Arizona Board of Regents-April 2005 Minutes

A meeting of the Arizona Board of Regents was held April 28 and 29, 2005, in the Alumni Lounge of the Arizona State University Memorial Union, Tempe, Arizona. President Stuart called the meeting to order at 1:10 p.m. on Thursday, April 28.

PRESENT:	Regent Fred Boice Regent Robert Bulla Regent Ernest Calderón Regent Lorraine Frank Regent Benjamin Graff Regent Chris Herstam Regent Jack Jewett Regent Wes McCalley Regent Christina Palacios Regent Gary Stuart Superintendent Tom Horne (Friday Only)
ABSENT:	Governor Janet Napolitano

Also present were: President Michael Crow, Dr. Milt Glick, Dr. Christine Wilkinson, Mr. Paul Ward, Dr. Juan Gonzales, Dr. Rich Stanley, Dr. Kathleen Church, Dr. Mernoy Harrison, Mr. Scott Cole, and Dr. Mark Searle, Arizona State University; President Peter Likins, Dr. George Davis, Dr. Randy Groth, Mr. Greg Fahey, Ms. Judith Leonard, Dr. Juan Garcia, and Mr. Joel Valdez, University of Arizona; President John Haeger, Dr. Elizabeth Grobsmith, Dr. M. J. McMahon, Mr. Rich Bowen, and Dr. John Burton, Northern Arizona University; Executive Director Joel Sideman, Board Counsel Paulina Vazquez-Morris, Secretary to the Board Judy Garza, Dr. Art Ashton, Ms. Cathy McGonigle, Mr. Ted Gates, Ms. Stephanie Jacobson, Dr. Mark Denke, Ms. Kathy Bedard, and Ms. Stella Galaviz, Central Office; and Dr. Frances Bernat, Arizona Faculties Council.

All lists, reports, summaries, background materials, and other documents referred to in these minutes can be found in the April 28 and 29, 2005, Documents File.

Regent Boice led the Pledge of Allegiance. President Stuart recognized Dorthea Litson, one of three Native American sisters who will receive degrees from ASU in May. Dorthea is the oldest of the three sisters and is graduating with her master of education degree in education curriculum and instruction from the College of Education in Tempe. Her sister Benita is graduating with a master of science degree in environmental resource management from the Department of Applied Biological Sciences in East College at the East campus. Elvira Litson is graduating with a bachelor of science degree in agribusiness from the Morrison School of Agribusiness and Resource Management at the East campus.

Dorthea has worked for ASU’s East campus for six years in areas of American Indian student retention and recruitment and more recently on a National Science Foundation grant that works with rural schools on sustaining and improving mathematics and science learning for all students. Education is important to the sisters because they see it as a way to give back to the people on the Navajo Reservation in Tsaile, Arizona, where they grew up. For their family and for others on the reservation, agriculture is very much a part of their culture and life.

Max W. Wilson, Chairman of the Maricopa County Board of Supervisors, said an agreement was under consideration wherein Maricopa County would purchase the Sundome from ASU. He would like the Regents to approve the agreement once it has been approved by the Maricopa Board of Supervisors and is brought to the Regents.

Norwood Sisson, said he had been denied access, by the ASU attorney’s office, to some of the public records he had requested. He said he was willing to take legal action if all the records he had requested were not made available to him.

Dr. Larry Mohrweis, President of the NAU Faculty Senate, spoke on behalf of the capital projects from NAU that were before the Board later in the meeting for adoption. He thanked the Board for its support of NAU.

Saif Al-Alawi, ASU West student government, said he had concerns with the proposed redesign system recommendations. He believes the document does not address minority issues and financial aid. He believes differentiated tuition will lead to an elitist ideal in Tempe and Tucson and they will not keep their tuition in the top of the bottom one-third.

Scott Ku, Asian Pacific American Students, spoke against the decision by the Asian Pacific American Studies Program to cancel all teaching assistantships. The decision was announced yesterday morning and causes an extreme hardship on those who have to find alternative employment or scholarships at this late date.

Laura Linden, UA MFA Creative Writing Program, asked that more resources be devoted to the UA MFA Creative Writing Program as faculty are retiring and working half-time and there are no plans to replace them with tenure-track faculty. Also, there will not be enough faculty for course coverage, mentoring and advising. This program is ranked in the top five percent nationally and merits increased support.

President Stuart said he would make an exception and allow students to speak on tuition and fees. However, he asked them to keep their comments very short as it is against Board policy to come to the Call to the Audience when a hearing has already been held on a particular topic and there was a two-hour hearing on tuition and fees.

Alistair Chapman, ASUA President, introduced the new ASUA President, Cade Bernsen. Mr. Chapman said ASUA was not in opposition to any of the fees proposed by the UA, but asked the Board to adopt a policy that guarantees student consultation in a thorough and intimate manner with the administration. He distributed the ASUA recommendations for a differential fee process and the Eller College Differential Fee Survey Results.

Jess Koldoff, ASU Graduate and Professional Students Association Tempe Campus President, said graduate students were unhappy about the way the fees were introduced. They would like to be at the tale and included in discussions from the beginning. She read a letter from the Vice President of the GPSA thanking the university for allowing student participation in the development of the ASU Comprehensive Development Plan. He asked for consideration of the appointment of a graduate student to the ASU/City of Tempe Joint Review Committee.

Alanna Ossa, ASU Graduate and Professional Student Association, said she believed the graduate students had learned at a late hour about the proposed graduate fees and were not able to get the feedback from their constituents in a timely manner. She said the process should have a way for the administration to communicate their thoughts on fees to student leadership as the process unfolds so the students can understand the proposed fees better. She said the fee increases of hundreds and thousands of dollars seem like a de facto tuition increase. She does not agree with using graduate fees to make up for short falls in other programs.

Jameson Smith, UA Engineering Student Council, spoke in support of the differential tuition for engineers at the UA and in support of a student advisory council to help allocate the funds. President Stuart said the tuition was adopted at the last meeting. President Likins said he tried to use the honest language of differential tuition rather than program fees when talking about undergraduate mission and that is why the student is using that vocabulary.

Christina Perpich, UA Student Society of Civil Engineers, spoke on behalf of the proposed program fees for engineering because she said more money was needed for the best equipment. She was confident her engineering degree would earn her enough money when she graduated to pay the increased cost of her education. The students support the fees as long as they have input as to where the increased money will be spent.

Teresa Clement, President of the Engineering and Applied Sciences Graduate Student Association, said the proposed graduate engineering fees would mostly be going to undergraduate programs and to improve the entire school of engineering. She believes a graduate program fee should go to graduate programs. She said there had been no plan to help international students who would have to pay the increased non-resident fees. She asked for data on how much graduate tuition and fees have increased. She asked that students be included on a committee to decide how fees would be used.

Richard Chesney, UA American Institute of Architecture Students, said he believes the additional program fees would provide more money for needed improvements. He encouraged the Board to adopt the proposed program fee.

Patrick Brennan, spoke on behalf of the proposed Eller College fee. He believed it would be an investment in his future.

Andrew McInerney, UA Eller College student, spoke on behalf of the proposed fee.

Ian Durnan, Eller College Student Council, reported on the survey taken in the Eller College. There is a communication issue between students and administrators. The students would like to have more information on where the proposed fees would be used.

Oliver Davis, Eller College of Management, supported the fee increase to improve his future and the future of all the continuing students.

M. Cledwyn Jones and Jonathan Confer, spoke on behalf of the proposed fee for the Barrett Honors College as the students had extensive involvement in crafting this proposal.

President Stuart said he had received many inquiries concerning the proposed transfer of the Sundome Center for the Performing Arts from ASU to Maricopa County. President Crow said ASU had been the steward of the Sundome for the last 21 years. ASU is now in negotiations with Maricopa County to transfer ownership to the County. As soon as the agreement is ready, it will be brought to the Board for action.

President Crow introduced the ASU Vice President for University Athletics designate Lisa Love. He presented her background. Ms. Love said she was very happy to be at ASU in Phoenix.

Provost Glick said to build a great university, you must have great faculty. Great faculty help build the rest of the faculty around them. Dr. Glick provided the Board with a booklet that lists new faculty, deans, and chairs for FY 2004-2005, and introduced many of them. He told the Board about Dr. Vijay Vittal, an Iran J. Fulton Chair of Electric Engineering, who is a leader in power systems dynamics and dynamics security assessment of power systems.

Dr. Bruce Rittmann is an environmental engineer who works in the area of the biological treatment of drinking water and will be the Director of the ASU Center of Environmental Biotechnology in the Design Institute. He told the Board he came to ASU because of ASU’s experiment with engineering and biology working together. Dr. Subbash Majajan, Chair of Chemical and Engineering Sciences, studies processing and induced defects in semiconductors. He came to ASU because of its leadership in electro-microscopes with one of the best equipped laboratories in the world and he sees a tremendous future for ASU.

Dr. Berthold Hoelldobler, Foundation Professor of Life Sciences, won the Pulitzer Prize for his book on ants. He and his co-worker have defined the area of social biology. Dr. Hoelldobler said he came to ASU because he was impressed by the plan to build a community for life sciences. It has been done in the School of Life Sciences. Regent Calderón commented that he understood the faculty-student ration at the ASU Law College is second only to Yale.

Items on the Consent Agenda, which are marked in these minutes with an *, were considered as consent maters and were adopted upon the motion of Regent Bulla, seconded by Regent Herstam. There was no discussion of these items. Regent Boice said he was not allowed to vote on Item 27, Reappointment to University Medical Center Corporation Board of Directors, as he is a member of the Board; so his vote will not be considered for that item.

The Board authorized Arizona State University to implement the Bachelor of Arts with a major in Global Studies; implement the Masters of Music with a major in Music Therapy; implement the Master of Liberal Studies (MLS) degree, using the expedited process, establish the School of Human Evolution and Social Change in the College of Arts and Sciences, and establish the Ira A. Fulton Research Institute in the Fulton School of Engineering.

The Board authorized Northern Arizona University to plan for a Bachelor of Arts with a major in Environmental Studies. The Board authorized the University of Arizona to establish the College of Optical Sciences and disestablish the Institute for Local Government.

A summary of the spring semester enrollment was provided to the Board. Arizona State University had a headcount of 43,779 undergraduates and 11,199 graduates for a total of54,978. Northern Arizona University had a headcount of 12,343 undergraduates and5,789 graduates for a total of 18,132. The University of Arizona had a headcount of26,298 undergraduates and 8,187, graduates for a total of 34,485.

Over the five years from Spring 2001 to Spring 2005, undergraduate headcount enrollment increased 12.9 percent. Graduate headcount enrollment increased 1.1 percent.

The Board authorized the University of Arizona to promote Professor Michael A. Cusanovich, Professor of Chemistry, Professor Michael Drake, Head of the Department of Planetary Sciences and Director of the Lunar and Planetary Laboratory, Professor Paula Ya-Mei Fan, Professor in the School of Music, Professor John W. Olsen, Professor of Anthropology, Professor Jeanne E. Pemberton, the John and Helen Schaefer professor of Chemistry, and Professor Vladimir Zakharov, Professor of Mathematics, to the rank of Regents Professor, effective July 1, 2005, and to award the $5,000 salary increase that customarily accompanies these appointments.

The Board approved the allocation of $37,600 of FY 2005 TRIF Regents Innovation Funds to the Arizona Department of Commerce to support development of a business plan by the Battelle Technology Partnership Practice Group for Arizona Virtual Water University (AVWU), as summarized below.

Under the leadership of Governor Janet Napolitano, AVWU is being formed to unite the cutting-edge work of the universities in a single super-center of information and technology focused on water education, research, community assistance, and economic development. The proposed mission of AVWU will be to serve as the hub of research and technology development to give Arizona the tools to assure clean and sustainable water resources for the next century; to provide education, information and analytical support to the public, government decision makers, water professionals, industry, and others about using, conserving, and managing water in arid environments; and to be a resource for new water management technologies that produce new products and services for Arizona companies to export worldwide, thus creating a major new economic driver for Arizona.

AVWU’s Core Group, comprising representatives from ASU, NAU, UA, SRP, Intel, the Arizona Departments of Water Resources, Environmental Quality, and Commerce, and the Governor’s Office, has determined that a business plan for AVWU is a critical first step and plans to engage the services of the Battelle Technology Partnership Practice Group to perform this work. The estimated cost of Battelle’s work is approximately$75,000. The Department of Commerce has requested financial support from ABOR in the amount of $37,500. An identical request will be made by the Commerce Director tothe Commerce and Economic Development Commission at its May 24,2005, meeting.

The Board reappointed Sam James, M.D., to the Board of Directors for UMCC for a term expiring in February 2007. Dr. James has served as the medical staff representative to the UMCC since February 2003. He was reappointed to membership, pending ABOR Approval, at the February 2, 2005, UMCC Board of Directors meeting.

The Board authorized the amendment of the Multiple-Year Employment Contract for Don James Livengood, entered into on March 18, 2005, to include the additional $1,000retroactive salary increase received by all UA administrators from the 2004 State mandated increase. The increase was part of the 2004 general salary adjustments for faculty and administrators were held, pending a review of an alternative distribution plan.

The Board of Regents authorized ASU to approve acceptance of a continuation award from the University of Arizona for support of an Electrical Engineering project at the Fulton School of Engineering to establish a Center for Low-Power Electronics. It will be formed as a consortium of corporations, state government, faculty, and students from the UA and ASU to generate and sustain research and development of the next generation of portable computing and communication systems. The project period is August 15, 1996, through April 30, 2005, and the amount is $2,448,790.

The Board also authorized ASU to finalize an agreement with the Arizona Department of Education for support of an Information Technology, Office of the Senior Vice Provost project to provide information technology development and maintenance services for the ADE’s Integrated Data for Enhancing Arizona’s Learning in the form of a single location on the Internet for access by relevant stakeholders to educational data, resources and services. The project period is January 7, 2005, through June 30, 2008,and the amount is $500,000 sub-federal funding.

The Board authorized the University of Arizona to enter into a Multiple-Year Employment Contract with Frank Busch, according to the summary of the terms and conditions below, at a base salary of $100,000 per annum for duties related to coaching Men’s and Women’s Swimming and Diving. The salary may be increased by an amount not to exceed the percentage increase available annually for employees of the university employed subject to the Conditions of Professional Service.

In addition to his base salary, Busch may receive incentive compensation for stated athletic and academic accomplishments. He will receive tickets to UA sporting events, use of one automobile, and guests to post-season swimming and Diving teams’ events. The contract contains termination penalties.

The Board authorized the University of Arizona to permit Drs. Daruka Mahadevan and Harinder S. Garewal to establish and maintain a substantial interest in Targeted Cancer Therapeutics, LLC, while continuing their employment at the University of Arizona. Targeted Cancer Therapeutics, LLC is a small start-up company interested in research and development of therapies for pancreatic and other gastrointestinal cancer.

The Board authorized the University of Arizona to permit Dr. Hamid Saadatmanesh to establish and maintain a substantial interest in HJ³ Composite Technologies, LLC while continuing his employment at the University of Arizona. HJ³ Composite Technologies, LLC is an Arizona company involved in providing consulting services and advanced construction materials to the building industry. In particular, the company is involved in transferring plastics composite technology from the aerospace industry to private and public works projects.

The Board authorized the University of Arizona and Northern Arizona University to permit Drs. Patricia B. Hoyer, Loretta P. Layer Mayer, and Cheryl A. Dyer to establish and maintain a substantial interest in Senes Tech, Inc., while continuing their employment at the UA and NAU. Senes Tech, Inc. is based upon the research done by Professors Hoyer and Mayer to develop a safe non-toxic method to chemically accelerate follicle depletion in mammals.

The Board approved the revised Board Policy 6-710, Severance Agreements, that would require the universities to obtain a waiver from ABOR Board Counsel for any severance agreements they wish to pursue that releases an employee from liability for the employee’s misconduct.

The Board approved the Sixth Amendment to the Arizona Board of Regents Cafeteria Plan, as summarized below, and authorized the Executive Director to execute the necessary documents.

The Article added with the Fifth Amendment is renumbered form VII to IX to follow the numbering sequence of the existing document. The proposed change is effective April 14, 2003. The definition of dependent is changed to comply with the definition of dependent in the Internal Revenue Code. This provision is effective January 1, 2005. Anew Article X, Security Act Amendment, is added to the plan. This addition will comply with the security provisions of the Health Insurance Portability and Accountability Act (HIPPA) of 1996. These security provisions require the implementation of administrative, physical and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of electronic protected health information. The HIPAA provisions are effective April 20, 2005.

The Board approved the Third Amendment to the Arizona Board of Regents Cafeteria Plan, as summarized below, and authorized the Executive Director to execute the Second Amendment.

The Article added with the Second Amendment is renumbered from VIII to IX to follow the sequence of the existing document. This change is effective April 14, 2003. The definition of dependent is changed to comply with the definition of dependent in the Internal Revenue Code. This provision is effective January 1, 2005. A new Article, Security Act Amendment, is added to the Plan. The added section will comply with the security provisions of the Health Insurance Portability and Accountability Act (HIPPA) of1996. These security provisions require the implementation of administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity and availability of electronic protected health information. The HIPPA security provisions are effective April 20, 2005.

The Board approved the Fourth Amendment to the Arizona Board of Regents Accident and Health Insurance Premium Plan, as summarized below, and authorized the Executive Director to execute the amendment.

The proposed amendment will change the definition of dependent to comply with the changes made to the Internal Revenue Code. This provision is effective January 1, 2005.

The Board approved the Second Amendment to the Arizona Board of Regents Dependent Care Plan, as summarized below, and authorized the Executive Director to execute this amendment.

The amendment will change the deadline for filing claim statements for reimbursement from January 15 to March 31 following the end of the plan year. This change will comply with how the plan is being administered and this provision will be effective January 1,2000. The amendment will increase the amount of earned income allowable for an unemployed spouse of a participant who is either a qualified individual or a full-time student. A spouse is considered to be a qualified individual if he or she is physically or mentally incapable of caring for himself/herself. The earned income amount will increase to $250 if there is one qualified individual for whom the participant has incurred covered employment related expenses; or $500 if there is more than one qualified individual for whom expenses are incurred by the participant. The amendment complies with changes made to the Internal Revenue Code. This provision is effective January 1, 2003.

The Board approved the Fifth Amendment to the Arizona Board of Regents Health Care Plan, as summarized below, and authorized the Executive Director to execute this amendment.

The amendment will change the definition of dependent to comply with changes the Internal Revenue Code has made to the definition. This provision is effective January 1,2005. The proposed amendment changes the deadline for filing claims for reimbursement from 120 days after the close of a plan year to March 31 following the end of the plan year. This provision is effective January 1, 2000.

In 1996 a Regents Award for Outstanding Services to Higher Education was established by the Arizona Board of Regents to provide special recognition for Arizona citizens and/or organizations that provide exceptional service to higher education in Arizona. Current and former Regents have contributed to a fund to cove the cost of designing, sculpting, and casting a suitable art object to present to recipients.

The Board approved the recommendation of the 2005 Regents Award Selection Committee, composed of Regent Robert Bulla, Regent Lorraine Frank, Regent Wes McCalley, former Regent Esther Capin, and former Regent Eddie Basha, that Mr. Christopher Bavasi, Mr. James E. Rogers, and the Virginia G. Piper Charitable Trust be presented with the 2005 Regents Award.

Regent Herstam chaired this portion of the meeting. Ms. Mary Jo Waits joined the meeting for this discussion. Regent Herstam said the Feasibility and Planning study Workgroup met on April 14 and adopted the proposed redesign of the university system which is being presented and recommended to the Board today. He thanked the many individuals who worked on the eleven-month initiative.

Regent Herstam said the study was carried out primarily by using staff of the university system which enabled the cost to be kept low. In addition, no consulting fees were paid to David Longanecker, other than reimbursement for travel expenses, for the substantial amount of work that he did. The ABOR Central Office was able to hire Mary Jo Waits on staff to lead the study by leaving the position formerly occupied by Tom Wickenden vacant. If Tom had still been employed with ABOR, he likely would have been the person to lead the study.

Regent Herstam reminded the Board that the redesign proposal that was adopted by the Feasibility and Planning Study Work Group on February 23, 2005, had been discussed extensively at the March Board meeting. Since the March meeting, public forums were held in Sierra Vista, Flagstaff, Tucson, ASU Tempe, ASU East Campus, ASU West Campus, and in Thatcher, Arizona. Attendance at these forums ranged from eight people to 150 people, Additionally, the Staff, Student, Faculty and Greater Phoenix Business and Economic Development Stakeholder Groups continued their dialogue and submitted input into this process.

Based on this input, the redesign proposal presented to the Board last month was revised and sent to the Board on March 13. On April 14, 2005, the Feasibility and Planning Study Workgroup met, made final edits to the document, and unanimously adopted the proposal contained in the Board book.

Regent Calderón asked the Board to modify the preference, in the fourth paragraph that begins NORTHERN ARIZONA UNIVERSITY by adding “a premier” between the words offering and undergraduate and adding “program and” following undergraduate. It will now read, “offering a premier undergraduate program and professional,” etc.

Regent Bulla said the plan was a great document to go forward, but the distance learning, ARU, electronic learning dimensions were not explored to the extent he believes the future will demand and he would like to see that dimension be expanded in the near future. Also, now that the plan has a framework, there should be a serious study by economists from the universities or other appropriate people, to quantify the plan, to put some type of financial per forma in place so there is a good idea of what funds will be needed. He said this is a strategic plan for the future of the system and it is only as good as the environment in which it was planned. If some one thing comes along to change the parameters or assumptions, the plan should be revisited. There should be a mechanism included for continued input and review and analysis so appropriate adjustments in the plan can be made as it moves forward.

Regent Herstam said the Council of Presidents proposed changes in ABOR policies can add additional details to the plan. Regent Bulla said he would like to have a formalized process to address the concerns he had raised.

Dr. Bernat said she agreed with Regent Bulla. Many of the faculty around the state have concerns about learner centered education, responding to a diverse student population, and how to be responsive to the learning needs of students, including distance education students. Regent Jewett said this would be an ongoing process, but he believes good work has occurred to lead to this moment. President Haeger said he also believes this document should live and change as the institutions change. He agrees there are many things out there that are changing higher education. He said he believes differential tuition naturally follows differentiated missions and he believes it has nothing to do with quality. He likes that this plan opens the door for different things to happen in the state as needs arise.

Regent Palacios joined the meeting at this time. Regent Frank agreed changes should be made when they are necessary. She said it might be interesting to look at the plan annually to see what ways it has been accurate and what needs to be changed. President Crow said this plan looks at many issues that needed to be resolved. It had been challenging and is the end of the beginning of the process, Regent Palacios said the issues that lie ahead are complex; but the report allows the universities to move ahead, making corrections when needed. Regent Boice said he agreed with what had been said. He was happy to have been part of the Board during this time.

President Likins said it had been a good process that had provided a good product. Regent Calderòn said he believed cooperation with the community colleges is still very important and will determine the success of the plan. Regent McCalley said he does not see the plan as unchangeable. Regent Graff said he appreciated the respect given to students’ opinions.

Regents thanked Ms. Waits, the stakeholders, the Work Group, and especially Regent Herstam for all the work that went into the plan. Upon motion of President Stuart, seconded by Regent Herstam, the Board approved the proposed redesign of the university system as adopted by the Feasibility and Planning Study Workgroup on April 14,2005, and as presented in Agenda Item 2. He further moved that the Board request the universities to develop implementation plans and the Council of Presidents to develop necessary Board policies to implement the redesign of the university system as modified in language by Regent Calderón.

Provost Glick, Provost Davis, and Provost Grobsmith, and Dr. Mark Denke joined the meeting for this discussion. Regent Boice said the Board was being asked to approve special class fees, special program fees, special program fees ranges, and other changes to existing special program fees. Class fees and program fees are charges to the student that are added to regular tuition. By statute, the Board is required to conduct a roll call vote on special fees.

Dr. Denke explained the purpose of special class fees and the criteria for program fees. He said the criteria were addressed in the requested class and program fees. In addition, internal auditors periodically review university fee collection expenditures and report their findings to the Board. Dr. Denke said this item contains four categories of fee requests: class fees, program fees, program fee ranges, and other changes to existing special program fees.

Provost Glick presented the ASU requests individually. He said the important thing for ASU was what would it take to produce a quality course or program and who should bear the burden--all the students or some of the students. President Crow said these requests were ASU’s attempt to move those things that shouldn’t be paid for by state appropriations to private funding, and to move the overall financial model to the basis where the core undergraduate tuition goes for the core programs with students and donors paying for everything else.

Regent Bulla asked if the online courses mentioned were linked with ARU and was told no. Dr. Glick said ASU would be happy to make sure the courses were visibly available through people looking at the ARU schedule, but they don’t intend to move them into ARU. Regent Bulla said this was what he was requesting. President Crow said if a course had been customized for a particular client, it might not appear in the ARU schedule.

Provost Grobsmith presented the NAU requests individually. She said the requests were for course fees; not program fees. NAU had not requested an increase in fees for several years, so that led to the current higher requests. Regent Bulla complimented the NAU biology request for its detailed information. He said that request came closest to what he would like to see in the future. He believes the Regents need more information in the future to make business decisions on fees. He would like to see offering sheets and if the money goes directly to a student or a program. He will be working with staff during the next year to see if better information can be presented next year.

Regent Calderòn asked if the classes would be offered if the requested fees were not approved and was told the departments are not operating in a deficit in regards to materials and supplies. Those costs are being underwritten by other operations budgets which are shrinking. President Haeger said when the operating funds do not exist for a particular program or class, the university will either stop offering the program or class or limit the number of students moving into that class or program.

Provost Davis explained the individual requests for the University of Arizona. He said these proposed revenue infusions were very important to the university and explained why. He explained how the students would be involved in the decision as to how the fees would be expended. He introduced the deans and vice deans who had worked with the students to develop the proposals put forth by the university. He described the requested fees.

Regent Bulla complimented the University of Arizona for being intellectually honest in calling the program fees differentiated tuition. Regent Herstam said he had real concerns with the undergraduate program and class fees. It seemed to him like tuition was raised in March and then, in effect, differentiated tuition was raised in April. He asked if all the fee requests, at the undergraduate resident level, kept the universities at the Board policy of the top of the lower third for all the categories. Provost Davis said it did not if only the other states’ tuition was considered. If tuition and fees are considered, the requests are within Board policy. Regent Herstam asked if the Executive Director and legal counsel had any concern that the requests violated Board policy. Executive Director Sideman explained how the fee requests did not violate Board policy.

Regent Calderòn said a climate had been created wherein students had been convinced fees are a reasonable necessity. This makes their test whether the fee reasonable; not whether having a fee is reasonable. President Stuart said he believed the Board should work to establish a new process for setting tuition and fees. He finds it hard to support the requested undergraduate fees after raising tuition. Regent Boice said he knew the need was monumental, but he also knew there would be difficult times with the legislature still to come, and he did not believe approving the requested fees would help anything.

Regent Jewett said this shows a failure on the part of Regents to convince members of the legislature of the importance of financial aid and the contribution the state must make. Given the change in Pell Grants, he is not sure the Board can still protect needy families.

He said the universities have moved from state supported institutions to state assisted institutions to institutions located in the state. Given these circumstances, he cannot vote to approve the requested fees.

President Haeger said the cost of being a “low tuition” state is building up a series of fees, over time, that make up the difference in cost of educating students. Regent Graff said he did not want to lose the student input that had accompanied the process of ascertaining the requested fees. He wanted students to continue to be involved in the process. Regent Bulla said he thought students who pay fees should benefit directly from that fee.

Regent Boice moved that the Board disapprove the requests by ASU, NAU, and UA for all undergraduate special class fees and all undergraduate special program fees, as presented in the executive summary. The motion was seconded by Regent Calderòn and passed by roll call vote with Regents Boice, Calderòn, Frank, Herstam, Jewett, Palacios, and Stuart voting yes and Regent McCalley voting no.

Regent Boice moved that the Board approve requests by ASU, NAU, and UA for special class fees for graduate classes and for special programs fees, and special program fee ranges for graduate programs as presented in the executive summary. The motion was seconded by Regent Herstam and passed by unanimous roll call vote.

Regent Boice asked President Stuart to establish a study committee charged to review the existing policy framework for special class fees and to develop and recommend a policy framework for special program fees for undergraduate programs and any other fee situations, be it timing or money, that should have a process duly established. President Stuart said he would be meeting soon with President Elect Palacios and they would discuss such a study committee. He believes this should be similar to the taskforce and work forces used before, but should have significant involvement of students. He asked for input from student leaders and Regents as to what should be involved and time lines.

President Stuart chaired this portion of the meeting. Mr. Jaime Molera joined the meeting for this discussion. He said there is an ongoing attempt to educate legislators concerning the shortage of doctors in Arizona. He answered the most frequently asked questions concerning the Phoenix expansion of medical education. There is a plan for this expansion. Only a small fraction of the graduates will become researchers. The state will not be committed to building a hospital to go along with the College of Medicine in Phoenix, and the College of Medicine does have support in Maricopa County. He said other organizations have also been helpful in answering the questions.

Mr. Molera said the plan is to eventually graduate 24 students a year in the downtown facilities. The facilities will also be used for the Department of Biomedical Informatics and will allow the coordination of clinical rotations that are already taking place in Phoenix. He said the possibility of a Level 2 structure that would be a full scale medical school has nothing to do with what is currently being proposed for Level 1. A policy decision to move to a Level 2 would be taken up by a future legislature.

President Stuart said help was needed by everyone to secure funding from the legislature for the medical education expansion. Regent Bulla said there is a huge need for doctors in Arizona and new doctors can’t be produced over night.

The meeting recessed at 4:40 p.m. and reconvened at 8:00 a.m. on Friday, April 29.

President Stuart announced that he had asked Regent Boice to chair the Board’s University of Arizona presidential search. Regent Boice said the general timeline for the search calls for initiating a competitive RFP process rather quickly to select a search consultant. It is hoped the search committee members can be named by July, with the first meeting to be held in early September. Various campus and community forums will take place in October and November. It is hoped the appointment of a new president can be approved at the March 2006 Board meeting. The broadest possible search will be conducted so a diverse pool of the top talent in the country can be identified and candidates of excellence can be aggressively pursued.

Mr. Greg Fahey, Ms. Cathy McGonigle, and Ms. Paulina Vazquez-Morris joined the meeting for this discussion. Regent Palacios thanked the government affairs people for all their help and hard work during this legislative session. Ms. Vazquez- Morris reported on the higher education reform bill, a bill requiring a study committee, the public programs, citizenship bill, the nursing education project bill, and the budget bills, including a capped tuition requirement. The university fingerprinting bill was signed by the Governor, charter school sponsorship was vetoed by the Governor, and stem cell research committee was signed by the Governor.

President Stuart reported that the Capital Committee had met twice and reviewed the entire capital process. The proposed revisions to Board capital policies will be considered next on the agenda. The technology enhancement plan is substantially in place. The video conferencing capacity, together with the Microsoft Share Point Software, is being pilot tested on the campuses and by committees. Now it is time to make sure the new technology can reduce travel time and expenses.

Mr. Ted Gates joined the meeting for this discussion. Regent Boice said the Board was being asked to review the revisions to Board Policy Chapter Seven relating to Buildings, Infrastructure, and Land. The policy changes include the addition of a charter for the new Capital Committee; modifications to the capital development process to incorporate oversight by the Capital Committee, and other modifications that were suggested by the universities and central office.

Mr. Gates said the Chapter VII policy modifications were driven by the Focused Governance initiative, leading to the creation of a new capital committee. The charter for the Committee will be added to the Board policy, along with other modifications that will enhance the Committee’s oversight of the capital development process. These modifications include inserting master planning and capital improvement as phases of the actual capital development process to be overseen by the Capital Committee. In addition, the Committee will have a role in reviewing capital development related issues within each university’s strategic plans. Recognizing the significance of third party projects to the universities’ development process, the Capital Committee is authorized to review these projects prior to submittal to the Board. All capital development plans and project implementation approval requests will continue to be approved by the Board, but will also now be reviewed by the Capital Committee prior to submittal to the Board.

Mr. Gates said, at the Project Approval phase, the Capital Committee has the authority to approve capital projects under $20M that have had no significant changes. Projects greater than $20M will continue to be approved by the Board after being reviewed by the Capital Committee. In addition to these changes, the policy contains many modifications that were requested by the universities, including raising the threshold of capital projects from $1M to $2M, raising the pre-capital development plan expenditure limit to $250,000,and raising the post-capital development plan approval expenditure limit to $500,000. Finally, the universities will be authorized to purchase property valued at less than$500,000 without Board approval and raises the threshold on new leases that require Board approval to greater than $500,000 per year.

Mr. Dan Anderson, Ms. Stephanie Jacobson, Dr. Milt Glick, Dr. George Davis, and Dr. Elizabeth Grobsmith joined the meeting for this discussion. Regent Frank said this is the first annual report of the new Regents Accountability Report (RAM).

Ms. Jacobson said the RAM grew out of two priorities. The primary one was to measure performance of the universities as a result of the changes instituted under the Changing Directions initiative. The second one was to replace the “UndergraduateConsolidated Accountability Report,” which had grown to over 100 items. This Report is streamlined, with a more strategic set of measures, and one that would allow the universities to address their unique missions. Over the past year, the Board approved 22 measures and their goals which comprise this report.

The RAM Report includes 7 systemwide measures and 5 unique measures for each university. The universities develop measures that cover each of the 4 performance areas mentioned in the original definition of Changing Directions, affordability and participation, programs and learning, work force development, and economic development. The system measures are categorized into 3 areas: access and participation, affordability, and student success.

Ms. Jacobson highlighted a few outcomes of this years reports for the system measures. One of the key purposes of the system measures is to analyze the impact of the Regents’ 14% set aside of tuition for need-based financial aid. In spite of the 14%increase in undergraduate tuition and fees and additional increase in the cost of attendance, student loan levels went up by only 4.6% and the average unmet need for resident undergraduates with need increased by only 3%.

Regarding student success, the systemwide six-year graduation rate increased by 1.3%in only 1 year. Two measures which address access and participation used the baseline of Fall 2004 enrollment information. As a result, progress on these measures will be reported on for the first time in next year’s RAM.

The next three goals address the affordability of higher education, particularly as they relate to students with need. Measure three addresses gift aid related to Pell Grant recipients from the Regents’ 14% set aside. In 2003, the Regents’ priority was to keep the neediest students, defined as Pell recipients, unharmed from the 40% tuition increase. The universities succeeded in doing that and agreed to continue that practice in 2004. However, for long term efforts to address the needs of all students with unmet need, the Regents established a goal that the universities will allocate no less than 50%of the Regents’ financial set aside for resident full-time undergraduate Pell eligible students. This will be in effect for Fall 2005 and thereafter.

Ms. Jacobson said the student debt measure looks at the average amount of debt for resident full-time undergraduate students with subsidized loans for an academic year. On average, students experienced about a 4.6% increase in loans for this academic year, significantly less than the 14% tuition increase.

She said the fifth measure looks at the unmet need of all resident undergraduate students with the cost of attendance not met by expected family contributions, grants, scholarship, and waivers, subsidized loans, and federal work study. During the past year, unmet need increased by about $164. In addition to the increase in tuition, there was also an increase in the cost of attendance. The last two measures address student success: the systemwide 6-year graduation rate and the combined graduation rate. The data is just now being compiled, and will be reported on in 2008.

Regent Frank noted that in 2004-2005, the average tuition increase was between $469and $499 and yet, the student unmet need increased by only $164 and the loan increase was low. She asked where the money was coming from and was told from the set-aside.

Provost Glick referred the Regents to ASU’s individual accountability measures that were outlined in the executive summary. The five measures are organized in three categories. The first three measures reflect student access and quality, the fourth measure reflects resource generation, and the fifth measure reflects community imbeddedness. Dr. Glick explained ways ASU had worked to improve its measures.

Regent Bulla asked if ASU was considering any other measures of imbeddedness in the community besides the teachers. Dr. Glick said there were other measures used internally. President Crow said a relatively elaborate community engagement and assessment survey for which ASU has engaged a firm to work with all the community groups in metropolitan Phoenix to access their needs, desires, present relationship with ASU, and things that will help them to advance their interests is under way. Hopefully, the results of the survey will be available in the next quarter.

Provost Grobsmith presented the five NAU goals. The first three pertain to undergraduate education, the second two to the graduate and professional mission and the distance learning mission. She explained why more non-tenure and tenure track faculty had been hired.

Provost Davis said the University of Arizona is a student-centered research university with a public land-grant mission as well. The five measures they adopted are in relationship to that mission. Each of the measures is a reflection of a number of activities and characteristics and hopefully success that are bound up in one. He said their engagement attempts to identify faculty linked, independent, intellectually-based activities that are taking place co-curricularly outside of the classroom. He explained the UA measures and goals.

Regent Boice said he believed the cost of a college education could be reduced by graduating sooner. Regent Bulla said one of the discussions in the IT Committee meeting had been the completing of the articulation dimension among the universities. He believed this would help the graduation rate.

President Stuart said one of the problems the universities have is that few people know about their successes. He recommended the Public Awareness Committee take this report and come back with a broad, comprehensive distribution plan that includes not just distribution to media and legislators, but a way to communicate these enormously powerful accountability measures to gain the confidence of others.

Provost Davis said these measures are all about how productively faculty use their time. Provost Glick explained how important it is for students to work on or close to campus. Regent Jewett asked if the existing accountability measures data continued to model so data is available as to where the system is at all times on the commitment to hold the most needy harmless. Provost Glick said he did not think just looking at this data answers that question. He said you could never answer it perfectly, but the universities continue to try to model and improve things.

Regent Frank said the reports of all 3 universities contained one or more items that the goal had been reached in the first year. She asked if there were plans to revise those goals. Provost Glick said there were some areas where ASU had met their goals and they wished to increase the goal. In other areas, reaching the goal is appropriate and trying to increase it would be a cosmetic effort. They will decide next year which goals they will ask to increase at ASU. Provost Grobsmith said the goals were self analytical vehicles for examining what the universities do. Provost Davis explained what measures the UA might wish to change.

Regent Jewett said we are measuring where we are. He asked if it would be possible to consider the trend line to see where we are going to make sure the Board is not going the wrong way on a delayed basis. President Likins said that would require predicting the behavior of the Arizona state legislature. Regent Bulla agreed the Board needs to know where it is going, even if the scenario is pessimistic as he believes it will be a way to educate other sectors of the community. President Crow said he believes more attention should be given to entities besides the legislature as funding sources.

Ms. Stephanie Jacobson, Dr. Thomas Miller and Ms. Dianne Sauers from the UA, Dr. Ronald Dorn from ASU, and Dr. Gypsy Denzine from NAU joined the meeting for this discussion. Regent Frank said these presentations will be from the project directors of four of the projects funded under the learner centered grants during 2003.

Ms. Jacobson said learner centered education (LCE) had been a high priority for the Board since 1999. This method of teaching has been a change for faculty and this transformation takes time. In recognition of this fact, the Regents established the LCE grant program in 2002 which annually authorizes the use of $500,000 from the Regents Innovation Fund for faculty grants to improve and expand LCE across the Arizona university system. This may be the only program in the country in which a public governing board provides grants to address teaching and learning. The projects presented today represent 4 of the 16 projects funded in 2003.

Dr. Tom Miller presented “Evaluating Learner-Centered Education Through Outcomes Assessment of Student Writing” which is a partnership among the 3 universities’ writing programs. These are the largest credit generating programs at the universities. First year composition is foundational to student’s graduation. Writing is the most student centered activity in a university and makes learning visible. He described the program, including how it works with community colleges and how it helps other teachers.

Dr. Dorn said the challenge of the grants was how to bring different learning styles together and how to open doors for students. “Connecting Disabled Students with Arizona’s Landscapes Through Geography LCE Education” at ASU brings in disabled students and teaches them about the Arizona landscape in a way that brings them beyond wheel chair access. This is done through the Internet so can be done by place-bound students.

Dr. Denzine said the goal of the “Increasing Learner-Centered Education Among Part-Time Faculty” was to provide part-time and full-time faculty members in core courses professional and development training activity to promote learner centered principles. She described the faculty and the program.

Ms. Sauers said the Eller College of Business and Public Administration serves over1600 advanced standing students. She explained the pressures on the program. The “Improved Assessment of Business Communication Outcomes and Student-Centered Learning” provides money to develop tools to measure the skill set the students were entered into and to curricularly redesign modules that were learner centered. She described the program and its outcomes.

Dr. Bernat expressed the thanks of the Arizona Faculties Council to the Board for the continuation of these grants as they have been very successful and have had a large outreach function. Regent Horne entered the meeting. Regent Bulla asked if information concerning the key results, impact, and findings of each grant could be communicated in the executive summary in the future so the Board would have clear evidence of the value of the grant.

Dr. Frances Bernat reported the Arizona Faculties Council volunteered to work with the university administrations to make sure the need for fees is clearly identified and explained. They understand it is essential to work with students, but they also believe faculty should be involved. Faculty want to be respected and understood as part of the life blood of the institution.

Regent Bulla reported NAU is moving forward with ARU, focusing on making ARU a state-of-the art web portal for all of the universities. NAU is also focusing on the 2 + 2programs with the community colleges to provide bachelor level programs throughout Arizona, especially in fire science, police science, health professions, and teacher education programs.

He said Mr. Jerry Wegenast, a consultant from the Western Cooperative for Educational Telecommunications (WCET), presented an update on their ARU study to create a new expanded web-based portal to provide one-stop student services. An update was given on the marketing study and an updated ARU business pan was also discussed.

Regent Bulla announced the three universities have finished analyzing and accepting a vast number of undergraduate courses for articulation. This summer all the undergraduate courses from all three universities will be on line so undergraduates can see what courses are available and what will transfer. Some graduate courses from NAU and ASU will also be available. Regent Bulla thanked all the people who worked so hard on this project.

He said the Arizona Regents Reach Out program was approved by the Subcommittee and will move forward. This will be approximately $300,000 for incentive grants for faculty to develop e-learning web courses.

Mr. Scott Cole, Mr. Adam Gross, and Mr. Steve King joined the meeting for this discussion. Regent Bulla said the Board was being asked to consider the proposed Comprehensive Development Plan for ASU, including Master Plans for the ASU East campus, the ASU Tempe campus, the ASU West campus, and the new ASU Downtown campus for first reading.

President Crow said this had been underway for a long time and had received a lot of community input. This Comprehensive Development Plan provides for ASU to position itself as a significant educational and higher educational engine in what will become a metropolitan area of 7M or 8M people in the next generation. This will be a university that can service the public with teaching, learning, diverse, and comprehensive programs.

Dr. Crow said ASU’s approach will be to build 4 campuses that are highly entrepreneurial, goal driven, and engaged in the community. The university is too big to think of as a single entity, but schools will be encouraged to work together in an intellectual and cultural federation.

President Crow said it will be necessary to overcome physical and fiscal constraints, He said this is all a part of the redesign process the Board has just been through. He explained some of the programs that would be available on each of the campuses and the number of expected students on each of the campuses.

Mr. Gross said ASU had a big advantage as they had land available. He said the vision of a university should be reflected in its physical plant. He explained how the vision for ASU can be constructed in a physical plant. He said there is hard data to back up the information used in the Report and it will be furnished to the Regents when the Report is finished, Mr. King explained how the proposed Downtown Campus, the West Campus, East Campus, and the Tempe Campus can be physically developed. President Crow said it is planned that, as the university grows and sports teams are added, to locate some sports at the other campuses, not just on the Tempe Campus. Regent Graff asked if ASU would remain a commuter campus or would shift more toward a residential campus. President Crow said it would shift more toward a residential campus, but it will always have commuting students. All will be rich campuses and there will be some residential students and some students that commute.

Regent Bulla said this study shows how much potential there is to absorb a growth in the number of students. Dr. Bernat said ASU West campus does a lot of students who commute to school, but they also are a place where the community can come.

Regent Herstam commented that this presentation has been exciting, shows much potential and matches the Board’s redesign plan. He said, however, Southern Arizona presents a different problem; they do not have the same ability to expand. So he believes it will be important for UA South or NAU to step in to help with enrollment growth. Regent Boice said he was happy there is now a plan and he appreciates the work that went into it. Regent Bulla said there will be more information before the Plan comes back for a second reading. He believes this is a flexible plan and will be able to deal with future needs.

Dr. Art Ashton joined the meeting for the rest of the Strategic Planning Committee. Regent Bulla said the IT Subcommittee had reviewed the following requests in depth at its meeting yesterday and was recommending the projects for approval.

Regent Bulla said the Board was being requested to approve Arizona State University’s mainframe software contract renewal, for the purpose of upgrading, at an anticipated cost of $1.170M. Upon motion of Regent Stuart, seconded by Regent Palacios, the Board approved ASU moving forward with a 3-year contract renewal for ASU Mainframe Applications, applications support, and monitoring software at an anticipated cost of $1.170M.

Regent Bulla said the Board was being requested to approve the Student Health and Wellness Center’s request to replace its existing enterprise practice management system with a new system that will interface with medical facilities and facilitate improved internal business process procedures at an anticipated cost of $526,000 through FY 06. NAU is also looking at this software. Upon motion of Regent Herstam, seconded by Regent McCalley, the Board approved the Student Health and Wellness Center replacing its existing enterprise practice management system with a new system at an anticipated cost of $526,000.

Regent Bulla said the Board was being requested to approve the purchase and deployment of a high performance computing system for the Fulton School of Engineering at an anticipated 5-year cost of $585,000. Upon motion of Regent Herstam, seconded by Regent Frank, the Board approved the purchase and deployment of the Fulton School of Engineering high performance computing system at an anticipated cost of $545,000.

Regent Bulla said the Board was being requested to approve the University of Arizona’s request to renew its contract for support of the university’s Oracle site license at an annual cost of $1,315,578 plus tax estimated at $50,000. Oracle products included atabase tools and applications used by departments and operating units throughout the campus. Upon motion of Regent Herstam, seconded by Regent Boice, the Board approved the University of Arizona’s expenditure of an estimated $1,365,578 for renewal of its Oracle site license.

Regent Boice chaired this portion of the meeting. Regent Horne left the meeting at this time. Mr. Ted Gates joined the meeting for the remainder of the Resources Committee items.

Dr. M. J. McMahon and Mr. Rich Bowen joined the meeting for this discussion. Regent Boice said Northern Arizona University was requesting Project Implementation Approval for the construction of the New Laboratory Facility project at an estimated total project cost of $33M. Dr. McMahon said the new laboratory facility will be located on the North Campus within a unified science complex. This project is in keeping with the stated intention of the Master Plan. Mr. Bowen provided details on the project.

Regent Boice asked why they were building a new facility rather than renovating the old building. Mr. Bowen said the old building was built when the requirements for the laboratory and air quality weren’t as intensive as they are now. The floors are not as low as they are now and it would be hard to fit new equipment into the building. The costs would be higher to renovate than to replace the space.

Regent Calderón asked if they will renovate the existing building for classrooms and was told yes, as classroom space is not as expensive as laboratory space. Upon motion of Regent Boice, seconded by Regent Boice, the Board granted NAU Project Implementation Approval for the New Laboratory Facility project and authorized NAU to proceed to complete design and construction documentation.

Dr. M. J. McMahon and Mr. Rich Bowen joined the meeting for this discussion. Regent Boice said Northern Arizona University was requesting Project Implementation Approval for the North Campus Research Infrastructure project at an estimated total project cost of$6M. Dr. McMahon said this project was linked to the last project the Board just approved. This project supports utility demands for the area. Mr. Bowen provided details on the project.

Upon motion of Regent Boice, seconded by Regent Calderón, the Board granted NAU Project Implementation Approval for the North Campus Research Infrastructure project and authorized NAU to proceed to complete design and construction documentation.

Mr. Joel Valdez joined the meeting for this discussion. Regent Boice said the University of Arizona was requesting authority to sell System Revenue Refunding Bonds to refinance debt service on outstanding System Revenue Bonds; and authority to sell Refunding Certificates of Participation to refinance debt service on outstanding Certificates of Participation. Mr. Valdez said this was an effort to restructure the finances and debt of the university.

Regent McCalley asked what type of constraints this type of restructuring will have in the next 10 to 15 years. Mr. Valdez said the restructuring would not prevent the next president from issuing additional debt as long as the university stays within the budgeted amount.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board authorized the UA to (i) sell one or more series of System Revenue Refunding Bonds in amounts to produce sufficient proceeds to refinance not exceeding $25M of the principal of and/or interest on its System Revenue Bonds, Series 1992A, 1998, 2002, 2003, 2004A and 2004B and to pay the costs of issuance of the System Revenue Refunding Bonds, (ii) sell one or more series of Refunding Certificates of Participation in amounts to produce sufficient proceeds to refinance not exceeding $22M of the principal of and/or interest on its Certificates of Participation, Series 1999A, 1999B, 1999, 200A, 2001A, 2001B, 2002A, 2002B, 2003A,2003B, 2004A, and 2004B and pay the costs of issuance of the Refunding Certificates of Participation, and (iii) take all related actions, enter into all necessary agreements and execute all necessary documents, as provided in the Supplemental Resolution relating to the System Revenue Refunding Bonds or the resolution relating to the Refunding Certificates of Participation, reviewed by University Counsel.

Mr. Bruce Wright and Mr. Joel Valdez joined the meeting for this discussion. Regent McCalley said he had a conflict of interest and he did not discuss or vote on this issue.

Regent Boice said the University of Arizona was requesting approval to enter into a Pre-Annexation and Development Agreement and Intergovernmental Agreement with the City of Tucson and KB Home in order to annex 573 acres at the UA Science and Technology Park into the corporate limits of the City of Tucson.

Mr. Wright said this was a request to annex a portion of the Science and Technology Park into the Tucson City limits. The City and the university have been engaged in annexation discussion for about 5 years. As a result of the recent approval by the Board of a land exchange with KB Home, this proposal needs to move forward. The City will extend vital city services to the Park that will open the center of the Park for future development. The City will also provide rezoning of the property to allow the KB project to move forward. The City has agreed to construct an intersection at Kolb Road with a traffic signal that will provide a badly needed entry point into the west side of the Park. In exchange for this annexation support from the City, the university would grant a 10-acre site to the City for use as a service center to probably include fire and police facilities at the Park.

Regent Bulla asked if this was an additional 10 acres, not part of the original exchange and was told yes. Regent Boice asked if these city services would be for the entire Park or just the annexation portion and was told technically just the annexation, but the service center would actually serve the wider community that surrounds the Park that falls within the corporate boundaries of the City.

Upon motion of Regent Boice, seconded by Regent Jewett, the Board granted the UA approval to enter into a Pre-Annexation and Development Agreement and Intergovernmental Agreement with the City of Tucson and KB Home for the annexation of 573 acres of land at the University of Arizona Science and Technology Park into the corporate limits of the City of Tucson. The appropriate legal documents are subject to review by University and Board Counsel.

Dean Gene Sander and Mr. Joel Valdez joined the meeting for this discussion. Regent Boice said the University of Arizona was requesting authorization to lease approximately two acres of land at the Maricopa Agricultural Center in Maricopa, Arizona, to the Arizona Cotton Growers Association to allow for the construction of a new building to house a USDA Agricultural Marketing Service Classing Office for Cotton. Dean Sander said part of the mission of the College of Agriculture is to support the agricultural industry. The Arizona Cotton Growers, working with the U.S. Department of Agriculture, are interested in having this new classing laboratory that would be located adjacent to the other USDA Laboratory that is currently being built on this site. Regent Boice noticed it was a 10-yearlease and asked if the land would revert to the UA if the lease were not renewed. Dean Sander said it would, but it would be his guess the lease would be renewed.

Upon motion of Regent Boice, seconded by Regent Herstam, the Board authorized the UA College of Agriculture and Life Sciences to lease approximately two acres of land at the Maricopa Agricultural Center to the Arizona Cotton Growers Association, for a period of ten years with option to renew, for the construction of a new building to house a USDA Agricultural Marketing Service Classing Office for Cotton, subject to approval of legal documents by University Counsel.

Mr. Rich Stanley, Mr. Dave Harris, and Dr. Mike Mobley joined the meeting for this discussion. Regent Boice said the University of Arizona and Arizona State University were requesting Project Implementation Approval for the Arizona Biomedical Research Collaborative Building at the Phoenix Biomedical Campus. This project will construct a shared 80,000 square-foot building at an estimated total project cost of $27.2M. Mr. Harris said this building would be devoted to medical and biomedical research, tied with TGen and the expanded medical school on the PB College Campus. Regent Bulla complimented everyone for the value engineering to reduce the cost. President Crow said ASU had determined what program would be located in this building and would becoming back for additional funds for that program.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board granted Project Implementation Approval to the University of Arizona and Arizona State University for the Arizona Biomedical Research Collaborative Building project.

Mr. Rich Stanley joined the meeting for this discussion. Regent Boice said Arizona State University was requesting authorization to enter into an Intergovernmental Agreement with the City of Phoenix for the development of the Downtown Phoenix Campus of ASU. Mr. Stanley said this agreement would allow the development of the Downtown Campus as discussed in the Comprehensive Plan presentation. This is a remarkable partnership between the two entities and he described the programs that would be located on this campus and its location.

Mr. Stanley summarized the terms of the lease. He said the City would commit to the acquisition of the land necessary for the campus, the purchase and renovation of existing buildings that will provide the beginning of the campus, and the construction of additional facilities on the campus over the next five years. In addition, the commitment is to build public park space and to significantly improve the street environment in the neighborhood with more shade and sidewalks. Over all, the space generated from this program would be approximately 700,00 square feet of academic and academic support space with a cost of $233M. The funding for that commitment will have to come from a bond program that the City will be proposing to include with the bond program to be presented to Phoenix voters in March of 2006.

Mr. Stanley said ASU would lease the facilities from the City of Phoenix at no cost. Upon retirement of the debt related to those facilities, the academic facilities will be transferred to ASU, subject to the restriction they be used for educational purposes. ASU will commit to developing the courses and to maintaining the cost of operating the academic programs and all their support such as student services and libraries. ASU will also be responsible for the cost of operations and maintenance of the academic facilities and will pay $2 per square foot towards a reserve and replacement fund to keep the buildings in good repair. The City will retain the retail portion of the property.

The initial cost of this project between now and the bond election will be funded by Phoenix from its funds and they have committed up to $100M to do this. ASU will cover½ of the interest cost associated with that $100M for a period of up to three years. ASU will transfer the ownership of the Mercado property upon the retirement of the debt associated with that property which currently is scheduled for the year 2024. ASU will be responsible for developing student housing on the campus.

Regent Herstam said this was probably the ultimate partnership and it is a great academic and financial fit. Regent Bulla agreed and thanked the City of Phoenix for their efforts and commitment. President Stuart recognized Sherry Sculley and Pat Grady from the City of Phoenix who were present in the audience.

Regent Calderón said, regardless of the motion, he understood this project would proceed at “full speed ahead.” Upon motion of Regent Boice, seconded by Regent Bulla, the Board authorized ASU to proceed with negotiation of an Intergovernmental Agreement with the City of Phoenix relating to development of the Downtown Phoenix campus, consistent with the terms and conditions set forth in the executive summary, and subject to review of the final IGA by the Capital Committee and approval by the full Board. All legal documents will be subject to review by Board and university counsel.

Mr. Paul Ward, former Regent Rudy Campbell, and Mr. Rich Stanley joined the meeting for this discussion. Regent Boice said ASU was requesting authorization to transfer and exchange a portion of street located south of University Drive along Forest Avenue in Tempe to the First United Methodist Church. The University requests wavier of Board policies 7-204 and 7-205 that require an auction, listing with a broker, and appraisals for this transfer and exchange of real property.

Mr. Ward said ASU was requesting this action to correct a mistake made 17 years ago. The law and practice has been that when the City of Tempe abandons a street that it conveys title to that street to the adjacent property owners. In this case, that didn’t happen. Former Regent Campbell, speaking on behalf of the First United Methodist Church, explained the history of the issue.

Mr. Ward said the request is for the transfer occur without consideration from ASU in order to correct the mistake. The conveyance was actually incorporated in a comprehensive clean-up with the City of Tempe and they did not realize at that time the university did not own the property on both sides of the street. The university will obtain a permanent easement for the use of that area and will continue to lease and maintain nine disabled parking spaces for which it will make a $2000 per year payment to the Church.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board authorized ASU to transfer and exchange the portion of Forest Avenue property discussed above to the First United Methodist Church with a retention by ASU of an easement right for ingress, egress, and parking, and an annual payment by ASU to the Church in the amount of$2,000 so long as the subject property is owned by the Church and is utilized by ASU for the purpose of parking, as described in the executive summary, without any requirement of an auction, listing with a broker, or appraisal.

President Crow and his staff were thanked for their hospitality. Regent Stuart was thanked for guiding everyone through all the big issues at this meeting. Regent Jewett said it was his last meeting at ASU and he thanked President Crow for making it a memorable one. Regent Herstam said it was also his last meeting at ASU and he thanked President Crow for all the memorable experiences he had had at ASU as a Regent. He especially thanked Dr. Christine Wilkinson and Ms. Lori Briese for their helpfor the last eight years. Regent McCalley said this was also his last meeting at ASU and he thanked President Crow and his staff for their hospitality through the two years he had been on the Board. Regent Herstam was thanked for his work on the Feasibility and Redesign Report.

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