Arizona Board of Regents-June 2005 Minutes

A meeting of the Arizona Board of Regents was held June 16, 2005, in the Havasupai Room of the NAU University Union in Flagstaff, Arizona. President Stuart called the meeting to order at 10:35 a.m. on Thursday, June 16.

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

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

All lists, reports, summaries, background materials, and other documents referred to in these minutes can be found in the June 16 and 17, 2005, Documents File.

Ms. Kathy Bedard, Dr. Elizabeth Grobsmith, Dr. George Davis, and Dr. Jonathan Fink joined the meeting for this discussion. Regent Boice reminded the Regents the end of the first 5-year cycle of Technology and Research Initiative Funding (TRIF) was nearing. Proposition 301, passed by Arizona voters in November 2000, approved a six-tenths cent sales tax increase to benefit education. The universities annually receive about 12% of this dedicated revenue stream.

It is estimated the first 5-year TRIF cycle will generate over $252M of revenue for the universities as presented in the Executive Summary. The focus at this meeting is the second 5-year TRIF cycle, fiscal years 2007-2011. During this period, it is estimated the TRIF revenue will be about $322M. Regent Boice said this is serious money, and it is the responsibility of the Regents to ensure this money is expended pursuant to state statute enacted under Proposition 301 and pursuant to Board Policy 3-412 that requires TRIF funding to be used to support projects and initiatives that meet one or more of the following criteria: 1) Promote university research, development, and technology transfer related to the knowledge-based global economy, 2) Expand access to baccalaureate or post- baccalaureate education for time-bound and place-bound students, 3) Implement final recommendations from the Governor’s Task Force on Higher Education and/or the Arizona Partnership for the New Economy, and 4) Develop programs that will prepare students to contribute in high technology industries located in Arizona. The draft business plans being presented were written to address these goals.

Provost Davis explained the University of Arizona’s business plans. He said the areas of importance for the UA included optics, water, bio, and information science/information technology. In addition, 20% of TRIF funding was placed into capital projects that are tightly related to those research directions. Two other initiatives all three universities are involved in are access to the Arizona Regents University, and workforce development in science and math education for teachers.

The evaluation of the TRIF program was carried out through self-evaluation, evaluation by advisory boards, and by a central team including community and foundation members and headed by former Provost Paul Sypherd. In reviewing the UA programs, all the areas except the ACIST Program (Arizona Center on Information Science and Technology) and the Access Program received gold stars. With regard to the ACIST Program, the review revealed that the TRIF funds were becoming too departmentalized and thus not focused effectively enough, and there was a departure from the business plans that were established by ACIST in the beginning. In the area of access, there was a sense there was not a tight enough connection to Focused Excellence at the UA.

Provost Davis introduced the leaders of the UA TRIF initiatives. He directed the Regents’ attention to the executive summary material that listed the distribution of the initiative, the fundamental importance of tech transfer, work force development, access, capital, infrastructure, and new opportunities such as venture capital. He said venture capital would not be used outside of the fundamental initiatives.

Regent Bulla asked about the venture fund. Provost Davis said it would not be limited to one area. Regent Bulla said he would like to see a standardized offering sheet or summary sheet for each initiative from all three universities, no longer than two pages, that would describe Return On Investment, explain the project, explain the people connected with the project, the objectives, what it is expected to accomplish, and would quantify the outcome. It would detail where the initiative is, what will be done, and what will be achieved. This should include dollars as best as is possible. Dr. Davis said he would like the universities to provide a description of all the players, including all the advisory boards and the dean leadership teams. He said he believed this would be helpful in telling the story to everyone.

President Stuart asked how many initiatives the venture funds would be invested in and who would make the investment decision. Dr. Davis said venture funds would be invested in the top four where there is the most significant, tangible, leveraging potential; and the decision would be made by him, with close communication from the Vice President for Research who will have input from the directors of the programs.

Regent Boice said he agreed that the venture fund should have flexibility and he believed it should have more money reallocated to it as rapidly as possible as that would be a benefit to the entire university. He said he would like to sit down with the universities to see if the business plans could be streamlined so they would take less time to prepare. He would like to know what was wrong with the ACIST and if money would be returned to the project if corrections were made. Provost Davis said it did not occur to him to go back to the three-year evaluation and that report had spelled out more clearly the problems with ACIST. He said the entire area of information technology is critical to the university in so many ways, including computational biology, bioinformatics, and other areas in the life sciences. They go into the next five years without prejudice towards ACIST and realize they will be pressed by the ACIST leadership group for more investment; but they believe, from the business standpoint, this is the way to proceed now.

President Likins said there is a difference between ACIST and MIS, Management Information Systems, in the Eller Colleges. ACIST was initially to pull together information technology people from the Eller College, from the Engineering College, and from the science department in the College of Science. He wanted to make clear there was no negative reflection on MIS.

Regent Boice said he would like to know who the people are on the advisory boards and the particular leaders. Provost Davis said that could be provided. Regent Boice asked the other two universities to do the same. He said he would like to see mentioned what the UA’s involvement in ARU is to further access. He asked President Likins to extend to Dr. Powell the Board’s appreciation for his leadership of the Research, Graduate Studies, and Economic Development efforts at the University of Arizona, along with best wishes for a well-earned retirement. He welcomed Dr. Leslie Tolbert and congratulated her on her appointment to fill some pretty big shoes. The Board would be acting on her appointment as UA Vice President for Research, Graduate Studies, and Economic Development later in the meeting.

Dr. Jonathan Fink said ASU viewed the TRIF funding as part of a larger investment strategy for the university. It is a significant tool; but is one of several that include the research infrastructure that was provided by the legislature, the indirect cost recovery from other grants, and funding being generated by technology transfer. He said the funds were being used first for people, second for facilities and third for partnerships to take advantage of other initiatives in this area and around the country. He said technology transfer is an area of growing importance to ASU and to the state. Outreach to the community and to K-12 is also a central part of what is being done at ASU.

Dr. Fink said another important component of the TRIF process is the whole area of assessment. ASU has been using the Morrison Institute to put together a set of metrics that track what is being done and what its impact is on the state’s economy and economic environment, not limited just to the dollars that are being brought in, but also to changes in attitudes and perceptions by the other leaders of the state of what the universities are contributing.

Dr. Fink said ASU had begun TRIF with four separate research initiatives plus tech transfer and outreach and that was too hard to manage. Even though TRIF brings in a lot of money, it was not enough to have an impact on a young university like ASU. So President Crow suggested the university should focus on one initiative that could have a chance of being nationally and internationally competitive. That is how the Biodesign Institute came into being and that is where most of the funding is being directed and will be directed for the coming five-year period. Other areas within the university that are important to Biodesign are referred to as capacity building programs and are also included in this report.

Dr. Fink described a flow diagram that illustrated the general cycle of investment from TRIF funding. He explained how input is received from deans, provost, president, outside advisory boards and faculty as to what areas should received investment funds. The five- year plans are revised on an annual basis. He explained the specific initiatives to the Regents and how they lead to funding streams that bring new money into the university and the state. President Crow said ASU has three or four other sources of investment capital besides TRIF. ASU is redirecting 1% of the base budget of the university to a strategic initiative fund on an annualized basis. This is the means of hiring exceptional faculty when they become available.

Provost Grobsmith said NAU established four major programmatic initiatives in the first five years of TRIF funding. In the next cycle, they will continue to build on these areas of excellence and meet the economic requirements of TRIF. Their areas focus on growing biotechnology, environmental research development in education, access workforce development and ARU, and e-learning. They also have a component of funds from new TRIF funding that will be under the discretion of the president to be able to invest strategically in areas as they emerge. While the plan for the next five-year period is the same overall direction with the same basic areas, there are some significant changes planned to address more effectively the goals of TRIF. She introduced the project directors.

Dr. Grobsmith said the NAU focus in the next five-year cycle is to stimulate entrepreneurship innovation and research development, to increase access to higher education by preparing a skilled workforce, to invest in infrastructure that will promote research and development in partnerships with business, to enhance technology transfer and connect the creators with knowledge users, and to develop new and existing programs to prepare students for innovation in the current highly technological society.

Provost Grobsmith explained the organizational chart which showed the increased oversight by external review. She explained the various initiatives and grants.

Regent Boice thanked everyone for their hard work on this report. He said he was pleased to see each university had advisory committees with external members for each project. He asked the ARU/IT Subcommittee to review the e-learning information technology business plans prior to the Board’s consideration of the plans for approval at the August meeting. All TRIF business plans will now be finalized by the universities and brought for approval to the August meeting.

Regent Boice said the TRIF funds and the use of the TRIF funds is the Board’s eye to the world and how those are used and the return on them will be measured in dollars, jobs, discovery, and other things. He wants to be able to point to the TRIF initiatives and say the universities were given money and look what they were able to do with it.

Regent Calderón led the Pledge of Allegiance. President Stuart introduced Robert Buscaglia, a second year undergraduate who has won many awards generally given to seniors. He has enough credits to be a senior, but he just finished his fourth semester at NAU with a 4.0 GPA. He is seeking an American Chemical Society certified Bachelor of Science degree in biochemistry and at the same time, an extended applied mathematics degree. He spends a lot of time in the molecular biophysics laboratory working for Dr. Edmond Lewis in his research in in-depth thermodynamics study of the interactions between specific DNA sequences capable of forming novel higher order structures in chemotheraputic drugs. As a result of this work, Robert was invited to speak at a recent research meeting at which several of the world’s leading researchers on G-quadruplex DNA were also speaking. He has won many awards and co-authored several manuscripts. He plans to go to graduate school for degrees in physical biochemistry and mathematics.

Mr. Buscaglia said he came to NAU not understanding the research opportunities he would have. He is working under Dr. Lewis to come up with a new cancer methodology to discover new cancer drugs that are more specific and can cut down on side affects. He said he could not have accomplished all he has without coming to NAU. He thanked the Regents for allowing him to speak.

Paula Travis, Tri-University Classified Staff Advisory Councils, said there were over 1,000 combined hours of commitment and dedication from Classified Staff Advisory Council members and employees from all three universities. With ABOR support, they coordinated staff stake holder group meetings and solicited staff input for the Arizona University System Redesign Study. She listed other activities such as meetings, committees, fund raising events, and community events in which members participate.

Cade Bernsen, UA Student Body President, introduced the new ASUA delegation. A seat has been created for someone in the grad or professional schools at UA. This year he appointed Sam Chang, a second-year law student to the ASA delegation.

Jane Jacobs, representing the law firm of Gammage and Burnham and its client Ray Evans, read a letter from Mr. Grady Gammage concerning Agenda Item 9, Authority to Purchase a One-Acre Parcel at 740 East Apache Boulevard and Authority to Use Eminent Domain if Necessary (ASU). She said Mr. Evans was opposed to having his property being acquired by eminent domain and was not aware until a few days ago the item was on the agenda. She said Mr. Evans’ primary desire would be to develop the property in a way that would be compatible with the university’s wishes. He would also be willing to exchange this property for other surplus university property which he could develop.

President Haeger said he had gone to the Western Governor’s Association during which Colorado State University, New Mexico Highlands, NAU, and the Governor’s of Colorado, New Mexico, and Arizona established ecological restoration institutes and new forest policies for the Western United States. No one has done more to rewrite that policy than NAU’ s Regents’ Professor Wallace Covington.

Professor Covington told the Board about the new institutes called the “Southwest Ecological Restoration Institutes” and why they were established through the Federal Government. Two years after the establishment of these institutions, there will be an evaluation. If the institutes are deemed to be successful, there will be institutes established in other states in the west.

Dr. Covington said everyone is paying attention to the unwanted fires; but there are multiple symptoms of degraded ecosystems in the dry forests of the Southwest. There has been declining water yield and watershed function, decreases in biological diversity, productivity of the grasses, wild flowers, and associated wild life habitat, and overall degraded human habitat conditions throughout the west.

These institutes are established to bring the unique strength of the universities to bear on this problem; to develop and synthesize knowledge; to translate that knowledge into useful forms that stakeholders can use to approach these problems; and to transfer that knowledge through the broad capabilities of the universities. The universities are recognized as neutral conveners.

The Charter establishes the three institutes and makes them eligible for up to $15M per year in federal funding. There is also some assumption that the states will also continue to support the institutes for a portion of their work. The NAU Institute answers to Dr. Haeger and is university wide. He said Arizona was recognized as the national leader in this field. Dr. Haeger said some of the NAU TRIF money goes to this Institute at NAU which was the boost needed to push it into the national level.

Items on the Consent Agenda, which are marked in these minutes with an *, were considered as consent matters and were adopted upon the motion of Regent Bulla, seconded by Regent Calderón. There was no discussion of these items. Item 13, Authorization to Lease Land from St. Ambrose Church for an Expansion of the Existing Park and Ride Facility (UA), was removed from the Consent Agenda to be considered under the Capital Committee agenda.

Regent Calderón said the April 28 and 29, 2005, Regular Meeting minutes on Page 17, Paragraph 3, should read, “by adding a premier between the words offering and undergraduate on line 2 and “a premier undergraduate program and professional,” on line 4.

The March 10 and 11, 2005, Executive Session minutes were approved. The April 28 and 29, 2005, Regular Meeting minutes were approved as amended.

The Board granted approval, at second reading, to ASU’s Comprehensive Development Plan (2005). The overall objective of the plan is to build a comprehensive metropolitan research university that is an unparalleled combination of academic excellence and commitment to its social, economic, cultural, and environmental setting.

The Board granted Revised Revised Project Implementation Approval to Arizona State University for the Academic Renovations and Deferred Maintenance Phase I Project. ASU was given Revised Project Implementation Approval in January 2005. Since that time, ASU has identified an additional major capital project appropriate for inclusion in Phase I, the Engineering Instructional Labs project at ASU at the East campus.

The Board authorized separately the President, the Senior Vice President and University Planner, the Executive Vice President and Chief Finance Officer, and the Associate Vice President for University Business Services of ASU to take all appropriate actions to finalize negotiations, to sign and deliver all documents and agreements associated with the lease, and to consummate the lease of space in the Cornerstone development on substantially the terms described in the Executive Summary.

The lease term is 10 years, commencing approximately September 1, 2005, and there are two 5-year options for ASU to renew the lease at 60% of the then-current market rate. Rent begins at $13.25 per square foot with annual increases of 45 cents per square foot. ASU will pay its share of common area expenses for the Center and its building operating costs of electricity, custodial services, and general building maintenance.

Landlord will provide ASU with a tenant improvement allowance in the amount of $300,000. Landlord will provide 30 covered, reserved parking spaces at no charge. ASU is entitled to use the entire parking area at the Cornerstone in common with the other tenants at no charge. The leased space contains 19,848 rentable square feet of space available for occupancy upon completion of tenant improvements, scheduled for January 2006. Funding for the lease (estimated at $275,000 per year) will be provided from redirected lease and operating costs for Mitchell School ($155,000 per year) augmented by ASU local funds.

The Board granted Project Approval for the New Laboratory Facility project to Northern Arizona University and authorized NAU to proceed to complete design and construction documentation. The total project budget is $33M funded by Certificates of Participation supported by Research Infrastructure funds appropriated by the legislature under House Bill 2529. The debt service will be funded through interest capitalization until July 1, 2007, when appropriations for Research Infrastructure are to begin.

The Board approved Northern Arizona University’s request to use $99,000 in one-time Eminent Scholars Matching Grant Program Funds to support five endowed chairs in FY 2006. Due to lower than expected earnings, the NAU Foundation is unable to provide additional support at the current years’ level. This $99,000 request provides the funds needed to maintain the same level of funding provided by the Foundation for endowed chairs in FY 2005 and would also give the Foundation time to pursue opportunities to increase the endowments and provide the scholars with time to adjust their planned research to the level of expected Foundation payout.

The Board approved Northern Arizona University’s contractual student tuition and fee agreements with international universities and consortia. This will allow NAU to participate in a 1-2-1 Partnership Program, facilitated through the China Center for International Educational Exchange and the American Association of State Colleges and Universities. This program will provide Chinese students from a designated list of universities to enroll at NAU at $10,242 (approximately 80% of the nonresident undergraduate tuition rate) in FY 2006 and FY 2007. Increases in the rate will be renegotiated on a biannual basis.

The student would enroll in a 1+2+1 program, where they complete their freshman year at one of the Chinese partner universities. In the second and third year of the program, the students travel to NAU or to other participating universities to complete their sophomore and junior years. The students then return to China for their fourth year. It is anticipated that approximately eighteen Chinese students will enroll at NAU for the 2005-2006 academic year.

The Board approved the appointment of Leslie P. Tolbert as the UA Vice President for Research, Graduate Studies, and Economic Development, effective July 1, 2005. The fiscal year salary for this position is $200,000.

The Board authorized the University of Arizona to permit Christopher Walker, Professor of Astronomy, Optical Sciences, and Electrical and Computer Engineering; Christian Drouët d’Aubigny, Optical Research Engineer; Douglas Miller, Associate Staff Scientist and Astronomy Lecturer; and Dathon Golish, Graduate Research Assistant in the Department of Astronomy, to establish and maintain a substantial equity interest in Tera Vision, Inc., while continuing their employment at the UA. TeraVision, Inc., is a for-profit company based in Tucson, Arizona, that will be focused on the design and fabrication of terahertz wave devices and associated technologies for defense, space, medical, and other applications. TeraVision, Inc., plans to partner with the UA for the purpose of answering a United States Air Force Small Business Technology Transfer solicitation to develop compact and highly efficient terahertz sources.

The Board authorized the University of Arizona to permit Daniel Silvain, Assistant Director of the Radiation Control Office, to establish and maintain a substantial interest in Checkmydose.com, LLC, while continuing his employment at the UA. Checkmydose.com, LLC, is a web-based company dedicated to providing Radiation Dosimetry information to radiation workers and managers responsible for Radiation Dosimetry compliance.

The Board authorized the University of Arizona to permit Jerome V. Moloney, Professor of Mathematics and Optical Sciences, to establish and maintain a substantial interest in Nonlinear Control Strategies, Inc. (NCS), while continuing his employment at the UA. NCS is a small start-up company offering specialized photonics-related consulting services and custom software to the semiconductor laser, optoelectronics, and optical data storage industry.

The Board authorized the University of Arizona to permit Ara Philipossian, Associate Professor of Chemical and Environmental Engineering, to establish and maintain a substantial equity interest in Araca, Inc. Araca, Inc., is a small start-up company that is licensing equipment and intellectual property from Toho Engineering, a Japanese company, and Intelligent Planar, a company based in Phoenix.

The Board authorized Arizona State University to enter into a multiple-year employment contract for Lou Belken to serve as Head Men’s Tennis Coach according to the terms and conditions summarized below.

The period of the appointment will be from the date the multiple-year contract is executed through June 30, 2008. Mr. Belken’s salary will be $65,000 per year, consisting of $64,000 base salary for basic duties relating specifically to coaching and for additional duties consisting of participation in media programs, development activities, public relations activities, and endorsements and other promotional activities, and $1,000 additional salary.

The salary will be increased for the year commencing July 1, 2005, and on each July 1 thereafter in percentage increments depending on achievement of stated performance milestones. If no milestones are achieved, the ASU Vice President of University Athletics may give Mr. Belken a percentage increase up to but not exceeding the increase of service professional employees during the year.

Mr. Belken may receive Special Compensation on the terms as defined. He may receive Supplemental Compensation annually for designated academic and athletic performances in a particular year. He will receive customary employee-related benefits and additional benefits consisting of tickets to ASU sporting events, use of one automobile or stipend, and golf privileges at the ASU Karsten Golf Course. He will have the right to use ASU facilities to conduct a summer camp as described. There are termination clauses included in the contract.

The Board of Regents authorized ASU to accept an award from the National Science Foundation, #0450137, for support of a Hispanic Research Center, College of Liberal Arts and Sciences public service project. The proposed amount is $1,800,000 with a projected total award amount of $9,000 federal funding with total project $2,700,000 cost sharing from non-federal sources. The project period is March 1, 2006, through February 28, 2010.

The Board of Regents authorized ASU to accept a continuation award from the National Institutes for Health National Heart, Lung, & Blood Institute, #5RO1HL058027, for support of a Harrington Department of Bioengineering, Fulton School of Engineering project. The proposed amount of the amendment is $286,130 for a new total award amount of $1,586,283 federal funding. The project period is April 1, 2001, through March 31, 2006.

The Board of Regents authorized ASU to accept an award from the National Institutes for Health, National Institute of Allergy & Infectious Disease, #1 RO1 A1066501-01, for support of a Center for Infectious Diseases and Vaccinology, VP Research project. The proposed amount of the award is $1,063,012 for a new total award amount of $1,096,380 federal funding. The project period is March 15, 2005, through August 31, 2006.

The Board of Regents authorized ASU to accept a continuation award from the National Institutes for Health, National Heart, Lung, & Blood Institute, #5RO1HL070715, for support of a Harrington Department of Bioengineering, Fulton School of Engineering project. The proposed amount of the amendment is $493,649 for a new total award amount of $1,315,278 federal funding. The projects anticipated total funding is $1,569,129. The project period is April 1, 2003, through March 31, 2007.

The Board of Regents authorized ASU to accept an award form the Arizona Department of Economic Security, E4374282, for support of a School of Social Work, College of Public Programs project. The proposed amount of the award is $1,991,447 of sub-federal funding from the U.S. Department of Health and Human Services. The project period is April 1, 2003, through March 31, 2007.

The Board approved the FY 2006 budget for the Arizona AHEC Program to include $862,615 anticipated support from Arizona State Lottery Funds as presented. The FY 2006 budget presented was developed to ensure that priority AHEC community-based programs are core-funded (contingent on continued federal support) through FY 2007.

The Board approved appointments for the Arizona AHEC Program EAHEC, MAHEC, NAHEC, SEAHEC, and WAHEC governing boards for terms as specified in the executive summary. The requested appointments for center boards meet the criteria required in A.R.S. §15-1643.

Arizona State University - to plan a PhD with a major in Gender Studies; to implement a PhD with a major in Physical Activity, Nutrition and Wellness (ASU East), using the one- step expedited review; to reorganize the Cronkite School of Journalism and Mass Communication as an independent school, to be located at ASU Downtown; and to disestablish the College of Extended Education and establish the School of Extended Education in University College.

Northern Arizona University - to plan for a Bachelor of Science in Health Sciences with a major in Speech-Language and Technology; and to implement the Master of Arts in Science Teaching (MAST) degree, using the one-step expedited process.

University of Arizona - to plan for a PhD with a major in Women’s Studies; to establish the Life and Planets Astrobiology Center (LAPLACE); and to split the School of Music and Dance into two schools, the School of Music and the School of Dance in the College of Fine Arts.

The Board authorized the University of Arizona to promote Dr. Farhang Shadman, Professor of Chemical Environmental Engineering and Professor of the Optical Sciences Center, to the rank of Regents Professor, effective July 1, 2005, and to award the $5,000 salary increase that customarily accompanies these appointments.

The Board approved, at second reading, the proposed amendments to the following ABOR policies: 2-206-B, Academic Credit for Foreign Study; 2-208.C, External Program Review (Dup Programs) by Outside Consultants; 2-302-A-5, Descriptions & Definitions of Academic Units; 4-202.D, General Rules/Tuition and Fees for Special Sessions; 4-301, Tuition Waivers; and 6-201.H, Conditions of Faculty Service. These changes originated with a review of ABOR policies as part of the Focused Government initiative, to determine which of them might be creating barriers to effective functioning at the universities. Additional changes are expected to be requested after further study by the Chief Academic Officers.

The Board authorized the universities to proceed with the Tri-University Personnel Guidelines on Protecting University Information and Systems. In February 2005, a Tri- University Work Group on Technology Employees was formed and worked together to formulate the Tri-University Personnel Guidelines on Protecting University Information and Systems. The guidelines were developed for any employee who has access to sensitive university information, research, and system.

The Audit Committee believed these policies were necessary to combat the implicit threat and risks such employees pose to vital university information and systems. The Audit Committee has reviewed the guidelines and recommended the universities proceed with implementing them. The Audit Committee will receive periodic updates from each university on their progress towards implementing the guidelines during future Audit Committee meetings.

Regent Bulla chaired this portion of the meeting. Dr. Art Ashton joined the meeting for this portion of the meeting.

Regent Bulla reported most of the Regents attended the ARU/IT Subcommittee and heard a presentation from Priscilla Harden and Mark Lord on the new Web site for ARU. He said they are waiting for the decision on a name, which will be decided as the next item on the June Board Agenda. The next presentation was by Lipman Hearne, a higher education marketing and communications consulting firm, on a new name for ARU.

Dr. Sally Johnson of the University of Arizona made a presentation on the COSMOS project. There are some issues with the project and they do want to do a “proof of concept” activity to see if a change in direction would be appropriate. Everyone believes there should be an outside consultant engaged over the summer to review where the university is and what is being proposed to see if this is the direction they should go or if there are other alternatives. The ARU/IT Subcommittee and the Audit Committee will be working on this issue over the summer.

Regent Bulla reported ARU was a Board of Regents effort, working with all three universities, to come up with an e-learning environment to unite the system. NAU has been given the administrative task for ARU. This past spring research was done by Lipman Hearne on positioning and message development, brand name review, and marketing execution. He explained the review process of developing a brand name. The name suggested is the Arizona Universities Network with a tag line of The Arizona Board of Regents Gateway to Quality Distance Learning. The Subcommittee asked Regent Bulla to work with the presidents and staff to finalize a logo so it can be ready for the Fall Semester material.

Upon motion of Regent Bulla, seconded by Regent Herstam, the Board approved the name, “Arizona Universities Network,” with a tag line of The Arizona Board of Regents Gateway to Quality Distance Learning. It was also approved that the combination of the name and tag line logo should be defined by the consultants and Regent Bulla, along with the future and present Board presidents, should make final approval of the logo.

Regent Boice chaired this portion of the meeting. Regent Boice said the Capital Committee met on June 2 to consider all of the Capital Committee items appearing on today’s agenda which were heard and discussed comprehensively. The public meeting was held using new state-of-the-art video-conferencing equipment in the Central Office.

Mr. Ted Gates and Mr. Rich Bowen joined the meeting for this discussion. Mr. Bowen said NAU’s FY 2006 Capital Development Plan included five new projects NAU would like to begin to plan: Conference Center for the North end of the campus to be used by the community and the campus; Faculty Housing Project as the real estate prices in Flagstaff have become very high and it is hard to recruit faculty; Parking Structure to be financed under a public/non-profit partnership; Yavapai College-NAU Facility on the Prescott campus of Yavapai Community College for which funding will be requested from legisla- tive appropriation; and Residential Complex which is a continuation of the residential community housing and will be financed by a public/non-profit partnership.

Regent Boice said he noticed NAU was estimating $285 a square foot for the parking structure and he would like them to determine if it can be built at a better price. He also said the Faculty Housing had no ABOR standards as it had never been done before by this system and he asked Mr. Gates to keep a close eye on the project to see the costs remain in line. He said NAU was asking for the ABOR standards to be waived or modified for the Residential Complex and he would like Mr. Gates to especially monitor that project, also.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board approved Northern Arizona University’s FY 2006 Capital Development Plan as presented in the executive summary. Regent Calderón said he had visited the University of California Irvine as a guest of NAU and it is a tremendous, well-developed, good quality housing project that is available to university employees. It is a collegial neighborhood with different tiers of housing available. He believes it will be wonderful for NAU to be able to offer this type of housing for employees.

Mr. Ted Gates and Mr. Joel Valdez joined the meeting for this discussion. Mr. Valdez said the University of Arizona was adding one project: Family and Consumer Sciences Building to house the John and Doris Norton School of Family and Consumer Sciences in the College of Agriculture and Life Sciences that will be gift funded.

Upon motion of Regent Boice, seconded by Regent Calderón, the Board approved the University of Arizona’s FY 2006 Capital Development Plan as presented in the executive summary.

Dr. Carol Campbell, Mr. Rich Stanley, and Mr. Ted Gates joined the meeting for this discussion. President Crow introduced Dr. Campbell, ASU’s new Executive Vice President and Chief Financial Officer. Mr. Stanley said ASU was proposing the addition of two projects: Academic Renovations and Deferred Maintenance, Phase II, to be financed by System Revenue Bonds with debt service paid by tuition and other Local Funds; and Living/Learning Dining Renovation Projects, to be funded by an internal loan repaid from Auxiliary Generated Funds.

Regent Boice asked for specifics about the debt that would be retired during the same time period as this project. Mr. Stanley said it was debt from previous renovation projects that are reaching the end of their payment period. It is a combination of debt on different campuses. Regent Boice asked if Mr. Stanley would provide him with a specific list. President Crow said it would be helpful if the Regents could look at ASU’s entire debt structure and he would send it to them.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board approved Arizona State University’s FY 2006 Capital Development Plan as presented in the executive summary.

Dr. Carol Campbell, Mr. Rich Stanley, and Mr. Ted Gates joined the meeting for this discussion. Regent Boice said ASU was requesting Project Approval for the Biodesign Institute at Arizona State University Building B. The request included a scope and budget increase to a new total project cost of $78.5M. Mr. Stanley said ASU was in the middle of the construction process in this building. The building was designed to deliver generic laboratory space so the labs would have a certain number of hoods, etc., but not built out to a final level of completion in anticipation of being able to adapt the lab to the specific needs of the faculty that would occupy that space. Now that the faculty that will occupy the space have been identified and the specifications needed for their work are known, this is a request to build out a number of laboratories in the building to that final requirement.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board granted Arizona State University Project Approval for the Biodesign Institute Building B, with a scope and budget increase as presented in the executive summary.

Mr. Paul Ward, Mr. Rich Stanley, Dr. Carol Campbell, and Mr. Ted Gates joined the meeting for this discussion. Regent Boice said Arizona State University was requesting approval to transfer the Sundome to Maricopa County. ASU was also requesting a waiver of Board Policy 7-204 requiring a public auction for the sale of real property, and Policy 7- 206 requiring two appraisals in connection with certain sales, purchases, or exchanges of real property.

Mr. Ward said this was a request to transfer the Sundome from one governmental agency to another for a nominal fee. The Sundome had been given to ASU twice by Del Web Homes, with operation use restrictions. The university has made a decision it is no longer able to operate the facility subject to those restrictions and is in negotiation with Maricopa County to assume the Sundome. ASU understands that the successor in interest to Del Web Homes, Pulte Homes, has consented to this transaction and Maricopa County Attorney’s Office has confirmed the County is proceeding with the transaction.

Regent Boice said it was vital to have a reversion clause and was told there is one. President Stuart said he would like ASU to publicize this action to the people in Sun City who have been very concerned that the transfer take place. Upon motion of Regent Boice, seconded by Regent Bulla, the Board authorized ASU to transfer the Sundome to Maricopa County and waived Board Policies 7-204 and 7-206 as presented in the executive summary.

Mr. Rich Stanley, Dr. Carol Campbell, and Mr. Ted Gates joined the meeting for this discussion. Regent Boice said Arizona State University was requesting authority to enter into an Intergovernmental Agreement with the City of Phoenix for the development of the Downtown Phoenix Campus of ASU. Mr. Stanley said the terms for an IGA with Phoenix for the development of a Downtown campus were presented to the Board at the April meeting and the Board agreed with the terms in general but requested the final document be reviewed prior to its conclusion. He said the IGA is completed and it is in congruence with the terms presented to the Board in April.

Regent Bulla said he had spent time with Mr. Stanley and President Crow discussing this issue and he was satisfied ASU would be able to uphold its part of the agreement. President Stuart said he was in favor of the IGA and believed it would lead to the correct use of the Mercado property.

Regent Boice said this item had been discussed so thoroughly, it might seem to be routine; but it should be remembered that, subject to an approval for the issuance of bonds by the City of Phoenix, the City will spend $230M for the Downtown Campus of ASU. He believes this is a monumental undertaking and he thanked President Crow and his staff for working out this IGA. President Crow thanked the City of Phoenix staff and his staff for their hard work on this project.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board authorized Arizona State University to enter into an IGA with the City of Phoenix for the development of the Downtown Phoenix Campus of ASU as presented in the executive summary.

Dr. Carol Campbell, Mr. Rich Stanley, and Mr. Ted Gates joined the meeting for this discussion. Regent Boice said Arizona State University was requesting authority to purchase a one-acre parcel at 740 East Apache Boulevard in Tempe and to use eminent domain if necessary. Mr. Stanley said this property is surrounded by ASU property and currently has an empty structure on the land. ASU has been in negotiations with the owner of the property for some period of time and has had several appraisals. At this point, there has not been agreement on a purchase price with the owner. Therefore, it is proposed the negotiation process continue, but ASU be given authority to use eminent domain, if necessary. The property is important to the university because it is a portion of the site that is intended for the development of the second phase of the McAllister Academic Village. He said the statements made at the Call to the Audience were not consistent with the conversations as ASU had understood them; so they will need to talk with the seller to try to reach an agreement.

Regent Calderón asked for the inconsistencies to be explained. Mr. Stanley said the statement that the property owner wanted to retain ownership of the property and to develop it was not consistent with the discussion that had taken place as the discussions had been about the sale and the determination of the price, including the counter offers from both sides concerning the price of the sale. Regent Calderón asked if it would be a good idea to have a negotiator try to establish a compromise price and was told it would be a reasonable approach. Regent Boice said it had been the policy of the Board to stay away from eminent domain wherever possible, but at some point you have to move ahead.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board authorized the ASU President, the Senior Vice President and Chief Financial Officer, and Associate Vice President for University Business Services, be and each of them acting alone hereby is authorized to take all appropriate actions to initiate and prosecute eminent domain proceedings, if necessary, and to complete the purchase of the real property located at 740 East Apache Boulevard, Tempe, on substantially the terms described herein.

Mr. Ted Gates, Dr. M. J. McMahon, and Mr. Bob Norton joined the meeting for this discussion. Regent Boice said Northern Arizona University was requesting authority to sell Certificates of Participation to produce sufficient proceeds, not to exceed $44M, for the construction of the New Laboratory Facility and North Campus Research Infrastructure projects. Mr. Norton said this is the second half of the infrastructure money that is anticipated will be made available to NAU in 2008. This is the second issue of debt that will pay for those projects. The New Laboratory Facility is $33M and North Campus Infrastructure is $5M. It is expected these will be issued in early July and they fit well within NAU’s debt capacity.

Upon motion of Regent Boice, seconded by Regent Calderón, the Board authorized Northern Arizona University to sell Certificates of Participation, in an amount no to exceed $44M, as presented in the Executive Summary.

Mr. Joel Valdez and Mr. Ted Gates joined the meeting for this discussion. Regent Boice said the University of Arizona was requesting authority to lease approximately 74,000 square feet of land at the St. Ambrose Church to allow for an expansion of the existing Park and Ride Facility at 315 South Plumer Avenue in Tucson. The UA subsidizes this program, including the shuttle system. The cost of parking on one of the secured lots is approximately 40 cents a day. The St. Ambrose Church approached the UA saying they had this vacant land and asked if the UA would like to expand their lot. The transportation committee decided the lot on Speedway could be closed and this lot could be expanded. This will also provide parking for athletic events. He said it would cost approximately $60,000 to pave the lot, amortized over 20 years.

Regent Boice asked if parking fees would provide the money for this project and was told yes, from parking fees, traffic fines, visitor parking, and special events.

Upon motion of Regent Boice, seconded by Regent Jewett, the Board authorized the University of Arizona to enter into a lease with the St. Ambrose Church for an expansion of the existing Park and Ride facility as presented in the Executive Summary.

Ms. Gale Tebeau, Ms. Paulina Vazquez-Morris, Ms. Christy Farley, and Mr. Greg Fahey joined the meeting for this discussion. Regent Palacios thanked the Governor and her staff for their assistance on legislation as well as the budget. She also thanked the staff for their help and hard work. She thanked President Stuart for his attendance at many hearings and representing the Board at the legislature. She also thanked Regents Calderón and Boice for their visits to the legislature.

Ms. Vazquez-Morris gave an overview of the legislative session. She said the universities’ budgets and the fingerprinting bill made up the university system’s legislative agenda for the 2005 regular session. The Governor signed Senate Bill 1517, Higher Education Budget, and Senate Bill 1513, the general appropriations bill. The provisions of SB 1517 are summarized in the executive summary. Other key items include that the Regents must submit a report to JLBC and OSPB to December 31, 2005, on the advisability and options for implementing a tuition structure that limits tuition increases to continuing students to no more than inflation. No state funding will be appropriated for students exceeding a mandated threshold of credit hours, 155 hours in FY 2007, 150 hours in FY 2008, and 145 hours after FY 2008. There are exceptions for those students whose chosen program requires credit hours beyond the threshold.

Ms. Vazquez- Morris said SB 1517 requires that a general fund amount of $4M is appropriated annually from FY 2006 through FY 2010 to the newly established nursing education demonstration project fund to increase the capacity of nursing education programs in Arizona. Funds will be allocated to a Board of Regents account and a community college account, based on the number of nursing graduates in FY 2005 from programs in each sector.

She said three other bills were passed by the legislature that impact the universities. Senate Bill 1196, Instate Tuition for Spouses, allows resident tuition status for certain individuals who are spouses of instate students; Senate Bill 1444, Fingerprinting, mandates conditions of employment for finalists seeking a security or safety sensitive position at a university; and Senate Bill 1295, the stem cell research committee, establishes a committee of legislators, doctors, clergy, researchers, and others to examine issues related to stem cell research. The Governor vetoed two bills, charter school sponsorship and citizenship requirements for university students. Other bills dealing with higher education reform did not pass. However, Speaker Weiers, at the close of the session, created a joint ad-hoc task force on higher education reform. Currently the task force includes ten members: Representatives Laura Knaperek, Russell Pearce, Steve Tully, Ted Downing, and Pete Rios; Senators Bob Burns, Jake Flake, and Linda Gray, with others to be named. The Task Force has an expansive charge and must submit an annual report by December 31st. The Strategic Program Area Review, or SPAR, of student financial aid that was requested by JLBC and OSPB received an initial response from the universities and they are currently in the process of producing a much more extensive submittal from each of the universities by June 30.

Regent Palacios said the legislative session did produce quite a list of “to do” items for the universities.

Ms. Tebeau said the legislature appropriated $841.5M in general fund appropriations to the universities for FY 2006, a $46.9M or 5.9% increase over FY 2005. That appropriation includes the $7M for the Medical College expansion, but does not include the universities’ portion of the nursing funding that will be appropriated between the community colleges and the universities. The specific components of the increase included enrollment growth funding at $14.5M, a $2.8M reduction in general reductions such as vacancy savings and travel, $22.8M for salary increases that is a 1.7% increase across the Board to compensate for the 1.7% increase in state retirement for both the employees and the employers, and $5.9M for employee health premium increases.

Ms. Gale Tebeau joined the meeting for this discussion. Regent Boice said the Board was being asked to review and approve the FY 2006 State Expenditure Authority. Ms. Tebeau said the State Expenditure Authority includes general funds appropriated by the legislature, a portion of tuition and fees, and other miscellaneous revenue. She said the proposed FY 2006 State Expenditure Authority is approximately $1.2B, an increase of $85M, or 7.4% of which $46.9M is general funds. Total tuition and fees, including regular tuition and tuition from special program fees increased a total of $65.3M, of 11.2% to $647M for FY 2006. Of that, about 24% or $153.9M is set aside for student financial aid of which 40% is the Regents’ formula driven set-aside fund. The set-aside will increase to about $47M this year from $42.5M last year.

Regent Bulla commented on the headings of various items. He believes tuition dollars go to the state and are remitted back to the universities in the form of appropriations. He would hope some day the tuition and fees can just remain in the universities.

President Stuart thanked Ms. Tebeau for all her help in his attempt to explain the budget to legislators more clearly. He suggested the tri-university legal affairs group assess the likelihood of a new legislative approach and to offer bills in the house and senate in the upcoming session to name the categories truthfully and for tuition and fee money to stay with the universities. President Likins suggested a look at the patterns in other states might be helpful.

Upon motion of Regent Boice, seconded by Regent Jewett, the Board approved the FY 2006 State Expenditure Authority as presented in the Executive Summary.

Ms. Gale Tebeau joined the meeting for this discussion. Regent Boice said the Board was being asked to discuss and provide guidance on the development of the FY 2007 State Operating Budget Requests.

Ms. Tebeau said the Board would be asked in August to review preliminary FY 07 State Operating Budget Requests. Final Board review and approval will be scheduled for the September meeting. The Governor’s Guidelines now have been issued and they are similar to previous years and mirror what is stated in the Executive Summary. The proposed elements to be included in the universities’ FY 2007 State Budget are similar to what the universities requested in the past, a continuation budget component and a decision package component. The major parts of the continuation request would include the 22 to 1 enrollment growth formula, performance incentive funding, academic support for developing campuses, new facility support, annualization, and student financial assistance including the Arizona Financial Aid Trust request for a 2 to 1 match.

Regent Bulla said the economy is doing quite well and revenues are increasingly coming into the state extremely well. He thought requests for one-time funds might be well received and asked if there had been an analysis of what would be appropriate for one- time funding like building renewal or new systems. President Likins and President Crow agreed that it would be good to ask for building renewal which is formula driven but is appropriated annually.

Ms. Kathy Bedard joined the meeting for this discussion. Regent Boice said the Board was being asked to approve the TRIF Regents Innovation Fund budget for FY 2006. He reminded the Board that $1M of annual TRIF receipts are used by the Regents to respond to immediate opportunities and issues. Only one piece of the proposed budget would be new to the Regents. That was the Arizona Virtual Water University. Regent Boice introduced Mr. Alan Stephen, Chief of Staff for Operations for Governor Napolitano.

Mr. Stephens reminded the Regents that about seven months ago there was a focus on the long-term drought in Arizona. He said there had been some rain, but the state is still dealing with major water issues. This initiative focuses on building on the assets of the three universities, working with communities in terms of applied research projects on the ground. The industry will also be involved, especially the high tech sector, where industries can share the technological gains they have made along with the universities and local communities. The purpose of the funding is to hire staff to get this project started. There will be a coordinator from each university. Other funding, such as fund-raising from the community and private sector partners is also being explored. SRP just announced a large grant to ASU and UA for water related projects. It is hoped this will also attract federal dollars. The Governor believes there does not need to be a new building, but this can be built on assets that already exist.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board approved the FY 2006 TRIF Regents Innovation Fund in the total amount of $1M as presented in the Executive Summary.

Regent Boice said the Board was being asked to authorize the renewal of Dr. Michael M. Crow’s multiple-year employment contract as President of Arizona State University for the period July 1, 2005, through June 30, 2008. He said President Crow had brought a tremendous amount of energy and vision to the presidency when he came to ASU three years ago. The Board is very pleased he joined this system and that he will be staying on.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board authorized the renewal of Dr. Michael Crow’s appointment and a multiple-year employment contract as President of Arizona State University through June 30, 2008, under the terms presented in the executive summary. He will receive a base annual salary of $440,000, subject to annual compensation review. He will receive employer paid contributions to a cash balance defined benefit pension plan at an annual rate of $30,000, an annual housing allowance of $50,000, and an automobile allowance of $8,394 per year. The contract will include provisions relating to termination of employment and will incorporate specific performance measures to be agreed upon between the Board and President Crow. In addition, the Arizona State University Foundation will provide a supplemental life insurance policy for Dr. Crow, a tuition benefit for Dr. Crow’s children, and a security system for Dr. Crow’s personal residence.

Dr. Crow thanked the Board for his reappointment and stated how much he appreciated their support.

Regent Boice said the Board was being asked to approve a multiple-year employment contract with Lisa Love as Vice President for University Athletics at ASU. President Crow said Ms. Love would bring a tremendous energy level to the job. She will be driven by three objectives: to graduate athletes from the university, to play by the rules, and to have programs that the Board, the University, and the people of Arizona can be proud of. He said the compensation is purposely at the mid-point of the major athletic programs in the country.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board authorized Arizona State University to enter into a multiple-year contract through June 30, 2010, with Lisa Love as Vice President for University Athletics under the terms as presented in the executive Summary.

Ms. Love’s base salary will be $280,000 per year for basic and additional duties. She will receive a one-time payment of $75,000 for transition expenses which will be “grossed up” so that the net payment to Love after subtracting federal and state income and employment taxes equals $75,000. She may receive special compensation annually for amounts designated in ASU contracts with media. She may receive performance bonuses annually for the accomplishments of designated athletic and academic performance accomplishments. There are termination clauses in the contract.

Regent Calderón thanked Dr. Christine Wilkinson for her service as Interim Athletic Director.

Ms. Mary Stevens and Ms. Paulina Vazquez-Morris joined the meeting for this discussion. Regent Boice said the Board was being asked to consider, at first reading, revisions to Board Policy 6-301 relating to Conditions of Professional Service. Ms. Stevens said there are two parts to the revisions. The first part is similar to the revisions to Conditions of Faculty Service that were done in 2004 that provides the university presidents authority to make multiple year appointments to academic professionals such as researchers and librarians. The second part of the revisions will bring the policy into compliance with the decision of the Arizona Supreme Court several years ago concerning university hearings. The changes had been made to the faculty policy and the university policies at all three universities, but this particular policy had not been revisited for some time and needed to be brought up to date.

Dr. Bernat commented that the members of the Arizona Faculties Council around the state have given positive feedback.

Ms. Mary Adelman and Mr. Robert Liberto from Segal Advisors, Inc., joined the meeting for this discussion. Regent Boice said the Board was being asked to approve the providers and plan structure changes to the Arizona Board of Regents Optional Retirement Plan.

Ms. Adelman said the Board was required to do a competitive bid process every five years to select the companies to provide optional retirement plan benefits to participants. A committee made up of human resources staff and faculty made the recommendations in the executive summary. Segal Advisors was hired to assist with the process. The Committee recommended the Board award contracts to AIG VALIC, Fidelity and TIAA- CREF. The Committee also recommended that a contract be awarded to ING to allow current participants to leave their money on deposit with that company if they so choose.

Mr. Liberto said the Committee had recommended a three-tiered approach. Tier One would be investment options that are best in class, have lower expense ratios, and are primarily Class A or 1 shares and would be reviewed by the Committee on an on-gong basis. Lifecycle funds would be included in this tier. The objective of Tier Two is to allow the providers to offer their own investment options similar to what they do today. Tier Three would be self-directed brokerage accounts which would be a voluntary election made by the participant.

Upon motion of Regent Boice, seconded by Regent Herstam, the Board approved the providers and plan structure changes to the Arizona Board of Regents Optional Plan and authorized the Executive Director to executive the required contracts subject to review by Board Counsel as presented in the executive summary.

Regent Calderón said the Joint Conference Committee’s (JCC) stated purpose is to improve the articulation agreements between the community colleges and the universities, essentially to provide greater access to undergraduate education and a bachelor’s degree. The chairmanship of the Committee rotates between the community colleges and the Board of Regents annually. The chair has now rotated to ABOR. The JCC believes, due to the interest of the legislature in articulation, they will be prepared to come to ABOR no later than December of 2005 with three to five solid recommendations that will provide greater access to undergraduate education.

Dr. Frances Bernat reported this would be her last meeting as the AFC representative. She thanked the Board and Ms. Stephanie Jacobson for their support of the AFC. The AFC hopes to work closely with the Board on issues of salary parity, inversion, and compression issues, tenure, post-tenure review, and other issues to assist the university system. She announced the Chair for the next academic year would be Robert Mitchell from the University of Arizona.

President Stuart thanked Dr. Bernat for all she had done and said she had been a wonderful representative for the faculty.

President Stuart reported the major accomplishment of the Focused Governance initiative was the formation of the Capital Committee. The Board is about to consider several policy changes that have come about as a result of Focused Governance. New technology has allowed committees to meet through video conferencing, therefore saving travel time. There are now four standing committees that are not committees of the whole: Audit, Assessment and Compensation, IT/AZUN, and Capital. The Central Office now has wireless capability. The cost of the new technology has been $110,362, including $45,000 for replacing aging Central office computers. Estimated operating costs are $59,000 including funds to increase the part-time Central Office technical person to a much-needed full-time person.

Regent Calderón asked for the source of the funds. President Stuart said one staff person was not replaced. President Stuart thanked the presidents and Executive Director Sideman for all their help. He also thanked Dr. Art Ashton for his work.

Provost Elizabeth Grobsmith, Milt Glick, and George Davis, and Ms. Stephanie Jacobson joined the meeting for this discussion. President Stuart said this was an information item; the proposed first reading of the requested policy changes. These are changes developed by the Provosts and Ms. Jacobson.

There were no questions from the Board concerning the proposed revisions to 2-206.B, Academic Credit for Foreign Study, which deletes the requirement for recording individual courses from other institutions on the transcript; 2-208.C, External Program Review (duplicative programs) by Outside Consultants which is deleted; 2-302, Descriptions and Definitions of Academic Units, which removes the time frame for reviewing the academic units defined in this policy and delegates the frequency for reviewing these units to the universities; 4-202.D, General Rules, which proposes to extend the scope of ABOR tuition and fee levels from Summer Sessions to Winter Session and other special sessions; 4- 301, Tuition Waivers, which removes policy requirements for community service for nonresident students who receive nonresident tuition waivers; 6-201.H, Conditions of Faculty Service, which removes language that requires community representatives and recent alumni to be involved in academic program reviews.

President Stuart reported the Governor signed legislation that provided start-up money for Level 1 of the Medical School expansion. A report must be filed by September 1, 2005, with the JLBC that details all the expenses made to date by ABOR, its institutions, and its partners and a description of a five-year capital budget and enrollment, among other things, and by December 1 a progress report on the Phoenix Campus must be filed.

President Stuart described an offer by the Huntsman Cancer Foundation to become a partner in the Phoenix Campus. There is a proposal to consider the development of an ambulatory care facility or a special cancer hospital on the downtown site. He described the problems facing the establishment of the Phoenix Medical School. Regent Frank asked how the establishment of another cancer center would help the development of the medical school and was told that in return for giving the Huntsman Family help in establishing the cancer center, they would be asked to give support to the College of Medicine. President Stuart was thanked for all his hard work on this issue.

Regent McCalley said he and Regent Herstam had served as a nomination committee for Board officers for next year. He placed in nomination the names of Regent Christina Palacios for President, Regent Robert Bulla as President Elect, Regent Fred Boice as Treasurer, Regent Lorraine Frank as Secretary, Regent Calderón as Assistant Secretary, and Regent Benjamin Graff as Assistant Treasurer. The nomination was seconded by Regent Herstam and passed by unanimous voice vote.

President Stuart presented Regent McCalley a crystal plaque on behalf of the Board for his service as a Student Regent. Regent McCalley also received gifts from the universities and the Associated Students. President Stuart received a first edition book as a gift from his fellow Regents for his service as President of the Board. He also received a gift from the Associated Students.

President Haeger was thanked for his hospitality. President Stuart and Regent McCalley were thanked for their service. Dr. Bernat was thanked for her contributions as AFC Representative. The ABOR staff and Executive Director Sideman and the presidents were thanked for all their help and support.

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