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Higher Ed Board committee approves capital budget adjustments, reviews athletics

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

PORTLAND, April 8, 2011 – The State Board of Higher Education’s Finance and Administration Committee met today to review capital budget adjustments, fiscal status of athletics, and the OUS debt management strategy, among other items they considered. 

Capital Budget Adjustments     Board members heard from university representatives regarding requests for budget adjustments on the 2009-2011 capital budget, and to the 2011-13 capital request. 

  • Oregon Institute of Technology: the Committee approved OIT’s request to seek state legislative approval for an additional $3.5 million of Other Funds spending limitation to allow it to use added Business Energy Tax Credit and Energy Trust funding to increase the amount of electric power production by 23%, which will provide approximately 73% of OIT Klamath Falls campus electric power needs to be generated through geothermal power after these improvements.
  • Oregon State University: the Committee approved OSU’s request to work with the Legislature to make the necessary adjustments to the OSU’s 2011-13 capital construction budget request to allow it to issue $65 million in Article XI-F(1) bonds to finance the construction of a new classroom building to accommodate significant student enrollment over the last couple of years and anticipated enrollment increases in the next few years. Debt service and operating costs will be fully funded by tuition revenue from nonresident and international student enrollment growth.
  • University of Oregon: the Committee approved (1) the UO’s Allen Hall request and authorized the Chancellor or designee to seek authorization in the 2011-13 Legislative Assembly to expend an additional $5.3 million in Other Funds consisting of university fund balances for the expansion and remodel of the UO’s Allen Hall; and (2) the UO’s request to seek legislative authority to expend an additional $10 million in Other Funds for the Lewis Integrative Science Building project for the Huestis Zebrafish Facility, consisting of the $9.117 million NIH CO6 grant plus $883,000 in gifts.
  • Western Oregon University: the Committee approved WOU’s request to shift funding from the Todd Hall project to a new Natural Sciences Laboratory Annex. WOU requests that $7.2 million in State Lottery Bond funding and $2.5 million in Other Funds expenditure limitation be transferred for construction of a new Natural Sciences Laboratory Annex from the Todd Hall renovation project, included in the Governor’s Recommended Budget, to renovate science labs to handle significant increases in healthcare enrollment and other students. $1.2 million in renovation funding would remain in Todd Hall limitation to make necessary seismic and safety improvements. 

OHSU/OUS Life Sciences Project     Lindsay Desrochers, vice president of finance and administration at Portland State University, described the university’s request to contract with Stacy Witbeck and Mowat Construction Company to construct the $10 million in light rail integrations necessary for continuity of design and construction on the light rail project to the OHSU/OUS Life Sciences Collaborative Complex project. TriMet, which selected Stacy/Mowat through a competitive procurement process, complied with all applicable state and federal requirements. The Committee approved authorization for PSU to enter into a contract with Stacy Witbeck and Mowat Construction Company for the $10 million portion of the LSCC project covered by the TriMet Intergovernmental Agreement.

Fiscal Status of Athletics     OUS controller Michael Green provided an update on the fiscal status of Intercollegiate Athletics as of June 30, 2010.  Green summarized the financial principles and policies and the status of each institution’s budget. University representatives noted concern about potential 2011-13 cuts to the Sports Action Lottery funding, which funds Title IX and other sports and scholarships. Eastern Oregon University president Bob Davies noted that fully one in four students enrolled at EOU are there because of the sports programs and that this would significantly affect enrollment if these funds are cut by the Legislature. Several other campuses echoed President Davies’ concerns. The Committee accepted the report. 

Internal Audit Charter     The Committee reviewed and approved changes to the OUS Internal Audit Division charter as outlined in the docket materials.  

Debt Management Strategy      OUS director of treasury operations, Karen Levear, described and the Committee discussed a debt management strategy for the OUS Internal Bank appropriate for the current financial environment and likely future scenarios. Levear noted that the Internal Bank is exploring ways to reduce overall cost to the System and reviewed details related to this. After a brief discussion, committee chair Kirk Schueler directed that a draft implementation plan and proposed policy changes be developed and provided to the Committee for review and approval in the near future.

The Oregon University System comprises seven distinguished public universities and one branch campus, reaching more than one million people each year through on-campus classes, statewide public services and lifelong learning. The Oregon State Board of Higher Education, the statutory governing board of OUS, is composed of twelve members appointed by the Governor and confirmed by the Oregon State Senate. For additional information, go to www.ous.edu; and for today’s Board Docket materials go to: http://www.ous.edu/state_board/meeting/dockets

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