OREGON STATE BOARD OF HIGHER EDUCATION
MINUTES OF REGULAR MEETING
UNIVERSITY OF OREGON--GERLINGER ALUMNI LOUNGE
EUGENE, OREGON

October 16, 1998

ROLL CALL

The meeting of the State Board of Higher Education was called to order at 8:30 a.m. by President Imeson.

On roll call, the following answered present:

Dr. Herb Aschkenasy
Ms. Diane Christopher
Mr. David Koch
Mr. Jim Lussier
Ms. Gail McAllister
Ms. Esther Puentes
Mr. Don VanLuvanee
Ms. Katie Van Patten
Mr. Jim Willis
Ms. Phyllis Wustenberg
Mr. Tom Imeson

MINUTES APPROVED

The Board dispensed with the reading of the July 16-17, 1998, minutes. Ms. Christopher moved and Mr. Lussier seconded the motion to approve the minutes as submitted. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

PRESIDENT'S REPORT

Thanks

Mr. Imeson expressed his appreciation to President Frohnmayer for hosting the Board meeting on the UO campus, and asked him for remarks. After welcoming the Board to campus, Mr. Frohnmayer noted that the Gerlinger Alumni Lounge is the most utilized room at the UO. "We would have wished to have a formal visit, but next week is not only our convocation, it's the celebration of the conclusion of the Oregon Campaign, and it is homecoming," he explained. "I hope that all of you have received invitations to our convocation on October 23. Nils Hasselmo, president of the American Association of Universities, will deliver a major statement on the future of the AAU in the 21st century."

President Imeson thanked Chancellor and Mrs. Cox for hosting dinner at Tree Tops the evening before. "It was a wonderful opportunity for us to get together in a relaxed setting," he said.

Welcome, Don VanLuvanee

Mr. Imeson introduced new Board member Don VanLuvanee, as it was his first Board meeting. He added that two presidents were formally installed since the September Executive Committee meeting and offered his congratulations to Martha Anne Dow and Dan Bernstine.

Engineering and Technology Industry Council (ETIC) Recommendations

President Imeson announced that Intel representative Jim Johnson was in the audience, and planned to speak in greater detail about the recent Engineering and Technology Industry Council (ETIC) recommendations. He added that Mr. VanLuvanee will participate in the discussion as well.

Meeting Agenda

After reviewing the agenda, Mr. Imeson explained that he would adjourn the Board meeting prior to the topical presentation. "If we determine we need to reconvene the meeting for formal action, I will do so. Also, if we discover during the meeting that there is a need for further, less formal discussion, we can refer these to the Work Session time at the end of the day."

CHANCELLOR'S REPORT

Enrollment Report

Chancellor Cox asked to make several brief points before deferring to Mr. Johnson and Mr. VanLuvanee for their report.

"For the first time, we have a second week enrollment report. We don't report our formal enrollment for the fall until the fourth week, after it's all been reconciled. We've begun to do a second week report because of considerable public interest.

"You can see that at several institutions we're up quite considerably and I must say that I'm delighted by the upturn at OIT. I commend the folks there who have literally turned themselves inside out to make that happen, and similar kudos to President Risser and the staff at OSU who significantly changed a trend there. It's now moving in a positive direction. Because of this serious upturn in enrollment, I am going to have conversations with Mr. Yunker about the possibility of getting some help from the Emergency Board to cover this," the Chancellor explained.

Faculty Hiring

Concluding his report, the Chancellor said, "I would like to comment on the faculty hires that the institutions have been able to make for this year--it's really quite stunning. The market nationally is very much in our favor at a time when some very fine people with very fine degrees from outstanding institutions are on the market and our institutions, I think, have done well in that regard. My compliments to the presidents and their provosts."

Engineering and Technology Industry Council Report

Turning to the ETIC recommendations, Mr. VanLuvanee opened the discussion. "The real issue that drove this is the rapid growth in the industry. I think the important thing is that this is what's really fueling the expansive economy in Oregon that we've seen over the last few years, so it's an investment in the future economy. It's not the type of degrees, we just aren't producing enough people to meet the needs. Those of us in the business have to pull people in from out of state and that's a shame, I think we ought to be preparing our children (and grandchildren) for taking a role in this leading edge part of the economy.

"The thing that I've been most heartened about over the last two years, is the level of cooperation, collaboration, and now I say the enthusiasm for what we can do, and that's really been the fun part. I think the real key is supporting the industries that allow us to invest more in the future."

Mr. VanLuvanee reviewed the five items in the initial proposal:

Mr. VanLuvanee concluded by stating, "From my point of view, I think that there's been success on all fronts. It's a good start, and I think we've got a group of people in our university system that are just having a good time working together."

Mr. Johnson, vice president and Oregon site manager of Intel Corporation, led off by saying he wanted to talk about the future investment. "In the last two months, I think we've put together a very effective plan that kept the strengths of the institutions in mind, but also began to really get industry much more engaged in this whole process, not only from the 'we want graduates' point of view, but 'how are we going to help make this a reality?'

"We wanted to set the philosophy of what would drive these investments. If I were to summarize these, it would be the quality and quantity. We need more engineers and we need more technicians, but the bottom line is, we need quality people. The Oregon University System has done a very good job with quality so we didn't really emphasize that, but, of course, you need to have good quality people.

"Secondly, we wanted to emphasize the notion of self-funding of these programs as quickly as possible. With the hopeful transformation to the new budgetary process, where tuition follows the students, we expect all of these new investments and the courses to be offered to be self-sustaining by bringing in the students and bringing in the tuition money. Lastly, we expect industry to also participate. So programs in which industries said, 'we will contribute matching money,' will rise in our priority as we drive forward," Mr. Johnson said. The summary of the investments can be broken up into three areas:

Mr. Johnson explained, "After prioritizing our activities, we looked at the cost per student because efficiency is very important to us. On the graduate level, our goal was twofold. One was to continue lifelong education.

"Continuing education needs to come from expertise. The professors who are teaching these classes aren't just simply going through and teaching something they've taught before; they need to be teaching leading edge kinds of things.

"The last section that we want to make investments in is research. I mentioned earlier the linkage between the graduate level and the ongoing education for our engineers; their lifelong education is really linked to this research area. Here's the area that we expect industry to really step up and have a significant investment; we were recommending a one-for-one matching. We think the Oregon Metals Initiative, which has been an ongoing program here in Oregon, is an excellent model of the way we would like to do that in the high-tech area."

Noting that the majority of the research funding for OUS is coming from the federal government, Mr. Johnson said, "We think that we also need industry to step up and invest more in the Oregon University System. The cooperation that we've seen, the quick turnaround in the initial Oregon Master's of Science program, I think is extremely encouraging."

Chancellor Cox concurred with Mr. Johnson's assessment of the evolution over the past several months. "The trajectory has been, as you say, almost meteoric. From my perspective, the extent to which industry has weighed in, and now the commitment to invest, is thrilling. The Metals Initiative has always seemed to me to be almost the ultimate model of the kind of collaboration we ought to have and that is incredibly cheering. One of the questions that occurs to me is that we know that those numbers are going to be negotiated. The Governor has all these commitments of certain revenues, so can we talk about the industry match component of this at whatever level we are able to be successful?"

"I would say that's a fair position," said Mr. Johnson. "Industry is learning how to more effectively be a member of the System. We think it's critical we make this investment. I think Oregon high-tech is at a pivotal point and I'm confident that industry will step up. I can't guarantee numbers, but we will do everything we can to make that a reality." Continuing, he said, "I think it's premature for us to be backing down on the numbers. I think there is a sense that now is the time to make the commitment, and now is the time to go for it."

Ms. Christopher inquired about the research income that is generated by faculty. "Does it represent an increase from last year? Is there an expectation that faculty will raise more than last year?" Mr. Johnson explained that as new faculty are hired, the amount of research dollars raised would be expected to increase.

Mr. Lussier asked Mr. Johnson to articulate what the investment would be for distance learning and the state infrastructure. "We decided go after what we call 'best industry practices' and find out who's delivering these courses today on the existing infrastructure that's out there and determine what kind of quality and what kind of results they are getting," responded Mr. Johnson.

Describing the basic distance learning plan, Mr. Johnson said, "The proposal is both developing or choosing the right technologies, as well as developing the right courses and investing in the infrastructure, and I don't mean communication infrastructure. RPI, one of the leaders in the field, has communicated that if you're going to make an investment, you can't expect the professors to run the facilities. If you are going to go into one of these teaching rooms with the cameras, and transmission equipment, you need to have professional technicians handling that."

Dr. Aschkenasy pointed out that in his years on the Board, "this may well be the most exciting, innovative program I've seen. Good work to you all."

Dr. Cox said, "I can't tell you how significant I think the industry commitment is to everything we're doing, not just in engineering, but to the budget redesign, and the reshaping and transformation of the System. The symbolism of that is enormous in this state. I am particularly thankful to my industry colleagues."

IFS Report

Chancellor Cox asked IFS President Kemble Yates for his report. The following is an excerpt of his remarks:

"On behalf of the faculty throughout the System, I'd like to welcome Don VanLuvanee to the State Board. We welcome your presence here and based just on what we heard today, it will be wonderful to have you working with us.

"The IFS met at Oregon State University two weeks ago. Two staff members informed us of special programs at OSU. Jackie Balzar described OSU's 'First Year Experience Program,' designed to help freshmen through their first year by giving them a small class with a faculty member in which they can learn good study skills, resource availability, and the like.

As we move into the new budget process, programs supporting first year students--and I know our other institutions have similar programs--will become crucial as we try to retain freshmen into their sophomore year.

"Joe Hendricks shared some highlights of the OSU Honors Program. It was clear from his description that the students adding the Honors component to their bachelor's degree studies were gaining a special environment for learning and critical thinking. Another special guest at our meeting was Yvette Webber-Davis, newly hired to the Chancellor's staff to promote Diversity and Affirmative Action. We had a very interesting dialogue with her about the need to provide better opportunities for students and faculty from underrepresented groups, and yet to not look at these issues from a purely numerical point of view.

"Representative Barbara Ross gave us her capsule views on the upcoming elections and probable outcomes in the 1999 Legislature. She definitely supports Higher Education's need for new resources, but warned us that the usual climate of limited extra dollars and many competing interests will once again prevail in Salem next year. We received a further political update from Grattan Kerans in the Chancellor's Office, Ed Dennis from the Oregon Student Association, and Mark Nelson from the Association of Oregon Faculties.

"As Chancellor Cox alluded to recently in his op-ed piece in the Oregonian, there is remarkable consensus on our priorities for the next several months: we need to get the new budget model, which effectively trades better accountability for the needed resources to deliver our product, fully funded by the next legislature. Whatever other issues might arise, that must remain priority one.

"OSU Faculty Senate President Margaret Niess discussed an issue I raised before you--that of limitations of the new payroll software, which faculty could elect to spread a nine-month contract salary over 12 months. As I told you then, the System's decision to change the scheme to be based on an October 1-June 30 schedule effectively borrowed faculty paychecks from September 16-September 30 for the life of their employment with OUS. The only remedy offered was to spread this pain over the entire year rather than up front. When Dr. Niess and President Risser fully understood the problem this summer, they both agreed that it was wrong. OSU has agreed to cover the two-week gap in September without misleadingly calling it a loan to faculty, and when either the law can be modified or the software glitch remedied, the accounting will be rectified. On behalf of the faculty at OSU and throughout the System, I wish to thank President Risser for doing the right thing. President Reno has promised to explore a similar solution for Southern faculty and I would call on the other campus presidents to explore doing this for your faculty as well. Faculty should not have to forego two weeks of pay because a software tail wags the payroll dog.

"Another important issue the IFS discussed is the coming of PEBB. At a meeting on September 28 and at subsequent meetings held throughout the state, the OUS representative on the PEBB Board, Denise Yunker, gave faculty and staff an update on the changes in the state employee benefits program. As she explained, we in OUS have much to be concerned about in this combination of SEBB and BUBB into PEBB. It is imperative that any new benefits plan maintain features like 'cafeteria style' (i.e., choices for healthcare and other insurance) and, in particular, not force faculty and staff into HMOs against their will. As you've heard me say before, faculty salaries are currently not competitive; if our benefits are reduced, then we have that much less to compete with in the national labor market for high quality faculty. My perception is that the Chancellor's staff and particularly Ms. Yunker are doing everything they can to make the final outcome of PEBB palatable.

"I wish to close with some concerns about how tuition will be charged in the new budget model. IFS fully supports the concepts of freezing undergraduate resident tuition and the campuses keeping their tuition dollars. But there are some details that need to be addressed. One is how tuition and fee waivers for graduate students will be accounted for. I understand this issue came up at the most recent Governance and Structure Committee meeting. This issue needs to be clarified. Also, it is my understanding that OUS is strongly considering, if not in fact committed to doing away with, the 'plateau pricing' for tuition (where students pay the same price for 12-18 credits) and replacing it with a strict, per-credit pricing method.

"I have already seen at least two ways in which this new method would have unintended consequences. In our math tutoring lab, we often extend education credits to our volunteer students. Frankly, this is in lieu of pay. Under the new system, we would not only fail to pay these tutors, we would charge them for the privilege! The other anecdote is that I run a one- credit seminar for students preparing for a national mathematics contest. While charging them for that credit may ultimately be justifiable, it does make recruiting students for such special opportunities more difficult. I would urge the Board to revisit this issue if it is not already too late to do so."

Mr. Imeson said that there was a lot of discussion in the Budget Committee about plateau pricing, and that those discussions were never brought before the full Board. "I think it's fair to say some of us involved in that think we need to take a look at how that works, but not at this juncture in the development of the new budget process. I think there will be a lot of opportunity for people to participate in discussions about that," he concluded.

APPROVAL OF SEPTEMBER 18 EXECUTIVE COMMITTEE MINUTES

President Imeson explained that only Executive Committee members could vote to approve the September 18, 1998, Executive Committee meeting minutes. After dispensing with the reading of the minutes, Dr. Aschkenasy moved and Ms. Christopher seconded approval of the minutes as submitted. Those voting in favor: Directors Aschkenasy, Christopher, McAllister, Wustenberg, and Imeson. Those voting no: none.

Mr. Imeson noted that because of the requirement to amend an Administrative Rule regarding appearances before the Board, the 30-minute public input session was postponed until the December meeting. He added that the Board would be voting on a Temporary Rule to accommodate that schedule.

OREGON MASTER OF SOFTWARE ENGINEERING

Introduction

Three Oregon University System (OUS) institutions--OSU, PSU, and UO--and the Oregon Graduate Institute of Science and Technology (OGI) propose to jointly offer the Oregon Master of Software Engineering (OMSE) degree program. Offered by the computer science departments of the four partner institutions and administered by the Oregon College of Engineering and Computer Science (OCECS), the program will begin fall 1998 in Portland, and will be extended via distance delivery to the OSU and UO campuses and, potentially, to other Oregon locations.

Staff Analysis

1. Background

The impetus for the program began with the Report of Findings produced by a consortium consisting of Intel, Tektronix, Sequent, and Mentor Graphics, in which the need for advanced education leading to enhanced technical skills and competencies in software engineering was detailed. While each of the participating schools employs two or three faculty who specialize in teaching and research in software engineering, none of the institutions has the critical mass of faculty to design or implement such a program on its own. As the institutions worked together to develop the OMSE, dialogue with industry continued--through the Industry Council (established by the Board of Higher Education in December 1996), the consortium's software Advisory Group, the Software Association of Oregon, the American Electronics Association, and through technology-company focus groups interviewed by the Oregon Survey Research Laboratory. In addition to strong industry participation, the program received initial approval by the Board of Higher Education (program preproposal in May 1996), and support from the 1997 Oregon Legislature, which allocated $2.25 million under SB 504 toward this effort.

2. Description

The OMSE is a professional degree program designed to provide the breadth of technical and organizational skills and knowledge required for success in a career as a software engineer. Students will likely be practicing software engineers, and typical graduates will be prepared to work as project leaders or senior technical contributors in a software development effort. Although designed as a full degree program, it also supports professional development needs of those not seeking a degree.

The following principles guided program design:

Development of the OMSE curriculum was informed by Oregon software engineering faculty, other MSE programs, and Oregon industry. Consequently, the curriculum focuses on the following areas: disciplined development, product-centered development, use of market-leading technology, professional competency (which includes communication and teamwork skills), and understanding of the business context.

To earn the OMSE degree, students must complete 48 credits. In lieu of a thesis, six credit hours of the curriculum are devoted to a practicum in which student teams apply their learning to a real software engineering project that may be industry sponsored or at a "virtual company." Each course will have a list of measurable outcomes expected of all students completing the work. Over the past year, intensive faculty effort was committed to development of new core courses by faculty from the four participating institutions.

Students will be admitted to one of the four institutions as well as to the program itself. Because most OMSE students will be working full time, delivery of the courses will be scheduled at times and places that best meet the needs of working professionals. It is anticipated that, in the third year of program implementation, enrollment will have built to the equivalent of 100 full-time students.

3. Evidence of Need

The Oregon Department of Labor has reported that Oregon will need about 7,000 new graduates in science and engineering in the next ten years. A large portion of these graduates will need to be prepared to work as software engineers in Oregon's burgeoning software engineering industry. Demand is high on the West Coast for software workers; employment projections rank computer/data processing industry growth as second only to the health care professions (Bureau of Labor Statistics). Oregon business spokespersons indicate that the growth of new software businesses is constrained by the availability of software engineers.

4. Adequacy of Resources

The legislative allocation ($2.25 million) will be used for start-up and operational expenses through June 1999. Total recurring costs are estimated at $2 million per year, to be met through continued state funding. The OMSE program will pay the four participating computer science departments course design and course delivery fees, which may be used to hire additional faculty for the program. A search is currently underway for a program director and assistant director, who will oversee implementation, ensure quality, and help maintain communication among the participating departments.

Program Review

At present, both OGI and PSU have completed their campus review and approval processes and are ready to admit students to the program. Reviews have been initiated at OSU and UO, with actions expected during the 1998-99 academic year. An external review of the program was conducted in June 1998. The reviewers concur that there is a critical need for such a program in Oregon, and believe that the institutions involved are able and committed to deliver such a program. A number of suggestions were made relating to the importance of the applied nature of this degree, both in terms of the type of students to be served and the balance of academic training and industrial/consulting experience of the faculty. Those involved in the design of the program have already begun to make program modifications in response to the external review recommendations.

The OUS Academic Council positively reviewed this program at its July 1998 meeting.

Staff Recommendation to the Executive Committee

Staff recommended that the Executive Committee authorize establishment of the Oregon Master of Software Engineering (OMSE), to be implemented by OGI and PSU, effective fall 1998, with implementation by OSU and UO to follow upon completion of campus processes. A follow-up review of the program will be conducted by the OUS Office of Academic Affairs in the 2003-04 academic year.

Executive Committee Discussion and Action (August 21, 1998)

Vice Chancellor Clark provided a background of the program, which was initiated by funding allocated through Senate Bill 504 in the 1997 Legislature. She described the target audience for the program as professionals who have bachelor's degrees in related fields; the OMSE will provide people with advanced skills to better meet the demonstrable needs of technology related industries in the state.

Vice Chancellor Dryden reported that the program should be self supportive by the next biennium, adding that, "with the registrations so far, this is indeed a possibility."

Both Chancellor Cox and President Imeson commended the efforts of those involved in the rapid development of this program, which will better meet market demands. "The collaboration has been great," said Mr. Imeson.

Ms. McAllister motioned and Ms. Wustenberg seconded the motion to approve the program as submitted. Those voting in favor: Directors Aschkenasy, Christopher, McAllister, Wustenberg, and Imeson. Those voting no: none.

Board Discussion and Action (October 16, 1998)

Mr. Imeson explained that this item, along with the others approved by the Executive Committee in September, could be ratified concurrently by the Board.

Ms. Wustenberg moved and Mr. Koch seconded the motion to ratify this item as submitted. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

B.S. IN FISHERIES & WILDLIFE SCIENCE, OSU

Introduction

Oregon State University requested authorization to consolidate two existing degree programs (B.S. in Fisheries Science and B.S. in Wildlife Science) into a single degree, B.S. in Fisheries and Wildlife Science, effective fall 1998. This consolidation would also reduce the six specific degree options to a single specialty option.

Staff Analysis

1. Rationale

Currently, the two degrees share a common core and differ by as few as 25 credits. The move to a single degree reflects changes in the professions, which emphasize commonalities in the science and management of wild animal resources. The change in options provides students the opportunity to examine their career goals and put together a coherent course of study to support those goals rather than just select one of six specializations. Students in this degree program will be prepared to succeed in complex, multidisciplinary work environments. They will understand fisheries and wildlife resources, as well as the ecosystems with which they interrelate.

2. Program Description

The 180-credit-hour requirements include a fisheries and wildlife core (103-115 credits), a specialty option (41-53 credits), and an internship/"experience" requirement (4-6 credits). The student's specialty option plan, developed prior to the junior year and approved by faculty, is intended to support their career goals. The two "experience activities" are required for graduation, at least one of which must be substantial (minimum three credits). The goal of this requirement is for students to apply the concepts, principles, and skills acquired in the classroom to a professional, real-world context. Additionally, students will gain an understanding of the structure and functions of natural-resource organizations. A three-term sequence in group problem solving has been developed in which a group of six to ten students is presented with a real, multifaceted conservation problem to resolve. Faculty, teamed with natural resource professionals, will serve as mentors.

3. Adequacy of Resources

Only four new courses need to be developed for this program; all other courses are currently being offered. No new resources are required to offer this program. In recent years, the undergraduate programs have enrolled 230 to 270 students annually, graduating 40 to 70 students each year. The programs have been in a stable or slow-growth pattern for the past ten years.

Program Review

The proposed program has been reviewed positively by all appropriate institutional committees and the Academic Council.

Staff Recommendation to the Executive Committee

Staff recommended that the Executive Committee authorize Oregon State University to consolidate two existing degree programs (B.S. in Fisheries Science and B.S. in Wildlife Science) into a single degree, B.S. in Fisheries and Wildlife Science, effective fall 1998, with a follow-up review of the program to be conducted by the OUS Office of Academic Affairs in the 2003-04 academic year.

Executive Committee Discussion and Action (September 18, 1998)

Vice Chancellor Clark overviewed the program consolidation. Provost Arnold noted that the impetus for this was the hiring of a new department head, who in turn, led a review of all programs. This review process involved input from the public sector, alumni, focus groups, and an advisory committee. "One observation was that the existing series made students almost too narrowly focused," explained Dr. Arnold. "People wanted a broader ecosystem perspective. This is an effort to make the program stronger and offer more flexibility to the students," he concluded.

"In this consolidation, is there any cost improvement?" asked Dr. Aschkenasy. Dr. Arnold pointed out that it remains an underfunded program, even with the new model. Responding to a question from Ms. Christopher regarding enrollment goals, Provost Arnold replied, "The goal is to maintain the enrollments. Many students are interested in the program, yet there are practical limitations."

Ms. Wustenberg commented that in the department there is now a real emphasis on ecosystem management. The consolidation of these programs falls in line with that focus.

Ms. McAllister moved and Dr. Aschkenasy seconded the motion to approve the program consolidation as submitted. Those voting in favor: Directors Aschkenasy, Christopher, McAllister, Wustenberg, and Imeson. Those voting no: none.

Board Discussion and Action (October 16, 1998)

Mr. Koch asked if classes were being eliminated in order to create new ones, or if they are being offered less frequently to allow for the four new classes, which are being developed.

OSU Provost Arnold summarized the merger: "This represents an overhaul of the entire curriculum. A new department head focused on increasing flexibility that would be required by having a combined major in terms of the range of career opportunities and national trends in the area. As resources are deployed, small classes are reviewed, and while they may be important, if they are not attracting significant numbers of students, then a judgment has to be made that it may be less important than a core course that serves larger numbers of students."

Ms. Wustenberg moved and Mr. Koch seconded the motion to ratify this item as submitted. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

RESOLUTION FOR THE SALE OF ARTICLE XI-G AND ARTICLE XI-F(1) BONDS

1998 Fall Bond Sale for Capital Projects
Four Campuses Served with Seven Individual Projects; Six Systemwide Allocation Projects
All Projects Approved by the Board and Legislative Assembly
A Total of $37,989,000 Recommended for Sale


Staff Report to the Board

Background. The 1997 Legislative Assembly authorized the Board of Higher Education to issue general obligation bonds, in specified amounts by fiscal year, with the proceeds to be used to finance capital construction and facilities repair and renovation projects in higher education. These bonds were authorized under two sections of the Oregon Constitution, Article XI-G and Article XI-F(1).

Article XI-G bonds are issued to construct and repair facilities classified as Education and General use, including classroom facilities, libraries, teaching laboratories, and general administrative space. These bonds are matched by an appropriation from the state General Fund and are general obligations of the state; the debt service is paid from the General Fund. The legislature established a mechanism whereby the General Fund match may be generated through gifts and federal and local governmental funds. These are first deposited to special project accounts in the Treasury and then treated as General Fund moneys for purpose of the match. Such accounts were permitted by the legislature to be established for the UO Campus Development Project (Phases II and III), PSU Urban Center, Phase I, WOU Library, and SOU Center for the Visual Arts.

Article XI-F(1) bonds are issued to construct and repair facilities that are self-financing and self-supporting as determined by the Board, in accordance with Article XI-F(1) of the Oregon Constitution. Bonds of this type have been issued to cover projects for the construction and renovation of auxiliary enterprises space (such as parking facilities or student housing) where the source of debt service is from auxiliary funds. Bonds have also been approved for projects in student facilities (such as student unions, student health facilities, or student recreation facilities) where the debt service is repaid from the student building fee or from a special fee approved for this purpose by the Board. The preponderance of bonds sold for capital construction in higher education has been under Article XI-F(1).

1997-1999 Higher Education Bond Bill Authorization. House Bill 5036, Chapter 556, authorized a maximum issuance of $34,299,500 of Article XI-G bonds and a maximum issuance of $136,000,000 of Article XI-F(1) bonds this biennium. To date, a total of $44,298,895 of bonds have been sold of which $14,122,702 have been Article XI-G bonds and $30,176,193 have been Article XI-F(1) bonds.

Request for Board Authorization to Issue. The institutions are now seeking authorization from the Board to issue a total of $37,989,000 in bonds, as part of a sale currently planned by the State Treasurer for September 1998. Of this amount, a total of $7,865,000 is requested in Article XI-G bond authorization and a total of $30,124,000 in Article XI-F(1) bond authorization. All projects to be financed by these bonds have been authorized by the legislature or the Emergency Board of the legislature.

Bond issuance costs estimated at two percent will be charged against each project for which bonds are sold under this sale. Prior to sale, the Board's bond counsel may designate a portion of the sale as taxable, owing to space utilization by private entities in the projects to be financed under this sale. At present, the percentage of the total square footage for private use affected under this sale is not sufficient to cause any portion of the sale to be taxable.

Several tables are provided herein:

Table A, included in the Resolution, identifies the Article XI-F(1) projects recommended for the Fall 1998 Bond Sale.

Table B, also included in the Resolution, identifies the Article XI-G projects recommended for the Fall 1998 Bond Sale.

Four tables are provided after the Resolution, to display information on debt service issues:

Table C displays the amount of Article XI-F(1) bonds to be sold, as well as the estimated annual debt service requirements associated with the projects proposed to be included in the Fall 1998 Bond Sale, by campus and Systemwide.

Table D compares the total Article XI-F(1) bonded debt outstanding as of June 30, 1998, Fiscal Year End, to the increment associated with the Fall 1998 Bond Sale, by auxiliary category and repayment sources.

Table E displays information on Article XI-G bonded debt, beginning with 1991-1993, through 1997-1999, assuming approval of the proposed Fall 1998 Bond Sale. It compares the amount of the debt service paid with the total biennial budget for E&G all sources and General Fund E&G.

Table F projects annual Article XI-G bonded debt outstanding and annual debt service beginning with the 1997-1999 biennium through 2004-2005, assuming approval of the proposed Fall 1998 Bond Sale.

In addition, summary information on each of the 14 projects included in the proposed sale is provided in a supplement to this item (on file in the Board's office).

Resolution for the Sale of Bonds for Capital Projects

The Resolution before the Board authorizes staff to pursue the sale of bonds for all projects currently identified by the campuses as needing bond funding consistent with the overall bond limitation imposed by the legislature for the period 1997-1999. With this sale, a total of $21,987,000 of Article XI-G bonds and $60,300,193 of Article XI-F(1) bonds will have been sold during the biennium.

Staff Recommendation to the Executive Committee

Staff recommended that the Executive Committee: 1) find that the projects for which Article XI-F(1) bonds are proposed meet the self-liquidating and self-supporting requirements of Article XI-F(1), Section 2, of the Oregon Constitution; and 2) adopt the following Resolution for authorizing the sale of Article XI-G and Article XI-F(1) bonds for capital projects.

Executive Committee Discussion and Action (September 18, 1998)

Vice Chancellor Anslow, while reviewing the docket item, reminded Executive Committee members that the Board previously approved all projects in the sale.

Ms. Wustenberg, referring to Table F, asked how the annual debt service is projected. Mr. Anslow responded that the vast majority of bonds have already been sold, and that "these are real numbers" based on total bond debt service for outstanding bonds plus the projected amounts for the new bonds to be issued in this fall sale.

Ms. Christopher inquired about PSU's public health and environmental lab. Ms. Lanier explained that this was a new building project approved by the Board a couple of years ago. The Department of Environmental Quality (DEQ), currently tenants in the science building, have planned to move to the new PSU public health building as tenants upon its completion. However, DEQ's plans are now somewhat uncertain so contingency plans have been created in which the bond proceeds to be issued for this project ($6.1 million) would be applied instead to another approved capital project, the exercise of an option to purchase Phase II of the US West Building. "OUS's bond authority is such that we can apply proceeds to the PSU/DEQ project or exercise the option to purchase the remainder of the US West Building," said Ms. Lanier. "Under current project plans, the cost is essentially the same."

Ms. Christopher moved and Ms. Wustenberg seconded the motion to approve the Resolution as submitted. Those voting in favor Directors Aschkenasy, Christopher, McAllister, Wustenberg, and Imeson. Those voting no: none.

Board Discussion and Action (October 16, 1998)

Ms. Wustenberg moved and Mr. Koch seconded the motion to ratify this item as submitted. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

RESOLUTION FOR THE SALE OF BONDS FOR
CAPITAL PROJECTS

WHEREAS, ORS 286.031 states, in part, that the State Treasurer shall issue all general obligation bonds of this state after consultation with the state agency responsible for administering the bonds proceeds; and

WHEREAS, ORS 286.033 states, in part, that the state agency shall authorize issuance of bonds subject to ORS 286.031 by resolution; and

WHEREAS, ORS Chapters 351, 288, and 286 provide further direction as to how bonds are sold and proceeds administered; and

WHEREAS, House Bill 5036, Chapter 556, Oregon Laws 1997, establishes Oregon Constitution limitations on the amount of bonds that may be sold pursuant to Articles XI-G and XI-F(1) for the 1997-1999 biennium; and

WHEREAS, Senate Bill 5536, Chapter 584, Oregon Laws 1997, lists those projects that may be financed pursuant to Articles XI-G and XI-F(1); and

WHEREAS, it is appropriate for this Board to authorize the State Treasurer to issue bonds for projects authorized by Senate Bill 5536 and in amounts not greater than authorized by House Bill 5036 and for other projects as may be provided by law and as otherwise required by law for the 1997-1999 biennium without requiring further action of this Board;

NOW, THEREFORE, be it resolved by the Board of Higher Education of the State of Oregon as follows:

Section 1. Issue. The State of Oregon is authorized to issue general obligation bonds (the "Bonds"), in such series and principal amounts as the State Treasurer, after consultation with the Vice Chancellor for Finance and Administration of the Department of Higher Education, shall determine are required to fund projects authorized by Oregon law. The Bonds shall be designated, dated, authenticated, registered, shall mature, shall be in such denomination, shall bear such interest, be payable, be subject to redemption, and otherwise contain such terms as the State Treasurer determines, including the designations as Oregon Baccalaureate Bonds, after consultation with the Vice Chancellor for Finance and Administration. The maximum net effective interest rate for the Bonds shall not exceed ten percent per annum.

Section 2. Article XI-F(1) Projects. Bonds are authorized to be sold to provide funds for projects and may be authorized by the Oregon legislature and may be revised by the Vice Chancellor for Finance and Administration as authorized by Oregon law.

Table A - Article XI-F(1) Projects Recommended for Fall 1998 Bond Sale

Article XI-F(1) Projects

Estimated Bond Cost, Including 2% Issuance Costs

Term

Systemwide: Repair & Renovation

$3,060,000 15 years
Systemwide: Safety Improvements 1,020,000 20 years
Systemwide: ADA/Accessibility 566,000 20 years
Systemwide: Seismic Improvements 1,270,000 20 years
Systemwide: Land Acquisition 1,020,000 30 years
Systemwide: Project Reserve Contingency

794,000

30 years
OIT: Residence Hall Improvements 224,500 15 years
OSU: Residence Hall Improvements 2,963,000 30 years
OSU: Warehouse Addition 561,000 30 years
PSU: Urban Center 3,560,000 30 years
PSU: Public Health/Environmental Lab 6,171,000 30 years
UO: Recreation and Fitness Center 5,243,000 30 years
UO: Knight Law Center 3,672,000 30 years
TOTAL XI-F(1) Projects $30,124,000 NA


Section 3. Article XI-G Projects. Bonds are authorized to be sold to provide funds for projects and may be authorized by the Oregon legislature and may be revised by the Vice Chancellor for Finance and Administration as authorized by Oregon law.

Table B - Article XI-G Projects Recommended for Fall 1998 Bond Sale

Article XI-G Projects

Estimated Bond Cost

Term

PSU: Urban Center

$7,865,000 30 years
TOTAL XI-F(1) Projects $7,865,000 NA


Section 4. Maintenance of Tax-Exempt Status. The Board covenants for the benefit of the owners of the Bonds to comply with all provisions of the Internal Revenue Code of 1986, as amended (the "Code"), that are required for Bond interest to be excluded from gross income for federal income taxation purposes (except for taxes on corporations), unless the Board obtains an opinion of nationally recognized bond counsel that such compliance is not required in order for the interest to be paid on the Bonds to be so excluded. The Board makes the following specific covenants with respect to the Code:

(a) The Board shall not take or omit any action if the taking or omission would cause the Bonds to become "arbitrage bonds" under Section 148 of the Code, and shall assist in calculations necessary to determine amounts, if any, to allow the State to pay to the United States all "rebates" on "gross proceeds" of the Bonds that are required under Section 148 of the Code.

(b) Covenants of the Board or its designee in its tax certificate for the Bonds shall be enforceable to the same extent as if contained herein.

Section 5. Sale of Bonds. The State Treasurer, with the concurrence of the Vice Chancellor for Finance and Administration, shall sell the Bonds as the State Treasurer deems advantageous.

Section 6. Other Action. The State Treasurer, the Vice Chancellor for Finance and Administration, or the Controller of the Department of Higher Education, is hereby authorized, on behalf of the Board, to take any action that may be required to issue, sell, and deliver the Bonds in accordance with this Resolution.

Additional Information on Debt and Debt Service

Table C - Fall 1998 Bond Sale for Article XI-F(1) Bonds:
Magnitude of Bonds to be Sold and Associated Annual Debt Service

(dollars in millions)

Institution Article XI-F(1) Bonds Estimated Annual
Debt Service
OIT $ 0.22 $0.02
OSU 3.52 0.23
PSU 9.73 0.64
UO 8.92 0.574
Systemwide 7.73 0.61
TOTAL DEBT ASSOCIATED WITH FALL BOND SALE $30.12 $2.07


Table D - Comparison of Total Article XI-F(1) Bonded Debt Outstanding by Auxiliary Category and Repayment Sources, June 30, 1998 to Fall 1998 Bond Sale
(dollars in millions)

Auxiliary Bonds Outstanding as of 6/30/98** Annual
Debt Service as of 6/30/98**
Fall Bond Sale Increment of Bonds Outstanding Fall Bond Sale Increment of Debt
Service
Revenue Available for Debt Service Dedicated Revenue Source
Consolidated Dorms $ 39.2 $3.9 $39.2 Res & Dining Hall
Independent Dorms 7.7 0.5 3.7 0.2 (same as above) Res & Dining Hall
Parking 14.9 1.5 5.1 Parking Fees
Auxiliary Programs 109.5 7.6 22.0 1.6 33.6 Housing rental income, lease payments, user fees, transfer from E&G
Student Building Fee Program 54.8 6.7 4.4 0.3 7.2 Student Building Fees
TOTAL DEBT OUTSTANDING $226.1 $20.2 $30.1 $2.1

** Excludes OHSU debt outstanding of $44.6 million. Debt service is paid by OHSU per OUS/OHSU Debt Service Agreement.

Table E - Article XI-G Bonded Debt Historical Trends
and Projected Requirements After Fall 1998 Bond Sale

(dollars in millions)

Biennial E&G
All Sources
Debt Service
Percent of E&G Total
General Fund
E&G
Debt Service
General Fund
1991-1993 $ 818 1.55% $515 2.46%
1993-1995 866 1.47% 482 2.64%
1995-1997 980 1.67% 431 3.79%
1997-1999 1,038 1.74% 470 3.84%

E&G = Education & General

Table F - Article XI-G Bonded Debt Outstanding Actual and Projected
(dollars in millions)

Bonds
Outstanding
Annual
Debt Service
Biennial
Debt Service
1997-1998 $ 65.1 $8.5 $18.1
1998-1999 73.6 9.6
1999-2000 75.0 9.4 17.3
2000-2001 68.9 7.9
2001-2002 63.8 8.0 16.0
2002-2003 58.7 8.0
2003-2004 53.9 8.0 14.2
2004-2005 50.2 6.2


RESOLUTION FOR THE BOND REFUNDING SALE OF ARTICLE XI-G AND ARTICLE XI-F(1) BONDS

Staff Report to the Board

The Board of Higher Education had an opportunity to achieve significant debt savings by refunding certain outstanding series of bonds. This required the issuance of refunding bonds. Authorization for the sale was granted by Oregon Revised Statues 286.051 and 288.605 through 288.695.

Based on advice to the Controller's office by the OUS bond underwriters, there was a potential to save about four percent on the debt service projected for certain maturities sold in previous bond sales. The Controller's office recommended the refunding of approximately $32 million of long-term bonds, from the 1996 Series A and 1996 Series C bond sale. This amount was below the approximately $56 million sold in that sale, the majority of the remainder being for short-term ORRBAC bonds (Oregon Baccalaureate bonds sold in small amounts to small investors, normally for the purpose of financing college tuition). Given current market conditions, the refunding was expected to more than meet the criteria of achieving at least a three percent savings; a savings of approximately $1.4 million was projected by the underwriters.

Staff Recommendation to the Executive Committee

Staff recommended that the Executive Committee adopt the following bond Resolution authorizing the issuance of refunding bonds.

Executive Committee Discussion and Action (September 18, 1998)

Following a review of the Resolution, Ms. Wustenberg asked if the existing bonds would be called. Ms. Lanier said that her understanding of the process was that the bonds are callable.

Dr. Aschkenasy moved and Ms. Wustenberg seconded the motion to approved the Resolution as submitted. The following voted in favor: Directors Aschkenasy, Christopher, McAllister, Wustenberg, and Imeson. Those voting no: none.

NOTE: Subsequent consultation with the Controller provided clarification on the processes followed when bonds are immediately callable (i.e., are on a fixed call schedule). In the second circumstance, proceeds from the sale of the new bonds will be placed in an irrevocable trust, to provide for all future debt service payments of the old bond series. The proceeds of the 1998D and E refunding sale will be used to refund part of the 1996A and C sale.

In addition, the proceeds in the trust will be used to purchase investments which, together with the earnings on those investments, will be sufficient to make all interest payments on the old 1996A and C bonds when they come due, as well as to pay principal and any premiums on the dates fixed for redemption. The proceeds from the 1998D and E sale and investment earnings will be held in trust for the benefit of the owners of the 1996A and C bonds being refunded.

Bonds with a call date may be redeemed before their stated maturity date. Typically, there is a set amount that may be called each year until the bonds mature. This schedule of redemption is included in the Official Statement at the time the bonds are sold. For example, the 1996C bonds with a maturity date of August 1, 2026 have the call dates beginning in August 2017 through 2026.

Board Discussion and Action (October 16, 1998)

Ms. Wustenberg moved and Mr. Koch seconded the motion to ratify this item as submitted. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

RESOLUTION FOR THE SALE OF REFUNDING BONDS

WHEREAS, ORS 286.031 states, in part, that the State Treasurer shall issue all general obligation bonds of this state after consultation with the state agency responsible for administering the bonds proceeds; and

WHEREAS, ORS 286.033 states, in part, that the state agency shall authorize issuance of bonds subject to ORS 286.031 by resolution; and

WHEREAS, ORS Chapters 351, 288, and 286 provide further direction as to how bonds are sold and proceeds administered; and

WHEREAS, ORS Chapter 286.051 authorizes the issuance of refunding bonds and ORS 288.605 et. seq. authorizes the issuance of advance refunding bonds by the State Treasurer upon finding that certain requirements and conditions have been met; and

WHEREAS, it appears advantageous to this Board to sell refunding bonds to refund certain outstanding bonds thereby benefitting the state;

NOW, THEREFORE, be it resolved by the Board of Higher Education of the State of Oregon as follows:

Section 1. Issue. The State of Oregon is authorized to issue general obligation bonds (the "Bonds") in such series and principal amounts as the State Treasurer, after consultation with the Vice Chancellor for Finance and Administration of the Department of Higher Education, shall determine are required to refund all or any portion of its General Obligation Building Bonds, 1996 Series A; 1996 Series C; and any other series of bonds that meet the requirements established by law and approved by the State Treasurer.

Section 2. Maintenance of Tax-Exempt Status. The Board covenants for the benefit of the owners of the Bonds to comply with all provisions of the Internal Revenue Code of 1986, as amended (the "Code"), that are required for Bond interest to be excluded from gross income for federal income taxation purposes (except for taxes on corporations), unless the Board obtains an opinion of nationally recognized bond counsel that such compliance is not required in order for the interest to be paid on the Bonds to be so excluded. The Board makes the following specific covenants with respect to the Code:

(a) The Board shall not take or omit any action if the taking or omission would cause the Bonds to become "arbitrage bonds" under Section 148 of the Code and shall assist in calculations necessary to determine amounts, if any, to allow the State to pay to the United States all "rebates" on "gross proceeds" of the Bonds that are required under Section 148 of the Code.

(b) Covenants of the Board or its designee in its tax certificate for the Bonds shall be enforceable to the same extent as if contained herein.

Section 3. Sale of Bonds. The State Treasurer, with the concurrence of the Vice Chancellor for Finance and Administration, shall sell the Bonds as the State Treasurer deems advantageous.

Section 4. Other Action. The State Treasurer, the Vice Chancellor for Finance and Administration, or the Controller of the Department of Higher Education, is hereby authorized, on behalf of the Board, to take any action that may be required to issue, sell, and deliver the Bonds in accordance with this Resolution.

REVISION OF INTERNAL MANAGEMENT DIRECTIVES

Summary

At its July 1998 meeting, the Board of Higher Education approved several recommendations submitted by the Governance and Structure Committee, including a directive to amend the System's Internal Management Directives (IMDs). Staff proceeded with the project, and presented several sections of IMDs to the Governance and Structure Committee on October 7, 1998. Following an extensive review, staff modified the document to reflect the Committee's recommendations. Below is the amended version, submitted for the Board's approval.

Section 1 - Administrative Organization and Procedures
Board Procedures -- Repeal
[Will be moved to Board's Bylaws]

1.001    Preparation of Meeting Agendas and Dockets See Board's Bylaws Section regarding Board Structure, Organization, & Meetings

(1) Repeal

(2) Repeal

The Chancellor

A. Duties and Responsibilities

1.010 General Duties

The Chancellor is the chief executive officer of the System, responsible for implementation of the Board's decisions and plans. Except where otherwise designated, the Chancellor is delegated full authority to act on behalf of the Board within guidelines, established by the Board and to ensure that institutions, through institution presidents, carry out their responsibilities. The Chancellor shall seek the advice of institutional presidents in making decisions having substantial Systemwide effects. The Chancellor shall be responsible for presentation of all business and other matters to be considered by the Board at any of its regular or special meetings in addition to those items identified and brought by Board members.

1.015 Preparation of Quarterly and Annual Reports

The Chancellor or designee shall report to the Board quarterly on the academic, fiscal, and operational affairs of the System. The Chancellor or designee shall also report to the Board as otherwise required by statute, by the Board, or by the Governor.

B. Authority

1.020 Authority over Staff and Employees

(1) The Chancellor shall make recommendations to the Board, in which rests sole power of decision, concerning the selection, appointments, salaries, transfers, suspensions, terminations and other conditions of employment of institution presidents.

(2) The Chancellor is authorized to approve, after consultation with the President and Vice President of the Board, the salaries, transfers, suspensions, terminations, and other terms and conditions of employment of the vice chancellors and the Secretary of the Board.

(3) The Chancellor is authorized to approve up to 60 days paid leave at 90 percent of regular pay for institution presidents, vice chancellors, and the Secretary of the Board for purposes of undertaking study or research that will be of benefit to the institution or the University System.

(4) The Chancellor delegates to institution presidents the authority for appointments, transfers, resignations, leaves of absence, changes in tenure status, promotions, establishment of emeritus status, fixing of salaries, terminations, and all other terms and conditions of employment of all institution employees to the extent they are consistent with the rules, directives, and policies of the System and applicable collective bargaining agreements. Institution presidents shall confer with the Chancellor prior to approving the selection, salaries, transfers, suspensions, terminations, and other terms and conditions of employment of institution vice presidents.

(5) The Chancellor is authorized to select, appoint, promote, fix the salaries, grant leaves to, transfer, suspend, or terminate all other System staff consistent with the rules, directives, and policies of the System and applicable collective bargaining agreements.

(6) The Chancellor is authorized to delegate responsibilities or to designate staff to carry out any of the duties assigned to the Chancellor.

1.023 Official Representative to State Government

(1) The Chancellor is the official representative of the Department to the legislature, to the Office of the Governor, and to the Executive Department.

(2) To the extent allowed by law, the Chancellor may designate other System employees to represent the System in its dealings with the legislature, the Office of the Governor, and other state agencies as the Chancellor deems necessary and appropriate.

1.028 Legal Services

(1) The Chancellor may designate those who, in addition to the Board or its members, shall be authorized to request legal services on behalf of the System. The Chancellor shall seek the advice of institution presidents in designating institution staff authorized to seek services. Any requests for formal opinions of the Attorney General must be approved by the Chancellor.

(2) The Chancellor or designee shall be responsible for coordinating provision of legal services for the System.

1.025 Authority to Appoint Committees and Determine Jurisdiction -- Repeal [moved to 1.200]

1.026 Functions of Interinstitutional Advisory Committees -- Repeal

1.027 Staffing of Interinstitutional Advisory Committees -- Repeal

1.030 Official Communications between the Board, the Chancellor and the Staff -- Repeal [moved to 1.205]

1.031 Change in Name of Institution -- Repeal [moved to 1.300]

C. Selection and Appointment of the Chancellor (to be developed)

1.040 Selection of the Chancellor (to be developed)

1.042 Selection of an Interim Chancellor (to be developed)

1.043 Selection of an Interim Chancellor and Permanent Chancellor (to be developed)

1.045 Appointment of a Chancellor

The Chancellor shall be appointed by the Board to serve at its pleasure and shall hold the rank of professor.

D. Evaluation of the Chancellor

1.050 Evaluation of the Chancellor -- Annual

(1) Performance assessments of the Chancellor shall be conducted on a yearly basis.
(a) In July of each year, the Chancellor will submit a list of goals and objectives for the coming year. These will coincide with those set by the Board.
The goals, both specific and general, should be stated in measurable terms.
A draft of the document should be provided to the Executive Committee for review and critique prior to presentation for approval at a full meeting of the Board. The plan should include a personal and professional development component.
(b) In May of each year, the Chancellor will submit to the president and vice president of the Board a written self-assessment of goals that have been met, areas of needed improvement, and work remaining to be carried over to the next year. At the same time, a suggested plan for continuing professional development will be proposed for the coming year.
(c) The Executive Committee, functioning as the Board's Personnel Committee, will review the assessment and provide guidance to the Chancellor for any changes or additions to the report. An important aspect of the Chancellor's assessment will be the timeliness and thoroughness of presidential evaluations.
(d) The Board will meet in executive session to discuss the Chancellor's performance, goals accomplished, and areas of focus for the coming year.
(e) Following the executive session, a summary of the assessment will be discussed in an open meeting of the Board.

1.055 Evaluation of the Chancellor -- Discretionary

Additional assessments, involving an external consultant and extensive interviews with a broad range of individuals, will be conducted by the Executive Committee when it deems necessary.

(1) The Executive Committee shall assist the Board in assembling the evaluation material.

(2) Evaluation criteria for the Chancellor shall include, but not be limited to, the following:

(a) Leadership and Management: academic, administrative, planning, public affairs, other.
(b) Internal Relationships: Board, presidents, vice chancellors.
(c) External Relationships: state government, general public, business/industry, and appropriate regional and national affiliations.
(d) Effectiveness in achieving affirmative action objectives and sensitivity to equity issues.
(e) Ability to Perform Essential Functions: personal statement, physician's report.

Institution Presidents

1.101 Appointment of President -- Repeal [moved to 1.145]

E. Relationship of Presidents to Chancellor and the Board

1.102 Presidents Responsible to the Chancellor

(1) The President is the chief executive officer of the institution and a member of the Chancellor's executive staff. The President is responsible to the Chancellor for all matters concerning the institution and is an advisor the Chancellor in matters of interinstitutional policy and administration. The President will participate in meetings called by the Chancellor to seek advice regarding System operations and policy. The president will implement policies, plans, budgets and guidelines approved by the Chancellor.

(2) The President shall develop and implement, in consultation with appropriate committees or members of the institution, the policies, plans, budget, and guidelines affecting the institution as deemed necessary and/or advisable so long as they are in conformance with those policies, plans, budget, and guidelines adopted by the Board or Chancellor. The President shall advise the Chancellor of any institution events that substantially affect the well-being of the institution or the System or any major proposed changes of institution policies, plans, budget, or standards.

(3) The President shall recommend to the Chancellor any proposals for significant changes of policy, plans, budget or standards requiring approval of the Board or Chancellor. The Chancellor will decide whether to take action or to recommend the Board take action.

1.103 Duty of Presidents

(1) The President or designee shall approve all recommendations transmitted to the Chancellor from the institution.

(2) The President or a designee is encouraged to attend all meetings of the Board (except executive sessions) and its committees and is expected to attend those meetings at which matters affecting the institution are to be considered.

(3) The relationship of the President to the Board is through the Chancellor as the chief executive officer of the Board.

F. Authority and Responsibility of Institution Presidents

1.120 General Responsibilities

The President is delegated full authority and responsibility to administer the affairs of the institution in accordance with Board policies, plans, budgets, and standards, including management and expenditure of all institution funds, within budgetary and other limitations imposed by the Board. The President is delegated full authority for determining the organizational structure of the institution, except where otherwise provide by law, rule, directive, policy, or guideline.
1.122 Responsibility to Solicit and Consider Public Input

(1) Each institution will develop and implement formal mechanisms for gathering and utilizing citizen advice and counsel, considering the institution's mission, history, culture, location, and relationship to the state/region.

(2) The designated local body or bodies shall:

(a) Provide advice and input to the President, the university and, ultimately, through the President to the Chancellor on institutional strategic direction in regard to programs, planning, budget priorities, and financial management.
(b) Provide a forum for direct dialogue about the institution's needs, opportunities, and innovations aimed at maximizing mission and program accountability and responsiveness.
(c) Monitor the institution's progress with regard to the performance indicators and to advise the institution, the Chancellor, and the State Board of Higher Education with respect to both progress and appropriate goals.
(d) Advocate for the institution and the System.

(3) Annually, at the May board meeting, the President will submit to the State Board of Higher Education a detailed plan for the solicitation of public input for the upcoming academic year, and a report on the effectiveness of and recommendations resulting from the past year's plan for the solicitation of public input, including a summary of significant institutional decisions affected by the public input.

(4) The State Board of Higher Education may invite representatives of public input bodies identified in the campus' public input plan to meet ­ as the Board deems appropriate and necessary ­ with the Board. Nothing in this directive shall be deemed to delegate any of the Board's authority or responsibility.

1.123 Internal Governance and Authority over the Faculty

(1) The President shall have the right to convene and preside over the faculty or faculties of the institution and shall have the right of veto over their decisions or those of the representative body, subject to review by the Chancellor. The President shall define the scope of authority of faculties, councils, committees, and officers, subject to review by the Chancellor, when not otherwise specifically defined by Board policy or established in the internal governance statement.

(2) Each institution shall have the right to formulate a statement of internal governance expressed as a constitution or in other appropriate format, which shall be ratified as the official statement of internal governance by those included in the internal governance structure of the institution and by the President.

The internal governance statement is subject to review and modification when a new President assumes office and at such other times as shall be provided for in the internal governance statement; any amendatory action shall also be subject to ratification by those included in the internal governance structure and by the President.

1.125 Authority over the Faculties and Committees -- Repeal [moved to 1.123]

1.126 Internal Governance -- Repeal [moved to 1.123]

1.127 Administrative Authority over Institution Employees

(1) The President is authorized to approve, after consultation with the Chancellor, the salaries, transfers, suspensions, terminations, and other terms and conditions of employment of institution vice presidents or others serving in comparable positions.

(2) The President is authorized to approve, in conformance with rules, policies, or guidelines established by the Board or Chancellor, appointments, transfers, resignations, leaves of absence, changes in tenure status, promotions, establishment of emeritus status, fixing of salaries, or terminations of appointments, except as provided in subsection (1) above for all institution employees. The president may delegate full responsibility for the foregoing personnel actions to institution staff.

1.130 Responsibility for Student Conduct and Discipline

(1) The President is responsible for development and administration of institutional policies and rules governing the role of students and their conduct. In carrying out this responsibility, the President shall take into account the views of students, faculty, and others.

(2) Institutional rules shall establish guidelines for student conduct which set forth prohibited conduct and provide for appropriate disciplinary hearings and sanctions for violations of institutional rules, consistent with standards of procedural fairness.

(3) The Board recognizes and affirms the importance of active student involvement in the deliberative and decision-making processes.

G. Selection and Appointment of Institution Presidents

1.140 Selection of a President

The Board retains the sole responsibility for the selection of institution presidents and authorizes the Chancellor to conduct the search on its behalf. The direct costs of the presidential search shall be borne by the institution.

(1) When it becomes necessary to hire a President, the Board will direct the Chancellor to initiate a search. The search shall be conducted in a manner consistent with guidelines established by the Chancellor.

(2) A single search committee shall be responsible for assisting the Chancellor and the Board by identifying and recruiting possible candidates for the position of president.

(a) Members of the search committee shall be appointed by the Chancellor after consultation with Board leadership.
(b) The Chancellor shall appoint a vice chancellor or top-level staff person who shall serve as liaison among the Board, the Chancellor's Office, the search committee, and the institution. The liaison shall serve in a nonvoting ex-officio capacity on the committee.

(3) The search committee shall recommend three to five finalists to the Chancellor. The recommendations should be accompanied by a detailed report of the strengths and weaknesses of each candidate, especially in terms of the desired qualifications for the position. The report may include summaries of the evaluations from individuals and groups who provided information to the search committee. The recommendations from the search committee shall be unranked.

(4) The Chancellor shall interview the committee's finalists prior to release of a public announcement of the names of candidates to be interviewed by the Board. The Chancellor shall have the authority to narrow the field of candidates, but only after consultation with the majority of the search committee. The Chancellor has the authority to rank the candidates.

(5) The Board will interview the finalists forwarded by the Chancellor.

(a) Following the Board's interviews with the finalists, the Board shall meet in executive session to rank the nominees in priority order and to direct the Chancellor to negotiate with the Board's first choice. If the first choice does not accept the Board's offer, the Chancellor shall seek further advice from the Board before contacting the second choice.
(b) When the Chancellor has negotiated an acceptable appointment, the Board shall hold a special or regular meeting, open to the public, to vote on the selection of a president.

1.141 Selection of an Interim President

If a resignation, retirement, or other situation necessitates naming an interim president before a search can be conducted, the Board will authorize the Chancellor to conduct an assessment on its behalf.

(1) The Chancellor recommends an individual to serve as interim president of the institution.

(2) The Board chair names three Board members to assist the Chancellor in conducting an assessment of the strengths and weaknesses of the individual.

(a) The Chancellor and Board members will agree on a recommendation to the Board.
(b) The full Board will interview the candidate for interim president.
(c) At the next regular meeting or at a special meeting, the Board will ratify the appointment of the interim president. The Board will specify the anticipated length of time for the interim appointment and indicate when a search for a permanent president will begin.

1.142 Selection of an Interim President as Permanent President

When the Board must decide whether to conduct a national search or move an interim president to the permanent status, the procedures used in naming an interim president will be followed.

1.145 Appointment of Presidents

Presidents shall be appointed by the Board, upon recommendation from the Chancellor, to serve at its pleasure. They shall hold the rank of professor. Indefinite tenure may be awarded in a department at the institution upon the agreement of the faculty.

H. Evaluation of Institution Presidents

1.150 Evaluation of the President -- Annual

(1) Performance assessments of presidents shall be conducted on a yearly basis.

(a) In July of each year, the President will submit a list of goals and objectives for the coming year to the Chancellor. The goals, both specific and general, should be stated in measurable terms and include how the institution is (or plans to) achieving the Board's System goals and strengthening and improving cooperation and collaboration among institutions. It is anticipated that there will be a high degree of congruence between the President's goals and those of the Chancellor and Board.
(b) In May of each year, the President will submit a written self-assessment of goals that have been met, areas of needed improvement, and work remaining to be carried over to the next year. At the same time, a suggested plan for continuing professional development will be proposed for the coming year.
(c) Upon receipt of the draft assessment, the Chancellor and President will confer regarding any changes or additions.
(d) Following the meeting with the Chancellor, the Chancellor and the President will meet with the executive committee of the Board to discuss the performance review and goals for the next year.

1.155 Evaluation of the President -- Discretionary

(1) Additional assessments, involving the services of an external consultant, will be conducted by the Chancellor at the direction of the executive committee, as deemed necessary.

(a) The Chancellor, in consultation with the President, may choose to use an external consultant to collect the information to be included in the formal assessment.

i. Academic leadership and management.
ii. Administrative leadership and management.
iii. Internal relationships: faculty, staff, students, alumni, and institutionally associated groups.
iv. External relationships: Board; Chancellor and other Board's staff; state government; general public, both local and statewide; business/industry; and regional and national affiliations.
v. Effectiveness in achieving affirmative action objectives and sensitivity to other equity issues.
vi. Ability to perform essential functions.

Other Authority and Relationships

I. Committees and Communications

1.200 Interinstitutional Committees

The Chancellor and vice chancellors may appoint interinstitutional councils and committees to formulate policy proposals, to advise on matters pertinent to Department operation and, when appropriate, to administer Board policies. When establishing interinstitutional advisory committees and in making appointments, the Chancellor and vice chancellors shall consult with the administrative officers of the institutions and divisions to be represented. Members of such councils, committees, or other advisory bodies shall serve without additional compensation. The Chancellor and vice chancellors shall decide all questions of jurisdiction, not otherwise specifically defined by Board action, of the several councils, faculties, and officers. The advisory and coordinative activities of the various committees do not supplant the responsibilities of the institution presidents, nor do they abrogate the ordinary reporting relationships within each institution.

1.201 Legal Services -- Repealed [moved to 1.028(1)]

1.202 Legal Counsel -- Repealed [moved to 1.028(2)]

1.205 Official Communication between the Board, the Chancellor, and the Staff

(1) Official communications from staff members of System institutions and Chancellor's Office to the Board shall be made through the respective Presidents and the Chancellor.

(2) Copies of all official communications from Presidents or institution or Chancellor's Office staff to Board members shall be sent contemporaneously to the Chancellor and the Secretary of the Board.

J. Authority for Naming Institutions, Schools, or Colleges

1.300 Change in Name of Institution

Any change in the name of an institution proposed by an institution shall be submitted to the Board for approval. If approved, the Board will submit the request to the Legislative Assembly.

1.305 Establishing and Naming Schools or Colleges

(1) The Board shall approve the establishment or elimination of schools or colleges.

(2) Institution presidents shall have authority to name schools and colleges, provided that the Board shall approve the naming of a school or college after a living person.

Section 2 - Academic Affairs

Board Authority

A. University System Curricula

2.001 Board Oversight of Higher Education Curricula and Institutions

(1) The Board shall exercise general oversight of curricula and instruction in the System including, but not limited to, approval and deletion of curricular allocations, and the establishment and closure of schools or colleges. The Board's primary consideration, in meeting curricular responsibilities, shall be to ensure that high-quality educational opportunities are provided to qualified citizens in as accessible and cost-effective manner as possible.

(2) The Chancellor's Office shall keep the Board informed of state educational needs and shall encourage vigorous institutional planning to meet these needs.

(3) The Chancellor's Office shall act in other capacities regarding curricula and instruction as the Board may determine.

2.010 Missions of System Institutions

System institutions shall provide: (a) instruction, (b) research, and (c) public service. Of these, instruction shall hold the highest priority. Research and public service, as integral corollary functions to teaching and learning, may vary from institution to institution in their relative emphasis among the three primary mission areas. Research, scholarship, and creative activities shall be recognized as a necessary and inseparable part of the teaching-learning process, particularly in graduate and professional education, and as vital to Oregon's health and prosperity in the global information age.

2.015 Approval of New Academic Programs

(1) New academic degree programs will be approved by the Board upon recommendation by the Chancellor. Academic degree programs include baccalaureate, professional, and graduate degrees of all types; certificates; and educator endorsements.

(2) Criteria for proposal of new academic programs by System institutions shall include, but not be limited to, the following:

(a) The needs of Oregon for higher education and the state's capacity to respond effectively to social, economic, and environmental challenges and opportunities.
(b) Student demand that may not be met satisfactorily by existing programs.
(c) Program duplication is primarily of concern at the graduate and professional levels; therefore, a duplicated graduate or professional program must be specifically justified in terms of state's needs, demand, access, and cost-effectiveness.
(d) The resources necessary for the program are available within existing programs; have been identified within existing budgets and will be reallocated; or will be secured to meet reasonable timelines for implementation, typically within a two-year limitation.
(e) The congruity of the proposed program with the campus mission and its strategic direction.
(f) Where appropriate and feasible, the program is a collaboration between two or more institutions that maximizes student access, academic productivity, and quality.

(3) The review and approval process consists of the following steps:

(a) Using the guidelines and format for submission of fully developed program plans, campuses will submit proposals to the Chancellor's Office, which will place the proposal on the next regular meeting agenda of the Academic Council. The Academic Council will review the program proposal in accordance with the criteria. If the proposed program is at the graduate level, an external review will be required and subsequently reviewed by the Academic Council.
(b) If no major issues are left unresolved as a result of these deliberations, the Chancellor's Office will provide abstracts of the program proposals to other Oregon postsecondary and higher education institutions and the state's Office of Degree Authorization. Under administrative rules implementing provisions of state law, the System is required to give notice of intention to establish a new program before final Board approval is given, in order to allow for resolution of any claims of "detrimental duplication" or "significantly adverse impact" by an institution in another Oregon education sector. If no such claim is made in a timely manner, the internal process of program approval moves on to the next step. If a claim is made, the parties involved must follow the procedures specified in the state's administrative rules before continuing on to the next step in the System's approval process.
(c) i. If the Board's criteria and the notice provisions are met, the vice chancellor will recommend the proposed program to the Chancellor for approval and placement on the Board's consent agenda.
ii. If, in the course of the Academic Council's and Chancellor's Office deliberations, it is determined that the proposed program does not meet the Board's criteria and the institution wishes to proceed anyway, the program will be presented to the Board for review and disposition after the statewide notice provisions are met.
iii. An annual summary of programs approved and programs closed will be reported to the Board.

2.021 Honorary Degrees

Each institution, with the concurrence of its faculty, may decide to award honorary degrees.

(1) An institution wishing to award honorary degrees shall adopt criteria and procedures for selection to ensure that the award will honor outstanding contributions to the institution, state or society, and/or distinguished achievement.

(2) Criteria and procedures for selection shall be forwarded to the Chancellor or designee for approval.

(3) An institution with an approved selection process shall forward its nominations and a supporting case statement for each nominee to the Chancellor or designee. The annual process should be planned to enable the Board's consideration at least 90 days before the date for awarding the degrees.

B. Instructional Program

2.025 Academic Calendar

The regular academic calendar of the System shall consist of fall, winter, and spring terms, and a summer session.

(1) After consultation with interinstitutional councils, as appropriate, the Chancellor's Office will set standard dates for the starting and ending of instruction for fall, winter, and spring terms, in order to facilitate interinstitutional curricular collaboration, articulation, and student access.

(a) A rolling five-year System academic calendar will be published annually.

(2) Within the framework of the regular academic calendar, institutions are encouraged to offer alternative course formats and schedules to ensure greater curricular access and flexibility to constituents whose personal and/or professional commitments might preclude access to the traditional academic schedule.

2.030 Credit for College Courses Taught in High Schools or Through Distance Education

Each institution may offer college-level courses taught for credit in high schools or through distance education to serve high school students.

(1) These course offerings shall be at the postsecondary level, and in addition to high school-level courses required for graduation. When courses are taught at the high schools, course materials shall be the same as, or equivalent to, those of the institution awarding the credit.

(2) Student eligibility for college-level credit courses will be mutually determined by the sponsoring institution and the high school.

(3) Registration processes and tuition will be determined by the sponsoring institution.

(4) Earned credits and grades will be transcripted by the sponsoring institution.

(5) High school teachers of college courses shall possess comparable qualifications to instructors of the disciplines in the sponsoring institution and shall be approved by the sponsoring institution's departments. College teachers may also teach college courses for high school students.

(6) Teaching/course evaluation practices shall be comparable to the practices of the sponsoring institution's department.

2.035 Undergraduate Transfer and Articulation

The Board affirms the importance for Oregonians to have maximum program articulation, course and credit transferability, and recognition of proficiencies that can be demonstrated. The Board recognizes that this is a shared responsibility among education providers and individuals. Toward achievement of these goals, the Board expects that:

(1) In a changing environment with growing access to electronically-delivered coursework, and transfer students presenting transcripts from multiple providers, System institutions should be flexible in accepting academic credits from accredited entities. Institutional practices should balance the integrity of a specific System institutions's degree with the reality of the dynamic educational marketplace (so long as admission, degree program, and graduation requirements are met).

(2) Each institution shall regularly update and publish information regarding course equivalencies between the institution's courses and partner community college courses and, in other ways, be responsive to transfer students' information and advising needs. Each institution shall also be guided by statewide agreements that enable broad-scale student transfer to occur among all System institutions and community colleges in Oregon.

(3) Each institution shall develop policies and practices that accept a reasonable amount of professional-technical coursework as electives or related work into baccalaureate degree programs.

(4) Where appropriate and feasible, institutions shall develop specific articulation agreements and co-admission/co-enrollment programs with community colleges and other partners in order to promote the orderly flow of students between and among institutions.

(5) Through such mechanisms as the Joint Boards' Articulation Commission, the OUS Academic Council, and the Council of Instructional Administrators of Oregon community colleges additional transfer degree programs should be considered and, if appropriate, developed to prepare community college students for transfer into a broad array of baccalaureate programs.

2.040 Accreditation Reports

Each institution shall submit to the Chancellor or designee in a timely manner both self-study and visiting team reports related to periodic general institutional accreditation by the Northwest Association of Schools and Colleges. Reports of specialized accrediting bodies on academic disciplines or professional programs shall also be submitted.

Vice Chancellor for Academic Affairs

2.100 Duties of the Vice Chancellor for Academic Affairs

(1) Under the direction of the Chancellor, the Vice Chancellor for Academic Affairs directs work of the System Office relating to academic programs, student and faculty academic affairs, and school relations.

(2) In the area of curricular and instructional affairs, the Vice Chancellor for Academic Affairs shall have full responsibility within the Board's Office for development of studies, policy analyses, and recommendations for the Chancellor and the Board.

(3) In the areas of student affairs and faculty affairs, the Vice Chancellor for Academic Affairs shall have major staff responsibility. Aspects of student or faculty personnel issues that have fiscal implications shall be coordinated with the Vice Chancellor for Finance and Administration.

(4) The Vice Chancellor for Academic Affairs will chair the Academic Council, an interinstitutional advisory group consisting of the chief academic officers of System institutions, whose primary functions shall include, but not be limited to: exchanging information, coordinating the planning of academic programs within the System, reviewing academic program proposals, encouraging collaborations, and stimulating and guiding a broad range of academic initiatives.

Section 3 - Student Affairs

A. Review of Admission Requirements

3.001 Review of Undergraduate Admission Requirements

(1) The Board shall review and set undergraduate academic admission requirements for the institutions. To enable timely institutional planning, program implementation, publications, and notice to prospective students, the Board shall approve admission requirements for each academic year not later than in February of the preceding calendar year.

(2) Institution and Chancellor's Office staff shall work with Oregon schools, the Oregon Department of Education and others, on effecting a coordinated transition from the traditional admission policy to the proficiency-based admission standards system (PASS) that aligns with legislatively-mandated changes in public K-12 education.

3.005 Establishment of Minimum Standards for Entry Into Programs

Each institution may establish minimum academic and other standards for entry into particular programs in excess of those established for the institution by general Board policy. In addition, the institution may selectively admit students into these programs on the basis of established standards. All standards established pursuant to this directive and the procedures applying to them shall comply with OAR 580-015-0025.

B. Financial Aid to Students, General Policy

3.010 Encouragement of Financial Assistance

To ensure maximum student access, the institutions shall provide financial assistance to students to the extent possible by encouraging gifts and grants for scholarships, loans, and other financial aids from government and private sources, and by developing and maintaining tuition remission scholarship programs from tuition revenues generated.

3.015 Assistance for Out-of-State Study

The Chancellor's Office shall assist Oregon students to avail themselves of special study and student exchange programs out of state in accordance with provisions of agreements with the Western Interstate Commission on Higher Education (WICHE) and other applicable student exchange agreements.

Section 4 - Staff and Faculty Personnel

Career Support

4.001 Faculty Career Support Program

(1) Each institution shall develop and maintain, through appropriate institutional procedures that provide for input from appropriate faculty and institutional bodies, a faculty career support plan.

(2) Institution programs shall include:

(a) Objectives;
(b) Periodic evaluation of faculty, including consideration of appropriate performance indicators;
(c) Specific delegations of responsibilities to academic administrators, peer groups, and individual faculty members;
(d) Specific steps that will be taken to provide career support for faculty members, taking into account stage in career, career development needs, identified performance strengths, and any areas identified for improvement;
(e) The manner in which faculty compensation is related to the results of the periodic evaluation and career support needs of individual faculty members.

4.003 Career Support Program for Unclassified Employees

Each institution should develop and maintain a career support program for unclassified employees. The plan should provide for periodic evaluation including consideration of appropriate performance indicators. The plan should also include the manner in which unclassified compensation is related to the results of the periodic evaluation and career support needs of individual unclassified employees.

4.005 Board Policy on Outside Activities and Related Compensation -- Repeal [moved to 4.011]

Compensation

4.010 Institution Policy on Outside Activities and Related Compensation -- Repeal [moved to 4.015]

4.011 Board Policy on Outside Activities and Related Compensation

(1) Employees may engage in outside consulting or other work so long as it does not substantially interfere with institutional obligations.

(2) "Employees," as used in this policy, means an employee hired under the authority of the Board.

(3) Laboratory and other institutional facilities and resources, including support staff and stationery, shall not be used in outside work for which the employee received remuneration unless expressly authorized by the institution. Such authorization may be included in the institution policy or as part of the approval of an employee's specific request.

(4) Remuneration received in accordance with IMD 4.011 and IMD 4.015 from sources outside the University System shall be considered official salary, honorarium, or reimbursement of expenses for purposes of ORS 244.040. Receipt of such compensation does not have to be reported under IMD 4.015(4) or (5) unless the outside work creates a potential conflict of interest as defined in ORS 244.020(8).

4.015 Institution Policy on Outside Activities and Related Compensation

Each institution shall adopt policies and procedures to implement IMD 4.011 to 4.015. Such policies and procedures shall:

(1) Include appropriate measures, such as one day per week, which define faculty time available for outside activities related to the faculty member's institutional responsibilities. Outside activities unrelated to institutional responsibilities and undertaken by faculty on personal time, regardless of whether compensated, are not subject to these Board of Higher Education and institution policies. However, if the faculty member, while on personal time, engages in outside activities which create a potential conflict of interest, the faculty member must provide written disclosure thereof in accordance with (4) and (5) below.

(2) Identify the name(s) or title(s) of institutional administrator(s) assigned responsibility for reviewing and acting on requests to engage in outside activities related to the faculty member's institutional responsibilities as referenced in (1) above.

(3) Identify and describe types of outside faculty activity related to faculty institutional responsibilities and associated funding sources which the institution approves as a class(es) and which will not require review and prior approval, such as health care faculty clinical activities, services as an expert witness, and services other than those identified in IMD 4.010(4) and (6) below. If, however, the particular activity under the class creates a potential conflict of interest, the faculty member shall provide a written disclosure thereof to a designated supervisor in accordance with (4) and (5) herein.

(4) Require faculty to disclose to the named institutional administrator(s) in writing, and to receive prior approval on a case-by-case basis, to engage in outside activities involving any or all of the following:

(a) Acceptance of compensation, or ownership of equity in the case of a private entity.
(b) Service in a line management position or participation in day-to-day operations of a private or public entity.
(c) Service in a key, continuing role in the scientific and technical activity of a private or public entity.

Institutional case-by-case approval will not be required if the activity is included within the scope of an institution-defined class as established under (3) above.

(5) Require that the faculty member's written disclosure, as referenced in (4) above, fully describe the:

(a) Type of work or consulting to be provided to the named entity;
(b) Nature of the relationship (e.g., employer/ employee, entity/contractor, or consultant);
(c) Anticipated time commitment;
(d) Expected benefits to the entity, faculty member, and institution;
(e) Use of institutional facilities and support personnel, if any, and method of reimbursing institution for both direct and indirect costs, if institution approves such use; and
(f) Financial arrangements pertaining to funding sources of compensation, including equity ownership and other forms of economic value provided the faculty member or any immediate member of the faculty member's family.

(6) Require the institutional administrator(s) to consider the following when reviewing written requests to engage in outside activities:

(a) Written disclosures identified in (5) above.
(b) Contributions of the relationship to the faculty member's primary obligation to the institution and its support of the academic integrity of the institution as well as the faculty member's interdepartmental relationships.
(c) Prospective nonfinancial benefits to the faculty member and institution.
(d) Average time commitment over an academic term, such commitment not to exceed the limits established by the institution unless the institutional administrator(s) determines that the activity provides extraordinary benefit to both the institution and the participant as a faculty member. In cases where the time limits are to be exceeded, the faculty member shall disclose the amount of time in excess of the limits, and the institutional administrator(s) shall document in writing the rationale for approving the request to exceed the limits.
(e) Assurances that the outside activity does not substantially interfere with the faculty member's instructional, research, and other related institutional responsibilities, including those to students. Special attention must be given to the intellectual property interests of students who may create and claim ownership to such property developed in the process of completing their academic programs.
(f) Appropriateness of the use of institutional facilities and support personnel, if approved, including written documentation that the full cost thereof will be reimbursed to the institution.

(7) Establish the type, nature, and extent of the information required to be reported under (2) through (6) above, which shall be made a part of a faculty member's confidential personnel record.

(8) Provide a process whereby a faculty member dissatisfied with a decision of an authorized administrator may appeal that administrator's decision to another institutional authority. That authority shall be vested with power to make a final determination relative to authorization to engage in the outside activity.

(9) Provide for the institutional president to report to the Chancellor's Office by August 31 of each year any change in institutional policy on outside activities and evidence of procedures followed in monitoring faculty and family acceptance of compensation and equity for outside activities of the faculty member.

(10) Specify appropriate sanctions against faculty who fail to comply with Board and institutional policies and procedures concerning outside activities and acceptance of related compensation and equity.

(11) Be submitted to the Chancellor's Office for review and approval prior to adoption.

4.020 Travel Awards and Bonuses

(1) Employees traveling on System business must use routes, schedules and airlines that provide the lowest rates and the most efficient travel.

(2) Because the cost of record-keeping outweighs the nominal monetary benefit to the System, frequent-flyer bonuses earned by employees traveling on System business are part of the employment package and may be used by employees as they choose unless the institution determines otherwise for specific employees or the terms of a grant or sponsorship do not permit.

4.021 Use of Telephones

(1) System campus and cellular telephones are intended primarily for conducting System business. Notwithstanding, employees may use System telephones for personal calls when that use will be more efficient to the overall conduct of the System's business.

(2) Employees shall reimburse the System for any direct costs incurred by the System for use of System campus and cellular telephones for personal use, consistent with (1). Any benefit the employee receives because of System rates shall be considered part of the employee's compensation.

4.022 Use of Computers

Personal use of computing facilities, Internet connections, and e-mail is acceptable as long as it does not interfere with an employee's ability to perform job duties or with the ability of other users to carry out their job duties or does not violate the other provisions of acceptable use contained in institution or Chancellor's Office policy.

Section 5 - Institutional Units and Administrative Services

Chancellor's Health Services Adviser

5.001 The Chancellor's Health Services Adviser -- Repeal

5.005 Governing Body, University Hospital -- Repeal

Oregon Health Sciences University Disposition of Fees

5.010 Disposition of Professional Medical Fees -- Repeal

5.015 Disposition of Professional Oral Health Fees -- Repeal

5.017 School of Nursing Practice Plan -- Repeal

Recommendation to the Board

The Board Governance and Structure Committee recommended approval of revised Sections 1-5 of the Internal Management Directives.

Board Discussion and Action

President Imeson asked Mr. Willis to lead the discussion on this item. "The Committee has done a quite a bit of work, but at our October 7 meeting, we determined that we are far from done," said Mr. Willis. "However, I do want to thank those on the Committee and staff who have been involved. It's been pretty tremendous." Mr. Willis briefly reviewed several of the modifications made to the IMDs, which were based on input from the Governor, the Board, and the Committee.

Continuing, Mr. Willis observed, "One of the pieces that we struggled with as a Committee and as a Board was the idea of Institutional Advisory Councils. The Committee's decision at last week's meeting was to set expectations for public input at the institutional level and allow the institutions to determine how to meet those expectations, including designing the structure and process for each Advisory Council. The Board would then receive reports in May of each year summarizing how presidents have accomplished this.

"The policy, which has been integrated into the IMDs, looks for direction in several areas: strategic direction of the institution; program planning; budget priorities; financial management; admissions; needs and opportunities; and performance. From the perspective of the Committee, it's our responsibility to help establish the expectations."

After complimenting the Committee and staff for their efforts on updating the IMDs, Chancellor Cox said that he had taken the liberty of meeting with the presidents individually to discuss goals and objectives for the coming year, assuming that the Board would approve the new evaluation process.

Ms. Christopher asked about IMD 1.055(b), and if staff is involved at any point in the evaluation of the Chancellor's internal relationships. "I believe the assumption is that in the overall effectiveness in operating the organization, the specifics relate to the Board, presidents, and vice chancellors," explained Chancellor Cox. Mr. Willis added that he felt the process would include other staff as well.

President Frohnmayer asked for clarification to IMD 1.141(2)(b) regarding the selection of an interim president. "If you're going to ask the full Board to interview the candidate, that means you'll have to call a special meeting, which has open meeting implications. This may be difficult if you want to move quickly to appoint an interim president. You could read this to say that all Board members shall have the opportunity to interview the interim president as opposed to in a Board assembly," he pointed out.

Ms. Christopher said that her interpretation was based on conversations following the recent appointment of President Dow. "It would be useful if the full Board had an opportunity to ask questions, and not just convene to formally approve the appointment. I don't think that 11 people should conduct separate interviews," she said. "My feeling is that the whole Board should convene."

Mr. Lussier, who submitted a paper to the Governance and Structure Committee on the subject, said that the intent was to have the process be consistent, whether it's a new or interim president being appointed, and not circumvent the in-depth process of a presidential search. "We did feel that the full Board should really be involved at some point in the active advancement of interim president to active president," he added. Mr. Imeson agreed that it should not be a "casual" situation.

Chancellor Cox suggested that a Board committee (comprised of three members) agree on a recommendation to the Board, then schedule an Executive Session prior to the full Board's final vote to allow for any questions by Board members. Ms. Grier said that, rather than working on the language at this time, the change will be made if there is some difference of opinion in the future. There was consensus that this was the appropriate strategy.

Referring back to the discussion regarding Institutional Advisory Councils, Mr. Willis clarified that the concept was first incorporated into the IMDs, and then a separate item was submitted for approval, which outlined the process in greater detail.

"Beyond the institutional input issue," said Mr. Lussier, "I think that the overall system of governance needs addressing, and as a committee, we are willing to continue to pursue this. I think we owe it to ourselves to take a look at a new way of doing some things down the road." President Imeson agreed, adding that he felt the Committee was suggesting movement in an important direction.

Mr. VanLuvanee shared that he felt the policy was somewhat weak, simply outlining expectations that he would already have of a good president. "We, as a Board, have some accountability as to who will be involved in that group, otherwise I don't think we're being fair to the presidents in approving a group that will be a major advisor for local activity," he pointed out.

Dr. Aschkenasy voiced his concern over the Board being held accountable for seven semi-autonomous boards, adding, "It strikes me as more than we can ask of a volunteer board. What happened to the discussion about having the Chancellor appoint the members?" he asked. "He can't do that without our directive," explained Ms. Christopher. Chancellor Cox clarified that he was advised by counsel that his acting on this matter was, in effect, acting on behalf of the Board.

"I think the original idea behind this was that, in the new era of conducting business, the presidents were going to need some help in thinking about how they are going to accomplish what is being set out for them," said Mr. Imeson. "I believe the institutions are looking, and maybe it would be useful to see the December report they would be required to submit, to get an idea of what they propose."

"At the Committee level, we need to provide a context for what we are trying to achieve," said Mr. Lussier. "We have not yet provided that context, which is why we continue to struggle with this."

Ms. McAllister added, "We need to first identify who we are, and then we'll have more clarity in what function an Advisory Council would have."

Mr. Imeson said that he felt the issue had been confused somewhat. "We started out talking about governance and now we're talking about how to deal with public input and they are not the same thing." Continuing, he said, "We're going to have to make some decisions about this. I don't want us to try to say we're resolving the governance issue by doing something about public input."

"The question today is, do we move forward with the public input policy, recognizing that we still have a lot of discussions remaining around governance?" asked Mr. Willis.

"I'm not diminishing the issue of governance, but do we solve any problems by approving this document?" questioned Mr. VanLuvanee.

"It formalizes an expectation and a process for involvement," responded Dr. Vines.

Mr. Imeson said that if approving the document referring to public input is beneficial to the institutions, then he would be in favor of it. "This is a volunteer group working with no staff," said Ms. Christopher. "I'm wondering about the reality of what this group of people are really going to do for an institution."

"The Committee's hope was to provide some broad guidelines for the institutions," explained Mr. Willis. "If you'll recall in the Governor's recent comments, one of the statements he made was for the Board to establish a formalized process for public input at the institutions. It's consistent with that concept. I think the public input is the key piece at this point, and not necessarily the governance issue. However, we will have to have some frank discussions about that," Mr. Willis said.

Chancellor Cox encouraged the Board to discuss the issue at length in the upcoming Association of Governing Boards self-assessment workshop. "There's no better group to bring you objective advice," he observed.

"I think we need to commit to resolve the issue one way or the other in the not too distant future," Mr. Imeson said. "I don't think we're going to get there through a consensus approach. I think the Governance and Structure Committee is doing a good job of grappling with the topic, but I think we're essentially going to end up with a couple of proposals, debate them, and then take a final vote. I think we're putting the presidents in an awkward situation as long as we have this issue unresolved."

Chancellor Cox suggested that the discussion be tabled for the day. "We can frame this for the consultant in terms of what we think the questions are, and ask him to bring to you a national overview, some alternatives, characteristics, how authorities are delegated, and how groups are appointed. That way you can at least look at the available options," he said.

Mr Lussier moved to approve the recommendation for the IMD revisions, with the exception of IMD 1.222, which will be referred back to the Governance and Structure Committee for a reformulating of specific governance proposals. Mr. VanLuvanee seconded the motion. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

INSTITUTIONAL PUBLIC INPUT

The Oregon State Board of Higher Education is committed to more effectively connecting with the people the Oregon University System serves by soliciting input from citizens, clients, and constituencies regarding the activities, programs, and services delivered to Oregonians by our public universities.

As a result of many months of discussion between Board members, institution presidents, and staff, the following policy statement is recommended for approval by the Board:

Keeping in mind the needs of its students and the publics served, each institution in the Oregon University System will develop and implement formal mechanisms for gathering and utilizing citizen advice and counsel, respecting the strengths and effectiveness of individual institutions as they serve the people of Oregon, both now and in the future.

Each institution will consider its own history, culture, location, and relationship to the state/region and its mission to determine the appropriate vehicle(s) to accomplish this charge. Action might range from creating a new advisory body, adapting the role of an existing entity (e.g., an advisory council, the institution's foundation board, the alumni board), or developing a composite of several established schools'/colleges' advisory boards, or relying on existing bodies providing external inputs

Responsibilities of the designated local body or bodies are:

1. Provide advice and input to the president, the university and, ultimately, through the president to the Chancellor on institutional strategic direction in regard to programs, planning, budget priorities, and financial management.

2. Provide a forum for direct dialogue about the institution's needs, opportunities, and innovations aimed at maximizing mission and program accountability and responsiveness.

3. Monitor the institution's progress with regard to the performance indicators and to advise the institution, the Chancellor, and the State Board of Higher Education with respect to both progress and appropriate goals.

4. Advocate for the institution and the System.

Annually, at the May Board meeting, the campus president will submit to the State Board of Higher Education a detailed plan for the solicitation of public input for the upcoming academic year. (The 1998-99 plan will be submitted at the December 1998 Board meeting.)

Annually, at the May Board meeting, the campus president will submit to the State Board of Higher Education a report on the effectiveness of and recommendations resulting from the plan for the solicitation of public input, including a summary of significant institutional decisions affected by the public input.

The State Board of Higher Education may invite representatives of public input bodies identified in the campus' public input plan to meet--as the Board deems appropriate and necessary--with the Board.

All authority and responsibility currently in statute remains with the State Board of Higher Education.

Recommendation to the Board

The Governance and Structure Committee recommended that the Board approve the Institutional Public Input policy as submitted.

Board Discussion and Action

Following the discussion regarding the IMD revisions, the Board opted to table this item, along with the correlating IMD (1.222), so that further work could be done by the Governance and Structure Committee.

RECOMMENDATIONS TO AMEND INSTITUTIONAL MISSION STATEMENTS

Summary

A recommendation of the Board Governance and Structure Committee at the July 1998 meeting was to initiate a review of institution mission statements for consistency with the legislatively mandated System mission, thereby representing a comprehensive Oregon University System.

Board members Esther Puentes and Phyllis Wustenberg were named as a Subcommittee to review institution mission statements and offer recommendations for amending them. On September 17, 1998, Vice Chancellor Clark, Board Secretary Vines, and Directors Puentes and Wustenberg, developed the following recommendations. They were subsequently approved for submission to the Board at a Governance and Structure Committee meeting on October 7, 1998.

Recommendation to the Board

The Governance and Structure Committee recommended that the Board approve the preceding guidelines and timelines for reviewing and amending institution mission statements.

Board Discussion and Action

Ms. Wustenberg and Ms. Puentes briefly reviewed the recommendations. Ms. Wustenberg asked that a slight amendment be made to the recommendation: that of deleting the text referencing that the Board's office staff would compose a preamble for each institution. "I have heard input the institution representatives would appreciate writing how they feel they are a part of the System," Ms. Wustenberg explained.

"Was the goal of your Subcommittee to make the mission statements more specific?" asked Ms. Christopher.

Ms. Puentes responded by saying that while the content was excellent, each institution approached the task of creating mission statements somewhat differently. Further, in reviewing them, there was agreement that the timeliness was inconsistent. Another issue that arose was that of supporting the System, and the institutions' role as a member of the System. "We thought one way of doing that was to use a preamble, because it does not dictate how they should address the mission at the institution level," Ms. Puentes said.

"I don't know if there is any really good or bad time to look at institutional missions," said Mr. Willis. "I think they should reflect the differentiation within the System and be really explicit about what each institution is trying to do. For example, when we are moving program approval to the consent calendar, we can feel confident that the program is consistent with the mission. I think it's appropriate that we move that forward," Mr. Willis surmised.

Ms. Christopher asked if presidents were consulted during the process. Ms. Wustenberg confirmed they had not, but she felt that the missions needed review in the context of the System mission as mandated by statute. "We have never given institutions much input about what we think should be in the mission statements. This needs to be an ongoing process now, especially if we expect them to take different directions," she said.

Mr. Willis moved to approve the recommendations with Ms. Wustenberg's amendment and Mr. VanLuvanee seconded the motion. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

REINSTATEMENT OF THE INVESTMENT COMMITTEE

Summary

Fiscal oversight is a key responsibility of the Board of Higher Education, including investments made on behalf of the Oregon University System. The Board Governance and Structure Committee, at an October 7, 1998 meeting, determined that given the world's volatile economic marketplace, an Investment Committee should be reinstated, thereby providing a more extensive review of the System's investments and related policies. The Committee shall routinely meet with the Controller and other investment representatives, with the Committee Chair reporting to the full Board at its regular meetings.

Recommendation to the Board

The Governance and Structure Committee recommended that the Board approve the reinstatement of a Board Investment Committee, comprised of a chairperson and two additional Board members.

Board Discussion and Action

Following a brief history of the Committee's work, Mr. Willis said that his hope would be for the appointed group to more closely monitor investment issues. "It's not just the Asian economic crisis, it's also the character and caliber of our investment managers," he explained.

Mr. VanLuvanee suggested the Committee review the investment policy to ensure that it is current with the changes in the conditions. Vice Chancellor Anslow reminded Board members that the Oregon Investment Council (OIC) also has a role. "A series of recommendations were forwarded to the OIC by the Board. We need to see the status of that," he said.

Ms. McAllister moved and Mr. Lussier seconded the motion to approve the recommendation as submitted. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

Note: Later in the meeting, President Imeson announced the Committee would be comprised of Ms. Wustenberg (chair), Ms. McAllister, and Mr. Willis.

COMMITMENT TO SYSTEM VISION, INTEGRATION, AND GOVERNANCE

Summary

The Board Governance and Structure Committee, as part of its charge to redefine System governance, developed numerous recommendations for Board consideration, the majority of which were approved at the July 1998 Board meeting. One concept that the Board believed required further consideration was the recommendation pertaining to the formation of Institutional Advisory Councils.

The importance of and methods for seeking public input at the campus level have generated thought-provoking dialogue among Board members and institution presidents for several months. As a result, a policy recommendation submitted by the Governance and Structure Committee to the Board for a vote at the October 1998 meeting detailed the Committee's recommendations on institutional public input. The Committee believed that there should be a commitment by the Board to continue to explore and discuss the governance structure necessary for an integrated Oregon University System.

Recommendation to the Board

The Governance and Structure Committee recommended that the Board continue work on the System vision, integration, and governance, and the role of institutions as a contributor to the integrated System.

Board Discussion and Action

In summarizing the Committee's recommendation, Mr. Lussier said, "The discussion centered around the future and where we're going. Can we develop a vision from a System perspective that takes in the entire state of Oregon with reference to higher education? How might we put something like that together? I think it would be an interesting expectation and one that we can continue to revisit," he concluded.

Dr. Aschkenasy moved to approve the recommendation as submitted and Mr. VanLuvanee seconded the motion. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

OAR 580-001-0000, APPEARANCES BEFORE THE BOARD-TEMPORARY RULE

Summary

At its July 1998 meeting, the Board of Higher Education approved a new Board meeting format, which included a 30-minute public input session. An amendment is necessary to Oregon Administrative Rule, 580-001-0000, Appearances Before the Board, before the new process of receiving public comment can be initiated.

In order for the Board to receive public comment at the December 18, 1998 meeting, a Temporary Rule must be filed with the Secretary of State's Office. A Permanent Rule will be prepared for a vote by the Board at the December meeting.

As part of the process, legal counsel suggested that Bylaws pertaining to the Board's Order of Business be amended as well to better reflect the modified agenda. Greater specificity regarding the meetings will be written into the Bylaws, as opposed to the Rule, thereby allowing for more expeditious change in the future, as the Board deems necessary.

The revised Rule is submitted as follows (bold text denotes deletions; bracketed text denotes additions):

Appearances Before the Board

580-001-0000 Individuals and representatives of organizations desiring to appear before the Board to present any matter concerning higher education [may do so, consistent with procedures]. shall file a written request stating the purpose of the appearance and naming explicitly the person or persons who desire to speak to the Board. The Board may establish procedures for public input at Board meetings [established by the Board in its Bylaws.] The written request shall be delivered to the Board Secretary at least seven days before the meeting at which the matter is proposed to be heard. If the request is granted by the Board President, conditions of the appearance may be imposed. If written materials are to be submitted for Board consideration, 25 copies thereof shall be furnished for consideration by the Board.

Staff Recommendation to the Board

Staff recommended that the Board approve the Temporary Rule, OAR 580-001-0000, Appearances Before the Board. Staff will submit a Permanent Rule and Bylaw amendments at the December 1998 Board meeting.

Board Discussion and Action

Mr. Koch moved and Mr. Lussier seconded the motion to approve the Temporary Rule as submitted. On roll call, the following voted in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

B.MUS. IN CONTEMPORARY MUSIC, WOU

Introduction

Western Oregon University requests authorization to offer a Bachelor of Music (B.Mus.) degree in Contemporary Music. The Board reviewed a preproposal for this program at its May 15, 1998, meeting.

The program will be phased in starting with the 1998-99 academic year, to be fully operational by the year 2000. Western's music department currently serves 40 majors in the B.A./B.S. programs. The proposed degree would draw some of those majors and may also attract other students who might have elected a different major or institution. Within the first five years of implementation, graduation rates are expected to reach approximately 8 to 12 per year.

No other OUS institution offers a B.Mus. in Contemporary Music. Specific components of the proposed degree are offered as separate programs (e.g., jazz studies); however, Western will offer the only degree program that blends these musical disciplines into a single, cohesive baccalaureate degree.

Staff Analysis

1. Relationship to Mission

Western's mission calls for providing liberal arts programs, including program offerings in the creative arts, as well as "responding to the challenges Oregonians face in career changes...and adapting to new technologies." The proposed program is particularly relevant given the changing nature of music and the impact that technology has had on the music industry.

2. Evidence of Need

The nature of "making music" has changed dramatically in the last 50 years. Mass distribution and broadcasting, electronic music, film and video scoring, field recording, and personal computers have all influenced this change. The roles of performer and composer have blurred, as have the musical styles of classical, jazz, and commercial music. The proposed degree is a response to this new reality. Skills and knowledge that are typical components within tracks in a traditional major are integrated in such a way that students will be prepared to participate in the generation and production of music in the new context.

As music production becomes more accessible to musicians of modest means, the music industry will become less focused in traditional metropolitan centers such as Los Angeles. The music market is expanding concurrently with the growth in high-tech industries, creating more opportunities for musicians at the leading edge of creativity and entrepreneurship. Students completing this program may find employment in a variety of music-making areas such as composition of commercial music; music for films, TV, or dramatic productions; jazz performance; studio musicians; work in post-production houses or recording studios; studio teaching in composition; and music software consulting.

3. Quality of Proposed Program

Utilizing the current core required of music majors, the proposed program will provide students with a broad foundation of applied and theoretical studies in music, with an emphasis on music since 1950. The program is designed to prepare students to either enter the professional marketplace in any number of capacities or to proceed to graduate study. To that end, Western has consulted with the University of Oregon's music program. (Since four of WOU's music faculty have earned their graduate degrees from UO, they are especially well-versed with the requirements of that school and will be able to prepare students for that eventual transition.)

Five new courses will be developed for this program: Introduction to Ethnomusicology; Jazz Styles and Analysis; Music Since 1950; The Business of Music; and Senior Seminar and Project. The new courses are logical extensions of elective areas currently in place and will utilize strengths of current and newly hired faculty. The Senior Project will be a capstone experience such as a public performance or presentation of original music and will serve as concrete documentation of each student's competency in performance, composition, and MIDI technology.

4. Adequacy of Resources to Offer the Program

Current resources are adequate to offer this program, and only minor additional costs (for services/supplies and library resources) are anticipated at this time. As noted earlier, technology is integrated into the coursework throughout this curriculum. Some of Western's facilities that support that feature include:

According to a reviewer from the Department of Recording Industry, Middle Tennessee State University, "the hardware and accompanying software currently in place . . . will provide excellent educational opportunities for students. . . . The facilities will give alumni of the program the necessary conceptual and practical foundation necessary to be successful in the pursuit of a career in contemporary and commercial music."

Financial resources for maintenance, replacement, and acquisition of new equipment are maintained through modest lab and computer usage fees.

Program Review

The proposed program has been reviewed positively by all appropriate institutional committees and the Academic Council.

Staff Recommendation to the Board

Staff recommended that the Board authorize Western Oregon University to establish a program leading to the Bachelor of Music in Contemporary Music, effective fall 1998, with a follow-up review of the program to be conducted by the OUS Office of Academic Affairs in the 2003-04 academic year.

Board Discussion and Action

Vice Chancellor Clark offered a brief synopsis of the proposal, and asked Provost Minahan to comment further. "Through retirements and through changes in position additions, we have changed the nature of the program to emphasize the study of voice and integrated in the study of composition, musical literature, technologies for making music, and providing the necessary equipment and experiences necessary to make it as a musician or someone who works in the industry for the next 25-30 years," explained Dr. Minahan. "It's going to be a small program to begin with, but we anticipate it to grow to between 30-50 students over the next five years."

Mr. VanLuvanee moved to approve the program proposal as submitted and Ms. Van Patten seconded the motion. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

CLEAN COPY, INC., LEASE AGREEMENT, PSU

Summary

As part of the PSU Urban Center, Phase I project, the building and site housing the Clean Copy, Inc. business was condemned by Tri-Met. Terms of the "friendly condemnation" by Tri-Met included PSU assisting Clean Copy, Inc., to obtain another site on or near the PSU campus. A lease has been negotiated that would provide Clean Copy, Inc. with renovated space in the PSU Parking Structure II. In September 1998, the Executive Committee of the Board approved the sale of $6.09 million of Article XI-F(1) Bonds for the Urban Center, Phase I project, of which $750,000 was associated with creating space for this tenant. The debt service on the $750,000 portion of the bonds would be paid from rental income derived from the Clean Copy, Inc. lease. The term of the lease is for ten years with options to extend. In accordance with ORS 351.150 and 351.060 and OAR 580-050-0005, the lease is submitted for the Board's review and approval.

Staff Report to the Board

PSU requests authorization to lease approximately 4,400-square-feet of space to be renovated for the lessee in its Parking Structure II, at the corner of Broadway and Mill Street. The lessee will be Clean Copy, Inc., which has provided copying and course packet/copyright clearance services for the University since 1979, with approximately two-thirds of their business related to the University or its students. Clean Copy, Inc. has been located on the site of the PSU Urban Center, Phase I, now under construction. Their building, which was not owned by PSU at the inception of the Urban Center, Phase I project, was condemned by Tri-Met as part of that project. Terms of this "friendly condemnation" stipulated that PSU assist Clean Copy, Inc. in obtaining an alternate location within the University District and, in return for this and other considerations pertaining to the transit mall improvement project, Tri-Met would convey the property to PSU.

Funding for the Clean Copy, Inc. relocation, as well as the construction cost of new facilities, was included in the revised total funding for the Urban Center, Phase I project that was approved at the February 20, 1998, Board meeting. The Legislative Emergency Board subsequently approved the revised expenditure limitation of $33.2 million for the project on April 10, 1998. As part of the Urban Center, Phase I project funding, the Board approved the issuance of $6.09 million in Article XI-F(1) bonds, of which $750,000 was to be attributable to the relocation of Clean Copy, Inc., with the source of debt repayment on the $750,000 portion to come from this lease. These bonds are scheduled to be sold as part of the fall 1998 bond sale.

PSU, working with Clean Copy, Inc., has retained the services of Soderstrom Architects to design new facilities for Clean Copy, Inc., to be located in space renovated on the ground floor of Parking Structure II. Bids for the construction of this facility were opened on September 10, 1998, and Shimizu Construction (the same contractor being used for the Urban Center construction) was selected as the lowest cost responsive bidder. Construction is scheduled to begin in late September or early October 1998 and should reach completion in time to allow Clean Copy, Inc., to occupy the premises by December 1998.

Lease Provisions. The initial lease term will be ten years, with an option to renew for four successive terms of five years each, for a total term, including extensions, of 30 years. The tenant will be responsible for its pro rata share of all operating expenses of the Parking Structure, all property taxes and assessments of any public authority against the Parking Structure, and its share of all insurance relating to the Parking Structure. The lease cost incorporates the revenue lost to PSU due to the loss of parking spaces. The tenant will also pay for up to eight parking spaces for its use at the standard rate charged by the University. Throughout the term of this lease, the tenant will be responsible for all charges for services and utilities incurred in connection with the tenant's use, occupancy, operation, and maintenance of the premises. The lease has been written and approved by the Attorney General's Office.

Staff Recommendation to the Board

Staff recommended that the Board approve the request by PSU for authority to lease space in Parking Structure II to the Clean Copy, Inc., by authorizing the Board President and Secretary to execute said lease on behalf of the Board.

Board Discussion and Action

Vice Chancellor Anslow explained that this item was related to the Urban Center project, which the Board has spent considerable time reviewing.

Mr. Koch asked about the 30-year lease agreement and if a contingency plan was in place in case the tenant moved. "PSU would have to secure a subsequent tenant for that particular space in order to have lease payments to cover the cost of the bonds, or they might decide to do something different with the property, such as turn it back into parking spaces," responded Mr. Anslow.

Mr. Lussier moved and Mr. VanLuvanee seconded the motion to approve the lease agreement as submitted. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

PSU BOOKSTORE LEASE AGREEMENT, PSU

Summary

As part of the PSU Urban Center, Phase I project, the City of Portland requires that retail space at the ground level be incorporated in the building plans. A lease to the PSU Bookstore has been negotiated that would meet this requirement and provide expanded space for the Bookstore in the East Wing of the new Urban Center. In September 1998, the Executive Committee of the Board approved the sale of $6.09 million of Article XI-F(1) Bonds for the Urban Center, Phase I project of which $4 million was associated with creating space for the PSU Bookstore. The bond debt service for the $4 million portion would be repaid from rental income from the Bookstore. The term of the lease is for 30 years, with one option for the Bookstore to terminate at the end of 15 years upon payment of a fee. In accordance with ORS 351.150 and 351.060 and OAR 580-050-0005, the lease is submitted for the Board's review and approval.

Staff Report to the Board

PSU requests Board approval to lease approximately 23,000 square feet of space on the first floor level of the East Wing building of the Urban Center, Phase I project to the PSU Bookstore. The term of the lease would be for a period of 30 years with an option to terminate after 15 years, under certain conditions. The PSU Bookstore is a vital service element of the University and is in need of expansion space not available at its current location. In addition, this new, larger retail store will front the busiest bus stop in Portland, and with the prospect of fronting on the new Tri-Met South-North Light Rail line, should have excellent retail potential.

The Board approved final, revised funding for the Urban Center, Phase I project at its February 20, 1998, meeting. The Legislative Emergency Board subsequently approved the revised total project expenditure limitation of $33.27 million on April 10, 1998. As part of the project funding, the Executive Committee of the Board recently approved the issuance of $6.09 million in Article XI-F(1) bonds, of which $4.0 million will be attributable to the Bookstore space with the source of debt repayment to come from this lease. These bonds are scheduled to be sold as part of the fall 1998 bond sale.

PSU has retained the services of Thomas Hacker and Associates to design the Urban Center, Phase I, including all retail areas on the first floor. The shell for the PSU Bookstore is estimated to cost $2.0 million and tenant improvements are estimated at another $2.1 million. Construction of the Urban Center, Phase I project should be complete in the fall 1999/winter 2000 timeframe.

Lease Provisions. The initial term of the lease is 30 years; however, the Bookstore will have the option to terminate this arrangement after 15 years subject to the payment of an early termination fee equal to six months' rent. The Bookstore will also have the option to extend the lease for two successive terms of five years. Rent for this space is based on the estimated costs of design and construction (including tenant improvements), plus bond interest and issuance costs, amortized over 30 years. In addition, the tenant will be responsible for its pro rata share of all operating expenses, including all charges for services and utilities of the facility, all property taxes and assessments of any public authority against the facility, and its share of all insurance relating to the facility. The lease has been written and approved by the Attorney General's Office.

Staff Recommendation to the Board

Staff recommended that the Board approve the request by PSU for authority to lease space in the East Wing of the Urban Center building to the PSU Bookstore by authorizing the Board President and Secretary to execute said lease, subject to minor changes approved by the Attorney General's Office, on behalf of the Board.

Board Discussion and Action

Ms. Christopher moved and Mr. VanLuvanee seconded to approve the lease agreement as submitted. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

COLEMAN FIELD RENOVATION, ADDITIONAL EXPENDITURE LIMITATION, OSU

Staff Report to the Board

Oregon State University received approval from the Board at its January 1998 meeting, and subsequent approval from the Legislative Emergency Board at its June 1998 meeting, for a $2,200,000 Other Funds-funded project to repair, renovate, and remodel the Coleman Field Baseball Facility. The project provides a completely renovated baseball park, new storage facilities for the men's baseball program, new seating, press box, and team dugouts. Code and handicapped access requirements are being met, and the brick exterior is being added to the face of the park, to link the facility architecturally to existing buildings.

Fundraising for the project continued during the summer, and additional restricted gifts and pledges were received, sufficient to provide an additional $300,000 to the project budget beyond existing limitation approval. During this same period, the construction bidding process was completed; upon opening, the bids were higher than expected, and would have required some portions of the project to be deleted. With the receipt of the additional gifts, the Athletics Department now has sufficient gift funds restricted to this project to permit the full project as previously approved by the Emergency Board to proceed. In order to be able to augment the project budget, an expenditure limitation increase will be required from the Emergency Board.

Staff Recommendation to the Board

Staff recommended that the Board approve the Oregon State University Coleman Field Renovation Project, with a revised total project cost of $2.5 million and authorize the Vice Chancellor for Finance and Administration to seek authorization from the State Emergency Board for an increase in the total project expenditure limitation to $2.5 million of Other Funds.

Board Discussion and Action

Mr. Lussier moved and Mr. Willis seconded the motion to approve the additional expenditure limitation as submitted. Those voting in favor: Directors Aschkenasy, Christopher, Koch, Lussier, McAllister, Puentes, VanLuvanee, Van Patten, Willis, Wustenberg, and Imeson. Those voting no: none.

FOURTH QUARTER REPORT ON INVESTMENTS

Staff Report to the Board

The fourth quarter investment report of the Pooled Endowment Fund of the Oregon University System for the period April 1 through June 30, 1998, prepared by R. V. Kuhns and Associates, investment consultants, is included in the supplemental materials (on file in the Board's office).

Board Discussion

Vice Chancellor Anslow called OUS Controller Mike Green to review both the fourth quarter and annual reports. Becky Gratsinger, from R.V. Kuhns, and Associates, provided highlighted specific aspects of the reports. She explained that OUS had a 1.5 percent return in the fourth quarter, which ranked just below the top third of all endowments and foundations.

Ms. Gratsinger distributed a document outlining activity in September 1998, which was not included in the original report. "The common fund equity commitment was down 12.2 percent, but the bond fund increased by four percent, which was a greater return than the market," she reported.

ANNUAL REPORT ON INVESTMENTS

Staff Report to the Board

A comprehensive report on the Oregon University System's entire investment portfolio, consisting of endowment funds (both pooled and separately invested), donation funds, and plant funds, is incorporated in the System's Investment Report, which is included with the supplemental materials (on file in the Board's office).

The annual report on the System's pooled endowment funds is presented in three parts: (1) a brief narrative that delineates the annual performance results of our investments at the Common Fund, (2) a table comparing investment performance for the fiscal year ending June 30, 1998, to prior periods and to related benchmarks, and (3) a fourth quarter investment consultant's report from R.V. Kuhns and Associates, which is included with the supplemental materials.

The June 30, 1998, market value and asset allocation of the System's pooled endowment fund investments are summarized as follows:

Pooled Endowment Fund Investments
Fund Title

Market Value
06-30-98

% of
Total

Multi-Strategy Bond Fund $13,284,516 23.1%
Multi-Strategy Equity Fund 37,804,188 65.6%
Real Estate Investment Trust 1,973,275 3.4%
Endowment Energy Partners 77,027 .1%
Endowment Partners Fund 248,823 .4%
Endowment Venture Partners 489,330 .9%
TOTAL Common Fund Investments 53,877,159 93.5%
Cash Invested in State Treasury's Short-Term Investment Pool
3,746,156

6.5%
TOTAL Pooled Endowment Funds 57,623,315 100.0%


Common Fund Summary

Multi-Strategy Bond Fund (6/30/98 market value $13.3 million, 23.1 percent of total). The Multi-Strategy Bond Fund is a "Fund of Funds," which means that it is a fund made up of allocations to other fixed income funds of the Common Fund. These funds include the High Quality Bond Fund, the Global Bond Fund and the International Bond Fund.

The Multi-Strategy Bond Fund continued its strong performance with return of 2.5 percent for the fourth quarter, up from 1.9 percent at the end of the third quarter. The rate of return for the year ending June 30, 1998, is 11.6 percent. The Multi-Strategy Bond Fund outperformed its benchmark, the Lehman Aggregate Bond Index, of 10.5 percent.

During the third quarter, the Multi-Strategy Bond Fund was helped by its 55 percent High Quality Bond Fund allocation, as well as its exposure to private debt strategies. Detracting from return, however, was the fund's 25 percent allocation to the Global Bond Fund, which reduced performance as foreign bond markets generally underperformed the U.S. The five percent allocation to high yield also lessened returns as corporate spreads widened due to concern that a failing yen and a renewed round of Asian devaluations would have a negative impact on corporate earnings.

Multi-Strategy Equity Fund (6/30/98 market value $37.8 million, 65.6 percent of total). The Multi-Strategy Equity Fund is also a "Fund of Funds," as described above. The funds included are the Core, Growth, Small Cap Growth, Small Cap Value, Equity-Income, Absolute Return, Hedge and International Funds.

The Multi-Strategy Equity Fund returned 1.0 percent for the quarter, but trailed its benchmark's return of 1.8 percent and the even stronger 3.3 percent return of the S&P 500 Index. For the fiscal year, the fund has a rate of return of 25.4 percent, compared with 22.7 percent for its benchmark and 30.2 percent for the S&P 500. Strategy allocations adding value over the S&P 500 for the quarter included the Growth, Hedge and Absolute Return (Equitized) Funds, while allocations to Core, Equity-Income and International/Global reduced performance.

Endowment Realty Investors I (6/30/98 market value of $2.0 million 3.4 percent of total). Through March 31, 1998, Endowment Realty Investors' I (ERI I) total return since inception stood at 6.07 percent, slightly ahead of the 5.04 percent total return for the benchmark, National Council of Real Estate Investment Fiduciaries (NCREIF) Index, over the same period.

The fund returned 11.49 percent for the past four quarters compared to the benchmark return of 15.22 percent. Total liquidation of the fund is scheduled for December 31, 2000.

Endowment Energy Partners Fund I (6/30/98 market value $77,027, 0.1 percent of total). Endowment Energy Partners I (EEP I) has produced a net internal rate of return of 9.6 percent since its inception in 1989 through March 31, 1998. EEP I completed its five-year investment phase on December 31, 1994, and is now over half way through its liquidation phase.

Endowment Partners Fund I (6/30/98 market value $248,823, 0.4 percent of total). Endowment Partners Fund I (EPF I) has returned an aggregated net internal rate of return of 11.2 percent since its inception in 1988 through March 31, 1998. This return is lower than the benchmark of 12.4 percent.

Endowment Venture Partners I (6/30/98 $489,330, 0.9 percent of total): The net internal rate of return on capital received from Endowment Venture Partners I (EVP I) participants since inception in 1990 through June 30, 1998, stood at 23.5 percent as compared to the benchmark of 17.8 percent.

The following table summarizes the investment performance results for the fiscal year ending June 30, 1998, for the OUS Pooled Endowment Fund.

Board Discussion

Mr. Green summarized that, overall, the System is in a fairly high cash position due to some liquidations of the alternative investments and the impending move to other investment managers. Mr. Green also stated that, due to recent market fluctuations, the value of the System's endowment fund has declined since June. Ms. Gratsinger said that in the past year, there was a 21 percent return on assets, considered to be a positive result.

Dr. Aschkenasy asked about how the long-term alternative investment return as reported as gross of fees versus net. Ms. Gratsinger said that the indexes used to compare performance also included gross of fees, but offered to include an informational line in future reports indicating the expenses related to that portion of the investment portfolio. Mr. Green noted that, in the past year, no fees were associated with those funds, because there was no investment for them.

After briefly reporting on the energy partner commitment, where some loss was experienced, Ms. Wustenberg asked about the need for the fund altogether. Ms. Gratsinger explained that it was an alternative investment entered into several years ago to help diversify the portfolio and lower the overall risk profile.

OREGON UNIVERSITY SYSTEM

POOLED ENDOWMENT FUNDS
PERFORMANCE COMPARISON
(Based on Total Return)
93-94 94-95 95-96 96-97 97-98
OUS Total Endowments
OUS Total Endowment 2.8% 15.8% 16.4% 18.9% 21.6%
NACUBO, Pools $25M to $100M 2.4% 15.8% 16.7% 20.1% ----
Equity (Stock) Investments
OUS Equity Fund 3.4% 17.6% 23.5% 25.4% 25.0%
S&P 500 Stock Index 1.4% 26.0% 26.1% 34.7% 30.2%
Oregon Equity Fund 1.6% 22.2% 26.0% 28.8% 25.4%
Fixed (Bond) Investments
OUS Bond Fund 1.6% 13.7% 6.3% 10.0% 11.3%
Lehman Aggregate Bond Index -1.5% 12.5% 5.0% 8.2% 10.5%
Other Investments
Real Estate Investment Trust 0.5% 8.5% 8.8% 8.5% 13.1%
Endowment Energy Partners 23.0% 33.0% 1.5% 0.5% -39.5%
Endowment Partners Fund 16.3% 9.2% 4.9% 11.3% 19.4%
Endowment Venture Partners 2.0% 40.4% 53.2% 12.6% 23.9%
OUS-Stocks/Bonds combined 2.7% 16.3% 18.5% 21.4% 21.4%
Weighted Target Index 0.2% 20.6% 17.7% 26.8% 23.3%
65% S&P 500 Stock Index
35% Lehman Aggregate Bond Index


SEMI-ANNUAL AUDIT REPORT

Staff Report to the Board

The Internal Audit Division's (IAD) Semi-Annual Audit Report January-June 1998, included in the supplemental materials (on file in the Board's office), summarizes audit results from projects completed over the past six months and provides an update on the status of IAD's 1997-98 Audit Plan. As part of the risk assessment program identified in the 1997-98 Audit Plan, departmental audits were completed at five OUS institutions. These audits focused on the business and administrative functions normally performed by campus departments. IAD dedicated significant consulting resources to provide support and information to the Board in three critical areas: 1) the development of OUS's biennial budget for submission to the Governor, 2) the remodel of the OUS budget system for allocating education and general funds to the institutions, and 3) the collection and analysis of pertinent information related to intercollegiate athletics.

Board Discussion

Director of Internal Audit Marv Wigle said that in the past year, 106 auditable units within the System out of a possible 705, or 15 percent, were audited. To complete a cycle, he said, would take approximately seven years. "Currently, we are working on audits in departments within the Chancellor's Office, and we will commence with OSU in November. I'd like to get the cycle down to six years, if possible."

Mr. Anslow reminded the Board that several members of the Internal Audit staff supported various committees during the past year, such as Athletic Funding and Budget and Finance, which affected the workload of the department. Mr. Imeson noted that "it was an important diversion from normal activities." Mr. Wigle said that, while he felt the activity would lessen, it would not go away.

Mr. Lussier asked if there were any particular areas in the report that should be pointed out for the Board. "We did not find anything that we were particularly disturbed about," reported Mr. Wigle. "As we identified trends, they related essentially to cash receipts, restrictive endorsement of checks, and the timeliness of deposits. Across the institutions, there were continuing problems with fixed assets, but that's related to Banner/FIS and it is being resolved," he explained.

1998-99 INTERNAL AUDIT PLAN

Staff Report to the Board

The Internal Audit Division (IAD) presents its audit plan for the 1998-99 fiscal year, which is included in the supplemental materials (on file in the Board's office). This plan incorporates selected best audit practices endorsed by the Institute of Internal Auditors, the American Institute of Certified Public Accountants, and other professional audit organizations. These practices have been integrated by IAD into three core programs designed to help address OUS's audit-related needs for the upcoming year: (1) the 1998-99 Risk Assessment Audit Program, which includes departmental audits of critical business functions, information technology audit plans, and contracting authority audits; (2) the Consulting Services Program, which includes provisions for consulting on both campus and Systemwide issues; and (3) the Control Assessment and Training Program, which makes available combined risk assessment and internal control training sessions to campus departments. In addition to these programs, the plan provides for such other projects and services as campus request audits, audit follow-ups, outsourcing, fraud audits, and liaison for Federal, Oregon Audits Division, and other external audits and reviews.

Board Discussion

Ms. Christopher asked Mr. Wigle to comment on the issues of ethics and conflict of interest. "In response to the devolution of accountability, is all of the people in the System who have responsibility for business practices and processes need to be aware of that responsibility, the implications of it, and the possible consequences of their work," Mr. Wigle said.

"Is it more a phenomenon of the future, than of the past?" asked Ms. Christopher. Mr. Wigle affirmed that it was an essentially preventative issue.

COMPENSATION FOR THE CHANCELLOR AND INSTITUTION PRESIDENTS

Background

Faculty and staff salaries throughout the OUS have been adjusted for 1998-99 in accordance with the Board's salary policy. The report of the Chancellor regarding 1998-99 salaries on July 16, 1998, for institution presidents, and the Board approval of the 1998-99 salary for the Chancellor, completed the process of salary adjustments.

The Board met with the Chancellor to discuss recommendations for institution presidents and the Chancellor. The Board is in agreement that Chancellor Cox and the seven presidents have performed above and beyond expectations and at high-levels of excellence and deserve merit increases. The increase for the Chancellor and presidents will be a three percent increase effective September 1, 1998, with an additional three percent increase on February 1, 1999.

Report of Action Taken

IMD 1.020 (1) provides that the Chancellor recommend to the Board salary adjustments for the institution presidents. The Chancellor's recommendation is found on the following schedule.

ORS 351.075 (3) stipulates that the Board of Higher Education shall fix the compensation of the Chancellor.

The President of the Board recommended on July 16, 1998 that the September 1, 1998, compensation for the Chancellor be increased by three percent and on February 1, 1999, an additional three percent increase shall become effective. The increases are reflected on the following schedule.

Board Discussion

Mr. Anslow briefly reviewed the report, which outlined the compensation plan approved by the Board for the Chancellor and presidents.

Compensation Schedule
Title/Institution POSITION Annual Rate as of 9/1/98 Annual Rate as of 2/1/99
Chancellor Joseph Cox
Salary
Expenses
Housing Allowance

$137,678
$ 16,188
$ 13,848

$141,808
no change
no change
Presidents
UO David Frohnmayer
Salary
Expenses

$133,908
$ 15,000

$137,925
no change
OSU Paul Risser
Salary
Expenses

$133,908
$ 15,000

$137,925
no change
PSU Daniel Bernstine
Salary
Expenses

$133,908
$ 15,000

$137,925
no change
WOU Betty Youngblood
Salary
Expenses

$107,124
$ 10,000

$110,338
no change
SOU Stephen Reno
Salary
Expenses

$107,124
$ 10,000

$110,338
no change
EOU Phillip Creighton
Salary
Expenses

$107,124
$ 10,000

$110,338
no change
OIT Martha Anne Dow
Salary
Expenses

$107,124
$ 10,000

$110,338
no change


COMMITTEE REPORTS

Joint Boards Working Group

Ms. Puentes reviewed items covered at a September 18 meeting, including a recent grant for $320,000 to be used to implement a virtual university throughout the state. The Fund for the Improvement of Post Secondary Education (FIPSE) awarded the grant to the System, from a proposal spearheaded by Associate Vice Chancellor for Academic Affairs Holly Zanville.

Another issue discussed, said Ms. Puentes, was the frequency of Joint Boards meetings. Board Bylaws currently state the Joint Boards shall meet three times annually. Ms. Puentes announced that there would be a recommendation for a Bylaw amendment at the November 20 Joint Boards meeting to reduce the number of meetings to three times per biennium.

"The other issues concerned the joint initiatives with the Oregon Department of Education," explained Ms. Puentes. "One of the outcomes was the determination that we need to prioritize our activities. We cannot take on all of the partnerships that we would like because of resources. Staff will be creating a priority list for review by the November 20 Joint Boards meeting."

Central Oregon Joint Boards

Chancellor Cox explained that, following the July meeting with the Central Oregon Community College (COCC) Board and the OUS Board, a joint committee was formed to address the issue of higher education in the region. Ms. Wustenberg and Mr. Lussier, COCC Board members Kate Van Vorhees and Bob Le Duc, comprise the Committee. "This has been an incredibly dedicated group that has met at least twice a month," said the Chancellor. He referred to a draft document created by the Committee that outlined a 20-year vision, and encouraged input from Board members. The Chancellor explained, "Our intent is to receive input from both Boards and then go back to the region, in a public meeting, to further discuss what's in the document.

"One of the wonderful things is that we are not talking about turf, but students' needs," observed Ms. Wustenberg."I think it's one of the reasons we are moving along so well. We are making every attempt to include input from different groups and individuals. Many studies have been conducted and we've tried to respect the recommendations coming out of those," she said.

Vice Chancellor Clark described current programs available through the University Center at COCC, including a UO General Science program. "This begins to cover an area in the sciences, as the balance of our offerings was more toward the humanities, liberal arts, and education--we've had business options there for a long time. As you'll see, there is also independent college participation. We have accommodated that within the operations of the Center," said Dr. Clark.

"We have been conducting routine surveys and convening focus groups to help us assess needs, from both students' and employers' standpoints. There's a high level of interest in a bachelor's level program in computer science, although when it comes time to begin the actual application, admission, and enrollment in courses, the numbers are sometimes there only in handfuls. We have learned that we attract more students when we offer the whole program versus making a course available to students," Dr. Clark explained. Chancellor Cox added that the most successful programs are those where resident faculty, who are more visible and involved in campus life, are accessible. "The direction that we will be trying to move in is that of at least a core of resident faculty in major programs," he said.

Mr. Lussier applauded the Board for its involvement in the discussions. "Having a meeting there and showing strong interest in the region has really focused a discussion around community development. That's going to benefit everybody. Flexibility, partnering, looking for a more visible presence--those things are very important to Central Oregonians," Mr. Lussier observed.

Continuing, Mr. Lussier said, "What we are talking about for the short term is embellishing the baccalaureate degree program that could be a capstone concept, or an embellishment of the University Center, or the beginning of an establishment of a branch campus of an existing university, or a series of partnerships from all kinds of public and private institutions that already have a presence in Central Oregon. That's what we're struggling with at this point--which direction is the best direction, that utilizes limited resources, but has an opportunity to grow."

Dr. Cox shared that he intended to reestablish the regional advisory board for the University Center, which will be charged to work with the current Committee, eventually replacing it. He added, "We are having conversations with COCC about constructing a 30,000-square-foot building to house the University Center and its successor activities. We would be prepared to sign a long-term lease as the anchor tenant. This would likely be the most substantive things we could do, is a statement of 'we're here to stay,'" he concluded.

"Is the thought to dissolve the current Committee, and let this advisory board take over?" asked Ms. Christopher.

Mr. Lussier said that he felt that was a distinct possibility. "I think everybody understood that this Committee was to come up with recommendations, go back to members' respective boards to seek advice as to where to go directionally. It was not to be a perpetuated endeavor. The University Center still needs to have a more public presence than it currently has. It sometimes is largely unnoticed and an advisory board would raise its stature," he observed.

"As the conversation continues about how to go forward with this, this new group would be driving that discussion?" questioned Ms. Christopher.

"It depends on the recommendations," responded Mr. Lussier. "If everything is going to go through the University Center, then yes, that's true. If the recommendation is to do something other than that, the University Center still needs to remain intact and needs an advisory board."

Ms. Wustenberg asked if Board members had any input at this point, and whether they felt the group was headed in the right direction. Mr. Willis shared that he thought it was positive movement. "I think there is a lot of momentum now, and the Board ought to support what's happening," he said.

Chancellor Cox concluded the conversation by briefly describing activities at Southwestern Oregon Community College (SWOCC). "The space has been set aside, and we're in the process of hiring a director. There are conversations going on with a number of our institutions, particularly OSU. We're going to grow another one," he exclaimed.

Governance and Structure

Mr. Willis said that he neglected to report on a Subcommittee formed at the October 7 meeting. Comprised of Mr. Koch, Ms. Puentes, and Ms. Wustenberg, this group will look at the report items currently being presented to the Board and make recommendations on better organizing them to be more consistent with new System processes.

ADJOURNMENT

President Imeson formally adjourned the Board meeting at 12:18 p.m. Following adjournment, a topical presentation and work session commenced.

TOPICAL PRESENTATION AND WORK SESSION

President Imeson asked Board Secretary Vines to explain the goals of the Oregon Emerging Business Initiative (OEBI): that of making Oregon one of the top three areas in the world for emerging businesses by 2008, and, in relation to higher education, build an educational environment that supports entrepreneurship.

In her work with other higher education team leaders, Dr. Vines explained one of the first tasks was to review the report card, Oregon's Entrepreneurial Environment, to determine the kinds of activities that would raise the grade (higher education received a C- in the eyes of entrepreneurs).

Several concepts that emerged included sharing intellectual assets, commercializing higher education ideas with the private sector, and vice versa, working to develop a plan to create a strong link between the public and private sector. Dr. Vines reported that campus response to the concept has been favorable.

One activity that Dr. Vines offered to spearhead is that of creating an electronic network to link faculty with specific expertise to entrepreneurs and companies when assistance is needed for a particular activity; e.g., developing a marketing plan, securing angel funding, and alpha/beta testing. "The Portland Chancellor's Office will be the clearinghouse for technical assistance," she said, adding that community college and independent faculty will also eventually be on the network.

Chancellor Cox asked Dr. Vines to address the levels of participation for the regional institutions. "We are developing a set of principles that includes a statement of equal access for all institutions," she explained.

"Are there targeted review dates prior to 2008?" asked Ms. McAllister. Dr. Vines said that each group operating within OEBI (the higher education arm being one of several) has a work plan with deliverables and a target.

Ms. Christopher asked how the project was funded. Seed money was provided by the Oregon Economic Development Department, but that the intent is to have the program be self supporting, explained Dr. Vines. She added that the Oregon Business Council and Association of Oregon Industries have been supportive, but have not provided funding. However, there are ongoing discussions with both entities as to how to collaborate on the project.

The topical presentation and work session concluded at 1:50 p.m.


Diane Vines
Secretary of the Board

Tom Imeson
President of the Board