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

June 8, 2001

CALL TO ORDER

The meeting of the State Board of Higher Education was called to order at 11:53 a.m. by President VanLuvanee. The meeting was preceded by a work session that began at 10 a.m.

ROLL CALL

On roll call, the following Board members answered present:

Mr. Jim Lussier
Dr. Geri Richmond
Mr. Jim Willis
Ms. Phyllis Wustenberg
Mr. Tim Young
Mr. Don VanLuvanee

Absent: Dr. Herb Aschkenasy (business conflict), Mr. Shawn Hempel (school conflict), Mr. Tom Imeson (business conflict), Ms. Leslie Lehmann (out of the country), and Mr. Bill Williams (personal conflict).

APPROVAL OF MINUTES

The Board dispensed with the reading of the April 20, 2001, regular meeting minutes. Mr. Lussier moved and Mr. Young seconded the motion to approve the minutes as submitted. The following voted in favor: Directors Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

PRESIDENT'S REPORT

Board Visitation

Mr. VanLuvanee thanked President and Mrs. Creighton for hosting the luau the evening before, saying what a fun event it was for everyone who attended. He then asked Mr. Lussier to report on the Board visitation. Mr. Lussier summarized the activities, which began with a reception on Wednesday evening, June 6. He noted that the interaction with students at virtually all activities was beneficial, but complimented particularly the "wonderful strength in the relationships between faculty, staff, and students. This personalization is seen as a huge strength," Mr. Lussier said. He concluded his report with highlights of President Creighton's discussion of EOU's strategic plan, which was culminated by an unveiling of a sign at the site of the new science building.

Faculty Honors

Saying that he planned to make it a practice of acknowledging faculty awards, Mr. VanLuvanee listed several recent recipients, including UO Physics Professor Russell Donnelly, who was selected as a Fellow of the American Academy of Arts and Sciences.

Also recognized was Dr. Laurence Lyon, an emeritus professor at WOU, who was recently commissioned to write a major sacred oratorio for solo, chorus, and orchestra, as part of the Ricks College Sacred Music Series. He has composed numerous choral works, many of which have been performed by the Mormon Tabernacle Choir.

Other acknowledgments included the selection of PSU to participate, for a second time, in a national educational collaborative sponsored by the John S. and James L. Knight Foundation. PSU faculty will create a community outreach plan designed to promote PSU and its service to the Portland community.

Further, 20 of the top faculty research scientists from OSU, PSU, and UO were named Intel Faculty Fellows for 2001. Their selection, and accompanying grants totaling $290,000, will support seven new and distinct projects to advance high-technology education at their respective universities. The funds will be used to develop new curricula or enhance student laboratory facilities. Intel Faculty Fellows for 2001 are as follows:

Oregon State University

Portland State University

University of Oregon

"Recognitions like these," said Mr. VanLuvanee, "merit our Board's collective admiration and respect. I hope those institution representatives present will convey, on behalf of the entire Board, our congratulations and best wishes to these accomplished faculty. Their work honors all of us associated with the Oregon University System."

Chancellor/Presidents' Evaluations

Mr. VanLuvanee explained the process for the upcoming Chancellor and Presidents' evaluations. The Chancellor's performance evaluation will be held in executive session in September or October by the Executive Committee (which serves as the Board's personnel committee), and the Chancellor will evaluate all presidents in private sessions later in the summer. A public discussion of goals for the coming year by the Chancellor and all presidents will take place in the fall.

Board Officers for 2001-02

Pointing out a document outlining Board Committee assignments for 2001-02, Mr. VanLuvanee said that Mr. Willis would soon give the Nominating Committee report and a vote would be taken on the officers of the Board and Executive Committee compilation.

CHANCELLOR'S REPORT

Legislative Update

Chancellor Cox briefly explained the current status of legislative hearings. He indicated that final OUS budget hearings would likely take place in the next week, but he was unsure of the exact timeline. "Things are heating up and the process of moving bills through is accelerating dramatically," he said.

Admissions

The Chancellor reported that admissions activity was up Systemwide. Increases in applications ranged between 5-12 percent.

Accountability Conference

Acknowledging OUS Senior Associate Director of Government Relations Andy Clark in the audience, Chancellor Cox noted that he is working with Education Secretary Rod Paige on the prospect of a joint conference that OUS would co-sponsor in the Northwest on institutional accountability.

Gifts to UO

The Chancellor pointed out two recent, large gifts to UO, totaling nearly $20 million. The first gift, by Bernice Ingalls Staton, provides for $10 million in need-based scholarships. Ms. Staton could not afford to continue her education at UO, and dropped out after two years. She hoped her gift would prevent others from having to do the same. The second gift, from Bob and Beverly Lewis, both alumni of the University, is earmarked for the new neuroscience center.

OIT Women's Softball Team

Concluding his remarks, Chancellor Cox reported that the OIT women's softball team has six starting players with GPAs over 3.6, commendable numbers for a technology and engineering-focused institution.

IFS Report

EOU Professor Jeff Johnson gave the IFS report in the absence of IFS President Craig Wollner. Below is an excerpt of his statement:

"IFS most wanted to communicate to the Board our collective gratitude. To Chancellor Cox, to the institutional presidents, and to this Board, a most sincere thank you for your work on behalf of public higher education in the State of Oregon.

"At our last IFS meeting a week ago, a few things clearly resonated with my colleagues. I'd like to share some of these with you. Perhaps most exciting was the presentation by Chancellor Cox. It stated an invitation to engage in real dialogue with IFS about future strategies for getting the message out about the importance of public higher education. My colleagues and I think that's a great idea and we would like very publically to accept the Chancellor's invitation. Indeed, we are working to find a time in the near future when we can begin this important discussion.

"IFS was also very intrigued by the presentation by President Frohnmayer. To hear that there was real progress being made with an institutional commitment shown to salary and equity issues at the University of Oregon was happy news indeed. To learn that it was undertaken in such an open spirit of partnership between administration and faculty governance bodies was downright exciting. IFS members certainly liked what we heard in this regard and are cautiously optimistic that something like the UO plan could serve as a model for all of our institutions.

"The dark cloud at our meeting was clearly the news about PEBB. We're very concerned that the change in faculty benefits, which we feel is something of a given, will further threaten our efforts in recruiting and retaining the finest faculty possible.

"I want to brag a moment on a remarkable institution and an equally remarkable group of colleagues who make up IFS. In my opinion, this Board, and indeed the entire state, is exceptionally well served by the IFS. In a climate that increasingly pits us against one another, program against program, institution against institution, I've been in awe of the ability of the IFS to always put the interests of the System and the state ahead of everything else. We've learned to be marketers, political consultants, and lobbyists. Where we are at our absolute best, however, is when we return to our primary roles as teachers and scholars and collectively worry about what is best for our students. I believe it's important for this Board to be reminded occasionally of remarkable entities within the System such as IFS."

EXECUTIVE COMMITTEE APPOINTMENTS, 2001-02

Nominating Committee Recommendation to the Board

Mr. Willis, acting on behalf of the Nominating Committee, recommended the following slate of Executive Committee members for 2001-02:

Mr. VanLuvanee, president
Mr. Lussier, vice president
Mr. Imeson
Ms. Lehmann
Ms. Wustenberg

Board Discussion and Action

Mr. Willis moved and Mr. Young seconded the motion to accept the Executive Committee appointments as recommended. The following voted in favor: Directors Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

AMENDMENT TO OUS POOLED ENDOWMENT FUND INVESTMENT OBJECTIVES AND POLICY GUIDELINES

Staff Summary

At its May 18, 2001, meeting, the Investment Committee approved the staff recommendation that the Board adopt the proposed new language and request approval by the Oregon Investment Council (OIC) (copies of the amendments are on file in the Board's office).

Investment Committee Recommendation to the Board

The Investment Committee unanimously recommended that the Board adopt the proposed new language and requests approval by the OIC.

Board Discussion and Action

OUS Controller Mike Green summarized the reasoning behind the proposed amendments. He explained that when co-mingled funds are utilized as part of an investment program, the policies of the co-mingled funds, which are attached and updated annually, are the operative document, even in the presence of existing guidelines within the policy. The amendments, if approved, would provide flexibility in going forward with a different fixed-income manager that operates on the mutual fund type of approach, and then allows the Committee to look annually at its investment guidelines and address any issues at that time.

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

CONSENT FOR SALE OF PEROZZI PROPERTY, SOU

Staff Recommendation to the Budget and Finance Committee

Staff recommended that the Board approve the sale of the Perozzi property (approximately 40.48 acres) to Ms. Barbara Coffman, of Ashland, Oregon, for the sum of $890,000, with the proceeds used only for educational programs at SOU, in compliance with the donor's restrictive covenant.

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.

Board Discussion and Action

Mr. VanLuvanee moved and Mr. Willis seconded the motion to approve the sale as recommended. The following voted in favor: Directors Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

RENAMING OF UNIVERSITY INN TO HONOR H.P. BARNHART, UO

Staff Recommendation to the Budget and Finance Committee

Staff recommended that the University Inn be renamed H.P. Barnhart Hall, in honor of H. Philip Barnhart, longtime director of University Housing at UO.

Budget and Finance Committee Discussion and Action

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

Board Discussion and Action

Ms. Wustenberg moved and Mr. Lussier seconded the motion to approve the sale as recommended. The following voted in favor: Directors Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

Following the vote, Mr. VanLuvanee asked Vice Chancellor Anderes to offer his assessment of the current status of the budget process in the legislature. Dr. Anderes, building on earlier remarks made by Chancellor Cox, indicated that he hoped the upcoming Ways and Means Education Subcommittee hearings would reveal more specific recommendations, as well as budget notes on particular requests such as the $7.2 million request made for the OSU-Cascades Campus. He felt that most of the work was done, and most issues surfacing would be minor. However, he added that responding to last- minute requests by the legislative leadership would be a priority.

Chancellor Cox recapped earlier discussions, noting that the Governor added $52.5 million in his enhancements budget early in January, and the Ways and Means Education Subcommittee proposed adding another $29 million to that. In March, Governor Kitzhaber proposed adding another $45 million to the model and $7.5 million to statewide public services. Given that, the Chancellor said he felt much more confident in the current situation than he did when the legislative session began. He did point out, however, that two "icebergs" remain and have yet to be addressed: rising health care and energy costs.

OAR 580-010-0035, RESIDENCE CLASSIFICATION OF ARMED FORCES PERSONNEL (TEMPORARY RULE)

Staff Recommendation to the System Strategic Planning Committee

Staff recommended the Board amend OAR 580-010-0035, Residence Classification of Armed Forces Personnel, as a temporary rule (a copy of the proposed amendments is on file in the Board's office). These amendments were required as a result of HB 2177, which changed the classification of armed services personnel as of July 1, 2001.

System Strategic Planning Committee Discussion and Action

Mr. Willis reported that the Committee, by consensus, recommended Board approval of the rule amendments. (All System Strategic Planning Committee action and consent items were approved by consensus only, as there were only three of six members present.)

Board Discussion and Action

Mr. Willis moved and Ms. Wustenberg seconded the motion to approve the rule amendments as submitted. Mr. Young, while saying that he generally approved of the amendments, asked about lowering the "dependent child" age requirement from 24 to 23. He noted that federal aid is currently assessed against a student and his/her parents' income until age 24. OUS Director of Legal Services Ben Rawlins indicated that the proposed amendments mimic the language in HB 2177. He said that he would research the inconsistency, in hopes that it might be addressed in the permanent rulemaking process.

On roll call vote, the following voted in favor: Directors Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none

M.M., INTERMEDIA MUSIC TECHNOLOGY, UO

Staff Recommendation to the System Strategic Planning Committee

Staff recommended that the Board authorize the University of Oregon to establish a program leading to the Master of Music degree in Intermedia Music Technology. The program would be effective immediately, and 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

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

UNDERGRADUATE CERTIFICATE, BOTANY, SOU

Staff Recommendation to the System Strategic Planning Committee

Staff recommended that the Board authorize Southern Oregon University to establish a program leading to the undergraduate certificate in Botany, effective fall 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

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

UNDERGRADUATE CERTIFICATE, NATIVE AMERICAN STUDIES, SOU

Staff Recommendation to the System Strategic Planning committee

Staff recommended that the Board authorize Southern Oregon University to establish a program leading to the undergraduate certificate in Native American Studies, effective fall 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

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

Mr. Willis concluded his report by highlighting a presentation that explained the Government-to-Government Education Cluster, which is a component of the Governor's Government-to-Government Initiative, which began via Executive Order in 1996. The Governor recently signed into law SB 770, which requires state agencies to develop policies and processes related to the Initiative. The Cluster has made some recommendations to enhance the ongoing efforts of the Universities, and has asked the Board to consider several policy decisions. Hearing generally positive statements about work thus far with OUS, Mr. Willis said, "it was nice to hear praise from tribal representatives for the efforts of the campuses in OUS. I think the institutions need to know that they are on the right track in their relationships with the tribes." The Chancellor expressed his gratitude to Dr. Yvette Webber-Davis, OUS director of diversity planning and special projects, for her work with the Education Cluster.

PUBLIC INPUT SESSION

Mr. Ryan Thompson, a student at EOU, described his feelings of frustration in a math class he was taking. He felt that his concerns about the class were not being properly addressed.

ITEMS FROM BOARD MEMBERS

Mr. Young followed up on a question he asked at the April Board meeting about the possibility of including the Oregon Student Association (OSA) in the regular meeting agenda. Mr. VanLuvanee asked for a Board vote on the issue. Mr. Willis moved and Mr. Young seconded the motion to include an OSA report in future regular Board meeting agendas. The following voted in favor: Directors Lussier, Richmond, Willis, Wustenberg, Young, and VanLuvanee. Those voting no: none.

All Board members thanked President Creighton, Mrs. Creighton, and his staff for their hospitality.

Ms. Wustenberg expressed her gratitude to Mr. Willis for his work as Chair of the System Strategic Planning Committee. Board Secretary Vines noted that both he and Dr. Aschkenasy will remain on the Board until their replacements are named.

ITEMS FROM PRESIDENTS

Echoing Board members' comments, institution presidents also thanked the Creightons and the staff at EOU for hosting the Board and Board-related meetings as well as other social events. President Creighton said that it was a pleasure, wishing everyone a safe trip.

DELEGATION OF AUTHORITY TO 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 October 19, 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 12:45 p.m.

Diane Vines
Secretary of the Board


Don VanLuvanee
President of the Board