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Higher Ed Board reviews strategic initiatives to more forward higher ed goals in Oregon, and progress on campus capital projects

Di Saunders, Cell: 971-219-6869; Office: 503-725-5714

PORTLAND, April 4, 2008 – The State Board of Higher Education (the “Board”) met today at Oregon Health & Science University in Portland to review strategic initiative proposals, current capital construction projects, and proposed new debt management approaches, among other items considered by the Board.

Strategic Initiatives Update
Each of the chairs of the Board committees and task forces reported on their progress to date on development of policy option package recommendations to present to the Governor and the Legislature. Board member Paul Kelly reported on the Governance Task Force and their work in gathering information on past governance structures within the OUS and in other states in order to determine recommendations on governance within the OUS system to be provided early this summer. Board member Don Blair reported on the progress of the Portfolio Task Force which is looking at opportunities to put the Regional universities on a stronger financial platform, decrease their operating costs and increase enrollment, and overall determine how to better leverage financial management across these 4 institutions. The team is specifically looking at admissions, financial aid and registration, and has contracted with a consulting firm that will visit campuses in April and document processes in these areas, and interview leadership. In May, the consultant with present a summary and analysis, benchmarking OUS against other systems, and provide a draft report in June.

Board member Jim Francesconi and OHSU provost Lesley Hallick reported on the components of the Portland Higher Education Committee. Francesconi commended the increasing cooperation among the OUS institutions, OHSU and the community colleges in Portland in program development and research efforts. He noted that the priorities that the Committee are developing include life sciences, sustainability, increased access in the Portland/Metro area for students and collaboration with K-12, and increased civic engagement in postsecondary education; and noted how these dovetail very well with the search for the next PSU president in terms of the qualifications needed to take PSU to the next level. Dr. Hallick elaborated on the life sciences planning, noting the diversity of health care areas and other topical areas would be encompassed in this collaboration between OHSU, PSU, OSU, UO and likely other institutions. Board member Dalton Miller-Jones reported on the progress of the Student Participation and Completion Committee which is developing proposals which will increase capacity in pre-college academic enrichment programs that prepare underserved students for success in college, and in retention programs in college that enable students to succeed and graduate. Dr. Miller-Jones noted the ties between increased educational attainment in Oregon and a strong economy, citing the costs to the state for citizens with lower education levels in terms of use of social services, and the revenues gained by the state from more highly educated Oregonians who provide greater tax revenues, fill highly skilled jobs, and have significantly lower needs for social support by the state.

Capital Construction Update
Bob Simonton, OUS assistant vice chancellor for capital programs, provided an update on current capital construction, deferred maintenance and repair projects on the OUS campuses. Simonton noted that there are currently 160 projects underway on the campuses, with a 6 year spending authorization (2003-05 to 2007-09) of almost $1.8 billion, of which 21% is state supported through bonding authority, but only 3% is made up of actual state General Fund dollars. The objectives of these capital investments include building quality facilities, making program improvements, and ensuring access and ability to handle enrollment growth. Simonton said that all new construction must ensure sustainability aspects and are required to meet a minimum of the LEED silver standard in construction. There is also active outreach by the OUS to increase participation in the construction projects through attracting new Minority, Women, and Emerging Small Businesses. Ongoing training is occurring with campus personnel in controlling construction costs and other aspects of project management. Board members discussed a balance between receiving requests for capital projects from the campuses, but also having the system deploy resources to serve education requirements in the state, and making investments based on the Board's strategic plan, such as the agenda around sustainability and growth areas in the state.

Summaries of campus projects are: Eastern Oregon University has 7 major projects which are 20% complete, and are 100% renovation related. Oregon Institute of Technology has 10 major projects which are 52% complete, and are 70% renovation and 30% new construction. Oregon State University has 46 major projects which are 32% complete, and are 61% renovation and 39% new construction. Portland State University has 33 major projects which are 26% complete, and are 70% renovation, 21% new construction, and 9% acquisition. Southern Oregon University has 12 major projects, which are 50% complete, and are 67% renovation, 25% new construction, and 8% acquisition. University of Oregon has 40 major projects which are 23% complete, and are 57% renovations, 33% new construction, and 10% acquisition. Western Oregon University has 11 major projects which are 21% complete, and which are 91% renovation and 9% new construction. Overall within the OUS, these projects are 57% renovation, 33% new construction, and 10% acquisition.

In other action and discussion at the meetings, the Board:

  1. Heard from Michael Green, OUS controller, about the human resource planning process for the financial function, an ongoing process intended to build and maintain a “best in class” finance function with OUS, including the attributes of financial performance; functional excellence/capability; quality individuals in key finance positions; effective and efficient system and processes; and a positive work environment. This process will also strengthen the internal control structure of OUS by helping to ensure consistent application of policies; stronger adherence to System goals; and sufficient “bench strength” for key finance positions. Next steps will include additional discussions among OUS presidents, and then move to Board approval of HRP policies with a status update later in the year.
  2. Heard from Michael Green, OUS controller, about a proposed new debt management approach of the System’s Article XI-F(1) debt on a portfolio basis rather than on a transactional or project-specific basis. OUS will take on an appropriate amount of variable rate debt to lower its overall cost of capital; and plans to begin utilizing a commercial paper program to provide interim financing for capital construction projects. Benefits include minimizing the cost of capital; managing volatility in interest rates; providing greater flexibility and clearer planning horizons; maximizing allowable arbitrage earnings; and simplifying the administration of the debt portfolio. Next steps include moving toward implementation of these strategies through work sessions with the State Treasurer’s Office, the Department of Administrative Services, the Legislative Fiscal Office, and campus administrators, with policy approval in June/July 2008.
  3. Discussed issues around the OUS salary funding not yet being released by the state, and the implications for campuses and students in terms of budget cuts or tuition increases should that salary funding of $28.5 million not be released or be released only in part. Chancellor George Pernsteiner noted that salary negotiations have already been completed by most campuses and must be contractually met regardless of whether the state provides the salary funding currently being held. The Board discussed budget issues overall and the difficulty of appropriately managing academic programs, growth, quality, research advancements and other strategic advancements in the constantly uncertain budget environment in higher education in Oregon.
  4. Heard an update on an international conference to be held in Portland later this year to share best practices with other countries, including Ireland, which hosted the last event in which the OUS participated.
  5. Heard an update on the UO arena from president Dave Frohnmayer, including work done within the community, economic impact, parking and traffic study underway, and groundbreaking and construction plans.
  6. Approved a new OSU program, Certificate in Water Conflict Management and Transformation, effective spring 2008.
  7. Heard an update on the OIT presidential search from Board member Paul Kelly.
  8. Approved suspending application of the OUS honorary degree policy (HB 2823), including the 90-day requirement for OUS institutions that would like to award honorary degrees to individuals held in World War II internment campus, and approve the University of Oregon awarding these degrees on Sunday, April 6, 2008.
  9. Heard reports from Board Task Teams and Committees; from the Interinstitutional Faculty Senate; and Oregon Student Association.

The Oregon State Board of Higher Education, the statutory governing board of OUS, is composed of eleven members appointed by the Governor and confirmed by the Oregon State Senate.

Oregon University System comprises seven distinguished public universities, reaching more than one million people each year through on-campus classes, statewide public services and lifelong learning. For additional information, go to www.ous.edu

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