State Board of Higher Education
Joint Meeting of the
Budget and Finance and
System Strategic Planning Committees
Rogue River Rooms A/D
Southern Oregon University
October 19, 2000
Budget and Finance Committee members present: Geri Richmond, Don VanLuvanee, Bill Williams, Tim Young, and Tom Imeson (Chair)
System Strategic Planning Committee members present: Herb Aschkenasy, Shawn Hempel, Leslie Lehmann, Jim Lussier, Phyllis Wustenberg, Jim Willis (Chair)
(An attendance record of all who attended is on file in the Board's office.)
Call to Order
The meeting was called to order at 3:40 p.m. by Mr. Imeson.
Mr. Imeson asked Senator Lenn Hannon to come forward, as the Senator requested a few moments to make some remarks to Committee members. Senator Hannon referenced his role as chair of the Education Subcommittee during the 1997 Legislative Session, pointing out one of the resulting pieces of legislation, SB 519, which emphasized a collaborative approach with regard to engineering in the state, particularly between OSU, PSU, and OGI. "My concern," he said, "is that the Oregon University System in not a one-campus institution, but rather multiple campuses, and SB 519 reflected that compatibility of each institution having involvement at the table. I hope that as the Board deliberates today's decision, it continues that legislative intent."
After Mr. Imeson described the intent of the meeting, the Board Secretary called the roll (attendance noted above).
Enhancing Engineering Programs: 2001 and Beyond
Vice Chancellor Anderes introduced Dr. Daniel Layzell from MGT of America, consultants for the engineering study conducted on behalf of the Board.
Dr. Layzell reviewed his presentation, which included details on the following:
(Copies of Dr. Layzell's slide presentation are on file in the Board's office.)
Expressing some concern over the scope of the study, Mr. Young said he felt as if he didn't get a good picture of what the Portland metropolitan model would look like. Dr. Layzell responded there wasn't a way to include them in the analyses because there was not an entity from which a peer comparison of PSU, OGI, and OHSU combined could be made. Dr. Richmond observed that comparison might be possible using National Research Council (NRC) rankings. Following the methodology MGT was using, Dr. Layzell said they were looking at OUS institutions and the fact that the metropolitan model included PSU only. However, he said that some details on OGI were included, acknowledging its impact in terms of faculty and research efforts.
Continuing his line of questioning, Mr. Young asked to confirm that a careful treatment of the spires proposal was difficult for the same reasons. Dr. Layzell reiterated that MGT was asked to talk to institutions about their aspirations and do comparisons against peer institutions. Dr. Aschkenasy asked if engineering and computer science needed to be grouped together. Acknowledging that to be an option, Dr. Layzell said as part of the study, MGT was asked to examine them together.
Dr. Richmond, noting that computer science and engineering acts on a national and international scale as well, asked if interviews were conducted out of state. Dr. Layzell responded that MGT did not speak to anyone outside of Oregon with regard to the study. Vice Chancellor Anderes, who did speak with some institutions independent of the study, indicated that they were generally not willing to speculate on another institution's aspirations and the state's commitment. Dr. Richmond felt that information was a critical factor in a strategic movement. While noting that institutions were reticent to comment, Dr. Anderes said that they did offer suggestions for key components essential for a top-tier program, including top-notch facilities, research start-up, and undergraduate scholarships. "As we move forward with this process, we need to hold institutions accountable for establishing a plan that will clarify and link to the conditions raised by people at these institutions," Dr. Anderes pointed out.
Mr. Imeson reminded Committee members that the impetus for the discussion was in response to the Governor's request to create a top-tier approach to engineering in the state. A submission to the Governor indicating that the Board had done its best to arrive at a reasonable proposal was imperative.
Following an explanation by Dr. Layzell of estimated new faculty necessary to create a top-tier program at OSU and PSU, Dr. Richmond asked if those numbers were arrived at relative to the number of students at the peer institutions versus the OUS institutions. Dr. Layzell responded that MGT did not consider that factor, but instead considered the overall size of the engineering programs. He added that student/faculty ratios were used as part of the resource estimation techniques only. Dr. Aschkenasy asked if that was the case, then the number of faculty would be used to "back into" the logical number of students to create a comparable department. Dr. Layzell confirmed that to be the case.
At the conclusion of Dr. Layzell's presentation, Vice Chancellor Anderes expressed his appreciation for the work of MGT, noting the difficulty in arriving at any precision for this type of study. Arriving at "comfortable" funding targets, he said, is the most important aspect of the report.
Dr. Anderes summarized the Board's 1996 vision statement and goals and objectives for enhancing engineering programs in the state, noting that many goals and objectives have already been realized. Continuing, he described three components in deriving the four options before the Committee: 1) how the overall plan was developed; 2) who is going to be paying for it; 3) how it is spread over a period of time. (Copies of Dr. Anderes' presentation are on file in the Board's office.)
After a review of the four options, Dr. Anderes noted that Option D (Option B spread over four biennia as opposed to three) is the option staff is recommending to the Committee for its consideration. He pointed out that the difference between the $113 million recommended by MGT and the $85 million estimate submitted by OUS to implement Option D was the amount that the Engineering Technology and Industry Council (ETIC) has committed. This amounts to a $28 million contribution from ETIC for faculty salaries, scholarships, and operating/start-up costs. Mr. Imeson urged members to consider the monies more holistically, rather than as separate amounts from varying sources.
Mr. Young asked how peer improvement relates to Tier I. Using OSU as an example, Dr. Anderes explained that the gap funding identified to move OSU's engineering program from its current rank of 70th to approximately 30th-35th is what constitutes peer improvement, thereby moving the program toward a set of peers that have established a funding target. He clarified that all four schools identified in the study (OIT, OSU, PSU, and UO) would experience peer improvement as a result of enhanced funding. Mr. Young asked if OSU is designated to receive funding to become a Tier I engineering institution that might preclude other institutions from striving to become Tier I as well. Those kinds of decisions, responded Dr. Anderes, would be up to the individual institutions.
Noting the focus on size of programs, Ms. Lehmann asked if other measures were considered when determining excellence and how that is rewarded. Dr. Anderes said that when looking at aspirational peers, a number of qualitative subsets existed suggesting excellence. Another component, he continued, related to research funding. Concerned that the conversation was not capturing quality because of the budgetary focus, Ms. Lehmann suggested the qualitative piece be factored in. Understanding Ms. Lehmann's sentiments, Dr. Anderes explained that, once the dollars are in place, those are hopefully used to enhance quality vis a vis more qualified faculty, better students, and research funding. "You're doing things that focus on becoming excellent with the dollars," he pointed out.
Ms. Lehmann, noting that studies indicate as programs rise in the rankings, reliance on state funds decreases, asked about the possibility of rewarding excellence at institutions with matching state public funds, and if that is a recognized sign of excellence by outside funding sources. Dr. Anderes indicated that would be possible, reminding members that the model was created with an initial 50-50 state/other sources funding split to begin with. Chancellor Cox observed that the ability by an institution to generate external dollars was crucial. Suggesting the ability to do that might be an indicator for excellence, Ms. Lehmann felt that would tie in well with the theory behind the new budget model.
Responding to Dr. Anderes' detailed explanation of the funding request, Mr. Young pointed out that he felt the Board should encourage all institutions to aspire to Tier I excellence. Concluding his presentation, Dr. Anderes observed that the overall budget should be assessed every biennia, but there should be annual progress reports on programs and funding, stressing the accountability of each institution.
Mr. Lussier asked if there was any kind of systems analysis conducted throughout the process, indicating that he felt it was a fundamental issue to address. Referencing the Board's 1996 vision statement, Dr. Anderes pointed out that there was a clear desire to emphasize statewide support for engineering, and that staff was guided by the Board's position of that support. Mr. Imeson clarified that, as engineering and computer science programs are becoming important across the System, assumptions were made in the analysis to that end.
Ms. Wustenberg asked if any programs and/or disciplines had been delineated or focused upon. Vice Chancellor Anderes explained those data would be expected by institutions as part of their expenditure plans. He was confident that particular emphases regarding priorities would emerge quickly. Concerned about possible duplication issues in the future, Ms. Wustenberg felt an identification process might be worthy of further discussion prior to awarding funds. The Chancellor suggested that the overwhelming industry need might negate any concerns about duplication. President Frohnmayer added that, since computer science is now considered a requisite discipline within an arts and sciences curriculum at the undergraduate level, program duplication should not be an issue.
Mr. Williams observed that in the 1996 vision statement, capacity issues were implied, but nothing was said about top-tier universities. By adopting Option D, he asked if the Board was de facto endorsing a top-tier philosophy for OSU, and questioned if the funding was sufficient to do so. Mr. Anderes explained that he translated the statements from the perspective of System evolution in computer science and engineering since 1996. If benchmarks had been created back in 1996, he said a Tier 1 would have most likely been brought up. Mr. Williams asked if the Board might need to be more explicit about what it's trying to do. Once the Board makes the decision to support a particular option, Dr. Anderes said that he saw the next step as one of information gathering from institutions, to learn how they envision what they would do, given a specific set of resources. He felt that a strategic planning session might be valuable after those plans are submitted.
Voicing his support for a Tier I program at OSU, as well as support for other institutions in their aspirational endeavors, Mr. Williams said he was unsure if the plan would achieve that end, and how verbal commitments are linked to the budget. Mr. Imeson encouraged input from presidents on the issue, reminding Mr. Williams that both MGT consultants and staff created their proposals with that in mind. While feeling confident in the budget submitted for Board consideration, Mr. Imeson said there was no way to say how the future environment might alter plans.
Chancellor Cox noted that the multi-biennia plan not only insists on accountability by OUS, but allows for some fine tuning along the way. Validating prior concerns about dilution and duplication, Mr. Imeson said that this isn't something that ought to be exclusive to any one institution or any one part of the state, thereby making it a "two-pronged proposal." While still grappling with the issue of the Governor's directive to create a Tier I institution weighed against other institutions' needs and abilities to produce undergraduates, Mr. Williams said he understood the plan before the Committees was the best way to address the directive at this point.
Dr. Richmond asked members to recognize that the amounts listed and the peer institutions identified were actually Tier II and not Tier I. Further, she felt some of the numbers have been called into question with regard to start up funds and operating budgets. "In a state that struggles to provide support for all programs, it seems reasonable for us to have those kinds of details before we make a commitment of this magnitude," she remarked.
Describing OSU's efforts to submit the most detailed plans possible, President Risser said he felt that Option D was fair to all involved. He added that he felt the amount of money earmarked for OSU would be enough to get it to a top-tier status, but that it will probably take longer than the institution and industry desires. Dr. Aschkenasy urged Dr. Risser to share the criteria used by OSU to arrive at its final analysis with the Board, to which he agreed.
Dr. Aschkenasy asked who would make the ultimate decision on whether there should be one Tier I or four Tier III Schools of Engineering. Mr. Imeson explained the Governor would be the most appropriate decision-maker. He added that, if the Board has a different perspective beyond the Governor's original request to submit plans for a Tier I School of Engineering, it ought to express whatever that perspective is, pointing out that staff had done a good job responding to his initial charge. Chancellor Cox went on to say that ETIC has conducted at least two analyses of the specifics behind the proposal.
Reminding members that the Board is not "giving out money" with the decision, Mr. Willis reiterated that the Board is simply trying to respond to the Governor's request to the best of its ability. Mr. Imeson added that a top priority is full funding of the budget model, which is not affected by moving the engineering recommendations forward.
To ensure he was clear on an earlier point made by Mr. Imeson, President Bernstine asked if there would be any restraints on other institutions such as PSU from aspiring to be a top-tier or Tier I institution. Vice Chancellor Anderes affirmed the prior statement, suggesting that the funding recommended will allow all institutions involved in the proposal to move forward in a collaborative manner. Agreeing with the concept, Ms. Lehmann said she felt the Board's strategy embraced both quantity and excellence across the System.
Concerned about sustainability, Ms. Wustenberg asked if others were unsure about future legislative bodies supporting these new initiatives. Mr. Imeson, observing that nothing is certain, said that much of what is allocated in the next biennia will be decided upon in the outcomes of certain ballot measures. He conceded that much work would need to be done by the Board and staff to ensure funding is approved, but that there is a great deal to build on, including the relationship with ETIC, coupled with strong industry support. Building on Mr. Imeson's comments, Chancellor Cox pointed out that, given the pressures of the new Oregon economy, the case will be very strong to pursue moving the state forward in this area.
Mr. Lussier, while supporting the proposal, indicated that he felt more attention should be paid to strategic planning and the development of criteria in order to better address future shifts. "We tend to look at these decisions from a budget and finance perspective and not strategically. I think we still have some work to do anticipating the kinds of changes we need to make as a System," he said.
Dr. Richmond posed the question of prioritizing budget requests beyond full funding of the budget model. Mr. Imeson pointed out that those requests were ranked at the time the budget was approved by the Board in July. Vice Chancellor Anderes reminded members that the Board could do as it wished in terms of prioritizing requests, but that he viewed the engineering proposal as an appropriate companion piece to the ETIC proposal, which was identified as a Priority Four item by the Board.
ETIC Chair Jim Johnson stated for clarification that ETIC evaluated the 2x proposal, as well as the OSU and PSU proposals. He felt that the Board's approval of the 2x proposal (doubling engineering/computer science degree production in OUS institutions by 2005 and beyond) would have a profound impact on the state. He observed that the Board, in its support of Option D, will have chosen to strengthen all institutions by giving them a stronger base, which enables them to compete in a free market. He said that Option D did not fully support the establishment of a Tier I College of Engineering. Mr. Imeson asked him to compare his viewpoint with that of President Risser's, who indicated that he felt the funding was adequate to create a Tier I program. Mr. Johnson said that he interpreted Dr. Risser's comments as 'we've made the decision as an institution and, while there's a shortfall beyond what our plan states, we'll go find the additional resources.' He commended Dr. Risser for his commitment to the overarching goal of becoming a Tier I institution.
Mr. Young said that he felt the Spires of Excellence model was most attractive and realistic to him. Given the budgetary constraints of the state, if the proposal were successful, it could be used to leverage increased funding from the legislature toward a Tier I program. "One of the most important things we can do is focus college resources on disciplines of highest priority to Oregon's industries and communities," he observed.
Offering another perspective on the discussion, Mr. VanLuvanee referenced the MGT report, and its basis for increased funding on the peer median versus OSU and doubling the number of students. "We're going to have twice the number of opportunities to practice what we're doing today. We're holding the university presidents accountable for the success of the institutions. I worry we're arguing in the areas in which the presidents have stated their accountability in terms of enrollment figures."
Mr. Williams asked Mr. Johnson to articulate his concerns over the funding laid out in the proposal, and if they had to do more with allocation or the amount itself. Mr. Johnson responded that there is a difference in balance where monies are invested, based either on 2x or Tier I excellence. He expressed his desire to see the System be successful as a whole, but did not want to see all institutions fail in its aspirations because funding was spread too thin.
Concluding the discussion, Mr. Imeson asked for a motion from the Joint Committee to move the recommendation [Option D] along with corresponding capital requirements forward to the Board for its final consideration. Mr. VanLuvanee moved and Ms. Lehmann seconded the motion to adopt the proposal as submitted. Those voting in favor: Directors Aschkenasy, Hempel, Lehmann, Lussier, VanLuvanee, Williams, Wustenberg, Young, Willis, and Imeson. Those voting no: Director Richmond.
The meeting adjourned at 5:45 p.m.