April 2001 Minutes/Arizona Board of Regents

A meeting of the Arizona Board of Regents was held April 11, 2001, in the Havasupai room of the University Union, Northern Arizona University, Flagstaff, Arizona. President Donald Ulrich called the meeting to order at 10:15 a.m.

PRESENT:	Regent Mary Echeverria Regent Judy Gignac Regent Chris Herstam Regent Jack Jewett Regent Kay McKay Regent Christina Palacios Regent Gary Stuart Regent Donald Ulrich
ABSENT:	Regent George H. Amos, III Governor Jane Dee Hull Superintendent of Public Instruction Lisa Graham Keegan

Present in addition to the Regents were: President Clara Lovett, Dr. John Haeger, Dr. Jeanette Baker, Ms. Anne Barton, Mr. Kurt Davis, and Mr. Josh Allen, Northern Arizona University; President Peter Likins, Dr. George Davis, Mr. Joel Valdez, Dr. Saundra Taylor, Dr. Patti Ota,, and Dr. Elizabeth Ervin, University of Arizona; President Lattie Coor, Dr. Milton Glick, Dr. Gary Krahenbuhl, Dr. Tom Trotter, Dr. Mernoy Harrison, Dr. Elaine Maimon, Mr. Steve Miller, Mr. Allan Price, Dr. Christine Wilkinson, and Mr. Paul Ward, Arizona State University; Executive Director Linda Blessing, Board Counsel Joel Sideman, Secretary to the Board Judy Garza, Mr. Dave Harris, Ms. Louise Houseworth, Ms. Norma Salas, Mr. Matt Ortega, Dr. Thomas Wickenden, and Dr. Art Ashton, Central Office Staff; and Dr. Judith Sellers, Arizona Faculties Council Representative.

CALL TO THE AUDIENCE

Linda Small, asked for help to resolve grievances she believes she has against the University of Arizona.

CONSENT AGENDA

Items on the Consent Agenda, which are marked in these minutes with an * were considered as consent matters and were adopted upon motion of Regent McKay, seconded by Regent Gignac. There was no individual discussion of these items.

*Minutes

The Board approved the March 2, 2001, Regular Meeting, and the January 26, 2001, Executive Session minutes.

Resources Committee Consent

*Authorization to Sell a Portion of Cowden Property to Ronald G. Roth and Waiver of Board Policy

The Board approved the sale to Ronald G. Roth of 11.28 acres in the northwest section of the Cowden Tract for $1.55/sq. ft. The Seller shall cause to be made a 37 ½ foot non-build easement around the subject property. The Seller will be responsible for a Broker's fee of approximately $38,080. The Buyer will pay for all utility hook-ups and/or extension needed for water and sewer service. The net proceeds of the sale will be approximately $723,523, excluding standard closing costs. The Board's share will be approximately $278,556, minus its share of closing costs.

As the Board does not own the substantial majority of the parcel, the Board granted a waiver to Board Policy requiring an appraisal and public bidding. The Board authorized the execution of all legal documents by the Board's President, Secretary, or Executive Director, subject to review of all documents by Board Counsel.

*Authorization to Refund the 1992 Bond Issue, Pay the Issuance Costs for the New Bonds, and Take Needed Related Actions and Enter into Necessary Agreements (ASU)

The Board authorized Arizona State University to refund the callable maturities of the 1992 system revenue refunding bonds ($24.3M) according to the terms and conditions identified in the bond resolution, to take all needed related actions, and to enter into a resolution reviewed by Board Counsel, if the refunding, after consideration of all issuance costs, results in net present value savings to ASU.

*Approval of a Multiple-year Employment Contract for Head Men's Basketball Coach (NAU)

The Board authorized Northern Arizona University to enter into a multiple-year employment contract with Mike Adras as Head Men's Basketball Coach, as summarized below, for the period July 1, 2001, through June 30, 2003. Coach Adras' salary for performance of Program duties will be $79,000 per year, subject to the same salary increases as other university employees serving under the Conditions of Administrative Service. He will be held accountable for student athletes meeting minimum expectations of academic performance and shall receive supplemental compensation annually for the academic performance of scholarship of student athletes depending on the achievement of certain grade point average or graduation rates. He shall also receive 1/12 of his Program salary if the NAU men's basketball team appears in the NCAA Division I Championship. Coach Adras will be granted an exclusive license to operate a men's basketball camp using university facilities, subject to a separate Licensing Agreement. The contract contains liquidated damages clauses regarding early termination of the contract. Other terms and conditions are contained in the employment contract.

*Approval of Multiple-year Employment Contract for Head Women's Volleyball Coach (NAU)

The Board authorized Northern Arizona University to enter into a multiple-year employment contract with Kelley Sliva as Head Women's Volleyball Coach, as summarized below, for the period July 1, 2001, through June 30, 2003. Coach Sliva's salary for Program duties will be $55,093 per year, subject to the same salary increases as other university employees serving under the Conditions of Administrative Service. Coach Sliva will be held accountable for student athletes meeting minimum expectations of academic performance and shall receive supplemental compensation annually for the academic performance of student athletes depending on achievement of certain grade point average or graduation rates. Coach Sliva shall also receive compensation in an amount of 1/12 of her annual Program salary if the NAU women's volleyball team appears in the NCAA Division I Championship. NAU grants Coach Sliva an exclusive license to operate a women's volleyball camp using university facilities subject to a separate Licensing Agreement. The contract contains liquidated damages clauses regarding early termination of the contract. Other terms and conditions are contained in the employment contract.

*Approval to Renew a Multiple-year Employment Contract for Head Football Coach (NAU)

The Board authorized Northern Arizona University to renew the multiple-year employment contract with Jerome B. Souers as Head Football Coach, as summarized below, for the period July 1, 2001, through June 30, 2003. Coach Souers' salary for Program duties will be $79,000 per year, subject to the same salary increases as other university employees serving under the Conditions of Administrative Service. Coach Souers shall receive supplemental compensation annually for the academic performance of scholarship of student athletes depending on achievement of certain grade point average or graduation rates. He shall receive compensation in an amount of 1/12 of his annual Program salary if the NAU football team appears in the NCAA Division I-AA Championship. NAU grants Coach Souers an exclusive license to operate a football camp using university facilities subject to a separate Licensing Agreement. The contract contains liquidated damages clauses regarding early termination of the contract. Other terms and conditions are contained in the employment contract.

Programs Committee Consent

*Adjustment to Academic Calendar for Spring Semester 2002-2005 (UA South)

The University of Arizona requested an adjustment to the date for the last day of final examinations at the UA South campus so the Commencement Ceremony at UA South could be held on a date that does not conflict with Commencement activities on the Tucson Campus. The Board approved the request to adjust the last day of final examinations at the UA South Campus to accommodate the UA South Commencement as follows:

REPORT FROM THE PRESIDENT OF NORTHERN ARIZONA UNIVERSITY

President Lovett introduced Dr. Thomas Witham, Regents Professor of biological sciences and environmental studies at NAU, who informed the Board about environmental groups at NAU and how they would be able to leverage Proposition 301 funds in productive ways. He described the range of projects these groups are currently accomplishing, focusing on the Marion Powell Center for Environmental Research. It is a grass roots effort of faculty that have come together to engage in long-term experiments, interdisciplinary, and interagency collaborations with two major goals–to understand the principles that affect global change such as climate change and land use practices, and to develop management tools to address the impacts of natural and human cause changes.

Dr. Witham said the Marion Powell unit was named after C. Heart Marion and John Wesley Powell who were ecologists in the late 1800's to emphasize the long tradition of environmental research. One of the units has received recognition from the National Science Foundation; they were chosen to give a presentation to its national board of directors. The group is studying a variety of things at the same site such as insect outbreaks, droughts, plant genetics, nutrient cycling, complex systems, microbes, and global change. Ecology students visit this site and are exposed to leading edge research.

Dr. Witham told the Regents about the study of drought and the consequences of drought on the economy. He also told the Board about a project from the National Science Foundation to invest money in ten environmental observatories scattered around the United States. NAU would like to be the site for one. These National Ecological Observatory Networks (NEON) will be networked throughout the country to integrate the environmental problems of the entire country.

Another initiative NAU would like to develop is a field station which is a requirement in the competition for a NEON site as well as other programs which require a field station. The proposal is to establish a field station in the Centennial Forest which is south/southwest of Flagstaff.

President Ulrich congratulated President Likins and Coach Olson on the success of the UA basketball team. He expressed his disappointment about the riot that happened after the basketball game. He said he believed people should take responsibility for their own actions rather than place the blame on the Tucson police department. He asked President Likins to try to find out who the students were who were involved in the incident and asked him to prosecute the students to the full extent of the law, including expulsion. President Likins said all who could be identified from the video tapes, photographs, or other identifications would be subject to appropriate civil and criminal sanctions.

President Ulrich asked President Coor to look into the apology issued by the student newspaper at ASU for running the add for reparations for slavery which appeared in the student newspapers at both ASU and UA. He said any paper had the right to decide whether to run an ad or not run an ad, but once run; he did not believe the ad should be censured, especially at a university where all opinions should be aired. President Coor said the State Press is checking to see whether they followed their own internal procedures in deciding to run the ad, rather than seeking to apologize for running the ad.

RESOURCES COMMITTEE

Setting of 2001-2002 Tuition and Financial Aid

Ms. Louise Houseworth, Ms. Gale Tebeau, Mr. Dick Roberts, Ms. Phyllis Bannister, Ms. Kate Dillon Hogan, and Mr. Josh Allen joined the meeting for this discussion. Regent Jewett said the Board is scheduled to set resident and nonresident tuition, Regents Financial Aid Set-Aside and the Arizona Financial Aid Trust Fund surcharge fee for academic year 2001-2002. The tuition hearing on April 5th gave the students a forum to voice their concerns regarding tuition and financial aid and, in general, the current and future costs of attending the three universities.

President Lovett said the process that occurred prior to the tuition hearings and the conversations that took place with the students during the tuition hearings and afterwards were the best in many years. She credited the campus student leaders and Student Regent Echeverria for the time they spent working to understand university budgets and needs, and for bringing the priorities of the students forward. She hope this process would continue next year.

Dr. Lovett said the tuition request she had announced was a $200 increase for resident students and a $400 increase for non-resident students at Northern Arizona University. She said she agreed with the students concerning the priorities for the new revenue generated--improvement of advising, salaries, and continuing improvement of technology for infrastructure for teaching and learning. The only disagreement is the students came up with a shorter list of items. The 5% increase for both resident and non-resident students proposed by the Arizona Students' Association (ASA) will generate approximately $2M of new revenue and this leaves NAU without the means to do other things that are necessary. President Lovett said NAU had the need for new revenue in the magnitude of $3.6M, the amount that would be generated by her recommendation. There is a need for funds for increased utility bills and for completing the student administrative system. She said NAU serves predominantly Arizona residents; there are not as many non-resident students as on the other campuses.

President Coor agreed with President Lovett that the tuition setting process this year had been a good one. He stated he believed the recommendations of the Governor's Task Force on Higher Education and its belief in quality higher education are consistent with the presidents' tuition recommendations this year. Dr. Coor recommended a $200 increase in resident tuition and a $500 increase in non-resident tuition for students at Arizona State University. ASU will use its increased revenue for technology related to teaching and learning, student services, equipment, facilities, teaching assistant compensation, and things ASU believes are important for the future.

President Likins said the tuition setting process is very stressful for everyone involved and sometimes leaves damaged relationships behind. He agreed this year had been a much better process. Dr. Likins recommended an increase of $200 for resident students and an increase of $500 for nonresident students at the University of Arizona. He said the UA student body president proposed $1.9M for advising, $1.1M for salaries for graduate assistants, teaching assistants, and faculty, $0.8M for information technology, and $1.6M for other university needs such as financial aid and academic facility debt service. If the increase voted by the Regents exceeds the 5% increase proposed by the students. Dr. Likins said he would commit to using the 5% portion of the increase in the domain requested by the students. He said advising, however, would not be spent just on hiring additional people; advising includes mentoring, counseling, software, and providing support services for specialized populations on the campus. After the UA deals with the All Funds Budget process and the allocations of the state legislature, President Likins said the UA would report on the expenditure of all incremental tuition dollars.

Regent Jewett said he had discussed with President Likins the option of a higher increase in non-resident tuition and a lower increase in resident tuition and he asked Dr. Likins to explain why he had not recommended this mix. President Likins said the non-resident tuition is set by the market place and he believed charging too much for non-resident tuition would actually drive total revenues down. President Coor said raising the non-resident tuition too fast also puts a great burden on those non-resident students already enrolled.

Regent Jewett asked the presidents for their thoughts on setting tuition for two years. President Lovett said she believed there were too many moving parts to the budget, especially the legislative allocations, to set tuition for two years. President Likins said he had believed setting tuition for two years would be a good idea, especially given how painful the process usually is. However, a two-year tuition would mean student government would be involved in the tuition process only every other year, leaving every other student body president out of the learning process.

Regent Jewett asked NAU Student Body President Sara Presler for her recommendation on tuition. Ms. Presler said she had learned a great deal from the tuition setting process this year. She believes the student proposal represents a compromise reached through the students understanding of both the university and student needs.

ASU Student Body President Alex Bainbridge said he was very encouraged by the process that took place this year. After the budget allocation and tuition process is over, he said he would like to sit down with President Coor and his staff to work together with the amount of funding available to accomplish the stated goals. ASA is recommending an increase of 5% for both resident and non-resident students. He believed one of the primary uses of increased funding should be for on-line registration. He also would like to see money be used for academic advising and in the area of graduate assistants and teaching assistants. Technology is also an important area.

UA Student Body President Benjamin Graff said this had been a great year for education with the passage of Proposition 301. He said President Likins had correctly stated the students' proposal. Students are very concerned about advising and want the portion of the money they requested to be spent on advising. They are also concerned about salaries, as noted, and technology. He said the students had proposed a 5% increase for both residents and non-residents because ASA believes all students should be treated alike.

Regent Echeverria thanked the students and ASA Executive Director Paul Peterson for their work the entire year. They met regularly with the budget officers and made extraordinary efforts to solicit student input during the budget process. She detailed all the effort the students had made and how the administration had worked with the students so they could better understand the university budgets. Regent Echeverria said she strongly supported the students' recommendation for the use of incremental tuition revenue. She knows they understand there is a need for more resources. She also knows the university presidents are trying to do the best they can to provide a quality education. She has picked a number that she believes both sides can work with to provide positive things for the universities and the students.

Regent Echeverria moved to increase resident tuition by $140 at all three universities for Fy 2001-2002 with the stipulation the university presidents come back to the Board in May with a more detailed account of how those funds will be distributed. There should be substantial student input in the report. This would be a 6.2% increase. The motion was seconded by Regent McKay.

Regent Herstam moved a substitute motion that the Board set resident tuition at all three universities for FY 2001-2002 at $78 more than the FY 2000-2001 tuition, an increase of 3.4%, and that the surcharge would change accordingly. This would bring tuition to $2,350, net of fees. The motion was seconded by Regent Jewett.

Regent Herstam said he opposed the university presidents' recommended 8.5% increase in resident tuition ($200) and he opposed Regent Echeverria's motion because the tuition increases adopted by the Board over the last five years averaged an appropriate 3.8%. CPI projection for next year is 2.4%. He said the maximum increase he could support is $78, which is CPI plus 1%. He believes a dangerous tuition trend is underway in Arizona. Over the last decade Arizona has increasingly relied on students as opposed to the general fund to fund the university system. He believes this unfortunate trend would be made worse by both the presidents' and the students' recommendations. He believes the failure of the Board, university administration, and students to convince state capitol politicians to make greater university investments should not penalize students or parents. The percentage of young adults in Arizona with a college degree is declining and there is a growing economic underclass in the state. He believes low tuition fees are critical in encouraging enrollment of lower economic students.

Regent Jewett spoke in support of Regent Herstam's motion. He said he sees many people who are qualified to attend the universities, but do not apply because they believe they cannot afford college. He believes low tuition will encourage low income students to attend the universities.

Regent Gignac said she could not support either motion. The substitute motion is an incremental increase and she had strongly stated last year she would never vote for an incremental increase again because she believes, regardless of what happens with state appropriations, the Board has to find a way to retain the quality of the three institutions. She does not support increases that are tied to CPI plus anything because she does not believe CPI represents the increased expenses that educational institutions face. She agreed the process this year has been remarkable and believes seeing areas where the universities and the students agree on funding is a magnificent step. However, she does not support the main motion because she has a slight unease this will become a student-university negotiated number that will then come to the Regents for a final decision.

Regent Gignac said she believed the tuition hearings brought out a problem with the way we are measuring advising in the UCAR Report as advising was the number one problem mentioned at the hearing. She said she could not support the larger increase without protecting the students already in the universities. She suggested the students currently in the universities, as long as they continue to take xx number of courses and maintain yy grade level, receive a contract stating what percentage their tuition would increase each year. That would protect them from a large increase. She said she understood this did not address the problem of students who are not yet in the institutions.

Regent Stuart said if he believed raising tuition would impair access, he could not even support the increase proposed in the substitute motion His quarrel with the substitute motion is it is based on CPI. He read the full February 2001 CPI report and was staggered by how inapplicable 90% of it is to setting tuition rates for public educational institutions. He said his service on a subcommittee for the Governor's Task Force on Higher Education taught him other states are increasing all their revenue streams, including tuition, private donations, charitable giving, legislative appropriations, and special funds. Increases in tuition will occur in all states where the new technology is going to happen. He said the only constitutional mandate the Regents have is to set tuition in a way that is reasonable. He said he did not believe the substitute motion raised enough money.

There was a discussion of how hard this decision is to make and how various Regents approach the issue. Regent Ulrich also expressed his appreciation for the way the process worked this year as he believed it was much better than ever before. He does believes the state, rather than the students, should be bearing the increased funding needs. He said the Governor's Task Force said the universities need to deal with salaries and infrastructure. However, he does not see the legislature funding those needs. He asked the students, faculty, and parents to lobby for more support for the universities.

Regent Herstam said he would support a better inflationary index than the CPI if anyone could come up with a better one. He really is more interested in keeping the tuition increase at about the average it has been over the last five years. He believes the charts that show Arizona low in tuition in comparison with other states is a positive as he believes Arizona residents receive an excellent education for a low cost.

The vote on the substitute motion to increase tuition $78 failed on a 6 to 2 roll call vote with Regents voting as follows: Yes–Regents Herstam and Jewett. No–Regents Echeverria, Gignac, McKay, Palacios, Stuart, and Ulrich.

There was a discussion on the need for financial aid and the legislative initiative to increase the state match for the AFAT program. Regent Palacios said she believed the students had spent a lot of time working on tuition this year and she believed they had arrived at a well thought-out number. She agreed they should be informed as to how the increased money will be used. She moved a substitute motion to set tuition at the increase asked for by the students. A 5% increase, $114, would result in tuition of $2,386. Regent Herstam seconded the motion.

Regent Echeverria said she had struggled whether to support the students' recommendation or to take into account both sides who had worked very hard on this issue and try to find a medium ground. President Likins said he would not be able to stand by the distribution of revenues asked for by the students if this motion passes as there will not be additional funds to do other needed projects. President Coor also spoke against the motion. The substitute motion failed on a 6 to 2 roll call vote with Regents voting as follows: Yes–Regents Jewett and Palacios. No–Regents Echeverria, Gignac, Herstam, McKay, Stuart, and Ulrich.

The motion to increase tuition by $140 passed on a 5 to 3 roll call vote with Regents voting as follow: Yes–Regents Echeverria, McKay, Palacios, Stuart, and Ulrich. No–Regents Gignac, Herstam, and Jewett.

Regent Echeverria moved to set the Arizona Financial Aid Trust Fund (AFAT) at the maximum amount allowable by law. This will increase AFAT by $2, making the fee $24. The motion was seconded by Regent Gignac. The motion passed by unanimous roll call vote with Regents Echeverria, Gignac, Herstam, Jewett, McKay, Palacios, Stuart, and Ulrich voting yes.

The discussion then moved to the subject of non-resident tuition. Regent Gignac said non-resident tuition setting is as important as resident tuition setting. Non-resident tuition has been set in the past to reflect the cost of education and the State Expenditure Authority Per Student (SEAPS). The number used is the SEAPS without capital dollars. Since the legislature has not yet passed the budget, it is not an exact number at this time; but Regent Gignac said her motion was an intent to bring non-resident tuition as close as possible to the cost of education to keep the Arizona taxpayers from subsidizing non-residents. She moved to increase non-resident tuition by $550 at all three universities. The motion was seconded by Regent McKay. The motion was that non-resident tuition be set for ASU and UA at $10,278 which is a $550 increase (5.65%) and for NAU at $9,254 which is a $550 increase (6.3%). New students in the Fall at NAU will pay $1,024 plus the $550 in order to bring the NAU non-resident rate to the same amount as UA and ASU for new non-residents.

Regent Herstam asked if setting the non-resident increase at $550 would provide enough money for President Likins to renew his guarantee on using the money as the students asked and was told yes. President Lovett said the $140 increase in resident tuition meant she would not be able to honor all the commitments that were on ASA's list. Out-of-state tuition does not produce enough revenue for NAU to make up the difference between what she had requested and what was adopted.

Regent Herstam reiterated he was hearing President Likins was planning to keep his commitments to the ASA requests and President Lovett was saying she could not. President Likins said he would furnish the Board with a written report of how the UA would spend the money. President Coor said he could not commit specific figures until he knew the legislature's decision on the budget and he said the tuition increase adopted was approximately 85% of what was requested. He has made clear internally they will stay within the boundaries of what has been put on the table except for a legislative appropriation that imperils salary increases and operating money for ASU East. He welcomes the chance to come back in May to provide the details if the legislature has finished the budget.

The motion to increase non-resident tuition by $550 passed by unanimous roll call vote with the Regents voting as follows: Yes–Regents Echeverria, Gignac, Herstam, Jewett, McKay, Palacios, Stuart, and Ulrich.

Setting of 2001-2002 Tuition for the College of Medicine (UA)

Regent Jewett said the University of Arizona recommended an increase of $450 or 4.9% for tuition for the College of Medicine. This represents $9,660 in tuition and $78 in current mandatory fees for a total of $9,738. Regent Gignac moved to approve the recommended increase and the motion was seconded by Regent McKay. The motion to set the tuition fees for the College of Medicine for FY 2001-2002 in the amount of $9,738 (inclusive of existing $78 mandatory fees), a 4.9% increase, passed by 7 roll call votes with the Regents voting as follows: Yes - Regents Echeverria, Gignac, Herstam, Jewett, McKay, Palacios, and Ulrich. Regent Stuart abstained.

Special Class Fees and Deposits, Program Fees, and Differential Tuition for MBA Programs for 2001-2002

Provosts Haeger, Davis, and Glick and Ms. Kate Dillon Hogan joined the meeting for this discussion. Regent Jewett said the Regents were being asked to review and approve several special class fees and deposits, program fees, and differential tuition for graduate and professional programs for 2001-2002.

Ms. Hogan said the information had been provided in three categories. The first is the "Special Class Fees and Deposits" that are covered by Board policy. They generally cover actual costs related to the course such as field trips or specialized equipment. The second category is "Special Program Fees", generally costs that are not normally associated with the delivery of an academic program. The third category is for "Differential Tuition", generally for selected graduate or professional programs. The seven criteria to be considered in this category are access, affordability, benefits to the entire university, the cost of the program, increased earnings potential of graduates, market pricing, and quality.

President Coor referred to Pages 2 and 3 where Differential Tuition for Graduate Professional Programs is listed. The middle column has a series of "not to exceed" fees for the second year of the biennium. He withdrew that request. He told the Regents these programs exist in a dynamic market place and flexible pricing becomes an essential way to respond to the market. In a once a year fee-setting process, the university cannot respond to the market place as it would like. Dr. Glick will also withdraw the second year of a request for an increase in fees for the Doctorate in Education Delta Program in an amount up to $15,000 for the three-year program. The fees have to do with the expense of mounting the program. Dr. Coor said he would like to bring to a future Board meeting a discussion on the possibility of delegating authority to set fees such as this, within certain parameters.

Regent Herstam said he would have had a problem with the professional program fees; but understood the Doctorate in Education fees to be based on actual costs, so he would not have had a problem with that request.

Regent Gignac questioned the fees for the Masters of Engineering programs, asking if this would set a precedent for ARU class fees. Regent Echeverria said the material states this fee would support the collaborative Tri-University Master of Engineering degree and other graduate degree programs. She questioned the "other graduate degree programs." Regent Gignac suggested this fee be deleted from the list until ARU fees are considered.

Provost Glick said an enormous amount of energy had been spent in getting this tri-university degree off the mark. There have already been large expenses involved and there will be more to make this work. He understands the universities may come with particular ARU policies on fees; but to put this program on hold while policies are being developed does not seem right when the first tri-university program is ready to go.

There was a discussion concerning the phrase "other graduate degree programs." UA engineering Dean Tom Peterson and ASU Engineering Dean Peter Crouch joined the discussion. Provost Davis suggested a period after the word Engineering, leaving off the words "other graduate degree programs offered by the three state engineering colleges." President Likins said he then under-stood the fee would be attached to any course that was intended to support this Tri-University Masters Degree program, even if the student taking the course had not applied for this particular degree, and even if the student taking the course ultimately applied this course to some other degree. Everyone believed that would be acceptable.

Provosts Glick, Davis, and Haeger explained the requests by their universities for these fees. Dr. Glick said the request for increased fees for the Doctorate in Education Delta Program is a result of the students requesting a semester in Mexico as well as the semester they currently spend in London and the addition of another semester. The request for the variable fee was because ASU does not know what the air fare and room and board will be next year.

Regent Echeverria asked why students did not receive credit for some PGA courses and was told by Dr. Charles Backus the PGA teaches special non-credit courses in addition to the academic curriculum. The students get a degree in Agri-Business, but the courses taught about how to be a professional golfer are not credit courses. However, these courses are required for PGA certification.

Regent Stuart asked why the matriculation fee for the college of law at ASU would apply toward tuition and the one at UA would not. He was told it was a different approach taken by the two different schools. Provost Davis said the Dean of the UA law college was willing to have the fee apply toward tuition so both law schools would be the same. Regent Herstam left during this discussion at 2:30 p.m.

Regent Jewett moved that the Board approve the requests by ASU and the UA to increase the class fees as specified in the Executive Summary, with the deposits for the colleges of law being applied to tuition. The motion was seconded by Regent Gignac. The motion passed by unanimous roll call vote with Regents voting as follows: Yes-Regents Echeverria, Gignac, Jewett, McKay, Palacios, Stuart, and Ulrich. Regent Herstam had left the meeting as noted above.

Regent Jewett moved that the Board approve program fees as specified in the Executive Summary. The motion was seconded by Regent McKay. The motion passed by unanimous roll call vote with the Regents voting as follows: Yes-Regents Echeverria, Gignac, Jewett, McKay, Palacios, Stuart, and Ulrich.

Regent Jewett moved that the Board approve the requests for differential tuition as requested with the modification of the withdrawal of the ASU request for a range of tuition for the MBA program, and the limit of the $200 credit charge for courses that apply to the Tri-University Engineering Programs. The motion was seconded by Regent McKay. The motion passed by unanimous roll call vote with the Regents voting as follows: Yes-Regents Echeverria, Gignac, Jewett, McKay, Palacios, Stuart, and Ulrich.

Approval to Increase the Nonresident Undergraduate Admission Application Fee and Implement a Resident Undergraduate Admission Application Fee

The Admission Directors, Mr. Tim Desch (ASU), Ms. Lori Goldman (UA), and Ms. Molly Munger (NAU) joined the meeting for this discussion. Regent Jewett said the Regents were being asked to approve an increase in the non-resident undergraduate admission application fee from $40 to $50 and to approve a new resident admission application fee of $25. Fees would be collected from students submitting applications for terms beginning with Summer 2002. The proposed fees would be required for each institution to which an admission application is submitted.

Regent Gignac said she would like to delete the requested $25 application fee for resident students as she believed raising tuition was enough of an increase for students. Presidents Coor and Likins agreed with this request. President Likins said this issue will be back before the Board at some future date and he would like the Board to understand why the request was made.

The Admission Directors told the Board the fees collected are not used solely for processing applications. The funds are used for early awareness and early outreach programs, for communications sent out to students beginning as early as 6th grade. The universities are prepared to offer a very liberal waiver policy so it does not create a barrier for students. However, this fee makes up the difference between what it costs to process applications and what the state provides; therefore, the non-residents are currently subsidizing the resident applications. The implementation of the resident application fee or the increase in the non-resident fee will allow more resources to focus on the students who are serious about attending a particular university as there is a great overlap in students applying to more than one university.

There was a discussion of the size of the application fee for both residents and non-residents and the use of the money raised by the non-resident fees. Regent Jewett moved the Board approve an increase in the non-resident admission application fee to $50 and table the resident admission application fee until such time as the possible impacts of such a fee on student access can be more fully explored. The motion was seconded by Regent Gignac. The Board approved the motion by unanimous roll call vote. The Regents voted as follows: Yes-Regent Echeverria, Gignac, Jewett, McKay, Palacios, Stuart, and Ulrich.

Setting of 2001-2002 Rates for Residence Halls, Family Housing Apartments, and Leased Facilities

The Senior Student Affairs Administrators, Dr. Christine Wilkinson (ASU), Dr. Sarah Bickel (NAU), and Dr. Saundra Taylor (UA), joined the meeting for this discussion. Regent Jewett said ASU, NAU, and UA were requesting approval to increase residence hall, leased facilities, and family housing apartment rates for 2001-2002. The proposed increases will provide funding to address increased costs. He said it was his understanding the student representatives from the residence halls support the proposed rates for each of the universities.

Upon motion of Regent Jewett, seconded by Regent Palacios, the Board approved the 2001-2002 residence hall leased facilities and family housing apartment rates requested by the three universities.

Spring Update of the FY 2001 All Funds Operating Budget

Ms. Louise Houseworth, Ms. Gale Tebeau, Mr. Dick Roberts, and Mr. Josh Allen joined the meeting for this discussion. Ms. Houseworth said the Spring Update identifies significant changes since the Fall Update approved by the Board in November of 2002. Regent Gignac asked if Proposition 301 money would eventually be reported under the All Funds Budget and was told it would be done separately but would be brought to the Board in a package at the same time as the All Funds Budget.

President Coor said the $1.9M deficit in the athletic department (ICA) would be stabilized. The new Athletic Director has identified and recalibrated the income flow. He is beginning a process of paring the staff and expenditures as outlined in the Executive Summary. ASU believes this is the magnitude of the deficit and there is a plan to liquidate the deficit in three years. Regent Gignac asked if this was known at the time of the Fall Update and was told it was known there was a problem but the magnitude of the problem was not known. President Ulrich asked Dr. Coor to let him know what revenue the golf course provides to ICC. Upon motion of Regent Jewett, seconded by Regent Gignac, the Board approved the Spring Update of the FY 2001 All Funds Operating Budget.

Packard Stadium Renovation: Conceptual Approval (ASU)

Dr. Mernoy Harrison joined the meeting for this discussion. President Coor reported on the ICA fund raising as it relates to capital items such as this item and the Wells Fargo Arena Expansion. He said these items would be funded entirely from the private fund-raising campaign underway currently in ICA. The aggregate initial goal of the campaign was around $20M and pledges to date have exceeded $30M. ASU plans to use Certificates of Participation which will be amortized by the gifts. The gifts are restricted for the capital projects. He said ASU has not committed more than roughly 85% of the anticipated proceeds.

Regent Jewett said ASU was requesting Conceptual Approval for the renovation of the Packard Stadium clubhouse and playing field. The estimated cost of this project is $2M, which is proposed to be funded through Certificates of Participation to be repaid from gift revenue. Upon motion of Regent Jewett, seconded by Regent McKay, the Board granted Conceptual Approval to ASU for the Renovation of Packard Stadium on the Main Campus.

Wells Fargo Arena Expansion: Conceptual Approval (ASU)

Dr. Mernoy Harrison joined the meeting for this discussion. Regent Jewett said ASU was requesting Conceptual Approval for the Wells Fargo Arena Field House Addition and Renovation. This project will involve the construction of a new 39,000 square foot field house to support gymnastics, wrestling, and volleyball, along with the renovation of the existing arena. The estimated cost of the project is $9M, which is proposed to be funded with Certificates of Participation to be repaid through gifts.

Regent Echeverria asked how disabled parking would be accommodated and was told the other parking would be changed to disabled parking and some additional parking would be created across Rural Road to replace those spaces. Upon motion of Regent Jewett, seconded by Regent Palacios, the Board granted Conceptual Approval to ASU for the design and construction of a new field house addition and for the renovation of the existing arena.

Infrastructure Improvements: Conceptual Approval (ASU East)

Mr. Terry Isaacson joined the meeting for this discussion. Regent Jewett said ASU East was requesting Conceptual Approval for a series of infrastructure improvements including roads, parking lots, telecommunications upgrades, and landscaping. This series of projects has a total estimated cost of $7.8M, which is proposed to be financed through Certificates of Participation with debt service being provided from Proposition 301 funds. President Ulrich said this absolutely needs to be done and will definitely enhance ASU East.

Upon motion of Regent Jewett, seconded by Regent Gignac, the Board granted Conceptual Approval to ASU East for Campus Infrastructure Improvements funded through Certificates of Participation as provided by Proposition 301.

Building Renovations-Multiple Facilities: Conceptual Approval (ASU East)

Mr. Terry Isaacson joined the meeting for this discussion. Regent Jewett said ASU East was requesting Conceptual Approval for multiple building renovations totaling approximately $16.5M. This project will entail renovations to 23 buildings with individual costs ranging from $15,000 to $3M for a five-building complex. Upon completion of conceptual design, each of the projects that exceeds $1M and results in changes in scope and/or cost will return to the Board for Project Approval. These projects are proposed to be funded with Certificates of Participation with debt service being provided from Proposition 301 funds.

Regent Echeverria asked if the construction could be planned so big areas would not be under construction for four years, the amount of time some students are on campus. Mr. Isaacson said ASU East has retained a consultant to help plan the sequencing and the prioritizing of how the dollars will be spent. Upon motion of Regent Jewett, seconded by Regent Gignac, the Board granted Conceptual Approval to ASU East for Building Renovations - Multiple Facilities to be funded through Certificates of Participation as provided by Proposition 301.

Authorization to Enter into a Ground Lease for a Public/Private Housing Development Partnership (NAU)

Dr. Sarah Bickel and Mr. Rich Payne joined the meeting for this discussion. Regent Jewett said NAU was requesting approval to enter into a ground lease with a to-be-formed not-for-profit entity to facilitate the development of a 320 bed residence hall located on south campus. This project represents an excellent example of a university public/private partnership. NAU will not be required to make any capital investment and will receive a positive net cash flow of over $3M over the first ten years of operation.

President Lovett said this is the first public/private project of its type on the mountain campus. Once this project is constructed, it will allow the renovation and possibly the raising of older residence halls. Upon motion of Regent McKay, seconded by Regent Gignac, the Board authorized the President or Vice President for Administration for Northern Arizona University or their designee to negotiate, sign, and enter into a ground lease agreement for the development of an approximately 320 bed residence hall on substantially the terms described herein, together with such additional terms and conditions that are not inconsistent with the approval granted, and to take all appropriate actions to complete negotiations and to enter into such related documents as needed provided that counsel to the Board has reviewed the ground lease.

NAU has selected Ambling West to design, finance, and construct the project. Financing for the project will be obtained with tax-exempt bonds which will be made available through a separate not-for-profit entity to be formed by Ambling West. This entity will in turn enter into a development agreement with Ambling West for the construction of the facility. NAU will enter into a ground lease agreement with the entity. Rental rates for these units are projected to be under market for the Flagstaff area.

Authorization to Sell Approximately 66.85 Acres Comprising the Former Christopher City and Adjacent Land (UA)

Dr. Saundra Taylor and Mr. Joel Valdez joined the meeting for this discussion. Regent Jewett said the UA was requesting Board authorization to sell approximately 66.85 acres by public auction. This is the site of the former Christopher City family housing project. In May 2000, the Board authorized the university to proceed with demolition of the site.

Mr. Valdez said the site is under demolition now and should be cleared by June. Replacement housing for graduate students is underway. There are several sites being considered for replacement of family housing, but that decision has not yet been made. The Request for Qualifications (RFQ) will go out in July for the family housing. It is expected the proceeds from the sale of this property will reimburse the expenses of demolition and relocation and the remainder will be used toward the replacement of family housing. Dr. Taylor said the transition team includes five former residents of Christopher City.

Regent Gignac stated her concerns with the replacement family housing being considered and the fact the RFQ had not already gone out.. She asked if the remaining dollars, after reimbursement of already incurred expenses, would be dedicated to replacement family housing and was told yes. President Likins explained options for family housing.

Upon motion of Regent Jewett, seconded by Regent Echeverria, the Board authorized the UA to sell at public auction the former Christopher City and adjacent land located in Tucson, Arizona, to the highest responsible bidder, with the successful bidder having the choice to either purchase the entire property with payment in full at closing 90 days after the public sale, or to have a series of options to purchase the property in multiple parcels over a period not to exceed two years, at such price and upon such terms as the University deems appropriate, but in no event below appraised value, subject to approval of legal documents by University and Board Counsel. Regent Gignac voted no and President Ulrich abstained.

Authorization to Initiate Eminent Domain Proceedings to Acquire Property Located at 8650 South Rita Road Within the UA Science and Technology Park (UA)

Mr. Joel Valdez joined the meeting for this discussion. Regent Jewett said the UA was requesting permission to proceed with eminent domain for 39,204 sq. ft. of privately owned property located within the UA Science and Technology Park. Regent Gignac asked if it was necessary to take this action today as the Board usually prefers to address issues like this when it meets at the University /locale affected by the action. Mr. Valdez said the owner has been contacted many times and refuses to sell this property. He has turned the property into a junkyard to make it as unsightly as possible to force the university to buy the property.

Upon motion of Regent Jewett, seconded by Regent Stuart, the Board authorized the UA to initiate eminent domain proceedings for the property legally described in Exhibit A and commonly known as 8650 South Rita Road, subject to approval of all documents by university counsel. President Ulrich voted no.

Regent Jewett asked President Coor to brief the Regents on the structural problems of the Social Sciences Building. Dr. Coor said a routine facilities audit found the 80,000 gross square building is falling in on itself and cannot be repaired. The fourth floor of the building will be vacated this summer prior to the monsoon season and the Department of Political Science that occupies that floor will be located in a gallery at the Old Matthews Hall across the way. Even with some structural stabilizing, the building will have to be razed in two or three years.

Regent Jewett said he had asked the Central Office and the universities to work with him to revise the capital process and he would like to bring the proposed new process to the Board at its next meeting for discussion. The proposal is to focus more on the capital improvement plan at the front end and let that be the primary guide as the Board moves through the process during the year.

PUBLIC AWARENESS COMMITTEE

Review of State Legislation with Potentially Direct Impact on the Arizona University System

Mr. Allan Price, Mr. Matt Ortega, Mr. Steve Miller, and Mr. Kurt Davis joined the meeting for this discussion. Regent Stuart noted there are three bills listed on which the Board had not previously taken positions. The first is HB 2345 which exempts contracts from Proposition 301 provisions and runs counter to what the voters approved. Mr. Ortega reported the bill is currently inactive, but at this time of the year it was thought it might still be important for the Board to take a position as sometimes bills reappear. It was recommended the Board oppose the bill.

Regent Stuart reported HB 2476 is the latest version of current anti-hazing legislation. Although it is well intended, current university student code-of-conduct policies and our own hazing prevention-policy would adequately protect students in this area. Therefore, it is recommended the Board monitor it closely. Mr. Ortega said some provisions that would have been unacceptable to the universities have been removed and it would be possible to live with the current language.

Regent Stuart said the third bill is SB 1295 which improves the current optional retirement program in place for university employees. It is recommended the Board support this bill. Mr. Ortega reported this bill is almost through the House. The bill has a key provision that changes the Optional Retirement Program to allow university employees in that program to withdraw employer contributions in a lump sum format.

Regent Gignac asked about SB 1085, Schools; College Savings Plan, which exempts a college savings plan from being considered when figuring financial need. She spoke in support of the bill. President Ulrich said he was most concerned about SCR 1005 State Land Trust Proceeds. The Regents were told that bill had been completely changed. President Ulrich asked how much authority the head of the State Land Department has over the disbursement of the money and was told none. He asked Mr. Ortega to check and make certain this was sure.

Upon motion of Regent Stuart, seconded by Regent Gignac, the Board adopted the positions recommended by staff on the three new bills.

STRATEGIC PLANNING COMMITTEE

Proposed Modification to the Northern Arizona University Master Plan (Second Reading)

Mr. Josh Allen and Mr. David Cain joined the meeting for this discussion. President Lovett said there had been additional meetings with campus groups to clarify some of their concerns since the March Board meeting. Residents of family housing had a misconception the university intended to raise some of the rather inferior structures in which married students are housed. The Master Plan does indicate this should happen over a period of time but there is no intent to remove the buildings from the inventory until there is an assurance new construction can be done. There were also concerns with safety as one of the aspects of the Master Plan is to remove as much cross traffic as possible from the central portion of the campus and have more peripheral parking. However, the final draft incorporates suggestions from student groups concerning safety.

Regent Gignac asked if there would still be parking for public events and was told yes. She said the convenience of parking is very important to both students and other people who use the campus. She said safety issues, such as lighting, walking distances at night alone, are also essential and the adoption of the Master Plan should not preclude these issues from being considered.

President Ulrich suggested a matrix be developed that puts the capital items in order in terms of when the Board saw the item each time, the cost of the project, an explanation of a change in the cost if it changed, and a reconciliation on an ongoing basis of bond and COP capacity as it relates to all the projects in process. Regent McKay agreed and asked Dr. Blessing to have her staff and university staffs develop a matrix so the Regents would have past, present, and future for reference. President Ulrich said he would also like to see the projects that are bonds and COPs that have a revenue source other than gifts on one sheet of paper and the ones that are going to be amortized with gifts on another. Dr. Blessing noted Regent Jewett's comment earlier about consideration of streamlining the capital review process and suggested some pro forma sheets could be presented at the same time.

Upon motion of Regent McKay, seconded by Regent Jewett, the Board approved the update of the Northern Arizona University Campus Master Plan.

Memorial Union Expansion: Revised Project Initiation and Request to Exceed Spending Limits and Authorization to Pay for Relocation and Demolition Costs (ASU)

Dr. Mernoy Harrison, Dr. Christine Wilkinson, and Mr. Dave Harris joined the meeting for this discussion. Regent McKay said the Board first approved this project in April 1999. Since then, the project has been significantly reconfigured and is coming back to the Board as a revised project initiation. The project as proposed includes: a project cost increase from $23.5M to $38.8M, an addition of 154,000 gross sq. ft. (GSF) of space in a new building adjoining the current Memorial Union, a 3,000 GSF addition to improve handicapped access, a 26,500 GSF underground loading dock, 65,000 sq. ft. of renovation for the Memorial Union, funding using certificates of participation and academic revenue bonds, and operation and maintenance costs of $476,000. Dr. Harrison explained why the university decided to make the changes to this project and described the proposed renovations.

President Ulrich asked about the money which was spent over the approved project budget and was told it was the result of demolition expenses, not design expenses. President Ulrich also asked what student services would be on the fourth floor of the building and was told student services that support first-generation college students and minorities. These services are currently located off campus in rented space.

Regent Palacios said she understood all the reasons for the increase in this project; but she hoped this large an increase would not be a usual occurrence. She hoped there would normally be better planning at the beginning stages. Mr. Harris said this was brought back as a revised Project Initiation because there was so much change from the original request it was felt this should be considered as a new project.

President Lovett left the meeting at 4:25 p.m. and Dr. John Haeger took her place at the table. Upon motion of Regent Gignac, seconded by Regent Palacios, the Board granted Revised Project Initiation, Project Budget Increase, approval of exceeding spending limits to produce the schematic design and permission to proceed with Phase I which is the relocation of programs in P.E. West Annex and the demolition of P.E. West Annex to Arizona State University for the Memorial Union Expansion.

Architecture Building Expansion: Project Initiation (UA)

Mr. Joel Valdez and Dean Richard Eribes joined the meeting for this discussion. Regent McKay said the UA was requesting an addition of 28,820 GSF at a cost of $7M to the UA Architecture Building. Funding is through system revenue bonds and donations. Operations and maintenance costs are $196,000. This addition allows for the consolidation of activities from a number of temporary locations. Mr. Valdez explained the project. Dean Eribes explained how the project will solve several programmatic needs.

Regent Gignac said she was concerned the capital projects were beginning to cause too much upward pressure on tuition. She would like the matrix concerning capital projects that was mentioned earlier to include where the universities are with debt service and its pressure on tuition. Upon motion of Regent Gignac, seconded by Regent Jewett, the Board granted Project Initiation approval to the UA to construct the Architecture Expansion.

PROGRAMS COMMITTEE (Continued)

Academic Program Planning and Implementation: B.S. in Engineering Management (UA), and Department of Indigenous Studies (NAU)

Provosts Davis and Haeger joined the meeting for this discussion. Dr. Haeger summarized the NAU request for a Department of Indigenous Studies and Dr. Davis summarized the UA request for a B.S. in Engineering Management.

President Ulrich asked the members of the Council of Presidents to consider ways to involve the business schools in the Proposition 301 proposals. There is a need to develop the business models to take the technology from inception to a commercial activity. Regent Gignac asked the UA to move forward with the Bachelor of Applied Science for UA South. Provost Davis and President Likins said it was moving through the process.

Upon motion of Regent Gignac, seconded by Regent McKay, the Board authorized the academic program planning request for the B.S. in Engineering Management as presented by the University of Arizona. The Board also approved the additional organizational change that establishes the new Department of Indigenous Studies at Northern Arizona University.

Resolution of Support for Articulated Master Planning

Regent Gignac said this was a followup to last year's Town Hall and the report of the Governor's Task Force on Higher Education. Both of these groups recommended the three state education boards, together with local district governing bodies, begin a collaborative planning process in order to speak with one voice to state government and to establish education as the number one priority for Arizona. The Arizona Education Conference Committee, consisting of representatives from these and other education boards, thought an appropriate first step would be to ask the three state boards to endorse this effort through a resolution of support. The Community College State Board passed a resolution last month. Regent Gignac said she had collaborated with President Ulrich on this resolution.

President Ulrich agreed he had collaborated on the resolution, but he did not believe the Board was in a position to begin this effort. He believes the Regents should know what issues are involved and should discuss these issues among themselves before joining a discussion with other boards. Regent Palacios asked if it could be put on an Agenda for a retreat or a study session so the Regents could better understand what issues are involved. Regent McKay agreed she would like to have more information before she started a process that she did not understand. However, she did not want people to think the Regents did not want collaboration as she believes there is already a great deal of collaboration among the community colleges, the Regents, and the State Board of Education. Regent Gignac reminded the Board of the emphasis placed on collaboration by the legislature, Town Hall, and the Governor's Task Force. Regent Jewett said he agreed there is already collaboration with the other two boards. He is comfortable with the collaborative processes currently underway and did not believe the resolution was necessary at this time.

The Regents discussed whether it would be helpful to have a discussion on this process before supporting a resolution of this type. Regent Gignac said this would be a way of formally stating the desire of the Regents for collaboration. Upon motion of Regent Ulrich, seconded by Regent McKay, the Board voted to table this item. Regent Gignac voted no.

REPORT FROM THE ARIZONA FACULTIES COUNCIL

Dr. Judith Sellers reported the Arizona Faculties Council (AFC) would like to move on with Learner Centered Education (LCE), but it is not cheap education and there is a need for more resources. The AFC urged the Board and the public to continue attempts to get more funding support from the legislature. The AFC is concerned about keeping the momentum going for LCE.

Dr. Sellers said the AFC is looking to make a transition from their own LCE Web site to the Regents Web site. Faculty are also involved in the discussions about the Arizona Regents University (ARU). The AFC has found the ARU management team to be open and interested in working with faculty and their issues. The AFC would like the issues concerning Proposition 301, LCE, and ARU to be integrated as much as possible so the wheel is not reinvented each time something new arises.

REPORT FROM THE BOARD'S REPRESENTATIVE TO THE STATE BOARD OF DIRECTORS FOR COMMUNITY COLLEGES (SBDCC)

Regent Gignac said the last meeting of the SBDCC had been by telephone as the Board was having budget problems and this was an attempt to cut expenses. Dr. Donald Puyear, who has been the Executive Director for many years, announced his retirement effective July 1. The major budget problems are for both the current year and the upcoming year. The major policy issues the SBDCC is considering are workforce development and teacher and healthcare shortages throughout the state.

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

Regent Echeverria introduced Myrina Robinson, one of the new Student Regents who will take office July 1.

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ARIZONA BOARD OF REGENTS

MINUTES OF A MEETING

April 11, 2001

TABLE OF CONTENTS

MINUTES OF A MEETING

ARIZONA BOARD OF REGENTS

April 11, 2001