MINUTES OF A MEETING
ARIZONA BOARD OF REGENTS
Thursday and Friday, December 4-5, 2008

A meeting of the Arizona Board of Regents was held December 4 and 5, 2008, in the Memorial Union, at Arizona State University, Tempe, Arizona.

 President Boice called the meeting to order at 9:25 a.m.

CONSENT AGENDA

Item #30 was removed from the Consent Agenda.  All remaining items on the Consent Agenda that are marked in these minutes with an asterisk (*) were consent matters and were unanimously adopted upon the motion of Regent Bulla, seconded by Regent Calderón.

*Minutes

The August 14-15, 2008 Executive Session Meeting Minutes and the September 25-26, 2008 Regular Meeting Minutes were approved.

ACADEMIC AFFAIRS COMMITTEE CONSENT AGENDA

*2007-2008 Progress Report on Articulation and Transfer for Arizona Postsecondary Education (Agenda Item #9 - Appendix)

The Board approved the submission of the 2007-2008 Progress Report on Articulation and Transfer for Arizona Postsecondary Education to the Joint Legislative Budget Committee.

*Proposed New ABOR Policy 2-409, “Course Materials” (Second Reading) (Agenda Item #10)

The Board approved the proposed ABOR Policy 2-409 to provide for the adoption of policies at each university that require publishers of postsecondary course materials to disclose to faculty members and staff written information on course materials offerings, prices, copyright dates and substantive content differences between editions, as presented in the executive summary.  

*2010-2011 Academic Calendar Approval (Agenda Item #11)

The Board approved the 2010-2011 Academic Calendars, as presented in the executive summary. 

HUMAN RESOURCES COMMITTEE CONSENT AGENDA

*Approval of Multiple-year Employment Contract for Head Softball Coach (UA) (Agenda Item #14)

The Board approved the University of Arizona's request for a Multiple-year Employment Contract for Michael Candrea as Head Coach of its Softball Team, for the period January 1, 2009 through June 30, 2013, as presented in the executive summary. 

*Proposed Revisions to ABOR Policy 6-103, “Salary Adjustments for Administrators who Return to Faculty Positions,” and ABOR Policy 6-206, “Salaries” (Second Reading) (Agenda Item #15) 

The Board approved the proposed changes to ABOR Policy 6-103 and ABOR Policy 2-206 to conform the Board policy to current practice, as presented in the executive summary. 

*Proposed Revisions to ABOR Policy 6-912, “Access to or Disclosure of Personnel Records or Information” (Second Reading) (Agenda Item #16)

The Board approved the proposed changes to Policy 6-912, which are to implement changes in state statute that will require the universities and the Board to permit access to certain records of employee disciplinary actions under the Arizona public records law, as presented in the executive summary. 

*Proposed Revisions to ABOR Policy 6-603, “Optional Tax Shelter 403(b) Program” (Second Reading) (Agenda Item #17)

The Board approved the proposed changes to Policy 6-603. The revisions are proposed to implement changes required by the Internal Revenue Service (IRS), as presented in the executive summary.

*First Restatement of the Cash Balance Pension Plan (Agenda Item #18)

The Board approved the First Restatement of the Cash Balance Pension Plan to fulfill Internal Revenue Code requirements, as presented in the executive summary.

*Fourth Amendment and Restatement of the Optional Retirement Plan (Agenda Item #19)

The Board approved the Fourth Amendment and Restatement of the Optional Retirement Plan to fulfill Internal Revenue Code requirements, as presented in the executive summary.

CAPITAL COMMITTEE CONSENT AGENDA

*Polytechnic Campus Central Plant Facility: Reaffirmation of Previous Approval for Privatized Financing (ASU) (Agenda Item #28 - Appendix) 

The Board reaffirmed Arizona State University's (i) previous authority to enter into a Ground Lease Agreement and an Energy Services Agreement with Polytechnic Campus Energy Center, LLC (now known as Arizona State University Energy Center, LLC), relating to the Polytechnic Campus Central Plant Facility, and (ii) approved a Leasehold Deed of Trust, the purposes of the LLC and the issuance by the LLC of tax-exempt revenue bonds not to exceed $18.5 million to finance the Facility. The Board originally approved these actions in March 2007, as presented in the executive summary.

RESOURCES CONSENT AGENDA

*Appointment and Reappointments to University Medical Center Corporation (UMCC) Board of Directors (Agenda Item #31)

The Board approved the University Medical Center Corporation request to appoint to its Board of Directors Dr. William M. Crist, Vice President for Health Affairs the University of Arizona, as an ex-officio member; and the reappointments of Esther N. Capin, Edmund L. Jenkins, N. Philip Strause, III, and Douglas J. Wall, each for an additional four-year term, as presented in the executive summary.

*College of Medicine Institutional Statement of Commitment for Graduate Medical Education (UA) (Agenda Item #32) 

The Board approved the University of Arizona's request for approval of the College of Medicine Institutional Statement of Commitment for Graduate Medical Education as required by the Accreditation Council for Graduate Medical Education, as presented in the executive summary.

*New and Continuation Awards (ASU) (Agenda Item #33)

The Board approved Arizona State University's request for approval for new and continuation awards as presented in the executive summary.

*Continuation Award (NAU) (Agenda Item #34)

The Board approved Northern Arizona University's request for Board approval for a continuation award as presented in the executive summary.

*Research Contract with the National Institutes of Health (UA) (Agenda Item #35)

The Board approved the University of Arizona's request for approval to enter into a contract with the National Institute of Child Health and Human Development as presented in the executive summary. 

*Approval of Various Disclosures of Substantial Interest (UA) (Agenda Item #36) 

The Board approved the University of Arizona's request for Board approval of various disclosures of substantial interest as presented in the executive summary.

CALL TO THE AUDIENCE

Per Board Policy 1-114, time has been set aside for Call to the Audience, an opportunity for people to express their views or concerns to the entire Board in a public setting.

David Martin, President of the Associated General Contractors spoke in support of the SPEED items.  He stated that he believed that the JCCR's job was to make certain that legislative intent is followed, not stand in the way.  He offered complete support of the Associated General Contractors for moving the package forward as passed by the legislature and further offered their assistance if needed.

Mark Minter, Executive Director of Arizona Builders Alliance, spoke in support of the SPEED items.  This legislation was needed, it is the best time and it will stimulate the economy.

Andrew Rigazio, Kendal Nystedt and Kathleen Templin, Arizona Students Association, spoke about the Solutions Coalition and stated that they had enrolled over 2,000 students in the Coalition.

ACADEMIC AFFAIRS COMMITTEE (Chair: Regent DeConcini)

2008 Student Financial Aid Report and Consideration of Proposed Design for Centennial Scholars Program

Item 1a 2008 Student Financial Aid Report (Agenda Item #1a - Appendix)

Mark Denke, Craig Fennell (ASU), David Bousquet (NAU) and John Nametz (UA) joined the meeting for this presentation.

Regent DeConcini stated that the Board was being asked to review and accept the FY2008 Student Financial Aid Report and to endorse the establishment of the Centennial Scholars Program. 

Mark Denke provided a brief overview of the FY 2008 Student Financial Aid Report.  The total amount of aid has increased for the university system to $1.06 billion.  The students continue to bear the burden as a source of financial aid.  The largest source and type of financial aid awards came from student loans, and the smallest source came from state funding.  94,625 students received some form of financial aid.  The average financial aid package for a family with an annual household income of less than $20,000 was $11,603, while a household with a family income of $120,000 or more received an average aid package of $5,686.  The amount of debt at graduation is a key measure that is monitored.  Over the past five years the increase in debt at graduation has only been 3%.  During the same five year period, the number of students with debt increased.

Regent Bulla stated that he believed that unmet need should be better defined. 

Upon motion by Regent DeConcini, seconded by Regent Bulla, the Board unanimously accepted the 2008 Financial Aid report as presented in the executive summary and companion documents.

Item 1b Proposed Design for Centennial Scholars Program (Agenda Item #1b)

Karen Nicodemus, President of Cochise College and co-chair of the Centennial Scholars Program Steering Committee, Linda Glover, Associate Vice President for University Student Initiatives ASU, Paul Kohn Vice President for Enrollment Management UA, David Bousquet, Vice President for Enrollment Management NAU, and Stephanie Jacobson joined the meeting for this presentation. 

Stephanie Jacobson introduced this item.  Governor Napolitano introduced this program in her State of the State address last year.  She described a program that would provide tuition to students who did well academically, did community service and stayed out of trouble.  The intent of this scholarship is to achieve the greater goal by increasing the number of people who receive baccalaureate degrees.  The Governor has asked the Regents to develop a program to accomplish this goal using existing resources. 

Dr. Nicodemus stated that the Centennial Scholars Steering Committee's goal is to submit the program to the Board in December 2008 for approval and then forward it to the Governor.  The first scholarship monies will not be needed until 2012.  No funds have been allocated, so the universities and any community colleges that decide to participate will need to reallocate existing financial aid resources to fund the Centennial Scholars.  The committee looked at what would be the ideal program for Arizona in the long run.  Some of the key elements of the proposed program are that initially, it will be limited to students who are eligible for free and reduced lunch in high school.  Further criteria will be based on the 16 high school academic competencies required for admission to the university and a 3.0 GPA.  A student and a parent/guardian must establish participation no later than 10th grade in high school by signing a pledge that the students will complete a rigorous course of study, complete 150 hours of community service, complete a recognized college-readiness assessment as a junior or senior and demonstrate good behavior throughout high school.

What is being brought before the Board today is a conceptual model for the program.  The intention is to be able to announce it this spring. 

Linda Glover stated that the universities are very supportive of this program.  Paul Kohn stated that this program shows that an investment from the state for financial aid needs to be made.  David Bousquet stated that there are implementation details that need to be worked out before this will work. 

Regent DeConcini asked if the universities had determined what this program would cost.  Stephanie Jacobson responded that the model being presented today allows for the expanding or compressing of the size of the award for the initial program. 

President Crow stated that the Presidents and the community colleges agreed that this is a program of immense merit, but it is a fantasy to think that this program can be funded through any source of revenue that the universities have access to other than tuition.  There is no state-based financial aid to engage in this type of program.  There are already thousands of students coming into the university system at this time who would be eligible for this program.  So, this program really needs to be thought through.

Regent Boice asked if there were programs in other states that are comparable to this program.  Stephanie Jacobson responded that the Indiana model and the Oklahoma model are ones that have been looked at.  Both of these programs have some form of state funding.  One of the questions that is being asked is how can we attract funding from the legislature. 

Regent McLendon asked what happens if the student doesn't get engaged until later in their education.  Dr. Nicodemus stated that a great deal of discussion has occurred regarding this matter.  The purpose of this program is to try to take students that might not believe they can go to college, to reach out to them early, in 8th or 9th grade and have them pursue a more rigorous course of study.  Because of funding, at this time, this program needs to be more narrowly defined and focused on the 8th and 9th grade students with the sophomore year being the cut off year.  Regent McLendon stated that he felt it was important that we meet the need of all the students and this needs to be looked at.  Regent McLendon stated that he had heard some of the community colleges were worried about this program as they didn't have room for the students they had now and he would like someone to check that information. 

President Shelton stated that he believed that the signature component of this program is the message it gives to younger students.  Each of the universities has similar programs at this time, where the message is you can't use finances as an excuse to not prepare for college.  That is the most important message of this program. 

Upon motion by Regent DeConcini, seconded by Regent McLendon, the Board unanimously agreed to direct the Centennial Scholar Program Steering Committee to move forward with the design of the scholarship, develop the cost model and return to the Board for final consideration. 

RESOURCES COMMITTEE (Chair: Regent Calderón)

Setting Base Tuition and Mandatory Fees for the 2009-2010 Academic Year (Agenda Item #2 - Appendix) 

Gale Tebeau joined the meeting for this presentation.

Regent Calderón stated that the Board was being asked to set resident and nonresident base tuition rates and mandatory fees for undergraduates and graduates for the 2009-2010 academic year.  This item does not include proposals for differential tuition, program fees, class fees, and other fees; or mandatory fees charged to students if no changes are recommended and the Arizona Financial Aid Trust (AFAT) surcharge fee. 

Regent Calderón further stated that the Board's tuition hearing was held on November 17, 2008, and provided the students a forum to comment on the Presidents’ recommendations regarding tuition and fees.  Students from around the state, including student leaders from each campus and the three university presidents were heard.  Prior to the hearing, the Presidents announced their recommendations for tuition and fees.  On December 1, 2008, President Shelton issued revisions to the UA's undergraduate and graduate base tuition recommendation, in response to comments made in that hearing.

President Crow presented his tuition proposal which consisted of a 10.9% increase for new and transfer resident students, a 5% increase for continuing resident students, nonresident undergraduate students and resident and nonresident graduate students. 

President Haeger presented his tuition proposal which consisted of a 6.5% increase for continuing resident undergraduate students not on the Pledge tuition plan, 11.6% increase for new and transfer resident undergraduate students which will remain constant through 2012-2013 academic year for students who begin Fall 2009, 3.8% increase for nonresident undergraduate new and transfer students which remain constant through the 2012-2013 academic year for students who begin Fall 2009, 2.6% increase for continuing nonresident undergraduate students not on the Pledge tuition plan, 6.5% increase for resident graduate students and 2.6 percent for nonresident graduate students and continue the Pledge Tuition Program for continuing students.  Further, as approved during last year's tuition setting the Student Recreation/Student Health fee will increase by $160 for Fall 2009, by $130 Fall 2010 and $80 for Fall 2011.

President Shelton presented his revised tuition proposal which consisted of a 9.5% increase for University of Arizona main campus resident undergraduate students; and thereafter a 5% increase annually for a four-year period starting with the semester of entry for first-year students, and for a two-year period starting with the semester of entry for transfer students; the indexed tuition program would apply to both resident and nonresident undergraduate and graduate students.  A 7.6% increase for resident undergraduate students at the University of Arizona South, a 14% increase for nonresident undergraduate students, a 8.2% increase for resident graduate students and a 13.8% increase for nonresident graduate students.  Further, as approved by the Board during last year's tuition setting, the University of Arizona's Student Services Fee was approved in the amount of $80 per year, to be phased in over two years.  Beginning in Fall 2008, the fee was $40 per year, and is scheduled to increase by an additional $40 per year in Fall 2009. 

Regent Calderón moved and Regent Bulla seconded the motion to approve Arizona State University's request to increase base tuition by 5 percent beginning Fall 2009 for continuing resident undergraduate students on both the guaranteed and nonguaranteed plans, at all Arizona State University campuses, bringing the 2009-2010 base tuition for continuing resident undergraduate students on the nonguaranteed plan to $5,316 at the Tempe and Downtown Phoenix campuses, and to $5,093 at the Polytechnic and West campuses, and for resident undergraduate students on the guaranteed plan to $5,679 at all ASU campuses; to increase base tuition by 10.9 percent beginning Fall 2009 for new and transfer resident undergraduate students at all ASU campuses, bringing the 2009-2010 base tuition to $5,997; to increase base tuition by 5 percent beginning Fall 2009 for nonresident undergraduate students at all ASU campuses, bringing the 2009-2010 base tuition to $18,582; to increase by 5 percent beginning Fall 2009 resident and nonresident graduate tuition at all ASU campuses for a total 2009-2010 base tuition of $7,128 for resident graduate students and $20,322 for nonresident graduate students.

Regent DeConcini stated that the bottom line is these increases are substantial.  This is a different world and the Board needs to look at different options.  This is not a time to raise tuition.  People are out of jobs, people cannot pay for some of the basic needs.  The universities are trying to maintain and advance their missions and there are cuts coming in the future.  The Board needs to keep in mind that these are difficult times and the legislature has failed to meet their public responsibility to pass far greater appropriations for the universities and that does not appear to be going to change.  He stated that he believed a tuition increase should not exceed the increase in the Consumer Price Index for this one year.  This is a one shot thing, a onetime freeze.  The system should be in a crisis mode.  We could increase how much the universities withhold for financial aid.  He stated that we should be willing to ask our universities to run on basically the same money they had last year.  Regent DeConcini stated that he will therefore make a substitute motion to increase resident undergraduate base tuition rates and mandatory fees by 3.7%.

Regent Bulla stated that he could not support that motion as freezing a rate has never worked.  He stated that President Crow had pointed out that a low tuition model did not help those who needed help.  The Board cannot help anyone if they do not have enough tuition to do it.  Unmet needs have fallen because the universities have been able to help those who needed help.  Also, 3.7% is not enough for the university to continue its guaranteed program. 

Regent Mariucci stated that the university system needs to change.  She stated that she supports radical change.  The universities need to be innovative, they cannot continue in the manner that they are.  Maybe forcing the system to do more with less will get the ball rolling on change.  The reality is that the state faces the largest projected state budget deficit in recent history.  The universities are going to have budget reductions to deal with.  The big question is how the system is going to trade off the important dimensions in crisis.  What are the impacts going to be on access and quality?  The universities owe quality to the students who come here to go to school.  The universities need to think critically and solve problems, which will mean major structural changes. 

Regent Boice stated that he felt the tuition situation was very strange.  In the past few years tuition has increased a great deal but, it has not impacted enrollment.  In fact, enrollment is up, retention is up, graduation rates have gone up.  We could stand aside and say because the legislature is not providing us with the funds they should, we won't provide them either.  But, that doesn't work.  A low tuition model reduces financial aid and in turn means low enrollment, low retention.  A higher tuition creates greater access and greater affordability. 

Regent McLendon stated that he attended the tuition hearings and was very impressed with the comments by the students.  The things that he brought away from the hearings were that the students wanted affordability, predictability and accountability.  The students also want to be able to compete, quality is very important to them.  The question "What are we known for" is an important question.  The universities need to go forward; they cannot afford to slide backward.  Transparency is also very important.  What is the money used for?  Where are the tuition dollars going?  He stated that he believed the Board should consider transparency as well.  He further stated that he did not think that 3.7% was going to be enough to support the universities. 

Regent Leonard stated that her heart felt one way, but looking at the business side was different.  She believed that one of the most important things that the students expressed was that they want predictability.  She stated that the 3.7% increase would jeopardize the predictability model and would adversely affect the quality of the level of education.

Superintendent Horne stated that he has been opposed to tuition increases and has maintained that position the length of his term.

Regent DeConcini moved and Regent Martinez seconded the motion for the Board to approve a 3.7% increase in resident undergraduate base tuition rates and mandatory fees for all resident undergraduate students at Arizona State University.  The motion failed with a vote of 5 to 4; Regents Calderón, DeConcini, Martinez and Superintendent Horne voting in favor of the motion and Regents Bulla, Leonard, Mariucci, McLendon and Boice voting against the motion.

Regent Martinez stated that he would be making a substitute that would incorporate other numbers in the spirit of compromise and hopefully this motion would be an impetus of change as well as allowing the universities to move forward a strong accountability piece.  He also wanted to reaffirm the tuition task force and bring all the stakeholders to the table.

Regent Bulla stated that his concern was similar to the previous motion.  His concern is that the predictability portion of future tuition would be compromised by this type of change and predictability was very important to the students.

President Crow stated that using numbers that are not derived from any actual financial calculations puts the university in a very precarious place.  There has been five years of effort to get a predictability model up and running and in the first year of the model the Board could derail the predictability model by changing the terms.

Regent Boice stated that the proposals put forth by the presidents of the university are scenarios that have been worked on for months.  They have been vetted with faculty, students, etc., and are the best numbers that the presidents could come up with, the amount they need to keep the universities going and to keep predictability and accessibility.

Regent DeConcini stated that this could be an opportunity to compromise.

Regent Martinez moved and Regent DeConcini seconded the motion for the Board to set resident undergraduate tuition at Arizona State University at an increase of 9% for first year students followed by a 3% increase for cohort years two through five with tuition increases at all campuses of ASU of 3% for continuing, non-resident undergraduate, and resident and non-resident graduate students.  The motion failed with a vote of 4-5:  Regents Calderón, DeConcini, Martinez and Superintendent Horne voting in favor of the motion and Regents Bulla, Leonard, Mariucci, McLendon and Boice voting against the motion. 

Regent Calderón then moved and Regent DeConcini seconded the motion to amend the main motion to increase the amount of university financial support set-aside from 15% to 17%.   The motion unanimously passed with a vote of 9 to 0: Regents Bulla, Calderón, DeConcini, Leonard, Mariucci, Martinez, McLendon, Superintendent Horne and Regent Boice voting in favor of the motion.

Regent McLendon asked if the transparency issue could be addressed.  Regent McLendon then moved and Regent Calderón seconded the motion to amend the main motion by the addition of language that the Counsel of Presidents meet with a student leadership and come up with a way to make this process more transparent so it is understandable to all parties concerned. 

Regent Martinez asked Regent McLendon if he would restate his motion to reaffirm the Tuition Task Force, which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, and task that body with the evaluation of the 2009-2010 tuition setting process for all students as well as all fees for all students, the implementation of a report for the flow of tuition funds at each university by the August 2009 Board meeting, the engagement of student government representatives to incorporate student priorities into tuition revenue expenditures, and to continue exploration of revisions to the current ABOR tuition setting policy. 

Both Regent McLendon and Regent Calderón agreed to restate the motion.  Regent McLendon then moved and Regent Calderón seconded the motion to amend the main motion by the addition of language which would charge the Tuition Task Force, which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, to evaluate the 2009-2010 tuition setting process for all students as well as all fees for all students, implement a report for the uses of the incremental tuition revenue at each university to be presented at the August 2009 Board meeting, engage student government representatives to incorporate student priorities into tuition revenue expenditures, and continue exploration of revisions to the current ABOR tuition setting policy.  The motion passed unanimously with Regents Bulla, Calderón, DeConcini, Leonard, Mariucci, Martinez, McLendon, Superintendent Horne and Regent Boice voting in favor of the motion. 

Regent Calderón then restated his motion which was seconded by Regent Bulla to include all amendments to approve Arizona State University's request beginning Fall 2009 to increase base tuition by 5 percent for continuing resident undergraduate students on both the guaranteed and nonguaranteed plans, at all Arizona State University campuses, bringing the 2009-2010 base tuition for continuing resident undergraduate students on the nonguaranteed plan to $5,316 at the Tempe and Downtown Phoenix campuses, and to $5,093 at the Polytechnic and West campuses, and for resident undergraduate students on the guaranteed plan to $5,679 at all ASU campuses; to increase base tuition by 10.9 percent for new and transfer resident undergraduate students at all ASU campuses, bringing the 2009-2010 base tuition to $5,997; to increase base tuition by 5 percent for nonresident undergraduate students at all ASU campuses, bringing the 2009-2010 base tuition to $18,582; to increase by 5 percent resident and nonresident graduate tuition at all ASU campuses for a total 2009-2010 base tuition of $7,128 for resident graduate students and $20,322 for nonresident graduate students. Further to increase the amount of the university financial support set-aside from 15% to 17% and to charge the Tuition Task Force,  which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, to evaluate the 2009-2010 tuition setting process for all students as well as all fees for all students, implement a report for the uses of the incremental tuition revenue at each university to be presented at the August 2009 Board meeting, engage student government representatives to incorporate student priorities into tuition revenue expenditures, and continue exploration of revisions to the current ABOR tuition setting policy.  The motion passed with a vote of 7 in favor and 2 opposed:  Regents DeConcini and Superintendent Horne voting against the motion and Regents Bulla, Calderón, Leonard, Mariucci, Martinez, McLendon and Boice voting in favor of the motion.

Regent Calderón then stated that the next order of business was tuition at Northern Arizona University. 

Regent Calderón moved, and Regent Bulla seconded, that the Board approve Northern Arizona University's request beginning Fall 2009 to increase base tuition by 6.5 percent for continuing resident undergraduate students not on the Pledge tuition plan, bringing the 2009-2010 base tuition for continuing resident undergraduate students not on the Pledge tuition plan to $5,236 at the Flagstaff campus, and to $5,039 at NAU statewide sites including the Yuma campus; increase resident undergraduate base tuition by 11.6 percent for new and transfer students at the NAU Flagstaff campus, bringing the 2009-2010 base tuition for new and transfer resident undergraduate students to $5,741, this rate will remain constant through 2012-2013 academic year for students who begin Fall 2009; increase nonresident undergraduate base tuition by 3.8% for new and transfer students at the NAU Flagstaff campus, bringing the 2009-2010 base tuition for new and transfer nonresident undergraduate students to $16,686, this rate will remain constant through the 2012-2013 academic year for students who begin Fall 2009; increase continuing nonresident undergraduate base tuition by 2.6 percent for students not on the Pledge tuition plan at all NAU campuses, bringing the 2009-2010 nonresident undergraduate base tuition to $15,645; continue the Pledge Tuition Program for continuing students - for Fall 2009 base tuition for continuing resident and nonresident undergraduate students will remain at the 2008-2009 level through the 2011-2012 academic year which are  $5,145 for resident undergraduate students and $16,243 for nonresident undergraduate students; increase graduate base tuition by 6.5 percent at all NAU campuses for resident graduate students and increase graduate base tuition by 2.6 percent at all NAU campuses for nonresident graduate students, bringing the 2009-2010 graduate base tuition for resident graduate students to $5,655 and for nonresident graduate students to $16,070.  As approved by the Board during last year's tuition setting Northern Arizona University's Student Recreation/Student Health fee will increase by $160 for Fall 2009, by $130 for Fall 2010, and by $80 for Fall 2011, bringing the total fee to $500 per year by Fall 2011.  Further to increase the amount of the university financial support set-aside from 15% to 17%.

Regent DeConcini made a substitute motion, seconded by Regent Martinez to approve a 3.7% increase in resident undergraduate base tuition rates and mandatory fees for all resident undergraduate students at Northern Arizona.  The motion failed with a vote of 8 to 1; Regent  DeConcini voting in favor of the motion and Regents Bulla, Calderón, Leonard, Mariucci, Martinez, McLendon, Superintendent Horne and Boice voting against the motion. 

Regent McLendon then moved and Regent Calderón seconded the motion to amend the main motion by the addition of language which would charge the Tuition Task Force,  which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, to evaluate the 2009-2010 tuition setting process for all students as well as all fees for all students, implement a report for the uses of the incremental tuition revenue at each university to be presented at the August 2009 Board meeting, engage student government representatives to incorporate student priorities into tuition revenue expenditures, and continue exploration of revisions to the current ABOR tuition setting policy.  The motion passed unanimously with Regents Bulla, Calderón, DeConcini, Leonard, Mariucci, Martinez, McLendon, Superintendent Horne and Regent Boice voting in favor of the motion. 

Regent Calderón then restated the motion to include all amendments and Regent Bulla seconded, that the Board approve Northern Arizona University's request beginning Fall 2009 to increase base tuition by 6.5 percent for continuing resident undergraduate students not on the Pledge tuition plan, bringing the 2009-2010 base tuition for continuing resident undergraduate students not on the Pledge tuition plan to $5,236 at the Flagstaff campus, and to $5,039 at NAU statewide sites including the Yuma campus; increase resident undergraduate base tuition by 11.6 percent for new and transfer students at the NAU Flagstaff campus, bringing the 2009-2010 base tuition for new and transfer resident undergraduate students to $5,741, this rate will remain constant through 2012-2013 academic year for students who begin Fall 2009; increase nonresident undergraduate base tuition by 3.8% for new and transfer students at the NAU Flagstaff campus, bringing the 2009-2010 base tuition for new and transfer nonresident undergraduate students to $16,686, this rate will remain constant through the 2012-2013 academic year for students who begin Fall 2009; increase continuing nonresident undergraduate base tuition by 2.6 percent for students not on the Pledge tuition plan at all NAU campuses, bringing the 2009-2010 nonresident undergraduate base tuition to $15,645; continue the Pledge Tuition Program for continuing students - for Fall 2009 base tuition for continuing resident and nonresident undergraduate students will remain at the 2008-2009 level through the 2011-2012 academic year which are  $5,145 for resident undergraduate students and $16,243 for nonresident undergraduate students; increase graduate base tuition by 6.5 percent at all NAU campuses for resident graduate students and increase graduate base tuition by 2.6 percent at all NAU campuses for nonresident graduate students, bringing the 2009-2010 graduate base tuition for resident graduate students to $5,655 and for nonresident graduate students to $16,070.  As approved by the Board during last year's tuition setting Northern Arizona University's Student Recreation/Student Health fee will increase by $160 for Fall 2009, by $130 for Fall 2010, and by $80 for Fall 2011, bringing the total fee to $500 per year by Fall 2011.  Further to increase the amount of the university financial support set-aside from 15% to 17% and to charge the Tuition Task Force, which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, to evaluate the 2009-2010 tuition setting process for all students as well as all fees for all students, implement a report for the uses of the incremental tuition revenue at each university to be presented at the August 2009 Board meeting, engage student government representatives to incorporate student priorities into tuition revenue expenditures, and continue exploration of revisions to the current ABOR tuition setting policy.  This motion passed with a vote of 7 in favor and 2 opposed:  Regents DeConcini and Superintendent Horne voting against the motion and Regents Bulla, Calderón, Leonard, Mariucci, Martinez, McLendon and Boice voting in favor of the motion. 

Regent Calderón stated the next order of business was tuition for the University of Arizona.

(The University of Arizona tuition matter (below) was revisited on Friday, December 5, 2008, and the results as shown below were amended and are shown later in these minutes) 

Regent Calderón moved, and Regent Bulla seconded, that the Board approve the University of Arizona's request beginning Fall 2009 to increase base tuition by 9.5% for resident undergraduate students at the main campus, bringing the 2009-2010 base resident undergraduate tuition to $5,774 and thereafter, beginning Fall 2010, increase base tuition by 5 percent annually for a four-year period starting with the semester of entry for first-year students, and for a two-year period starting with the semester of entry for transfer students.  This indexed tuition program would apply to both resident and nonresident undergraduate and graduate students; for new resident undergraduate students starting Fall 2010 and after, set base tuition at the maximum parameter allowable by Board policy, and thereafter apply the indexed tuition program; increase base tuition for resident undergraduate students at the University of Arizona South by 7.6 percent, for a base resident undergraduate tuition of $4,953; increase base tuition for nonresident undergraduate students at all campuses by 14.0 percent for 2009-2010, for a nonresident undergraduate base tuition of $20,983; increase base tuition for resident graduate students at all campuses by 8.2 percent to $6,564 for 2009-2010; increase base tuition for nonresident graduate students at all campuses by 13.8 percent to $21,276 for 2009-2010.  As approved by the Board during last year's tuition setting, the University of Arizona's Student Services Fee was approved in the amount of $80 per year, to be phased in over two years.  Beginning in Fall 2008, the fee was $40 per year, and is scheduled to increase by an additional $40 per years, to a total of $80 per year, in Fall 2009.  Further to increase the amount of the university financial support set-aside from 15% to 17% and to charge the Tuition Task Force, which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, to evaluate the 2009-2010 tuition setting process for all students as well as all fees for all students, implement a report for the uses of the incremental tuition revenue at each university to be presented at the August 2009 Board meeting, engage student government representatives to incorporate student priorities into tuition revenue expenditures, and continue exploration of revisions to the current ABOR tuition setting policy.

Regent DeConcini made a substitute motion, seconded by Regent Martinez to approve a 3.7% increase in resident undergraduate base tuition rates and mandatory fees for all resident undergraduate students at the University of Arizona. 

Regent Mariucci stated she believed that there is more opportunity and need at the University of Arizona for structural change.  There are more embedded obstacles for achieving change and that the Board needs to take a leadership role in instigating that level of change particularly as it relates to under graduate resident students.  There are supply and demand opportunities for out of state students and we should let the market bear what it will for nonresident students.  If Regent DeConcini would modify his proposal to allow for an increase in tuition for out-of-state students she would be willing to support this motion. 

Regent DeConcini stated that he was now in a quandary about how to deal with the equity of this situation, where two universities get what they want and the third university does not. 

Regent Meyer stated that he believed it was very important that the students that are already here be treated differently than students that are just coming in to the system.  The students that have been paying out-of-state rates for one, two or even three years have a general idea of what is going to happen, but to just all of a sudden, without any vetting, raise their tuition a large amount is not right. There is no information regarding what the correct number would be at this time.

Regent Mariucci proposed that the president's recommendations related to nonresident students be the same.  As it relates to consistent policy across the universities she stated that she did not believe that the Board was starting with a level playing field.  She stated that she felt there were significant differences across the universities, for example in terms of how each university has embraced change, the degree of constraints about being able to talk about change.  For that reason she believed that a different posture for the university is an attempt to try to get the three universities on more of a level playing field in terms of looking to the future, rationalizing the system, rationalizing the cost structure and making change.

Regent DeConcini stated that he was not willing to accept Regent Mariucci's requested amendment.

President Shelton stated that this whole process reflects how complicated this system is.  Each university has talked to students about the recommendation being made.  There have been tuition hearings and because of the input at the hearing he changed his original proposal to what you see before you today.  The Regents need to weigh heavily all of the previous discussions regarding this matter.  President Shelton stated that the University of Arizona is very committed to accessibility. 

Student body president Tommy Bruce stated that accessibility and predictability are the priorities for the students.

Regent Calderón restated the substitute motion made by Regent DeConcini and seconded by Regent Martinez to approve a 3.7% increase in resident undergraduate base tuition rates and mandatory fees for all resident undergraduate students at the University of Arizona.  This motion passed with a vote of 5 to 4; Regents Bulla, Leonard, McLendon and Boice voting against this motion and Regents Calderón, DeConcini, Mariucci, Martinez and Horne voting in favor of the motion. 

Regent Calderón moved, and Regent Martinez seconded the motion to  increase the amount of the university financial support set-aside from 15% to 17% on the University of Arizona resident undergraduate tuition and to charge the Tuition Task Force, which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, to evaluate the 2009-2010 tuition setting process for all students as well as all fees for all students, implement a report for the uses of the incremental tuition revenue at each university to be presented at the August 2009 Board meeting, engage student government representatives to incorporate student priorities into tuition revenue expenditures, and continue exploration of revisions to the current ABOR tuition setting policy.  The motion passed with a vote of 6 to 3; Regents Bulla, Mariucci and Boice voting against this motion, Regents Calderón, DeConcini, Leonard, Martinez, McLendon, Superintendent Horne voting in favor of this motion.

Regent Boice stated that he was very concerned about what was happening here.  Two universities got what they ask for and the University of Arizona was going to get 3.7 percent instead of the requested 9.5%, the predictability portion of tuition at the University of Arizona was not going to happen and now the Board is considering increasing the financial set-aside from 15% to 17%.

Regent Meyer stated that the other universities have a $1000 out of state tuition increase, but the University of Arizona was asking for a $2500 out of state tuition increase.  He stated that these funds could be utilized to make up the difference for the University of Arizona.

Executive Director Sideman stated that the financial set-aside is calculated on the resident portion of tuition paid by all students. 

Upon motion by Regent Calderón, seconded by Regent Bulla, that the Board approve the University of Arizona's request to increase nonresident undergraduate base tuition at all campuses of the University of Arizona by 14.0 percent for 2009-2010, for a nonresident undergraduate base tuition of $20,983; increase resident graduate base tuition at all campuses of the University of Arizona by 8.2 percent to $6,564 for 2009-2010; and increase nonresident graduate base tuition at all UA campuses by 13.8 percent, to $21,276 for 2009-2010.  And further as approved by the Board during last year's tuition setting, the University of Arizona's Student Services Fee was approved in the amount of $80 per year, to be phased in over two years.  Beginning in Fall 2008, the fee was $40 per year, and is scheduled to increase by an additional $40 per year, to a total of $80 per year in Fall 2009.  And further to  increase the amount of the university financial support set-aside from 15% to 17% and to charge the Tuition Task Force, which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, to evaluate the 2009-2010 tuition setting process for all students as well as all fees for all students, implement a report for the uses of the incremental tuition revenue at each university to be presented at the August 2009 Board meeting, engage student government representatives to incorporate student priorities into tuition revenue expenditures, and continue exploration of revisions to the current ABOR tuition setting policy.

Regent Martinez then moved to amend this motion by changing the amount of the increase for all nonresident students to 5%.  Regent DeConcini seconded the motion. 

Regent Boice stated that this is the exact opposite of what we were just speaking about.  If the university was going to receive its additional funds from nonresident students decreasing the amount of their tuition would defeat that concept.  Regent Boice stated that he was having difficulty understanding why all of these changes are being placed on the University of Arizona.  Regent Boice asked for an explanation of why the University of Arizona is being singled out.  Regent Mariucci responded that she opposed Regent Martinez's motion because the high quality product that the university's produce should be priced in a private enterprise model of supply and demand for nonresident students.  She stated that she supported Regent DeConcini's motion to give the University of Arizona an opportunity to confront some of the structural constraints that have impeded the pace and depth of change at the University of Arizona.  She believes that the students at the University of Arizona are not all there to benefit from the great research prowess that is embedded in the cost structure at the University of Arizona.  They are not there to take classes from a teacher that teaches one class a week and does research the rest of the time.  It was a vote in favor of change.

Regent DeConcini stated that he would be voting against Regent Martinez's amendment.  He stated that he believed his primary responsibility was to provide an education for the residents of Arizona.  If you are an out-of-state student, your tuition is going to go up. 

Executive Director Sideman was asked to provide figures regarding the reduction in income created by the changes to President Shelton's recommendation.  He stated that the change from 9.5 percent for the main campus and 7.6% from UA South results in a reduction of approximately $5 million and the reduction in nonresident tuition would result in a change of approximately $21 million. 

President Shelton stated that maybe $5M seems small, but these are significant dollars to the people trying to lead the university. As more and more constraints are added it makes the management of these funds more difficult and costly.

Regent Martinez stated that after hearing everyone speak, he would like to withdraw his motion and Regent DeConcini agreed. 

Regent Calderón restated his motion which was seconded by Regent Bulla, that the Board approve the University of Arizona's request to increase nonresident undergraduate base tuition at all campuses of the University of Arizona by 14.0 percent for 2009-2010, for a nonresident undergraduate base tuition of $20,983; increase resident graduate base tuition at all campuses of the University of Arizona by 8.2 percent to $6,564 for 2009-2010; and increase nonresident graduate base tuition at all UA campuses by 13.8 percent, to $21,276 for 2009-2010.  And further as approved by the Board during last year's tuition setting, the University of Arizona's Student Services Fee was approved in the amount of $80 per year, to be phased in over two years.  Beginning in Fall 2008, the fee was $40 per year, and is scheduled to increase by an additional $40 per year, to a total of $80 per year in Fall 2009.  And further to  increase the amount of the university financial support set-aside from 15% to 17% and to charge the Tuition Task Force,  which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, to evaluate the 2009-2010 tuition setting process for all students as well as all fees for all students, implement a report for the uses of the incremental tuition revenue at each university to be presented at the August 2009 Board meeting, engage student government representatives to incorporate student priorities into tuition revenue expenditures, and continue exploration of revisions to the current ABOR tuition setting policy.  This motion passed unanimously with Regents Bulla, Calderón, DeConcini, Leonard, Mariucci, Martinez, McLendon, Superintendent Horne and Regent Boice voting in favor.

(The University of Arizona tuition matter (above) was revisited on Friday, December 5, 2008, and the results as shown below were amended and are shown later in these minutes) 

Differential Tuition, Special Program Fees, Special Class Fees, and Other Fees for the 2009-2010 Academic Year (Agenda Item #3 - Appendix)

Regent Calderón stated that the Board was being asked to consider the universities’ requests for differential tuition, special program fees, special class fees, and other fees for the 2009-2010 academic year. These additional charges to students are added to base tuition and mandatory fees.

Mark Denke, Betty Capaldi (ASU), Liz Grobsmith (NAU) and Meredith Hay (UA) joined the meeting for this presentation.

Regent Boice asked about the Arizona State University request in that in the past it seems that differential tuition was applied to specific courses or programs and now it seems you are applying it to whole colleges.  He stated that this is a departure from what has been happening.  This is not just approving fees for a class, but rather approving fees for every class in a college.  President Crow stated that there have been other cases where program fees have been approved on a college-wide basis.  There are four specific requests that are related to that:  engineering, nursing, design and business. 

Regent Boice then asked about the $750/semester fee for nursing and it has been proposed that the nursing class be decreased in size.  Provost Capaldi stated that differential tuition is used when the cost of a program is very high and there is a high guarantee of employment for the student from that program.  In addition, some programs are more expensive than others and nursing is the most expensive program.  Undergraduate students only pay 23% of the cost of the program.  A total of $6 million over and above what is brought in has been allocated to this program, to the detriment of other programs.  The state also contributed $750,000 to help with the nursing program.  The headcount for this program is 1800 students.  At this time ASU can no longer afford to invest like this, so students are being asked to contribute a little more.  The students are in support of this. 

Regent DeConcini stated that he thought that nursing should be a high priority.  President Crow stated that over the last few years ASU has doubled the number of nurses that are being produced.  At this time, with the budget cuts, the growth of this program must be slowed.  President Crow further stated that they are looking for institutions to partner with, such as hospitals, but at this time, there is no one doing that. 

Regent Mariucci stated that this result is very instructive and appears to be a wave of the future.  The Board needs to understand better what it costs to deliver all of the academic programs and then the Board will have a framework to decide what can we afford to charge for this program.  This is exactly what needs to be done across all programs, including the critical decisions regarding access.  Regent Mariucci further stated that the demands for nurses are not as large as originally stated.

Regent DeConcini stated that because of the financial crisis it is possible that the Board and the universities may have to limit access in the future. 

Regent McLendon asked how much of the cost is covered in nursing with the increase in the fee.  President Crow stated that tuition paid for approximately 23% of the cost and now with the fee, tuition and fee will pay approximately 30% of the cost.  This fee allows the university to maintain the size of the operation at the 1800 students.  This is an extremely competitive program.

Regent Martinez stated that after talking to students it has become apparent that when tuition and program fee dollars go toward student priorities, like class sizes and class resources, the students are more willing to support such increases.

Upon motion by Regent Calderón, seconded by Regent DeConcini, the Board approved the differential tuition, special program fees, special class fees and other fees for the 2009-2010 academic year, as requested by Arizona State University, Northern Arizona University and the University of Arizona, as presented in the Executive Summary with a vote of 8 to 1; Regent Boice voting against this motion and Regents Bulla, Calderón, DeConcini, Leonard, Mariucci, Martinez, McLendon and Superintendent Horne voting in favor of the motion.

The University of Arizona College of Medicine Resident Tuition for 2009-2010 Academic Year (Agenda Item #4)

Regent Calderón stated that the next order of business was the setting of resident tuition for the University of Arizona College of Medicine for the 2009-2010 academic year.  Since the 2007-2008 academic year, the College of Medicine follows a cohort tuition pricing model, where tuition for incoming students is set at the top of the lower one-third of rates set by all other state-supported colleges of medicine, and then to increase the tuition in subsequent years incrementally, based on a three-year rolling average of the higher education price index. 

Regent DeConcini asked when the College of Medicine will open enrollment to nonresidents.  President Shelton stated that this matter has been studied in great detail and when it is possible to increase enrollment, primarily through the College of Medicine in Phoenix, then the College of Medicine will have the capacity and the need to open admissions to nonresidents.  At the moment the class is about 160 and at that number there is excellent competition from Arizona residents.  Regent DeConcini asked what the average tuition at a medical school for an out-of-state student is.  President Shelton stated he believed the average was about $40-45,000 in tuition and fees.  Dr. Crist then joined the meeting.  Regent DeConcini stated that he didn't understand why the College of Medicine was reluctant to allow nonresident students.  Dr. Crist stated that the message that had been given by various entities including the legislature was to educate the students most likely to stay in Arizona, which are Arizona residents.  He stated that as the College of Medicine expands its class size at the Phoenix site; they will be entertaining allowing nonresident students.  He further stated that the time to start looking to nonresident students is fast approaching.  Regent Mariucci stated that as this process evolves she suggests that some added incentive be added to reward students who stay in Arizona to practice.  Dr. Crist stated the estimated cost, according to the AAMC; to train a medical student is approaching $200,000/year.  The cost per student is now approaching $20,000/year, a huge bargain.  The reason it is so expensive is because of all the one-on-one training with highly paid people.

Upon motion by Regent Calderón, seconded by Regent Leonard, the Board unanimously approved tuition for the 2009-2010 academic year at the University of Arizona College of Medicine, as presented in the Executive Summary with Regents Bulla, Calderón, DeConcini, Leonard, Mariucci, Martinez, McLendon, and Superintendent Horne and Regent Boice voting in favor of the motion. 

RECESS

The meeting recessed at 1:20 p.m. and reconvened at 2:40 p.m.  Superintendent Horne left the meeting.

REPORT FROM THE PRESIDENT OF ARIZONA STATE UNIVERSITY

President Crow reported that one of the central objectives in advancing Arizona State University in its role related to the technological competitiveness of greater Phoenix and Arizona is to advance the Ira A. Fulton School of Engineering.  Deirdre Meldrum, Dean, is leading the team to build a world class engineering program to the finest level possible.  Dean Meldrum reported that what is being done aligns with the 2020 Vision.  The School of Engineering is 6400 students strong. They are focused on attracting talented students and faculty. It will also require clear direction, and good strategy to achieve the goals of the school.  The vision for the school is to lead engineering discovery and innovation education for global impact on the quality of life.  The major goals are to advance quality research and disseminate discoveries that benefit science, technology and society, deliver rigorous, relevant and innovative engineering education; recruit and retain talented and diverse students, faculty and staff; cultivate resources that support the school's vision and mission; achieve global recognition for excellence in engineering, education and discovery; provide a positive, interactive, entrepreneurial working and learning environment; and develop and practice responsible leadership that drives progress and produces results. 

President Boice then stated that we would be taking the Capital Committee items next. 

CAPITAL COMMITTEE (Chair: Regent Calderon) 

Issuance of SPEED Revenue Bonds for Financing of SPEED Projects (NAU) (Agenda Item #21)

Kathe Shinham (NAU), Kurt Freund (RBC) and Lorenzo Martinez (CO) joined the meeting for this presentation. 

Regent Calderón stated Northern Arizona University was requesting authority to sell Revenue Bonds to finance five SPEED building renewal projects.  The Capital Committee reviewed this item at its November 19, 2008 meeting and recommended Board approval. 

Kurt Freund, university financial advisor, reported on the current conditions of the bond market. Everyone has seen the turmoil across the market.  He stated he would provide some background to help put everything into context.  One of the things that have happened is that all of the traditional municipal bond insurance companies have been downgraded.  In the past, the universities have used municipal bond insurance on almost all of the transactions that have occurred and municipal bond insurance was almost a commodity in the marketplace and priced like a commodity, so credit was cheap.  Without the municipal bond insurance, the universities must sell bonds on their own credit.  The second thing that has happened is a significant flight to quality across markets.  This means a lot of money has flowed from the stock market, the municipal bond market and from other investment vehicles generally into the treasury markets.  People are looking for safety, not for yield.  What that means is that investors have moved away from the municipal market.  The third thing that has occurred is there has been a significant loss of institutional investors in the marketplace, i.e., hedge funds, money market funds, etc.  Traditionally these have been very big block buyers of municipal bonds.  Because of these things it has become more difficult to sell municipal bonds, interest rates have gone up, there has been an increase in credit spreads and there has been an increase in financing costs.  The outlook for the universities is difficult to gauge at this time.  RBC's advice at this time is if possible to avoid being in the municipal market for this rest of this year, wait until the first of next year. 

Upon motion by Regent Calderón, seconded by Regent Bulla, the Board unanimously approved authority for Northern Arizona University to issue SPEED revenue bonds to finance $26.3 million for SPEED project and issuance costs, as presented in the Executive Summary and issue additional SPEED revenue bonds to finance $38.5 million for SPEED project and issuance costs, as presented in the Executive Summary provided necessary legal requirements have been met.

Issuance of SPEED Revenue Bonds for Financing of SPEED Projects (UA) (Agenda Item #22)

Joel Valdez joined the meeting for this presentation.

Regent Calderón stated the University of Arizona was requesting authority to revenue bonds to finance ten SPEED building renewal project categories.  The Capital Committee reviewed this item at its November 19, 2008, meeting and recommended Board approval. 

Upon motion by Regent Calderón, seconded by Regent Bulla, the Board unanimously approved authority for the University of Arizona to issue SPEED revenue bonds to finance $17.5 million for SPEED project and issuance costs, as presented in the Executive Summary, and issue additional SPEED revenue bonds to finance $51 million for SPEED project and issuance costs, as presented in the Executive Summary provided necessary legal requirements have been met.

Issuance of SPEED Revenue Bonds for Financing of SPEED Projects (ASU) (Agenda Item #23) 

Carol Campbell joined the meeting for this presentation.

Regent Calderón stated Arizona State University was requesting authority to sell revenue bonds to finance five SPEED building renewal projects.  The Capital Committee reviewed this item at its November 19, 2008 meeting and recommended Board approval. 

Upon motion by Regent Calderón, seconded by Regent DeConcini, the Board unanimously approved authority for Arizona State University to issue SPEED revenue bonds to finance $20.8 million for SPEED project and issuance costs, as presented in the Executive Summary, and issue additional SPEED revenue bonds to finance $13.6 million for SPEED project and issuance costs, as presented in the Executive Summary provided necessary legal requirements have been met. 

Issuance of System Revenue Bonds for the Financing of Three Previously Approved Capital Projects (ASU) (Agenda Item #24)

Carol Campbell and Lorenzo Martinez joined the meeting for this presentation.

Regent Calderón stated that Arizona State University was requesting authority to sell system revenue bonds to finance the Memorial Union Renovations, the Weatherup Basketball Practice Facility, and other Academic Renovations and Deferred Maintenance projects. The Capital Committee reviewed this item at its November 19, 2008 meeting and recommended Board approval.

Upon motion by Regent Calderón, seconded by Regent Bulla, the Board unanimously approved Arizona State University's request for authority to issue system revenue bonds to finance the project costs, including related issuance costs, and execution of necessary agreements, as presented in the Executive Summary.

SPEED Deferred Maintenance and Building Renewal Projects Phase 1b: Combined Project Implementation Approval and Project Approval (ASU) (Agenda Item #25) 

Rich Stanley (ASU) and Lorenzo Martinez joined the meeting for this presentation.

Regent Calderón stated that Arizona State University was requesting Combined Project Implementation Approval and Project Approval for Phase 1b of Deferred Maintenance SPEED projects.  The Capital Committee reviewed this item at its November 19, 2008 meeting and recommends Board approval.

Upon motion by Regent Calderón, seconded by Regent DeConcini, the Board unanimously approved Arizona State University's request for Combined Project Implementation Approval and Project Approval for SPEED Deferred Maintenance and Building Renewal Phase 1b Projects, as presented in the Executive Summary. 

SPEED Psychology and Geography Program Expansion: Combined Project Implementation Approval and Project Approval, Including Scope and Budget Increases (ASU) (Agenda Item #26) 

Rich Stanley and Lorenzo Martinez joined the meeting for this presentation. 

Regent Calderón stated that Arizona State University was requesting Combined Project Implementation Approval and Project Approval, including scope and budget increases for the Psychology and Geography Program Expansion. The Capital Committee reviewed this item at its November 19, 2008 meeting and recommended Board approval. 

Upon motion by Regent Calderón, seconded by Regent DuVal, the Board unanimously approved Arizona State University's request for Combined Project Implementation Approval and Project Approval for the Psychology and Geography Program Expansion, as presented in the Executive Summary.

Science and Technology Park Master Land Use Plan Revisions (UA) (Agenda Item #27)

Bruce Wright (UA) and Lorenzo Martinez joined the meeting for this presentation.

Regent Calderón stated that the University of Arizona was requesting approval of three revisions to the UA Science and Technology Park Master Land Use Plan.  The Capital Committee reviewed this item at its November 19, 2008 meeting and recommended Board approval.

Upon motion by Regent Calderón, seconded by Regent Martinez, the Board unanimously approved the University of Arizona's request for approval of revisions to the UA Science and Technology Park Master Land Use Plan, as presented in the Executive Summary. 

ACADEMIC AFFAIRS COMMITTEE (continued)

Report from the Academic Affairs Committee (Agenda Item #5) 

The Board received an update from Regent DeConcini on the November 20, 2008 meeting of the Academic Affairs Committee.  He stated that the university provosts made their first report to the committee on the 7-year Academic Program Reviews.  The universities have been conducting these reviews for many years as a way to improve program quality, but the results have not been presented to the regents for a number of years.  The review process involves an in-depth self-study and a review team that includes external evaluators.  The final result is a large detailed document.  The Academic Affairs Committee received a summary report on each review using an outline and template, which the committee approved in September.  The summary report describes the program strengths, areas of concern and recommendations for changes.  In addition, the report details the plans for quality improvement to be made between now and the next review.  Each report includes data on the number of students enrolled in the program, the number of majors and number of graduates over a 7-year period.  It also provides data on faculty and staff numbers.  It is clear that the universities invest considerable effort and, no doubt, significant resources into this review process.  The committee was very pleased with the provosts' presentations and in the written reports that were submitted. 

Regent DeConcini stated that the next two items would be taken together as they were related.

2007-2008 High School Report Card (Agenda Item #6)

Regent DeConcini stated that the Board was being asked to review the annual report on the academic performance of Arizona’s 2006-2007 high school graduates enrolled in the universities in 2007-2008. The Academic Affairs Committee reviewed this item at its November 20, 2008 meeting. 

2008 Fall Enrollment Report (Agenda Item #7) 

Regent DeConcini stated that the Board was being asked to review the 2008 Fall Enrollment Report of headcount and full-time equivalent enrollments for the Arizona University System. The Academic Affairs Committee reviewed this item at its November 20, 2008 meeting.

Dan Anderson joined the meeting for this presentation.  Dan Anderson stated that the High School Report Card was a feedback card to the high schools to let them know how well their graduates performed at the university level.  Dan stated that he felt there were four key findings.  (1) 11,748 Arizona high school graduates came to the university in Fall 2007, an increase of 1,036 (10%); (2) the academic preparation and success of this year and last year's cohorts were unchanged, 79% were admitted without deficiencies; (3) the majority of students (72%) took freshman English and had an average grade of 3.2, up from 3.0 the previous year (4) the majority of students (48%) took college algebra and had an average grade of 2.6 which is unchanged from the prior year. 

Regent Boice asked what the significance of the 10% increase in Arizona students attending the university.  Dan Anderson responded that he felt it was that the universities were getting their message out.  The universities are reaching out to the high schools and they are strongly competitive to outside institutions and with the community colleges.  Regent Boice asked if Dan Anderson thought this was a one time thing.  Dan Anderson responded that he did think an increase of this magnitude was the result of several things happening and it was probably a one time increase.

Regent McLendon stated that he believed that the Solutions campaign is going to increase enrollment in the future.  He believes that the pipeline is going to fill up more than expected.

Dan Anderson then turned to the 2008 Fall Enrollment Report.  He stated that between Fall 2007 and Fall 2008 headcount enrollment in the system rose 3.8%, with undergraduate enrollment up 4% and graduate enrollment up 3.1%.  The total enrollment of 127,446 is ahead of enrollment projects contained in the 2020 Vision.  FTE enrollment rose even more rapidly.  Not only are more students coming on campus, but the students are taking heavier class loads.  Nonresident undergraduate students comprise 24.8% of the system student body. 

Proposed New ABOR Policy 1-118, “Tribal Consultation” (Second Reading) (Agenda Item #8) 

Nancy Tribbensee joined the meeting for this presentation.

Regent DeConcini stated that the Board was being asked to approve the proposed ABOR Policy 1-118 to provide for the adoption of tribal consultation policies at each university and to provide for annual reporting to the Board on activities undertaken pursuant to these policies. The Academic Affairs Committee reviewed this item at its September 24, 2008 meeting and recommends Board approval.

Upon motion by Regent DeConcini, seconded by Regent Leonard, the Board unanimously approved ABOR Policy 1-118, Tribal Consultation, as presented in the Executive Summary. 

STRATEGIC PLANNING, BUDGET AND FINANCE COMMITTEE (Chair: Regent Bulla)

Board and University Five-Year Strategic Plans (Agenda Item #12 - Appendix: ASU - NAU - UA - ABOR) 

Sandra Woodley joined the meeting for this presentation. 

Regent Bulla stated that the Board was being asked to approve the Board and university FY 2010-2014 Five-Year Strategic Plans with the understanding that these plans will become much more closely aligned with the 2020 Vision plan by next year.  Even though more work is to be done, the Board is required by statute to submit five-year plans to the Governor and the Legislature prior to the next Board meeting.  These plans are a first step toward developing the various phases of the micro plan, and the committee will continue to flesh these out over the coming months. 

The committee had also hoped to approve the final version of the 2020 Vision plan today, but is still working on two components.  First, there are some differences between the university projections and the Decision Theater Model forecasts for the various targets in the plan.  These differences mainly concern enrollment and community college transfers out to 2020.  Sandy is working through these issues with the team and expects to finalize the forecast numbers in a few weeks.

The second issue to be resolved involves cost estimates for the plan.  To this point, the Committee has reviewed early drafts of cost estimates, but expects to see new, more detailed options at the January committee meeting.  There are many ways to cost out the plan and so agreeing on methodologies and assumptions will take more time to resolve.  Sandy is gathering the necessary data and developing some costing options for the Committee to consider at its next meeting. 

With the 2020 Vision plan nearing the final stages, the challenge now is to develop the more detailed micro plans.

Sandra Woodley discussed the preliminary draft of the executive summary for the 2020 Vision.

Regent Mariucci stated that it is unfortunate that there has been a radical change in the economic climate at this time.  The Board has talked about the need for leadership around change management.  The Board needs to take that to heart as it relates to the delivery, package and the presentation of the strategic plan.  The strategic plan makes sense in a stable neutral or growing economic environment, but seems to be irrelevant in the environment in which we are operating today.  This is the roadmap and blueprint for the future.  She suggested that the Board have a "wrapper" that goes around the plan that speaks to what this Board believes in the present environment are necessary tradeoffs of resource reduction relative to access and relative to quality.  The Board needs to do its part to show what it is prepared to do and what it has done and beyond that if the universities have to absorb more reductions these are the difficult choices that will have to be made.  Regent DeConcini stated that he agreed with Regent Mariucci.  He believes it is important to get out the message that disaster and/or a financial crisis could cause severe restructuring. 

Regent Bulla stated that the plan was to show in the 2020 Vision Plan the cost involved to do what needs to be done and determine where the resources would be coming from out to 2020 so it will be easier to see where the shortfalls are.  This would allow the Board to be more able to show the state that this is where the Board wants to be, but with the resources that the universities and the state provide, the Board can only do some of these priorities and therefore the universities won't be as successful or competitive as they need to be.

Regent Bulla stated that at the most recent Strategic Planning and Budget Committee meeting, the universities presented some new and exciting ideas on how to increase degree production over the next twelve years, many of which will have to begin during the next five years.  The next phase of the planning will involve bringing together the most creative and innovative ideas to map out a strategy to education more Arizonans. 

President Crow stated that Arizona State University is devoting much energy to making access and quality for all a reality.  President Crow stated that he felt the acquisition of the silver target in the 2020 Vision Plan is highly probable and the gold target is probable.  ASU is working on restructuring the effectiveness of the university.  In addition to restructuring the university is also planning to design and launch a series of entities that are being referred to as the colleges of Arizona State University.  The colleges would be four year colleges and operate on a cost basis dramatically lower than the present state investment on a per student basis and lower on a tuition basis.  President Crow stated that he believed this will greatly and dramatically increase the production of baccalaureate graduates through this system.  The colleges would be in various locations, some in partnership with community colleges, some in partnership with private sector partners, some in partnership with municipalities and some would be stand alones.  President Crow stated that he hoped to bring more information to the Regents in relatively short order.  President Crow stated that this is being done in the context of the realities of Arizona:  the capital needs to be found somewhere else; models need to be organized in unique ways so they work; and technology needs to be maximized.  President Crow further stated that he believes there could be 25,000 students in these colleges by 2015. 

Regent Mariucci asked what the major drivers for the cost differences are.  President Crow stated that they would be the use of technology, the use of a different academic structure, all services would be provided centrally, offering classes that are not equipment intense, no leadership hierarchy, and higher teaching loads. 

President Shelton distributed a revised version of his five-year plan.  President Shelton stated that the planning has been guided by three priorities.  First, academic excellence.  Secondly, access and success on the part of students and finally the ability of the university to make an impact on the quality of life.  President Shelton stated that the university was committed to educating all of its students to become creative, productive, and engaged members of society.  The university will collaborate with education partners to better prepare students for university success.  The university will build on its national leadership in interdisciplinary and collaborative research to lead the nation in those research and outreach activities that are critical to Arizona's future.  The university will contribute to the richness and vibrancy of the community and serve as an incubator and magnet for talent.  The key to this is not only revising the curriculum but also ensuring that undergraduates have a one-on-one research experience.  This is part of what brings students to the University of Arizona.

President Haeger assured the Board that the intent of the university is to align itself with the 2020 plan.  The NAU Flagstaff campus will continue to move down the road as one of Arizona's three research universities.  President Haeger stated that he was very conscious of the need to adapt and change constantly.  All three presidents have thought very hard about the concept of educating all Arizona students in research universities and the answer is no.  President Haeger stated that he is working hard on expanding the hybrid model with various community colleges.  President Haeger stated that he was also exploring the regional college concept. 

Upon motion by Regent Bulla, seconded by Regent Leonard, the Board approved the FY 2010-2014 Five-Year Strategic Plans for the Board, Arizona State University, and Northern Arizona University as presented in the Executive Summary and the revised 12-2-08 version of the University of Arizona's document with Regent Mariucci voting against the motion.

Regent Bulla stated that the Five-Year Strategic Plan would be submitted to the legislature with a cover letter stating that this is a work in progress. 

AUDIT COMMITTEE (Chair: Regent Mariucci)

Report from the Audit Committee (Agenda Item #20)

Regent Mariucci stated that the audit committee met on November 18, 2008.  One of the primary responsibilities of the Committee is the review of audit reports.  Regent Mariucci reported that one of the reports they reviewed highlighted payroll processing problems that were experienced during the implementation of ASU's PeopleSoft system last year.  The Auditor General also identified some payroll processing issues during the FY 2008 annual financial audit.   ASU's administration has stated the problems have been rectified to a great degree and will provide a written summary regarding this matter to the committee in January. 

The Committee formally accepted the Auditor General's Full-Time Equivalent Student Enrollment audit report for the Fall Semester 2007.  This is the first such report issued by the Auditor General and is now required annual by state statute.  There were no significant findings.

The productivity measurements that were put into place last year are functioning as designed.  The auditor's productivity is just about where it should be. 

The Committee continues to focus on construction project audits.  The internal auditors are finalizing their standard construction audit program, which will provide for consistency in the audits they perform across the system.  The internal auditors are also closely watching the developments in the SPEED projects to assess the effect that delays will have on the audit plans. 

HUMAN RESOURCES COMMITTEE (Chair: Regent Bulla)

Approval of Appointment of Senior Vice President and General Counsel (ASU) (Agenda Item #13)

Regent Bulla that stated that Arizona State University was requesting approval of the appointment of José Cárdenas to the position of Senior Vice President and General Counsel. The Human Resources Committee reviewed this item at its November 12, 2008 meeting and recommends Board approval. 

Upon motion by Regent Bulla, seconded by Regent Calderón, the Board unanimously approved the appointment of José Cárdenas as Senior Vice President and General Counsel at Arizona State University according to the terms and conditions set forth in the Executive Summary.

RECESS

The meeting recessed at 4:35 p.m. and reconvened at 9:45 a.m. Friday, December 5, 2008. 

RESOURCES (continued)

Center for the Future of Arizona’s Beat the Odds Institute (Agenda Item #29)

Dr. Lattie Coor, Dr. Sybil Francis, Robert Lester and Dr. Marjorie Kaplan joined the meeting for this presentation. 

Regent Calderón stated that the Board would hear a report on the work of the Center for the Future of Arizona’s Beat the Odds Institute. This project has been awarded TRIF Regents Innovation Fund support during the three-year period FY 2007-FY 2009. 

Regent Calderón introduced Dr. Lattie Coor, President Emeritus of Arizona State University and Chairman and Chief Executive Officer of the Center for the Future of Arizona; Dr. Sybil Francis, Executive Director of the Center for the Future of Arizona; Robert Lester, Director of Web Communications for the Center for the Future of Arizona; and Dr. Marjorie Kaplan, Director of the Center's Beat the Odds Institute.  The Center is a "do tank" as opposed to a "think tank,” dedicated to improving the quality of life for all Arizonans and addressing the issue of access to high quality education for all Arizonans.

Dr. Coor stated that the Center for the Future of Arizona keeps important issues in public view by providing focused attention and thoughtful action on pressing problems.  One of the most important issues of our time is access to high quality education.  The Beat the Odds project is an example of the Center's role and an early indicator of its intention to use electronic communication tools for collaborative, thoughtful action to improve education in Arizona. 

One of the programs, The Center's Beat the Odds Institute was created to serve as the umbrella organization for all activities designed to implement the findings and recommendations of a landmark Arizona study, "Why Some Schools with Latino Children Beat the Odds… and Others Don't."  The study is important because it found 12 Arizona schools that were successfully serving mostly poor, mostly Latino students.  It demonstrates clearly that "demography is not destiny," that all children can learn, and that our schools can be transformed to meet the human and social needs of the 21st century.

The Institute's goal is to implement the six keys to success identified in the study by helping school leaders embed the principles into their culture and operating behavior.  The six keys to success are (1) clear bottom line - focus on achievement per student, (2) ongoing assessment - use data in the classroom to improve student achievement, (3) strong and steady principal - not too rigid, not too flexible, (4) collaborative solutions - share the responsibility for success, (5) stick with the program - pick a good one and stick with it, and (6) built to suit - customize instruction, one size does not fit all. 

The Beat the Odds Institute is now taking this program around the state.  To-date, fifty-nine schools have partnered with the Beat the Odds Institute.  Nine metro Phoenix-area schools have reached the first milestone on the road to becoming a "Beat the Odds School" - one in which student academic achievement exceeds expectations.  The website is getting approximately 1100 hits each month.  Dr. Coor stated that a handbook was also being developed.  This will be a resource for Kindergarten through 12th grade educators, including principals, teachers, and anyone with a direct responsibility for increasing student achievement.

The Center also has a new initiative called Pathways to Postsecondary which is focused on increasing student success through system-wide changes in public education which is led by Dr. Francis.  The initiative will emphasize the creation of seamless pathways between high school and postsecondary education for all students based on their interests and skills.

Regent Boice stated that he has observed a charter school that was doing exceptional things.  Dr. Coor stated that different schools are different.  There are good charter schools and not so good charter schools.  Many charter schools are good models.  Regent DeConcini asked if charter schools were still not politically popular.  Dr. Coor stated that charter schools are now actively and broadly embraced, even though there are still some critics.  He stated that every school can use the Beat the Odds model. 

Regent DeConcini asked what the various sources of funding for the Center were.  Dr. Coor responded that originally the Center was 100% philanthropic supported but they are moving to a user fee funded program.  They receive funds from the Salt River Pima Maricopa Indian Community, the University of Phoenix, TRIF and many foundations.  This year, for the first year, schools will be asked to contribute part of the cost. 

Regent Calderón stated this project has been a stellar success.  He commended Dr. Coor for the important work that is making a difference in the success of students and is preparing them to be successful in the universities.  Dr. Coor stated that they would be asking the Board to consider a second cycle of funding from TRIF for the Center for the Future of Arizona. 

FY 2008 University Technology Transfer Reports (Agenda Item #30 - Appendix: ASU - NAU - UA)

Regent Calderón stated that this item had been pulled from the Consent Agenda.  The Board was being asked to review the universities’ Technology Transfer Reports, highlighting activities and performance for the fiscal year ending June 30, 2008. 

Regent Mariucci stated the technology transfer goes to the whole issue of the important role that research plays and how that role is positioned, costed, priced and evaluated.  As the Board continues to have a strategic dialogue about the role of research in our system and our individual universities having some good tools on how to evaluate the productivity of that research is something that needs to be elevated.  The Audit Committee recommended that there be a study session on this topic and ask all three universities to work together to solidify how the Board should look at the productivity and the return on the research efforts and putting that in context to the goals and benchmarking it against nationwide peers with whom we compete for the same research dollars.

Setting Base Tuition and Mandatory Fees for the 2009-2010 Academic Year (continued) (Agenda Item #2 - Appendix)

Gale Tebeau joined the meeting for this discussion.

Regent Calderón then stated that several Regents had stated they wanted to revisit Agenda Item #2 in relation to the University of Arizona. 

Regent Martinez stated that he received several opportunities to share in various discussions with members of the University of Arizona since yesterday's actions on tuition.  The sentiments were overwhelmingly in support of President Shelton and his management style which has worked well in the advancement of the university.  He stated that the students at the University of Arizona can rest assured that their student advocates have worked closely with President Shelton to address the concerns of students in regards to tuition.  Case in point is the revisions which President Shelton made to his original proposal, which affirmed the universities commitment to predictability and affordability.  It is important the university have the resources available to continue to advance the University of Arizona, while maintaining affordability, predictability and accountability. 

Regent Martinez then moved to reconsider the motion as previously approved for tuition and fees at the University of Arizona.  Regent Bulla seconded the motion.

Regent DeConcini moved to table the motion made by Regent Martinez.  Regent Mariucci seconded the motion.  Motion failed with a vote of 3 to 6; Regents Calderón, DeConcini and Mariucci voting in favor of the motion and Regents Bulla, DuVal, Leonard, Martinez, McLendon and Boice voting against the motion. 

Regent DeConcini stated that he objected to the procedure.  This item was scheduled to be heard yesterday and that was done.  The Board is being asked to reconsider, but what was done yesterday was in proper governance.  He asked if this matter was going to be reconsidered, that the student body representatives come back to the table and testify.  The representatives from the student bodies then came forward. 

Regent Mariucci stated that she wants this matter to be elevated.  She stated that the vote yesterday had nothing to do with the university administration nor was it a vote regarding confidence.  It was a vote about dollars.  The proposals on the table yesterday would have brought $53 million into the system.  The University of Arizona's piece was $36 million, well over half of the request.  The motion passed yesterday only removes $5 million from what was originally requested.  The vote was not a reflection of confidence in the leadership of the university.  This was a vote to force change in the cost structure at the University of Arizona. 

Regent Calderón stated that procedurally what is being done here today is not unlawful; it is well within parliamentary procedure to reconsider a motion.  He stated that it is very important that all Regents do their best to be present at all meetings.

Regent Boice stated that he believed there was another issue.  This isn't just about dollars, it is also about predictability.  Regent Boice reminded everyone that President Shelton had revised his original request based on input from the tuition hearing reducing the amount of the increase and adding a guaranteed tuition program, which the action yesterday did not take into account. 

Regent DeConcini asked the student representatives what their positions were.  Tommy Bruce, the student body president of the University of Arizona stated that even though he and the students appreciated what Regent DeConcini was doing, he had omitted one of the most important aspects, which was predictability.  Predictability is one of the most vital aspects of tuition increases that the students are looking to gain.  After consultation with the students, President Shelton changed his original proposal to include a predictability model.  Michael Slugocki, Board member of ASA, stated that he supported the student's position and the Student Regent. 

J. C. Mutchler stated that the AFC discussed this matter and believes that tuition setting should be a rational and largely financially driven decision process.  It should be based on predictable affordability and sustainable accessibility for all students.  Tuition needs to remain a financially driven process rather than a politically driven process. 

Regent Boice stated that he had asked Joel Sideman to call Regent Horne to inform him of the current proceedings.  Regent Horne was invited to participate, but was not available. 

Upon motion by Regent Martinez, seconded by Regent Bulla, the Board approved the motion to reconsider Item #2, in relationship to the University of Arizona, with a vote of 6 to 3; Regents Bulla, DuVal, Leonard, Martinez, McLendon and Boice voted in favor and Regents Calderón, DeConcini and Mariucci voted against the motion. 

Regent DeConcini moved, and Regent Mariucci seconded, that the Board approve a 3.7% increase in resident undergraduate base tuition rates and mandatory fees for all resident undergraduate students at the University of Arizona and a 5% increase annually for future years for those students enrolled in 2009.  Further to increase the amount of the university financial support set-aside from 15% to 17% and to charge the Tuition Task Force, which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, to evaluate the 2009-2010 tuition setting process for all students as well as all fees for all students, implement a report for the uses of the incremental tuition revenue at each university to be presented at the August 2009 Board meeting, engage student government representatives to incorporate student priorities into tuition revenue expenditures, and continue exploration of revisions to the current ABOR tuition setting policy.

Regent DuVal moved, and Regent McLendon seconded, to amend the motion to substitute 6.5% for 3.7%. 

Regent Mariucci stated that she has been from the onset of guaranteed tuition concerned and opposed to a cap as a matter of public policy.  A cap ties everyone's hands in the future.  She does not want to lose long term flexibility. 

Regent Bulla stated that he wasn't sure that 6.5% would be enough on the front end to support the back end.  He stated he was concerned that 6.5% just wouldn't be enough to build up the front end to support the guarantee. 

Regent DuVal stated that there are multiple conversations around the tuition debate which is the underpinning of the frustrations being felt.  The Board is talking about what is an adequate level of resources, an entirely new economic world with stresses that have never been seen before and the Board is talking about the institutions having a speed of adaptation and change that we have never asked them to deal with before and all of that is finding its way into the tuition debate.  But, that said, this process is primarily about adequate resources and secondarily a tool to give a message.  With regard to all of the institutions the universities are going to have to make dramatic changes in the delivery models and everything that the universities do.  The system is looking at potential cuts and budget reductions, the likes of which have never been seen before.  The Board must rethink everything anew and the Board must serve notice on the universities that we need to define our destiny or it will be defined for us by others.

Regent Calderón restated the motion made by Regent DuVal and seconded by Regent McLendon, which would amend Regent DeConcini's motion by changing 3.7% to 6.5%.  The motion failed with a vote of 6 to 3; Regents Bulla, Calderón, DeConcini, Mariucci, Martinez and Boice voting against the motion and Regents DuVal, Leonard and McLendon voting in favor of the motion. 

Regent Calderón then restated the motion made by Regent DeConcini and seconded by Regent Mariucci, that the Board approve a 3.7% increase in resident undergraduate base tuition rates and mandatory fees for all resident undergraduate students at the University of Arizona and a 5% increase annually for future years for those students enrolled in 2009.  Further to increase the amount of the university financial support set-aside from 15% to 17% and to charge the Tuition Task Force, which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, to evaluate the 2009-2010 tuition setting process for all students as well as all fees for all students, implement a report for the uses of the incremental tuition revenue at each university to be presented at the August 2009 Board meeting, engage student government representatives to incorporate student priorities into tuition revenue expenditures, and continue exploration of revisions to the current ABOR tuition setting policy.  The motion failed with a vote of 7 to 2; Regents Bulla, DuVal, Leonard, Mariucci, Martinez, McLendon and Boice voting against the motion and Regents Calderón and DeConcini voting in favor of the motion. 

Upon motion by Regent Martinez, seconded by Regent Boice, the Board approved the University of Arizona's request beginning Fall 2009 to increase base tuition by 9.5% for resident undergraduate students at the main campus, bringing the 2009-2010 base resident undergraduate tuition to $5,774 and thereafter, beginning Fall 2010, increase base tuition by 5 percent annually for a four-year period starting with the semester of entry for first-year students, and for a two-year period starting with the semester of entry for transfer students.  This indexed tuition program would apply to both resident and nonresident undergraduate and graduate students; for new resident undergraduate students starting Fall 2010 and after, set base tuition at the maximum parameter allowable by Board policy, and thereafter apply the indexed tuition program; increase base tuition for resident undergraduate students at the University of Arizona South by 7.6 percent, for a base resident undergraduate tuition of $4,953; increase base tuition for nonresident undergraduate students at all campuses by 14.0 percent for 2009-2010, for a nonresident undergraduate base tuition of $20,983; increase base tuition for resident graduate students at all campuses by 8.2 percent to $6,564 for 2009-2010; increase base tuition for nonresident graduate students at all campuses by 13.8 percent to $21,276 for 2009-2010.  As approved by the Board during last year's tuition setting, the University of Arizona's Student Services Fee was approved in the amount of $80 per year, to be phased in over two years.  Beginning in Fall 2008, the fee was $40 per year, and is scheduled to increase by an additional $40 per years, to a total of $80 per year, in Fall 2009.  Further to increase the amount of the university financial support set-aside from 15% to 17% and to charge the Tuition Task Force, which consists of the three university presidents, three students as assigned by the Arizona Students' Association and four Regents including the two student regents, to evaluate the 2009-2010 tuition setting process for all students as well as all fees for all students, implement a report for the uses of the incremental tuition revenue at each university to be presented at the August 2009 Board meeting, engage student government representatives to incorporate student priorities into tuition revenue expenditures, and continue exploration of revisions to the current ABOR tuition setting policy.   The motion passed with a vote of 6-3; Regents Bulla, DuVal, Leonard, Martinez, McLendon and Boice voting in favor of the motion and Regents Calderón, DeConcini and Mariucci voting against the motion.

REPORT ON P-20 COUNCIL RETREAT

Regent Calderón provided a report on the November 13, 2008 P-20 Council Retreat.  He stated that the P-20 Council was developing goals and considering their future at the retreat.  The Council was created by Executive Order by the Governor.  The P-20 Council served a real need for the state by providing a forum for stakeholders to address the state's education needs across the P-20 spectrum.  The Council has made an impact on the state.  It is possible that the current P-20 structure has served its purpose but it is in the Board's interest to be sure there is an organization to address statewide educational needs.   One proposal was to create a voluntary organization comprised of the three education boards with representation from other sectors as well.  There will be a P-20 Council meeting in January. 

TECHNOLOGY OVERSIGHT COMMITTEE (Chair: Regent DeConcini) 

Report from the Technology Oversight Committee (Agenda Item #37) 

Regent DeConcini reported on the December 2, 2008 Technology Oversight Committee meeting.  He stated that the committee covered a status report on the UA MOSAIC IT project.  Charlie Moran, consultant for the University of Arizona's MOSAIC project, presented his independent project audit which included the results of his team's on-site visits to the University of Arizona as well as progress of the project's various system implementation plans.  The Committee approved the University of Arizona's Student Information System Implementation Plan for its MOSAIC project at an estimated budget of $37.8 million subject to the university obtaining the necessary funding.  The JCCR has not chosen to review the $33 million bond package for the MOSAIC project.  The University of Arizona also provided an update on the Tri-University Vulnerability Scanning/Management Solution project.  This important IT security project was funded from the Regents' Technology Innovation Fund.  Further the Committee approved the universities' Information Technology Annual Expenditure Reports.  Arizona State University has increased the proportion of expenditures in its central IT operations.  The universities presented their draft six-month follow-up reports to the Auditor General concerning the Auditor General's IT Security Performance Audit.  The Committee approved funding for a total of seven projects for the 2009 Arizona Regents Reach Out (ARRO) Grant program, which will be funded through ARRO and Arizona Universities Network (AZUN) TRIF resources at a $290,625 level.  Additionally, the Committee received a status report on ARRO Grant projects from 2007 and 2008.  The Committee approved a revised Memorandum of Understanding between the Board and Northern Arizona University that extends Northern Arizona University's continuing management of the AZUN program for five more years, approved the AZUN Strategic Plan for fiscal years 2009-2013, which includes financial information designed to implement the Strategic Plan, and approved the AZUN budget for 2008-2009 in the amount of $3.8 million.

AD HOC PRODUCTIVITY COMMITTEE (Chair: Regent DuVal) 

Report from the Ad Hoc Productivity Committee and Presentation by President Crow (Agenda Item #38)

The Board received a report from Regent DuVal on the November 19, 2008, meeting of the Ad Hoc Productivity Committee.

Regent DuVal reported that the first meeting of the Board's Ad Hoc Productivity Committee was held on November 19.  It was a very productive meeting.  The major thrust of the committee's efforts will be to focus on specific areas that can help increase degree production by the universities.  In order to double the number of bachelor's degrees by 2020, the universities must improve retention and persistence rates.  The Committee will continue to discuss these issues, working to identify barriers the universities now face in increasing retention and persistence rates, and to develop options for overcoming the barriers.  Andrea Smiley, from the Central Office, presented a preliminary report to the Committee on a plan to communicate information about the universities' productivity efforts and will be working with the universities to finalize and carry out the plan.  As part of the communication plans, with the agreement of the Presidents, there will be a presentation on one productivity initiative or topic at each Board meeting.  President Crow will be making today's presentation. 

President Crow summarized the collective thinking of the presidents on productivity.  Productivity is measured by two things:  efficiency which is the use of resources in the production of the product and effectiveness which is the result of the expenditure of those resources.  On efficiency as measured by national measures we are the 48th most efficient allocation of dollars for the return in net graduates among the 50 states, which is very high.  From an efficiency perspective a dramatic number of graduates have returned to the state for a relatively modest investment.  From an effectiveness perspective, the system is not where it would like to be.  The system has low graduation rates, inadequate freshman retention, and diversity is lagging.  That means that the universities have a very incomplete design of the enterprise and there are issues in the design.  The universities need to find ways to increase its effectiveness while maintaining its efficiency.  The focus going forward is on two fronts.  One front is student success and the second front is business practices.  The elements by which student success can be enhanced is to continue to redesign the academic enterprise so that it can be both modernized and made more effective and secondly to enter the 21st Century in regards to learning technologies.  Business practices can be optimized continuously and it should be a constant focus.  In going forward, the focus at the tactical level is to enhance effectiveness on the student success side and to enhance the efficiency on the business practice side.

PUBLIC AWARENESS COMMITTEE (Chair: Regent DuVal)

Solutions Through Higher Education (Agenda Item #39)

Andrea Smiley joined the meeting for this presentation.

Regent DuVal stated that the Solutions campaign was launched a little over a year ago in November 2007.  The purpose was to raise statewide public awareness of the brewing educational crisis nationwide and in Arizona.  Consider this:  When our new president finishes his first term 90 percent of the fastest-growing jobs, 60 percent of all new jobs and 40 percent of manufacturing jobs will require some form of postsecondary education.  Yet our state and nation won't likely be ready unless something changes.  The Solutions campaign has laid the groundwork for such change by speaking to more than 125 organizations through the state.  The coalition has grown to more than 5500 individuals and 87 organizations.  Over the last three months membership has increased from 1930 members to more than 5500 members.  The message is resonating and people are joining the cause. 

Andrea Smiley reported until now, the campaign has been a grass roots campaign.  There is an active web site that is being redesigned.  The campaign has now added a Facebook page that people can join when they have like interests.  The interesting thing about a Facebook page is that people who join bring with them their network.  The campaign has now started a viral campaign which is a campaign where a member is sent an informational e-mail and asked to forward it to several of their friends and also ask their friends to forward the e-mail to several of their friends.  There has been an increase in traffic to the website since this campaign started.  Students are working on videos to students asking them to learn more about the campaign.  Andrea stated that she would be putting together a strategic communication campaign to get the university system story out to more people.   Andrea stated that she is working with the public affairs people at the universities and they are working on how to engage with one another to tell the university story in the areas of research and productivity and other things that, as a system, we are doing to advance education in this state.

REPORT FROM THE LEGISLATIVE AFFAIRS COMMITTEE (Co-chairs: Regent McLendon and Regent DuVal)

Legislative Update (Agenda Item #40 - Appendix)

Regent McLendon provided a legislative update.

Regent McLendon expressed the Board's and the universities thanks to Governor Napolitano.  As you all know, earlier this week, President Elect Obama announced his nomination of Governor Napolitano as Secretary of Homeland Security.  The Governor has indicated that she intends to resign upon her confirmation by the United States Senate.  The Governor has been critical to the success of higher education during her term in office.  Her leadership has made education a priority in good and bad economic times.  Her vision led to the passage of the Research Infrastructure and SPEED programs.  She has left an indelible mark on higher education in Arizona and she will be missed.

Regent DuVal stated that the Governor also supported funding adequacy for the universities with her leadership on the Lumina Grant and for attainability of an affordable education through Centennial Scholars.  The Board thanks the Governor for her leadership and the Board commits to carry the torch as considerable work remains to be done on these transformative initiatives. 

Regent McLendon then reported that the Legislative Affairs Committee met on November 7th.  The agenda included several items that have already been discussed including Centennial Scholars and the SPEED projects.  In addition to changes in the executive leadership, new legislative leadership was elected by the Democrats and Republicans in both the House and Senate.  The President of the Senate Elect, Bob Burns, and the Speaker of the House Elect, Kirk Adams, have both created committees and assigned chairs.  John McCormish will be the majority leader in the House, Andy Tobin will be the majority whip in the House, David Lujan will be the minority leader in the House and Chad Campbell will be the minority whip in the House.  Chuck Gray will be the majority leader in the Senate, Pamela Gorman will be the majority whip in the Senate, Jorje Garcia will be the minority leader in the Senate and Linda Lopez will be the minority whip in the Senate.  There will no longer be a higher education committee.  Education issues will be heard by both a House and a Senate education designed to deal with the entire education system.  Rich Crandell will chair the House Education Committee and John Huppenthal will chair the Senate Education, Accountability and Reform Committee.

Regent McLendon stated that the committee looks forward to working with the next Governor, Secretary of State Jan Brewer, and with the new legislature.  They are setting meetings between Regents and legislative leaders and the new Governor.  Obviously a significant portion of our legislative agenda will be comprised of any FY09 mid-year budget reductions and the FY10 budget.  At this time, the Committee has not heard of any plans for a special lame duck session to address the current budget shortfall, but we expect the transition between administrations to impact the FY10 budget process.  The committee will keep the Board apprised of any significant developments.

Regent McLendon stated that committee members will be meeting in advance of the legislative session to review pre-filed legislation and items of interest to the university system, including any progress regarding the budgets.  Session begins on January 12, and the committee will meet on a regular basis to review and provide guidance on legislation and other legislative matters.

Regent DeConcini suggested that the staff make a resolution thanking Governor Napolitano.  He further suggested that we should extend an invitation to her to attend the Board meeting.  Regent McLendon stated that he thought we should also invite the new Governor to the next meeting and see if she would speak to her plans for the university system.

REPORT FROM THE ARIZONA FACULTIES COUNCIL

 J. C. Mutchler reported that the AFC has been busy.  They received a legislative update.  They received updates from the Provosts on the various approaches that would be taken in regards to possible budget rescissions and budget cutting.  Every faculty member has been invited to join the Solutions Coalition.

INQUIRIES, REQUESTS, REPORTS, AND COMMENTS FROM REGENTS AND MEMBERS OF THE COUNCIL OF PRESIDENTS

Regent Boice expressed the Board's appreciation to President Crow and everyone at Arizona State University for another fine meeting.  The new Memorial Union is wonderful. 

ADJOURNMENT

The meeting adjourned at 12:03 p.m.

SUBMITTED BY:

Margaret L. Martin
Secretary to the Board

APPROVED BY:

Fred T. Boice
President

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