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Higher Ed Board reviews Governor's Budget, discusses priorities, and approves seed-funding for new Signature Research Center

Contact: Di Saunders – Office, 503-725-5714; Cell, 503-807-5539

PORTLAND, Jan. 5 – The State Board of Higher Education (the “Board”) met today at Portland State University to hear about a fiscal reform proposal from four Oregon Senators; review a proposal for providing seed funding for a new signature research center, the Governor’s Recommended Budget for OUS, Summer 2007 tuition and fee rates, and a proposed bond sale for capital projects, among other items considered by the Board.

GRB Report     Jay Kenton, vice chancellor for finance and administration, provided a summary report on the Governor’s Recommended Budget (GRB) for Higher Education. He noted that this budget represents one of the most significant investments in higher education in recent history, and is a very positive step in a new direction for OUS. The GRB invests in the System’s most important assets: its students, faculty, facilities, research, and economic development. The budget will allow the System to: preserve access, improve affordability, serve more students, enhance academic quality, provide greater research and public service, invest in economic development and workforce shortage areas, and facilitate collaboration with K-12 and community colleges as well as the Oregon Student Assistance Commission. Kenton said that the GRB totals $827.1 million in General Fund and $31.5 million in Lottery Funds. This is a historic capital budget which will fully fund capital repair needs, reduce deferred maintenance by 14%, and fund new facilities on each campus. The Governor has acknowledged all of the Board’s strategic priorities with this budget. It also creates a direct linkage between higher education and economic development. He said that, despite this significant increase, some campuses will have to continue to make budget cuts to regain fiscal stability.

Oregon Best     Susan Bragdon, OUS sustainability advisor, presented a proposal to the Board to provide start-up funding to establish the Oregon Bio-Economy and Sustainable Technologies (Oregon BEST) signature research center. The GRB contains $3 million for Oregon BEST, which has been developed in response to industry cluster advantages identified by the Oregon Innovation Council relating to bio-products, clean energy, and green buildings. Recognizing the need to leverage this specialized area of expertise contained within the state, this initial investment will provide start-up funding to develop new market opportunities, such as promoting innovations in green building technologies, and bio-based product processing and development. In addition to OUS and state funding, Oregon BEST is seeking foundation and other grant funding to be able to pilot some research and to leverage any investment made by OUS and the legislature. After some discussion, the Board approved funding of $270,000 from the Chancellor’s Office fund balance for Oregon BEST start-up expenses.

Summer Tuition     Glen Nelson, OUS assistant vice chancellor for budget operations, presented and the Board approved the proposed Summer Session 2007 tuition and fee, residence hall and food service charges. Summer Session tuition, fee and other rates are set separately from regular academic year and continuing education rates, and will increase, on average, 3.4% over Summer 2006. A summary of the approved tuition and fee rates are:

OUS Summer Term 2007 Tuition and Fees for Resident Undergraduates (at 12 credit hours)

 

EOU

OIT

OSU

PSU

SOU

UO

WOU

OUS Average (weighted)

Tuition & Fees

$1,473

$1,402

$1,603

$1,456

$1,443

$1,557

$1,381

$1,510

Percent increase over 2006

4.2%

2.9%

5.1%

1.8%

2.8%

4.1%

3.4%

3.4%

Capital Bonds Projects     Robert Simonton, OUS director of capital construction planning and budget, described the proposed sale of $119.4 million in bonds to fund 14 individual projects on 4 campuses, and 3 systemwide allocation programs, with the sale scheduled for April 2007. The Board approved the request to the State Treasurer to issue $70,646,839 of bonds under authority of Article XI-F(1) of the Oregon Constitution, and $48,824,751 of bonds for construction projects under authority of Article XI-G of the Oregon Constitution. A summary of the approved bond funded projects are as follows:

Approved University and Systemwide Bond Sale Projects, January 2007

Institution

Project

Bond Type and Amount

Systemwide: Capital Repair/Code Compliance
Small Capital Projects
Project Reserves
Article XI-F(1) / $4.7 million
Article XI-F(1) / $2.9 million
Article XI-F(1) / $1.7 million
OSU: Parking Services Building
Reser Stadium Phase II
UHDS, Residential Upgrades
Energy Center
Article XI-F(1) / $1.6 million
Article XI-F(1) / $17.0 million
Article XI-F(1) / $3.0 million
Article XI-G / $8.0 million
PSU: Retail Development-Various Locations
Parking Structure
PCAT Redevelopment
NW Engineering Science Center Phase 1
Article XI-F(1) / $1.0 million
Article XI-F(1) / $7.1 million
Article XI-F(1) / $25.0 million
Article XI-G / $8.6 million
UO: Food Service Upgrade
High St./Baker Building Purchase
Gilbert Hall Expansion
New Education Building
Theater Complex
Article XI-F(1) / $2.0 million
Article XI-F(1) / $4.6 million
Article XI-G / $3.3 million
Article XI-G / $19.4 million
Article XI-G / $3.9 million

Hopeful Reform     State Senators Ryan Deckert, Frank Morse, Kurt Schrader, and Ben Westlund met with the Board to describe a fiscal reform proposal that will build a solid financial solution for Oregon. They noted that this proposal addresses Oregonians’ interests around accountability, state spending, taxes, stabilizing revenue sources, and establishing a rainy day fund for use during economic downturns. Oregon was hit the hardest of any state in the 2001 recession because of this imbalance and the “boom and bust” economic cycle. This reform proposal would reduce taxes for Oregonians, create new jobs, stabilize revenues, establish a rainy day fund and increase economic development in the state, while also focusing on continuous improvement and accountability in government. The Senators summarized that this proposal would include a 5% sales tax while making cuts in personal income tax for all Oregonians and providing property tax cuts for some and renters relief; additionally, it would include economic growth incentives. The Senators noted that Oregon is at a crossroads and must make fiscal reform now; and needs “passionate advocacy” from the Board of Higher Education and all Oregonians for a proposal of this nature.

In other action and discussion at the meetings, the Board and/or Committees:

  • Received an announcement from Tim Nesbitt that, since he is now on the Governor’s staff, that he would be resigning from the Board as soon as his successor is appointed by the Governor; Mr. Nesbitt received thanks and congratulations from the Board members for his excellent service and commitment.
  • Approved Oregon State University’s request for a change in use of Certificates of Participation proceeds and to seek Department of Administrative Services and legislative approval as required.
  • Approved delegation of authority to the Presidents of OSU, Portland State University and the University of Oregon to enter into agreements regarding intellectual property.
  • Accepted the 2006 Annual Financial Report of OUS, and heard a report on the annual audit from Moss-Adams, LLP. Controller Michael Green noted that the OUS earned the State Controller's Gold Star Award for fiscal year 2006 financial reporting, and congratulated the OUS staff for their diligent efforts in this regard.
  • Approved the staff recommendation to repeal OAR 580-020-0020, effective on filing, to eliminate the potential for conflicts between this rule and current payroll calculations.
  • Approved a request to the State Treasurer to refund outstanding general obligation bonds to achieve debt service savings.
  • Heard about new Board committee organization from Board President Henry Lorenzen, which will include Finance, Strategic Initiatives, and the Integrated Education Enterprise committees.
  • Heard a status report on the use of proceeds from the sale of the Westmoreland Housing complex and other strategic housing plans by the UO.
  • Approved renewal of the employment contract of EOU president Khosrow Fatemi through June 30, 2008.
  • Heard reports from the Interinstitutional Faculty Senate, and the Oregon Student Association.

Oregon University System comprises seven distinguished public universities, reaching more than one million people each year through on-campus classes, statewide public services and lifelong learning. For additional information, go to www.ous.edu

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