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MINUTES OF THE
REGULAR MEETING OF THE
STATE BOARD OF HIGHER EDUCATION

April 20, 2001

CALL TO ORDER

The meeting of the State Board of Higher Education was called to order at 10:04 a.m. by President VanLuvanee.

ROLL CALL

On roll call, the following Board members answered present:

Dr. Herb Aschkenasy
Mr. Shawn Hempel
Ms. Leslie Lehmann
Mr. Jim Lussier
Dr. Geri Richmond
Mr. Jim Willis
Ms. Phyllis Wustenberg
Mr. Tim Young
Mr. Don VanLuvanee

Absent: Mr. Tom Imeson (ill) and Mr. Bill Williams (business conflict).

APPROVAL OF MINUTES

The Board dispensed with the reading of the February 16, 2001, regular meeting minutes. Ms. Lehmann moved and Mr. Lussier seconded the motion to approve the minutes as submitted. The following voted in favor: Directors Aschkenasy, Hempel, Lehmann, Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

The Board dispensed with the reading of the March 2, 2001, special meeting minutes. Mr. Lussier moved and Ms. Lehmann seconded the motion to approve the minutes as submitted. The following voted in favor: Directors Aschkenasy, Hempel, Lehmann, Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

President VanLuvanee asked if there were any questions or corrections to the February 16, 2001, Committee of the Whole minutes. Mr. Young asked to amend his comments to better reflect his reasons why he supported UO's proposal to manage the Central Oregon branch campus: reliance on distance education (by OSU), breadth of curriculum, demanding less state support, and greater COCC faculty involvement. There being no disagreement to his amendments, Mr. Young motioned to approve the amended minutes, and Dr. Richmond seconded his motion. The following voted in favor of the amended version of the minutes: Directors Aschkenasy, Hempel, Lehmann, Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

PRESIDENT'S REPORT

Board Visitation

President VanLuvanee thanked President Youngblood for hosting a reception and dinner. He called on Mr. Lussier for a report on the visitation. Mr. Lussier complimented President Youngblood on all aspects of the visitation, particularly the interaction with students throughout the day. Presentations by faculty and students in the Earth Sciences Department were particularly outstanding, he said, adding that all the Board members were very impressed with the caliber of work being done. These were followed with a presentation by faculty in the area of educational research, regarding the studies of people with developmental disabilities who wish to attend college.

Incoming SOU President

Acknowledging that SOU's president-designate, Dr. Elisabeth Zinser, was in the audience, Mr. VanLuvanee said that she expects to begin working full-time as president of Southern later in the summer.

OSU Accreditation

Several Board members met with OSU's accreditation team the day before, said Mr. VanLuvanee. Discussions focused on both opportunities and challenges that lie ahead for the institution. He noted that the accreditation team is one of the largest assembled by the Northwest Association of Schools and Colleges.

Faculty Recognition

Mr. VanLuvanee pointed out three newly-named Guggenheim Fellow recipients from the UO: Professors Ehud Havazelet and Dorianne Laux from the Creative Writing Department and Professor Monte Westerfield, director of the Oregon Zebrafish International Resource Center. The UO's College of Education was recently ranked 13th in the nation by U.S. News and World Report, he added. Further, seven faculty from three EOU, OSU, and SOU were recently awarded Fulbright Fellowships, said Mr. VanLuvanee. "These are remarkable achievements, and as members of the Board, we congratulate the recipients and the campuses for the high quality they bring to public education in Oregon," he said.

Ways and Means

Reporting that the first round of Ways and Means Subcommittee hearings recently concluded, Mr. VanLuvanee expressed his gratitude to all Board members, institution presidents, and the many stakeholders who testified on behalf of OUS.

Nominating Committee

Mr. VanLuvanee announced the Nominating Committee for 2001-02: Dr. Aschkenasy (chair), Mr. Willis, and Ms. Wustenberg. They will present their recommendations for executive officers and committee assignments at the June meeting.

CHANCELLOR'S REPORT

Ways and Means Follow-Up

Chancellor Cox described the recent Ways and Means Subcommittee hearings as "exciting, exhilarating, challenging, and somewhat exhausting." He noted that the success of the effort was due to the work of all involved, including institution presidents and Chancellor's Office staff. Saying that it was among the best set of presentations ever made by OUS, he pointed out that Board members and private sector colleagues added a powerful dimension to the case made to lawmakers.

Meeting with U.S. Secretary of Education

The Chancellor highlighted his itinerary for an upcoming trip to Washington, D.C., in which he planned to meet with Education Secretary Paige. Among items slated for discussion were the PASS project, a nationally-recognized program based in the Chancellor's Office. Ongoing work with K-12 and teacher education efforts in Oregon were other items on the agenda.

OIT Men's Basketball Coach

Congratulating OIT Head Men's Basketball Coach Dan Miles on his induction into the NAIA Hall of Fame, Chancellor Cox listed several notable statistics from Mr. Miles' 30-year career. President Dow added that Mr. Miles also was recently presented with Favell's Klamath County Western Heritage Award, a prestigious community distinction.

IFS Report

Following is an excerpt of IFS President Wollner's remarks:

"At our last meeting on April 6 and 7, IFS convened at the Oregon State Capitol Building in Salem in order for members to make personal visits to their legislative representatives and to other legislators in key positions with respect to higher education and budget deliberations.

"Prior to the visits, however, we were addressed by, among others, Representative Mark Simmons, the Republican Speaker of the House. Speaker Simmons reaffirmed the commitment of the Republican caucus to adequate funding for higher education. Speaker Simmons was followed by Senator Cliff Trow, a democratic member of the Joint Ways and Means Education Subcommittee. Like Speaker Simmons, and all others who addressed IFS at our meetings on those dates, he emphasized that the fate of higher education budgeting would depend in large measure on the state economist's May revenue forecast, meaning that the task of budget making would finally commence once the final and firmest forecast of the monies that will be available to the state from tax revenues is known.

"Chancellor Cox made some very positive remarks about the accomplishments of OUS over the last several years, pointing out that the System has responded to the demands of the legislature and the public. IFS members left the meetings heartened by the positive attitude of the legislators we spoke with and Chancellor Cox's very affirmative message. Given the clear signals that these legislators are eager to help us, the System's excellent performance, and the Governor stepping forward to assist, we believe it is time for the Board to keep spending its capital as our stewards and help these legislators keep their commitment to the System.

"Notwithstanding the support of our political allies, there is at least one difficult issue that has arisen in the legislature. There is a movement among a handful of legislators to abolish the incidental fee system. It would, in our judgment, be an unwarranted intrusion into the educational process and a classic case of throwing out the baby with the bath water if they succeeded in such a campaign.

"A number of questions were asked about the budget model at our meeting and I have been directed to raise them with you. The first issue concerns accountability. Are the monies generated in the RAM filtering down to the lowest level? That is, does tuition follow the student all the way to the department?

"Second, IFS would like the Board to give attention to the way the model treats the small institutions. Are they being funded adequately under the budget model?

"Third, faculty would like to be assured that the budget model itself was under review. We assume that the cell values are correct. But are they? We feel that it is equally important for the Board as the advocate of all the System's stakeholders to question the functionality of the model at every turn and to consider the unique relationship of each of the institutions to the model as it scrutinizes the results of the RAM's application."

Chancellor Cox echoed Professor Wollner's remarks with respect to the incidental fee system. "The presidents and I are absolutely united in defense of this process on our campuses. It is the most collaborative and democratic process. It is a marvelous learning opportunity for student government associations to raise their own funds and spend them on projects that matter to them and we regard this as very important. We are very energetic in our defense of the system," he stated.

As a former vice chair and chair of the fee committee at PSU, Mr. Young categorized student control of student fees as vitally important. He asked that all Board members sign a support statement in favor of retaining student-controlled student fees.

TUITION RATE INCREASES FOR 2001-2003

Staff Recommendation to the Budget and Finance Committee

Staff recommended Board approval of a range of tuition increases between two and five percent each year in the 2001-2003 biennium that would allow each university to have the latitude to choose within the range.

Budget and Finance Committee Discussion and Action

Mr. VanLuvanee, who chaired the meeting in Mr. Imeson's absence, reported that the Committee unanimously approved the staff's recommendation. Institution presidents, after assessing their own campus needs, would return to the Board in June, Mr. VanLuvanee said, with a report of their recommended tuition increases for the biennium.

Board Discussion and Action

Noting the concept was for presidents to tell the Board what they needed, Mr. VanLuvanee said presidents were in agreement about the plan.

Vice Chancellor Anderes clarified that presidents may recommend setting different rates for each year, depending on their institutions' situation. He added that the Board's action does not formally implement any specific decisions relating to increases, as those will be determined after the May revenue forecasts are released in mid-May. Ms. Lehmann expressed her support for more flexible tuition policies generally.

Saying that it was important for the Governor and the legislature to know that higher tuition rates will be based on budget allocations by them, Dr. Richmond pointed out that fact should be emphasized as final decisions are made.

Mr. Lussier moved and Ms. Lehmann seconded the motion to approve the staff recommendation as submitted. The following voted in favor: Directors Aschkenasy, Hempel, Lehmann, Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

ENGINEERING/COMPUTER SCIENCE ALLOCATIONS ($20 MILLION ENHANCEMENT FOR 2001-2003)

Staff Recommendation to the Budget and Finance Committee

Staff recommended the $15 million Engineering and Technology Industry Council (ETIC) and $5 million top tier initiative distribution for OUS and participating institutions.

Budget and Finance Committee Discussion and Action

Mr. VanLuvanee reported that the Committee unanimously approved the staff recommendation.

Board Discussion and Action

Vice Chancellor Anderes explained the reasoning behind the allocations, which was based on a proportion of the original OUS request ($40.6 million) and the Governor's recommended budget for the two initiatives ($20 million).

Ms. Wustenberg moved and Dr. Richmond seconded the motion to approve the funding allocation as recommended. The following voted in favor: Directors Aschkenasy, Hempel, Lehmann, Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

INSTRUCTIONAL ALLOCATIONS ($17 MILLION ENHANCEMENT)

Staff Recommendation to the Budget and Finance Committee

Staff recommended instructional allocations as they appear in the following table pending final legislative appropriation*:

Instructional Enhancement

University

2001-02

2002-03

Biennium

Eastern Oregon University

$0.4

$ 0.6

$ 1.0

Oregon Institute of

0.3

0.2

0.5

Oregon State University

3.3

6.3

9.6

Portland State University

1.0

2.1

3.1

Southern Oregon University

0.0

(0.1)

(0.1)

University of Oregon

0.8

1.6

2.4

Western Oregon University

0.1

0.4

0.5

Total

$5.9

$11.1

$17.0


Note 1: Based on enrollment projections for 2001-2003 compared to 2001-01 projected enrollment.
Note 2: The $17 million for enrollment growth is applied proportionately to fundable undergraduates and graduates.

*This was the table as it appeared in the original staff recommendation. Since the April 20, 2001, meeting, staff have determined that these original estimates may be slightly altered. A final appropriation schedule will be presented to the Board at its June 8, 2001, meeting.

Budget and Finance Committee Discussion and Action

Mr. VanLuvanee reported that the Committee unanimously approved the staff recommendation.

Board Discussion and Action

Chancellor Cox reiterated to the Board that the estimated enhancement monies were earmarked for enrollment growth and not to "backfill" current enrollments.

Mr. Lussier moved and Mr. Young seconded the motion to approve the staff recommendation as submitted. The following voted in favor: Directors Aschkenasy, Hempel, Lehmann, Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

Saying that she felt there were some general misunderstandings about the OUS budget, Ms. Lehmann voiced some concern over how that might play out in the legislature. As an example, she pointed out that she heard someone in the legislature had thought that funding for the Central Oregon branch campus was a one-time appropriation. Vice Chancellor Anderes explained that staff have worked to better describe the interworkings of the RAM to lawmakers, including how the Central Oregon branch would operate. There is little doubt, he added, that OUS will be asked to make specific statements within a budget note about funding and enrollments regarding the branch campus.

While inroads are being made with legislators, OUS Director of Government Relations Grattan Kerans said that nearly 35 percent of current lawmakers will be replaced by the next session due to term limits, which will require further instruction about the model to freshmen legislators in the 2003 session.

NAMING OF CENTRAL OREGON BRANCH CAMPUS/TITLE OF BRANCH CAMPUS EXECUTIVE OFFICER

Staff Recommendation to the System Strategic Planning Committee

Although branch campus implementation planning activity falls within the purview of the Chancellor, staff brought two action items to the Board per understanding of the Board's deliberations at the February 16, 2001, meeting. These were (1) the name of the branch campus, and (2) the primary title of the lead branch campus administrator (to comport with national practice and the Board's policies).

1. Staff recommended that the name of the branch campus be Oregon State University-Central Oregon.

2. Staff recommended that the primary title of the lead branch campus administrator be Campus Executive Officer.

System Strategic Planning Committee Discussion and Action

Chair Willis reported that the Committee discussed at length the name of the branch campus. Mr. Lussier felt that "Cascades Campus" better suited the branch, noting that the term "Central Oregon" was used extensively in that part of the state. The Committee, Mr. Willis said, recommended unanimously to the Board the name "OSU-Cascades Campus."

Referring to the title of the lead administrator for the branch campus, Chair Willis said that the Committee unanimously agreed with the staff recommendation.

Board Discussion and Action

Mr. Willis moved and Mr. Lussier seconded the motion to approve the name of the Central Oregon branch campus as "OSU-Cascades Campus." The following voted in favor: Directors Aschkenasy, Hempel, Lehmann, Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

Mr. Willis moved and Mr. Hempel seconded the motion to approve the staff recommendation to name the lead branch campus administrator "Campus Executive Officer." The following voted in favor: Directors Aschkenasy, Hempel, Lehmann, Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

CONFIDENTIALITY RULES FOR CAMPUS NEGOTIATION OARS 580-001-0030 AND 580-022-0047

Staff Recommendation to the System Strategic Planning Committee

Staff recommended Board approval of OARs 580-001-0030 and 580-022-0047, as approved by the Governor.

System Strategic Planning Committee Discussion and Action

Chair Willis reported that the Committee unanimously approved the rules, which were originally adopted as temporary rules by the Board at its December 15, 2000, meeting.

Board Discussion and Action

Mr. Willis moved and Mr. Young seconded approval of the temporary rules as permanent rules. On a roll call vote, the following voted in favor: Directors Aschkenasy, Hempel, Lehmann, Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

GRIEVANCE PROCEDURES: OARS 580-021-0050, -0055, AND -0390 (REPEAL)

Staff Recommendation to the System Strategic Planning Committee

Staff recommended Board approval and finalization of the revised OARs 580-021-0050 and 0055, and repeal of OAR 580-021-0390, relating to grievance procedures.

System Strategic Planning Committee Discussion and Action

Chair Willis reported that the Committee unanimously approved the staff recommended amendments to the administrative rules, including repeal of OAR 580-021-0390.

Board Discussion and Action

Mr. Willis moved and Ms. Lehmann seconded the motion to approve the rule amendments and repeal of OAR 580-021-0390. On a roll call vote, the following voted in favor: Directors Aschkenasy, Hempel, Lehmann, Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

B.A./B.S., INFORMATION SYSTEMS, WOU

Staff Recommendation to the System Strategic Planning Committee

Staff recommended that the Board authorize Western Oregon University to establish a program leading to a baccalaureate degree in Information Systems, effective fall term 2001. The OUS Office of Academic Affairs would conduct a follow-up review in the 2006-07 academic year.

System Strategic Planning Committee Discussion and Action

Chair Willis reported that the Committee unanimously approved the program proposal as requested on its consent agenda.

Board Discussion and Action

Mr. Willis moved and Ms. Lehmann seconded the motion to approve the program proposal. By consent, the following voted in favor: Directors Aschkenasy, Hempel, Lehmann, Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

OTHER COMMITTEE REPORTS

Investment

Ms. Wustenberg, chair of the Investment Committee, reported that the Committee last met on March 16. A technical presentation by representatives of the Commonfund, fund managers of OUS's multi-strategy bond fund summarized the past year's performance. The second quarter fiscal report was also discussed-the endowment fund market value was down nearly $5 million from the first quarter-fairly typical for the market trend. Ms. Wustenberg complimented the OUS investment consultants at R.V. Kuhns for their ongoing work.

OUS Controller Mike Green said that R.V. Kuhns recommended a review of the Board's investment policy with regard to its multi-strategy bond fund. The Committee, he said, will begin that process at its next scheduled meeting. Referring to the second quarter investment report losses, Mr. Green said the situation will be monitored.

Concluding the report, Ms. Wustenberg said the Committee is investigating the possibility of asking someone from Oregon's Treasury Department to become a member of the Investment Committee, which she felt would be useful for information exchange and guidance.

OHSU

In Mr. Imeson's absence, Dr. Hallick reported that OHSU's board met on April 19 and discussed primarily issues relating to master planning and budget. Budget presentations to the Ways and Means Subcommittee are scheduled for late May, which is very late in the session, she said. However, the proposed merger with the Oregon Graduate Institute was recently approved by both the House and Senate.

Joint Boards Working Group

Mr. Lussier said that, at the Working Group's meeting on March 17, three major items were discussed. These included a report on minority teachers in Oregon and the broader issue of diversification; a legislative update; and the evolution of a K-20 distance education system.

PUBLIC INPUT SESSION

The following people spoke during the public input session:

William Bragg/Patrician Quinn-Students for a Progressive Alliance, WOU

Mr. Bragg and Ms. Quinn spoke out against the Board's business practices policy, which was approved in February 2001. They pointed out areas in which they felt the policy contradicted that of OUS in general:

1) institutional mission statements;
2) funding;
3) lack of information to students-dissemination issues; and
4) business ethics.

Chad Sullivan-Student Representative to Faculty Senate, UO

Mr. Sullivan explained that he was a member of a faculty senate committee that investigated trademark licensing and monitoring. He said that the committee felt that codes of conduct are necessary for universities.

Speaking more specifically to the business practices policy, Mr. Sullivan urged the Board to reopen the issue for debate, and distributed a petition signed by more than 50 UO students requesting this action.

Agatha Schmaedick-Community Alliance of Lane County

Ms. Schmaedick, an alumna of UO, indicated that, in her research in Indonesia, university apparel are made in poor factory conditions. She, like Mr. Sullivan, felt that codes of conduct would be beneficial, adding that the business practices policy would not necessarily block universities from having such a document if the Board amended the policy to make an exception for internationally-recognized illegal activities. Ms. Schmaedick questioned the policy's consistence with the purpose and heritage of higher education in Oregon.

ITEMS FROM BOARD MEMBERS

Dr. Richmond asked that a study be conducted on faculty/staff gender equity issues in OUS with regards to hiring, promotions and tenure, salary chaired positions, teaching loads, and access to resources. She referenced current litigation nationwide on the issue, noting that it seemed reasonable that OUS engage in a proactive approach to the issue. Mr. VanLuvanee said that he would ask the Chancellor to direct staff to conduct such a study and bring it before the System Strategic Planning Committee for review.

Acknowledging the comments regarding the recent business practices policy decision, Mr. Lussier said, "While we may not always agree on the specific way of achieving results, I certainly do appreciate the passion and dedication that so many people have with regard to this policy and the ethical issues surrounding it."

Mr. Lussier expressed his appreciation to President Youngblood for hosting the visitation and dinner, adding that being able to sit down with students and discuss relevant issues is one of the great rewards of being a Board member.

Ms. Lehmann encouraged everyone to read the OUS Diversity Report, which was summarized at the System Strategic Planning Committee (a copy of the full report is on file in the Board's office). Noting its instructiveness, Ms. Lehmann felt encouraged by some of the progress made in student recruitment, but pointed out that faculty recruitment is challenging, particularly with an anticipated wave of retirements over the next several years.

On a related subject, Ms. Lehmann said that in her discussions with minority students on OUS campuses, there is general consensus that recruiting efforts are good, but that more work is needed in providing adequate support systems once the students arrive on campus.

Ms. Wustenberg shared her positive experiences with students at the recent rally at the Capitol, as well as on campuses. She said she was very impressed with their intelligence and commitment to high ethical standards.

Mr. Young suggested that, at each Board meeting, the Oregon Student Association present a report. He added that he would like to participate in any follow-up deliberations related to the business practices policy.

ITEMS FROM PRESIDENTS

President Dow congratulated Mr. VanLuvanee on the recent opening of the new Electro Scientific Industries, Inc. facility in Klamath Falls. She also thanked President Youngblood for hosting the meetings.

President Hopkins-Powell announced the upcoming 75th anniversary of SOU's continuous operation. She described many of the events planned for the week of May 14-19.

Announcing the kickoff of UO's 125th anniversary later in the year, President Frohnmayer said more information on events would be forthcoming. He also expressed his appreciation to President Youngblood, pointing out how beautiful the campus looked.

After thanking everyone for attending the meetings, President Youngblood said that she was always happy to showcase Western.

DELEGATION OF AUTHORITY TO THE BOARD'S EXECUTIVE COMMITTEE

Board Secretary Vines read the statement pertaining to delegation of authority to the Board's Executive Committee:

"Pursuant to Article II, Section 5 of the Bylaws of the Board of Higher Education, the Board delegates to the Executive Committee authority to take final action as here designated or deemed by the Committee to be necessary, subsequent to the adjournment of this meeting and prior to the Board's next meeting, which is scheduled for June 8, 2001. The Executive Committee shall act for the Board in minor matters, and any matter where a timely response is required prior to the next Board meeting."

Board members agreed to the delegation of authority as stated.

ADJOURNMENT

The Board meeting adjourned at 11:27 a.m.

Diane Vines
Secretary of the Board


Don VanLuvanee
President of the Board