April 2002 Minutes/Arizona Board of Regents

A meeting of the Arizona Board of Regents was held April 25 and 26, 2002, in the Havasupai Room of the University Union at Northern Arizona University at Flagstaff, Arizona. President Kay McKay called the meeting to order at 1:10 p.m.

PRESENT:

Regent Fred Boice
Regent Robert Bulla
Regent Chris Herstam
Governor Jane Dee Hull (Tuition setting by telephone only)
Regent Jack Jewett
Regent Kay McKay
Regent Matthew Meaker
Superintendent of Public Instruction Jaime Molera
Regent Myrina Robinson
Regent Christina Palacios
Regent Gary Stuart
Regent Donald Ulrich

Also present were: President John Haeger, Dr. Jeanette Baker, Dr. Susanna Maxwell, Dr. Sarah Bickell, Mr. Josh Allen, Mr. Kurt Davis, and Dr. M. J. McMahon, Northern Arizona University; President Lattie Coor, Dr. Milton Glick, Dr. Charles Backus, Mr. Paul Ward (Thursday only), Mr. Steve Miller, Dr. Christine Wilkinson, Dr. Elaine Maimon, Dr. Mernoy Harrison, and Dr. Gary Krahenbuhl, Arizona State University; President Peter Likins, Dr. George Davis, Mr. Joel Valdez, Mr. Greg Fahey, Dr. Saundra Taylor, Dr. Patti Ota, and Ms. Judith Leonard (Thursday only), University of Arizona; Executive Director Linda Blessing, Board Counsel Joel Sideman, Secretary to the Board Judy Garza, Dr. Thomas Wickenden, Mr. Matt Ortega, Dr. Art Ashton, Ms. Tonya Drake, Ms. Norma Salas, Ms. Louise Houseworth (Thursday only), Mr. Dave Harris, and Ms. Kathy Bedard, Central Office Staff; and Dr. Andrew Jackson, Arizona Faculties Council.

President McKay asked President Coor to lead the Pledge of Allegiance as this was his last meeting on the NAU campus as ASU President. Dr. Coor had served as Student Body President at NAU when he was a student earning his undergraduate degree.

President McKay announced that Item 2, Setting of 2002-2003 Tuition for the College of Medicine at the University of Arizona, had been withdrawn from the Agenda at the request of the University of Arizona to be considered at another date.

CALL TO THE AUDIENCE

Wanda Howell, University of Arizona faculty and parent, spoke on behalf of a higher tuition increase.

President McKay announced that a special hearing for people to express their opinions on tuition had been held; therefore, the Board would not hear more comments on tuition today.

Jered Mansell, Student Senator, said he did not have a chance to speak at the hearing and spoke in support of low tuition.

Ray Quintero, UA Student Body President, informed the Regents there had been an academic advising task force at the UA which has just completed its work and its report is available online. Problems were identified by both faculty and students. Recommendations, to be phased in over three years, were made and they include outcome measures. Mr. Quintero introduced Jered Mansell, the new UA Student Administrative Vice President, and Doug Hartz, the new Student Body President.

RESOURCES COMMITTEE

Setting of 2002-2003 Tuition and Financial Aid

Governor Hull joined the meeting by telephone for this discussion. Ms. Gale Tebeau, Ms. Louise Houseworth, Mr. Michael Johnson, Mr. Ray Quintero, and Ms. Devin Rankin also joined the meeting for this discussion.

President Haeger explained why he believed an increase of $145 per semester for resident students and $375 per semester for nonresidents was necessary. He believes the higher tuition allows for higher financial aid so access will not be affected. In the United States, low tuition was based on public funding of the universities. Across the country, public funding has begun to fall significantly. The only other major revenue source for the institutions is tuition. If revenues are not sufficient, quality will be affected. The requested tuition increase will cover roughly a to 3 of the expected budget cuts.

Dr. Haeger said economic development in the state is at risk when the education level of the population declines. Today, the level of education needs to be a college degree and post baccalaureate education. He believes Arizona stands at a critical point. Unless the financing of public higher education is readjusted, there will be a deterioration in the ability of Arizona citizens to compete and to obtain a first-rate education.

President Likins said he had integrated his financial aid and tuition proposals. He said Arizona undergraduate resident students who receive Pell grants would have a $100 tuition increase under his proposal. For the balance of the resident students, the tuition increase would be $300. Non-residents would pay an additional $1,000 except for the relatively small number who receive Pell grants who would pay an additional $800.

Dr. Likins provided an update on what other institutions are doing. He explained how a computer model can be used to make budget decisions. The cuts being made now are not one-time cuts; they are permanent cuts and will involve structural changes.

President Coor said he was recommending a $300 increase for residents and a $750 increase for non-residents. He said there must be an attempt to turn around the lack of funding. Not only does tuition need to play a larger role; but once the budget difficulties are resolved, the state needs to also play a larger role. He said the faculty/student ratio is moving in the wrong direction. He asked the Regents to adopt the tuition recommendations to help temper the consequences of the current financial situation. Dr. Coor agreed that needy students should be held harmless from large tuition raises. He explained that ASU plans to put $6M of the increased tuition funds into financial aid.

Following the Board's custom, the student body presidents were asked to voice their opinions. Mr. Johnson, NAU, explained why he believed the presidents' requests were too high and would cause problems for students. He suggested the Regents and students continue to lobby the legislature for better funding and to make the university budgets no longer discretionary funds. He recommend tuition not increase any more than the 4% cost of living.

Ms. Rankin, ASU West, said she could not support any tuition increase this year as students still had not received the things promised them with the tuition increase from last year. She expressed support for increased financial aid. Mr. Quintero, UA, said he did not believe the state budget should be balanced through tuition. He discussed quality and accessibility. He asked the Regents not to raise tuition.

Student Regent Robinson said she believed all the proposals were simply band-aids that would not solve the problem. She believes the deeper issue of why there is such difficulty with the budget every year should be addressed. She believes a 0% increase is not realistic and a 12% increase is too high. Therefore, she moved the Board set resident tuition for all three universities for 2002-2003 at $2,508, a $96 or 4% increase over 2001-2002. The motion was seconded by Regent Jewett.

Regent Jewett commended the presidents and the students for setting a passionate, but professional, tone for the tuition debate. He said the presidents are being asked to do more for many more with less. He regards his approach to the problem as dealing with a public policy issue. He agreed with President Haeger there must be a readjustment to higher education finance in Arizona as Arizona is a state where there is a growing disparity between the top incomes and the lower incomes and middle incomes. In light of this, he believes financial aid is very important and there is not sufficient financial aid at the Arizona universities.

Regent Jewett said he believes now is the time to begin to integrate the relationship among tuition, financial aid, and appropriations from the Arizona legislature. Only when policy makers at all levels can be engaged in these issues does he believe the needs of students and faculty in aligning the missions of the institutions with the resources available can be accomplished. He supports a 4% resident tuition increase at the current time, but hopes to aggressively pursue the public policy issues underlying the issue next year.

Regent Bulla said, as a business person, he had been taught to look not only at the numbers for the current year of operation, but the strategic impact of the current situation. He said he believed the data shows a university system about to crack, as during the last ten years, the most promising economic years of Arizona history, the universities have lost financial ground in building renewal, financial aid, and in faculty. He is concerned the revenue streams will not be there to replace retiring faculty and the capital stream will not be there for building upkeep.

Regent Bulla said he is also concerned about financial aid. He recommended an increase in the financial aid set-aside of 25% to deal with the current economic situations and for scholarship students. He suggested a $500 resident tuition increase.

Regent Stuart said he comes from the same policy perspective as Regent Jewett. As a member of the Community College Board, he said he participated last week in setting tuition for the state community colleges. The tuition increase ranged from a low of 6% to a high of 29% and there was no opposition from students because they believe they are investing in their future.

Regent Stuart also said he had done a lot of research and he did not believe the "nearly free as possible provision" in the Arizona Constitution would prevent the Board from raising tuition a considerable amount. He believes access will not suffer if the presidents' recommendations are followed. He believes the state will suffer a revenue shortage next year and the universities will lose more general fund money. Therefore, he believes tuition should be raised a larger amount than usual.

Regent Molera said tuition increases averaged about 9.3% per year when he was a student at ASU. However, given current economic times, he does not believe a 12% increase is appropriate. The students who are working their way through school, like he did, might not be able to stay in school. While he would like to see a 0% increase, he can live with a 4% increase because he knows the universities need the money.

Regent Molera said he believed the "nearly free as possible" phrase is something to be embraced. He believes it is a strength for the state to provide education at a reasonable cost to residents. He agrees there is a need to find ways to add resources to higher education; but he does not believe the additional funding should be placed on the backs of students.

Regent Boice said he agreed there is no constitutional impediment to raising tuition and he agreed having tuition as free as possible is good as long as it can be afforded. He does not believe there will be any additional money from the legislature this year or next. He is a businessman and knows there must be money to maintain the quality of the educational institutions. Since it is not going to come from the legislature, he believes the students must pay more money or quality will suffer. He does agree with increasing financial aid to keep access available. He believes 4% is not enough. This is what has been done in the past and the trend line continues to go down.

Regent Palacios said she believes the cuts the legislature has made have cut to the muscle. She agrees with Regent Bulla; not addressing the financial needs of the universities will begin a downward spiral that will be difficult or impossible to stop. She also believes it is counter-productive to try to second guess the legislature. The
Regents need to do what they believe is right. She also worries about student debt and insufficient financial aid; she was a single Mother putting herself through college. She would like to continue to work on financial aid; but she supports the presidents' proposals.

Regent Herstam reminded the Regents the motion on the table was for the Board to set resident tuition for the three universities for 2002-2003 at $2,508, a $96 or 4% increase over 2001-2002. The motion passed by roll call vote with Regents Herstam, Jewett, Robinson, Ulrich, Molera, and Governor Hull voting yes. Regents Boice, Bulla, Palacios, Stuart, and President McKay voted no.

Governor Hull said she does not think the budget process has ever been fair to the universities and she does not see things getting much better. She does not believe students be asked to compensate for shortfalls in the general fund. She urged the Regents to look at where the university system could go financially on a long-term basis before next year's tuition setting as she is not optimistic about next year's state budget. There are several new initiatives on the ballot to put more of the budget under restrictions that remove legislative discretion and this will leave the universities even more vulnerable. Regent Ulrich said he would like to see the students work with the Regents to see what can be done to solve this problem.

Regent Herstam moved the Board set the student surcharge for the Arizona Financial Aid Trust Fund at the maximum dollar amount permitted under law (1% of resident tuition), or $25. The motion was seconded by Regent Boice and passed by unanimous roll call vote. Governor Hull left the meeting at this time.

Regent Herstam moved the Board set non-resident tuition for all three universities for 2002-2003 at $11,028, a $750 or 7.3% increase. The motion was seconded by Regent Stuart and passed by unanimous roll call vote.

Setting of 2002-2003 Tuition for the College of Medicine (UA)

President Likins explained there will be a hearing on the 3rd of May concerning the tuition for the College of Medicine to comply with state statute regarding notice and publication. Sometime after that hearing, the Board will be asked to have a special meeting to set the tuition.

Special Class Fees for Academic Year 2002-2003, Special Program Fees for Academic Year 2003-Academic Year 2005, and Special Program Fee Ranges for Academic Year 2004-Academic Year 2006

Regent Boice moved to approve the fees and ranges as proposed. Regent Bulla seconded the motion. Regent Meaker brought up the possibility of grandfathering in law students once notice of their tuition had been given. A discussion determined there was a misunderstanding of when the ranges would be used to raise law school fees. When it was explained law school students would not be given a number in the spring and arrive in August to find their fees raised, it was decided the original motion was all that was needed.

Setting of 2002-2003 Rates for Residence Halls (ASU, NAU, UA), Leased Apartments (UA), and Family Housing apartments (NAU)

Regent Herstam moved the Board approve the 2002-2003 residence hall, leased apartments, and family housing apartment rates requested by the three universities. The motion was seconded by Regent Bulla. The motion passed by roll call vote with all Regents voting yes.

Campus Recreation Student Referendum

Dr. Saundra Taylor and Mr. Ray Quintero joined the meeting for this discussion. Regent Herstam said the Board approved a request form the University of Arizona, in conjunction with the Associated Students of the University of Arizona at its February 1, 2002, meeting to implement a student referendum to support recreational programs, campus recreation student staff salary increases, sport clubs, and facility needs of the Department of Campus Recreation.

This student-initiated and managed referendum was held on March 6-7, 2002, with 67 percent of participating students voting to approved collection of a $3 per semester refundable student activity fee. The University of Arizona and ASUA are requesting permission from the Board to begin collecting this fee in Fall 2002.

Mr. Quintero said ASUA had an opportunity, through this fee, to educate students on the services the recreation center provides. The fee is supported by students and the recreation department.

Regent Herstam moved the Board approved the request of the University of Arizona, in conjunction with the Associated Students of the University of Arizona, to begin collecting a $3 per semester refundable student activity fee designated to support recreational programming as approved at the March 6-7, 2002, student referendum. The motion was seconded by Regent Robinson. The motion passed by roll call vote with all Regents voting yes.

REPORT FROM THE PRESIDENT OF NORTHERN ARIZONA UNIVERSITY

President Haeger introduced Dr. Paul Keim, E. Raymond/RR Cowden Professor of Biological Sciences, who explained how genomics research had been applied to real life situations and the work being done with anthrax at NAU.

President Haeger introduced Ms. Karen English, Associate Director for the Center for Sustainable Environments, Professor William Auberle, Civil and Environmental Engineering and Technology, and Dr. Carl Fox, Vice Provost for Research and Graduate Education, who described a gift received from the Babbitt family. NAU received a 30-acre parcel of land from the Coconino Plateau National Reserve Land, a partnership in the Environmental Monitoring and Assessment Foundation, and research rights on the entire Babbitt holdings, which is approximately 750,000 acres.

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 Boice, seconded by Regent Stuart. There was no individual discussion of these items.

*Minutes

The Board approved the January 31, 2002, Executive Session, March 21 and 22, 2002, Regular Meeting, and the March 29, 2002, Special Meeting minutes.

Resources Committee Consent

*Extension and Modification of Track and Field Head Coach and Cross Country Head Coach Multiple-Year Employment Contract (ASU)

The Board authorized ASU to extend its multiple-year employment contract with Gregory A. Kraft according to the terms and conditions summarized below. The period of the appointment will be extended through June 30, 2007, and his salary will be increased to $100,000 per year, consisting of $98,000 of base salary and $2,000 of additional salary for basic duties relating specifically to coaching men's and women's track and field and men's and women's cross country, and for additional duties consisting of participation in media programs, development activities, public relations activities, and endorsement and other promotion activities.

The salary increase provision will be modified to eliminate the existing automatic annual minimum increase. Thus, Coach Kraft's salary will be increased on July 1, 2003, and on each July 1 thereafter in percentage increments depending on achievement of certain performance criteria milestones. If no milestones are achieved, the Director of Intercollegiate Athletics may give Coach Kraft a percentage increase up to but not exceeding the increase of service professional employees during the year.

The criteria to receive supplemental compensation for academic performance will be modified by raising the grade point average requirements for men and women and the graduation rate requirements for women as specified.

The schedule for payments by Coach Kraft if he terminates the contract for another NCAA Division I intercollegiate coaching position or for a professional coaching position will be as specified. All other terms of Coach Kraft's existing contract will remain the same.

*Approval to Name the New Mediated Classroom Building the Lattie F. Coor Mediated Classroom Building (ASU)

Under the leadership of President Coor, ASU has become a major research institution with multiple campuses serving the vast needs of the greater Phoenix metropolitan community. Under his leadership, the university has not only grown in size, but also in quality and diversity. In 2001, ASU became one of only two public universities in the nation to be represented in five top scholarships awards: the Rhodes, Truman, Marshal, Goldwater, and Udall. ASU's number of National Merit Scholars has escalated in the last few years and the university's minority enrollment has more than doubled.

The Board authorized ASU to name the new Mediated Classroom Building the Lattie F. Coor Mediated Classroom Building at Arizona State University Main Campus.

*Price Elliott Research Park: Amendment to the By-Laws (ASU)

Board approval of amendments to the by-laws for the Price-Elliott Research Park, Inc., were sought to comply with changes in the Arizona Nonprofit Corporation Act which became effective January 1, 1999, and to reflect current operating procedures and board representation.

The required modifications include clearer definition of committee appointments and committee membership. Recommended modifications include clarification of the following: conditions for a quorum, definition of members (at-large versus University), notice provisions, terms of service, and qualifications of officers. In addition, recommended changes include providing authorization for the creation of an executive committee and changes to indemnification provisions to comply with statute and mirror the Articles of Incorporation. The board of directors of Price-Elliott Research Park, Inc., has approved the amendments.

Article V of the Ground Lease between ASU and Price-Elliott Research Park, Inc., requires the prior written consent of Lessor to any amendments to the Research Park's by-laws. Although not required by ABOR policy or the Non-Profit Corporation Act, ASU has historically sought the approval of ABOR for such amendments. In accordance with this past practice, ASU hereby requests approval of these amendments to the by-laws. In the future, ASU recommends providing prior notice of any amendments to the by-laws to Board counsel.

The Board approved the amendments to the by laws of the Price-Elliott Research Park, Inc., as described. The Board further authorized ASU to give notice of any future amendments to the by-laws of the Price-Elliott Research Park, Inc., to Board Counsel prior to any consent given pursuant to Article V of the Ground Lease.

*Price-Elliott Research Park: Amendment of Ground Lease (ASU)

The current ground lease commenced in 1984 and expires on October 31, 2083. At the present time, approximately 81 years remain of the current term of the ground lease. When the Price-Elliott Research Park subleases property at the research Park to tenants, the term of the sublease is limited to the then current term of the ground lease. This limitation may decrease the value of current and future subleases.

The Board granted authority to ASU (the "Lessor") to enter into an amendment of the Ground lease with Price-Elliott Research Park to extend the current remaining term of the ground lease to 99 years, with a new natural termination date of December 31, 2101, and authorized the president of ASU or its designee to execute and deliver any other documents in connection with, in furtherance of, or arising out of this amendment, subject to review by university counsel.

*Proposed Revisions to Board Policies 7-101 and 7-106, "Use of Capital Debt for Project Financing" (Second Reading) (Continued)

In response to an inquiry from the Joint Committee on Capital Review, the Board, at its September 2001 meeting, directed the Central Office and the universities to bring back recommended revisions to Board Policy regarding the use of capital debt mechanisms for Board consideration. These policy changes formalize and standardize the review process to determine the method of financing to be used for individual capital projects. The proposed revisions were presented to the Board as an information item at the January 2002 meeting and were brought back for first reading at the March 2002 Board meeting.

*Approval of the Third Restatement of the Optional Retirement Plan

The ABOR Optional Retirement Plan (ORP) is being amended and restated to comply with numerous laws that have been enacted since 1994 (collectively referred to as "GUST"). Also, to coordinate eligibility provisions with the Arizona State Retirement System, the eligibility requirement for an employee to participate in the ORP will be employment of 20 hours per week and 20 weeks per year. Under rules recently announced by the Internal Revenue Service, ABOR must adopt a "good faith" amendment to comply with the EGTRRA by June 30, 2002.

In order to maintain the qualification of the ORP under 401 (a) of the Code, all of the foregoing amendments to the ORP must be adopted and the ORP must be filed with the IRS by June 30, 2002.

The Board approved the Amendments to the Arizona Board of Regents Optional Retirement Plan, effective July 1, 1997, and authorized the Executive Director to execute the Third Amendment and Restatement of the Optional Retirement Plan and the "good faith" EGTRRA Amendment.

*Correction of Prior Communications Regarding the Project Description of the University of Arizona North (UA)

The Board accepted a correction to its previous communications from the University of Arizona regarding the UA North building to be located at the Northwest Campus of Pima Community College. This correction includes the addition of a third floor, consisting of approximately 12,500 square feet of unfinished "shell space," to the two-story, 22,000 gross square foot building that was previously communicated to the Board. This correction is contingent upon such space being included within the $5.4M authorized total cost of the project.

*Request to Enter into Various Contracts (UA)

The Board authorized the University of Arizona to enter into a contract with the National Aeronautics and Space Administration to support the Project Near Infrared Camera for Next Generation Space Telescope Probing Origins in the amount of $15,509,174 for the first year of the project with a total anticipated funding amount of $48,836,298 for the life of the project. The contract period is August 1, 2002, through June 30, 2014.

The Board authorized the University of Arizona to enter into a contract with the Jet Propulsion Laboratory to support the Gamma Ray Spectrometer Mission Operations 2001 Mars Odyssey Project in the amount of $6,724,292 for the first year of the project with a total anticipated funding amount of $10,834,272 for the life of the project. The contract period is May 26, 2001, through September 28, 2003.

The Board authorized the University of Arizona to enter into a contract with Lockheed Martin to support the Lockheed Martin Space Systems Company, Missiles and Space Operations Lotis 63.5 Meter Collimator Project in the amount of $5,000,000 for the first year of the project with a total anticipated funding amount of $28,497,110 for the life of the project. The contract period is September 14, 2001, through April 6, 2006.

The Board authorized the University of Arizona to enter into a contract with the Arizona Department of Health Services to support the Arizona Poison Control Center 2001-2002 Fiscal Year Project in the amount of $1,050,000 for the life of the project. The contract period is July 1, 2001, through June 30, 2002.

Request to Receive Various Grants (UA)

The Board authorized the University of Arizona to receive a grant from the National Institutes of Health to support the Natural History of Human Papillomaviruses (HPV) Infection in Men: The HIM Project in the amount of $1,201,129 for the first year of the project with a total anticipated funding amount of $9,935,587 for the life of the project. The grant period is January 1, 2003, through December 31, 2007.

The Board authorized the University of Arizona to receive a grant from the Leakey Foundation to support the Ontogeny of Positional Behavior in Three Primates in Costa Rica Project in the amount of $9,810,000 for the life of the project. The grant period is April 25, 2002, through April 24, 2003.

The Board authorized the University of Arizona to receive a grant from the Air Force Office of Scientific Research to support the Exploiting Adaptive Optics with Deformable Secondary Mirrors Project in the amount of $3,255,000 for the life of the project. The grant period is May 15, 2001, through November 14, 2002.

The Board authorized the University of Arizona to receive a grant from the National Institute of Neurological Disorders and Stroke to support the Neural Development: Intercellular and Humoral Control Project in the amount of $1,135,596 for the first year of the project with a total anticipated funding amount of $6,273,151 for the life of the project. The grant period is July 15, 2001, through June 30, 2006.

Programs Committee Consent

*Annual Spring Enrollment Report

The Board received a written summary of spring semester enrollment. ASU Main had a total headcount of 42,923, ASU West of 5,877, ASU East of 2,520, NAU of 18,803, UA of 33,571 (including UA South students). ASU Main had a total FTE of 38,610, ASU West of 4,396, ASU East of 1,577, NAU of 16,224, UA of 30,501 (including UA South). From Spring 2001 to Spring 2002 total Headcount and FTE increased at all institutions. Undergraduates increased at each of the ASU campuses and at UA and graduate headcount and FTE increased at all institutions.

*Proposed Revisions to Board Policies 4-203, 4-300, 4-301, 4-302, and 4-307, and Repeal of Board Policies 4-310, 4-313, and 4-314, "Student Financial Aid" (Second Reading)

The Board approved the revisions of Board Policies 4-203, 4-300, 4-301, 4-302, and 4-307 and the repeal of Board Policies 4-310, 4-313, and 4-314, "Student Financial Aid" as proposed. These revisions were necessary to provide more management flexibility for the universities and more effective oversight for the Board of the major institutional gift aid programs, including both waivers and cash grants.

The modifications include five sets of changes: 1) Establishing in 4-300, Preamble, new guidelines for awarding resident undergraduate institutional gift aid, including both waivers and cash, to needy and meritorious students; 2) Adding to 4-300, Preamble, a new requirement for budget plans and reports describing the total value of institutional gift aid, total and net tuition revenues, and the distribution of these resources to students by academic level, residency, need and merit; 3) Merging 4-301, Resident Waivers, and 4-302, Non-Resident Waivers, into one policy on tuition waivers, eliminating the current guidelines for awarding resident undergraduate waivers to needy and meritorious students, and eliminating the formulas that determine the number of these two types of waivers that may be awarded; 4) Deletion of 4-307, Graduate Assistants and Associates, and instead of non-resident waivers, redefining the tuition obligations of graduate assistant and associates as resident students in 4-203, Requirements for Resident Status; and 5) Repeal of 4-310, 4-313, and 4-314, prescribing responsibilities that were transferred to the Arizona Commission on Postsecondary Education.

Additional changes further enhance flexibility in the management of financial aid by allowing the universities to award partial tuition waivers as well as full waivers, as long as the sum of all the waivers does not exceed the total value approved by the Board.

*Proposed Revision to Board Policy 4-104, "Procedure for Setting and Distribution of Tuition and Fees" (Second Reading)

The Board approved the proposed revision to Board Policy 4-104, "Procedure for Setting and Distribution of Tuition and Fees," that will add to current policy a process for approving program fee ranges. This new process will provide more flexibility in setting market-based fees for selected graduate professional programs.

Administrative Business Consent

*Authorization for Regents' Medal and Designation of Emeritus Status

Dr. Lattie F. Coor will be retiring from his position as President of Arizona State University on June 30, 2002. ASU is a major research institution with multiple campuses serving the needs of the greater Phoenix metropolitan community. During Dr. Coor's term as president, he enhanced ASU's status as a major research institution, nationally recognized in many fields, as he guided the university through a major enrollment growth. Under President Coor's leadership, ASU has undertaken a successful Campaign for Leadership, which raised more than $560M in support of great teachers, great students, and great communities.

In recognition of his years of service, dedication, and achievement, the Arizona Board of Regents honored Lattie F. Coor by designating him "President Emeritus," effective July 1, 2002. The Board also authorized the Regents' Medal to be awarded to President Coor at commencement on May 9, 2002.

The meeting recessed at 4:40 p.m. and reconvened on Friday, April 26, 2002, at 9:07 a.m.

REPORT FROM THE COMMISSION ON THE STATUS OF WOMEN

President McKay welcomed Ms. Helaine McLain of NAU, Ms. Karen Moses of ASU, and Dr. Diane Perreira of UA, the three university Commission on the Status of Women (CSW) chairs, and Ms. Kathy Bedard, Central Office. Ms. Moses said three areas of concern were expressed in the original CSW report--Equity, Career Development, and Campus Climate. In 1991 a permanent, independent CSW was established at each university. The purpose of the commissions was to monitor progress toward the goals, to generate strategies to implement those goals, and to study and make recommendations on new issues that affect women. Since 1991, the university commissions have kept the Board informed on progress through regular reports. The ten-year report marked significant progress towards the original recommendations; yet the work must be continued to fully achieve equity, maximize career development, and enhance the climate for women at the universities.

Ms. Moses said current statewide concerns identified include addressing institutional cultures and campus civility, dependent care that includes both child and elder care, disciplinary disparities in faculty salaries, the clustering of women in lower pay grades, and the impact of the rising health care costs on women, especially those in lower salary areas.

Ms. Moses outlined highlights and priorities for the future at ASU. Policies and structures that have addressed many of the goals in the Vision, including inclusion of
trained, equal opportunity/affirmative action representatives on all search committees, a sixteen-hour relief-time policy for the professional development of classified staff, and a work-life task force appointed by the president that is resulting now in a family-friendlier work place have been instituted. ASU has established and maintains data bases to monitor gender distribution and compensation equity. Discussions have been initiated with individuals and campus organizations representing women that reveal there is a need for a plan to guide the progress of CSW into the future.

Ms. Moses reported ASU CSW embarked on a strategic planning event last week. It is led by a consultant and approximately 200 ASU women participated in small group interviews about their experience on ASU's campus. The results were taken to a strategic planning retreat involving the women's organizations on campus and individuals concerned with women's issues. Six priority areas were identified for continuing work: Climate and Culture, Accountability, Professional Development, Compensation and Resources, Visibility and Voice for Women, and Safety. Over the summer, a long-term strategic plan will be created to address these issues. Immediate action will be taken on enhancing campus safety programs, enhancing leadership training, enhancing support structures, and strengthening connections among women's organizations.

Ms. McLain told the Regents the NAU CSW had restructured itself so the past chair would be a mentor or advisory chair to the current chair. The CSW Executive Committee will be comprised of the two co-chairs as well as the subcommittee chairs and the liaisons from other groups. The number of subcommittees and their charges fluctuate according to the current needs.

Ms. McLain updated the Board on the accomplishments of the subcommittees and outlined the future priorities. NAU has decided to generate a report for the campus that would be similar to the UA Millennium Report. CSW's Diversity and Equity and Compensation Subcommittees will join with the Commission on Ethnic Diversity, Indigenous Studies, Faculty Development, and Planning and Institutional Research to begin surveying women faculty and faculty of color as soon as funding can be secured.

Due to budgetary constraints at this time, Ms. McLain reported the Work Life Issues Subcommittee, along with NAU's administration, will seek possible partnerships and other alternatives to provide child care options for the campus community. This subcommittee has also presented NAU legal counsel with an initial draft of flexible schedules and telecommuting policies. Having successfully created an elder care directory accessible to everyone at NAU, the Elder Care Subcommittee will celebrate its retirement in May.

Procuring external funding in Flagstaff can be a challenging task, but the Elder Care Subcommittee was successful in doing so. This inspired CSW to create the new Grant Support Fund Raising and Marketing Initiative Subcommittee. This Subcommittee is only a few pledges away from establishing a CSW Foundation account. On April 30 the Harassment and Assault Prevention Subcommittee will submit a grant proposal for funding a full-time harassment and assault counseling position at NAU's Fronske Health Center.

Dr. Perreira said the UA CSW was looking at their strategic plan to determine the direction they would take in the future. They are changing from a traditional four-committee structure and will now act only with an executive committee and a series of task forces which exist only as needed. Current concerns are equity, diversity, harassment, promoting professional and leadership development, and work force climate.

Dr. Perreira said she was pleased to be one of the co-chairs of the Millennium Two Project. This project will investigate the work-place climate for classified staff and appointed personnel. Surveys have been mailed to classified and non-faculty, non-tenure-related appointed personnel. Issues raised in the early discussion groups are an ongoing and constructive appraisal system throughout the campus, the development of opportunities for professional growth that lead to promotion, advancement, or change in career path, and the freedom to participate actively in the growth of the institution without fear of danger of reprisal.

Dr. Perreira asked the Board to reaffirm its support for the Commission on the Status of Women as much has been accomplished since the Board first created the group. She also asked the Board to create a performance assessment task force in 2005 and continue to monitor progress.

Regent Palacios said she liked the idea of the strategic planning as she believes that will be key to continued success. She asked who should be appointed to the suggested performance assessment task force and was told historical representatives, former commissioners, people outside the realm of the commission, and current commissioners.

Upon motion of Regent Bulla, seconded by Regent Boice, the Board reaffirmed its commitment to the work of the Commission on the Status of Women and agreed to
create, in 2005, a performance assessment task force, and to continue to monitor progress every five years as outlined in Reaching the Vision (ABOR 1991) and affirmed in the Ten-Year Report (ABOR minutes, September 2000).

PUBLIC AWARENESS COMMITTEE

Update on Legislative Session

Mr. Matthew Ortega joined the meeting for this discussion. He reported the new Student Regent, Danelle Peterson, had received a favorable recommendation from the Senate Education Committee and was expected to be confirmed by the Senate in the next couple of weeks. Mr. Ortega reported on the status of several bills. He highlighted SB 1257 Universities Bonding Authority, which is out of committee and is moving to the House floor and HB 2466 and SB 1154, Caregiver and Resource Expansion, which are not moving at this point.

Regent Jewett reported he was co-chair of the Governor's Task Force on Nursing along with Debbie Wells. The first two meetings have included presentations from the National Advisory Board, a think tank that helped to frame the issue nationally. Dr. Fran Roberts, Vice President for Professional Services at the Arizona Hospital and Healthcare Association, made the same presentation to the group that she made at the joint meeting of ABOR and SBDCC in Tucson. The Deans of the Colleges of Nursing are members of the Task Force and they made presentations at the second meeting, along with presentations from the community colleges and the University of Phoenix. Dr. Gerald Swanson, Associate Professor of Economics at the UA, gave a reality check on the problem. He helped focus the Task Force on what is within its control, presented a market based analysis of the problem and where the solutions may lie. The Task Force will hear from staff nurse members at its next meeting. The Task Force report is due at the end of the year.

Mr. Ortega said SB 1270, Medical Research, is one component of the funding for the ABBI project. HB 2414 is a legislative attempt at cost savings by limiting the number of hard copies of reports that can be distributed. Mr. Ortega described the proposed budget numbers.

RESOURCES COMMITTEE (Continued)

Spring Update of the FY 2002 All Funds Budget

Mr. Josh Allen, Mr. Allan Carroll, Ms. Kathy Bedard, and Mr. Dick Roberts joined the meeting for this discussion. Regent Herstam said the Board was requested to review and approve the Spring Update to the FY 2002 All funds Operating Budget. Since the mailing of the board materials, the JLBC staff revised the allocation for the June 8, 2002, salary adjustment. The final appropriation numbers for ASU East, ASU West, and the UA increased slightly, for a net increase of $8,800. These changes will be reflected in the All Funds Budget materials submitted to the Board for the June meeting.

Regent Ulrich said one of the stipulations placed on 301 money in the Board Retreat was no money would be forthcoming on any initiative until there was a business plan for that initiative. He moved that business plans for all initiatives supported through the Regents' Technology and Research Initiative Fund (TRIF) will be presented for review by July 30 of this year so they can be reviewed before the August 16 meeting. At the August 16 meeting they would be approved, reaffirmed, or revised. The motion was seconded by Regent Boice.

President Likins cautioned that business plans for private sector initiatives focus on anticipated returns on investment. However, Proposition 301 is a different situation. There is a desire to get a long-term societal return on investment, but these projects will not create a certain dollar return on investment. Regent Ulrich said he would lay out his suggestion as a starting point, furnish it to Dr. Blessing and ask her to get it to Regents so they can make additions or subtractions.

The motion for business plans for initiatives supported through TRIF passed by unanimous voice vote. Upon motion of Regent Herstam, seconded by Regent Boice, the Board approved the Spring Update of the FY 2002 All Funds Operating Budget.

Gittings Renovations and Improvements: Revised Project Approval and Budget Increase (UA)

Mr. Dave Harris, Mr. Joel Valdez, and Mr. Jory Hancock joined the meeting for this discussion. Regent Herstam said the University of Arizona was requesting Revised Project Approval with a Budget Increase of $1.5M to provide renovations and improvements to the Ina E. Gittings Building. The proposed improvements will be funded from a $650,000 grant from the Kresge Foundation and $850,000 in gifts.

Mr. Valdez said the demise of building renewal caused the university to look for funds in other places. That is why this project will be done with a grant and gifts. Upon motion of Regent Herstam, seconded by Regent Bulla, the Board granted Revised Project Approval with a $1.5M Budget Increase to provide renovations and improvements to the Ina E. Gittings Building.

Sixth Street Parking and Office Building: Revised Project Approval and Budget Increase (UA)

Dr. Gene Sander, Mr. Joel Valdez, and Mr. Dave Harris joined the meeting for this discussion. Regent Herstam said the University of Arizona was requesting Revised Project Approval with a $500,000 Budget Increase for the Sixth Street Parking and Office Building. This project received Project Approval from the Board in June 2001, and Revised Project Approval in February 2002. Under this third Revised Project Approval, the university is requesting a Budget Increase of $500,000 in order to modify the base structure to accommodate a future sixth floor that will house greenhouses to be relocated from the Chemistry Building. The proposed improvements will be funded from the Agriculture Endowment.

Mr. Valdez said this change to the project and budget increase is due to impending federal rules. Dean Sander said it was necessary to have a greenhouse in close proximity to laboratories to conduct plant genomic research. To accomplish this in the space available, it became necessary to place the project on top of the parking garage. This placement will also help maintain the security necessary to prevent bioterrorism.

Upon motion of Regent Herstam, seconded by Regent Bulla, the Board granted Revised Project Approval with a $500,000 Budget Increase to the University of Arizona for the Sixth Street Parking and Office Building.

Authority to Form the Southern Arizona Capital Facilities Finance Corporation and Issue the Corporation's Student Housing Revenue Bonds for a Graduate Housing Project and Approve the Form of the Ground Lease (UA)

Mr. Joel Valdez and Mr. Dave Harris joined the meeting for this discussion. Regent Herstam said the University of Arizona was requesting authority to form the Southern Arizona Capital Facilities Finance Corporation; authority to issue the Corporation=s Student Housing Revenue Bonds for a Graduate Housing Project; and approval of the form of the ground lease with the Corporation.

Mr. Valdez said this is a unique opportunity for the university to help create a private, non-profit corporation which can float tax-exempt bonds to build housing at no risk or expense to the university. Ambling West, LLC, was the winning developer. Upon motion of Regent Boice, seconded by Regent Ulrich, the Board approved the formation of the Southern Arizona Capital Facilities Finance Corporation, the issuance of not exceeding $24M principal amount of the corporation's student housing revenue bonds for the purpose of financing the Graduate Housing Project, and the ground lease and other related matters, actions, and documents, all as provided in a resolution approved by Board Counsel.

Regent Bulla said he would like to see an inventory of all "off-balance sheet" liabilities. Mr. Harris said the Board would receive that inventory, systemwide, before the next Board meeting. Regent Ulrich asked for debt limits to be incorporated in the report.

Building Renovations - Multiple Facilities Approvals: Memorial Union (Project Implementation Approval), Building 1 (Project Approval), and Building 425 (Project Approval) (ASU East)

Mr. Terry Isaacson, Dr. Chuck Backus, and Mr. Dave Harris joined the meeting for this discussion. Regent Herstam said ASU East requested Revised Project Implementation Approval for the construction of a new $5M Student Union Building; Project Approval with a Budget Increase of $833,564 for the renovation of Building 1; and Project Approval with a Budget Increase of $500,703 for the renovation of Building 425. The three projects were approved by the Board in June 2001 as part of the Building Renovations master project in ASU East's Capital Development Plan.

Mr. Isaacson described the projects and said they were consistent with the Williams Campus Master Plan. Upon motion of Regent Herstam, seconded by Regent Boice, the Board granted ASU East Revised Project Implementation Approval for the new Student Union Building; Project Approval with a $833,564 Budget Increase for the Renovation of Building 1; and Project Approval with a Budget Increase of $500,703 for the renovation of Building 425.

Regent Boice said he would like more data, such as projections of numbers of students by year. President Coor said ASU East does not currently receive enrollment growth funding and that should be corrected in the near future.

Energy Services Agreement with APS Energy Services Company, Inc. (ASU)

President McKay chaired this item as Regent Herstam declared a conflict of interest. Regent Palacios also declared a conflict of interest and also did not participate in the discussion or voting. Dr. Mernoy Harrison and Mr. Dave Harris joined the meeting for this discussion.

President McKay said Arizona State University was requesting authority to enter into an Energy Services Agreement with APS Energy Services Company for the provision of $35M in energy conservation projects, equipment, and technological improvements over a two-year period. APS Energy Services Company was selected through a competitive RFP process. The proposed improvements will be financed thorough the non-profit Arizona Capital Facilities Finance Corporation, with debt service being provided from utility savings.

Dr. Harrison explained why ASU had decided to try this kind of agreement and the savings it expects to realize. He explained APS is the regulated utility that will continue to provide the electricity and APS Energy Services Company will provide a full range of energy services which are construction and management of energy conservation measures. The energy savings will pay for the anticipated projects. ASU is financing the operation using a 63/20 corporation, the same approach used with ASU's privatized housing project. Dr. Harrison explained how the corporation would work, the financing associated with this agreement, and the guarantees associated with the agreement.

Upon motion of Regent Ulrich, seconded by Regent Boice, the Board authorized Arizona State University to enter into an Energy Services Agreement with APS Energy Services Company. Regent Boice asked for a periodic report to let the Board know how the project is proceeding through the years.

Men's Basketball Head Coach Extension of Existing Multiple-Year Employment Contract (ASU)

Regent Herstam said ASU was requesting approval for a two-year extension through April 15, 2007, of its existing multiple-year employment contract with Men's Basketball Head Coach Robert O. Evans. All other terms of Coach Evans' existing contract will remain the same.

Upon motion of Regent Herstam, seconded by Regent Bulla, the Board authorized ASU to enter into a modification of the existing multiple-year employment contract with Robert O. Evans to extend his contract through April 15, 2007. The other terms of Coach Evans' existing contract will remain the same.

PROGRAMS COMMITTEE

Authorization to Plan for One New Academic Degree Program: Master of Science in Applied Psychology (ASU East)

Dr. Chuck Backus joined the meeting for this discussion. He said ASU East was requesting planning authority for a Masters in Applied Psychology as they currently are offering a Bachelor's in Applied Psychology, the only one in the State of Arizona. He had letters of support from the heads of the Psychology Departments at ASU and UA saying the program is not a duplication and will fulfill a need in the state. This program is focused on human factors in industrial organizational sites.

Upon motion of Regent Bulla, seconded by Regent Boice, the Board approved the request by ASU East for planning authority for a Master of Science in Applied Psychology.

Annual Undergraduate Consolidated Accountability Report (UCAR)

Dr. Tom Wickenden, Dr. Milt Glick, Dr. George Davis, and Dr. Susanna Maxwell joined the meeting for this discussion. Regent Stuart highlighted several issues displayed in the report showing progress in advising and teaching by tenure-track professors. He said there are two new common measures, one dealing with academic advising and one dealing with goals and goal years.

Dr. Wickenden presented a history of the Undergraduate Consolidated Accountability Report (UCAR) and its evolution. He said this year's report had been reorganized into new categories, containing some new measures of learning, new system measures, new definitions, and new narratives which include discussion of measures that are not on track toward their Board approved goals.

Dr. Wickenden said last year measures were added in the areas of student satisfaction with advising, student satisfaction with the education they receive in terms of their ability to write clearly and effectively, to analyze quantitative problems, to think critically and analytically, and to use computer and information technology. Two measures have been added to make certain programs become more learner-centered over time. In the future, faculty-based and employee-based measures will be added.

Dr. Wickenden explained the Board was being asked to vote on two recommendations today. The first is the wording of the two new advising measures concerning accessibility of advisors. The second is a request for approval for goals and goal years for some of the new measures.

Upon motion of Regent Stuart, seconded by Regent Ulrich, the Board approved the wording of two new measures on accessibility of academic advisors (C4 and C9) as requested, and approved the goals and goal years for the new common measures (NAU: C8, All: C15, 16) and new unique measures (ASU 1, ASU 2, NAU 1, UA 6) as requested.

Provost Glick said the Board could conclude from the ASU UCAR results this year that strategies to improve student success and student satisfaction are working. However, it also shows the progress shown over the last decade is today at risk. Over the last five years, ASU's improvement in freshman retention is above that of any other PAC 10, Big 10, and peer public universities. However, the actual numbers do not yet match those schools.

Dr. Glick said the two areas of major concern for ASU shown by the data were that student interaction with tenured and tenure-track faculty has dropped and class section availability is dropping. That has happened because the number of students has increased, but the number of tenured and tenure-track faculty has not increased due to budget constraints.

Provost Maxwell said NAU is concerned with the one-year persistence rate for freshman. She said NAU has hired a consultant to help them find solutions to the problem and hopes next year will show some significant improvement. The progress in graduation rates is showing an upward trend and NAU is particularly pleased with the faculty/student interaction. However, this is an area that could be hurt by budget problems. Seniors and alumni report favorable experiences at NAU.

Provost Davis reported there has been a decline in the percentage of full-time lower division students enrolled in a semester with two or more courses taught by tenured or tenure-track faculty. He said he believes this is related to an increased number of students without an increase in faculty. There has been an increase in the percentage of freshman who return for a second year. The percent of students who started as freshman and graduated in six years is the highest ever. He said there are a combination of factors and activities working toward improvement of the measures, including the Integrated Learning Center, the Academic Advising Task Force Report, the new General Education Program, and the university outcomes assessments.

Regent Ulrich said it would be helpful to compare what we measure to other public universities and to peer universities. President Likins said the Arizona universities have abysmal graduation rates compared to their academic peers and always will have due to our admissions policies. We have chosen to provide a greater access than other universities allow. He suggested the academic profiles of incoming freshmen could be divided into quintiles using a single linear measure of an academic index. Then the top and bottom quintiles could be compared against other universities.

Regent Palacios said the new format, especially pointing out the areas of concern, was very helpful. There was a discussion of how admission requirements impact graduation rates and how access might be affected with higher graduation rate requirements. Regent Bulla said he would find it helpful to see sample sizes or variations for survey data.

Status Report on Learner-Center Education Grants Process and Request to Allocate Additional Regents Innovation Fund Monies

Dr. Tom Wickenden joined the meeting for this discussion. Regent Stuart said the Learner Centered Education Team (LCET) had approved funding for sixteen grant recipients in the inaugural year of the learner centered education grant program. President McKay, Chair of the LCET, reported the Regents had designated $500,000 from the Regents' Innovation Fund last year for the creation of grant-fund projects to promote learner-centered education. The grants were intended to support short-term faculty projects which could not be funded by existing state funds but which would result in improved student learning. The ideal projects would be portable to other departments or campuses to increase the benefits these grants should provide. The LCET was especially interested in tri-university projects focused on professional development for faculty.

President McKay reported 100 proposals were received. She thanked the faculty, staff, and students, especially Dr. Tom Wickenden and Ms. Stephanie Jacobson, on the selection panel for giving up two Saturdays to participate in the selection process. She also expressed her admiration for the quality of the proposals that were submitted. Following the panel's review, the Leaner-Centered Education (LCE) Team funded sixteen grants that had been recommended for a total of $483,000.

Dr. Wickenden said the largest grant was $100,000 for a tri-university proposal to enhance faculty professional development for learner-centered education. One grant for $50,000 involves eight departments on two campuses. The remainder were awarded to individual faculty or programs in ranges from $16,000 to $25,000. He reported there were four additional proposals the review panel and the LCE Team recommended for funding, but for which there was not funding available from the $500,000. One proposal is from ASU, two are from NAU, and one is from UA.

Upon motion of Regent Stuart, seconded by Regent Ulrich, the Board approved an additional, one-time allocation of $73,433 from the Regents' Innovation Fund for the purpose of supporting learner-centered grants, bringing the total allocation for this program in 2001-2002 to $573,433. Regent Ulrich thanked Dr. Wickenden for his work on all the learner-centered issues for the past several years.

Proposed Revisions to Board Policies 4-308, AResident Waivers for Children and Spouses of Slain Peace Officers, Fire Fighters, or Emergency Paramedics and Conservation Corps Participants, and 4-316, AResident Tuition Waivers for Members of the Community College All-Arizona Academic Team (First Reading)

Ms. Tonya Drake joined the meeting for this discussion and explained the proposed revisions to the Regents. She said these changes were being made to make Board policy consistent with state statutes, as well as to provide more flexibility to meet student needs. Representatives of the community colleges and the State Board of Directors for Community Colleges have asked the Regents to consider broadening the All Arizona Academic Team waivers to provide greater flexibility in allowing those students to attend the universities on a part-time basis.

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

Regent Stuart reported the SBDCC set tuition and worked on the disestablishment of the ALS system at its last meeting.

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

Dr. Jackson thanked the Board for its support of the Arizona Faculties Council (AFC) and said the AFC stands ready to assist the Board in any way with its discussion of a new financial model for higher education in Arizona.

President Likins gave Student Regent Myrina Robinson a glass presentation piece from the University of Arizona mirror lab as a memento. President Haeger presented a gift to Student Regent Robinson. President Coor presented a gift to Student Regent Robinson.

Student Regent Robinson expressed her appreciation for everyone who worked with her the past year and enriched her experience. She thanked the presidents for her gifts. Regents expressed their deep appreciation to President Coor for his service as President of ASU. They also said how much they had enjoyed the breakfast meeting with NAU faculty and recommended more of these be scheduled. It was suggested Regents, especially the local Regents, arrange to stay after the meetings for an hour and meet with faculty or students on an informal basis.

Everyone thanked President Haeger for his hospitality and Dr. Haeger recognized his NAU staff for their assistance with the meeting arrangements. President McKay received the gratitude and support of the Regents for her year of service as President of the Board.

MINUTES