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Board of Higher Education endorses OSU-Cascades campus expansion

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

PORTLAND, August 3, 2012 – The State Board of Higher Education (the “Board”) met today at Portland State University to review expansion plans for Oregon State University Cascade campus, and review and approve annual and biennial budget plans, among other action items.

OSU-Cascades    

Ed Ray, president of Oregon State University, and Becky Johnson, vice president of OSU-Cascades campus, summarized the proposed expansion by the Bend-based campus to expand into lower division courses from its current 2+2 model in which Central Oregon Community College provides these courses and OSU-Cascades provides upper division. Ray said that the impetus for this direction is based on the need to address four critical issues: support of the State’s and System’s 40-40-20 goal; the campus’ obligation to support growth and development in the Central Oregon region; the campus’ recent enrollment growth and anticipated future growth path; and the need for a more efficient and a sustainable business model.

Ray noted that to meet the 40-40-20 educational attainment goal in Oregon, OSU will need to provide capacity and support for 35,000-plus students by 2025, and that a portion of this enrollment obligation will need to be carried by the Cascades campus. While the current 2+2 model works for some students, there is demand for a 4-year university in Bend, and for degree programs which meet the unique workforce needs of the region and to attract new companies looking to locate in the area. Johnson said that the business community is fully behind a 4-year university in Central Oregon, expressing concern that lack of this prevents faster growth in traded sectors and discourages businesses locating in the region.

Johnson said that with just under 1,000 students currently and with projections of 2,000 by 2019, enrollment is driving a need for additional facilities besides the one building on the COCC campus and the recently purchased building housing graduate programs and administrators off campus, which will reach maximum capacity by 2014. Ed Ray said that the community is very supportive and excited about the 4-year option, driving philanthropy totaling $1.5 million in just the last six weeks. Johnson noted that OSU-Cascades needs a more efficient and sustainable business model to address the burden of a 30-year lease for Cascades Hall on the COCC campus, and offering only the more expensive upper-division courses. These components make the campus very reliant on decreasing state support; and Cascades does not have the benefit of being able to attract non-resident students who pay 2-3 times the tuition of in-state students because they only offer the 2+2 model. By offering a 4-year model, still as a branch campus, Cascades will be able to diversify its revenue streams and reduce costs. OSU-Cascades today receives many administrative and other services from the main campus in Corvallis, and these efficiencies will continue under the branch model going forward.

After some discussion, the Board unanimously endorsed OSU-Cascades’ plan to expand its programs and enrollment, including offering lower-division coursework, while continuing to work cooperatively with COCC. The campus will follow the standard approval process for new degrees in the future, and the endorsement is predicated on its continued financial viability.

2013-2015 Budget Request    

OUS chancellor George Pernsteiner and Jan Lewis, OUS assistant vice chancellor for budget operations, summarized the current 2013-2015 budget process and proposal. Pernsteiner noted the complexity of this budget request because of the transition to budgets now aligned with new achievement compacts, collaboration with Funding Teams on budgets, and the necessity to provide budget information in both the old and new budget formats. Achievement compacts at this point are baseline projections; once OUS receives the Governor’s Recommended Budget in early December, compact targets will then be aligned with that. This budget request will be submitted at the end of August to the Governor’s Funding Teams, who in turn will make allocation recommendations to the Governor for his scheduled budget release in early December. He noted that unlike in the past, an upper budget limit was provided to the OUS based on the Current Service Level (CSL) budget plus 20 percent, which is about $760.5 million, of which $53.3 million in for special initiatives to be reviewed by the Education Funding Team, and $8 million by the Economy and Jobs Funding Team. The budget includes the base (primarily made up of Education and General funding) as well as new initiatives which are aligned with Board and state goals, and which were proposed by the campuses and the System, and vetted by the Academic Strategies Committee of the Board. This budget seeks to use much of the CSL adjustment to serve growing enrollments and to increase access and success rates of underserved students; OUS has the highest percentage enrollment growth in the nation over the last five years. Lewis said that Round 2 proposals include more collaborative initiatives with the Statewide Public Services out of OSU, and other education sectors. The only change in the capital budget already reviewed and approved by the Board is an addition of $5 million for the 21st Century Research Collaboratory, originally in the operating budget proposal. After some discussion, the Board approved the approach to the 2013-2015 Budget Request, and authorized the Chancellor or designee to adjust proposed budgets with the prescribed request limit if needed, prior to submission to the Department of Administrative Services.

Presidents’ Compensation    

Chancellor Pernsteiner reviewed compensation recommendations with the Board related to OUS presidents’ salaries. He noted that presidents last received a salary increase in July 2008 (except for longevity adjustments made for Dr. Ray and Dr. Cullinan this past June), and had also taken temporary salary reductions in 2009-2011 because of budget constraints during the recession. He said that this will be the only increase provided in the current biennium, and that national norms data has been used to aid in determining these recommendations. After some discussion the Chancellor recommended and the Board approved a 5% base salary increase for all of the OUS presidents, with the exception of President Gottfredson who just started in his position on August 1; and with the addition of supplements for Presidents Ray and Wiewel as provided by their respective foundations. Pernsteiner asked the Board’s Governance and Policy Committee to review the policy of accepting foundation supplements in the coming months and consider how compensation for presidents receiving these would be made in 2013-14 and beyond.

In other action and discussion at this and recent meetings, the Board and/or its Committees:

  • Approved the re-appointment of Board president Matt Donegan and Board vice president Jill Eiland for the 2012-13 year.
  • Approved the annual 2012-2013 OUS budget allocation as presented.
  • Heard a report from chancellor Pernsteiner, including information on how federal sequestration may negatively impact higher education research grants and funding as well as other areas.
  • Approved the following new programs: Oregon State University, (1) B.A./B.S. in Social Science, with an Option in Community Development and Leadership, effective Summer 2012; (2) BFA in Graphic Design, effective Fall 2012; and (3) B.A./B.S. in Innovation Management, effective Summer 2012.
  • Approved the Special Procurement Process for Phase II of classroom expansion at UO’s Straub Hall and Earl Hall.
  • Directed the vice chancellor for finance and administration to work with campuses to develop a standard five-year projection framework and to schedule campus presentations to the committee.
  • Approved the July 2012 Quarterly Internal Audit Division Progress Report.
  • Adopted the Fifth and the Sixth Amendments to the 2008 Restatement of the OUS Optional Retirement Plan to meet a requirement of the Internal Revenue Service and to conform the plan document to Oregon state law regarding the participation of unclassified police officers commissioned by a public university.

 

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 fifteen members appointed by the Governor and confirmed by the Oregon State Senate. For additional information, go to www.ous.edu.