget
Another 18% is contractually committed or infrastructure specific and cannot be immediately reduced
Therefore, significant savings must be absorbed from Personnel, OPS and Other Expenses and Other Support Areas
*Other Support Areas include Advancement, External Relations, Govt. Relations, Presidents Office and General Counsel
NON-ACADEMIC AFFAIRS OPERATIONS*FY09-10 Incremental Reduction Plan
Incremental Planned Cuts
Prioritization
Planned cuts range from 1% to 7% by FY 2011-12
Group 4 cuts could exceed 35%
$3.9M in additional cuts
55 Positions: 7 Attrition, 21 Vacancy, 19 Eliminated** and 8 Reassigned
*Includes Finance & Administration, Advancement, Community Relations, General Counsel, Government Relations, BOT Office, President’s Office** Includes 2 replacement positions in HR
Group 1: Compliance and University-Wide Strategic ProjectsExamples: Equal Opportunity Program, IT Security, BioChemical Receiving
Group 2: Essential Services where service will be reduced or contractual commitments renegotiated
Examples: IT Support Center, Media Technology Services, PeopleSoft
Group 3: Areas where efficiencies gained from a change in current business processes or in customer service delivery method
Examples: Purchasing Services, Student Payment Services (Online)
Group 4: Less Essential Services where current levels cannot be affordedExample: Groundskeeping
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PERSONNEL IMPACTE&G Reduction Plans Through 2012
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FY08-09 FY09-10 FY10-11 FY11-12
Attrition 27 65 80 84
Vacancy 26 87 134 157
Elimination 43 52 65 76
Shift to Non-E&G Funding Sources
29 94 99 100
Total Position Reduction
125 298 378 417
Faculty 36 91 123 140
Non-Faculty 89 207 255 277
Total Position Reduction
125 298 378 417
Cumulative FTE
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AGENDA
E&G Budget Assumptions FY09-10 (Maidique/Martinez) Legislative Update Gap Analysis
E&G Budget Rolling Reduction Plans (Wartzok/Miller) Budget Cut Methodology Rolling Three Year Budget Reduction Plans
College of Medicine Update (Maidique)
Non-E&G Funds Budget FY09-10 (Miller)
Construction Plan (Maidique)
THE FLORIDA INTERNATIONAL UNIVERSITYBoard of Trustees
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COLLEGE OF MEDICINEFY09-10 Update
Faculty & Students
Affiliations
State Funds/Gifts/Grants
Faculty Practice Plan
130 faculty on board, 14 of 15 chairs identified 1st and 2nd year curriculum completed 43 students accepted from 3,332 applicants Students begin orientation August 3, 2009 Provisional accreditation obtained in record time
Agreements in place with: Jackson Public Health Trust Leon Medical Centers Mercy Hospital Miami Children’s Hospital Mount Sinai Medical Center
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State funds increase of 100% to $22M Over $53M in donations to date; $14M expected in FY09-10 $10M gift from Benjamin Leon Jr. and Family $10M gift from Miami-Dade County for an ambulatory facility $2.4M in new and transferred grant awards $2.7M in Stimulus related applications as of April 2009
Starting Faculty/Staff clinic on University Park campus
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AGENDA
E&G Budget Assumptions FY09-10 (Maidique/Martinez) Legislative Update Gap Analysis
E&G Budget Rolling Reduction Plans (Wartzok/Miller) Budget Cut Methodology Rolling Three Year Budget Reduction Plans
College of Medicine Update (Maidique)
Non-E&G Funds Budget FY09-10 (Miller)
Construction Plan (Maidique)
THE FLORIDA INTERNATIONAL UNIVERSITYBoard of Trustees
Activity & Service, $12M,
2% Athletics, $19M, 3%
Technology Fee, $6M, 1%
Scholarships, $88M, 12%Sponsored
Research, $89M, 13%
Auxiliary Enterprises, $107M, 15%
DSO's, $13M, 2%Fiscal Stabilization Funds, $15M, 2%E&G Tuition,
$126M, 18%
E&G State Funds, $219M, 31%
FIU UNIVERSITY BUDGETFY09-10 Expenditures
OPERATING BUDGET$685M*
* Net of interfund adjustments, includes College of Medicine25
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ACTIVITY & SERVICEFY09-10 Budget
Fee is charged equally to all levels of students to fund student life
70% supports student programs and infrastructure like Graham and Wolfe Centers
30% supports student activities and groups
Renovations in Graham Center and Wolfe University Center and UP Recreation Center
Additional operations for BBC Pool
Increase allocations of funds for student groups and affinity programs
Recommended fee increase of $1.08/credit hour brings total fee to $11.60/credit hour
Incremental Fee Uses
Allocation
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ATHLETICS ENTERPRISEFY09-10 Budget
Net loss of $1.6M in FY08-09 covered by reserve balance
Net loss expected to be at the same level in FY09-10 using majority of the reserve balance
Athletics Operation
Athletics Finance Corp
Risk of breach on debt covenant if revenue generation from special event sales, stadium naming rights and sponsorships do not materialize
Major League Soccer contract will not materialize adding additional pressure on other revenue sources
Construction nearing completion
Academic use approved by BOG allowing for matching of donor gift
Bridge financing still pending
Field House
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Non-Need Based Activity
Need Based Activity
FINANCIAL AID SCHOLARSHIPSFY09-10 Budget
Need-based Scholarships projected to increase $8.0M
Pell grant maximum award increased by $619 per student to $5,350
Differential Tuition allocation of 30% to Need Based Aid
Non Need-based Scholarships projected to increase $5.3M
An increase in the number of students receiving Bright Futures
Additional funds allocated toward Athletic Scholarships
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Operations
SPONSORED RESEARCHFY09-10 Budget
Revenues to increase by $4.1M to $90M ($110M)* Increase in number of awards received in FY08-
09 Impact of Federal stimulus awards which are
required to be spent within 18 months of receipt
Higher indirect cost rate Growing from 42% to 44% Effective rate will increase by 2% to 20%,
targeting industry benchmark of 50% of the federal rate
Grants Module implementation to be completed July 2009
Investments
* National Science Foundation survey of research and development expenditures is projected at $110M
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AUXILIARY ENTERPRISESFY09-10 Budget
In $
Mil
lio
ns
Actuals 06-07 Actuals 07-08 Forecast 08-09 Budget 09-1070
80
90
100
110
120
130
$107$111
$118 $120
$87
$100$105
$116
RevenueLinear (Revenue)
$11 M
Investments Expansion of Parking garages -
$2M Replacement of obsolete network
infrastructure - $2M Housing capital improvements
$0.7M
Increasing cost of operations (filling vacant positions and Utilities costs) - $2M
Realignment of E&G expenses - $3M
Revenues remain relatively flat in FY09-10 while expenses increase to absorb investments and
properly align costs
Note: Expenses include debt service
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TREASURY OPERATIONSFY09-10 Budget
Cash & Short Term
Securi-ties,
104.1, 50%
Fixed In-come,
61.8, 30%
Equity, 18.6, 9%
Alternatives, 23.1, 11%
FIU Portfolio - April 2009Portfolio Performance FY
Since Inception
FY 05-06 3.3% 3.3%
FY 06-07 7.3% 6.3%
FY 07-08 2.3% 4.5%
FY 08-09(thru 4/30) (4.2%) 1.8%
FY 09-10(Budget) 4.0% ---
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FIU FOUNDATION FY09-10 BUDGET
Endowments $4M (15%)
Scholarships & Programs Non-Endowed $4M
(15%)
Building Funds $0.2M (1%)
Pledged Revenue $11M
(41%)
MARC Building Rental Income
$1M (5%)
Investment Returns $5M
(15%)
Annual Fund $0.4M (1%)
Admnistrative Fee
$1M (1%)
Highlights:
Endowed and Non-endowment Scholarship & Program revenues are forecasted to be $8M for new gift agreements and expected pledge payments. Reduction due to delay of State Match for Courtelis program expected in future years.
Investment returns based on 5% return on $95M
Pledged revenues totaling $11M included committed contracts of $18M net of 25% allowance and $7M in anticipated payments.
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AGENDA
E&G Budget Assumptions FY09-10 (Maidique/Martinez) Legislative Update Gap Analysis
E&G Budget Rolling Reduction Plans (Wartzok/Miller) Budget Cut Methodology Rolling Three Year Budget Reduction Plans
College of Medicine Update (Maidique)
Non-E&G Funds Budget FY09-10 (Miller)
Construction Plan (Maidique)
THE FLORIDA INTERNATIONAL UNIVERSITYBoard of Trustees
FIU UNIVERSITY BUDGETFY09-10 Construction Plan
Major construction projects in progress:
Nursing & Allied Health (Molecular Biology)
Satellite Chiller Plant Social Science Building (International
Studies) Parking Garage V / Public Safety
Building Science Classroom Complex Graduate Classroom/Research Building International Hurricane Research Center Field House
Construction Funds $249M
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Total University Budget $934M
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UNFUNDED MATCH TO DATE
Facilities $1.2
Endowment $9.0
New Funds (FY 08-09) $4.9
TOTAL $15.1
AMOUNT IN MILLIONS
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AGENDA
E&G Budget Assumptions FY09-10 (Maidique/Martinez) Legislative Update Gap Analysis
E&G Budget Rolling Reduction Plans (Wartzok/Miller) Budget Cut Methodology Rolling Three Year Budget Reduction Plans
College of Medicine Update (Maidique)
Non-E&G Funds Budget FY09-10 (Miller)
Construction Plan (Maidique)
THE FLORIDA INTERNATIONAL UNIVERSITYBoard of Trustees