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Minutes of a Meeting
January 22-23, 2004
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Table of Contents
REPORT FROM THE PRESIDENT OF ARIZONA STATE UNIVERSITY
*Proposed Amendment to Board Policy 3-701, “Authority and Responsibility” (First Reading)
*Multiple-Year Employment Contract for Women’s Water Polo Head Coach (ASU)
*Multiple-Year Employment Contract for Men’s Golf Head Coach (ASU)
*Multiple-Year Employment Contract for Women’s Gymnastics Coach (ASU)
STUDY SESSION ON FUNDING FORMULAS
Arizona Biodesign Institute Phase II: Project Approval (ASU)
Highland Avenue Parking Structure; Project Implementation Approval (UA)
Multiple-Year Employment Contract for Head Football Coach (UA)
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MINUTES OF A MEETING
ARIZONA BOARD OF REGENTS
January 22 and 23, 2004
A meeting of the Arizona Board of Regents was held January 22 and 23, 2004, in the Alumni Lounge of the Memorial Union at Arizona State University, Tempe, Arizona. President Herstam called the meeting to order at 1:20 p.m. on Thursday, January 22.
PRESENT:
Regent Fred Boice
Regent Robert Bulla
Regent Chris Herstam
Regent Jack Jewett
Regent Danelle Kelling
Regent Wes McCalley
Regent Christina Palacios
Regent Gary Stuart
Regent Don Ulrich
Superintendent Tom Horne (Thursday Only)
ABSENT:
Regent Kay McKay
Governor Janet Napolitano
Also present were: President Michael Crow, Dr. Milton Glick, Dr. Christine Wilkinson, Mr. Scott Cole, and Dr. Mernoy Harrison, Arizona State University; President Peter Likins, Dr. George Davis, Mr. Joel Valdez, Ms. Edith Auslander, Dr. Richard Powell, Dr. Ray Woolsley, Mr. Greg Fahey, and Mr. Dick Roberts, University of Arizona; President John Haeger, Dr. M. J. McMahon, Mr. Dave Harris, and Dr. Elizabeth Grobsmith, Northern Arizona University; Executive Director Linda Blessing, Board Counsel Joel Sideman, Secretary to the Board Judy Garza, Dr. Tom Wickenden, Dr. Art Ashton, Ms. Cathy McGonigle, Ms. Kathy Bedard, Ms. Stephanie Jacobson, Ms. Gale Tebeau, and Ms. Norma Salas, Central Office Staff; and Dr. David Camacho, Arizona Faculties Council. Regent Designees Lorraine Frank and Ernest Calderón were also present.
All lists, reports, summaries, background materials, and other documents referred to in these minutes can be found in the January 22 and 23, 2004, Documents File.
Regent Kelling led the Pledge of Allegiance. President Herstam acknowledged Regent Designees Lorraine Frank and Ernie Calderón.
Colby Ashton, alumnus of ASU, said he believed a higher tuition burden should be placed on non-resident students than resident students. He believes tuition increases hurt the middle income students, those who have to work their way through college but who do not qualify for financial aid.
Sophie O’Keefe-Zelman, ASASU, told the Board about the voter registration contest held among the three universities. She described the activities held on the campuses. ASU Main campus won. To mark that victory, she distributed T-shirts that said “I love ASU Main.”
Debbie Wyckoff, Interim Director of the UA Medical Technology Program, spoke about studies that show how important medical technologists are and the current and projected shortage of trained medical technologists. She asked the Board to continue the current Medical Technology Program at the University of Arizona.
Dr. Donna Wolk, Southern Arizona VA Health Care System, spoke of the need for highly trained medical technologists by bio-researchers in order to meet the requirements of their grants. She asked the Regents to request the UA reconsider its decision to end its program in light of the new studies released since the decision was made.
Linda Smith, Director of Laboratory Services at Northwest Medical Center who was representing all clinical management in Tucson, asked the Regents to reconsider the closure of the School of Medical Technology at UA. She explained how the shortage of medical technologists was greater than the shortage of nurses and why it could cause a greater problem than the shortage of nurses.
Joan Apt, Arizona Department of Health Services, explained why the medical technologists provided by the University of Arizona are so important and why the program should be continued.
Thomas Walker, Tri- University Classified Staff Councils (TUCS), said the ABOR Five-Year Strategic Plan identifies the need to optimize the universities’ resources acquisition and work environment to enhance competitive human operating and capital resources. The TUCS supports this effort on salaries, benefits, work environments, and operations as a means of better supporting staff and other employees. The TUCS also supports the need to communicate with universities and their constituencies and stakeholders on Board policies and initiatives and offers the help of their membership as resource partners in this communication effort.
Frank Cassidy, an adjunct professor in UA School of Planning, asked for a decision from the UA as to whether they were going to cancel or continue the School of Planning as the indecision is causing problems with the program. He asked them to not be penny wise and pound foolish by eliminating the program as well trained planners are needed in this state.
Trevor Barger, a lawyer who had attended both the UA and the ASU planning schools, explained the difference between the two schools and asked that the UA School of Planning be continued.
Sandra Rosenbloom, read a letter from Matthew Zoll supporting the UA School of Planning.
Mark Holden, graduate student in School of Planning at UA, read letter from Richard Rhey, Executive Director of Southwest Fair Housing Council, who supports the UA School of Planning.
REPORT FROM THE PRESIDENT OF ARIZONA STATE UNIVERSITY
President Crow introduced Dr. Linell Cady, the Franca G. Orrefice Dean’s Distinguished Professor of Religious Studies and Director of the Center for the Study of Religion and Conflict at ASU. Dr. Cady focuses on the study of the relationship between religion and society, religion and institutions, and religion and nonreligious life. Professor Cady explained how the study of religion is relevant today and how the center for the Study of Religion and Conflict is being organized.
Professor Cady said Americans are used to considering religion a private thing, a matter of personal belief. The assumption has been that modernization will progress toward a society where science is the primary motive for finding truth. These kinds of assumptions have not been helpful in making sense of the world around us. Public consciousness has been dramatically transformed in the past few years to become more aware of the role religion plays in shaping societies around the world. It creates stronger identities, articulates values, serves as a mover of protest against political regimes, or against economic development. Some are movements for justice, unity, and peace and some are movements that advocate extreme violence.
The mission of the Center is to promote research and education on the nature, causes, and consequences of religious conflict around the world with the goal of contributing imaginative strategies for their containment and resolution.
Regent Ulrich asked how many collaborations were underway with different universities and was told there are not formal agreements, but there are many different universities and institutions sponsoring forums. Regent Stuart asked if white papers would be produced that do not promote a particular religion and was told there is great care taken not to take sides with one group or another, but to understand the various groups. There is great interest in white papers and one institution that has expressed interest is the U.S. State Department. Dr. Crow said this is one example of 30 projects that have been funded in the last 18 months.
Regent Horne left the meeting at this time.
Items on the Consent Agenda, which are marked in these minutes with an *, were considered as consent matters and were adopted upon motion of Regent Boice, seconded by Regent Kelling.
The Board approved the September 25 and 26, 2003, Executive Session, and the November 20 and 21, 2003, Regular Meeting minutes.
Public Awareness Committee Consent
*Update on the 2003-2004 Public Awareness Plan
The Board received a written update on activities carried out in support of the Board’s 2003-2004 Public Awareness Plan. A sampling of the Media, Citizen, and Community Outreach activities completed are: information packets regarding the Board were sent to all higher education beat reporters at the major state newspapers; student leaders received an orientation at the Board office in September. The Board’s annual report was published and is available on the Board’s website; Central Office and university staff participated, along with other public/private postsecondary representatives, in a brainstorming session with Channel 3 television station in Phoenix to discuss possible topics for a segment on higher education the station wishes to air in February as a part of its series on education in Arizona, and President Herstam advanced public awareness of the Board through speeches, meetings with business and community organizations, numerous media interviews, a guest appearance on a Phoenix radio show, letters to the editor, and an op-ed piece on the importance of undergraduate education.
A sampling of the Legislative Awareness and Advocacy activities completed are: Legislative Affairs Workgroup was formed to enhance the Board’s oversight of the university system’s legislative affairs program; Regent Boice made courtesy visits to several members of the state legislature, discussing faculty and staff salaries with those members who serve on the Joint Legislative Committee on State Employee Compensation; President Herstam, the university presidents, and Executive Director Blessing met with Governor Napolitano in November to discuss the universities’ budget requests and priorities; and on an ongoing basis, Regent Stuart and the government affairs officers of the universities and central office met to discuss legislative issues, possible legislation, and the upcoming legislative session.
*Proposed Amendment to Board Policy 3-701, “Authority and Responsibility” (First Reading)
The Board was asked to review a proposed amendment to Board Policy 3-701 (aka central office internal audit charter) that updates the central office internal auditors’ access to records, property, personnel, and the Audit Committee. The Audit Committee considers these revisions necessary to ensure the auditors have the access to records, property, personnel, and the Audit Committee that they need to effectively execute the internal audit function.
*Multiple-Year Employment Contract for Women’s Water Polo Head Coach (ASU)
The Board authorized Arizona State University to enter into a multiple-year employment contract with Vicki Gorman, as summarized below, as women’s Water Polo Head Coach. The Board further waived the requirement of ABOR Policy 6-1003 concerning the effective date of multiple-year coach contracts.
The period of the appointment will be January 1, 2004, through June 30, 2008, at a salary of $49,000 per year consisting of $48,000 base salary and $1,000 additional salary for basic duties relating specifically to coaching Women’s Water Polo and for additional duties consisting of participation in media programs, development activities, public relations activities, and endorsements and other promotional activities.
Coach Gorman’s salary will be increased for the year commencing July 1, 2004, and on each July 1 thereafter in percentage increments depending on specified performance milestones for the previous season.
Coach Gorman may receive specified Special Compensation annually, amounts designated as being for the Women’s Water Polo Coach in agreements negotiated by ASU with manufacturers, retailers, wholesalers, vendors, and others relating to use and promotion of athletic equipment, etc. Coach Gorman may receive Supplemental Compensation annually for specified academic and team performances.
*Multiple-Year Employment Contract for Men’s Golf Head Coach (ASU)
The Board authorized Arizona State University to enter into a multiple-year employment contract, as summarized below, with Randall Lein as Men’s Golf Head Coach. The Board further waived the requirement of ABOR Policy 6-1003 concerning the effective date of multiple-year coach contracts.
The period of the contract will be January 1, 2004, through June 30, 2008, at a salary of $75,000 per year, consisting of $74,000 base salary and $1,000 additional salary. This will be for basic duties relating specifically to coaching Men’s Golf and for additional duties consisting of participation in media programs, development activities, public relations activities, and endorsements and other promotional activities.
Coach Lein’s salary will be increased for the year commencing July 1, 2004, and on each July 1 thereafter in percentage increments depending on specified performance milestones for the previous season.
Coach Lein may receive specified Special Compensation annually, amounts designated as being for the Men’s Golf Coach in agreements negotiated by ASU with manufacturers, retailers, wholesalers, vendors, and others relating to use and promotion of athletic equipment, etc. Coach Lein may receive Supplemental Compensation annually for specified academic and team performances.
*Multiple-Year Employment Contract for Women’s Gymnastics Coach (ASU)
The Board authorized Arizona State University to enter into a multiple-year employment contract, as summarized below, with John Spini as Women’s Gymnastics Head Coach. The Board further waived the requirement of ABOR Policy 6-1003 concerning the effective date of multiple-year coach contracts.
The period of the contract will be January 1, 2004, through June 30, 2008, at an annual salary of $75,000 per year, consisting of $74,000 base salary and $1,000 additional salary. This will be for basic duties relating specifically to coaching Women’s Gymnastics and for additional duties consisting of participation in media programs, development activities, public relations activities and endorsements, and other promotional activities.
Coach Spini’s salary will be increased for the year commencing July 1, 2004, and on each July 1 thereafter in percentage increments depending on specified performance milestones for the previous season.
Coach Spini may receive Special Compensation annually, amounts designated as being for the Women’s Gymnastics coach in agreements negotiated by ASU with manufacturers, retailers, wholesalers, vendors, and others relating to use and promotion of athletic equipment, etc. Coach Spini may receive Supplemental Compensation annually for specified academic and team performances.
Strategic Planning Committee Consent
*Action Plan: Mid-Year Status Report
The Board received a written status report on its Action Plan Objectives. The Action Plan is the primary annual planning document for the Board and it currently has twenty objectives. This is the halfway mark and considerable progress has been made in meeting the objectives.
*Academic Program and Organizational Unit Change Requests
The Board approved planning authorization for the Bachelor of Science in Engineering at ASU East; implementation of the Doctor of Nursing Science degree (DNS) (using the expedited one-step process) at ASU Main, and the establishment of the Center for Biology and Society at ASU Main.
The Board approved the merger of the BS in Soil and Water Science into the BES in Environmental Science; the merger of MS and PhD programs, Range Management, Watershed Management, Wildlife and Fisheries Science, and Renewable Natural Resources Studies into the MS and PhD major, Renewable Natural Resources; the implementation of the MS and PhD Major in Pharmacology and Toxicology in the College of Pharmacy; and the MS and PhD major in Medical Pharmacology in the College of Medicine (using the one-step expedited process) through a split and transfer of the Graduate Interdisciplinary MSD and PhD major in Pharmacology and Toxicology; the implementation of the MEd in Education Leadership; and the planning authorization for the MS in Public and Nonprofit Management, all at the University of Arizona.
*Approval of Regents’ Professors (UA)
The Board authorized the University of Arizona to promote Professor David J. Chalmers, one of the most influential figures in contemporary philosophy of mind and metaphysics, Professor Henry Jay Melosh, the greatest mind on the subject of impact cratering, Professor Allan C. Newell, a dominant figure in the emergence approach to natural sciences, Professor John L. Pollock, who has been on the leading edge of research in several important areas of philosophy, cognitive science, and artificial intelligence, and Professor George H. Ricke, widely recognized as one of the fathers of infrared astronomy, to the rank of Regents Professor, effective July 1, 2004, and to award the $5,000 salary increase that customarily accompanies these appointments.
The Regents adopted the changes to Policies 2-205 A and H and 2-206 A as proposed. They also directed the universities to review and recommend revisions to Policies 2-205 D, E, and F, as specified in Recommendation #2, for a first reading at a future Board meeting.
These amendments are related to the guiding principles of Changing Directions. These changes are permissive, allowing each university more flexibility in providing off-campus courses and programs in support of its differentiated mission rather than mandating changes at each institution.
Paragraphs 1, 5, and 8 of Policy 2-205 A, General Requirements - Credit Course Work, are modified, and the other 5 paragraphs are deleted to provide more flexibility for the universities in delivering off-campus courses and programs, while also recognizing current requirements and guidelines of the North Central Association.
ABOR policies 2-205, Requirements - Temporary Off-Campus Instructional Sites, and 2-205 E, Requirements - Branch Campuses, and 2-205 F, Requirements - Free standing Campuses were revised to reflect changes in 205 C and D. Specific recommendations will be brought back to the Board at a future date.
Policy section 2-205 H, External Graduate Degree Programs, and the six paragraphs it contains were deleted. A new section, Policy 2-205 H, was added to require a periodic report describing off-campus courses and programs. Policy 2-206 A, Academic Credit, Definition of a Unit of Credit, was modified by adding to it a paragraph to address the assignment of credit to off-campus courses. A reference to existing shared governance processes was added to the new language recommended for policy 2-205 A 2. This modification had been requested by the Arizona Faculties Council.
STUDY SESSION ON FUNDING FORMULAS
Discussion of Enrollment Growth Funding Formula
President Herstam said this study session was a continuation of the Board’s study sessions on the topic of Changing Directions. Financial viability, one of the guiding principles under Changing Directions, suggests the Board look at a budget model for base funding that considers program enhancement and new program development along with growth, and that the Board look to move from a narrow and volatile state funding base to a broader and more stable funding base.
President Herstam said the Changing Directions process centered on four areas: geographic boundary elimination, reform of the tuition situation, reform of admissions policies, and reform of the funding formulas. He said he believed there would be a couple more study sessions with more specific recommendations from the presidents on funding in March or April and hoped the Board could make a recommendation for the governor and legislature to reform the funding formula. The goal of the current study session was to enhance the understanding of the complex issue of base funding, to move toward a consensus on guiding principles for base funding for the universities, and to provide additional direction and guidance to the members of the Council of Presidents with respect to the development of more specific options and strategies which could be brought back as early as the March meeting.
President Crow said his remarks would be based on the assumptions that the traditional model of enrollment growth is too limited to be of much value for the new directions and differentiation assumptions the Regents are hoping to see realized through the evolution of the universities. Whatever is developed must be capable of being flexible and adaptable, and ASU is the institution for managing much of the growth that will be realized in the university system. However, he said a complete abandonment of the enrollment growth formula might not be a good thing for ASU.
President Crow said the absolute principle that must be remembered by everyone is the Arizona university system will not be made better by making it lower cost. It can be made better by setting a price that allows an institution that is competitive on a national and international basis to be built and then finding mechanisms to pay that price. The universities are becoming more technically complex and there are requirements for teaching more diverse courses.
With those principles in mind, Dr. Crow said ASU believes the price of the university should be set to secure the resources to fulfill the mission responsibilities the university has been asked to accomplish. Student financial aid is an essential part of rethinking the model. He said ASU believes the 22 to 1 formula can be updated and modified to make it work for the system and for ASU.
President Crow said the universities are seriously disadvantaged by the lack of a capital fund development program funded by the legislature. He believes the development of a new funding model for the universities should involve the Regents supporting two policy changes at the state level–financial aid for students to help pay for the university appropriately priced and a capital development budget for ultimately helping to fund the construction needed at the universities. Within the context of the existing 22 to 1 model, an enrollment growth model more reflective of variance in mission and student type should be developed.
President Haeger said the current formula does not work from the perspective of NAU. He explained the problems it causes at NAU, including low salaries and infrastructure problems. It does not work because of economies of scale and because NAU’s mission is fundamentally different from the other two universities. NAU does not have access to large corporations for funding needs as there aren’t these types of companies in Flagstaff. They have the lowest paid faculty living in the highest cost area of the state. As new formulas are developed, he would like to keep in mind that they reward what the Regents want each institution to accomplish. A new formula should recognize the geography in which Flagstaff exits.
President Likins said a new funding formula would be changing the relationship between public universities and the state that sponsors them. He told the Regents what is happening around the country with funding for colleges and universities. He believes receiving funding for specific accomplishments, like successful completion of degrees, would be a formula that has built in incentives for improving performance. He believes this would be a new concept the legislature could embrace.
President Herstam asked Dr. Likins if there were any performance areas other than graduation rates that he would like to see be a part of a new formula Dr. Likins said only those discussed before. Scholarship awards to needy Arizona students that are portable are needed and would motivate behavior by making the universities compete for those students. Some of those students would go to the community colleges, making the community colleges a partner in the effort to establish a formula of this type.
Regent Jewett said this discussion had reminded him of what a crisis university funding has become. The Regents now have an opportunity to begin a discussion that can lead to a more contemporary formula that will meet the needs of each university, address financial aid, capital needs, and building renewal.
President Herstam listed guiding principles he had noted as the discussion progressed. He asked for comments if anyone had any discomfort using this list to move the process forward.
The guiding principles he listed were: 1. The current traditional model is too limited and the new model needs to be flexible and adaptive. 2. Complete abandonment of enroll-ment growth as part of a formula cannot take place. 3. A formula should include mission specifics, including student types. 4. More financial aid by the state is paramount. 5. Some form of capital development at the state level is also critical. 6. The undergraduate mission at NAU must be protected, as well as the 2+2 programs, the rural programs, the distance education, and consideration of the cost of living in Flagstaff. 7. The formula should include performance criteria such as graduation rates or time-to-degree.
Regent Stuart suggested the Board consider a completely different model that did not involve a formula. President Herstam reminded the Regents that Arizona has a constitutional provision that mandates tuition be as low as possible and that makes it different from other states.
Regent Bulla said predictability was as important as flexibility. He believes there needs to be a plan that rewards performance in the strategic direction of each university and creates predictability. Regent Designee Calderón asked how any formula would help with current university needs.
President Crow said the universities could also consider an endowment equivalency core level of support for each of the institutions that is pegged to grow with the economic success of the state. Every other dollar offered to the universities from that point forward beyond the core would be offered in an investment model for initiatives.
President Likins suggested graduation rates might be a secondary measure; he believed the primary measure might be how many bachelors degrees in nursing, bachelors degrees in teaching, masters degrees in engineering, etc. might be awarded.
John Haeger said it might be interesting to know what kind of budget a given institution would need to run it at the highest quality for the citizens of Arizona. Then options as to how to get to that figure could be developed. He believed each of the universities would develop different ways to reach that figure.
Regent Ulrich said the business community was unaware of the extent of the need of the universities for building renewal. He would like to see a marketing campaign along with any new funding model to inform the community of the university needs.
Regent Boice said he believes a formula-driven approach is antiquated. He would like to focus on an outcome approach. President Haeger said running NAU as an investment model would mean pursuing out-of-state students, moving new doctoral degrees in place and forming research centers, closing the rural centers, reducing the number of tenure and tenured track faculty, and reducing the size of the institution. This would solve NAU’s revenue problems, but would not serve the needs of the state.
Regent Palacios said she believed the funding model needs to be palatable and attractive to the legislature. She believes offering methods and models to help funding will accomplish that.
President Herstam asked the members of the Council of Presidents to come back to the March meeting with more specific suggestions. He said the Governor’s office and various legislators are interested in new funding models; so he asked that information be shared with OSPB and JLBC and their input be received as the process progresses.
Regent Stuart chaired this portion of the meeting.
Update on Budget Recommendations and Proposed Legislation
Ms. McGonigle, Mr. Fahey, Mr. Miller, and Ms. Tebeau joined the meeting for this discussion. Regent Stuart said the budget recommendations had been issued by both the Governor’s Office of Strategic Planning and Budgeting (OSPB) and the Joint Legislative Budget Committee (JLBC). He thanked the Governor for her budget recommendations for the universities.
Ms. McGonigle said the universities had requested a budget increase of $108M. The Governor’s recommendation is $45.9M and the JLBC is 0. Of the Governor’s recommendation, $21.9M is for a pay package and enrollment growth money for FY 2005. For FY 2004, it includes some enrollment growth money for ASU Main and ASU West, building facility money for ASU East, faculty retention money for NAU and UA, and money at NAU for nursing pay raises and program expansion.
President Herstam said he hoped there would not be an attempt to compromise between the Governor’s recommendations and the JLBC recommendation of 0 because that would be catastrophic for the universities. He also asked the universities to encourage their constituents not to play the numbers game wherein data is used to show each university has been underfunded at the expense of the other two. President Crow said ASU was supportive of the Governor’s recommendations.
President Likins asked about the money requested by the universities for the cost of employee healthcare and was told there is money in the Governor’s budget for healthcare for FY05, but there is no backfill money for FY 04. Regent Ulrich asked for an accounting of the Proposition 301 money–what had been received and where it had been spent. Regent Ulrich suggested the universities work toward the budget they submitted rather than supporting the budget proposed by the Governor. Other Regents thought the universities would be more successful in securing budget money by supporting the Governor’s recommendations.
Report From the Audit Committee Chair
Audit Committee Chair Stuart thanked Mr. Rick Gfeller, from the Central Office, and the university auditors for their work the past year. He reported the Audit Committee had held four meetings the past year and had reviewed all the status reports of both planned and unplanned audits. The Committee has met twice with representatives of the Arizona Auditor General’s office. The universities were given a good financial rating on their financial audits.
One area the Committee would like to see improve is the information technology area. The Central Office now has the expertise to audit these areas both from a performance and from a control and cost standpoint. The Central Office auditors have assisted the universities’ intercollegiate athletics organization in meeting NCAA requirements for annual financial audits and periodic audits of compliance with NCAA regulation. They will immediately begin to phase out this NCAA work. However, they will complete any work they have already committed to do. This NCAA work had previously been performed by local CPA firms and others, and can be again.
The Committee has learned about the GASB-39, new rules on financial reporting, and the Sarbanes-Oxley Act of 2002, improved controls and procedures over the financial reporting process. Regent Stuart said he believed the largest accomplishment of the Audit Committee is the improved communications with university senior management in dealing with complaints and problems on all three campuses.
Dr. David Camacho reported the Arizona Faculties Council (AFC) now has a first draft of a rewrite of the Bylaws of the AFC. The rewrite is meant to update the document to reflect what the AFC currently does. The AFC is also working on its compensation survey, working closely with university administrators. Dr. Camacho thanked the Board for involving the AFC in the work of revising the Board Policy on off-campus courses and programs.
The meeting recessed at 4:05 p.m. and reconvened at 9:35 a.m. on Friday, January 23.
Regent Palacios chaired this portion of the meeting. She announced Items 11 and 13 had been removed from the Agenda
Regent Palacios said the establishment by the Board of Regents of the Arizona Biomedical Collaborative for Education, Research, and Health Policy (ABC) in April 2003 ratcheted up the collaborative efforts of the three universities to meet the healthcare needs of Arizona through biomedical research programs, and expansion and development of statewide healthcare educational programs and health policy.
Regent Palacios reminded the Regents they had heard the results of the feasibility studies and preliminary site planning for the bricks and mortar part of ABC at their November meeting. These facilities will be situated next to the International Genomics Consortium and TGen at the Phoenix Bioscience Center in downtown Phoenix.
The Board is being requested to approve an Intergovernmental Agreement (IGA) between ABOR and the City of Phoenix under which ASU, UA, and NAU will develop the ABC facilities. The IGA will provide the basis for the building leases for the renovation of the Phoenix Union High School historic buildings on the site, and for the ground leases for construction of new university facilities. Under the IGA, the Board will be given a 5-year option to lease the three PUHS historic buildings. The term of each building lease would be 40 years, with a 20-year extension option, exercisable only if the term extension is required for financing. The City would retain ownership of the historic buildings at the end of the lease terms, but an extension of the term may be negotiated by the parties. In consideration of rehabilitation and use of the historic buildings, the rent will be $1 per year. ABOR will be obligated to maintain the buildings in accordance with the applicable city guidelines for historic buildings.
Additionally, the Board will have a 5-year option to ground lease/purchase building pads for up to three new buildings for academic, life science, biomedical and health professions educational programs, and supportive administrative activities. The size of the new buildings will be specified in the building pad ground leases which will each be for a term of 40 years with a 20-year extension option, exercisable only if the term extension is required for financing. Each will include the option to purchase the property at the end of the lease term. Lease payments will consist of equal installments of the purchase price, to be calculated based on an agreed upon percentage of the fair market value of the land at the time of execution of each lease. At the end of the lease term and upon payment of all obligations thereunder, the purchase price for the land will have been paid and title to the land will be conveyed to the Board or its designee.
Each lease executed pursuant to the IGA will provide that, in the event a parking structure is constructed to serve the site, the lessee will be responsible for paying a proportionate share of the operation, maintenance, and debt service costs associated with the financing and construction of the parking structure, based upon a minimum allocation of two structured parking spaces per 1,000 square feet of rentable building area.
Upon motion of Regent Palacios, seconded by Regent Bulla, the Board granted the Executive Director authorization to execute an Intergovernmental Agreement with the City of Phoenix on substantially the terms presented, subject to approval by Board Counsel of the form of the Agreement.
Regents Herstam, Bulla, and Jewett declared a conflict of interest and did not discuss or vote on this item. Regent Boice, who serves as the ABOR representative on the UMC Board, can discuss this item, but cannot vote. Ms. Kathy Bedard, Mr. Greg Pivirotto, and Mr. Kevin Burns joined the meeting for this discussion.
Mr. Pivirotto gave the Board a history of UMC. He said they have the same mission as the UA College of Medicine and the University Physicians, Inc., (UPI), to heal, teach, discover, and to serve the community. He explained the hospital was privatized in 1984 through the use of the Lease and Conveyance and the Education Agreement. He explained the changes through the years and when there had been capital investment in the facilities.
Mr. Burns explained the financial performance for the last four years. There was modest profitability in 2002-2003. In 2002, UMC realized there was a need for significant changes in its operation and there was a need for a stable platform for the future. Their Strategic Plan lays out specific goals, one of which is to maintain a bottom line of 3% to 5% of net revenue to make certain the academic and community missions can continue to be supported. There is currently a good cash flow from operations. Mr. Burns told the Regents about things UMC had done to make revenues better and what they would like to invest in to upgrade the facility.
Regent Boice spoke on behalf of the management of UMC and the bond proposal. He said he wished it could be higher as the need is great, but applauded the fiscal responsibility of keeping the request reasonable. President Likins said the UA, UPI, and UMC were working well together and hoped to expand the faculty of the medical school so they can be effective in the national arena.
Upon motion of Regent Palacios, seconded by Regent Kelling, the Board approved issuance of UMCC Hospital Revenue Bonds in an amount no to exceed $52M and approved an amendment to the Lease and Conveyance Agreement with the Arizona
Board of Regents and UMCC, extending the term by five years to September 30, 2039. Regent Boice abstained from voting.
Proposed Student Referendum (ASU)
Mr. Brandon Goad, ASU Student Body President, and Mr. Brian Collier, Graduate Student Body President, were present for this discussion. Regent Palacios said the Associated Students of Arizona State University (ASASU), with the support of Arizona State University administration, will submit to ASU students a student-initiated and directed fee referendum to fund redevelopment and expansion of the Memorial Union and Student Recreation Complex on Main Campus.
President Crow said he knew the Regents were concerned about the cost of education and the success of ASU. He said this referendum was being brought to the Board with the success and performance of the university in mind. He said this was brought to the Regents today to explain the process. ASU was not asking for a decision as to whether to advance the fee or the construction that might result from this in the future. The referendum is to test the will of the students as to whether they are interested in making this kind of investment. He explained what the construction could accomplish for the students and compared the services available at the other universities that are comparable in size to ASU.
Mr. Collier said he and Brandon had come to explain the referendum. Many hours have been spent considering ways the students could help improve the culture of the university. They believe too many students simply come for classes and then leave without becoming involved in the culture of the university. The current Memorial Union is too small and it is believed money from the referendum could help with this problem.
President Herstam said he was concerned about the timing of the referendum, how it would work with the tuition setting process. He believed there should be a full discussion of the item as the next time the Board would have to discuss it would be the meeting in which they set tuition. He asked President Crow how he would factor this proposed fee into his tuition recommendation as he would have to make his recommendation prior to the referendum vote.
President Crow said he would make a tuition recommendation that would be within the range mandated by Board policy, factoring in the possibility of the addition of this fee.
Regent Jewett said he had talked to a lot of students last year and they were supportive of a tuition increase, but they were concerned about loading on fees in addition to tuition increases. He also expressed concerns about how the fee would affect financial aid. He also asked President Crow to explain what he meant by student ownership and student governance of the money raised by the proposed fee.
President Crow said he believed the universities were committed to moving tuition to a particular national position and this fee would be factored in so the tuition at ASU would not exceed that position. He also said ASU would not disadvantage Pell Grant students by making the proposed fee a barrier to entry. However, it has not yet been decided how that would be accomplished.
Dr. Crow said the student leaders were willing to take the political risk of taking the building of the university directly to the students. He said ownership comes from this process. Also, additional governance responsibilities have been outlined for these facilities in terms of what kinds of programs would be offered and decisions that would be made.
Regent Bulla said he was delighted to see the activity by current students to improve the institution, but he does not believe governance by referendum is a positive thing. He said there are a lot of needs on the ASU campus and he thinks there should be a priority mix rather than a restricted use of funds. He asked what would happen if fifteen or twenty referendums were circulating around the university, all with restrictive funds.
Regent Stuart said he would like the students to consider separating the Memorial Union from the Student Rec Center as they are vastly different. Secondly, a mandatory fee is dramatically different than a user fee. He could see a mandatory fee for the Memorial Union, but could not understand any reason for there to be a mandatory fee for the Student Rec Center that many students do not use. He also shared other Regents’ concerns about the timing.
Mr. Collier said the students decided they wanted the two issues to be combined. Also, he said he did not have a car or kids, but he pays for roads and schools. The timing of the referendum is due to the cycle of student government. He said he would take the Regents concerns back to the students.
Regent Designee Calderón said he appreciated the efforts of the students, but he wanted the students to know the Board may not automatically pass the request even if the referendum passes and President Crow recommends the fee.
Regent Ulrich said this is the most positive thing he has ever seen come out of the student organization during his tenure on the Board. Regent Kelling said she had been very involved in this process for a number of months and she thanked the students for meeting with her and answering her questions. She said she had concerns how the fees would be dealt with in regard financial aid, waivers, and scholarships. She understands a work team will make sure the boards for both the Memorial Union and the Student Rec Center will be composed of alumni, students, and staff if this fee is approved.
Regent Boice said a vote of only 20% of the students would give him pause. He agreed with Regent Stuart concerning the difference between a mandatory fee and a user fee as he sees these buildings as capital items. If the students should choose to make the fee a user fee in order to retire a capital debt, he would be more favorable to the fee.
Regent Palacios said she is concerned about how many students will vote and obligating future students in times when the cost of education is rising. She did appreciate the example of leadership being demonstrated. Student Regent McCalley said his main concern was the fiduciary flexibility of the university in the next five years as the fees continue to grow. He wonders how this will fit in the tuition needs of the future.
2004-2005 Special Program Fee for the J.D. Program at College of Law (ASU)
Ms. Gale Tebeau and Provost Milt Glick joined the meeting for this discussion. Regent Palacios said the Board was being asked to approve a request to increase the special program fee for the J.D. program at the ASU College of Law. Provost Glick said the Board had approved a range within which fees could be set without going back for a public hearing. The recommendation was to increase the special fee in the Law School by an amount not to exceed $1,500. The fee is based upon looking at market and assuming ASU would like to raise the Law School fee by $2,000, including the tuition increase. At this point, it is not known what the tuition increase will be. After the tuition increase is known, the fee will be set so the total will not exceed $2,000.
Dr. Glick said President Crow has made it clear that schools, like the law school, need to become less dependent on state appropriations and should become more self-supporting. At the same time, ASU needs a law school that is bigger in both number of students and faculty and stronger with a better law library. So the purpose of the fee is to move in that direction. The law school will be required to set aside 15% of the special fee, as has been done in the past, for financial aid.
Upon motion of Regent Palacios, seconded by Regent Stuart, Regents Boice, Kelling, Palacios, Stuart, Ulrich, and Herstam by roll call vote approved Arizona State University’s request for a special program fee increase for the J.D. Program at the College of Law not to exceed $1,500, resulting in a special program fee total not to exceed $7,250. There were no nay votes. Current second-year students’ special program fee will remain at $4,250 for their final year.
Arizona Biodesign Institute Phase II: Project Approval (ASU)
Dr. Mernoy Harrison, Mr. Scott Cole, and Ms. Kathy Bedard joined the meeting for this discussion. Regent Palacios said the Arizona Biodesign Institute Phase Two continues development of the multi-phased Biodesign Corridor along the east side of ASU Main campus. ASU is requesting Project Approval for this 172,000 square-foot facility at a cost of $73M.
Mr. Cole said this was the second phase of a four-phase bio-design complex. The demolition of the current warehouse buildings on the site will happen within the next 30 days and ASU is ready to start construction. Regent Ulrich asked when the building would be finished and was told in 1 ½ years.
Upon motion of Regent Palacios, seconded by Regent Ulrich, the Board approved the Arizona Biodesign Institute Phase II Project.
Mr. Peter Slate, Chief Executive Officer of Arizona Technology Enterprises, joined the meeting for this discussion. Regent Palacios said ASU was requesting Board approval to transfer technology in the field of molecular diagnostics to Nanobiomics, Inc., pursuant to a License Agreement between Arizona Technology Enterprises and Nanobiomics.
President Crow introduced Mr. Peter Slate, President of Arizona Technology Enterprises. He is leading ASU’s efforts to market and license technology. It is a joint technology development enterprise with technology coming from ASU and from the Translational Geonomics Institute. Mr. Slate said this is the first significant venture between ASU and TGen in the commercial sector. It marries ASU’s competency in nanobiotechnology for “lab on a chip” which is a diagnostic device which will allow physicians at bedside to be able to diagnose diseases.
This will cut down the lead time it will take for certain blood evaluations to be done. In order to insure this will be a technology that would be competitive, outside funding has been sought to do research and due diligence. The ASU Research Park and TGen have agreed to fund the due diligence.
Upon motion of Regent Palacios, seconded by Regent Bulla, the Board approved the transfer of technology to Nanobionics, Inc., pursuant to a License Agreement between AzTE and Nanobiomics, Inc.
Highland Avenue Parking Structure; Project Implementation Approval (UA)
Ms. Kathy Bedard and Mr. Joel Valdez joined the meeting for this discussion. Regent Palacios said the University of Arizona was requesting Project Implementation Approval to construct the 1,500-space Highland Avenue Parking Structure at an estimated project cost of $18M. This new parking facility will serve students, faculty, and staff in the northeast campus district and at the Arizona Health Sciences Center, replacing parking to be lost as a result of future university development. Funding will be provided by the sale of $13M in Certificates of Participation, with debt service funded with Auxiliary Enterprise funds, and $5M in Parking Replacement Reserves.
Upon motion of Regent Palacios, seconded by Regent Bulla, the Board granted Project Implementation Approval to the University of Arizona for the Highland Avenue Parking Structure.
Ms. Kathy Bedard, and Mr. Joel Valdez joined the meeting for this discussion. Regent Palacios said the University of Arizona was requesting Combined Project Implementation Approval and Project Approval for Phase I of the Residence Life Building Renewal Project. Mr. Valdez said last summer the Board authorized the full phase project of renovating residence halls on the campus. This is Phase I and is valued at about $8.6M. The university is ready to proceed as this project can only be done in the summer when the students are not in the rooms.
Upon motion of Regent Palacios, seconded by Regent Kelling, the Board granted the University of Arizona Project Implementation Approval and Project Approval for Phase I of the Residence Life Building Renewal Project.
Multiple-Year Employment Contract for Head Football Coach (UA)
Regent Palacios said the University of Arizona was requesting Board approval of a multiple-year employment contract for Michael Stoops as Head Football Coach for the period beginning December 1, 2003, through December 31, 2008.
Coach Stoops’ base program salary for duties related to coaching football will be $350,000 per annum. His compensation for peripheral duties related to radio, television, and other speaking engagements and public appearance will be $300,000 per annum. In addition to program salary and related compensation, he may receive additional performance compensation for specified team performances, tickets sold, and academic achievements. He will receive use of two motor vehicles and athletic tickets and an exclusive license to operate and control a football camp during the summers using university facilities.
Upon motion of Regent Palacios, seconded by Regent Boice, the Board resolved that the One-Year Contract entered into by the University of Arizona and Michael Stoops on November 29, 2003, was approved as a Multiple-Year Employment Contract in accordance with the terms and conditions summarized above and presented in the Executive Summary.
Review of Annual University Technology Transfer Reports
Mr. Peter Slate, Ms. Kathy Bedard, Dr. Richard Powell, and Dr. Carl Fox joined the meeting for this discussion. Regent Palacios said Board Policy 6-909.10 requires the universities to submit annual reports highlighting their activities and performances in the area of technology transfer. Reports have been submitted by the universities for the fiscal year ended June 30, 2003.
Mr. Slate said ASU had hired him to build a new type of tech transfer organization focused on commercialization, new venture development, etc. He said he had hired a new staff with industry, venture capital, and product development experience. An extremely qualified board of directors has been established and an infrastructure to build on for future success had been developed. He described a new program, Technology Venture Clinic. He said there had been a market increase of 25% in technology filings. ASU is working on more collaboration with the other two universities. The ASU Technology Innovation Fund, a partnership with the ASU Research Park, has been established to provide seed grants to professors.
Dr. Carl Fox said NAU is continuing on an upward trend on intellectual property development with a large increase last year. He said NAU’s strategy, because they are not flush with resources in this area, is through strategic partnerships. The first partnership, with TGen, revolves around work Dr. Keim did with Anthrax, applying this technology to other infectious diseases such as plague. A second partnership is with an NAU alumni in securing a Phase II SBIR grant from the army. The third partnership is with staff with one example being a submersible pool lens replacement device.
Dr. Powell provided the Regents with a copy of a UA research magazine that told about many TRIF projects. He said the university had only one start-up company last year (usually they have 4 to 6) and it was attributed to the downturn in the economy which made it difficult to get capitalization for start-ups. The economy is better this fiscal year and the UA has already spun out 4 companies.
Dr. Powell said one of the examples of unusual activities at UA in intellectual property management is a computer based course in mathematics for business decisions which is a great example of learner-centered education. Another project is a way to induce premature menopause in mice which is important because mice models are used to study disease and develop new therapies for disease. This is used to study various age-related diseases.
Regent Bulla asked if the new tax law proposal would impact the donation of patents and was told the new law would not allow companies to take fair market value of their donations anymore but instead is cost basis. It is too early to see if this will make a difference in technologies donated.
Tuition Setting Calendar for Academic Year 2004-2005
Ms. Gale Tebeau joined the meeting for this discussion. Regent Palacios said the Board was being asked to review and adopt a tuition setting calendar for the 2004-2005 academic year. Ms. Tebeau said the proposed calendar outlined the process for the academic year 2004-2005 tuition setting. The Board would set resident and nonresident undergraduate and regular graduate tuition and residence hall rates at the March meeting. This would also be the Board’s opportunity to preview the Regents’ financial aid set aside.
The Board would set all other program and class fees that require Board approval at the April Board meeting. The university presidents will make public their tuition and fee recommendations on February 2 and the tuition hearing will be held February 25.
President Herstam asked the presidents to email their recommendations to the Regents before they make them public as the Regents have to answer questions from the press.
Upon motion of Regent Palacios, seconded by Regent Kelling, the Board approved the tuition setting calendar for the 2004-2005 academic year as proposed.
Regent Palacios left the meeting at this time.
Regent Bulla chaired this portion of the meeting. He reported the ARU/IT Subcommittee met in December. They reviewed an issue resolution process designed to improve the processing of ARU business. A three-part ARU needs analysis was undertaken. The survey of student needs was reviewed earlier. At this meeting a survey of Arizona employer education needs was reviewed. Part three of the analysis will focus on the needs of educators. A combined report on all three studies will be presented at the ARU/IT Subcommittee meeting in March.
The Subcommittee approved a Masters of Engineering program request to reallocate $100,000 of their current ARU grant for marketing purposes. The Subcommittee requested a summary of the OnQ study, including a spending plan from the MEng Coordinating Board at its March meeting identifying time lines, functions, major components, and activities for the marketing effort.
The Subcommittee approved the NAUNET Conversion plan that is on today’s agenda for Board approval. A report on the internal IT Project Approval Process and progress reports made on a variety of projects were also reviewed.
FY 2004 Capital Development Plan Update
Ms. Kathy Bedard, Mr. Scott Cole, Dr. Mernoy Harrison, Mr. Joel Valdez, and Mr. David Duffy joined the meeting for this discussion.
Regent Bulla said Board Policy 7-105 permits the universities to revise their current year Capital Development Plans in January, if necessary. Revisions may include the addition of new projects, project budget adjustments, and deletion of projects.
Mr. Cole said ASU was bringing forward 4 new projects. He described the Academic Renovations and Deferred Maintenance Phase I, Infrastructure Improvements Phase III, Arts and Business District Gateway, and South Campus Academic Village projects.
Mr. Valdez said the UA was requesting 2 new projects and incorporation of the next phase of a previously approved project: UA Science Center, $72.7M, Environment and Natural Resources Phase II, $45.4M, and Residence Life Building Renewal Phase II, $7.8M. The UA also included an information item on the Adaptive Reuse of Phoenix Union High School Historic Building 1 at the Arizona Biomedical Collaborative site in downtown Phoenix.
Upon motion of Regent Bulla, seconded by Regent Ulrich, the Board approved revisions by Arizona State University and the University of Arizona to their FY 2004 Capital Development Plans as presented.
South Campus District Plan (ASU)
President Crow presented the ASU South Campus District Plan. He said ASU does not have the capacity to house the number of students that should be in university housing. This Plan will allow ASU to double its housing capacity. The university would like to be able to house all its freshmen, many sophomores, and any others that wish to live on campus. The area is currently a combination of ASU facilities, hotels, bars, and other facilities.
This site will help expand the freshman engagement, the Greek community, and provide parking and mixed use commercial areas. President Crow explained this is an approximately $600M project and ASU will not be able to fund the entire project at once. Regent Boice asked if this plan was in conformance with the overall Campus Plan and was told yes. He asked when the Regents would see the Campus Plan and Dr. Crow said ASU was hoping to have the Plan at the September meeting.
Regent Stuart suggested the Campus Plan consider the Memorial Union in the same way the Tempe Center and the South Campus Plan are being considered for development. President Crow said the students would pay for part of the South Campus Plan through the fees they pay for their dormitory. In the case of the Tempe Center, the combination of the commercial value of the property for vendors that will be co-locating will help pay for the project as well as lease-like payments for academic facilities. There would need to be income streams for the Memorial Union in the same manner.
Regent Ulrich asked how much of the property was already owned by ASU and was told about 90%.
Approval for NAUNET Conversion (NAU)
Dr. Art Ashton and Dr. Fred Hurst joined the meeting for this discussion. Regent Bulla said NAU was requesting major modifications to the existing aging 14-year old analog microwave network. The university distance learning sites currently receive instruction through the use of its analog microwave system and leased equipment that will be converted to a digital network for use in conjunction with satellite-based course delivery. The ARU/IT Subcommittee approved this item subject to a business plan being completed. NAU has provided a business plan that was added to the agenda item.
Dr. Hurst said this is a proposal to replace the old analogue microwave system with a digital internet protocol-based system that will be entirely compatible with any other state of the art equipment. The current system continues to deteriorate as it uses old technology that was originally developed for telephone connections. This is seen as a bridge between the current system and new systems as NAU can continue to teach its television courses over this system.
Upon motion of Regent Palacios, seconded by Regent Boice, the Board approved NAU’s request to upgrade the existing NAU Net from analog to digital carriage.
The meeting recessed at 11:07 a.m. and reconvened at 1:50 p.m.
Regent Boice chaired this portion of the meeting.
Update on NAU/Yavapai Community College Agreement
President John Haeger and President Doreen Dailey, Yavapai Community College, joined the meeting for this discussion. Regent Boice said this item concerns an agreement between Yavapai College in Prescott and NAU. Dr. Haeger said this agreement begins to offer a pathway to serve the citizens of the entire state, particularly the rural and small town areas. This is a partnership that makes the differences between Yavapai College and NAU disappear. It will increase the number of baccalaureate degrees in Arizona. There will be joint faculty appointments, dual admissions, and a seamless transition from one entity to the other.
Dr. Dailey said she believes this is a ground-breaking agreement that should get national attention. President Herstam signed the Memorandum of Understanding and Joint Facilities Use Agreement between the Yavapai Community College District and the Arizona Board of Regents on behalf of Northern Arizona University.
Annual Report on the Faculty Tenure and Post Tenure Review Processes
Ms. Stephanie Jacobson, Dr. Milt Glick, Dr. George Davis, and Dr. Elizabeth Grobsmith joined the meeting for this discussion. Ms. Jacobson summarized the tenure and post-tenure review processes.
Regent Stuart said he had heard the post-tenure review process had worked its way down to the faculty evaluation process in such a way as to require a fairly significant amount of time, effort, and paperwork for non-tenure track faculty. He asked if there was anything about post-tenure review that would impact a lecturer. Provost Davis said he was not aware that was happening at the University of Arizona. Provost Glick said there was no direct correlation at ASU.
Regent Boice asked if tenure-track review had improved the quality of the faculty. Dr. Glick said it gave the university a way to deal with faculty who are truly not doing the job they should be doing. For most faculty, post-tenure review is merely an inconvenience. But the ability of the university to reduce the poorly-performing faculty, over time, makes a great difference in the faculty. Also, reducing the poorly-performing faculty inspires other faculty to perform better.
Provost Davis said it believed it was a valuable process. However, it would be even better if there was a built-in opportunity for the universities to deploy the program with rewards for merit. Provost Grobsmith said the awarding of tenure should not be the end of a process, but the beginning of a process. There must be continuing review to insure the faculty member maintains those high standards, continues in his or her high levels of productivity and continues to contribute in meaningful ways to the institution. Post tenure review is a measure of accountability.
Regent Designee Frank asked what the value of tenure was if the faculty member was being continually reviewed. Dr. Glick said the awarding of tenure shifts the burden of proof. Until someone is tenured, the burden of proof to become tenured lies with the faculty member to demonstrate his or her portfolio. After tenure, if the university should wish to dismiss a tenured faculty member, the burden of proof lies with the university to demonstrate why the dismissal should occur.
Annual Student Financial Aid Report for 2002-2003
Mr. Dan Anderson, Mr. John Nametz, Mr. Jim Pritchard, and Mr. Craig Fennell joined the meeting for this discussion. Regent Boice said this annual report is provided to the Board in advance of and as background information for the tuition setting process. In addition to reporting on the utilization of financial aid in the previous academic year, this year’s report also provides information on the impact of the decision last Spring to change the policy for need-based financial aid.
As part of the Changing Directions initiative, the amount of tuition revenue the universities set aside for need-based financial aid was raised to 14%. This was done with the expectation that undergraduate students with the most unmet need would be held harmless, to the greatest extent possible, from this year’s tuition increase. This report is the first view of how that objective was achieved in the Fall 2003 semester.
Mr. Anderson said an impressive amount of aid is available; over $690M in financial aid was provided in the last academic year, a 5.1% increase over the previous year and a 22% increase over the last 5 years. The aid is coming from institutional, federal, private, and state aid. The state aid is the only category that has declined over the last 5 years.
Over 78,000 students in the last academic year received some form of financial aid with the majority of those, approximately 44,000, being needy students.
Mr. Anderson said there was only one semester to report on since the financial aid set-aside was raised. Between the fall semester of 2002 and the fall semester of 2003, gift aid increased by 2,000 students in the resident, undergraduate Pell-eligible students. For all undergraduate students who had unmet need, 4,945 additional students received gift aid.
Regent Bulla said he was trying to obtain an understanding of the total unmet need for students in the state. Mr. Anderson said he was working on a subcommittee for the Arizona Community Foundation to try to measure the total potential amount of unmet need for all students interested in obtaining post-secondary education.
Regent Stuart said the Audit Committee spent some time on financial ratios for the system at large. They looked at 8 different ratios to get a sense of the fiscal health of the system. He noticed the Executive Summary for this item says there has been a fairly significant decline in undergraduate debt. He asked if the Board would be likely to see a continued decline in average undergraduate debt in the system. Mr. Nametz said he believed there would be a significant increase, $400 or $500, in the coming year. It would be the first increase for several years. Arizona has been counter to the national average for the last three or four years. Regent Stuart noted the graduate debt has gone up over the last several years and asked if that would continue. Mr. Nametz said he believed it would continue to increase. Regent Stuart said the continued need for increasing financial aid is very significant.
President Likins emphasized the universities did hold the Pell recipients harmless as had been promised. Regent Jewett said the Board did what they had the power to do, but to take it further, the state will have to contribute towards financial aid.
President Crow said the return on a higher education degree is such that the investment made by students is the most positive investment an individual will ever make over their lifetime. He said the system won’t work better by lowering the price. The price is not the issue; the resources to pay the price is the issue. The investments coming from the Federal government are massive. The universities are about at the limit of what they can offer for financial aid. He believes the state has not stepped up to help as much as it should and Arizona is low in its number of college graduates in relation to its economic competition. He also believes foundations and corporations should be making higher investments in financial aid.
President Haeger said one of the categories being impacted now is the student who just barely does not qualify for financial aid but has to interrupt his or her education to work to pay for it. It is known that many students who interrupt their education do not come back and finish their education. He said financial institutions could help this group by allowing them larger loans. Regent Kelling agreed with Dr. Haeger’s comment. She said the amount of loans these people qualify for are very small and may not even cover tuition, let alone other needs such as books and living expenses.
Regent Bulla suggested some funds could be set aside to leverage with local financial institutions to help students who have debt capacity problems. He thought this area should be explored. Regent Boice said he believed one of the large costs of running a university these days is financial aid. Prior to his service on the Board, he had believed financial aid was someone else’s problem.
Annual Report on Academic Programs
Dr. Milt Glick, Dr. George Davis, Dr. Elizabeth Grobsmith, and Ms. Stephanie Jacobson joined the meeting for this discussion. Regent Boice said the Board agreed to a revised annual report that could provide a high level view of all academic view programs, describe the program additions and eliminations approved by the Regents over time, and focuses on the comprehensive review of program quality. That format was approved last April and this is the initial report with the new format.
Ms. Jacobson said this report would retain one component from the previous report, the analysis of programs with few graduates. The report is divided into 4 sections. Part 1 is the summary of the academic program inventory which is a list of all the Board-approved academic institutions at each university. A 5-year recap of all programs added to or deleted from the inventory was considered more informative than simply looking at one year’s changes.
Ms. Jacobson said Part 2 identifies all the changes approved during the most recent academic year. By listing specific programs, the summary of content changes can be seen. Part 3 will inform Regents about programs that underwent the required 7-year review during the previous academic year. Programs which seek external accreditation, as many professional programs do, may adjust their schedule to coincide with the external review process. In 2005, using criteria established by the Board, the universities will report on programs completing the 7-year review which graduate low numbers of students. This reporting requirement was added to Board policy too late to incorporate in this year’s review process. In Part 4 of the report, each university provides an overview of the changes to their academic program inventory with an explanation of how they relate to the university’s strategic plan or other changes or initiatives such as Changing Directions.
Provost Davis said an outstanding program review leads to pressure to provide more money to that department to sustain or improve the quality. In the case of a poor result, which happens rarely, the elimination of the department or program can happen. Dr. Davis said Regents Boice and Palacios had suggested a department that has received a good review with some deficiencies be given a date certain when they need to report out what the deficiencies were and how they addressed the issues. Regent Boice asked if the program reviews were helpful to the universities. Dr. Davis said the program reviews were a very constructive, non-political process that can help universities make significant decisions on re-allocations. Provost Grobsmith said NAU has built in a process to check back in three years to make sure things are moving as they should. She also thought it was a helpful process.
Regent Ulrich asked if the program reviews addressed the issue of general education that is not thematic or does not have learning outcomes. Ms. Jacobson said this review looks at specific degree program majors and does not look at general education as he referred to it. Provost Glick said the reviewers were always asked to look at the undergraduate curriculum and through that they did understand and comment on the need for communication and global awareness, particularly in accreditation reviews.
INQUIRIES, REQUESTS, REPORTS, AND COMMENTS FROM REGENTS AND MEMBERS OF THE COUNCIL OF PRESIDENTS
Everyone thanked President Crow and his staff for their efforts in hosting the meeting and the social function. They thanked Regent Ulrich for his service on the Board, wished him well, and asked him to keep in touch.
Executive Director Blessing introduced two new staff members, Mark Denke, Assistant Director for Academic and Student Affairs, and Ted Gates, Assistant Director for Capital Development.
President Likins introduced Juan Garcia and Jerry Hogle, two new Vice Provosts at the University of Arizona. Regent Ulrich thanked everyone for their kind words. He said he had enjoyed his time on the Board and was especially proud of being involved in the hiring of all three university presidents. He said he believed the Central Office staff is great and he has enjoyed working with them. He values the friendship of the other Regents and appreciates all he has learned from them
The meeting adjourned at 3:15 p.m.
SUBMITTED BY:
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Judy E. Garza
Secretary to the Board
APPROVED BY:
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Chris Herstam
President
ATTEST:
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Robert B. Bulla
Secretary