March 2003 Minutes/Arizona Board of Regents

A meeting of the Arizona Board of Regents was held March 6 and 7, 2003, in the Alumni Lounge, Memorial Union, Arizona State University, Tempe, Arizona. President Jewett called the meeting to order at 1:10 p.m.

PRESENT:	Regent Fred Boice Regent Robert Bulla Regent Chris Herstam Regent Jack Jewett Regent Matthew Meaker (Thursday Only) Regent Kay McKay Regent Danelle Kelling Regent Gary Stuart Regent Donald Ulrich Superintendent of Public Instruction Tom Horne (Thursday Only)
ABSENT:	Regent Christina Palacios Governor Janet Napolitano

Also present were: President Michael Crow, Dr. Milton Glick, Dr. Mernoy Harrison, Dr. Kathleen Church, Dr. Jim Rund, and Dr. Christine Wilkinson, Arizona State University; President Peter Likins, Dr. George Davis, Dr. Saundra Taylor, Dr. Elizabeth Ervin, Mr. Joel Valdez, Dr. Patti Ota, Ms. Judith Leonard, and Mr. Greg Fahey, University of Arizona; President John Haeger, Dr. M. J. McMahon, Dr. Elizabeth Grobsmith, Mr. David Lorenz, and Dr. Jeanette Baker (Thursday Only), Northern Arizona University; Executive Director Linda Blessing, Board Counsel Joel Sideman, Secretary to the Board Judy Garza, Dr. Tom Wickenden, Dr. Art Ashton, Ms. Louise Houseworth, Ms. Cathy McGonigle, Mr. Matt Ortega, Mr. Dave Harris, and Ms. Norma Salas, Central Office Staff; and Dr. Wanda Howell, Arizona Faculties Council.

All lists, reports, summaries, background materials, and other documents referred to in these minutes can be found in the March 6 and 7, 2003, Documents File.

Regent Jewett announced that the Board had held a 2½ hour, statewide tuition hearing on February 27. Therefore, consistent with Board policy, comments or testimony concerning the proposed tuition or fee recommendations would not be heard.

Peter Morris, President of the UA Graduate and Professional Students Council, asked for graduate students to be fully protected from a possible pay cut due to the proposed tuition increase. He asked for them to be considered university employees for tuition purposes.

Tim Lant, President ASU Graduate and Professional Students Association, told the Regents about the formation of the ASU GPSA. In 2003 they formed an alliance among ASU, the UA and NAU graduate student governments called the Arizona Graduate and Professional Student Coalition. They have a close relationship with the administration and are addressing issues of concern to graduate students. The group supports Changing Directions and the universities’ fiscal and operational plans.

Regent Stuart said this was a proposed amendment to Board Policy 4-309, “Tuition Collections Retained for Need-Based Financial Aid.” At the January meeting, the Board reviewed the proposal to increase the set aside for need-based financial aid to 14% at each university. This is an important part of the Changing Directions initiative.

President Jewett recognized former Regent Rudy Campbell, who was present in the audience. President Haeger introduced the new Vice President for Enrollment Management and Student Affairs at NAU, Dr. David Bousquet.

President Jewett said the Board struggled last year with the issue of tuition setting, primarily because there was not a mechanism to ensure there would be enough need-based financial aid. Since the August Retreat, the Board has kept its focus on the principle of affordability. This change will represent a 140% increase in need-based financial aid that will be dedicated to making the universities affordable. This will enable the Board to hold unharmed those Arizona undergraduate students with the greatest financial need. The presidents have worked to allocate some additional financial aid that will be used for graduate students and students with demonstrated merit.

President Jewett said the increase in need-based aid generated by this policy change will not be enough to make a university education affordable for everyone. The Regents are trying to convince the State to establish, at the appropriate time, an additional program for financial aid assistance. Regent Meaker said he supported this very large first step in improving financial aid.

Upon motion of Regent Stuart, seconded by Regent McKay, the Board adopted the proposed amendment to Board Policy 4-309 that modified existing policy on need-based aid by increasing the percentages of tuition revenue that is set-aside at each university for need-based aid as follows: 1) ASU from 8% to 14%, 2) NAU from 9% to 14%, and 3) UA from 8% to 14%. Section B of the Policy has been modified to indicate this need-based aid may be provided in part to students in the form of tuition credits or waivers. The requirement in Section C that requires a plan and report describing the uses of the funds that are set-aside pursuant to this policy has been modified to include appropriate data for analyzing the extent to which each university’s financial aid set-aside will maintain or improve affordability for resident undergraduates.

Ms. Louise Houseworth and Ms. Gale Tebeau joined the meeting for this discussion. Student leaders Mike Leingang, ASASU, Yolanda Sanchez, ASASUW, Wes McCalley ASNAU, Pedro Wolf, ASUAS, and Doug Hartz, ASUA, also joined this discussion.

Regent Stuart praised the student leaders for engaging in the debate on this issue in an intellectual way. He said this was the fourth meeting the Board had dealt with the issue of tuition. It had reviewed various models and approaches and the stress on the system in previous meetings.

President Crow said ASU was a rapidly growing institution trying to accommodate thousands of new students per year. The East and West campuses are evolving rapidly, also. They are focusing on building academic success and academic quality, and resources are needed to accomplish these objectives. The interface among the professor, the academic support professional, the support staff, and the students has weakened after years of under-investment. There is a need to maintain and enhance access for both undergraduate and graduate students. There is a need to enhance the probability that a student attending ASU will graduate at a level commensurate with the quality of the institution.

President Crow said he had sent to community leaders and student leaders a list of ASU’s commitments should the proposed tuition increase be adopted. ASU will focus the resources from the tuition increase on the educational mission of the university, the front line. There will be a financial aid set-aside of 14%, allowing ASU to increase its financial aid commitment by 140%. Student leadership will be engaged directly on the academic priorities they feel are most important to their success and the building of the academic environment. ASU is agreeing to reach out to all the communities, in both Spanish and English, throughout the State; so students are not scared away from applying to the university because of the price. ASU has begun the process of maintaining and expanding support for Research Assistants and Teaching Assistants. ASU must lower its faculty to student ratio by establishing the ability to hire and retain faculty. Dr. Crow said he believes these commitments and the tuition increase will allow ASU to take the next steps toward guaranteeing the highest quality possible education attending ASU.

President Haeger said he believed the proposed tuition increase was the most critical issue facing higher education in Arizona. National and state patterns show declining public support for higher education. Most states have responded by increasing tuition, but also by looking at ways to adjust student financial aid to continue to offer opportunity, accessibility, and high quality. Without a tuition increase, the students will not have accessibility or a high quality education.

Dr. Haeger said the Regents and the presidents are committed to pushing to build a student financial aid pool for the future that will continually enable more and more students to access public higher education. Currently, higher education is the single most important investment an individual can make in his or her future. Students will also be called to make an investment in their education.

President Haeger said the proposed tuition increase will guarantee accessibility to the students of the state, both on the Mountain Campus and the statewide programs. A tuition increase will also guarantee that NAU will begin to move slowly to deal with the serious infrastructure issues that low tuition and moderate state support have caused.

President Likins said the process of simultaneously considering tuition and financial aid was a new process for Arizona. This is an attempt to improve, over time, the affordability of the institutions for the poor and increase the financial strength of the institutions.

Dr. Likins said he was advocating the movement of the tuition charged by the Arizona universities toward the 33rd percentile of the tuition charged by the senior public institutions across the country. He would like to see this happen in two years. This means next year he will be recommending moving to that point and that will require at least a $200 increase plus whatever amount the 33rd percentile has grown this year during the year since the other universities across the nation will also be raising their tuition.

President Likins said the UA student body leadership has requested that needy resident undergraduates receive priority from the increased money raised by the increased set-aside. The UA has agreed to restrict the incremental set-aside gained this year to that group. The increased financial aid will allow the universities to help the neediest students to a much greater degree than a smaller tuition increase would allow.

Dr. Likins said the UA would make sure the graduate teaching assistants who are financed centrally do not suffer any kind of a financial disadvantage from the tuition increase. They will use tuition waivers and other mechanisms to protect this group from harm. He cannot agree to the same protection for the research assistants; but believes, in concert with the principal investigators, the university will also be able to protect this group from negative consequences of the tuition increase. There will be some money to meet the requirements of needy graduate students, but not all this need can be met.

Mr. Mike Leingang said he would like to convey a message to the legislature that it is time to invest in the universities and whatever tuition increase is adopted today should remain in the universities. ASASU conducted a survey of over 8300 students on campus which identified five main uses for a possible tuition increase. They are working with the administration to accomplish these suggestions.

Ms. Yolanda Sanchez said ASAUW was pleased about the conversations concerning increasing accessibility by raising financial aid. She emphasized the importance of reaching out to those students who will feel the most perceived impact. She expressed her support of the proposal to be presented by Mr. Doug Hartz.

Mr. Wes McCalley said the situation at NAU was more critical than the other two universities as there is such a great need for building renovation. Surveys and conversations with students have raised five critical areas they would like to see improved: 1) Salaries of faculty, 2) More diversity in faculty and students, 3) Improvement in student services and activities, 4) Financial aid leading to better accessibility, and 5) Improvement of infrastructure.

Mr. Pedro Wolf said he represented approximately 350 students who attend a small campus in Sierra Vista. The same services are not available on that campus that are available on the larger campuses. He believes the tuition increase will hurt his campus. He asked that tuition waivers be granted to UA South students so their tuition would not increase. He realized the money used for this purpose would otherwise be invested in the campus.

Mr. Doug Hartz said the universities have been suffering and more state money is unlikely. He said the transition to higher education would be a great sacrifice for many students. He asked the Board to mediate the transition by raising the tuition for undergraduate resident students at the University of Arizona by $900 and $1450 for non-resident undergraduate students. He believes this will raise more money than the president’s proposed tuition increase.

Regent Stuart praised Regent Meaker for the time he spent traveling around the state to inform all students about the universities’ financial needs. Regent Meaker thanked the university administrators and the student leaders for all their efforts the past year to raise the level of understanding of university funding needs among the students.

Regent Stuart said he would not like to put any student in the position of having to pay the price of being uneducated. Regent Stuart and Regent Meaker moved to increase 2003-2004 resident, undergraduate tuition at all three universities by $1,000 for a total tuition of $3,508. The motion was seconded by Regent McKay.

Regent Boice asked President Likins to respond to the proposal submitted by Mr. Hartz. President Likins said he respected the students and the work they have done; but it does not mean he agreed with their proposal. When they asked him to shift all of the incremental revenues from the 14% set-aside for needy resident undergraduates, he agreed, even though it was contrary to his intention, because he wanted to be responsive. He said he did give the proposed model serious thought and discussed it with his colleagues; but they came to the conclusion they could not recommend that proposal. They were concerned about the elasticity quotient of the nonresident students. The presidents’ recommendation already contains a large tuition increase for nonresident students and they are already building their financial models based on the assumption it will not negatively impact nonresident enrollment. Financial aid dollar commitments are being made based on the assumption these price increases will not negatively impact enrollment. The student proposal creates a greater risk of negative impact.

Dr. Likins said he also believed the student proposal would just add to next year’s problems. He would like to reach the top of the bottom third of public universities so the tuition setting process would simply become a matter of calculating the amount to remain at this position every year. He believes the student proposal would just add $100 to what may be another larger increase than desired next year.

Regent Bulla said he believed the student proposal was creative and he complimented the students. However, as the Chair of the Strategic Planning Committee, he said he did not believe the proposal was in keeping with the strategic directions of a major research university.

Mr. Hartz said the students did not believe their proposal was contrary to moving to the top of the bottom third. They believe it allows the students a better opportunity to plan for this transition. He said the students had conducted a national survey and had questioned the economics department and they believe their proposal will not negatively impact nonresident enrollment.

President Jewett clarified that this motion and the following tuition motions do not include the mandatory fees charged for the student recreation center, currently $50, and the financial aid trust fund surcharge, currently 1% of resident undergraduate tuition. Additionally, the motion is consistent with Board policy not to exceed an amount required to maintain a position at the top of the lower one-third of rates set by other public universities.

Regent Meaker said he appreciated the students’ input on this issue and he thought they had brought important ideas to the table. He encouraged them to continue their research and innovative approach to student issues. The motion passed by unanimous roll-call vote.

Regent Stuart and Regent Meaker moved that the Board increase 2003-2004 nonresident undergraduate tuition at ASU and NAU by $1000, for a total tuition of $12,028, and increase nonresident undergraduate tuition at UA by $1,250, for a total tuition of $12,278. The motion was seconded by Regent McKay and passed by unanimous roll-call vote.

Regent Stuart said there had been an enormous response to the Board from the graduate student population at all three universities and many discussions had taken place. It is believed this tuition increase will help the financial position of graduate research assistants and teaching assistants in one more year. Regent Stuart and Regent Meaker moved that the Board increase 2003-2004 general resident graduate tuition at ASU and NAU by $1200, for a total tuition of $3,708, and increase general resident graduate tuition at UA by $1250, for a total tuition of $3,758. The motion was seconded by Regent McKay.

Regent Boice said he had received a lot of e-mail from graduate students and would like the assurance from the presidents that this class of students is going to be fairly treated when it comes to financial aid. He believes many of these students are unaware of what is being proposed. President Likins said it had been difficult to convince the graduate teaching assistants and research assistants they will be unharmed by the increase. It is not formally being guaranteed in advance, but the principal investigators who control the research contracts are being encouraged to help solve the problem of protecting the graduate research assistants from adverse consequences of the higher tuition. This involves negotiating with the faculty; so it will be a case-by-case determination by each principal investigator. He believes the research and teaching assistants will not suffer an adverse impact and he believes there will be some money left for other needy graduate students.

President Haeger said he believed he could guarantee graduate teaching assistants and research assistants there will be a way in which the university can help them. He believes there may be a tuition waiver for half of the resident tuition they currently pay. However, other NAU graduate students will see an increase in their tuition.

President Crow said this year ASU has provided a 25% waiver of in-state tuition for half-time teaching assistants and no waivers for half-time research assistants. Next year they have committed to a 50% waiver for teaching assistants and a 50% waiver for research assistants and half of that for people on quarter time appointments. In the third year, ASU hopes to take it to 75% and in the fourth year, to 100%. The other graduate students are subject to normal financial aid strategies that are more complicated.

The motion for general resident graduate tuition passed by unanimous roll-call vote.

Regent Stuart and Regent Meaker moved that the Board increase 2003-2004 general nonresident graduate tuition at ASU and NAU by $1200, for a total tuition of $12,228, and increase general nonresident graduate tuition at UA by $1500, for a total tuition of $12,528. The motion was seconded by Regent McKay. The motion passed by unanimous roll-call vote.

Provost Davis, Ms. Louise Houseworth, and Ms. Gale Tebeau joined the meeting for this discussion. Regent Stuart said the College of Medicine maintains the practice of setting tuition at the top of the lower one-third of rates set by all other state-supported colleges of medicine. This provides a good illustration as to what might work next year for the revised ABOR process for setting resident undergraduate tuition in the same manner.

President Likins said this is just a calculation and always leaves the UA College of Medicine in the bottom one-third. Regent Stuart moved that the Board approve resident tuition at the College of Medicine at $11,483 plus the mandatory fees of $75 for a total of $11,558. The motion was seconded by Regent Regent McKay and passed by unanimous roll-call vote.

Regent Stuart said the proposed rate increases would provide funding to address increased costs. The universities request Board authority to increase residence rates for 2003-2004 as follows: Arizona State University requests an increase of annual residence hall room rates of $158, or 5% weighted average; Northern Arizona University requests an increase of residence hall room rates of $282, or 10.989% annually for single student housing and $53, or 10.67% monthly for family apartments; the University of Arizona requests an increase of annual rental rates for residence halls and leased apartments of $215, or 6.41% weighted average.

Regent Stuart said the residence hall associations at each university support the proposed rate increases. As pointed out in the Executive Summary, at the University of Arizona the rate for Apache-Santa Cruz Hall is increasing more than the other residence halls in order to place it in the same rate tier as Kaibab-Huachuca, Manzanita-Mohave, and Maricopa. This change in tier is the result of a significant renovation in Apache-Santa Cruz that includes major improvements in all corridors and student rooms, including all new furniture.

Regent Boice asked if the expense of running the dorms would be covered by these rates and the debt for the facilities would be covered by tuition and was told the debt service was paid by the rate payers who reside in the residence halls. Upon motion of Regent Stuart, seconded by Regent McKay, the Board approved the 2003-2004 residence hall, leased apartments, and family housing apartment rates requested by the three universities.

The meeting recessed at 2:40 p.m. and reconvened at 2:57 p.m. Regent Horne left the meeting at this time.

Dr. Christine Wilkinson, Dr. Patti Ota, Dr. Tom Wickenden, Dr. M.J. McMahon, and Dr. Kathy Church joined the meeting for this discussion. President Jewett said the Regents have talked about changing policies on the admission of students, but the first priority in the Action Plan was to address the issues of tuition and financial aid. Having made those changes, the Regents need to give their full attention to the second set of issues: admissions and access.

President Jewett said several scenarios for delegating a portion of the decisions about admissions to the universities were discussed at the January meeting. Instead of guaranteeing admission to all students who meet the minimum requirements, it was proposed that some of those applications would be reviewed by and admission would be determined by each university.

Consistent with the principle of differentiation that underlies Changing Directions, the presidents differed in terms of how discretion over admissions would be exercised at each university. Regents and presidents expressed a preference for Scenario 2, the scenario that delegated more decisions rather than less to the universities. The staff was asked to bring to this meeting a draft of the policy changes necessary to implement the second scenario, together with more comprehensive information about how students would be affected.

The Board discussed the importance of providing access for all qualified students to university education. To allow for the management of enrollments, there can no longer be a guarantee of access for all qualified students to every campus and every program at each of the universities. At the same time, however, the Board must continue to ensure that all qualified students have access to higher education at one or another of the universities. And once they get into a university, all students need to improve their chances of success in completing their undergraduate education and obtaining a degree.

For those reasons, the Board had asked the universities to recommend measures of access and measures of completion that could be used to track their performance. Based on these measures, the Board can then set goals for access and graduation, and through periodic reviews, can ensure that continued progress toward these goals is maintained.

Dr. Ota highlighted the specific changes in admissions’ policy that were proposed for Board consideration. She listed the four guiding principles for undergraduate admission that were supported at the January Study Session: Set minimum qualifications based upon ability to complete a four-year curriculum, Ensure access for all qualified Arizona residents, Meet the needs of the state for an educated workforce, and Allow universities to manage enrollments. She said the Regents need to communicate their expectations to the universities and then hold the universities accountable for meeting them.

The proposed policy identifies a group of resident students, identified as Regents’ Graduates, to whom it assures admission to all three Arizona universities. These students are resident, high school students that are in the top 25% of their high school graduating class and have zero deficiencies in required courses. In Scenario 2 proposed in January, it was suggested that, in cases where high schools do not provide class rank, the universities should consider a GPA of 3.25 being the substitute requirement for recognition as a Regents’ Graduate.

Upon further analysis, Dr. Ota said the universities now believe that recommendation has serious flaws. While on average across all Arizona high schools, being in the top quartile may correspond to a minimum GPA of 3.25, this is not the case at the individual school level. In those schools where being in the top quartile correlates to a GPA of higher than 3.25, it is likely the school that currently ranks its students would be pressured to stop providing class rank, thereby allowing more of the students to qualify as Regents’ Graduates. Thus to be considered a Regents’ Graduate, the universities are now recommending the single aptitude criterion of being in the top 25% of the applicant’s high school graduating class.

In January, a scenario was also suggested that could have permitted students to qualify as Regents’ Graduates who had one deficiency in their core course competency requirements. This is because the universities recognize that students who have one deficiency in certain courses, such as fine arts, perform as well in their freshmen year as students with similar aptitude profiles and zero deficiencies. However, allowing one deficiency is likely to have the defacto corollary of reducing the set of courses by one, an unintended consequence. The universities are now recommending that the Regents’ Graduates have zero deficiencies. It is believed this policy will provide an incentive for Arizona high school applicants to complete all of their core course requirements.

Dr. Ota said the policy also assures admission to all three universities to resident students who attend a community college or other higher education institution and earn 24 transferable credits with a GPA of at least 2.0. This is consistent with current Board policy. Included in this group are resident students who have earned an associates degree or higher or have completed the Arizona general education curriculum with a minimum GPA of 2.0. These students are separately identified only to be consistent with current ABOR policy.

The proposed policy also establishes the floor for undergraduate admissions for both resident and nonresident students as suggested by guiding principle number one. One set of minimum requirements for high school students is being in the upper half of their high schools graduating class and having no more than two deficiencies in core courses as long as the deficiencies are not both in math and science. An alternative set of minimum qualifications for high school students is having a cumulative high school GPA of at least 2.5 and having no more than two deficiencies, not both in math and science. Decisions about whether to admit high school applicants who meet these minimum requirements but who do not qualify as Regents’ Graduates are delegated to the individual universities who can best determine an applicant’s ability to succeed at a specific university and the enrollment capacity at their campuses.

The minimum floor for transfer students who have earned twenty-four or more transferable college or university credits is a minimum GPA of 2.0 in those courses. Decisions about whether to admit non-resident transfer applicants who meet these minimum transfer requirements are delegated to the individual universities. Resident transfer applicants who meet the minimum qualifications are guaranteed admission to all three universities as indicated before. Thus for resident transfer students, the floor for admission is congruent with assured admission status. Dr. Ota said the policy changes being proposed do not change the current minimum guidelines for transfer students into the three Arizona universities.

The new policy also delegates to the universities the responsibility for establishing undergraduate admission requirements for students under 18, for home schooled-students, for students from non-accredited charter schools, and for students seeking admission through general education development test scores.

The new policy does not change the ability for each university to establish requirements for international students and graduate students, the ability to adopt additional requirements for admission to colleges or other academic units within the university, the ability to limit the number of qualified nonresidents if it concludes that exceeding that number may have a negative impact to the services and quality of education provided for resident students, to adopt specific competency requirements, and to adopt alternative requirements for students 22 or older. Each university may establish a special admission committee that may admit students who do not meet minimum requirements but meet other specified conditions, such as GPA’s over 2.0 and upward grade trends, (limit of 10% of students admitted for the semester in question), and may establish special requirements for honorably discharged veterans.

Dr. Ota said the universities strongly believe the proposed delegation of admission decisions to the individual institutions is a key strategy to the Changing Directions initiative. The proposed policy changes will allow each university to manage its enrollment in a more purposeful way.

Regent Ulrich raised the issue of imposing special admission requirements for charter school graduates. He said the Board had determined a few years ago the charter schools should be treated the same as public schools in terms of university admission requirements. Dr. Ota said the proposed policy would allow each university to determine what admission criteria it would use for non-accredited charter schools. The universities may decide that those criteria are the same as for all other students; it just makes that policy institutional specific as for international and graduate students. Regent Ulrich said the Board had earlier decided there was no reason for differentiation between a public school student and a charter school student in terms of admission to the universities since he did not believe any charter schools were accredited.

President Likins said he had believed charter schools were accredited by either the Board of Education or the Charter School Board; therefore, he did not know there would by any difference between charter and public schools’ admission requirements. Dr. Ota said charter schools were accredited by the North Central Association. Regent Ulrich asked how many were accredited and how many weren’t and Dr. Wickenden said 25 to 35 are accredited and the remainder are not.

Regent Bulla said he needed more information to make a decision on this issue. He would like to know more about the differences between the accredited and non-accredited charter schools. Dr. Wickenden said it was his understanding charter schools are allowed to hire teachers that are not certified and accreditation requires schools to hire certified teachers. Regent Ulrich said the state allows the charter schools to hire non-certified teachers; he does not see why the universities should penalize someone following the law.

President Likins said he would be willing to change the requirement if it is true most charter schools are not accredited. President Crow said he believed the students from all the schools that have a charter from the State of Arizona would be eligible under the proposed admission standards the same as public high school students. President Jewett said the Board would like to have language for the second reading that neutralizes the outcomes for charter school students so they conform with the same requirements as public schools.

President Jewett asked if the schools in Arizona that do not use class ranking had been identified. He asked how many there were and what type of school would be most likely not to rank students. Ms. Lori Goldman, University of Arizona Director of Admissions and New Student Enrollment, said 10% of Arizona’s high schools do not rank their students for a variety of political reasons. These includes public and charter schools.

President Likins said some fraction nationally of schools that are reluctant to rank feel uncomfortable ranking the bottom. He said he believed some schools would rank the top quartile if this policy were adopted. Dr. Ota said many private schools will tell students they are in the top quartile, but do not tell students their ranking. Dr. Wilkinson said there are many private schools and many Native American schools that do not rank their students. Regent Kelling said this part of the proposed policy troubles her as she would not like to preclude a student from guaranteed admission just because their school does not rank students, especially since she does not know the reasons schools do not rank students.

Regent Boice said he believed there was too much speculation on reasons and what might happen. As this is a first reading, he asked staff to come back with more complete information relative to accreditation, charter schools, and class ranking at the second reading. Regent Bulla said he was not clear enough on the monitoring process that would be put in place. He would like to see the policy monitored, without it being burdensome, so the Regents know the goals and directions of diversity, access, etc. are being accomplished.

Dr. Wickenden said the Board had asked for information regarding the context within which the delegation of admissions would take place; that accountability measures and reports to monitor the impact and outcome of these decisions be proposed to insure goals for access and graduation would be met. Dr. Wickenden described the overall process within which admission takes place, the pipeline for students who move through that process from high school graduation through admissions, enrollment, and on through university graduation, the numbers and percentages of students who would be affected by the policy change at various points in that process, measures of access and measures of completion, and the time frame within in which these measures would be implemented.

Dr. Wickenden said the process through which students move from high school through the universities can be broken down into steps: graduation from high school, a record of academic performance that makes a student eligible for admission, application for admission, admission to the university, the student’s decision as to whether to enroll, and persistence at the university for those who do enroll until they graduate.

Admission is only one step in the process and the flow of students is affected by a variety of factors–preparation, outreach, admissions, recruitment, teaching and academic support.

The result of this process is the number shrinks as the students move through the pipeline from high school graduation to university graduation. Dr. Wickenden described the numbers and percentages of students whose admission would be delegated to the universities at various steps in the process. He said the best data available is for students who are admitted, not for students who apply.

Dr. Wickenden described how the proposed measures of access and graduation are defined. Access measures would be described as the percent of eligible Arizona high school graduates who apply, are admitted, and enroll at the universities. Graduation measures would be described as the percentage of enrolled Arizona high school graduates who persist and then graduate from the universities. Each of the sets of measures would include one for freshmen and another for transfers.

Access includes a measure for eligible graduates who take one to three years at a community college and then transfer. The graduation measures include a six-year graduation rate for freshmen, a five-year rate for lower division transfers, and a four-year rate for upper-division transfer students. These measures will track the access students have to the university system and their success at the universities.

Both sets of measures would be calculated for students in different ethnic groups as well as in total. In addition, there will be an attempt to calculate separate access rates for students from different counties and students with different family income levels. For graduation rates, there is currently a breakdown by ethnic groups and gender. Once they are enrolled in the university, the location of the high school from which they graduated and their income level are no longer as important to their academic success.

Dr. Wickenden presented an example of what graduation rates might look like. The time frame for implementing the proposed changes and measures lists April 2003 as the possible approval date for the policy changes for admission. Spring 2004 is the possible approval date of operational measures with data and goals. Fall 2004 is the possible implementation date of policy changes with the 1st class of freshmen entering under new admission policies. Measures of access for freshmen and transfers would reflect the impact of admission policy changes 1, 2, and 4 years after implementation, respectively.

Measures of graduation for transfers and freshmen would reflect the impact of admission policy changes 5, 6, and 7 years after implementation.

President Jewett said he has a concern with the proposed implementation time line. He is afraid the Fall of 2004 is too quick and might disenfranchise some of the students that are currently sophomores and juniors in high school. He believes Fall 2006 would provide sufficient time for current high school students to prepare. President Likins said he knows the community fears there will be a radical change from the delegation of authority to the universities. It has always been the intention of the University of Arizona to be very careful and very gradual in the implementation of the new policies; so he accepted the suggestion to change to Fall 2006. He asked for delegation now with the measurements to begin now so the recruiting offices and admission offices can be prepared for implementation.

President Likins reminded the Regents that current policy allows the universities to redirect 10% of the student body eligible for admission to the community colleges and the universities would gradually begin to exercise that existing freedom. Current policies also allow the universities to have differential admission standards for different programs and those changes may occur.

President Haeger agreed with the change to Fall 2006. Robert Bulla said he worried the poor economy and an increase in the pipeline might result in enrollment growth and cause a decrease in diversity at the universities. He would like to see monitoring of the situation so there would be data to make sure no one is excluded because of growth.

President Crow said he agreed with the phased-in approach as it allows the universities time to build support for the program. He believes the universities should be speaking to middle schools as well as high schools to motivate students. Regent Boice said he would like some sign posts along the way to make sure objectives are being met and everyone will be ready for implementation in 2006. Regent Stuart said he would encourage haste instead of caution because the universities will have a more-prepared student body and a newly energized faculty.

President Jewett said he believed each president will deal with the delegated authority differently. The University of Arizona will probably utilize the delegation more rapidly than the other institutions. He believes the admission issue is one of the most important issues and there is a need for the community to understand the changed behavior necessary for admission before going forward. He also believes the institutions need time to create internal policies for this new delegation.

President Crow said he did not see this as a delay. He believed the change in the policy framework would be made by the Board and the universities would then have a schedule for implementation. This decision would affect only those who are currently in the ninth grade and below. President Likins said he did not see changing the date to 2006 as a delay, either. The universities can use the current policy discretion, as outlined earlier, to begin making the slight adjustments that will take the universities to Fall 2006.

Regent Ulrich asked if all three universities had to do the same thing at the same time. President Likins said he believe the public needs to be assured that students who are currently sophomores need not fear a change. Each university will deal with the delegation differently when it becomes effective. He does not believe there will be dramatic changes in 2006, either; but believes the changes should be made this spring and implemented in a scheduled way. President Crow said he believes the universities currently have enough discretion to deal with current incoming students and ASU has planning exercises underway to prepare for implementation of the policy changes when they are effective.

Regent Stuart asked if the tracking would include persisters that transfer to another college or university and graduate. Dr. Wickenden said the universities do now have the capability and the data base to track students transferring among the universities. Regent Ulrich asked if the process the universities use for tracking is the same as used by their peer institutions so comparable data can be considered. Dr. Wickenden said the universities make sure their data is comparable to national surveys.

President Jewett said the universities would continue to meet with various constituencies and provide feedback to the Regents in April on the proposed changes. Regent Ulrich’s concern about charter schools should be addressed. He believed the Board was giving conceptual approval to the performance measures outlined by Dr. Wickenden. With this additional information, he believes the Board will be ready to address a second reading in April. Dr. Wickenden asked if this would include changing the implementation date to Fall 2006 and was told yes. The Board would also like a schedule of additional meetings where progress would be benchmarked.

The meeting recessed at 4:15 p.m. Regent Meaker left the meeting. President Jewett reconvened the meeting at 9:16 a.m. on Friday, March 7.

President Crow introduced Dr. Alberto Rios, ASU Regents Professor of English. He said Dr. Rios is an individual who blends his creative energy with his teaching. He is an excellent example of how ASU hopes to build a national program in writing and the creative arts. Dr. Rios said he grew up in Nogales and is a product of the University of Arizona.

Dr. Rios read a poem from his book that was a National Book Award finalist. He described his “poems of purpose,” such as his public art project at Tempe Town Lake where a story of the area is etched on stone along the walkway. He showed a video he had written that SRP will use in its centennial celebration to tell about water in an imaginative way. He demonstrated an art form that combines metaphor and humor to create an epiphany. He read a poem from which the Scottsdale Center for the Arts plans to inscribe two lines on an entrance door. Dr. Rios read from a poem he wrote for the inauguration of Governor Napolitano. President Crow and several Regents acknowledged Dr. Rios for his moving presentation and his outstanding contributions to ASU.

Items on the Consent Agenda, which are marked in these minutes with an *, were considered as consent matters and were adopted upon motion of Regent Boice, seconded by Regent Stuart. There was no individual discussion of these items. President Jewett announced that Item 36, Appointment of Vice President for Administration and Finance (NAU), had been removed form the Consent Agenda to be discussed under the Resources Committee Agenda.

The Board approved the October 30, 2002, Special Executive Session, November 21 and 22, 2002, Executive Session, January 10, 2003, Special Joint Meeting, and the January 23 and 24, 2003, Regular Meeting Minutes.

The Board approved the proposed policy revisions to ABOR Policy 6-903, “Educational Assistance Plan.” These changes include tuition waivers and remissions for graduate teaching and research assistants and associates in the Education Assistance Plan adopted by ABOR pursuant to Internal Revenue Code Section 127. This will permit the universities the flexibility to treat tuition benefits as tax exempt and to properly charge tuition benefits to federal grants or contracts.

The Board approved the proposed change in Board Policy 5-207, “Student Health Insurance,” which delegates a variety of administrative functions to the existing Student Health Insurance Advisory Committee. In addition, the practice will be to retain a leading health insurance consulting firm to advise and assist in working with the health insurance industry. The Council of Presidents will review the Student Health Insurance Advisory Committee recommendation.

The Board authorized Arizona State University to enter into an amendment to the ground lease of the Karsten Golf Course at ASU with The Collegiate Golf Foundation that provides for a reduction in the percentage rent payable to ASU from 10% to 5% of Gross Revenues during fiscal years 2002-03, 2003-04, and 2004-05, subject to review and approval by university counsel.

The Board authorized Arizona State University to sell one or more series of System Revenue Refunding Bonds in amounts to produce sufficient proceeds to refinance all or a portion of its System Revenue Bonds Series 1989, 1991, 1993, 2000, 2002 (refunding), and 2002 (new money) and to pay costs related to the refinancing and to take all related action, enter into all necessary agreements, and execute all necessary documents, as provided in the Supplemental Resolution, reviewed by Board Counsel and staff.

The Board authorized Arizona State University to sell one or more series of Refunding Certificates of Participation in amounts to produce sufficient proceeds to refinance all or a portion of its Certificates of Participation, Series 1991, 1993, 1999(A), 1999(B), and 2002, and to pay costs of issuance of the COPs, to take related actions, and to enter into all necessary agreements, as provided in a resolution reviewed y Board Counsel and staff.

The Board approved the sale to EMJ Development Co., a California limited partnership, in substantial accordance with the terms and conditions described below, approximately 15.05 acres of the former Cowden Estate Property located in Tolleson, Arizona. The Board also authorized the execution of all legal documents by the Board’s President, Secretary, or Executive Director, subject to review of all documents by Board Counsel.

This parcel is wholly owned by the co-beneficiaries. The basic terms of the proposed sale include a cash transaction with a purchase price of $1,081,704. The seller shall, at its cost, provide buyer with an ALTA survey of the Property. If this transaction closes, seller shall be entitled to recover from Buyer at closing the actual cost of the survey up to $3,000. Grubb & Ellis, who has represented the Seller, will receive 2.5% of the gross purchase price and 2.5% of the gross purchase price will be paid to CB Richard Ellis, who has represented the buyer. The Board’s share of the net proceeds will be approximately $395,633.

The Board appointed Sam James, M.D., to the Board of Directors for UMCC for a term expiring in February 2005. The UMCC Board of Directors recommended the appointment.

The Board authorized Northern Arizona University to enter into a multiple-year employment contract with Mike Adras as Head Men’s Basketball Coach, as summarized below, for the period July 1, 2003, through June 30, 2006. Coach Adras’ salary for performance of program duties related specifically to the basketball program will be $80,450 per year, subject to the same salary increases as other university employees serving under the Conditions of Administrative Service.

In addition to the performance of his team in NCAA Division I basketball, Coach Adras will be held accountable for student athletes meeting minimum expectations of academic performance. Coach Adras shall receive supplemental compensation annually for the academic performance of student athletes depending on achievement of designated grade point averages or graduation rates. He will also receive additional compensation if the NAU men’s basketball team appears in the NCAA Division I Championship.

Coach Adras has an exclusive license to operate a men’s basketball camp with specified restrictions. He may provide services not included within the contract for compensation as long as such services can be performed within the limits permitted by law and restrictions placed by NAU and the NCAA. The contract contains termination and liquidated damages clauses.

The Board authorized Northern Arizona University to enter into a multiple-year employment contract with Jerome B. Souers as Head Football Coach, as summarized below, for the period July 1, 2003, through June 30, 2006. Coach Souers’ salary will be $80,450 per year, subject to the same salary increases as other university employees serving under the Conditions of Administrative Service.

In addition to the performance of his team in NCAA Division I football, Coach Souers will be held accountable for student athletes meeting minimum expectations of academic performance. He shall receive supplemental compensation annually for the academic performance of student athletes depending on achievement of specified grade point averages or graduation rates. He will also receive additional compensation if the NAU men’s football team appears in the NCAA Division I-AA Championship.

Coach Souers has an exclusive license to operate a football camp with specified restrictions. He may provide services not included within the contract for compensation as long as such services can be performed within the limits permitted by law and restrictions placed by NAU and the NCAA. The contract contains termination and liquidated damages clauses.

The Board authorized Northern Arizona University to enter into a multiple-year employment contract with Meg Sanders as Head Women’s Basketball Coach, as summarized below, for the period July 1, 2003, through June 30, 2006. Coach Sanders’ salary will be $76,450 per year, subject to the same salary increases as other university employees serving under the Conditions of Administrative Service.

In addition to the performance of her team in NCAA Division I basketball, Coach Sanders will be held accountable for student athletes meeting minimum expectations of academic performance. She shall receive supplemental compensation annually for the academic performance of student athletes depending on achievement of specified grade point averages or graduation rates. She will also receive additional compensation if the NAU women’s basketball team appears in the NCAA Division I Championship.

Coach Sanders has an exclusive license to operate a women’s basketball camp with specified restrictions. She may provide services not included within the contract for compensation as long as such services can be performed within the limits permitted by law and restrictions placed by NAU and the NCAA. The contract contains termination and liquidated damages clauses.

The Board authorized Northern Arizona University to enter into a multiple-year employment contract with Ronald E. Mann as Head Track and Field/Cross Country Coach, as summarized below, for the period July 1, 2003, through June 30, 2006. Coach Mann’s salary will be $82,450 per year, subject to the same salary increases as other university employees serving under the Conditions of Administrative Service.

In addition to the performance of his team in NCAA Division I track and field, Coach Mann will be held accountable for student-athletes meeting minimum expectations of academic performance. He shall receive supplemental compensation annually for the academic performance of student athletes depending on achievement of specified grade point averages or graduation rates. He will also receive additional compensation for each of the NAU Men’s or Women’s Cross Country or Track and Field teams finish in the top five at the NCAA Championships.

Coach Mann has an exclusive license to operate a track and field/cross country camp with specified restrictions. He may provide services not included within the contract for compensation as long as such services can be performed within the limits permitted by law and restrictions placed by NAU and the NCAA. The contract contains termination and liquidated damages clauses.

The Board authorized Northern Arizona University to enter into a multiple-year employment contract with Michell Hansen as head women’s volleyball coach, as summarized below, for the period July 1, 2003, through June 30, 2006. Coach Hansen’s salary will be $56,500 per year, subject to the same salary increases as other university employees serving under the Conditions of Administrative Service.

In addition to the performance of her team in NCAA Division I volleyball, Coach Hansen will be held accountable for student-athletes meeting minimum expectations of academic performance. She shall receive supplemental compensation annually for the academic performance of student athletes depending on achievement of specified grade point averages or graduation rates. She will also receive additional compensation if the NAU women’s volleyball team appears in the NCAA Division I Championship.

Coach Hansen has an exclusive license to operate a women’s volleyball camp with specified restrictions. She may provide services not included within the contract for compensation as long as such services can be performed within the limits permitted by law and restrictions placed by NAU and the NCAA. The contract contains termination and liquidated damages clauses.

The Board authorized Arizona State University to enter into a multiple-year employment contract with Brad Saindon as Head Volleyball Coach, as summarized below, for the period from the execution of the contract through December 31, 2007. Coach Saindon’s salary will be $82,000 per year, consisting of $81,000 base salary and $1,000 additional salary for basic duties relating specifically to coaching volleyball and for additional duties as listed.

The salary will be increased for the year commencing January 1, 2004, and on each January 1 thereafter in percentage increments depending on achievement of listed performance milestones. If no milestones are achieved, the Director of Intercollegiate Athletics may give Coach Saindon a percentage increase up to but not exceeding the increase granted service professional employees during the year.

Coach Saindon may receive, but is not assured, Special Compensation annually. Special Compensation is all amounts designated as being for the volleyball coach in agreements negotiated by ASU with manufacturers, etc., relating to use and promotion of athletic equipment, etc. The Coach will receive the amounts designated in the agreements less $1,000. Coach Saindon may receive Supplemental Compensation annually for specified academic and athletic performances.

Coach Saindon will receive tickets to ASU sporting events, use of one automobile, and golf privileges at the ASU Karsten Golf Course. Coach Saindon has the right to operate a volleyball summer camp with specified restrictions. He may provide services not included within the contract for compensation as long as such services can be performed within the limits permitted by law and restrictions placed by ASU and the NCAA. The contract contains termination and liquidated damages clauses.

The Board authorized Arizona State University to enter into a multiple-year employment contract with Joseph Kenn as Head Coach Sports Performance, as summarized below, for the period from the execution of the contract through June 30, 2005. Coach Kenn’s salary will be $105,000 per year, consisting of $104,000 base salary and $1,000 additional salary for basic duties relating specifically to coaching sports performance and for additional duties as listed. The salary will be increased for the year commencing July 1, 2003, and on each July 1 thereafter in percentage increments depending on achievement of listed performance milestones.

Coach Kenn may receive, but is not assured, Special Compensation annually. Special Compensation is all amounts designated as being for the sports performance coach in agreements negotiated by ASU with manufacturers, etc., relating to use and promotion of athletic equipment, etc. The coach will receive the amounts designated in the agreements less $1,000. Coach Kenn may receive Supplemental Compensation annually for specified academic and athletic performances.

Coach Kenn will receive tickets to ASU sporting events and use of one automobile. Coach Kenn has the right to operate a sports performance summer camp with specified restrictions. He may provide services not included within the contract for compensation as long as such services can be performed within the limits permitted by law and restrictions placed by ASU and the NCAA. The contract contains termination and liquidated damages clauses. In approving this multiple-year employment contract, the Board waived the requirement in ABOR Policy 6-1001 (c) (3) that a coach must be the head coach of an intercollegiate team to receive a multiple-year employment contract.

The Board approved the upgrade to the Network Infrastructure at ASU at an estimated cost of $1,150,000. This will ensure secure and reliable network access to meet increasing demand for Internet access and add/enhance the Virtual Private Network (VPN) and firewall.

The Board approved the Regents Award Selection Committee’s nomination of The Honorable Clinton Pattea, President of the Fort McDowell Yavapai Nation, and the Fort McDowell Yavapai Nation as recipients of the 2003 Regents Award.

President Pattea and the Fort McDowell Yavapai Nation have been instrumental in support of scholarship programs for all three Arizona universities. They have endowed the universities with $2M in scholarship and program support. Since 1997, over 500 University of Arizona undergraduate and graduate Native American and non-Native American students have received direct financial assistance in the form of scholarships, stipends, student/staff wages, emergency funds, paid internship opportunities, and travel related expenses.

President Pattea urged each state university president to formally appoint an American Indian representative to serve as liaison to Arizona’s Indian nations; and, with the support of the Fort McDowell Yavapai Nation, the three appointees have worked with students, faculty, and staff in organizing Arizona Tri-Universities for Indian Education, the first organization of its kind in the United States.

The University of Arizona and the Regents will host a celebratory event in honor of President Pattea and the Fort McDowell Yavapai Indian Nation in conjunction with the April 2003 Board meeting.

Dr. George Davis, Dr. Tom Wickenden, Dr. Elizabeth Grobsmith, Dr. Ron Pitt, and Dr. Milt Glick joined the meeting for this discussion. Regent Stuart said the Board was being asked to review and discuss two proposed changes to its policy regarding definitions for allowable uses of special class fees. The first proposed change includes allowing personnel expenses for supervisory instruction in fields such as social work, student teacher placement, and nursing. Instructors in these fields often have to drive long distances in order to supervise field experiences.

The second proposed change allows class fees to be used for musical accompanists for music and dance classes. The staff was asked to bring the item back for second reading at the April meeting.

Dr. Mernoy Harrison and Mr. Dave Harris joined the meeting for this discussion. Regent Stuart said the Board was being asked to approve Project Implementation for safety improvements to the rigging system and fire curtain of Grady Gammage Memorial Auditorium at an estimated cost of $1.6M. It was not included in ASU’s Capital Development Plan because the university’s initial cost estimate was under $1M.

Regent Ulrich asked if this had anything to do with the last Gammage renovation where the size of the stage was increased and was told this is a different issue. This health and safety issue has arisen due to the age of the facility.

Upon motion of Regent Stuart, seconded by Regent McKay, the Board granted Project Implementation Approval to Arizona State University for the Grady Gammage Memorial Auditorium Rigging Project.

Mr. Kurt Freund of RBC Dain Rauscher, financial advisor to the universities and the Board, Dr. Mernoy Harrison, and Mr. Dave Harris joined the meeting for this discussion. Regent Stuart said this was a proposed modification to the ground lease with the South Campus Group Housing L.L.C. that was approved by the Board at its November 2002 meeting.

Mr. Freund explained the structure of the financing. They are public/private partnerships that begin with an RFP for a development team to construct, design, finance, and operate these facilities. The development team is picked and a non-profit is set up to enable the financing transactions to move forward. The non-profit receives a ground lease of the land from the university and they issue bonds that are paid for by use revenues from those who use the facilities.

The credit structure is fairly weak as it is a single project financing. Excess revenues are spun off to the project after debt service, operating, management fees, and other costs are paid. This has worked well for the projects done in the past and helps the universities keep within their debt capacity limits. The current problem with this type of project is the cost of the projects has roughly doubled in the last year and credit enhancers, rating agencies, and the market place in general have imposed more restrictive covenants on the universities when these financings are used.

An alternative approach that allows the universities to maintain the benefits of these types of financings without the higher costs and more restrictive provisions has been developed. In the past, the universities have pledged net revenues of the facilities being financed. The current plan is to pledge the gross revenues, i.e. the pledge to debt service would be first with operating expenses being subordinate to the payment of debt service. This strengthens the credit to some extent. The second thing is for the universities to provide contingent assistance to back these projects. There would be a different structure for ASU, where the university would provide contingent assistance for operating cost, versus NAU where the contingent assistance would be for operating cost and for debt service. This strengthens the credit for the issue and brings down the cost of the credit enhancement. This eliminates the restrictive covenants on the construction of future housing, allows more of the excess revenues to go to the universities, and means less chance the contingent assistance will be needed.

Mr. Harris said the universities would probably be using a process more like the one being requested by NAU today in the future. If the universities are assuming the risk, there is no need for a private partner. Dr. Harrison said each project should be considered on its own merits and ASU could not say at this point they would not request a private partner in the future for any project. President Crow said ASU needed to add more bed space as quickly as possible and this is one way to accomplish that goal. President Haeger said the advantage to NAU was also to get the projects built quickly as the residence space at NAU is mostly older buildings.

Regent Ulrich asked how the revenue projections had been in the projects already built and was told the academic year revenues were good, but the revenues in the summer had been somewhat lower than assumed. Regent Boice said he was concerned the universities, over time, were taking on more and more of the risk and the private partners less. He said he believed it is time to look at other ways of financing.

Upon motion of Regent Stuart, seconded by Regent Boice, the Ground Lease approved at the November 21-22, 2002, meeting was modified to include ASU providing contingent operating assistance to the project. All other aspects of the previously approved action item remain the same.

Mr. Joel Valdez, Mr. David Harris joined the meeting for this discussion. Regent Stuart said the Board was being asked for a waiver of Board policy to exceed the authorized spending limit (for schematic design) for the Institute for Biomedical Science and Biotechnology Building and the Chemistry Building Expansion. Board policy allows for up to 5% of the estimated project cost for these preliminary design service expenses, but no more than $600,000. Preliminary design expenses for these two projects would not exceed the 5% threshold, but would substantially exceed the $600,000 limit.

Mr. Harris said three or four times in the past year the Board has been asked to waive the monetary limit. He believes it may be time to consider changing the Board policy as the cost per square foot has risen. The monetary limit could be raised, or the Board could remove the monetary limit and just keep the percentage limit. Also, with the new capital development process, the Board would have to know about a project before any money could be spent on design; so staff believes there would be adequate protection for the Board if the policy were changed.

Regent Ulrich agreed the Board policy should be changed as this will probably arise in the future with the medical and biotech building projects. Regent Stuart said he had discussed this issue with Mr. Harris and had given the issue a lot of thought. He did not believe there would be another number that would be workable. He suggested Board staff be directed to come back to the Regents with a change in policy that eliminates the dollar amount, but keeps the percentage cap, with the understanding the project must be in the Capital Development Plan.

Upon motion of Regent Stuart, seconded by Regent Boice, the Board granted the University of Arizona’s request for an exception to Board policy in order to expend up to $2,500,000 for the IBSB project and $1,500,000 for the Chemistry Building Expansion project to proceed through the schematic design phase.

Mr. Dave Harris, Mr. David Lorenz, and Mr. Kurt Freund joined the meeting for this discussion. Regent Stuart said Northern Arizona University was requesting Board approval to form an independent limited liability corporation for the purpose of developing a 300 to 500 bed residential complex on campus, approval to enter into a ground lease with the corporation, and authorization for this corporation to issue not to exceed $25M of student housing revenue bonds to finance the project. This is a new approach in student housing where a non-profit corporation will sell bonds and contract with NAU to oversee design and construction and operate and manage the completed facility.

Upon motion of Regent Stuart, seconded by Regent McKay, the Board approved the formation of the L.L.C., the lease of the project site to the L.L.C. pursuant to a ground Lease for a term not exceeding 40 years, and the issuance of bonds not exceeding $25,000,000 in principal amount for purpose of financing the design, construction, furnishing, and equipping of a central campus housing complex of approximately 300-500 beds on the central campus of Northern Arizona University.

The Board also authorized the President, the Executive Vice President, the Vice President for Administration and Finance, and the Assistant Vice President for Financial Services to negotiate, sign, and deliver said ground lease agreement on substantially the terms described within the Executive Summary and summarized below, and any other necessary or appropriate documents in connection with the transaction and related financing, and take all necessary and appropriate actions in this connection.

Regent Stuart said the Board was being asked to renew the appointment and a multiple-year contract for Peter Likins as President of the University of Arizona. Upon motion of Regent Stuart, seconded by Regent Bulla, the Board authorized the appointment of Dr. Peter W. Likins as President of the University of Arizona in accordance with a multiple-year employment contract that incorporates the terms and conditions summarized below.

The appointment period is July 1, 2003, thorough June 30, 2006. The base annual salary will be $285,000 (subject to annual compensation review) with employer paid contributions to a cash balance defined benefit pension plan at an annual rate of $163,007. He will receive an annual housing allowance of $46,993 and an automobile allowance of $8,394 per year. He will receive the same fringe benefits available to all university administrators and an appointment to a tenured faculty position as professor of engineering. The total compensation package is identical to his compensation package for FY03 (a portion of his base annual salary–$35,000–that was provided as supplemental compensation by the UA Foundation in FY03 will be provided from university fund sources in FY04 and will be gifted back to the university by Dr. Likins as a charitable contribution, as well as an additional $25,000 of his base annual salary).

Regent Stuart said the Board was being asked to authorize the renewal of the appointment and a multiple-year contract for Linda Blessing as Executive Director of the Arizona Board of Regents. Upon motion of Regent Stuart, seconded by Regent McKay, the Board authorized the appointment of Dr. Linda J. Blessing as Executive Director of the Arizona Board of Regents in accordance with a multiple-year employment contract that incorporates the terms and conditions summarized below.

The appointment period is July 1, 2003, through June 30, 2006. The base annual salary will be $172,500 (subject to annual compensation review) with employer paid contributions to a cash balance defined benefit pension plan at an annual rate of 18%. She will receive the same fringe benefits available to all central office administrators. The total proposed compensation package for Dr. Blessing is identical to her compensation package for FY03.

Regent Stuart said this is a new policy that would delegate to the presidents the discretionary authority to approve a voluntary separation and retirement incentive program for employees at each university. President Crow said ASU is in a position of desiring to move ahead with the transformation and expansion of the institution and expanding its research agenda. It is important to find mechanisms to motivate employees to consider retirement who may not be as interested in or as committed to the new agenda as the university moves forward as they were in the past.

Regent Stuart said this was another example of the agility and flexibility being led by Changing Directions. The proposed policy will be brought back for Board approval at the April 2003 Board meeting.

President Haeger said Mr. David Lorenz had been serving as interim Vice President for Administration and Finance since May 1, 2002. The position is being converted to the permanent position of Vice President for Administration and Finance to recognize Mr. Lorenz’s contribution to the university and to recognize that NAU will conduct a national search for a vice president, probably in the next year. Mr. Lorenz will serve until a new vice president is hired.

Upon motion of Regent Stuart, seconded by Regent McKay, the Board approved the appointment of Mr. David Lorenz as Vice President for Administration and Finance, effective March 10, 2003. The current fiscal year salary for this position is $106,450.

Mr. Matt Ortega and Ms. Charlene Ledet joined the meeting for this discussion. Mr. Ortega said there was a good possibility the Governor would be able to call a Special Session next week to adopt the FY03 budget.

Mr. Ortega asked the Board to support SB 1133 and HB 2408, Appropriations, universities, research facilities. President Crow said this is the bill requesting $29M in annual funding from the state to retire some $370M+ of the debt for the construction of about 10 research buildings on the campuses of ASU East, ASU West, ASU Main, and the University of Arizona Main Campus. The bill has the support of much of the private sector. He said complicated funding mechanisms are being offered that would allow the state, in spite of its fiscal stress, to be able to move forward with the request. It is supported by legislative leadership and the Governor’s office.

President Haeger said NAU’s dominating priority now is to deal with capital infrastructure issues on the campus. Legislative leadership is aware NAU will ask for equivalent funding through a variety of different mechanisms.

Mr. Ortega said HCR 2028, Technology transfer, and HB 2403, Technology transfer, university research development, is a part of the Changing Directions initiative concerning technology transfer and the ability for the universities to own stock or equity interest in companies, especially small start-up companies. HCR would refer the item to the 2004 general election ballot and HB 2403 is the enacting legislation.

Mr. Ortega said HB 2122 is an appropriation for the Yuma Science Complex and HB 2498 prohibits state employees (including universities) from using state owned computers to access, print, or store any files or services that depict nudity, sexual activity, etc. It includes exemption for agency approved research and projects. However, there are issues with university libraries and free speech. President Likins said the bill was unenforceable and he hoped the Regents would place the bill in a neutral category.

Upon motion of Regent Herstam, seconded by Regent Stuart, staff was directed to support SB 1133, HB 2408, HB 2403, HB 2122, and HCR 2028.

Mr. Ortega said two bills were considered potentially detrimental to the university system. SB 1294, University dormitories, sale; operation, would require ABOR to sell dorms that are not under lease-purchase or for which bonds are outstanding. Proceeds would go to the general fund unless state trust land is involved. HB 2243 Illegal Immigrants, enforcement, would prohibit universities and community colleges from enrolling or permitting the attendance of students not legally in the U.S. Each university would be required to verify the legal status of every student enrolled at the beginning of each term. Upon motion of Regent Herstam, seconded by Regent McKay, the Board directed staff to oppose SB 1294 and HB 2243.

Mr. Ortega discussed SCR 1003 and HCR 2011, Budget Stabilization Act, that would limit state spending to growth in population and cost of living increases. They are in the monitor category which is a stronger position than simply remaining neutral. Staff is not sure of the direction of these bills, but will watch them closely.

Upon motion of Regent Herstam, seconded by Regent McKay, the Board directed staff to take a neutral position on SB 1181 Universities, class audits, seniors; SB 1277 Public employees, collective bargaining; SB 1325 Public employees, organizational rights; SB 1326 state employee payroll deductions; SB 1334 Paid family and medical leave; HB 2320 Gun free zones. liability; HB 2324 State buildings energy conservation standards; HB 2518 Nonresident tuition exemption; and HB 2498, State Employees, Internet Access; and, if necessary, communicate these positions to the appropriate legislative committee.

Regent Ulrich asked for a copy of SB 1260 passed in the last legislative session to expand nurses training. Mr. Ortega said he would distribute it to the Regents.

As Vice Chair of Programs Committee, Regent McKay chaired this portion of the meeting in the absence of Regent Palacios.

Dr. George Davis, Dr. Tom Wickenden, Dr. Elizabeth Grobsmith, Ms. Stephanie Jacobson, and Dr. Milt Glick joined the meeting for this discussion. Regent McKay said this item was a request to approve a new report to replace the 5-year system-wide report on low productive academic programs. It also included the first reading of changes to two ABOR Policies–2-204 B, “Academic Program Changes”, and Policy 2-208 B, “Academic Program Review.”

The Five-Year system-wide report on low productive and duplicative degree programs was presented to the Regents at the August 2002 meeting, but was tabled. At that time, the Regents asked the Provosts to return at a later date with a proposal for an alternative report that would take into account the quality of programs as well as the quantity of graduates.

Ms. Jacobson said the Five-Year System-wide Program Review was intended to report on academic programs with low degree productivity. It utilized a specific methodology that established graduation threshold, addressed duplicative programs, and determined the types of programs exempt from the threshold levels. The goal was to eliminate programs with few graduates or to justify their existence. The limitations of this Report were it addressed eliminations made by this process only, and it didn’t consider the context of the program and the quality of the program.

After the August meeting, the Provosts met with Regents Palacios and Boice to discuss the types of information that would be more beneficial for a high level report. Incorporating their suggestions, the Provosts proposed a new Annual Report on Academic Programs that will be a broad, high level summary of actions related to academic programs. It will address quality as well as productivity and quantity.

The new annual Report will summarize the 7-year academic program reviews and will incorporate methodology for less productive programs. There will be a summary of all programs offered at each university and a summary of programs added and eliminated over a 5-year period. Ms. Jacobson illustrated the proposed format of the report.

Ms. Jacobson said the proposed policy changes would incorporate the low degree productivity process into the 7-year review process, The Board would now approve the deleted programs as well as the new programs. She illustrated a sample format for bringing requests to the Board for action. The benefits of the proposed process would be that it is more comprehensive, at a higher level, provides an explanation of major changes, provides better information on elimination of programs, and will result in better accountability by universities and the Regents.

Regent Boice said he believed Regents would find this report to be very concise and will find it easy to see where the academic programs are headed. Regent Stuart asked if there would be some place to find the underlining reasons for deleting programs. Dr. Wickenden said that would appear in the narrative section.

Regent Stuart asked if the report on the programs would come to the Board after the action would be taken, or if the Board would have input. Dr. Wickenden said the Board currently approves all proposals to plan or implement new programs and part of this proposal is that the Board will also review and approve requests to eliminate programs. Regent Ulrich asked if the Provosts had looked at courses in the general education area to see what the learning outcomes were and whether the courses were thematic. He asked if that could be incorporated into this report. He asked for a report within the next two meetings on what has been eliminated in the area of general education courses that do not comply with learning outcomes or thematic format and those that are remaining that do not comply.

Provost Davis said what was presented was in respect to academic programs and degree programs as opposed to individual courses. He recommended the evaluation of courses,
particularly in respect to general education, not be folded into this policy change; but be done independently. Dr. Goldsmith said one attribute of the accrediting reviews by the North Central Accreditation is the examination of the learning outcomes from curricula, both in the major and in the general education program. Therefore, one of the areas in which every university strives to improve is general education.

Upon motion of Regent McKay, seconded by Regent Boice, the Board authorized the universities to replace the 5-Year System-Wide Report with the Annual Report on Academic Programs as described in the Executive Summary and the presentation. Regent Ulrich asked if the motion included the information he requested and President Jewett said he believed staff could be directed to provide that information.

Provost George Davis, Provost Milt Glick, and Vice Provost David Schwalm joined the meeting for this discussion. Regent McKay said the first request from the University of Arizona is to implement a new degree program and the second request if from ASU East to establish a new department.

Provost Davis explained the University of Arizona’s request for a new academic program, an Au.D in Audiology. He said it was triggered by new certification standards by the
American Speech-Language-Hearing Association. Dr. Davis described the faculty needed to implement the program.

Upon motion of Regent McKay, seconded by Regent Ulrich, the Board approved the request of the University of Arizona to implement a new Au.D in Audiology.

Dr. Schwalm explained the ASU East request to establish a new department of Applied Biological Sciences at the east campus. He said it was the third part of a process to complete transformation of existing faculty, resources, and programs to a sharper and more focused use. This will complement the direction of the School of Life Sciences at ASU Main. On February 13 the Executive Director of the Board of Regents approved the changing of the name of the current B.S. in Environmental Resources to a B.S. in Applied Biological Sciences. Also approved was the transfer of that program and its faculty from the Morrison School of AgriBusiness and Resource Management to East College. This request is to create an organizational unit for that faculty in East College.

Regent Ulrich asked the universities to help the Regents understand how the biological programs fit into the new bio science programs being developed by ASU and UA both independently and collaboratively. President Crow said ASU is being sensitive in its planning program to end up with an applied campus at East, a research university at Main, a partnership with an expanded medical school in Phoenix, and nursing and other programs that fit into that format. Provost Glick explained the charge to the ASU planning committees.

Upon motion of Regent McKay, seconded by Regent Boice, the Board approved the request of Arizona State University to establish the Department of Applied Biological Sciences at ASU East.

Dr. Art Ashton joined the meeting for this discussion. Regent Bulla said the Board’s Vision, Mission, and Strategic Directions were discussed at the August Retreat and it was determined they were more than 10 years old and revision was in order. In the past, principles were combined with Strategic Directions and there were eight Strategic
Directions, some of which were strategic and others tended to be more routine, but nonetheless important. This time a set of Guiding Principles that apply to all activities, in addition to fewer Strategic Directions, has been developed. The Principles, Vision, Mission, and Strategic Directions are primarily based on the Board’s stated priorities as exemplified in the Changing Directions activity and Board members’ expressed interests.

Regent Bulla said the Executive Summary provided a diagram that outlined the process being followed in developing, proposing, and eventually communicating theses changes. Step Four is the current request for Board review and approval.

Regent Bulla reported he, Regent Stuart, and Regent Boice met with university Information Technology administrators on Thursday and they requested the modification of Strategic Direction #6 to incorporate language regarding the need to “capitalize on new and emerging technologies.” A modified “Strategic Direction #6 was circulated to the Regents and to members of the audience.

Upon motion of Regent Bulla, seconded by Regent Stuart, the Board approved the Board Principles and revision of the Board Vision, Mission, and Strategic Directions, with the modification to Number 6 of the Strategic Directions.

Dr. Bill Lewis and Dr. Art Ashton joined the meeting for this discussion. Dr. Lewis reminded the Regents they had approved money to be used for collaborative information technology type prototypes or experimental projects. The theft of personal information from computers at the University of Texas at Austin over the weekend illustrates the problem with computer security.

Dr. Lewis said the proposal being presented was for an initial security survey of the universities’ networking and server communities within the three universities. Regent Bulla said he believed this is an area where the universities are vulnerable and he believed this survey would be very important. Regent Stuart said he did not believe there was any choice; this needed to be done. Regent Ulrich said he also believed there was no choice because he believes the federal government will require computer protection. He believes consideration should also be given to how the universities are linked together and he would like assurance they are compatible.

Upon motion of Regent Bulla, seconded by Regent Boice, the Board approved funding of $100,000 for Security Assessment of the Tri-University Network and Server Environment.

Dr. Wanda Howell said the Arizona Faculties Council (AFC) would like to see qualitative data as well as quantitative data in the admissions policies’ accountability measures relating to students who enter the university system, those students who do not, those students who succeed and graduate, and those do not graduate.

Dr. Howell said the AFC would also like the Regents to consider changing the UCAR Report as there is currently some superfluous criteria in the report that is not directly related to the strategies currently being pursued. The AFC would be more than happy to participate in the process of revising the UCAR criteria if the Board should so wish.

She said the AFC was pleased with the outcome of the tuition discussion. However, the AFC believes flexibility is more important than locking into a system like the medical college tuition. The AFC applauds the flexibility of the voluntary separation-retirement incentive program; however, the key element is voluntary. This is especially important when areas are targeted.

Dr. Howell said the members of the AFC have enjoyed their contacts with the Regents and asked the Board to consider, as part of the scheduling, a breakfast with the AFC at each university.

Regent Stuart said the SBDCC had not met, but the Joint Conference Committee (JCC) met. The JCC is composed of four members of the Board of Regents and four from the SBDCC. Since the SBDCC is about to expire, the JCC needs to be retained in some form to deal with articulation agreements.

President Crow was thanked for his hospitality and President Jewett was praised for his leadership on the tuition issue. Regent Kelling thanked the Regents for their investment in financial aid.

Regent Boice reported he represents the ABOR on the University Medical Center Corporation (UMCC) Board of Directors. UMCC is currently losing money and has hired a consultant to review the revenue side to see if they can rectify the matter. President Jewett expressed his thanks to staff for all the help given to the Changing Directions initiative and to his fellow Regents for their work on these issues.

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