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Higher Ed Board reviews funding priorities for next biennium, seeks extension of expenditure limitation to meet student enrollment demands

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

PORTLAND, May 14, 2010 – The State Board of Higher Education (the “Board”) met today to, among other items, review a proposed increase in the Oregon University System’s expenditure limitation, and review proposed recommendations for programs to be included in the 2011-2013 budget request.

Expenditure Limitation
Chancellor of the OUS, George Pernsteiner, and OUS vice chancellor for finance and administration, Jay Kenton, reported on the request to seek an increase of $76 million in the OUS expenditure limitation at the May meeting of the Emergency Board of the Oregon Legislature. The Chancellor noted that OUS is facing large and rapid enrollment growth – exceeding projections – which is driven by record high school graduates in Oregon, the current state economic condition, increased financial aid, and the increasing realization that higher education is essential to success in today’s global economy. OUS campuses have also achieved great success in securing federal research grants. Together, these factors have resulted in increased revenues which can only be expended if the Oregon Legislature increases the expenditure limitation for the 2009-2011 Education and General Other Funds Limited. To meet the increases in enrollment growth, campuses have had to hire additional faculty and staff, pay increased healthcare costs, and pay other expenses related to serving students. The chancellor said that the $76 million increase in expenditures will be funded from incremental tuition, fee, and indirect cost recovery income from research grants, and that no State General Fund resources are included in the request.

Pernsteiner said that campuses have been effective at keeping costs down in the first year of the 2009-2011 biennium, but to ensure quality while serving the increases in students on campuses, the system needs to add 367 FTE (full time equivalent) in faculty and staff, 60 new graduate assistants, and increase spending in other areas which support instruction and campus operations. He noted that there are significant negative implications if OUS does not receive the expenditure limitation increase, most serious of which is not being able to admit as many new students in fall 2010 or to be able to offer classes to those who are enrolled, and thereby impacting student retention, success, time-to-degree, and graduation rates. Another implication of not getting the expenditure limitation is having to layoff newly hired faculty and staff who were brought in to serve large enrollment growth, and not being able to hire additional personnel to instruct students and provide important support services. In short, Pernsteiner said that the OUS is seeking approval to allow the system to spend money it already has to teach students it already has, and to be able to enroll students who are applying for fall term admittance. He said that if OUS does not get the increase it will mean coming back to the Board and asking for a budget reduction, the results of which will be “chilling” to the education of Oregon students now and far into the future. The Board unanimously approved the request for the OUS to seek an Other Funds Limited expenditure limitation for its education and general services program in the amount of $76 million.

Academic Strategies Committee Recommendations for 2011-13
Board members, led by Jim Francesconi and Rosemary Powers, and OUS vice chancellor for strategic programs and planning, Susan Weeks, reviewed with members the funding recommendations for the 2011-2013 biennium which have been vetted by the Academic Strategies Committee. The funding recommendations fall in 4 categories, with programs under each of those. Proposed action #1, Creating a College-Going Culture for Underrepresented Students, included (a) Mini-grants for Outreach and Retention; (b) Bilingual College Access Information; (c) Increased Support for ASPIRE & GEAR UP, and Summer Institutes for Rural Counselors and Mentors; #2, Improving Student Outcomes, included (a) Retention Programs Tied to Need-Based Aid; (b) Increased Peer Mentoring and Advising; and (c) Teacher Data Exchange; #3, Preparing for a Diverse World, included (a) recruitment and Retention of Diverse Faculty & Professional Staff; and (b) Latino Student Success Advisory Council; #4, Serving Oregon with Regionalized Approaches, included (a) Hub and Spoke Models for Educational Delivery to Rural and Remote Underserved Areas; (b) Academically and Administratively Aligned “University College” for Central Oregon; and (c) New Instructional Facility for OSU-Cascades; and #5, Strengthening Critical Areas of Oregon’s Economy, included (a) Sustainability, including a Research Initiative, Coordinated Support for Campus Sustainability Efforts, Doctoral Education in Sustainability, Health/Life Sciences, Sustainability tracking/benchmarking system; (b) ETIC – Making Sustainable Engineering a Strategic Priority; (c) Product Design Collaborative in the Portland Area; (d) Metals and manufacturing “Collaboratory”; and (e) Consolidation of OIT’s Portland Area Programs into a Single Location in Wilsonville.

Members had a lengthy discussion, addressing how to prioritize the various programs, what more could be done collectively and individually by the campuses, and what funding would be requested through the state budget process, what private resources may be available, and what will not be able to be supported at this time. At the June Board meeting, a few additional policy option packages will be brought to the Board for review.

In other action and discussion at this meeting and Committee meetings held earlier this month, the Board and/or its Committees:

  • Reviewed the OUS pooled endowment fund policy with the Finance and Administration Committee and the consulting firm of Strategic Investment Solutions, Inc. (SIS), which provided the Committee with several risk/return profiles to foster discussion of the Board’s tolerance for risk and return expectations.
  • Accepted the Quarterly Management Report for March 31, 2010; accepted the Investment Report as of March 31, 2010; and reviewed the investment policy for Operating Funds, which will be reviewed and approved by the Oregon Investment Council, and brought to the Committee in June for approval.
  • Approved the request for Certificates of Participation to finance capital costs related to construction or acquisition in the amount of $8,185,000. This will fund projects and equipment purchases at Eastern Oregon University at $360,000; at Oregon State University at $600,000; at Portland State University at $2,025,000; at Southern Oregon University at $200,000; and at University of Oregon at $5,000,000.
  • Approved the following new academic programs: EOU – B.A./B.S. in Public Administration, effective fall 2010; SOU – B.A./B.S. in Outdoor Adventure Leadership, effective fall 2010.
  • Recognized the tragic loss of EOU student, Dylan Steigers, with a moment of silence by the Board and meeting participants and attendees, due to an injury during a football scrimmage last Saturday.
  • Updated members on the work of the Board’s Governance & Policy Committee.
  • Received the final audit report on Mike Bellotti’s separation agreement.
  • Approved a resolution related to the Development, Relief, Education for Alien Minors (DREAM) Act, to ensure a strong future workforce and economy, and to support students who have succeeded in their secondary education in Oregon, often with distinction, and who will contribute to Oregon’s communities in the years to come.

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. 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

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