May 2000 Minutes/Arizona Board of Regents

A meeting of the Arizona Board of Regents was held May 19, 2000, by Interactive TV at the following locations: Room 212 in the Center for Excellence in Education in the Eastburn Education Center at Northern Arizona University; Room 328 of the Business Wing C Wing at Arizona State University; and Room 211 of the Harvill Building at the University of Arizona.

PRESENT:	Regent George H. Amos, III (At UA) Regent Chris Herstam (At UA) Regent Judy Gignac (At ASU) Regent Jack Jewett (At UA) Regent Gary Stuart (At ASU) Regent Christine Thompson (At ASU) Regent Donald Ulrich (At ASU)
ABSENT:	Regent Kay McKay Regent Christina Palacios Governor Jane Dee Hull Superintendent of Public Instruction Lisa Graham Keegan

Also present were: President Peter Likins, Mr. Joel Valdez, Dr. Randy Groth, Dr. Elizabeth Ervin, Mr. Dick Roberts, Ms. Judith Leonard, Mr. James Van Arsdel, and Mr. Greg Fahey, University of Arizona (at UA); President Lattie Coor, Dr. Milton Glick, Dr. Mernoy Harrison, and Mr. Steve Miller, Arizona State University (at ASU); President Clara Lovett, Dr. Mason Somerville, and Ms. Anne Barton (at ASU), Mr. Kurt Davis, Dr. Jeanette Baker, and Dr. Michael Mullen, Northern Arizona University (at NAU); Executive Director Linda Blessing, Secretary to the Board Judy Garza (at UA), Mr. Joel Sideman, Dr. Thomas Wickenden, Ms. Louise Houseworth, Dr. Art Ashton, Ms. Norma Salas, Central Office (at ASU); Arizona Faculties Council Representative Judith Sellers (at ASU); and Student Regent Designee Mary Echeverria (at UA).

All lists, reports, summaries, background materials, and other documents referred to in these minutes can be found in the May 19, 2000, Documents File.

Jake Elkins, President of the Christopher City Neighborhood Association, asked for the resignation of Mr. Van Arsdel of Residence Life as he believes he has been unfriendly to students, has a long history of disseminating misinformation, and has misappropriated funds. The Christopher City Neighborhood Association has asked for a copy of the study that recommends the closing of Christopher City and has not been able to secure one.

Martha McGrath, a Christopher City resident, asked for the immediate removal of Mr. Van Arsdel, his assistant Mr. Patrick Call, and the head of maintenance at Christopher City for the same reasons stated by Mr. Elkins. She believes giving the notice of the closing of Christopher City during finals was inappropriate timing.

Michelle Lowry, a resident of Christopher City, said she believes the necessity to close Christopher City is the result of lack of maintenance over the years. She believes money from Christopher City was used to support other residence halls. She urged the Regents to vote yes on the proposed rent subsidy.

Joe Staples, a resident of Christopher City, said the students with families are the only demographic the university does not support with housing. He presented a petition, signed by 33 Christopher City residents, asking the Regents to approve the proposed rent subsidy.

President Amos announced there were no items removed from the Consent Agenda. Items on the Consent Agenda, which are marked in these minutes with an *, were considered as consent matters and were adopted upon motion of Regent Jewett, seconded by Regent Thompson. There was no individual discussion of these items.

The Board authorized the President or Vice Provost for Administrative Services for Arizona State University or their designee to sign and enter into a lease agreement with St. Paul Properties, Inc., for office space located at 1130 East University Drive, Tempe, Arizona, for use by Intercollegiate Athletics (ICA) during the remodeling of the ICA Complex, on substantially the terms listed below, and to take all appropriate action to complete negotiations and to enter into such related documents as needed.

The lease will have a 3-year term, beginning in May of 2000, and ending April 30, 2003. The lease will be for approximately 16,012 square feet at the rental rate of $21.50 per square foot for year 1, $22.00 per square foot for year 2, and $22.50 per square foot for year 3. Lease payments will be funded as part of the ICA addition renovation project budget financed from ICA's capital campaign funds.

The Board approved the subgrant amendment in the amount of $600,037 to Arizona State University from the Maricopa County Community College District to continue the Hispanic Border Leadership Program for the fifth year. This brings the total award to $3,386,152. The project period for year 5 is July 1, 2000, to June 30, 2001. Facilities and administrative costs are not recovered on this agreement.

The Board approved the proposed revisions to Board Policy 2-103 which specify the current methodology for calculation of nonresident headcount enrollments, address the inclusion of enrollments in courses delivered by nontraditional forms of instruction such as Internet courses, clarify that retroactive enrollment transactions are the responsibility of university staff, and update outdated terminology such as "tuition and/or registration fees" which is replaced by "tuition" throughout the policy.

The Board authorized the University of Arizona College of Agriculture to enter into a long-term lease agreement with the U.S. Department of Agriculture-Agricultural Research Service (USDA-ARS) to allow construction of USDA-ARS funded buildings and facilities at the Maricopa Agricultural Center, subject to approval of the necessary documents by University and Board Counsel. The UA College of Agriculture will lease approximately 20 acres of land at the Maricopa Agricultural Center to the USDA-ARS for construction of federal research facilities for a period of 50 years, with a rental fee of $1 for the first year and no further rental fees during the term of the agreement.

The Board authorized the University of Arizona to sell at public auction the residential property located at 100 North Camino Español, Tucson, Arizona, to the highest responsible bidder, at such price and upon such terms as the University deems appropriate, but in no event below appraised value. The property is approximately 1.3 acres located in the El Encanto subdivision and the house consists of approximately 4,378 square feet of living space. The minimum sale price, as determined by appraisal, is $775,000. The original purchase price was $470,000. The residential property formerly served as the residence for university presidents.

The Board approved a contract between the Administrative Office of U.S. Courts and the University of Arizona to support the Spanish/English interpreter certification program. The proposed amount of the contract is $1,487,602 for the first year of the project; $3,240,923 for the 5 years of the project. The contract period is June 1, 2000, through September 30, 2005.

The Board approved changes to a previously approved date for academic year 2001-2002 for Arizona State University. The calendar for 2001-2002 will be Fall: August 20 - December 13, and Spring: January 14 - May 9.

Dr. Harrison, Mr. Valdez, Mr. Harris, and Dr. Mullen joined the meeting for this discussion. Regent Thompson said the Board, for the last several years, has set a maximum limit of $30M in annual allowable General Fund requests for the 3 universities combined. In addition, the Board has limited General Fund requests to those projects that are on branch campuses, new emerging campuses, or projects involving partnerships with local sponsors. This year the Central Office staff and senior staff at the universities are recommending a revised process.

Mr. Harris outlined the recommended process. He said there is a deferred maintenance backlog of $111M, 854 buildings with a replacement value of $2.8B. The universities have received an average of 43% of the Building Renewal Formula funding for the last 10 years. They have received 23% for the last 2 years. This year it is recommended the Board delay guidance on a General Fund dollar limit until after the June presentation on needs vs. resources by the universities.

Mr. Harris said the recommended Capital Improvement (CIP) Guidelines are: 1. Expanded to say the requests for General Fund Appropriations may include: a) Reuse and rehabilitation of existing facilities and infrastructure (that have not been met with Building Renewal Fund allocations); b) Infrastructure improvements for electronic technology; c) Projects that contribute to the cultural heritage of the state; and d) Projects on branch campuses, newly emerging campuses, and partnerships with local sponsors; 2. Capital projects proposed to be funded with debt shall not increase the ratio of debt payments to total unrestricted current expenditures to over 10% for any given year; and 3. All projects included in the FY 2002 and FY 2003 CIP shall have Board approved Project Initiation or Conceptual Approval, or shall be submitted to the Board for Preliminary Justification prior to the August 31-September 1, 2000, Board meeting.

The calendar for the CIP submittals shall be as follows: May 2000 - Submit CIP Guidelines for Board approval; June 2000 - Submit Preliminary Justification requests for Board approval, and Board reviews each university's preliminary statement of capital needs and resources available; August 2000 - Board reviews comprehensive CIP and provides guidance on General Fund request limits; and September 2000 - Submit Final CIP and the Council of Presidents recommendations for a system-wide prioritization of General Fund requests for Board approval.

Pursuant to the provisions of A.R.S. §41-1252 (A)(4), each university shall submit their allocation and expenditure plans for FY 2002 Building Renewal to the Joint Committee for Capital Review for format review along with their FY 2001 expenditures for informational purposes, as part of their CIP submittal in October 2000.

President Amos asked the universities to prioritize the capital items when presenting the budget. Upon motion of Regent Thompson, seconded by Regent Gignac, the Board adopted the proposed FY2002-2005 CIP guidelines.

Dr. Harrison joined the meeting for this discussion. Regent Thompson said Arizona State University was requesting Project Approval and a Budget Increase from $8M to $9M for the construction of a 252 bed residence hall on the North Campus. This project received Conceptual Approval from the Board in November 1999. The budget increase was requested to fund phone data system costs and unanticipated utility relocations.

Upon motion of Regent Thompson, seconded by Regent Gignac, the Board granted Project Approval and a budget increase to $9M to ASU for the new Residential Life Building located at North Campus.

Dr. Harrison joined the meeting for this discussion. Regent Thompson said Arizona State University was requesting Conceptual Approval with a Budget Increase from $6M to $19.1M for the Intercollegiate Athletic Building expansion and modification. The project received Project Initiation in June 1998. Since that time, the scope of the project has changed substantially.

Dr. Harrison explained the scope had changed due to the successful capital campaign by the Intercollegiate Athletic Department (ICA). An additional 42,000 square feet will be renovated and 15,000 square feet will be added to the project. The infrastructure supplying steam and chilled water is not sufficient for these additions, so it will need to be increased. A portion of the staff will have to be relocated during the project. President Coor explained ASU would have planned for this type of facility in the beginning if it had been known how successful the capital campaign would be.

Regent Thompson asked why the project would be funded with Certificates of Participation (COPs) and was told the pledges and gifts are paid over time. Regent Stuart and President Amos noted the documents said the funding would be primarily from COPs, and asked what the other sources would be. Dr. Harrison said there is money from the sky boxes and gate receipts, but he believes the pledges will come through on time to provide necessary funding.

Upon motion of Regent Thompson, seconded by Regent Gignac, the Board granted Conceptual Approval to ASU for an ICA Addition and Renovation Project with a program and associated budget increase to $19.1M.

Dr. Harrison joined the meeting for this discussion. Regent Thompson said Arizona State University was requesting Conceptual Approval for campus infrastructure improvements and expansion at a cost of $36.2M. ASU presented this project, which will provide capacity for the construction and operation of new campus facilities, as an information item at the February 2000 Board meeting. This project was being brought to the Board for Conceptual Approval at this time since the Project Initiation step of the Board's Capital Development Process is not required for infrastructure projects.

Dr. Harrison said this request includes a number of projects and ASU intends to begin construction on some of the projects this summer. Each individual project will come back to the Board for Project Approval as they proceed. Regent Thompson asked if this would cause a major disruption for students moving around campus and was told yes. ASU will try to do the major projects during the summer, but not everything can be done in that time frame.

Regent Stuart asked if the $4.7M for ICA and ASU/Wells Fargo was related to the earlier approval and was told yes. He asked if funding would be tied to individual projects when these requests come to the Board at the next step and was told yes. Also, there will be an attempt to reduce the reliance on bonding. For example, it is hoped the City of Tempe will finance the sewer project and the university will then reimburse the City. The chillers may be accepted as part of an energy conservation project.

President Amos asked if the project could be phased and was told ASU has been doing that for the last ten years. At this point, the infrastructure projects are necessary. Upon motion of Regent Thompson, seconded by Regent Stuart, the Board granted Conceptual Approval to ASU for the Infrastructure Improvement Project.

Mr. Valdez joined the meeting for this discussion. Regent Thompson said the University of Arizona was requesting Board approval to sell Certificates of Participation in an amount not to exceed $15.75M, divided as follows: $3.25M to purchase the Police Building from the UA Foundation, and $12.5M for the McKale Athletic Performance Center and Heritage Hall.

Mr. Valdez said the UA Foundation had constructed the Police Building and was leasing it to the UA. However, it is to the university's financial advantage to purchase the building from the Foundation as the university can fund the purchase with tax exempt financing. For the ICA building, there are already $12M in pledges, but it is necessary to have the money in the bank before construction can begin. President Amos asked how much of the cash was in hand and was told $3M, but the strength of the donors leads the university to believe they will follow through on their pledges.

Upon motion of Regent Thompson, seconded by Regent Jewett, the Board authorized the University of Arizona to sell one series of Certificates of Participation (COPs) in amounts to produce sufficient proceeds to finance the acquisition, construction, and improvement budgets for the McKale Athletic Performance Center Addition and the University Police Department Facility, (currently $15,750,000) 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 by Board Counsel and staff.

Regent Thompson said Arizona State University was requesting a 2-year extension, through
April 15, 2005, of its existing multiple-year employment contract with Robert O. Evans, Men's Basketball Head Coach. President Coor explained ASU would like to maintain a 5-year contract by extending Coach Evan's contract 2 more years. Coach Evans has met or exceeded all ASU's expectations.

Regent Herstam said this issue was discussed in Executive Session, but he would like to state publically he believes Intercollegiate Athletics has gotten out of hand. He does not fault ASU for trying to meet market conditions; he just wanted to express his frustration with what he believes are outlandish monetary considerations. Regent Stuart said he shared this concern. However, he noted coaches earn their own salary to some extent by increasing revenues to athletic departments. President Amos said he agreed with Regent Herstam. He also believes the Regents, or the President of the Board, should be notified at an earlier stage in contract negotiations. Regent Jewett said he also agreed with Regent Herstam. At some point, however, a balance will have to be struck as he believes the market place is going too high. He does not want to lose sight of the universities' real missions.

Upon motion of Regent Thompson, seconded by Regent Stuart, the Board authorized ASU to enter into a modification of the existing multiple-year employment contract with Robert O. Evans, according to the terms and conditions set forth generally below, with the changes becoming effective on the date there exists a fully executed modification agreement. The agreement will be extended for 2 years, through April 15, 2005, and Coach Evans' salary will be increased $75,000 per annum. Coach Evans will receive additional compensation of $25,000 per year for the next 3 years. ASU will provide Coach Evans with a membership in the Paradise Valley Country Club (including payment of membership fees and monthly dues.) The other terms of Coach Evans existing contract will remain the same, including, among others, the liquidated damages provision in the event of termination of the contract by Coach Evans. This provision will expire on April 15, 2003.

President Likins reminded the Regents they had been hearing about Christopher City issues for years. The university had planned to take action within the next 2 or 3 years; the mold problem just forced acceleration in dealing with the problem. This acceleration is causing problems to the residents beyond dollars, but the university can at least help with the financial problem. He summarized the relocation and subsidy request before the Board. The source of funds for the proposed subsidies is Residence Life operations and the total expected cost for moving assistance and rent subsidies is approximately $800,000.

Regent Thompson asked why the period of the proposed subsidy was for 12 months and was told this issue arose after all arrangements for financial aid were made for the coming year. Next year housing costs can be considered as part of the students' financial aid package. Regent Gignac said Christopher City offers a sense of community and she hope the new living facilities created by the university will offer the same culture.

President Likins said he and his wife and their first child lived in similar facilities, so he understands the sense of community. The plan under considerations is to demolish the current buildings and use a portion of the current property for married housing. The rest of the property would be sold and that money could be used to construct the married housing. The university does intend to provide a married housing facility somewhere.

Regent Stuart said he was also a product of family housing, the predecessor to Christopher City. He would like to see the family housing keep the sense of community. He said he had received a lot of E-Mail on this subject and most of it was supportive. However, he would like to see the issues raised at the Call to the Audience investigated. President Amos said he agreed the timing of the notices may not have been the best.

Upon motion of Regent Thompson, seconded by Regent Jewett, the Board approved the proposed rent subsidy payments to Christopher City residents as recommended.

Dr. Glick, Dr. Sellers, Dr. Somerville, Dr. Wickenden and Dr. William Davey joined the meeting for this discussion. Regent Jewett reminded the Regents that the team of Regents, faculty leaders and Chief Academic Officers who are developing an action plan for Learner-Centered Education proposed some changes to the Arizona University System Mission statement. They also recommended the addition of a new strategic direction to promote learner- centered education. The purpose of these proposed changes is to reflect more clearly the central role of learning in the educational process. Modifications suggested at the last meeting were incorporated into the proposals presented today.

President Amos thanked everyone for their work. He reminded the members of the Council of Presidents of the discussion at the Retreat last year concerning redefining the mission and roles of each of the universities. Upon motion of Regent Gignac, seconded by Regent Herstam, the Board approved the changes in the University System Mission Statement and the addition of a new System Strategic Direction, as proposed.

The Arizona University System Mission Statement reads as follows: The primary mission of the Arizona University System is to serve Arizona by providing outstanding undergraduate, graduate, and professional programs of learning, basic and applied research, and public service for Arizona and the nation. Arizona's public universities (1) Promote learning through appropriate educational environments, student support, and instructional activities in a comprehensive array of disciplines, from baccalaureate through post-doctoral study, to equip citizens to participate fully in and to contribute to the economic social, cultural, and political life of the state and nation; (2) Conduct and disseminate the results of basic and applied research and engage in creative activity, to add to knowledge of the universe for the benefit of current and future generations; and (3) Extend the promotion of learning and the products of acquired knowledge, research, and creative activities to expand the horizons of Arizona citizens in general, to promote economic development, and to improve the commonweal. The promotion of learning is the precedent and primary purpose of all postsecondary institutions, and integration of learning with research and service is the distinguishing feature and unique strength of the university.

The new System Strategic Direction is: VIII. To Promote Learner Centered-Education - To promote learner-centered education by placing improvement of learning at the center of decision making processes and policies at all levels of the institution; by developing and using clear measurable goals and student outcomes for all academic programs; and by directly involving learners in activities that produce knowledge, abilities and skills broadly transferable to life and work.

Regent Gignac said the team would like to move forward with consideration of policy changes that may influence learner-centered education but won't affect other issues. The first reading for those changes would come to the Board in August. The second category of policy changes the team would like to consider are the policies that impact learner-centered education and other parts of the enterprise.

Regent Gignac said the second area being considered is the inventory of what learner-centered education already exists at the universities and what it is within courses and programs that makes them learner-centered. The team would like to look at particular programs to see how the good programs could be used in other places, as well. The third step is long term. The universities need to move forward with learner-centered education. They should reflect a change in their strategic directions and their planning. Learner-centered education should be incorporated in the Board's Action Plan for the coming year. Finally, the Board needs to be sensitive to previous and future actions to make sure they are not inconsistent with learner-centered education. e.g., measures in the UCAR and faculty workload and classroom uses.

Ms. Barton and Mr. Fahey joined the meeting for this discussion. Ms. Barton reported HB 2123, In-state tuition; teachers, will require a revision of Board policy to align the university system residency rules with the new state statute. HB 2340, Procurement; state contract procedures, will require revisions of Board policy to align ABOR procurement rules with the new state statute. SB 1190, Regents; second student member; university fees, will require the Board to adopt clean-up language to the policy governing the tuition-setting process.

Regent Gignac asked if SB 1079, Appropriation; NAU science building, would study building renewal for all the universities or just NAU and was told the study would be for all of state government.

The Regents received a copy of the news release sent out by the Arizona House of Representatives titled, "House Unveils R.E.W.A.R.D. for Classroom Teachers," which described nearly $340M in new K-12 classroom funding to boost teachers' salaries by over $3,000 annually, improve teachers' retirement benefits, reduce classroom sizes, and add 5 days to the school calendar. Regent Ulrich expressed his disapproval of handing out raises to teachers on an equal basis, regardless of ability. He said he believes more money should be spent on teaching children math and science. He does not believe there is a plan for education in Arizona and he said he could not support money for education without a plan. He cannot support the proposed Resolution of the Arizona Board of Regents Regarding: A Proposal to Repeal Arizona's Personal and Corporate Income Taxes as he does not believe the Board's action will have any meaning.

Regent Gignac said there have been tax cuts for the last ten years and the K-12 teachers are now struggling to accomplish what is asked of them. We are losing good teachers to other states and other career fields due to low salaries. She spoke in support of the proposed Resolution in opposition to the Proposal to Repeal Arizona's Personal and Corporate Income Taxes.

Regent Stuart said he believed the repeal of corporate and income taxes in Arizona would be the end of public education in Arizona. He is unalterably opposed to the proposal and believes the Regents should take a public stand. Regent Ulrich said he believed there should be a grass-roots effort at the legislature to secure more funding for education which would include the private sector, parents, teachers, alumni, and students.

President Amos said the Southern Arizona Leadership Council has made education its Number 1 priority. The business community is rallying in support of education as it believes the needs of the New Economy will require more education. President Likins said he believed the repeal of the state income tax would destroy public education in Arizona.

Regent Jewett said he supported the proposed resolution as the repeal of the income tax would be devastating to education. He believes the Tax Code is a mess as special interest groups have been nibbling away at it for years. He believes it is necessary for the business community to support education. Regent Ulrich said he believes there must be an effort to establish a "grass roots" effort to put pressure on the legislature to support education.

Upon motion of Regent Gignac, seconded by Regent Thompson, the Board adopted the Proposed Resolution of the Arizona Board of Regents Regarding: A Proposal to Repeal Arizona's Personal and Corporate Income Taxes, with Regent Ulrich voting no. The members of the Arizona Board of Regents pledged to inform citizens, policy makers, business leaders, and voters of the jeopardy created for the universities by the passage of "TPA 2000," and to work with other concerned citizens to defeat the initiative.

Regent Herstam reported on the April 12 meeting of the Governor's Task Force on Higher Education. The Task Force discussed the university research proposals that will help support the New Economy, the virtual Arizona Regents University, and the incentive programs for universal student access. The Task Force leadership suggested the Regents and the State Board of Directors for Community Colleges promptly address virtual education, including ways the two systems can collaborate. Regent Herstam asked for a briefing on the status of the Arizona Regents University at the next meeting.

Regent Gignac reported Town Hall attendees had received their discussion outline. She hoped a list of recommendations would come out of Town Hall and a follow-up committee would be appointed to oversee the implementation of the recommendations.

Regent Gignac, as Chair of the Nominating Committee, moved the following slate of officers for FY 2000-2001: President Don Ulrich, President Elect Kay McKay, Treasurer Jack Jewett, Secretary Chris Herstam, Assistant Secretary Gary Stuart, Assistant Treasurer Mary Echeverria. The motion was seconded by Regent Thompson and passed by unanimous voice vote.

President Amos thanked the technical people for their assistance in staging the meeting. He said he believed it worked very well.

MINUTES

ARIZONA BOARD OF REGENTS

MINUTES OF A MEETING

May 19, 2000