Oregon State Board of Higher Education
Board Budget and Finance Committee
October 20, 2000
Table of Contents
Acquisition of Westfall Apartments for Student Housing, PSU
Portland State University (PSU) is requesting the Board's review and approval of the purchase of the Westfall Apartment Building, a four-story 43,240 square foot facility, built in 1910 with an addition built in 1923, and including 58 rental units. The Board is asked to authorize the Vice Chancellor for Finance and Administration to seek authorization from the Legislative Emergency Board for an Other Funds expenditure limitation of $2,800,000 for the issuance of Article XI-F(1) bonds to finance the project. The property is located at the junction of Fifth Avenue and Hall Street in Portland, immediately adjacent to PSU. The facility will provide much needed additional student housing and will be managed by College Housing Northwest (CHNW), the University's current student housing provider. The acquisition is subject to satisfaction of several standard terms and conditions.
PSU continues to experience strong enrollment growth yet has a shortage of student housing. With the overall growth in the numbers of students attending PSU, more traditional full-time undergraduate students are choosing on-campus housing, thereby exacerbating the campus' housing shortage. The waiting list for student housing currently totals 600 individuals.
This facility meets a number of PSU's needs. It will increase the housing stock available to PSU by seven percent. The building contains 53 one-bedroom flats, three two-bedroom flats, and two ground floor retail locations. It is in sound condition. Its brick exterior is in keeping with PSU's design standards. Many recent upgrades have been made to unit interiors and common areas. In addition, there is an elevator and a complete sprinkler system. The University District master plan, part of the City of Portland's Master Plan, made provision for acquisition of such properties. Finally, the facility is offered at an attractive price, considering rising real estate values in the vicinity.
In accordance with the zoning code governing downtown Portland, including the University District, "active ground floor" uses, either retail or commercial, are required; therefore, a small commercial activity will be included.
A financial analysis of the operating and debt service costs associated with this acquisition has been completed. Even including a five percent vacancy factor, projected revenues from rental receipts are projected to adequately cover estimated debt service requirements over the 30-year life of the bonds and other operating expenses. These costs will be borne by College Housing Northwest (CHNW) with which PSU contracts to provide housing management services for the 801 University-owned student housing units, as the contract includes costs for debt service, building and equipment repair reserves and administrative overhead.
Rental rates at the facility will remain at or below market, as with all other properties of comparable size and quality that are managed by College Housing Northwest for PSU. For example, a one-bedroom apartment is expected to rent between $450 and $600 per month and a studio between $275 and $445 per month.
Conditions of Purchase:
The proposed purchase is subject to review and acceptance of the following terms: a thorough inspection of the premises and examination of all books, records, leases, etc. associated with the property; approval by the State Board of Higher Education; approval of the Legislative Emergency Board; the receipt of two independent appraisals for which the average values equal or exceed the agreed upon purchase price; receipt of a satisfactory Level I environmental report; and obtaining adequate bond proceeds to finance the transaction.
Staff requests that the Board Budget and Finance Committee recommend the full Board approve the acquisition by Portland State University of the facility known as the Westfall Apartments for a total cost of $2,800,000, plus closing costs, and authorize the Vice Chancellor for Finance and Administration to seek authorization from the Legislative Emergency Board for an Other Funds expenditure limitation of $2,800,000 plus closing costs for the issuance of Article XI-F(1) bonds to finance the project.
Northwest Center for Engineering, Science and Technology:
Phase I, Stage A: Remodel of Fourth Avenue Building (PSU)
Portland State University requests the Board Budget and Finance Committee approve and seek full Board approval to accomplish the following: (a) renovate the first two floors of the Fourth Avenue Building, to accommodate faculty and programs being relocated from the PCAT building, for a total cost of $7.2 million; (b) authorize the Vice Chancellor for Finance and Administration to seek authorization from the Legislative Emergency Board for a $7.2 million Other Funds expenditure limitation for the issuance of Article XI-F(1) bonds, to be repaid from rental revenues from tenants in the Fourth Avenue Building.
In the 2001-2003 OUS Capital Construction Budget, PSU requested approval of Phase I of its Northwest Center for Engineering, Science and Technology. This three-stage project would respond to the strong enrollment growth PSU is currently experiencing as well as to projected growth. The first stage of this project, Stage A, is the subject of this request.
Placed in context, the three stages are as follows:
In 2005-2007 and following, PSU has identified additional projects to provide space either through further renovation of the Fourth Avenue Building and/or through construction of a new research and teaching building, only half of which would be for the College of Engineering and Applied Sciences, with the remainder to house other sciences and mathematics units.
Relationship of the Request to Alternative Proposals for Engineering Enhancements:
At its July 2000 meeting, the Board approved the 2001-2003 OUS Capital Construction Budget, and included a placeholder for the PSU engineering project (as well as for the engineering project at OSU) while a review of alternative approaches to meeting engineering needs was completed. The results of this review will be provided for the Board's consideration at its October 2000 meeting.
Notwithstanding any other decisions the Board makes regarding how to fund enhancements and computer science program enhancements, the PSU project discussed herein is required, in order to house faculty and programs being moved from the PCAT building. The PCAT facility (about 39,000 gsf plus underground parking), is part of the Urban Center Complex and occupies the other half of the block on which the newly-dedicated facility sits. It is the subject of negotiations between PSU and the City of Portland concerning a development agreement that would involve demolition of PCAT and the erection of a large, multi-use facility, including space for PSU. Under terms still being negotiated, the City would obtain development rights and would commit a minimum of $5 million toward PSU's engineering and computer science facilities needs.
Prior to any actual demolition and construction, however, the PCAT space vacated by the engineering and computer science units would be reassigned to meet immediate general purpose classrooms and other academic space.
The timing of the relocation of the programs from PCAT to the Fourth Avenue Building is related to the early termination of a short-term lease in the Fourth Avenue Building. This, in turn, makes possible a renovation that could be completed by the fall semester, 2001. Given PSU's extreme space needs, the campus wishes to secure this released space as soon as possible.
In sum: (a) This is a stand-alone project; (b) approving it does not require the Board to approve the remaining portion of the PSU request for Phase I of its Northwest Center for Engineering, Science and Technology; and (c) release of space in the PCAT for other immediate needs is vital to PSU's plan for providing space for the strong enrollments it is experiencing.
Elements of the Stage A project include:
Project Cost and Funding:
The $7.2 million cost is based on a schematic design prepared by an architectural firm. To provide funding, PSU wishes to use existing proceeds from the sale of 30-year Article XI-F(1) bonds having a tax-exempt rate of 5.66%. The annual debt service is approximately $504,000. These costs would be repaid from rental revenues associated with a lease to a major corporate tenant in the Fourth Avenue Building; the lease is for a five-year term, with two additional five-year extensions. Given the desirability of the building location in downtown Portland and strong office demand, PSU's reliance on rental revenues to repay the debt service is low-risk.
Staff recommend the Board Budget and Finance Committee approve and seek subsequent Board approval to accomplish the following: (a) renovate the first two floors of the Fourth Avenue Building, to accommodate faculty and programs being relocated from the PCAT building, for a total cost of $7.2 million; (b) authorize the Vice Chancellor for Finance and Administration to seek authorization from the Legislative Emergency Board for a $7.2 million Other Funds expenditure limitation for the issuance of Article XI-F(1) bonds, to be repaid from rental revenues from tenants in the Fourth Avenue Building.
Campus Development Project - Gilbert Hall Phase III B, UO
The University of Oregon requests the Board Budget and Finance Committee approve and seek subsequent Board approval to accomplish the following: (a) construct Phase III B of the Campus Development Project - Gilbert Hall Additions and Alterations Project, a $33 million entirely gift-funded project to extensively remodel and build an addition to Gilbert Hall; and (b) amend the previously approved 2001-2003 OUS Capital Construction Budget request to the Department of Administrative Services to include this project.
The project will accomplish the following:
Because of its location on the western edge of the campus, at East 13th Street and Kincaid in Eugene, a major public entrance to the western UO quad will be provided. Strong links connecting the various building elements will be designed, with a central space unifying the entire complex. Barriers to the movement of individuals with physical disabilities will be removed.
Finally, the new addition will use advanced "green building" concepts to minimize environmental impacts and significantly lower operating costs. This approach will involve interior and exterior materials, lighting, heating and cooling, and many other building systems.
UO's business school, the Lundquist College of Business, has steadily improved its national position and is now ranked as one of the top business schools in the country. In the current academic year, over 2,500 students are enrolled in the business curriculum. However, the school is hampered by inadequate classrooms, offices, and support space. As an example, the last comprehensive improvement to the facilities for business education occurred in 1955.
Currently, the school is housed in Gilbert Hall and in the connected Chiles Business Center, which was constructed in 1986. Gilbert Hall is, itself, comprised of two brick wings, built in 1916 and 1921, connected by a bridge element, added in 1952. Over time, the College of Business has expanded into the entire complex, which also contains classrooms in the University's general classroom pool.
In 1997, the Legislature approved a combination of two previously authorized projects and approved a three-phased Campus Development Project. Phase I was originally a new Law Library, but later became the Knight Law School. Phase II was a remodel, expansion, and renovation of the former UO Law School into a facility housing general purpose classrooms and Phase III A, a project to renovate a portion of Gilbert Hall for the business school.
Phase III A included an expenditure limitation of $100,000 of Other Funds (Article XI-F(1) bonds), $3,450,000 of Article XI-G bonds and $3,450,000 of Other Funds (gifts) to match the Article XI-G bonds. The Article XI-G bonds were reauthorized by the Legislature in the 1999 session and sold in the Fall 1999 bond sale. A small amount of the proceeds were used to carry out a master plan for the entire complex and prepare for renovations and a larger addition to Gilbert Hall than originally planned due to the additional gift funds.
The project now before the Board for approval may be considered Phase III B. It will greatly increase the size of the addition and provide for more extensive renovation of the two brick wings, as well as the additional networking, infrastructure and "green building" elements of the project. Thus, the new project will replace the 45,000 square-foot 1952 bridge element of Gilbert Hall with a 150,000 square-foot structure with the flexibility and infrastructure necessary to support the teaching and research mission of the Lundquist College of Business. The total area of the new and existing buildings in the complex, including general assignment classrooms, will be approximately 200,000 square feet. All classrooms will be replaced or renovated to provide state-of-the-art instructional facilities.
A new addition will include a combination of three and four floors including a partial basement. A new entrance will be at the center of the new addition with an atrium on the axis of the Memorial Quadrangle, enhancing the visual connection between the University's historic Knight Library and Dad's Gate.
In addition, the first floor of the complex will be largely devoted to general assignment classrooms and Lundquist College of Business student services. The second floor will house the Lundquist College and general assignment classrooms, the graduate center, and the career center. The third and fourth floors will have faculty offices, learning centers, computer labs, and other functions.
This new configuration of the Gilbert Hall portion of that plan allows for the continuation of operations during construction. Construction for Phase III A of this project is anticipated to begin in summer 2001, and Phase III B would then begin in the fall or winter of the 2001-02 academic year. Construction of the new building addition will take approximately 18 months, by the spring of 2003. Renovation of the existing facility would then be completed in approximately eight months, or by winter-spring 2004.
Project Cost and Funding Sources:
The funding available from the Legislatively approved Phase III A ($7 million) will be combined with the gift funds for this new $33 million Phase III B construction project. A $12 million gift from UO alumnus Charles Lillis and his wife, Gwen, has now pushed the Lundquist College of Business past the halfway mark in funding for the new teaching facility. As of September 1, 2000, $17.5 million is in-hand or pledged. University officials anticipate that the full amount of gifts required for the project will be pledged or in-hand before construction begins.
Amendment to the OUS 2001-2003 Capital Construction Budget:
The gifts and pledges required to move forward with this project were secured in the month following the Board's approval of the 2001-2003 Capital Construction Budget and prior to the submittal of the request to the State of Oregon's Department of Administrative Services. In order to meet the construction schedule for this project, the capital budget request must be amended.
Staff recommend the Board's Budget and Finance Committee approve the request by the University of Oregon to seek Board approval to accomplish the following: (a) construct Phase III B of the Gilbert Hall Additions and Alterations Project, a $33 million entirely gift-funded project to extensively remodel and build an addition to Gilbert Hall; and (b) amend the previously approved 2001-2003 OUS Capital Construction Budget request to the Department of Administrative Services to include this project.
Straub Hall Addition for Functional Magnetic Resonance Facility
The University of Oregon requests the Board Budget and Finance Committee approve and seek subsequent Board approval to accomplish the following: (a) amend the Straub Hall Additions and Alterations project, approved by the 1999 Legislature, to carry out additional remodeling and build a small addition to house a functional magnetic resonance imaging machine (fMRI); (b) approve an increase in the project budget from $3,320,000 to $4,495,000; and (c) authorize the Vice Chancellor for Finance and Administration to seek authorization from the Legislative Emergency Board for a change in the expenditure limitation from $1,166,000 in Article XI-G bonds and $1,166,000 in Other Funds (Gifts) to $1,166,000 in Article XI-G bonds and $500,000 in Other Funds (Gifts) and $2,829,000 in Other Funds (Federal).
In July 1999, as part of House Bill 5021, the Oregon State Legislature approved an expenditure limitation of $1,660,000 of Article XI-G bonds, matched by $1,660,000 of Other Funds for improvements to Straub Hall on the University of Oregon campus. Straub Hall houses the Institute of Cognitive and Decision Sciences and the Departments of Psychology and Linguistics, which together constitute one of the largest teaching and research units of the University. The faculty conduct research programs in social cognition and decision cognitive neuroscience, endangered languages, cognitive linguistics, and other areas.
The goal of the remodeling project was to upgrade the teaching space and provide state-of-the-art research space for scientists studying the function of the brain. The need to incorporate a functional magnetic resonance imaging (fMRI) unit and its supporting technology was always acknowledged; however, until the receipt of several federal grants, the costs were prohibitive. With funding now secured from the National Science Foundation and other federal agencies, the fMRI research unit can be added.
Magnetic resonance imaging (MRI) is an imaging technique used to produce high quality images of the inside of the human body. It is a spectroscopic technique that can obtain microscopic chemical and physical information about molecules, through the use of energy in the radio frequency range of the electromagnetic spectrum. Radio waves make it possible to image objects smaller than the wavelength of the energy being used to image.
The fMRI technology to be installed in this project permits the brain activity (or function) to be analyzed using a image. Research utilizing this technology has already resulted in major advances in the fields of neuroscience and psychology and is expected to continue to do so.
Specific space requirements are associated with housing an fMRI unit, such as shielding the instrument from surrounding electromagnetic radiation; and these requirements are difficult to meet within the existing building, and thus will require a small addition to Straub Hall. After examining alternatives, a site adjacent to the north wing of Straub Hall facility has been determined and a design for an addition completed. Combining new construction with the remodeling of existing facilities will allow an efficient physical arrangement of fMRI and associated laboratory equipment.
The UO Campus Planning Committee has approved the siting and schematic design of the fMRI facility. Consultations have begun with the City of Eugene Building Department regarding code requirements for the fMRI facility and a code analyst has been retained to address concerns regarding occupancy and construction design issues. Site tests are underway to analyze the suitability of the site in terms of electromagnetic fields and vibrations that might affect the functioning of the machine.
UO seeks approval to approach the Legislative Emergency Board rather than await an additional eight months in order to meet the terms of the granting agencies for producing results of research experimentation. An expansion of the expenditure limitation at this time will allow the construction of the space and acquisition of the equipment to occur without delay. The estimated completion date is approximately September 1, 2001.
Staff request the Board Budget and Finance Committee approve and seek subsequent Board approval to accomplish the following: (a) amend the Straub Hall Additions and Alterations project, approved by the 1999 Legislature, to carry out additional remodeling and build a small addition to house a functional magnetic resonance imaging machine (fMRI); (b) approve an increase in the project budget from $3,320,000 to $4,495,000; and (c) authorize the Vice Chancellor for Finance and Administration to seek authorization from the Legislative Emergency Board for a change in the expenditure limitation from $1,166,000 in Article XI-G bonds and $1,166,000 in Other Funds (Gifts) to $1,166,000 in Article XI-G bonds and $500,000 in Other Funds (Gifts) and $2,829,000 in Other Funds (Federal).
Naming of Buildings within the Center for the Visual Arts, SOU
Southern Oregon University is pleased to announce as part of its grand opening celebration of the Center for the Visual Arts, the renaming of two campus buildings that make up part of the Center. The three-story Siskiyou Commons Building will be renamed the "Marion Ady Building" for Marion Ady, a long-time University faculty member. The second building, Art East, which houses the sculpture studio, will be renamed the "DeBoer Sculpture Building", for Walter DeBoer, a well-known community leader.
Staff Report to the Board:
The Center for the Visual Arts project, approved by the Legislative Assembly in 1997, will be formally dedicated on October 20, during the Board's visit to the campus. Four projects are included in this new Center: a 2000 gsf addition to the Schneider Museum; a doubling of the Siskiyou Commons Building to 35,000 gsf, housing a number of Art Department studios; a new 19,000 gsf building housing classrooms, faculty and departmental offices and gallery space; and a renovation of the Art East sculpture facility.
In concert with the opening, President Sara Hopkins-Powell wishes to report her decision to rename two of the recently remodeled facilities that are part of the newly-completed Center. This action is taken pursuant to OAR 580-050-0025, which sets forth the Board's policies concerning naming of campus facilities. Under that OAR, a campus president is authorized to name campus buildings and structures for persons who are deceased.
The former Siskiyou Commons Building will be renamed the "Marion Ady Building". Ms. Ady was instrumental in launching art instruction at the University after she appeared on the new campus of the reopened Southern Oregon Normal School in 1926--just one year after construction of Churchill Hall, the first building erected on the new site. She represented, at that time, the entire faculty of the Art Department and built the foundation of what is today a strong and growing program at the University. During her 38 years of service to SOU, Ms. Ady served as chair of the department and as a respected teacher and colleague, valued mentor, and artist. The building now renamed after Marion Ady has been handsomely remodeled and is nearly twice the original size of the Siskiyou Commons Building. The 35,000 gsf building now houses Photography, Printmaking, Art Education, Painting and Drawing. In addition, there is space for two digital media labs and semi-private studios.
The former Art East sculpture facility will be renamed the "DeBoer Sculpture Building." It will house the Sculpture Studios and Gallery. In so naming the building, SOU honors the life of a prominent Ashland citizen, Walter DeBoer, who owned and operated the Lithia Motors auto dealership on the Ashland plaza from 1945 until his untimely death in 1968. This act recognizes a generous gift from the Sid and Karen DeBoer Foundation for the construction of the Center. Sid DeBoer, Mr. DeBoer's son, is a University President's Medal recipient. He has also served as the co-chair of the Center's capital campaign.
The total construction cost of the Center for the Visual Arts project was $11.2 million. The State of Oregon provided funds for half the cost through the issuance of Article XI-G(1) bonds; the remaining funds, needed to match the state bonds, were acquired by the SOU Foundation through gifts and grants.
Oregon State Board of Higher Education
Board Committee on Budget and Finance
July 21, 2000
Budget and Finance Committee members: Tom Imeson, chair, Geri Richmond, and Bill Williams. (Members of the Strategic Planning Committee joined the meeting at 10:00 a.m.)
OUS University Presidents or senior staff: Vice President Ron Bolstad, SOU; Vice President Ron Bolstad, SOU; President Phil Creighton, EOU; President Martha Anne Dow, OIT; Provost Lesley Hallick, OHSU; Provost John Moseley, UO; President Paul Risser, OSU; and President Betty Youngblood, WOU;
Chancellor's Office staff: Joe Cox, Chancellor; Tom Anderes, Vice Chancellor for Finance and Administration; Shirley Clark, Vice Chancellor for Academic Affairs; Robert Dryden, Vice Chancellor for Oregon Engineering and Computer Sciences; Diane Vines, Vice Chancellor for Corporate and Public Affairs; Marilyn Lanier, Deputy Vice Chancellor for Finance and Administration; Lynda Swanson, Director of Capital Construction, Planning, and Budgeting; Susan Weeks, Chief Information Officer; and Marv Wigle, Associate Vice Chancellor for Budget and Management, and Bill Anslow, Consultant.
Meeting participants also included other institutional representatives, other members of the Chancellor's Office staff, and interested observers.
Introduction of Vice Chancellor Tom Anderes by Chancellor Cox. Dr. Anderes thanked the staff for their excellent work in the preparation of the materials.
MINUTES FROM June 16, 2000
The minutes from the June 16, 2000, were approved and seconded as presented. The motion was approved.
ACTION ITEM: PURCHASE OF LEWIS PROPERTY, SOU
Dr. Anderes advised that Southern Oregon University seeks Board approval to acquire a property within the campus boundary designated construction of single apartment-style housing. The University has reached an agreement with the sellers, Donald E. and Marsha S. Lewis, for the purchase of a parcel located at 1349 Oregon Street, Ashland, for the sum of $130,500. The $130,500 will be funded through Article XI-F(1) Bonds, which will be repaid through student housing auxiliary and rental income. Staff recommends the Board authorize SOU officials to purchase the Lewis property for a price not to exceed $130,500 plus closing costs.
Committee action: Williams/Richmond moved/seconded to approve the authorization for SOU to purchase the property in Ashland, Oregon; the motion was approved. The item now goes to the full Board for consideration.
ACTION ITEM: 2000-01 ACADEMIC YEAR FEE BOOK
Dr. Anderes stated that staff recommends the Board approve the proposed 2000-01 academic year tuition and fees, and related policies, as presented in the 2000-01 Academic Year Fee Book. No significant changes have occurred to the tuition and fees, increases are relatively moderate. Dr. Anderes provided a brief summary of the changes in fees with a range of low to high:
Tuition: the tuition freeze will be continued for resident undergraduates; all other tuition is increasing by 5.25% (except PSU graduate tuition will increase 3%). Incidental fees (student activities) will increase from one percent at PSU to 14.5% at OIT; these fees are reviewed and approved by the students, based on their goals and directions. Health services fee: OIT is reducing this fee by 2.2% and SOU is increasing it by 27%; however, SOU's adjustment is to achieve a fee level that is comparable to the other institutions and to add options to their health care program. The building fee remains unchanged at $25 per term. Most resource fees did not change, with campuses focusing increases on selected programs that generate higher costs. Room and board increases range from four percent at the UO to 5.9% at OIT.
Dr. Anderes noted that in comparison to peers, in most cases, the costs to students are either at a medium to a high cost compared to the peer institutions; with the annual percentage increase similar to their peers. When comparing total cost that a student would pay, excluding room and board, resident undergraduate total cost will increase from 0.2% at the UO to 4.2% at SOU; non-resident undergraduate cost will increase from 0.6% at EOU to 6.2% at SOU (SOU's increase in fees is the result of increases to technology and health services fees in order to be comparable with other OUS institutions). Resident graduate total cost will increase from 3.6% at PSU to 7.0% at SOU; and non-resident graduate total cost will increase from 3.4% at PSU to 6.3% at SOU. These are considered reasonable rates of increase when compared to their peer institutions.
Policy changes: In June 2000, the Board approved the "Transfer of Staff Fee Privileges" policy wherein one qualified family member/domestic partner at a time can utilize the fee privilege at any institution, during any term, including summer session and continuing education credit courses. Under this policy, the family member/domestic partner may enroll for up to 10 credit hours at the staff fee rate (currently $15 per credit hour). Also the "Cooperating School Districts" policy has been modified. Under this revised policy, cooperating school districts may earn five credit hours of enrollment privilege for supervising a full-time student teacher per term or three credit hours of enrollment privilege for supervising a part-time student teacher or experiential preparatory practica. The credit hour privilege may be redeemed by any qualified employee designated by the local school district, and no more than eight credit hours at the staff fee rate may be redeemed in any one term by any one school district teacher. This policy is being revised to establish consistency throughout the System in qualifications for earning and redeeming these enrollment discounts.
Dr. Anderes advised that staff recommends the Board adopt the 2000-01 Academic Year Fee Book.
Bill Williams asked for details on health services provided under the plan and if the fee income covers the cost of the program. Dr. Anderes explained that the health services fee is primarily a premium that students pay for healthcare coverage for a package of coverage to use at their selected healthcare provider. This program is considered self-supporting and these services extend through June 30, 2001. At that time, institutions must look at the coverage provided by vendors and, if there is a statewide impact, then a revision of the coverage may be made in the following year. Chancellor Cox advised that the Legislature has indicated that the tuition freeze will be lifted at the end of this biennium; therefore, tuition may increase in the 2001-02 academic year, at the Board's discretion.
Committee action: Richmond/Williams moved/seconded the motion to adopt the 2000-01 Academic Year Fee Book; the motion was approved. The item now goes to the full Board for consideration.
ACTION ITEM: SETTLE-UP ISSUES and 2000-01 OPERATING BUDGET
Settle-up: Dr. Anderes advised that, in the midst of transitioning to the new budget model, part of the process involves adjusting from the first year to the second within the current (1999-2001) biennium. The basic concept is, if there are changes in the FTE enrollment within the academic year, there would be a movement of state General Fund to the institution that experienced increases in actual enrollment beyond the budgeted enrollment and a shifting away of funds from institutions that are below their budgeted enrollment goal, in accordance with established Board policy. Overall, within the System, the movement of monies has not been significant. Approximately $820,000 was not distributed this first fiscal year based on actual versus budgeted enrollment (the FTE differential was relatively small); these funds are then moved into a reserve ($2.2 million in total for settle-up in fiscal year 2000-01 and other Board contingencies) and carried forward into 2001. A goal has been set to maintain this reserve at the $2.2 million level. To achieve this goal, certain elements have been established:
2000-01 Annual Operating Budget: Vice Chancellor Anderes advised the Fiscal Year 2000-01 annual operating budget is a $1.48 billion budget comprised of $379.3 million in state General Fund, $350.6 million in student tuition and fee income, $749.4 million in non-limited funds (gifts, grants, and contracts), and $2.4 million from lottery funds for athletic programs. This budget is a reflection of the second year allocations of the biennial appropriation, adjusted to include the following: April 2000 enrollment data as a basis for 2001 projections; 3.2% increase to cells and appropriate increases to targeted programs; enrollment reserve; one percent resident undergraduate enrollment adjustment; funding for internships; graduate enrollment funding caps (capping funding not FTE); an increase in the Systemwide budget for audit assessments levied by the state (a $900,000 increase); and transition funding. Chancellor Cox asked, in terms of Year 2, if funds were released to campuses after the winter term enrollment. Mr. Anslow Anslow advised that, with significant increases in enrollment projected for both years, the Board elected to support the undergraduate program fully and cap graduate enrollment funding. At the end of the first year, enrollment would be measured, compared cell by cell, and then the settling up process would begin. Year 2 adjustments involve changing the cell values to reflect inflation and projected enrollment (during April), allowing for a $2.2 million reserve, and $900,000 targeted specifically for undergraduate enrollment. This $900,000 provides for 200 enrollments at the undergraduate base. If the $900,000 is not used, a portion would then be released for the one percent holdback; and if the $2.2 million reserve isn't used, it would also be freed up to fund the one percent holdback or to increase the cell values at that time.
Staff recommends that the Board Committee recommend for approval by the full Board: (1) the proposed Annual Operating Budget and allocations for 2000-01; (2) continue the policies governing the new model (adopted in September 1999) as relating to all previous budget allocations of state General Fund and/or other resources indicating that only those items specifically identified as part of the 2000-01 Targeted Programs will be covered in Year-2 of implementation and added targeted program items may only be included by Board consideration and resolution; (3) delegate authority to the Chancellor to make adjustments to the OUS Annual Operating Budget for 2000-01 as required; and (4) approve the proposed 2000-01 travel reimbursement rates.
President Dow asked how and when funding would be released for the internship program and how these internships would be defined. Mr. Anslow advised that in the original design presented to the Legislature, internships would be funded at $1 million per year; however, since the model was not fully funded and due to other budgetary uncertainties, this program was held in abeyance. During Year 2, some internship funds will be available to the Vice Chancellor for Academic Affairs, who will be working with presidents to develop a proposal for allocation of these funds.
Director Williams asked how the two percent inflation number was determined. Anslow advised that during the development of the model, the two percent inflation was based on what the OUS could afford in each of the two years of the new biennium (assuming a 2+2% increase for salaries and 1+1% inflation for services and supplies, and then attempting to calculate what the cell values would need to increase by in order to fund the inflationary increases). Some campuses have elected higher pay increases, but if the campuses exceed the allocated cell value increase, they would have to fund the pay raise through other institutional income. Director Williams asked, knowing what we know now, would we have done differently? Anslow stated we would have budgeted a three percent inflationary increase; enrollment has been greater than anticipated (by 150 students). Williams asked if the System would apply the two percent across-the-board next time or be more selective. Anslow stated that, depending on the amount the Legislature appropriates, the Board should look at the cell values and make a decision relative to tuition (representing about 50% of the revenue supporting the programs) in addition to the state support cell values. In calculating a 3.0% to 3.2% increase for salaries in the next biennium, the System would need to push the cell value up in the second year.
Mr. Imeson asked if the travel rates are the same for other state agencies. Mr. Anslow stated that there are some minor differences in both in-state and out-of-state reimbursement rates (lower out-of-state and higher in-state rates as compared to DAS).
Committee action: Richmond/Williams moved/seconded to approve the 2001 travel rates and the 2000-01 Operating Budget; the motion was approved. The items will be presented to the full Board for consideration.
ACTION ITEM: 2001-2003 BIENNIAL OPERATING BUDGET REQUEST
William Anslow provided an overview of the development of the 2001-2003 Biennial Operating Budget Request, which involved a series of meetings to build the budget. As background, in the early 1980s, Oregon went through a recession, leading to possible closures of institutions. From 1982-1999, the Budget Allocation System (BAS) Model and Enrollment Corridor pooled tuition and state General Funds. This funding model had inherent characteristics: 1) a two year lag in funding changes due to enrollment changes (up or down); 2) wide enrollment corridors (±500 student FTE); 250-300 decision points that affect the budget (e.g., 100 student/faculty ratios, 50 faculty salary benchmarks; 25 instructional supply categories, etc.); utilized 1960s/70s data and analysis; and the model was never redesigned throughout the 1982-1999 time period. To compensate, in 1996 the Legislature initiated a "freeze" on enrollment to halt growing tuition increases, and replaced the loss in tuition revenue with state funds. OUS experienced a modest funding recovery and established "Centers of Excellence." With the tuition freeze, during the 1997-1999 biennium, OUS experienced overall stability, with gains in engineering and enrollment growth. In 1999 the new budget model was introduced with significant increases in state funding. This new budget model shaped allocations and allowed campuses to retain tuition. These allocations to campuses were based on student categories with special funds for law, veterinary medicine, pharmacy, graduate engineering and undergraduate engineering technology, specific funding for Statewide Public Services, targeted performance incentives, Chancellor's Office operations, and debt services. This new model brought many advantages: faster response to needs and demands; more students being educated; and campus budget choices. However, there were concerns: higher risk to campuses; inadequate new investment capital for small campuses; the need for a predictable funding mechanism; and campuses are required to make internal reallocations to maintain affected programs. Even with these changes, campuses had to make internal reallocations during the biennium (e.g., taking 0.5% to 1% of allocation from one category to another to fund shortages).
Director Richmond asked, in making these internal reallocations, how the campuses have been impacted. Ron Bolstad advised that at Southern, the undergraduate programs have been reorganized with concentration on writing and literature, believing that the undergraduate experience coming out of the freshman year is well grounded. Southern has not experienced a diminution of substance in the experience, but the funding has been moved to high demand areas where faculty have performed with extremely high faculty/student ratios. President Creighton advised that Eastern has experienced painful cuts in administrative departments, the Presidents Office in particular, and has placed that funding in recruitment and retention. John Moseley advised that the University of Oregon has had to freeze campus general operations (only where absolutely necessary to receive increases), redirect funding from the arts and sciences to support the growth of students in education. President Dow noted that OIT had to look at an overall budget deficiency of $400,000, both reallocating and downsizing some programs and operations after carefully analyzing the target programs and market potential; however, the majority of cuts were in administration, not filling additional or new openings in faculty positions. Changes were also made in the granting of leave without pay in the place of sabbaticals, and the withholding of productivity grants that are historically given for applied research. All these actions can have negative impacts on faculty morale. President Bernstine stated that Portland State has had to make choices and cuts in administration.
Director Williams asked to what extent campus adjustments reflect a natural campus evolution or were forced on the institution because of the new budget process? Chancellor Cox stated that, in most cases, this is a natural progression of change. However, with a possible revenue shortage in the next biennium, the Board will need to look at cells either from a policy standpoint and make a decision, or look at cells in terms of the state's needs and fund those differently (i.e., not funding across the board). Provost Moseley stated that, specific to the UO, allocations were made to business, computer science, and education, because of enrollment growth and state needs; however, the other two UO changes are the result of a "flaw" in the budget model itself. President Youngblood advised that WOU has reduced administrative staff in a number of areas, dropped the Japanese language minor, reduced international relations staff, reallocated to education and special education and high-cost programs. President Risser reallocation is larger than provided, cutting administration in order to preserve academic programs.
Vice Chancellor Anderes emphasized that the ultimate goal of the new budget model is flexibility at the campus level, providing institutions the opportunity to reallocate appropriately. Until the model is fully-funded, this flexibility is critical to the campuses.
Priority One--secure base level state funding (CSL) ($804.2 million). The Current Service Level is being proposed in its historical basis and includes adjustments for ongoing costs of salaries and 1+1% inflation rate.
Objectives of the CSL:
The quantifiable goals resulting from this appropriation will be: increased bachelor degrees; high-achieving high school graduates are enrolled; tuition rates are consistent with estimated costs; high performance levels of professional licensure exams; and high student and employer satisfaction.
Priority Two-- ($137.8 million in total) The objectives of this priority are:
Under the 2001-2003 Capital Construction Program Request, OUS is also requesting sufficient capital funds to reduce the deferred maintenance backlog by 50% over the next 10 years.
Priority Three--expand access for qualified Oregon undergraduates. $19.6 million is requested to expand access for Oregon undergraduates; sustain the current percentage of Oregon high school graduates; maintain current proportion of minority students (12.6% of total enrollment); attract higher ability freshmen (3.75 GPA)--the goal is to achieve 41% by 2006; and increase community college transfers.
Priority Four--contribute to state and community needs:
Under Priority Four (expansion of existing programs):
And under Priority Four (new investments):
Director Richmond remarked that with all of the focusing on technology, it is helpful to have comparators for agriculture. Her questions were: what is the impact in the area of education and education-related industry to the state? How many teachers are needed? What are the shortages? How does it compare in terms of the jobs and the need of teachers? Are there other factors (e.g., retirement, movement between states) that impact the state? Vice Chancellor Clark said that in the late 1980s there was strong legislative pressure that forced OUS to gear down the production of teachers under the presumption that not as many would be needed, but the independent sector increased their number of teacher education graduates. At this point, there are shortages in the teachers available. Director Richmond noted that the teacher needs are as high as for graduates in technical fields. Vice Chancellor Clark noted that teacher education is an important enterprise, with programs to meet the needs for master's education, for professional development, continuing licensure eligibility, using technology in classrooms, and more.
Chancellor Cox stated that there has been 130 years of evolution of commitment of OUS to the natural resources foundation of the state. However, we now confront a new, changed Oregon, with a revolving set of demands. At the heart of the contention over the next decade is balancing the effort to support the historic base of our economy to the support of the new technology-driven economy that has emerged.
Mr. Anslow noted that there are other budget items for discussion: Independent Oregon Veterinary Medicine Program and a budget reduction exercise. The Vet Med program was not included in this biennial budget request; the requirements of funding for this independent program was $7.9 million, adding even greater funding requirements to an already expensive program. After cost analysis, staff determined that OSU currently reallocates and cross-subsidizes programs already existing in order to supplement the existing Vet Med program. The proposed independent program would add an additional $40,000 to the cost of tuition, and would not immediately add enrollment or graduates. Staff recommends against implementation at the present time, but also recommends that the program be reassessed in the future.
Budget Reduction Exercise: for the past two biennia, at the request of DAS, staff has conducted budget reduction exercises. For the 2001-2003 biennium, a 10% reduction would mean approximately $80 million reduction based on the $804.2 million Current Service Level. This is roughly equivalent to the gains from the last legislative cycle. This budget request assumes a Systemwide approach to the reduction and assumes the Board would be involved in prioritizing the current and proposed programs if a budget reduction of this magnitude were to materialize.
At the conclusion of this portion of the budget proposal, Mr. Anslow stated that the staff recommendation to the Board proposes that the Board Budget and Finance Committee recommend for approval by the full Board the following actions on the Oregon University System 2001-2003 Biennial Operating Budget Request: approve the 2001-2003 Current Service Level request as presented to the Board; approve the 2001-2003 policy option packages as presented to the Board; and authorize the Chancellor to present the approved budget to the Governor's Office on or before September 1, 2000, in a form agreed upon with the Director of the Department of Administrative Services. Staff recommends that the Vice Chancellor for Finance and Administration be authorized to make any technical adjustments required to the request during the ensuing period prior to the Legislative session.
Committee action: Williams/Young moved/seconded the recommendations; the motion was approved.
Oregon College of Engineering and Computer Science
Chancellor Cox noted that it is a laudatory goal that we seek, as the state, to move engineering and computer science into top tier of the nation. However, the strategy, process, and steps to acquire that goal need to be examined for appropriateness for Oregon. Is the plan achievable financially, programmatically, and is it sustainable? In 1995, a fundamental Board decision was proposed to physically merge the programs at PSU and OSU under the leadership of PSU; the Board decided, instead, to move to a "soft" merger, creating a virtual college of engineering and computer science.
Vice Chancellor Bob Dryden provided a historical perspective and a look at the future. In 1996, the Board established the Oregon College of Engineering and Computer Science (OCECS), under the leadership of the Vice Chancellor fro Engineering and Technology. This position, in order to maintain a close relationship with industry, was advised by the Oregon Engineering and Technology Council. The Oregon Center for Advanced Technology Education (OCATE) and the Joint Schools of Engineering merged under the umbrella of OCECS. The Vice Chancellor would then contract with the Oregon Graduate Institute (OGI); work with the deans of engineering to retain their current structures and degree-granting authority; identify resource requirements for submission to the Governor for current budgeting requirements under development; and measure goals for graduate and undergraduate engineering to leverage private sector contributions.
The goal was to graduate better equipped Oregon students to be ultimately employed in Oregon versus having industry employ out-of-state engineers and having to transplant these engineers into Oregon. This involved equipping, at state level, a number of laboratories to minimize the transition from the academic to the industrial environment. During the first biennia (1997-1999), the Engineering and Technology Industry Council (ETIC) was established to provide a private-public partnership between OUS and OGI. Investments were focused on graduate education (four faculty positions, Master's of Software program, Graduate Internship program, Opt for Co-op, and course development) and an industry matching pledge of $6.7 million. During the second biennia (1999-2001), House Bill 5061 allocated $10 million ($5 million for roll-up and $5 million in new monies) to maintain graduate investment programs and to also focus on undergraduate engineering education.
A larger number of the "best and brightest" students are graduating from Oregon high schools; scholarships have been established and funded by industry which will attract these students to remain in Oregon. In order to remain responsive to the needs of industry in the state, new programs have been established at all of the institutions. The Spires of Excellence in Engineering combines nationally prominent and regionally relevant programs. However, there is a need to expand faculty to accommodate increased enrollment and to direct the laboratories that will be created. Up-to-date facilities are also needed provide an opportunity for faculty to expand their creative scholarship tasks. During the third biennia it is proposed that the graduate and undergraduate investments will continue, focusing on growth and collaboration. Undergraduate enrollment will increase by 85% by 2005 and graduate enrollment will increase by 40%. An expansion in "hands-on" laboratory experience (e.g., SMILE, MESA, and Saturday Academy) will require hiring 39 faculty, expanding laboratories, enhancing distance education capabilities; expanding programs offered in engineering and computer science majors. An industry match of $17 million is pledged to date.
Director Richmond asked if Vice Chancellor Dryden is confident that the post-tenure reviews are adequate to ensure that current faculty are functioning properly before new faculty are added. She requested Dr. Dryden to study the issue and report back to the Board. Dr. Dryden advised that OSU and UO have lost key faculty, but if the investment can be increased appropriately to support the faculty, OUS will experience smaller turnover.
Dr. Dryden concluded his report to the Board by providing the 2001 Edition of U.S. News & World Report
listing of the top engineering schools graduate rankings.
President Dow added that the "Opt for Co-Op" program has partnered OIT with high schools and community colleges in both Klamath Falls and Portland. This program has developed cooperative educational experiences with industries in the Portland area and extending throughout the state, and focuses on providing quality programs such as the OGI Saturday Academy.
Director Williams asked about the Chancellor's prospective recommendation for the engineering program. Chancellor Cox advised that there are three Spires of Excellence proposals put forward: Metro Engineering of Excellence and Computer Science; Oregon Photonics Initiative; and Materials Science. He added that more analysis is needed before a concrete recommendation can be given. Although there is great interest by the Board, the following issues need to be studied: is this a realistic target for Oregon at this time? Will it receive legislative support? Is it achievable and sustainable?
Chancellor Cox noted that the consultant commented, with Governor present, that there is a tension that exists in Oregon: "You want the California economy but Oregon is conflicted and has doubts about what comes with it." Oregonians have historically supported natural resources and high-tech industry. However, K-12 is dependent on the computer science and math teachers in the high schools, which places importance on the quality of the teacher education programs in our state. K-12 teachers will be retiring in large numbers within the next ten years and Oregon must have qualified teachers to replace these departing teachers. Are we prepared to make the same bonuses at signing for math and science as we do for athletes? Director Herb Aschkenasy asked, in reference to the consultant's comment, if the Board should be willing to increase support for OUS' engineering programs or should the state of Oregon bring in qualified engineers from out-of-state and invest the funding in OUS' facilities instead. Director Phyllis Wustenberg asked, with the increased enrollment, how do OUS institutions balance these student populations with the need to provide a quality education? She also asked how this will affect the other educational opportunities in the System?
President Creighton remarked that the California State University System has increased graduates in teacher education from 12,000 to 15,000, but the actual need was for 45,000 teacher education graduates. The first priority for the CSU system is to prepare teachers to meet the state's needs. OUS is in a national competition for the best and the brightest students, and must identify its number one priority. The question should be "where do we want to be in the next five to 10 years and how do we get there?" Director Aschkenasy agreed, but asked if the Board is looking only for the good of the higher education system or more broadly for the good of Oregon?
Director Williams stated that the facts should be compiled and should address in summary: 1) policy concerns about the quality of programs offered; 2) how closely the higher education system follows and anticipates the state economy (parallel or lag); 3) how is the funding appropriated (i.e., appropriating funds to OSU and ETIC, both with industry matching support), and how results are measured; and 4) use an economic model and invest in what "gives the best return." Director Williams added that the charts depicting degrees awarded in 1998-99, 1994-95, and 1987-88, display decreases in degrees granted in math, computer science, teacher education, etc. Does this indicate that the economic model we are using is pointing us in the wrong direction? Chancellor Cox replied that fluctuating funding support and tuition increases have affected programs provided by the campuses; additionally, in the past decade the legislature directed a reduction in the number of graduates in teacher education.
Staff recommends that a placeholder of $20 to $40 million beyond the ETIC number be placed in the 2001-2003 Agency Biennial Request for engineering (Tier 1 at OSU, metro collaboration model, etc.) which will allow OUS to study this issue further. Chancellor Cox added that staff will attempt to provide Board members with an initial design within the next two weeks and the present its final recommendation to the Board during the October meeting in Ashland. President Imeson added that the Governor is supporting this placeholder recommendation and is well aware of the magnitude of the proposal.
Director Williams requested that interim reports on the progress of the study be provided prior to the October 2000 meeting. Young/Richmond moved/seconded the recommendation to study the issue and move forward in the recommended manner with a due date for the October 2000 Board meeting; the motion was approved by the full committee.
ACTION ITEM: 2001-2003 CAPITAL CONSTRUCTION PROGRAM REQUEST
Vice Chancellor Anderes introduced Lynda Swanson, Director, Capital Construction, Planning, and Budget, who provided an overview of the OUS 2001-2007 Capital Construction Program Request. Ms. Swanson advised that the Capital Construction differs from the Operating Budget in a few respects. The set of proposals contained in the six-year program request represent a strategic, long-term plan for the Oregon public higher education system that, if funded, would carry the campuses forward for the next decade and longer. The new capital program was developed by conducting several comprehensive studies to determine priority needs, examining the ability of current facilities to meet those needs, and setting priorities for which needs would most advance the goals of the Board, after taking into account the changing educational and budgetary environment in the state of Oregon. The size and scope of the six-year capital program is the result of a number of factors converging at the beginning of this new century. They include the large scale of the public higher education enterprise in Oregon, its changing role in the economy and the society in general, and the aging of facilities on all campuses.
In an effort to be consistent with the 2001-2003 Biennial Operating Budget request, this two-year capital request contains priorities that closely follow priorities set in the Operating Budget:
Education and General (E&G) specific projects, funded through state General Fund and Article XI-G bonds, make up 80% of the request. Article XI-F(1) bonds principally support auxiliaries and student building fee funded projects.
The six-year plan was also provided for the Board's review. The first biennial request (2001-2003) totals $762.6 million in requested funds; however, the entire six-year plan will total almost $2 billion. In terms of scale, the seven campuses plus growing university centers in Bend, Coos Bay, and Greater Portland, comprise 17.7 million gross square feet of space or more than 40% of all state-owned facilities in Oregon. The current replacement value of the state's investment in public university facilities is in excess of $3 billion, and the Oregon University System is projecting a 15% increase in enrollment. Additional objectives as a System are to grow in those areas where there is a perceived need by the community and the state, or where there are opportunities for efficiency by consolidating facilities or building new facilities. The program request is balanced, strategic, cost effective, and supports the academic program. The 10-year campus master plans were then collapsed into a six-year program.
Ms. Swanson noted that pages 19 and 20 of the capital construction budget display the Article XI-F(1) and Article XI-G bonds, with corresponding debt service projections. Exhibit 12 displays the total biennial E&G historical budget from all sources, beginning in 1991 through 2001, and that the debt service has been a fraction of that funding requirement. As submitted, if OUS received the $804 million CSL request and the entire Article XI-G bonding appropriation for capital projects, the percent of that budget that would be appropriated to debt service would be approximately 4.4% (still below the prudent 6% level).
Staff recommends that the Board Committee on Budget and Finance approve the 2001-2003 Capital Budget for all funds sources, and permit the Vice Chancellor for Finance and Administration to submit to the Department of Administrative Services the full six-year program. Staff also recommends that the Vice Chancellor for Finance and Administration be authorized to make any technical adjustments required to the request during the ensuing period prior to the Legislative session.
Director Williams acknowledged that while there are guidelines for debt service as a percent of the whole budget, it would be more fiscally wise to increase debt service in order to reduce the state General Fund requirement. Ms. Swanson replied that the structure of the Article XI-G bond program, a constitutional requirement, which is the principle funding mechanism for E&G buildings, requires a dollar-for-dollar match for every dollar sold of bonds. The magnitude of the bonds included in the budget are substantial and are 30-year term. The General Fund request (exhibit 1) is $188 million and is approximately eight times greater than typically requested. Of the Article XI-G bonds, the General Fund would match $188 million of the $258 G-Bonds request, the balance of the matching revenues would be from gifts. Director Williams pointed out that the net present value of the dollar is much better today than it will be in 30 years. He asked why the state requires that we spend today's dollars of the General Fund for an asset that has a 30-year life expectancy?
Mr. Anslow added that there was an effort two years ago to change this constitutional requirement; and there is an effort for a general ballot measure to allow alternative financing for capital projects. Grattan Kerans advised that below the constitutional requirement, the legislature has adopted a bond budget law that limits the amount of bonds that can be sold within a biennium.
Director Aschkenasy stating that, concerning the economic question, OUS is proposing a $2 billion budget to maintain an asset that is worth $3 billion. Ms. Swanson replied that the Current Replacement Value (CRV) of OUS facilities is $3 billion; OUS is trying to catch up after almost 20 years of no funding for deferred maintenance and, at the same time, trying to modernize outdated academic facilities. These areas of modernization have become the most expensive elements that OUS has to face (upwards of $400 per square foot).
Director Aschkenasy noted that this opens up the question of tearing down and rebuilding instead of upgrading. Swanson countered that 10% of space are historic buildings that would never be removed; most of problem is that OUS built 40% to 50% of the space between 1960 and 1980 and these facilities are now simultaneously failing. Campuses have been asked to look at the of razing and replacing certain buildings. Both OSU and PSU are considering this alternative for two of their buildings, respectively. Cost effective decisions need to be made.
In response to a question from Director Williams, Ms. Swanson explained that the bond matching requirement applies to each capital project financing (not the aggregate bond issuance). From an allocation point-of-view, the only category where there is flexibility to allocate among projects is the systemwide omnibus line-item request (i.e., deferred maintenance, code, capital repair, and modernization). The state has permitted these funds to be received as a block of funds and be reallocated to campuses on the basis of a number of factors. However, PSU expenditure limitation and bonds cannot be used at UO without requesting differentiating language in the capital construction bill. These funding requirements are applicable for all state agencies. Director Williams recommended, at some point, discussing a recommendation be presented to the legislature requesting a less conservative matching requirement of state General Fund to Article XI-G bonds.
At the conclusion of the discussion, Director Richmond presented a motion recommending the approval of the 2001-2003 all funds capital request as outlined in the 2001-2007 Capital Construction Program Request. Director Williams seconded the motion and the motion was carried. Subsequent to the motion's approval, Director Williams asked how this budget would affect the engineering proposal. Ms. Swanson advised that the $111 million for facilities includes the proposals for engineering and there are three different elements in the request that pertain to engineering. President Imeson noted that the budget pertaining to the engineering programs needs to be held in abeyance until the proposed engineering study is completed. Therefore, Director Richmond withdrew the original motion and made a motion that the 2001-2003 Capital Construction Program Budget be accepted, excluding the capital appropriations relating to the earlier priority four budget discussions pertaining to Engineering Spires that will be presented to the Board in October 2000. Mr. Williams seconded the motion and it was approved.
The meeting was adjourned at 11:15 a.m.
Prepared by Marcia Stuart