August 2002 Minutes/Arizona Board of Regents

A meeting of the Arizona Board of Regents was held August 16, 2002, in the Havasupai Room of the University Union, Northern Arizona University, Flagstaff, Arizona. President Jewett called the meeting to order at 8:12 a.m.

PRESENT:	Regent Fred Boice Regent Robert Bulla (Morning Only) Regent Chris Herstam Regent Jack Jewett Regent Matthew Meaker Regent Kay McKay Regent Christina Palacios Regent Danelle Peterson-Kelling Regent Gary Stuart
ABSENT:	Regent Donald Ulrich Governor Jane Dee Hull Superintendent of Public Instruction Jaime Molera

Also present were: President John Haeger, Dr. M. J. McMahon, and Dr. Jeanette Baker, Northern Arizona University; President Michael Crow, Dr. Milton Glick, Dr. Mernoy Harrison, and Mr. Steve Miller, Arizona State University; President Peter Likins, Dr. George Davis, Dr. Richard Powell, Dr. Elizabeth Ervin, Mr. Joel Valdez, Dr. Patti Ota, and Mr. Greg Fahey, University of Arizona; Executive Director Linda Blessing, Board Counsel Joel Sideman, Secretary to the Board Judy Garza, Dr. Thomas Wickenden, Dr. Art Ashton, Ms. Louise Houseworth, Mr. Matt Ortega, and Ms. Norma Salas, Central Office Staff; and Dr. Wanda Howell, Arizona Faculties Council.

All lists, reports, summaries, background materials, and other documents referred to in these minutes can be found in the August 16, 2002, Documents File.

Regent Herstam led the Pledge of Allegiance. President Jewett welcomed ASU President Michael Crow, Student Regent Danelle Peterson-Kelling, and Dr. Wanda Howell to their first meeting.

CALL TO THE AUDIENCE

Wes McCalley, President of Associated Students of NAU, introduced himself to the Board and said NAU students would be conducting an in-depth look at student fees.

Doug Hartz, President of Associated Students of UA, introduced himself and said the students were beginning to work on tuition and were trying to increase voter turnout this year for state elections.

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 and second by Regent Stuart. There was no individual discussion of these items.

Strategic Planning Committee Consent

The Board was provided a written report describing the progress on accomplishing the Action Plan objectives for FY 2002. The Board’s strategic planning process includes eight long-term strategic directions. To help accomplish these strategic directions, the Board develops an annual Action Plan each summer. The Action Plan for FY 2002 had twenty objectives. The Board was provided a final report describing progress toward meeting each of the Action Plan objectives. Objectives that are multi-year will be continued in the FY 2003 Action Plan.

Resources Committee Consent

The Board authorized ASU to finalize an agreement with the Dysart Unified School District to fund the Arizona Prevention Resource Center project titled, “School Violence Prevention Dysart U.S.D.” The objective is to develop safe, disciplined, and drug free communities and schools and to assist students to develop skills and emotional resilience to prevent violent behavior and drug use. The period of the agreement is October 1, 2001, through September 30, 2004 and the funding is $1,004,025.

The Board granted permission to the University of Arizona to purchase commercial property located at 1014 East Sixth Street at the sales price of $580,000 (the current appraised value), subject to approval of legal documents by University and Board Counsel. The property is located within the University Planning Area. The parcel is located in a commercial/retail center with university-owned lots on both sides. The facility will be assigned to the Chemistry Department to address their laboratory space deficit. The source of funds is local funds.

The Board granted permission to the University of Arizona to purchase property located at 1302-1304 North Cherry Avenue, Tucson, at the sales price of $280,000 (the current appraised value), subject to approval of legal documents by University and Board Counsel. The property is located within the University Planning Area. The acquisition of the property is in support of future Arizona Health Sciences Center needs. The source of funds is local funds.

The Board authorized the University of Arizona to purchase, at public auction, 320 acres of common school’s state trust land at Tumamoc Hill, subject to approval of legal documents by University and Board Counsel. This land accommodates the Desert Research Laboratory for desert plant and wildlife ecology research and has been administered by the University of Arizona since 1903. However, recent legislation now requires a lease payment of approximately $40,000 per year with progressive increases annually.

Funding will be provided by the State’s Growing Smarter Program Grant ($1.5M) and the matching Pima County’s Open Space Bonds proceeds ($1.5M) that are designated for Tumamoc Hill’s acquisition and preservation. The funds will be transferred to the UA through a cooperative agreement between Pima County and the University.

The Board granted permission to the University of Arizona to sell the Oceanic Properties at current appraisal price to the U.S. Fish and Wildlife Service, without public auction, as an exception to ABOR Policy 7-204B, subject to approval of legal documents by University and Board Counsel. The property consists of approximately 309,003 acres and will be sold at current appraisal price.

The mining claims are located in south central Pima County on the western edge of the San Luis Mountains bordering the Buenos Aires National Wildlife Refuge. The Oceanic Properties have long been recognized as an archeological resource. The Tohono O’odham Nation supports the sale to the U.S. Fish and Wildlife Service. Because of the particular value as an addition to the Buenos Aires National Wildlife Refuge, the University believes that public auction would be counterproductive as to the preservation of resources on the properties.

A local qualified appraiser has been contracted to perform a land appraisal and mineral survey of the property to be completed according to federal standards.

Audit Committee Consent

The Board approved an addition to Board Policy 3-700 that establishes a charter for the Audit Committee. The key features of the Charter include its purpose, organization (membership), policy, and responsibilities. It ensures the independence of the central office and university audit groups and promotes coordination of audit plans.

STRATEGIC PLANNING COMMITTEE

Dr. Art Ashton joined the meeting for this discussion. Regent Bulla said he did not believe the current strategic planning documents are fully utilized and they may not focus on the desired missions. He has had discussions with the universities regarding what the role of strategic planning should be, what the methodologies should be, and how to move forward from this point. A complicating factor is the new legislatively mandated five-year strategic plan that is due the first of next year. He believes there needs to be consolidation of current splintered plans, such as Information Technology and Building Renewal, and some simplification.

Regent Bulla described a meeting he and President Jewett had with the university provosts, strategic planners, and central office staff to seek input on ways to improve the strategic planning process. He suggested the Regents think about creating a vision to go along with its mission statement. He also suggested the mission statement and the strategic directions be reviewed for relevancy.

Regent Bulla reported on the current requirements for the various strategic plans and demonstrated how they sometimes overlap and how they differ. He said a recommendation would be made that ABOR drop its five-year plan and incorporate it into the new state five-year planning process. There has been some conversation with the universities about new directions, incorporating things such as compensation, building renewal, and financial aid. Throughout the process, measurement tools and funding will be considered. This hopefully will lead to the ability to do gap analysis. There will be an attempt to provide a summary that can be used to educate various constituencies on university needs and plans. Regent Bulla summarized the proposed new planning process that would meet legislative requirements and provide more realistic Board oversight and university guidance.

Mr. David Harris, Mr. David Cain, and Dr. Art Ashton joined the meeting for this discussion.

Mr. Harris explained the difference between the Capital Development Plan (CDP) and the Capital Improvement Plan (CIP). The CDP is the “go to” list of projects for the coming fiscal year, the projects the universities intend to proceed with between now and next June 30. The CIP is an annual plan for the next fiscal year and is mandated by state law. It contains two forecast years. A project cannot proceed unless it is in the CDP or the modified CDP.

Regent Bulla reported NAU was requesting Board approval of its FY 2003 Capital Development Plan, consisting of four new projects at an estimated cost of $31.4M. NAU also was requesting approval of its FY 2004 Capital Improvement Plan consisting of three new projects at an estimated cost of $31.5M.

President Haeger explained the current requests were the result of an allocation by the legislature for bonding expenses. He explained the process used to select what projects were chosen to go first. Mr. Cain described the particular project requests and the need for each project: School of Communication, Modular Swing Space, Campus Infrastructure Upgrades, Gateway Student Success Center, and Applied Research Faculty Site Preparation.

Upon motion of Regent Bulla, seconded by Regent McKay, the Board granted NAU approval for the 2003 Capital Development plan, and authorized NAU to proceed with: 1) Campus Infrastructure Upgrades; 2) Gateway Student Success Center (formerly University Union projects and Central Dining); 3) Modular Swing Space; 4) Communication Renovation (School of Communications); and 5) Applied Research Facility Site Preparation.

Mr. Joel Valdez, Dr. Art Ashton, Mr. Dave Harris, Mr. David Duffy, and Dr. Ray Woosley joined the meeting for this discussion. Regent Bulla reported the UA was requesting Board approval of its FY 2003 CDP, consisting of two new projects at an estimated cost of $73.7M, and its FY 2004 CIP, consisting of five new projects at an estimated cost of $150.2M.

President Likins gave an overview of the UA requests. He said some of the projects would proceed depending on how fast gift funding is received. He focused on the new UA Science Center, telling the Regents the current facility is used extensively by the community and school children. It is not positioned for accessibility by the public and is a very small facility. The UA has hoped for many years to be able to relocate the Center in downtown Tucson. The city’s Rio Nuevo Project provides this opportunity and the UA is engaged in a feasibility study to see if it would be a good funding decision to place the project in downtown Tucson.

Mr. Valdez described the project requests. Mr. Duffy provided information for the Infrastructure Phase VI and the three stages of the project. Dr. Woosley provided more information concerning the request for the Medical Research Building. President Likins explained the Medical Research Building was planned in phases. If the first phase is successful in bringing in the expected research dollars, the next phase would be built. Mr. Valdez explained the process used at the University of Arizona to plan for buildings before the requests were brought to the Regents. Regent Bulla asked how the operations and maintenance for the buildings would be funded if the state did not provide the funds and was told it would be funded through internal reallocations.

Upon motion of Regent Bulla, seconded by Regent Palacios, the Board granted approval to the University of Arizona for the 2003 Capital Development Plan and authorized the UA to proceed with : 1) Infrastructure Phase VI, and 2) Medical Research Building.

Dr. Mernoy Harrison, Dr. Art Ashton, and Mr. Dave Harris joined the meeting for this discussion. Regent Bulla reported Arizona State University was requesting Board approval of its FY 2003 Capital Development Plan, consisting of three new projects at an estimated cost of $55.3M and three public/private partnerships, and its FY 2004 Capital Improvement Plan, consisting of four new projects at an estimated cost of $56M.

President Crow said ASU is an institution in a high-growth mode; they are expecting an additional 4,000 to 5,000 students this coming year. He explained the need for expanded research space as well as space needs at ASU East. Dr. Harrison explained the individual projects: USB Backfill Project Phase I, USB Backfill Project Phase II, South Campus Parking Structure, Memorial Union Renovation and Expansion Phase I, and Bookstore Renovation and Expansion. ASU was also asking approval to negotiate with developers or donors for the following public/private projects: ASU Foundation Building, Small Group Student Housing-South Campus, and Wrestling Training Facility. Regent Bulla asked if ASU would reallocate internal funds if state funds were not received for maintenance and operations and was told yes.

Upon motion of Regent Bulla, seconded by Regent Boice, the Board granted approval for the Arizona State University Main Capital Development Plan, and authorization to proceed with: 1) USB Backfill Project Phase 1, 2) USB Backfill Project Phase II, 3) South Campus Parking Structure, 4) Memorial Union Renovation and Expansion Phase I, 5) Foundation Building, 6) Small Group Student Housing-South Campus, 7) Wrestling Training Facility, and 8) Bookstore Renovation and Expansion. The Board also authorized ASUM to proceed with negotiations with developers/donors for the ASU Foundation Building, Small group Student Housing-South Campus, and Wrestling Training Facility.

Dr. Carl Fox and Dr. Tom Wickenden joined the meeting for this discussion. Regent Bulla reported the Business Advisory Team (BAT) was formed at last year’s Retreat. It is made up of interested business representatives identified by the university and Board presidents. Regents Ulrich and Jewett are the co-chairs.

President Jewett reported President McKay appointed the business representatives who are asked to help advise on evaluating the Technology and Research Initiative Fund (TRIF), established by Proposition 301, and the various initiatives supported through allocations from the fund. The BAT had its organizational meeting in May and its first working meeting in July and has provided excellent advisory support.

A Business Plan Model was requested by the Board at its April meeting for the TRIF initiatives. It was drafted by the university business deans and was used as the basis for the four sample business plans reviewed and critiqued by the BAT in July. Panels of team members provided suggestions for improving the model. They recommended it be strengthened by expanding the discussion of business and competitive risks, by adding a section on the sustainability of the initiatives, and by including a description of early proof of performance.

President Jewett said the Board was being asked to approve the proposed business plan model which includes the BAT suggestions. The plan for completing the review of business plans is as follows: By September 1st, plans for all initiatives will be finalized and provided to the BAT; By October 1st, team comments on these plans will be published and they will be discussed at the next team meeting on October 17th; On November 7th, the team will turn to the issue of how best to roll up the evaluation of the specific individual initiatives into an evaluation of the TRIF program in general; At the Board meeting in November, the Regents will receive the recommendations of the BAT regarding the evaluation of the TRIF program. Finally, at the Board’s January 2003 meeting, the Regents will receive the TRIF business plans for approval.

Upon motion of Regent Bulla, seconded by Regent Herstam, the Board approved the Business Plan Model together with the revisions suggested by the Business Advisory Team.

Regent Bulla introduced Mr. Tom Browning, President of the Greater Phoenix Leadership, Inc. (GPL). He provided an overview of the P-20 Initiative, an education strategy. Mr. Browning said the GPL, in close coordination with the Southern Leadership Council in Tucson, has taken a very strong stance with regard to improvements in education in both K-12 and higher education. GPL hosted an economic summit last November and out of that meeting came six identifiable cross cutting issues and GPL volunteered to take the lead in pulling together the education component as they believe education is the foundation for all the other issues, especially when placed in the context of the economy.

Mr. Browning said GPL hopes to proceed to accomplish several objectives based on studies and information from past panels, studies, and blue-ribbon task forces. The group is working under the following guiding principles: Education is a life-long process; Arizona’s future depends on the success of its educational providers and students; Arizona’s educational foundation is an investment–not an expense; Success requires long-term stewardship of business, education, and public officials; Student performance must be linked to academic standards and based upon continuous improvement, within an articulated curriculum.

Mr. Browning said GPL believes a quality education system must develop the talents of Arizona’s people in order to: 1) Have America’s most highly skilled citizenry and best quality of life; and 2) Satisfy both the needs of the economy and the aspirations of our citizens. The system must be articulated from pre-school thorough higher education to facilitate the progression and success of students. He said the Arizona Business and Education Coalition (ABEC) has been formed with educators from around the state, mostly school principals. The GPL is not proposing a new governance structure; they hope to work with the one that is in place.

Mr. Browning said the GPL believes the community colleges and universities need the resources to be able to provide top quality post-high school education and to provide a world-class research and development resource. The GPL is ready and willing to help find those resources. There is a need to enhance the ability of higher education institutions to promote capacity building, engage in entrepreneurial endeavors by individuals and entities participating in university research and development activities, and encourage the development of commercially valuable technology.

Mr. Browning said the Arizona Partnership for Higher Education and Business (APHEB) was formed to help to optimize the research and development partnerships between the Arizona universities and the needs of a world-connected economy and to maximize the participation rate of high school graduates in higher education.

Mr. Browning said the next steps are to establish commitments from organizations and individuals, solidify working relationships with those in position of authority, define the long-term strategy, and to define and establish responsibility for near-term action items. Legislative initiatives include technology transfer and stabilizing the university funding structure.

President Jewett thanked Mr. Browning for coming to the meeting and asked if his reference to stabilizing university funding included revising the state tax policy. Mr. Browning said there was not unanimity in the business community as to how to approach that, but in his view, the entire state tax structure should be examined. He said he did not believe the general fund would be able to support everything that is needed in the state. President Jewett said he believed the Board would be looking to the leadership of the business community throughout the state to help communicate to the legislature and others that the universities are really focused on an enterprise approach. The view that the universities are just a part of big government misses the point of the power of the economic engine that resides in the universities. President Jewett, Regent Bulla, and Mr. Browning expressed the hope the business community and the universities could work together to further the cause of education. Mr. Browning said he would keep Executive Director Blessing informed of the work of GPL and asked to be informed when the business community could be helpful.

RESOURCES COMMITTEE

Mr. Dick Roberts, Ms. Gail Tebeau, Ms. Louise Houseworth, Mr. Josh Allen, and Mr. Alan Carroll joined the meeting for this discussion. Regent Stuart directed the Regents’ attention to the Page entitled System Summary FY 2003 Initial All Funds Operating Budget, which describes the $2.6B in Sources and $2.3B in Uses. Ms. Houseworth commented that the All Funds Operating Budget combines the State Operating Budget and the Local Funds Budget into a comprehensive report that includes projected revenues, expenditures, and year-end balances.

Regent Stuart commented on the amount of the operating budget that is funded by tuition rather than general fund dollars due to state funding reductions. President Likins commented on the size of the grants and gifts funding, which is larger than the state funding. However, this funding is restricted in use. Upon motion of Regent Stuart, seconded by Regent McKay, the Board approved the FY 2003 Initial All Funds Operating Budget for the universities and the central office.

Mr. Dick Roberts, Ms. Gail Tebeau, Ms. Louise Houseworth, Mr. Josh Allen, Mr. Alan Carroll, and Mr. Dan Anderson joined the meeting for this discussion. Mr. Anderson gave the Board a brief overview of economic conditions in Arizona. Ms. Houseworth directed the Regents’ attention to the Summary of FY 2004 State Operating Budget Requests which is the preliminary request of the universities and the central office. This is the chance for the Regents to give guidance for the preparation of the final requests which will be presented in September. The requests consist of two basic components–the continuation budget adjustment, which reflects $8M for annualization of health and dental insurance premium increases and the 22 to 1 enrollment growth formula, and the strategic readjustment requests which are in the amount of the budget cuts to the FY 2002 and 2003 budgets for high priority strategic initiatives.

President Likins said he believed it was important for the universities to ask for what funds they need, even though the reality is the state will not fund the entire request as the funds will not be available due to the slow economy. He believes it will be hard for the universities to rebuild when the economy recovers if their needs are not a matter of record. He said the University of Arizona had limited its requests to the dollar level of the cuts received in previous budgets.

President Haeger said he agreed with President Likins’ statement regarding displaying the universities’ needs. He talked about the results on faculty salaries because of prior budget cuts. Dr. Haeger said the community colleges are beginning to offer faculty salaries that are higher than NAU can offer.

President Crow said he concurred with the general comments made by President Likins and President Haeger. He said there are different circumstances and environments in each of the universities that makes the management of financial stress somewhat different. Specifically, ASU is experiencing tremendous growth and he would like the Regents to continue to defend the present growth formula funding. It may not be the best model for the development of the universities, but it is what is in place now. Dr. Crow said ASU had reduced its request for strategic reinvestment by reducing the number of state supported projects to those that are the most critical. Foremost in those projects will be economic development and research support requests which are representative of the kind of investment ASU needs to stimulate its capacity to generate additional revenues. Dr. Crow said the university was redirecting funds to areas that are most important to its moving forward, and that will cause pain and suffering in other areas.

Regent Stuart said the dilemma facing the Regents and the universities was to recognize the obligation to state accurately the financial needs of the universities, but to recognize at the same time this is both a political and financial document. On the one hand it would seem foolish to ask for a 13.5% increase over the general fund base; on the other hand, there are obligations to at least tell the legislature what the needs are as stewards of the system. If this can be done by reducing the strategic reinvestment to the most critical needs, he believes both the political and financial statement can be made. The challenge for the Board is to communicate this budget in a way that makes clear to the people who make the decision that we recognize the state is in hard times and an enormous effort has been made to reduce the needs to the most critical items. He would like to see the presidents come back in September with a request that reflects the most critical strategic reinvestment needs.

Regent Bulla said he believes, if the needs can be prioritized and documented through the strategic planning process, perhaps even more than this can be justified. He would be comfortable with a budget of this magnitude if the needs can be documented. He believes areas of strategic directions would be brain drain or compensation, building renewal, and financial aid and efforts should be focused in these areas of concentration. Simply asking for restoration of funds cannot be supported.

Regent Palacios said she agreed with Regent Bulla about priorities as the universities should be prepared to describe what they will give up if they do not receive their requests. She suggested another way to present the budget is to present a more realistic budget and to present the unmet needs and what will happen if funds are not received separately.

Regent Herstam said it was one thing to be good stewards to ask for everything the universities need, but he did not want to look foolish by asking for a 13.5% increase over the current general fund base when you know it will not be forthcoming. He would rather go with the style suggested by Regent Palacios of being more realistic with the numbers, then showing the consequences and the programs that need to be funded to keep the university system functioning properly.

President Likins said the annual personnel report illustrates the problem as it provides the state mandated number that would be required to bring the university faculty salaries to the medium of their peer populations, $157M. Everyone knows the universities will not receive that amount, so the UA is asking for $3M in targeted funding. However, he believes it is proper to express to the legislature the large number and the consequences of not being able to pay even median salaries. He said it was an arbitrary decision where to draw the line and the universities had decided to draw the line at the level of last year’s cuts.

Mr. Dick Roberts, Mr. Josh Allen, Mr. Alan Carroll, and Ms. Cathy McGonigle joined the meeting for this discussion. Regent Bulla asked if the unmet needs of $157M were restored, would the universities be at the 50 percentile and was told yes. Regent Stuart said he believed this one page summary would be a good way to make a point to a legislature that is usually drowning in paper.

Dr. George Davis, Dr. Milt Glick, Dr. Tom Wickenden, Ms. Kathy Bedard, Dr. Elizabeth Ervin, and Dr. Carl Fox joined the meeting for this discussion. Regent Stuart said the Board was being asked to review and approve the FY 2002 Technology and Research Initiative Fund Annual Report.

Dr. Wickenden presented an overview of the Technology and Research Initiative Fund (TRIF), which was authorized by statute to implement Proposition 301. In March 2001, a five-year budget plan was approved by the Board and this report is on the first year of funding under the five-year plan. He said the Board-approved TRIF budget for FY 2002 was $45,600,000 and the actual revenues received were $44,274,372. The total expenditures through June were $23,733,022. The funds were not all expended because they did not start arriving in the fund until September; these are large, complicated projects and it takes a while to get them started; and the Board approved guidelines that allow the universities to expend the funds through December 2002. There may be minor refinements in the numbers as the books on the fiscal year were just closed at the end of July and a subsequent review shows several small changes that need to be made.

Dr. Wickenden highlighted a few of the performance measures. He noted the universities were in compliance with all the statutory requirements for expending the funds and the report indicates expenditures and performance data reflect sound fiscal management.

Provost Glick said ASU had expended about 60% of the revenues and will have expended it all by January 1. He said no expenditures had as yet been expended for ASU East and ASU West as those debt service expenditures had not yet come due. Under President Crow’s leadership, ASU has reconceptualized the use of Proposition 301 dollars. In a macro scale the dollars look the same, but in a micro scale they are dramatically different. President Crow said he found the focus of this part of the 301 investment is to create a biomedical research institute at ASU. He believes ASU will be greatly advantaged by taking a more focused approach by reconfiguring the investments around biodesign--basic science and basic engineering related to designing solutions to specific problems. He also believes this investment, in highly concentrated ways, will enhance and build on the relationship with the UA, particularly in clinical and biomedical leadership. He believes there should be a return of $5 to $10 of every dollar invested in resources. The foundation within ASU to build the AZ BioDesign Institute will be the School of Life Sciences.

Dr. Carl Fox said there were five major areas relative to 301 funding. NAU’s unique program is in the environmental research and education areas and a capital development project. NAU is also concentrating on work force development. He described grant money that had been leveraged by 301 funding. He described how the university was working with the Greater Flagstaff Business Council to attract new business to Flagstaff and with the other two universities. He described some new technologies that have been developed from 301 funds.

Dr. Davis thanked the citizens of Arizona for the Proposition 301 funds. He explained how the University of Arizona was taking a cross-disciplinary approach to using the funding. He gave several examples of how the UA had leveraged Proposition 301 funds.

There was a discussion of the meaning of the terms “Return on Investment” (ROI) and “leveraging” and the need for all three universities to define the terms in the same manner. Regent Boice said he believed it was important to show ROI, but it must be a meaningful term that really shows progress and is understandable to the public.

Upon motion of Regent Stuart, seconded by Regent Boice, the Board approved the FY 2002 TRIF Annual Report with the minor adjustments mentioned by Dr. Wickenden.

Mr. Dave Harris and Mr. David Cain joined the meeting for this discussion. Regent Stuart reported Northern Arizona university was requesting project implementation approval for the Campus Infrastructure Upgrades Project. This bond-funded project will include the replacement of electrical distribution, high temperature hot water distribution, and domestic water distribution systems for the south campus at an estimated cost of $12M. Upon motion of Regent Stuart, seconded by Regent Boice, the Board granted Project Implementation Approval to NAU and authorized NAU to proceed to complete design and construction documentation and then proceed to bid and construct the proposed project.

Mr. Dave Harris and Mr. David Cain joined the meeting for this discussion. Regent Stuart reported Northern Arizona University was requesting project implementation approval for the Gateway Student Success Center. This bond-funded project will involve the renovation of the former Central Dining Building in order to accommodate the relocation of Student Advisement, Career Services, and other ancillary student services into a consolidated unit of integrated student services at an estimated cost of $3.2M.

Upon motion of Regent Stuart, seconded by Regent Bulla, the Board granted Project Implementation Approval to NAU for the Gateway Student Success Center and authorized NAU to proceed to complete design and construction documentation.

Mr. Dave Harris and Mr. David Cain joined the meeting for this discussion. Regent Stuart reported Northern Arizona University was requesting project implementation approval for the Communication Building Renovation Project. This bond-funded project will renovate 73,580 square feet to rectify failing electrical and mechanical components and deficiencies in accessibility, fire-life safety, and plumbing systems within the Communication Building at an estimated cost of $13M.

Upon motion of Regent Stuart, seconded by Regent McKay, the Board granted Project Implementation Approval to Northern Arizona University to proceed to complete design and construction documentation for the Communications Building Renovation Project.

Mr. Dave Harris and Mr. David Cain joined the meeting for this discussion. Regent Stuart reported Northern Arizona University was requesting project approval for the Modular Swing Space Project. This bond-funded project involves the construction of infrastructure and concrete pads which will house modular buildings that may be installed as needed by user groups relocated during interior building renovations planned across campus, at an estimated cost of $2.6M. This project was granted project implementation approval by the Board at the September 2001 meeting.

Upon motion of Regent Stuart, seconded by Regent McKay, the Board granted Project Approval for the Modular Swing Space Project to Northern Arizona University.

The meeting recessed at 11:50 a.m. and Regent Bulla left the meeting at this time. The meeting reconvened at 1:05 p.m.

Mr. Dave Harris and Dr. Mernoy Harrison joined the meeting for this discussion. Regent Stuart reported Arizona State University was requesting Board approval to exchange or sell a parcel of property, located near Price Road and the 101 Freeway, with two parcels owned by the City of Mesa and authority to sell the property acquired from the City of Mesa. The issue had been discussed in Executive Session earlier.

The City of Mesa is in the process of entering into a Development and Disposition and Intergovernmental Agreement (DDA) with the Tourism and Sports Authority (TSA) for the construction of a multipurpose stadium facility on real property owned by Mesa. The construction plans provide that a portion of the parking for the stadium facility will be located on land currently owned by ASU near Price Road and the 101 Freeway (ASU Land). Mesa desires to acquire title to the ASU Land in exchange for two parcels of land owned by Mesa located at (a) south of Thomas Road and West of Recker Road and (b) northeast corner of Baseline Road and the future Hawes Road extension for the purpose of performing Mesa’s obligations under the DDA.

The value of the property to be exchanged will be determined by appraisals conducted in accordance with ABOR Policy 7-206. Board Counsel will be notified of the results of the appraisals. ASU intends to sell the Mesa Land after the exchange. Proceeds from the sale of the Mesa Land will be used to assist with funding of other University priorities. ASU and Mesa propose to accomplish the exchange of real property by entering into an Agreement for Exchange of Real Property and Escrow Instructions (Exchange Agreement).

Upon motion of Regent Stuart, seconded by Regent Herstam, the Board authorized ASU to exchange or sell the ASU Land with the Mesa Land and authorized ASU to sell the Mesa Land, once acquired, in accordance with the terms described in the Executive Summary, without further approval from the Board. Further, the President of ASU, the Executive Vice President for Administration and Finance, or designee are hereby authorized to negotiate, finalize, sign, and deliver the Exchange Agreement and any and all necessary and appropriate documents and related writings and to take any and all necessary and appropriate actions, to consummate the exchange of real property and sale of the Mesa Land in a manner not inconsistent with the information provided above. It is to be emphasized that the proposed land exchange is contingent upon a final decision of the TSA to construct the multipurpose stadium facility at the Mesa location.

PROGRAMS COMMITTEE

Dr. Milt Glick, Dr. Tom Wickenden, Dr. George Davis, and Dr. Ron Pitt joined the meeting for this discussion. Regent Palacios reported this item was a report on the
system-wide review of academic programs with low graduation rates. Board Policy requires this review at least once every five years. Dr. Wickenden said that in 1995 the Board of Regents developed a new academic program review process called the System-wide Academic Program Review Process. The purpose was to supplement the existing process which continues to be a seven-year academic review process conducted by the universities. Dr. Wickenden summarized the review process.

Dr. Wickenden presented the overall results of the 2002 System-wide Program Review. There were 745 programs reviewed across the university system: 611 were found to be above the minimum graduation thresholds and 134 fell below the graduation thresholds. Of the 134 programs, 90 were exempt from further review under the guidelines. Based on the further review, ten programs were recommended for elimination–seven by phasing out and three by merging or reorganizing. A continued review is recommended for five programs, one would be deferred because it is being renamed and restructured, two will have an interim review in a couple of years, and two programs are being considered for merging. Finally, 29 programs out of the 44 are being recommended for retention.

Dr. Glick said ASU was not recommending any programs for elimination. ASU is convinced elimination of programs through program review is an important responsibility; however, they do not believe counting degrees given should be the primary criteria. Over the last six years, ASU has eliminated 21 degree programs and ASU has a relatively small number of programs compared to other universities its size. This is because ASU grew so fast. Dr. Glick reviewed the programs on ASU’s list.

Regent Palacios asked what the Regents could do to improve the program review process. Provost Glick said he believed the seven-year program reviews conducted by the universities should determine whether a program is kept, improved, or discontinued. Given the relatively slim portfolio of programs at ASU, it is more likely programs would be improved rather than eliminated. President Crow said ASU intends to apply national standards to its programs and either improve or eliminate those that fall below the standards.

President Likins said UA is currently considering what programs to eliminate due to budget cuts. Graduation rates are one of the criteria; not the main criteria. President Haeger said every time a position is open at NAU, the position is reviewed to see if it is valuable to the program and the program is reviewed to see if it is justified.

Regent Jewett agreed there are questions on methodology and maybe there should be further consideration of the reviews. He suggested the policies and practices behind the reviews be evaluated. He would like to see some cost data when it is stated the costs are marginal. He would like to see what opportunities are lost when programs are eliminated or retained. If there are methodology flaws, they should be identified and corrected.

President Crow gave an example of a question he hopes can be answered with new evaluation criteria: Why is there not a graduate program in Spanish or mathematics at any of the three universities in Arizona that is ranked in the top two categories in the national rankings?

President Likins said he believed the problem with the review as it exists is that one single measure was selected as the trigger for review. He believes there should be some kind of matrix, a set of criteria against which programs are tested, and each program would be examined from a multiple perspective before being brought to the Board for review. He said there are some programs that have zero cost.

Regent Boice said there are other evaluating entities that not only rate programs as not good, but also as not good enough. He agreed the reviews need to be evaluated in a broader sense. Regent Palacios suggested the Provost and staff create a template or matrix and bring it to the Regents for approval before the next report.

Provost Davis said the current process has had the impact of eliminating degree programs. The UA has eliminated or merged 70 programs since 1996. He said the current measures are not perfect, but do challenge the universities and provide the Provosts’ offices with some leverage. Regent Palacios said she would like to see the valuable things from this process be added to other criteria to create a better process. Regent Boice asked how the issue of programs that were not as good as they should be would be addressed. Regent Palacios said the issue is program elimination, not just low productivity; so anything that could lead to program elimination should be examined, including whether the program is just not good enough.

NAU Associate Dean of the College of Communications Tom Knight introduced Dr. Bryan Short, who is the co-author of the program. Dr. Knight gave an overview of the proposed Master of Arts in Applied Communication. He said the primary customers for this program would be place bound and working professionals with bachelor’s degrees in rural and Northern Arizona. One distance course will be offered each semester by web delivery, possibly as a hybrid with ITV. Degrees can be completed on campus, off campus, or as a combination. Dr. Short said the program had been in the planning stages for several years, but the Proposition 301 funding has made it possible.

Upon motion of Regent Palacios, seconded by Regent Boice, the Board granted planning authorization for the M.A. in Applied Communication for NAU. The Board also received a written summary of program changes that had been approved by the Executive Director.

Dr. Tom Wickenden joined the meeting for this discussion. Dr. Wickenden said Board Policy calls for students who are admitted without having taken all the courses required for admission to make up these courses during the first year they attend the university. The Board granted a temporary exemption to this policy after new admission requirements were implemented several years ago so students could have up to two years to make up these deficiencies. This time limit for the temporary exemption has expired. The proposed recommendation is to extend the temporary exemption until Spring of 2004.

The studies needed to determine whether the modification should be removed or made permanent have been postponed to next year due to budget constraints. Admission policies may be reviewed and revised as part of the Board’s “Changing Directions” initiative during the upcoming year. Therefore, it is believed it is premature to decide whether the exemption should be made permanent or deleted.

PUBLIC AWARENESS COMMITTEE

Regent Herstam reported that the Fall 2002 University and ABOR Outreach events are listed in the Executive Summary.

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

Dr. Wanda Howell reported the Arizona Faculties Council appreciated the briefing they received from Dr. Tom Wickenden and Dr. Art Ashton on the Retreat the Board held yesterday. She offered the services of the faculty for any committee that might be formed as part of Changing Directions. She also asked for faculty to be involved in the Retreat next year.

Regent Stuart reported the State Board of Directors for Community Colleges had closed its offices and now has temporary space at the state capitol. Most of the staff has been eliminated. Elimination of the teacher certification requirement at the community college level became law in July of this year. It is not clear what will happen to the applications that are being received. The Real property, leases, and bond obligations will be transferred from the State Board directly to the community college districts and counties.

Regent Stuart reported there had been a voluntary association called The Arizona Community College Association. Its role had never been clearly defined. Mohave Community College District has passed a resolution to withdraw from this association. Santa Cruz County has an election in September to decide whether to establish a provisional community college district; Gila County will vote on one in November; and Eastern Arizona College, after 34 years, will not provide community college services in Gila County. It is hoped the Joint Conference Committee, a mechanism between the Regents and the community colleges, can be saved.

The Regents and the presidents thanked President Jewett for his leadership of the Retreat and President Haeger for the social Thursday evening and the work his staff did to host the meeting. President Crow, Student Regent Peterson-Kelling, and Dr. Howell were welcomed to the Board.

MINUTES