Arizona Board of Regents-March 2005 Minutes

A meeting of the Arizona Board of Regents was held March 10 and 11, 2005, in the Catalina Room of the University of Arizona Student Union Memorial Center, Tucson, Arizona. President Stuart called the meeting to order at 1:05 p.m. on Thursday, March 10.

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

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

All lists, reports, summaries, background materials, and other documents referred to in these minutes can be found in the March 10 and 11, 2005, Documents File.

Regent Ben Graff led the Pledge of Allegiance.President Stuart recognized Julio Eduardo Cañón-Barriga, a doctoral student majoring in Hydrology at the University of Arizona. He was born in Bogotá, Columbia, and is attending the university as a Fullbright Fellow. Julio received many honors while earning his Master of Science degree from the Universidad Nacional de Columbia, Bogotá. He has completed 15 graduate units with a 4.0 GPA and is now completing his second full semester of course work. He reads and speaks in German and can read French, Italian, and Portugese.

Julio’s doctoral dissertation interests are an interesting combination of hydrology and water resources and agricultural and resource economics. He will start work this summer on a SAHARA Center-supported project involving the Conchos River in Mexico, the main tributary to the lower Rio Bravo. During the current academic year, he has been supported by TRIF funding and working on drought characterization in the Colorado basin.

Julio said he chose the University of Arizona because of its national reputation in hydrology. He thanked the Regents for the recognition and for the chance to address the Board.

Associate Research Professor John C. Knight, ASU Cancer Research Institute (CRI) and a friend and colleague of Regents Professor George R. Pettit, protested what he considered the mistreatment of Professor Pettit. The ASU CRI has now been incorporated into the ASU BioDesign Institute, leaving little research space for the CRI researchers who have several anti-cancer drugs under clinical trials.

Robin Pettit, Associate Research Professor at the CRI, said the CRI is in the vanguard of producing anti-cancer drugs from microbes, plants, and animals. She said the CRI has five drugs in Phase II human cancer clinical trials. Two more drugs are in Phase I trials. Dr. Pettit has been removed from his directorship and the CRI has been moved to the BioDesign Institute. Lab space has been given to other researchers and she does not believe CRI has been left with enough space to continue its work. She would like to know what is to become of the CRI scientists and their ongoing research; how 33 scientists can work in 7,000 sq. ft. of lab space; if and where alternative lab space will be made available; how CRI will work together as a unit if their scientists are spread throughout the campus; will the CRI scientists be retained at ASU; and what facts warrant the elimination of the CRI.

Lisa McFarlane, said she did not fully understand the KB Home land swap, but her understanding was it would be bad for the UA, the City of Tucson, and the long-term viability of Davis Monthan Air Force Base.

Robin Gomez, a member of the Coalition of Central City Neighborhoods that supports Davis Monthan Air Force Base. They have serious reservations with the noise contour passed by the Council of the City of Tucson. He described the noise contour around the base and said the land swap would bring homes right up to the noise contour. He would like the City and the Air Force to reconsider the noise zone.

Anita Scales, Coalition of Central Tucson Neighborhoods, said she was having problems seeing the integrity of the land swap as the City of Tucson has been having two opposing conversations at the same time. She does not believe the City is dealing fairly with the neighborhoods and is sorry to see the UA as part of the issue.

Linda Marie Small, believes it would be better to leave biotechnology to the private sector as that will increase the tax base. She also would like there to be some agreement with companies that get patents from the UA that they have to remain in the Tucson area.

Kathryn Kunoth, Dean of Academic Affairs at Gateway Community College, spoke in support of the NAU proposal for a Bachelor of Science in Health Sciences with a major in Diagnostic Medical Imaging and Therapy. This will provide a pathway for students of Gateway Community College to earn a baccalaureate in a focused and efficient manner.

Russell Reiten, Arizona Students Association, was given permission to speak, even though he had spoken at the Tuition Hearing, because he said he was going to address a different topic. He said he did not believe it was fair for NAU to have a lower set-aside for financial aid than the other two universities. He asked the Regents to mandate a higher contribution from NAU.

Elaine Ulrich, a graduate student in the UA Optical Sciences Center, asked the Regents to not raise graduate tuition higher than undergraduate tuition. She believes the higher tuition has already made an impact on the graduate enrollment at ASU.

President Stuart reported the Audit Committee reviewed 42 reports issued by the Central Office auditors, university auditors, and the Auditor General during the past year, including the auditors’ annual audit plans. The Committee approved the Central Office Audit Plan for the 2004-2005 fiscal year. The Central Office auditors passed their tri-annual peer review in January 2004.

The audit staffs analyzed the National Association of College and University Business Officer’s (NACUBO) white paper which helped identify a number of provisions in the Sarbanes-Oxley Act of 2002 that are deemed to constitute possible “best practices” for higher education. The GASB-39 for June 30, 2004, year-end financial reporting that changes how the universities relate to their affiliated entities, was implemented. The Audit Committee met with the chief auditor from each of the universities and the Central Office during the year.

Ms. Gale Tebeau joined the meeting for this discussion. President Stuart said students see tuition as a cost, even though it is an investment in their future, and universities see tuition as revenue. The legislature sees it as state collections. He described the sources and uses of the university budgets. He said an increasing share of the university budgets is being financed by the students instead of taxpayers. He reviewed various ratios that impact university finances.

Regent Boice said the Board was scheduled to set regular resident and nonresident tuition and new mandatory fees for undergraduate and graduate students for the academic year 2005-2006. The tuition hearing held on March 2, 2005, provided the students a forum to voice their concerns regarding tuition and financial aid. The Regents heard from the university presidents and from students around the state, including student leaders at each university and their campuses. The hearing was broadcast throughout the state and aired on local cable networks and NAU’s Webcast, allowing many other students, faculty, staff, and citizens to view the hearing. He thanked all who coordinated and participated in the hearing.

Regent Boice said the university presidents announced their recommendations calling for increases in resident and nonresident tuition and fees for undergraduate and graduate students and new mandatory fees at NAU and the UA prior to the tuition hearing. The presidents’ specific recommendations for regular tuition and mandatory fees are found on pages two and three of the Executive Summary.

Since each of the university presidents and student leaders had made public their recommendations and each of them had shared these recommendations and perspectives on tuition and financial aid last Wednesday at the tuition hearing. They were not asked to repeat their positions.

Regent Boice recognized the student leadership that was present: Sophie O’Keefe Zelman, Hari Kowtha, and Alistair Chapman. He said he had been very impressed with student leadership as it seems to get more profound and have better depth. He believes the leaders represented their constituents well.

Regent Boice said he would like to have one vote for resident undergraduate tuition and mandatory fees for all three universities. After that, he would like to vote by university for all other tuition increases.

Regent Boice moved the Board increase tuition for resident undergraduate students as follows: at the University of Arizona by $396, for a total resident undergraduate tuition of $4,394 in 2005-2006 which will increase the Arizona Financial Aid Trust (AFAT) by $4, for a total tuition and fee increase of $400, or 9.8%; at the University of Arizona South by $100, for a total resident undergraduate tuition of $4,098 in 2005-2006 which will increase AFAT by $1 at the south campuses, for a total tuition and fee increase of $101 or 2.5%; at Arizona State University Tempe by $338 for a total resident undergraduate tuition of $4,311 in 2005-2006, which will increase AFAT by $4 for a total tuition and fee increase of $342 or 8.4%; at ASU East and West campuses by $278, for a total resident undergraduate tuition of $4,251 in 2005-2006, which will increase AFAT by $3 on these campuses for a total tuition and fee increase of $281 or 6.9%; at Northern Arizona University Flagstaff by $240 for a total resident undergraduate tuition of $4,223 in 2005- 2006, which will increase AFAT by $3, and that NAU establish two mandatory fees–a student health fee of $30 per year, and an information technology fee of $2 per credit hour or $48 per year--both beginning Fall 2005, for a total tuition and fee increase at the Flagstaff campus of $321, or 7.9%; at NAU Statewide Programs, including NAU Yuma, by $159, for a total resident undergraduate tuition of $4,142 in 2005-2006, which will increase AFAT by $2 for these statewide programs, and that NAU establish an information technology fee of $2 per credit hour, or $48 per year, beginning Fall 2005, for a total tuition and fee increase for the statewide programs of $209, or 5.2%. Regent Bulla seconded the motion.

Regent McCalley said he believes students have evolved and are becoming more responsible and more understanding of the real issues in the state and the effort put forward by the student leaders exemplifies that growth.

Regent McCalley moved the Board increase tuition for resident undergraduate students as follows: at the University of Arizona Main by $320 for a total of $4,318 in 2005-2006 which increases AFAT by $4 for a total tuition and fee increase of $324 or 7.9%; at the University of Arizona South by $100 for a total resident undergraduate tuition of $4,098 in 2005-2006 which will increase AFAT by $1 for a total tuition and fee increase of $101 or 2.5%; at all Arizona State University campuses $238 for a total resident undergraduate tuition of $4,211 in 2005-2006 which will increase AFAT by $3 for a total tuition and fee increase of $241 of 5.9%; at Northern Arizona University Mountain Campus in Flagstaff by $240 for a total resident undergraduate tuition of $4,223 in 2005-2006 which will increase AFAT by $3 and that NAU establish two mandatory fees–a student health fee of $30 that applies only to those students on the Flagstaff Campus, and an Information and Technology Fee (IT) of $2 per credit hour or $48 per year maximum that applies to all students, both for 2005-2006 for a total tuition and fee increase at the Flagstaff Campus of $321 or 7.9%; at NAU statewide programs, including NAU Yuma, by $159 for a total resident undergraduate tuition of $4,142 in 2006-2006 which will increase AFAT by $2 for the statewide programs and that NAU establish an IT fee of $2 per credit hour or a maximum of $48 per year for 2005-2006 for a total tuition and fee increase for statewide programs of $209 or 5.2%. The motion was seconded by Regent Jewett.

Regent Boice said there had been substantial tuition raises over the last several years and there is concern the Board is depriving a section of society of university attendance. He asked President Likins to comment on this issue.

President Likins said the number of resident undergraduate student body members who are needy has not changed significantly. Four years ago 46% of the resident undergraduate students demonstrated need; and with dramatic tuition increases, but with more dramatic financial aid increases, the need remains essentially constant. This is also true of each of the ethnic populations. This has been done by increasing the aid to undergraduates as well as the tuition cost and by increasing the percentage of financial aid well above what is required by Regents’ policy.

Regent Bulla expressed his appreciation for the student’s involvement and said he has seen their level of sophistication grow over the years. He said research from Mr. Dan Anderson of the ABOR staff shows unmet need has remained stable rather than growing because of the substantial tuition increase with its large contributions to financial aid. He does not believe the substitute motion will allow as high a contribution to financial aid. He is also concerned that the students’ desire for more class availability will not happen under the student proposal. Strategically, he believes the universities should move to differentiated tuition. He said the redesign proposal strongly suggests it and he believes it will take several years to completely accomplish.

Regent Calderón said he had heard from students that fees are harder to absorb than tuition increases. He will be looking harder at the fees that come to the Board in April and he is heartened by Dr. Crow’s efforts to decrease his original fee proposal before it comes to the Board in April. He said the two tuition motions were separated by $480 at the UA and $101 difference at ASU. NAU is primarily the same. So he will be looking in April to see if over $470 in fees were saved at the UA and at least $100 in fees at ASU. He would like to see the universities go beyond that; but at least those numbers will be a win for everybody.

Regent Graff said Regent McCalley’s motion was not exactly as the students had proposed but was between their proposal and the universities’ proposals. He agreed fees were important, but believed students were also interested in a lower tuition increase. He urged the Regents to consider Regent McCalley’s motion.

Regent Herstam said he was pleasantly surprised by the proposed differential in tuition. He also believes it is a process that will take several years and he looks forward to seeing that happen in the following years. Regent Palacios said Regent Boice’s motion was between the recommendations of the presidents and the students. She also thought the proposal was a natural outgrowth of Changing Directions. She applauded the students for their work.

Regent Boice said a lot of time and effort had been made to do what was possible to acknowledge the student’s request and still maintain a financial viability at the universities.

The substitute motion made by Regent McCalley failed by roll call vote with Regents Herstam, Jewett, and McCalley voting yes and Regents Boice, Bulla, Calderón, Frank, Palacios, and Stuart voting no.

The motion made by Regent Boice passed by unanimous roll call vote. Regent Calderón said he would still like the issue of predictability of tuition addressed over the coming years. Regent McCalley said he would like to see the Board continue to work on securing more financial aid.

Regent Boice moved the following for the University of Arizona: an increase in nonresident tuition for undergraduate students of $600, for a total tuition of $13,578 in 2005-2006, and an increase in graduate tuition by $600 for both resident and nonresident students, for a total tuition of $4,848 for resident graduate students and $13,828 for nonresident graduate students in 2005-2006. The motion was seconded by Regent Bulla and passed by unanimous roll call vote. (Regent Calderón was absent for this vote.)

Regent Boice moved the following for Arizona State University: an increase in nonresident tuition for undergraduate and graduate students currently enrolled at ASU by $1,090, for a total tuition of $13,918 for nonresident undergraduates and $14,648 for nonresident graduate students in 2005-2006; increase resident graduate tuition by $428 for a total tuition of $5,466 in 2005-2006; and increase nonresident tuition for those students starting Fall 2005 by $2,172 for a total tuition of $15,000 for nonresident undergraduate students and $15,730 for nonresident graduate students in 2005-2006. The motion
passed by unanimous roll call vote.

Regent Boice moved the following for Northern Arizona University: an increase in nonresident undergraduate tuition at Northern Arizona University by $350 for a total nonresident undergraduate tuition of $12,853 in 2005-2006; an increase in resident graduate tuition by $380 for a total tuition of $4,563 in 2006-2006; and increase nonresident graduate tuition by $508 for a total tuition of $13,211 in 2005-2006. President Haeger asked that the motion include the fee recommendations in the nonresident graduate tuition the same way as they were in the resident tuition. It was stated it was intended for the mandatory fees that were previously adopted to also apply to these categories. The motion was seconded by Regent Bulla and passed by unanimous roll call vote.

Regent Boice said the UA College of Medicine maintains the practice of setting tuition no higher than the top of the lower one-third of rates set by all other state-supported colleges of medicine. Regent Boice moved that the 2005-2006 tuition for the College of Medicine be set at $14,359, an increase of $1,614 or 12.6 %, excluding mandatory fees. The motion was seconded by Regent Palacios. The motion passed by unanimous roll call vote.

Regent Boice explained the ASU request for summer and winter session rates. Regent Boice moved the following for Arizona State University: an increase in summer and winter session tuition for nonresident students, from the current level of one and one-half times the resident tuition rate to one and three-quarters the resident rate, beginning Summer Session 2005. Special programs with pre-existing agreements will not be charged increased rates until winter Session 2005. The motion was seconded by Regent Palacios and passed by unanimous roll call vote.

Regent Graff asked if this would be the time to make a motion to have $30 of the tuition increase be set aside at the University of Arizona for course availability. President Likins indicated the budget for next year was hypothetical, based on assumptions as the state legislature has not approved a budget. That model had $1M in new money for course availability, which is roughly twice that would be generated by the proposed motion. He urged the Regents not to stipulate the ways in which the dollars will be used as no one knows at this point what the legislature will do. He would not want to be bound by the proposal if there is a problem with the legislative budget.

President Stuart said he believed this motion should have been considered earlier when tuition was set and he believed this would add to the restrictions on dollars in university budgets. Regent Graff said he appreciated the discussion and the comments made by President Likins. Regent Calderón said he would like a discussion at a future meeting to see how the UA did direct its dollars compared to what the students recommended and compared to what the legislature recommended.

Dr. Mark Denke, Dr. Juan Gonzalez, Dr. David Bousquet, and Mr. Jim Van Arsdel joined the meeting for this discussion. Regent Boice said the universities were requesting approval to increase residence hall rates, lease apartments, and family housing apartment rates and meal plan rates for 2005-2006.

Dr. Denke said the proposed rate increases would provide funding to address increased costs for service, repairs, and general operations. He said ASU was requesting a 7 ½ % weighted average increase of $272. NAU was requesting a 3.87% weighted average increase of $114 for single student housing, a 3.87% increase of $23 per month for family student apartments, and a 3% increase of $78 for a mandatory meal plan. The UA is requesting a 7.04% weighted average increase of $274. The Student Residence Hall Associations at each university supported the proposed rate increases.

Upon motion of Regent Boice, seconded by Regent McCalley, the Board approved the 2005-2006 residence hall, leased apartments, and family housing apartment rates and meal plan rates as presented in the Executive Summary.

President Stuart reported this has become of vital statewide interest. He said the Arizona Commission on Medical Education and Research has met four times and done a great deal of work. He recognized Mr. Dave Harris for his work on this issue. Renovation is in progress on the historic buildings and a ground breaking is scheduled for April 27. The dedication of the new TGen building will take place on March 22.

The Commission asked the Vice President of Clinical Sciences and Deputy Scientific Director of TGen to head a design team to develop a vision for the Phoenix Campus of the University of Arizona College of Medicine and to focus on the themes and design the Phoenix Campus curriculum. He described the analysis that would be needed to accomplish this task and the seven task forces that would work on academic, clinical care, finance, administration, information technology, research development, biomedical master planning, science and technology, and business community and federal relations. President Stuart said the collaboration is really coming together.

President Stuart said the Capital Committee, with Regent Boice chairing, met for the first time earlier in the day. Over 100 policy changes have been identified by the universities and are going through a review process. The Information Technology Enhancement project is being implemented. Computers and BlackBerry devices have been distributed to Regents and staff. Additional telecommunications bandwidth and wireless communications equipment have been installed and videoconferencing equipment is being installed at the Central Office. Testing of Microsoft SharePoint software is being conducted and a pilot project is planned. Future focus will be on using these technology enhancements in creative ways to increase productivity, reduce travel time, and travel related expenses.

Ms. Cathy McGonigle and Ms. Paulina Vazquez-Morris joined the meeting for this discussion. Regent Palacios said a number of bills that have implications for universities and higher education in general have been considered in legislative committees since the Board’s January meeting. Regent Palacios has been working with the Government Affairs Group on these issues.

Student Regent Benjamin Graff’s appointment was confirmed by the Senate and Governor Napolitano’s nomination of Kolby Granville to be the new Student Regent on July 1 sailed through the Senate Higher Education Committee.

The Legislative Affairs Work Group discussed the far-reaching House initiative that has now been formalized in HB 2079 and HB 2385 and agreed to compose a letter from President Stuart and the presidents that was delivered to the Higher Education Appropriations Subcommittee at their meeting on March 1. The letter spelled out the university system opposition to the House proposal as well as the approach for implementation. The same day, the letter was delivered to all the members of the House Appropriations committee and Speaker Weiers. President Stuart also hand delivered a copy of the letter to Senate President Ken Bennett.

Ms. Vazquez-Morris presented a summary of bills affecting Arizona’s public universities. HB 2079 allows community colleges to offer baccalaureate degrees in disciplines selected by the district board. The proposal prescribes funding calculations for both community colleges and the universities and expands the Joint Conference Committee to include legislators and other private sector members. She explained the many ways the bill is considered detrimental to the universities.

HB 2385 allows community colleges to offer baccalaureate degrees and the Legislative Affairs Work Group is opposed to this bill, also, for the same reasons as they oppose HB 2079. President Haeger said the passage of either of the above bills would require significant changes in both ABOR’s policies and relations with community colleges. He said there has been a lot of talk about the deficiencies of the current system, but there has been no evidence this is true. If the bill passes, Dr. Haeger suggested the Regents and the three universities should begin conversations relating to Board Policy 2-205. A. 3 that was adopted in 1984. This was a time when the State of Arizona was extremely interested in developing partnerships between the community colleges and the universities. That policy guaranteed to community colleges that universities offering courses off campus would not offer courses that were in the course bank of the community colleges. The universities would offer the junior and senior level courses and the community colleges would offer the freshman and sophomore classes. The changes proposed by the legislature would require a reconsideration of that policy. NAU, in particular, would have to re-evaluate the cost-effectiveness of the courses if offers to students statewide.

Ms. Vazquez-Morris said House Concurrent Resolution 2029, the taxpayer bill of rights, allows the legislature to adjust the amount of money appropriated by initiatives or referendums. She said House Concurrent Resolution 2045, voter approved expenditures, allows the legislature to proportionally reduce appropriations for a specific purpose outlined in an initiative or referendum if the monies approved for the purpose are insufficient to cover all the cost. The Legislative Affairs Work Group is considering the impact of both bills if they move forward.

Other bills being considered are a state employee salary increase and enrollment growth to be funded from general fund with no tuition money included. There is currently some money being proposed for bioinformatics.

President Crow said the Senate bill for university appropriations includes the defunding of all universities for all students with more than 140 credit hours. This could cause ASU $6M and would be harmful for students with double majors or transfer students. Ms. McGonigle said it would cost the university system $14M. The Senate version has a footnote requiring the universities keep a student’s tuition constant during the student’s tenure.

The meeting recessed at 3:15 p.m. and reconvened at 8:55 a.m. on Friday, March 11.

Provost George Davis introduced Dr. Farhang Shadman, Director of the NSF/SRC Engineering Research Center for Environmentally Benign Semiconductor Manufacturing. Dr. Shadman thanked the Regents for this opportunity to present an overview of the NSF/SRC Engineering Research Center. The Center focuses on environmentally friendly semiconductor manufacturing.

Dr. Shadman said the semiconductor industry is a key player in Arizona’s growth and prosperity as approximately 60% of the state’s export is semiconductor products.

It is the foundation and a magnet for other high technology industries, but is facing tough competition attracting and keeping these industries. The semiconductor industry has traditionally been attracted to and supported universities with a strong commitment to engineering and technology-based research. Perhaps no other industry has had the rate of growth and the socio-economic impact of the semiconductor industry. Dr. Shadman used the example of transistors per chip to illustrate how the industry and its technology have grown. He discussed the problems faced by the industry, one of which is to use raw material more efficiently.

The goals of the Center are research to develop science and technology that leads to simultaneous performance improvement, cost reduction, and environmental safety and health; incorporating ESH principles in engineering and science education, and promoting Design for Environment and Sustainability as a technology driver and not a burden. This is an interdisciplinary program among universities.

Dr. Shadman said the main product of a research center at a university is a student. He is proud there are a number of students who have gone through this program, both graduate and undergraduate. Many of the graduates who have risen in industry have now come back to the Center as mentors. The Center has initiated six spin-off companies, three of which are in Arizona. He described currents projects and the future of the Center.

Items on the Consent Agenda, which are marked in these minutes with an *, were considered as consent maters and were adopted upon the motion of Regent Boice, seconded by Regent Bulla. There was no discussion of these items.

The Board received a written report on academic programs that provides a high-level overview of academic program activity on an annual basis to insure program quality is addressed. The report has four main sections: Academic Program Inventory Summary, Summary of Changes to Academic Programs for 2003-2004, 7-Year Academic Program Review Summary, and Institutional Narratives. Each university provided an overview of the changes to their academic program inventory with an explanation of how they relate to the university’s strategic plan, as well as changes or initiatives, such as Changing Directions, which may impact academic programs.

The Board approved appointments of the five Arizona Area Health Education Center (AHEC) presidents to the Arizona AHEC Program Advisory Commission as ex officio appointments meet statutory criteria. Those appointed were: Glenna Cheek, 01/2003-09/2006; Abel Estrella, 01/2002-01/2006; David Hogate, 02/2005-02/2007; LeAnn Swanson, 01/2004-12/2005; and Charles Zweig, 01/2005-01/2007.

The Board of Regents authorized Arizona State University to finalize an agreement with the Corporation of Public Broadcasting for support of a KAET Public Television Station, Office of Vice President of Public Affairs public service project. The proposed amount of the award is $1,531,864 non-federal funding for the period October 1, 2004, through September 30, 2006. The objective of the agreement is funding support for nearly 15% of KAET’s operating costs.

The Board authorized the University of Arizona to permit Dr. Michael E. Hogan, Research Professor, Bio5Institute, to establish and maintain a substantial equity interest in GUSA, Inc., a technology based on the low-cost manufacture of DNA microarrays, and GenVault, Inc., that is focusing effort on commercializing the original dry state DNA storage technology as a suite of large-scale automation and information technology products, while continuing his employment at the UA.

The Board also authorized the University of Arizona to permit Dr. Stuart K. Williams, Director, Biomedical Engineering, and Leigh B. Kleinert, Research Specialist, to establish and maintain a substantial equity interest in IKEN Tissue Therapeutics, Inc., whose mission is to improve vascular health with novel tissue-based therapies, while continuing their employment at the UA.

The Board appointed Keith A. Joiner, M.D., MPH, Dean, College of Medicine (for a term of January 2005 - December 2009). Dr. Joiner was appointed to membership, pending ABOR approval, at the January 2005 UMCC Board of Directors meeting. The Board reappointed to membership Esther Capin, N. Philip Strause, III, M.D., and Douglas J. Wall (for terms of October 2004 - September 2008) to the Board of Directors for UMCC. These people were appointed to membership, pending ABOR approval, at the October
2004 UMCC Retreat.

The Board modified the authorization it granted on February 17, 2005, to the University of Arizona to enter into lease agreements with the City of Phoenix and DESCO Southwest for three historic buildings and related land located at the former Phoenix Union High School site, by extending the terms of the leases to 33 years from 30 years.

Regent Herstam chaired this portion of the meeting. Ms. Mary Jo Waits joined the meeting for this discussion. Ms. Waits reported the proposal subcommittee looked at the original proposal, all the alternatives that were submitted, all the stakeholder input, as well as the dialogues with community members, and drafted the proposal submitted in the Executive Summary, a Redesigned Public University System. This will be taken to the stakeholder groups and public forums in March.

Ms. Waits said the document contains four challenges: Expanding Access, Enhancing Diversity, The Inefficiency of the Current System, and Financial Constraints on both the State and the Students. Ms. Waits said the mission differentiation that was started with Changing Directions was further refined, in particular the concept of differentiating within the three universities on services, price, and cost. The redesign parameters and features include real mission differentiation, focus on undergraduate education including community college collaboration and baccalaureate-focused institutions, graduate education and research, tracking mission success, the need for stronger research universities including differentiation by price and cost, financial aid–the missing link in Arizona, and a process to expand on demand.

Ms. Waits said feedback is now being sought for the proposal. This will be brought back to the Work Group on March 28 and any changes that are necessary, based on the feedback, will be made so the proposal can be brought to the Regents in April.

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

Regent Bulla reported on the ARU/IT Subcommittee meeting held earlier in the day. They heard a report from Mr. Fred Hurst that NAU is moving forward with Arizona Regents University with a focus on meeting the 2 + 2 needs for bachelors level programs throughout Arizona. A marketing firm is now looking at the name and ways to create awareness of the 1800 or more courses that are being offered electronically in a distance learning environment. Fire and Law Enforcement programs will be launched in the Fall of 2006.

The items on the Board Agenda were discussed at the Subcommittee meeting. Centralization of IT issues on the university campuses was discussed. Each university presented a list of items for consideration. Progress was reported for the IT Architecture project. Initial IT systems for the first gap analysis were identified, tools for the GAP analysis were created, and a pilot gap analysis was completed.

Regent Bulla said this is a commitment of temporary and ongoing expenditures at an anticipated cost of $5.38M over 5 years for the purpose of connecting to CENIC, a means by which the universities can gain access to National LambdaRail. Upon motion of Regent Bulla, seconded by Regent Palacios, the Board approved the total 50 ear anticipated cost of approximately $5.38M for joint UA/ASU membership in CENIC.

Regent Bulla said Northern Arizona University was requesting Board approval for the WebCT Vista Upgrade Course Management System at an anticipated cost of $4.3M over 5 years. Their current system is an older course management system that does not take advantage of up-to-date hardware, web, and database technologies to provide efficient grade book access, strong calendar and assignment integration, rich assessment and collaborative tools, or content management and development tools.

Upon motion of Regent Bulla, seconded by Regent McCalley, the Board approved NAU’s WebCT Vista Upgrade Project at an anticipated cost of $4.3M over a 5-year period.

Regent Bulla said the University of Arizona was requesting Board approval for the Financial Services Office and the Chief Information Officer to commit staff time and funding of approximately $590,000 to the Kuali Project, a financial administrative systems software development collaboration led by Indiana University. He said the other two universities should be able to use this system in the future at no cost.

Upon motion of Regent Bulla, seconded by Regent Boice, the Board authorized UA’s commitment of cash and personnel totaling an anticipated cost of $590,000 to become a core institutional partner in the Kuali Project.

Regent Bulla said the University of Arizona was requesting Board approval for an upgrade to the electrical infrastructure at the computer Center Building at an anticipated cost of $730,000. He said this was a health and safety issue as well as an upgrade.

Upon motion of Regent Bulla, seconded by Regent McCalley, the Board approved UA’s request to upgrade the Computer Center electrical infrastructure at an anticipated cost of approximately $730,000.

Regent Bulla said the University of Arizona was requesting Board approval for an upgrade of the routers, equipment that directs computer traffic, on the campus data network at an anticipated cost of $512,000. Upon motion of Regent Bulla, seconded by Regent Boice, the Board approved the $512,000 expenditure for the UA network router upgrades.

Ms. Stephanie Jacobson, Dr. Elizabeth Grobsmith, Dr. Milton Glick, and Dr. George Davis joined the meeting for this discussion. Dr. Glick said these requests are the result of the Design Team recommendations to restructure how the university does its academic programs. Most of the requests are being funded by restructuring the existing institution.

Provost Glick said the Bachelor of Liberal Studies is for a student who dropped out of the university and has returned after several years. It is patterned after the University of Oregon’s very successful program. The Bachelor of Science in Tourism in Development and Management is part of the redesigned School of Community Resources. Tourism is one of the major industries in Arizona and this degree is different from what NAU does in the hospitality industry. ASU is asking to establish the School of Global Studies, one of 4 new schools within the College of Arts and Sciences, ASU’s largest college. The idea is to reconstruct the schools and departments in Liberal Arts and Sciences to better meet the needs of tomorrow’s world. The reconstruction brings together faculty from sociology, political science, art history, architecture, Latin American studies, Asian studies, all of the Slavic studies, and language and literature. The Virginia G. Piper Center for Creative Writing was created with the gift from the Virginia G. Piper Trust of $10M. It will be placed in the old president’s house, which has been used as an archive. The house will be restored and used for writers’ workshops and conferences to take the currently strong creative writing program and make it one of the top 5 programs in the country.

Regent Bulla asked where the tourism program would be housed until the Downtown Campus was ready. Dr. Glick said it is part of an existing department on the main campus and it is possible this department and the one on the West Campus will eventually come together in the Downtown Campus.

Upon motion of Regent Frank, seconded by Regent McCalley, the Board approved ASU’s requests to implement the Bachelor of Liberal Studies degree using the expedited process, to plan for a Bachelor of Science in Tourism Development and Management, for the Bachelor of Arts in Global Studies, to establish the School of Global Studies, and to establish the Virginia G. Piper Center for Creative Writing.

Provost Grobsmith said the NAU request for a new institute, The Strategic Alliance for Bioscience Research and Education, is a collaboration among the community, faculty, and students in interdisciplinary research and teaching to foster economic development and the production of products in health care services and the health care industry. It is an umbrella organization to bring together faculty and the community to address issues in biotechnology and bioengineering.

Dr. Grobsmith said NAU was asking for a reorganization of the health area. She reminded the Board a consortium of professional schools and colleges that contained the health professions, the School of Forestry, and the School of Hotel and Restaurant Management was created in the reorganization last year. NAU would now like to remove the words “and colleges” from this consortium, leaving a consortium of professional schools and making Health Professions a school, with three departments, instead of a college. This request makes the Department of Nursing into a School of Nursing and a part of this consortium and includes a new Department of Rehabilitation Sciences with three programs.

The reorganization of these areas is predicated on a very important two plus two agreement with Gateway Community College with their degree in Diagnostic and Medical Imaging. This would enable students to acquire a baccalaureate degree which will become the required degree for health professionals in Arizona. This proposal also includes a request for an exception to Board policy to allow students in this program to transfer 81 community college credits as the program requires additional credits for licensure. These courses will be taught by NAU at a distance, from Phoenix. Students will still be required to meet NAU’s upper division requirements and their university-wide liberal studies requirements. The Gateway Agreement is predicated on NAU offering a Bachelor of Science in Health Sciences in Diagnostic Medical Imagining.

Regent Palacios asked if the additional credits would dilute the other areas of study that would have normally been required and was told no. The same number of courses in liberal studies will still be required.

Upon motion of Regent Frank, seconded by Regent Palacios, the Board approved the request of Northern Arizona University to establish the institute, Strategic Alliance for Bioscience Research and Education; to reorganize the Consortium of Professional Schools and Colleges into the consortium of Professional Schools as described in the executive summary; to establish the School of Nursing and the School of Health Professions; to implement the Bachelor of Science in Health Sciences degree with a major in Diagnostic Medical Imaging and Therapy, using the expedited process; and to authorize the transfer of 81 community college credits to this major from the Associate of Applied Sciences at Gateway Community College in the specified programs listed in the executive summary.

Provost Davis described the UA’s request to disestablish the Masters and Ph.D. degrees in Nuclear Engineering as there is only one Ph.D. student remaining in the program and there is no one in the pipeline. They are asking to establish a new program in the College of Law, a Doctorate of Juridical Sciences (Scientiea Juridicae Doctor, SJD). The concept is to have this as another mechanism to ultimately appoint UA doctor’s of law into scholarly academic positions around the country. Regent Calderón asked how long the SJD program would be and was told it was thought of as individual professionals electing to come to the UA from outside the university or through an LLM at the UA. An individual would work closely with a professor in the College of Law in terms of course design and legal writing and scholarship. There is a strong endowment that could provide support for students in this program and there would not be an expectation they would pay tuition.

Regent Calderón asked the difference between this and the LLM and was told the LLM has specific degree and credit hour requirements and this degree would be framed with close faculty interaction centered around literature review and writing. He asked if an LLM was a degree requirement for this program and was told no.

Upon motion of Regent Frank, seconded by Regent Boice, the Board authorized UA to implement the Doctor of Juridical Sciences, Scientica Juridicae Doctor (SJD) degree in the College of Law and to disestablish the M.S. and Ph.D. majors in Nuclear Engineering in the College of Engineering.

President Stuart noted the amount of work and specificity that goes into all the program requests. He asked the Provosts to describe the differences between schools and colleges. Provost Davis said at the UA the fundamental academic unit is the college with a center being similar to a college. Within individual colleges, the university may have school designations. They try to keep schools from reporting to schools.

President Stuart said it seemed to him the first step in establishing a degree is to establish the purpose of the degree, then have an analysis that includes learning outcomes and plans for assessment, a gap analysis that focuses on need and job prospects, and sources of funding. He asked for a ball park number of what it takes to establish a degree program and Dr. Glick said typically from conception to implementation is about two years. The request must go through a department, a college, a university curriculum committee, the Provost’s Office, and the President’s Office before it comes to the Board. He suggested some changes that might expedite the process as the public is expecting the universities to be more responsive to new needs as they occur.

Provost Grobsmith said as the program recommendations move through the process, they are also reviewed by the faculties of the other universities. President Stuart asked about the effort it took to create the consortium of schools at NAU. Dr. Grobsmith said the discussion that led to the formation of the Consortium of Professional Schools and Colleges took six months of on-campus discussion before a recommendation emerged for the new structure. This proposal has been worked on since September. It was at least six months ago that the intention to collaborate arose and involved faculty and administrators at both NAU and Gateway.

President Stuart said he was relating this discussion to the proposals for new four-year degrees at community colleges that are currently being discussed.

Dr. Francis Bernat thanked Ms. Mary Jo Waits for being forthcoming, insightful, and accommodating during the Redesign process. As a result, Dr. Bernat thinks the Redesign Proposal Draft seems to accomplish many of the things that were beginning goals. She believes the goal of all faculty is to have sound academic programs as demonstrated by the prior discussion. She named the faculty stakeholders that had worked so hard on the Redesign proposal at the three universities.

She said the AFC had received an update on the Learner Centered grants which the AFC are an integral part of developing sound programs at the universities and enable the universities to work together. They received some input on a flexible system that would allow faculty to make a decision as to when they should declare their retirement options and how to make the best informed decision concerning their retirement benefits.

Regent Boice reported the Capital Committee had its inaugural meeting earlier in the day. It is organizing itself in order to provide a more expeditious way to get project approval that will provide the Board with ample and sufficient information to make judgements on particular proposals without having the same project come to the Board many times. In the future, the Capital Committee will be looking at public and private partnerships, bond guarantees, and the Information Technology areas.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board delegated authority to the Capital Committee to grant Project Approval for projects that are under $20M and have not increased in budget or scope since receiving Project Implementation Approval; to revise Board Policies so the Chair of the Capital Committee can grant Project Approval for projects under $10M if the project has not increased in scope or budget from the Project Implementation Approval level; and raise the limit on capital projects that require Board approval to $10M. The Board will grant Project Implementation Approval.

Regent Palacios asked how big the change would have to be to come back to the Board and Regent Boice said he assumed in the area of 5% to 10%. Mr. Sideman said specific policy changes would be brought back to the Board since these recommendations were approved.

Dr. Carl Fox, Ms. Kathy Bedard, Dr. Richard Powell, and Dr. Jonathan Fink joined the meeting for this discussion. Regent Boice said the three universities would present the results of evaluations of the first three years of their TRIF-funded programs. The results of these evaluations are a significant element of this Board’s decision-making process as to how the second five-year cycle of TRIF funding should be allocated and expended.

During FY 2002 through 2004, over $141M in TRIF funding has been received by the Board of Regents and allocated to the universities for initiatives to accomplish the goals of Proposition 301: to support university research, development, and technology transfer related to the knowledge-based global economy; to expand access to baccalaureate or post-baccalaureate education for time-and place bound students; to implement recommendations of the Governor’s Task Force on Higher Education and the Arizona partnership for the New Economy; and to develop programs that will prepare students to contribute in high technology industries located in Arizona.

The universities worked diligently to develop detailed business plans for each TRIF- funded initiative. These plans were reviewed and revised by the Board’s then-business Advisory Team, and were approved by the Board.

Regent Boice said the presentation was to report how well the TRIF initiatives had met the objectives and performance measures spelled out in the business plans. The universities were requested, as part of their evaluations, to also assess how their TRIF initiatives intersect and align with the Battelle Roadmaps.

Dr. Powell said an outside peer evaluation process was used for the UA evaluation. He said UA chose to invest TRIF money in areas of their strength that matched with the GSPED industry clusters of the state. They invested in biotech, information technology, optics, and association and sustainability. They also put some money in three infrastructure areas to support tech transfer, access or distance learning, and work force development (K-12 math-science teacher education). The Roadmaps happened to match the plan developed by the UA.

Dr. Powell said the specific direction given when Proposition 301 passed was for higher education to develop new and existing programs that will prepare students to contribute to industries associated with the new economy in the State of Arizona. The UA had a TRIF oversight committee, chaired by Dr. Powell, that had oversight of the TRIF money. Each of the 7 initiatives had dean oversight committees and the work was carried out by faculty working with key faculty members and outside business advisors.

The evaluation process involved having the people working on the TRIF initiatives write a self-study report explaining how the money was spent and the accomplishments. Then outside evaluation committees of experts in the field review the reports, meet with the people, and write a report based on what they saw in terms of the success of the projects and the impact they had. A group of community leaders than reviewed the entire process and provided constructive criticism concerning what the university did with its TRIF money.

Dr. Powell said an explanation of TRIF expenditures was included in the overview, but they are also reported to the Board every year. For the research expenditures to expand the programs for the new initiatives, new space, faculty members, students, equipment for research, seed money for new grants, conferences for working with industry, and outreach activities required additional money. The infrastructure initiatives have more generic expenditures such as personnel and operations, but this is all detailed in the report.

Dr. Powell said the summarized metrics are also reported each year for the individual initiatives. The four research initiatives have either met or exceeded all metrics for economic development. Overall comments made by the evaluation committee were extremely positive. However, he said the most helpful part of any review is the constructive criticism. He presented several positive comments and some constructive criticism. For the final year of this TRIF project, the university is significantly reducing the budget for the information technology project and has asked the Dean of Engineering to take a strong leadership role in redirecting the initiative, working with colleagues and the local information technology industry to focus more on the local industry needs and the Battelle Roadmap.

There were also positive and critical comments made in the infrastructure area in distance learning or access. The university response has been to decrease the funding for this initiative next year and to ask the TRIF initiative leaders to use the points raised to guide future investment decisions.

Dr. Powell said a vigorous outside review process, using local taxpayers that passed Proposition 301, showed the projects were appropriate and meet the objectives of 301. The expenditures of TRIF funds are appropriate for achieving the program goals and objectives, projects are meeting their metrics, and providing a significant return on investment. Based on this evaluation, the UA will provide new 5-year plans next year in the same general areas but with updated business plans and significant refocusing of IT and Access. He said the local advisors were very excited about what they saw in this process and went to the newspaper which resulted in a very good editorial praising Proposition 301 and how the UA had used the money.

Dr. Carl Fox said NAU’s evaluation process was similar to the UA process. NAU’s goals were to stimulate research and development, increase access, invest in infrastructure, and increase high technology skills. The two research initiatives, biotechnology and environmental research, met or exceeded the metrics, made new discoveries, transferred technology, and developed new businesses.

Dr. Fox described some of the new discoveries that had been made with TRIF money, and provided examples of technology transfer and business development are. He said some strategic Arizona partnerships are the Greater Flagstaff Economic Council, Northern Arizona Technology and Business Incubator, TGen, and the two other Arizona universities.

Dr. Fox said NAU had met or exceeded all expectations in the Access and Workforce Development Goal, particularly in the areas of education, nursing, business and e-learning. NAU has invested in its infrastructure in terms of research capabilities, learning technologies and new faculty. He described the new research and development building. In distance learning, NAU has gone from microwave-based interactive television to Internet 2.

Dr. Fox summarized the progress NAU has made in focusing academic programs on those areas that are critically important to the state in terms of biotechnology, environmental science and engineering, and statewide access. In summary, he said NAU has met the spirit and metrics of TRIF, enhanced innovation for Arizona’s knowledge-based economy, increased the technology workforce, and prepared students for a high technology world.

Regent Boice asked if outside people were involved in the evaluation process and was told the TRIF Advisory Council has an outside member and each of the research initiatives have outside members on their advisory boards. Dr. Fox said he thought the UA model was good for the research initiatives and NAU would move in that direction. Dr. Jonathan Fink talked about the reorganization ASU had done early in the process, the assessment process ASU used, and how ASU has tried to place it TRIF in more of a national context. The early assessment was that ASU’s program was too defused; so they changed their focus and developed the Biodesign Institute. Dr. George Post was recruited to head the Institute and a large portion of TRIF funds were allocated to the Institute. The other areas of TRIF funding are materials information technology and wireless. In the next 5-year plan, he expects ASU to move into the area of sustainability.

Dr. Fink said ASU used the Morrison Institute to analyze and assess its TRIF funding. He said today’s report was one of 4 assessments ASU had done. It shows the return on investment from Proposition 301-funded research in dollars and the impact it has had on the state. It talks about the trend over the first 3 years of funding and gives an over all perspective on how the TRIF funds are being invested. Until the new biodesign buildings come on line, ASU does not expect to see significant growth in the specific quantitative metrics that are laid out.

Dr. Fink explained the CAT (Connections, Attention, Talent) measures that the business community had said were important. This assessment has received international attention as a way to determine the impact of these kinds of investments.

Dr. Fink summarized ASU’s TRIF. After critical analysis in the first year, ASU aggressively restructured TRIF investments in FY 2003, creating the Biodesign Institute. Based on the FY 2002 through FY 2004 results, ASU’s TRIF investments are performing well, with even larger impacts expected as the Biodesign Institute continues to mature and its faculty become fully engaged in targeted research. ASU has developed a comprehensive evaluation strategy for the TRIF investment–economic context (“Seeds of Prosperity”), performance on ABOR-approved goals/business plans (“New Returns”), and en route indicators of long term prospects (CAT measures).

Regent Boice asked if ASU had redrawn a business plan when it refocused its TRIF funding to the Biodesign Institute and was told the existing business plans are still relevant and there is one for the Institute. Some of them have been folded into the Biodesign Institute. Regent Boice said he did not question the Morrison Institute’s ability to carry out the evaluation, but he believed involviing outside evaluators is one of the best ways to spread the message of what wonderful things are happening at the universities. Dr. Fink said the Biodesign Institute does have its own board that has international participation and he believes that is comparable to what the UA is doing. The other areas being folded into Biodesign such as wireless, information technology, and materials also have their own advisory boards which provide outside feedback.

Regent Boice said he would also like to see how ASU matches the Battelle Roadmap. Dr. Fink said some of the non-TRIF fund investments also match the Roadmap. ASU has made progress in all the areas laid out by Battelle.

Regent Boice complimented everyone for their work on this issue. He said he believes this is one of the faces the universities present to the world and how these funds are used will be the way the outside world sees the universities. President Crow told the Regents about the stringent evaluations ASU had imposed on itself and the measurements they were using. Regent Boice said he appreciated the thorough evaluation ASU had done and assumed the business plan for the next 5 years would incorporate those measurements.

Regent Boice said the next step of the process will be to review the universities’ draft business plans for the FY 2007-2011 TRIF funded initiatives at a future meeting.

Mr. Joel Valdez joined the meeting for this discussion. Regent Boice said the University of Arizona was requesting approval of a 5-year employment contract for Jim Livengood as Director of Athletics for the period July 1, 2005, through June 30, 2010. President Likins said he was very happy with Mr. Livengood’s work and is pleased he is willing to accept an extension to his contract.

Upon motion of Regent Jewett, seconded by Regent McCalley, the Board authorized the University of Arizona to enter into a Multiple-Year Employment contract with Don James Livengood, according to the terms and conditions set forth in the executive summary.

The period of the contract will be July 1, 2005, through June 30, 2010. His annual salary for base compensation and related peripheral duties will be $345,000, an increase of $25,000. Other terms remain the same in the new contract except for the potential to earn an additional incentive payment of one months’s salary for a national championship in football (previously undefined.)

Mr. Joel Valdez and Mr. Ted Gates joined the meeting for this discussion. Regent Boice said the University of Arizona was requesting authorization to enter into a 20-year lease with JL Investments, LLC, for approximately 4,800 gross square feet of commercial property located at 811 North Euclid Avenue in Tucson. The lease rate for the first 5 years will be a flat rate of $12,500 per month; $150,000 per year plus applicable taxes. Increases beginning year 6 will be 3% every year thereafter. After the expiration of the 20-year lease term, the university will have the first right to acquire the property should it become available for purchase at a 25% discount of the market value at that time.

Mr. Valdez said the UA had been trying to create a new Visitor Center for several years. The current location of the Visitor Center is a small office on Third Street. The UA has approximately 2M visitors a year. This is an opportunity to use a commercial facility on Third and Euclid, a very heavily traveled area. This property has been the site of commercial entities that have caused neighborhood problems due to noise and liquor problems. The neighborhood supports this effort and it will improve the image of UA and provide more opportunity to service visitors. There will be sufficient parking. The UA will be renting the facility.

Regent Boice asked what income parking meters on this property would provide the university and was told approximately $50,000 per year. The source of funds is the revenue from leases, the parking revenue, and local funds.

Upon motion of Regent Boice, seconded by Regent Palacios, the Board granted the University of Arizona authority to enter into a 20-year lease with JL Investments, LLC, for approximately 4,800 square feet located at 811 North Euclid Avenue, subject to approval of legal documents by university counsel.

Mr. Joel Valdez, Mr. Bruce Wright, and Mr. Ted Gates joined the meeting for this discussion. Regent McCalley declared a conflict of interest on this issue and did not vote or participate in the discussion on this issue. Regent Boice said the University of Arizona was requesting authority to exchange approximately 132 acres of land at the UA Science and Technology Park for 65 acres of land located at 36th Street and Kino Boulevard, south of the university campus.

Upon motion of Regent Boice, seconded by Regent Jewett, the Board granted approval to the University of Arizona to exchange approximately 132 acres of land at the UA Science and Technology Park, consisting of approximately 108 acres outside the approach/departure corridor and approximately 24 acres inside the approach/departure corridor, for approximately 65 acres of land at 36th Street and Kino Boulevard that is under contract to KB Home. The exact areas of the parcel to be exchanged are subject to adjustment to equalize appraised valuations and offset development costs. The appropriate legal documents are subject to review by university and Board counsel.

Mr. Joel Valdez, Mr. Ted Gates, and Mr. Dick Davis joined the meeting for this discussion. Regent Boice said the University of Arizona requests authority to auction approximately 43 acres, or any portion thereof, of undeveloped real property located in New River, Maricopa County, Arizona. The land was accumulated through separate gifts to the university. Sale proceeds will be distributed, as specified by the donors, to the College of Medicine, Department of Surgery, Center for Creative Photography, and the College of Law scholarships.

Mr. Valdez introduced Dr. Mercy Valencia who is in charge of property management. Mr. Valdez said it had been suggested the university sell one parcel of land and wait to see if the others go up in price and the university will consider this approach. The property is worth approximately $1M currently. Upon motion of Regent Boice, seconded by Regent Bulla, the Board authorized the University of Arizona to advertise and sell at auction approximately 43 acres, or any portion thereof, of real property located in New River, Maricopa County, Arizona, as described, at no less than fair market value as determined by appraisal, subject to approval of legal documents by university counsel.

Mr. Joel Valdez, Mr. Ted Gate and Mr. Dick Davis joined the meeting for this discussion. Regent Boice said the University of Arizona was requesting Project Approval and a Budget increase of $1M to construct a new facility for the Poetry Center at a revised total cost of $6.8M.

Mr. Davis said construction costs are beginning to stabilize in Tucson. The increase in budget is primarily due to increased costs in steel, concrete, metal studs, and mechanical, electrical, and plumbing and market fluctuations; but about 1/4 of the increase was due to site relocation and infrastructure that was necessary. On the revenue side, additional gifts will be solicited for the increased budget.

Regent Calderón asked about the funding and President Likins said the university had agreed to fund 1/3 of the project if the benefactors could fund the other 2/3 of the Poetry Center. When the price rose, the university was asked to increase its funding; but the university declined and will still fund only 1/3 of the original project cost.

Regent Calderón asked how many students would be served by the Poetry Center and was told this is not primarily a place for undergraduate students, is a repository or library of some extraordinary archives of poetic materials and other creative writing materials. Guest writers and lecturers come to the Poetry Center. Dr. Dennis Evans, Associate Dean of the College of the Humanities, said the Center is important for a library and a scholarly archive. It is also the primary academic support unit for many undergraduate programs such as creative writing and English. It is also a place where students can come and read as well as meet with faculty and visiting writers.

Regent Calderón asked if, in today’s world with all its needs, this still would be a university priority. President Likins said the university had made a commitment to those who gave gifts for this project to fund 1/3 of the Center. It is one of the true gems of the university. The Poetry Center has lived in whatever facilities were available and their last building was torn down to make room for the Keating Bioresearch Building.

Dr. Likins said they had been pushed out of their former shabby habitation and had been challenged to raise money for a proper facility, which they have done.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board granted Project Approval and Budget Increase of $1M for the Poetry Center, with Regent Calderón voting no.

Mr. Joel Valdez, Mr. Dick Davis, and Mr. Ted Gates joined the meeting for this discussion. Regent Boice said the University of Arizona was requesting authority to sell System Revenue Bonds to produce sufficient proceeds, not to exceed $40.4M, for the construction of the Architecture Building Expansion project, the Poetry Center project, the Deferred Renovation, Building Renewal, and Infrastructure project, and the Residence Life Building Renewal Phase II project. Regent Boice said the universities were being forced to use bonding money as they were no longer receiving deferred maintenance money.

Mr. Valdez said the university would be ready to start the Residence Life project when the bonds sold as it must be done in the summer when there are not as many students on campus. The other projects are the result of lack of building renewal money. The projects must still receive JCCR approval.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board authorized the University of Arizona to sell one or more series of SRBs’s to produce sufficient proceeds to finance not exceeding $40.4M for the acquisition and construction of the Architecture Building Expansion, Poetry Center, Deferred Renovation, Building Renewal and Infrastructure, and the Residence Life Building Renewal Phase II projects, to pay the costs of issuance of the SRBs, to take related actions, to enter into necessary agreements, and to execute documents–contingent upon JCCR favorable review of each of the projects as provided in a resolution approved by Board Counsel and staff.

Mr. Rich Stanley, Mr. Ted Gates, and Dr. Mark Searle joined the meeting for this discussion. Regent Boice said Arizona State University was requesting Project Approval with a Scope and Budget Increase of $525,000 for the construction of a new Recreational Park at the West Campus, at a revised total cost of $1.675M. Mr. Stanley said this park will be on the southern end of ASU West, will be a shared facility with the community, will be used to build the recreational programs as the West Campus develops its residential program. The change in scope is the result of changing the water source from city water to well water which will save money in the long run. Regent Boice asked if there were restrictions on building on the south part of this property and was told the south part of this parcel is required storm water retention land.

Upon motion of Regent Boice, seconded by Regent Herstam, the Board granted Project Approval with a Scope and Budget Increase to Arizona State University for the Recreational Park Phase I project at ASU West Campus as presented in the executive summary.

Mr. Rich Stanley, Dr. Mark Searle, and Mr. Ted Gates joined the meeting for this discussion. Regent Boice said Arizona State University was requesting authority to sell System Revenue Bonds to refinance a portion of the Series 2000 and Series 2002 Bonds, to pay the costs of the refinancing issuance, and to enter into necessary agreements and execute necessary documents. Mr. Stanley said the estimated savings from this refinancing is $2.1M over the next 22 years.

Upon motion of Regent Boice, seconded by Regent McCalley, the Board granted approval to Arizona State University to sell System Revenue Bonds to refinance a portion of the Series 2000 and Series 2002 Bonds, pay the costs of the refinancing issuance, and enter into necessary agreements and execute necessary documents as presented in the executive summary.

Mr. Rich Stanley, Dr. Mark Searle, and Mr. Ted Gates joined the meeting for this discussion. Regent Boice said Arizona state University was requesting approval for West Campus Housing LLC to issue refunding revenue bonds to refinance the existing bonds for the housing complex at ASU West. ASU also requests authority to execute a contingent commitment to cover any deficiencies and to execute a revised ground lease with the LLC.

Mr. Stanley said the housing on the West Campus was built by the West Campus LLC. The project was plagued by early problems, including a fire during the construction, so a portion of the project opened a year behind schedule. One of the results is the occupancy rates in the complex have not been as high as was initially anticipated. The refinancing permits ASU West to take advantage of currently lower interest rates and the inclusion of the contingent commitment also helps to reduce the interest rates on the refinancing. The refinancing permits more time to reach necessary occupancy levels in the housing complex to pay the costs. It is expected the occupancy rate will grow over the next several years.

The contingent liability provides for the university to make up for any short falls on the costs incurred by the LLC for debt service or for operations that are not covered by the proceeds from the rental of the property. A new marketing plan has been put in place and a new marketing agent has been hired. ASU believes this, along with the growing student population at the West Campus, will provide the tools needed to make the project successful.

Regent Herstam asked if there was a question in regard to the need for student housing at the West Campus and was told the numbers used in the business plan were conservative and it is hoped the occupancy will be higher than outlined in the business plan. Dr. Searle said he was confident the need was there. Last year at this time he had 0 applications for housing and this year he has approximately 60. There are also a large number of non-resident applications and some of those students will need housing.

Regent Boice said the original occupancy rates were wrong and asked if these numbers are more correct. Dr. Searle said the he believed the original numbers were based on rentals in the area and these numbers are based on student interest and demand. President Crow presented some history on the project and how ASU planned to move forward in the future.

Upon motion of Regent Boice, seconded by Regent Bulla, the Board granted Arizona State University approval for West Campus Housing LLC to issue refunding revenue bonds, to execute a contingent commitment to cover any deficiencies, and to execute a revised ground lease with the LLC as presented in the executive summary.

Mr. Rich Bowen and Mr. Ted Gates joined the meeting for this discussion. Regent Boice said Northern Arizona University was requesting Revised Project Approval and a $2.7M budget increase to construct the Applied Research and Development Facility at a revised cost of $23.2M.

Mr. Bowen said NAU reported at the original Project Approval they would be seeking additional gifts and institutional funds for the project. They have received a $1.5M gift from Arizona Public Service for the purpose of adding additional space to the building to be used primarily for meeting and conference space. Also, APS was interested in associating with the university in the renewable energy venue and providing funds so solar energy could provide 20% of the energy for the building using renewable resources. In addition, the university has experienced increased construction costs. In the original project approval, staff included the basic design cost; however, they did fail to include the additional design cost affiliated with achieving elite platinum status for a green building. This corrects the record.

President Haeger thanked Bill Post of APS for his assistance in making the project viable. Upon motion of Regent Boice, seconded by Regent Bulla, the Board granted Project Approval with a Budget Increase for the Applied Research and Development Facility at Northern Arizona University as presented in the executive summary.

Ms. Paulina Vazquez-Morris joined the meeting for this discussion. Regent Boice said the Board was being asked to consider, on first reading, a new policy requiring the universities to obtain a waiver from Board counsel for any severance agreement they wish to pursue that releases an employee from liability for the employee’s misconduct.

Regent Calderón reminded the presidents that fee requests would be on the next Board Agenda. He expressed hope that a conservative view would be taken on fees to help lessen the burden on students. President Crow and his staff were thanked for their hospitality. Students, staff, and Regents Boice and Bulla were complimented for their work on tuition.

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