State Board Of Higher Education
Committee Of The Whole
Ballroom A/B, CH2M Hill Alumni Center
Oregon State University
February 16, 2001
Call to Order
Chair VanLuvanee called the meeting to order at 9:53 a.m.
Board Members Present: Herb Aschkenasy, Shawn Hempel, Tom Imeson, Leslie Lehmann, Jim Lussier, Geri Richmond, Bill Williams, Jim Willis, Phyllis Wustenberg, Tim Young, and Don VanLuvanee
(A complete attendance record is on file in the Board’s office.)
Central Oregon Branch Campus: Review of Proposals and Recommendations
Chair VanLuvanee asked Chancellor Cox and Vice Chancellor Clark to present the staff recommendations on the management of a branch campus in Central Oregon. The Chancellor asked Patti Moss, acting chair of the Central Oregon Regional Advisory Board (CORAB) to make a statement on behalf of the group. Ms. Moss explained that CORAB was appointed to represent the Central Oregon region and to articulate the direction for expanding higher education opportunities in the best long-term interest of the people in the area. Highlighting the intense work of CORAB over the past two years of its existence, Ms. Moss said a common vision of direction by the community was first and foremost in its effort. Culminated by the request for proposal (RFP) process, she said that CORAB formally acknowledged that either proposal submitted by OSU and UO could meet the desired outcomes, but that the group would stand behind the Chancellor’s recommendation that OSU be awarded management of the branch campus.
Concluding her remarks, Ms. Moss expressed her gratitude to the Board, Chancellor, and his staff for their commitment in bringing higher education to Central Oregon. She urged Board approval of the Chancellor’s recommendation. Mr. Imeson asked to confirm that CORAB did not issue a formal recommendation on the RFP prior to the Chancellor’s recommendation. Further, he asked if the Chancellor had recommended UO, would CORAB have unanimously supported that decision. Ms. Moss responded that would have been the case.
Vice Chancellor Clark highlighted the staff’s side-by-side analysis of the RFPs (copies of the slides used in the presentation are on file in the Board’s office), including the criteria used. Noting that the regional branch campus would be the first in Oregon, Dr. Clark said, "We had two distinctly different and outstanding proposals that provide a real choice. However, this is a new endeavor for all of us and we need to be flexible and adaptive. This is actually not a ‘civil war,’ but rather it’s a huge step that we are going to be taking, and a collective effort in order to better serve the interest of the central part of our region, which has been underserved….Where we came out was to advise that the selection ought to be as meritorious as possible; thinking not so much about our own institutional sense of justice, but rather our best attempt to respond to what is in the best interest of the Central Oregon community."
Moving to the staff’s financial analysis of UO’s and OSU’s plans, Associate Vice Chancellor Marilyn Lanier reviewed several aspects of each, including the fiscal viability of both proposals, which were deemed to have very different approaches. Enrollment estimates, academic program mix, use of faculty and student/faculty ratios, administrative infrastructure, and partnerships were all examined as part of the overall budgetary assessment. Ms. Lanier pointed out that, when the RFP was issued, detailed specifications regarding space needs and construction were not included, thereby allowing some latitude in approach. "What emerged," she said, "were two very different constructs." However, Ms. Lanier added that both proposals were roughly equal in terms of state cost.
Ms. Lanier explained the difference in cost per student pointing out that OSU’s estimates exceeded UO’s by more than $3,000. However, UO used higher enrollment estimates of 855 FTE students compared to 549 FTE by OSU. She said that OSU’s financial plan, while resulting in a higher cost per student, appears achievable, due in part to OSU’s successes in recruitment the past several years. UO’s overall cost effectiveness, she said, depends on the ability to achieve the higher enrollment, a key driver in many ratios used in the analysis. Ms. Lanier suggested that both financial plans would likely require a "re-scaling" and understanding of how the hydraulics of enrollment would work, an exercise considered quite manageable.
Concluding her presentation, Dr. Clark summarized the staff recommendation. The OSU proposal, she said, was seen as the "bolder, more imaginative, more expansive" of the two, and would serve a broader cross section of the region. Continuing, Dr. Clark said staff regarded the academic plan as providing the curriculum that would be more attractive to students and more likely to meet the economic needs of the community.
Ms. Wustenberg, who served on CORAB, heartily endorsed the Chancellor’s recommendation, adding that to question it would be to "cast doubt upon the processes that brought us to this point. I have the greatest respect for the abilities and judgment of the many people involved in this project. We asked them to perform a large task and they have, particularly the Chancellor, his associates, and the members of CORAB." Ms. Wustenberg observed that the endeavor would require a great deal of commitment to ensure its success as an integral component of the Oregon University System.
Saying that he had many concerns about the process, Dr. Aschkenasy outlined both the positive and negative outcomes. He said that both OSU and UO responded very thoughtfully to the RFP. The work of staff in analyzing the two proposals was also noteworthy. However, Dr. Aschkenasy’s observations regarding the potential long-term fracture of OUS, some of the comments made by both OSU and UO supporters, and the inability to build a consensus on the matter, forced him to reject the proposal altogether. "I think the Board has the opportunity to send the message that this competition is unacceptable behavior…I am sure that all Board members, including me, have agonized considerably about all of this, and I have decided that the bad outweighs the good."
Mr. Young said that he did not have enough time to read the volume of documentation provided in making what was a "decision that is in perpetuity," and asked that an ad hoc committee be formed to further investigate the proposals and possible options.
Attempting to look at both proposals from a student’s perspective, Mr. Imeson asked for more clarity on what each might look like five years from now. In addition, he asked for more explanation of the burden and liability, given the dollar figures associated with different-sized programs. Chancellor Cox explained that staff consulted with neighboring states that already have branch campuses. If one equalizes the enrollment levels for OSU and UO, they are very comparable to both Washington’s and Arizona’s numbers. Responding to Mr. Imeson’s second question, the Chancellor said that legislative leadership has indicated that there will be a level of subsidy over the next several years, but eventually the branch would become independent through its integration as another component of the RAM (resource allocation model).
Mr. Imeson asked, if the two proposals were compared, what would be the difference from a General Fund perspective per student. Saying that it would depend, in large part, on which programs grew, Chancellor Cox noted that some programs are more expensive than others. "Our sense is, if you equalize the enrollment numbers, costs are very similar," he explained. Ms. Lanier, while not knowing exactly what the difference would be, said that UO would cost slightly less, based on its proposal to use more COCC faculty and work more closely with the current administrative structure at the community college.
Mr. Williams noted his desire to make a final decision on the RFP. "It seems to me that we’ve had a long gestation period and it’s about time to get that over with. I can’t think of anything else that we can do. I think that each institution put in a terrific amount of work and each has a wonderful proposal. It’s almost a flip of the coin in many regards and that’s what makes it so difficult." Mr. Williams followed his comments with a question for both Presidents Frohnmayer and Risser about contingency plans, should there be a dramatic change to the projected outcomes.
President Frohnmayer responded that UO premised its entire strategy on a fast start, not only because of the expectations of Central Oregon students, but because of the vulnerability of the state support. Explaining UO’s current presence in the region, President Frohnmayer noted that the institution is pledging $1 million to the startup if awarded the bid. He further outlined agreements and "crucial" integrations with COCC, which he said were the "mother ship" of UO’s proposal. "To ignore them, the Board ignores the basis of this proposal, including the students of Central Oregon." Naming the courses already published in a spring catalog, the president underscored UO’s ability to be operational by fall 2001. Further, he stated that the overall cost would be 25 percent less per student.
President Risser announced that the OSU Foundation committed $3.5 million to an endowment, for what would amount to 65 scholarships that could be awarded to students in fall 2001. Noting that several major newspapers endorsed OSU’s branch campus proposal, President Risser said that people are looking for a model that is looking to the future and anticipating what higher education will be.
Saying that the decision had been a struggle, Dr. Richmond wanted to examine the proposals with complete objectivity, despite her faculty status at UO. She said that over the past several months she visited the campuses and consulted with students, faculty, and staff at UO, OSU, and COCC in order to get as broad a viewpoint as possible. Dr. Richmond said that she also gathered additional data, which led her to the conclusion that UO deserved the branch campus award. "My decision," she explained, "is based on the premise that students in Central Oregon are no different from students I have in my classroom. I can’t tell the difference between a Central Oregon student and a Portland student in terms of their aspirations, their needs, or their desire to have a tuition that is affordable. I don’t think we should design a curriculum for a region."
Dr. Richmond further articulated her points by presenting data on the proposed curriculum. UO’s curriculum, she said, was based on fundamental disciplines, while OSU’s focused on large specialty programs, which she deemed important, but only after a student reached a certain depth of a particular discipline. She expressed concern that, if OSU were awarded the management of the branch campus, Central Oregon would be used as a test bed for new curricula. Concluding her remarks, Dr. Richmond viewed the branch campus as both an opportunity and a burden for the System, given the resource challenges it faces.
Mr. Lussier remarked on his assessment of the RFP process, and thanked the Chancellor for his leadership and his staff for their work on the analysis of the proposals submitted by OSU and UO. He also thanked CORAB, of which he was a member. Prefacing that if he thought his forthcoming comments in any way jeopardized the establishment of a branch campus that he would not make them, Mr. Lussier proceeded to outline his reasoning for standing behind UO’s proposal. "I must advocate for what I think is right and in the best interest of the continued development of OUS and one that maximizes the value of a branch campus as well as to select a lead provider," he said. While agreeing with many of the Chancellor’s conclusions, Mr. Lussier admitted that he did not concur with some curriculum choices set forth by OSU, feeling that UO’s plan was better aligned with the long-term needs of Central Oregon.
Outlining his specific reasons for supporting UO’s proposal, Mr. Lussier said that, beyond the curriculum issues he and Dr. Richmond described, UO’s current relationship with COCC should be considered as advantageous. He added that OSU’s focus was better suited toward the Board-approved funding for reaching Tier I engineering status. He did not rule out collaboration in Central Oregon as an option, however. "Everybody is collaborating to utilize scarce resources," he observed. While Mr. Lussier agreed that there did need to be a "lead provider" identified, he believed that students would ultimately be better served by some combination of presence. He urged the Board to name a branch provider and ask the Chancellor, and Presidents Frohnmayer and Risser, in collaboration with the Board’s System Strategic Planning Committee, to work out a blueprint for a successful collaborative endeavor. "I do not believe that we have to continue a win-lose game. We have an opportunity to set a new course for OUS that focuses on the needs of students as opposed to focusing on institutional development and the accompanying silo mentality."
The worst outcome, pointed out Ms. Lehmann, would be if the Board did not reach a decision at the meeting. She reminded members that, following an analysis of several possible options for increasing OUS presence in Central Oregon, a branch campus model was declared to be the best option. The reason for the struggle, she added, was because of the high quality of both proposals, and she expressed concern over the message a non-decision would give to state lawmakers.
Referring back to prior questions of his, Mr. Imeson asked for further clarification on the costs and overall sustainability of the proposal, particularly with regard to future General Fund obligations. In his analysis, Mr. Imeson saw a discrepancy of 34 percent (UO’s being the lower cost) in the estimates between the two institutions.
Mr. VanLuvanee, concerned about the level of detail being discussed, asked for comments from the Chancellor and the two presidents. Chancellor Cox said that the UO’s approach with COCC faculty, coupled with tuition management, brought UO’s proposal in at a lower overall cost. However, he said that it was staff’s view that if one equalized the enrollment numbers to the higher number of FTE estimated in UO’s proposal, OSU’s costs would be similar. Student enrollment estimates, added Ms. Lanier, are considered the influencing driver of these figures. Loren Stubbert, OUS budget director, further explained that faculty composition, and anticipated absorption of administrative support services versus more independence, were all factors in how staff arrived at such variances. But, if one scaled all factors to the same number of students, the difference in cost to a taxpayer would be between five and six percent, explained Mr. Stubbert.
The reasons for the difference, said President Frohnmayer, was that OSU’s faculty, programmatic, and administrative costs were all higher. He asked Provost Moseley to briefly describe the reasoning behind UO’s lower cost per student, per administrative staff, and overall lower cost of state funds. Provost Moseley, using materials already presented, said that he disagreed with the 5-6 percent difference, pointing out that the major differences were in average faculty salaries and relative cost between instruction and administration, resulting in lower overall costs.
Observing that OSU and UO have different assumptions in their grant plans, Mr. Williams asked, if that aspect was factored out, how UO would fare in its operating expenses. Provost Moseley said that the net effect would still be lower cost, noting that they were not required dollars, but important nonetheless. After additional conversation about the details of the gifts and grants portion of the proposal, Provost Moseley indicated that, via reduced expenditures, a reduction of students may occur, due to a reduction of available scholarships (enhancements), but that the actual expenditure per student would not go up.
President Risser, describing his assessment of the reasons behind the 5-6 percent discrepancy, said that the OSU proposal would provide greater autonomy for a campus in Central Oregon, a more expansive mix of course offerings, and more faculty.
Mr. Imeson asked how the course costs compare to other OUS institutions. Vice Chancellor Clark responded that they are higher in all respects. Ms. Lanier added that, in a comparison of other branch campuses nationwide, costs were generally higher.
Agreeing with Mr. Lussier’s observations that the decision should not be a win-lose issue, Mr. Young said that he did not feel it was imperative to make the decision immediately, once again pointing to the volume of material presented, and his perception of a lack of time to absorb it all. However, if a vote were taken, he would support the UO proposal. OSU’s reliance on distance education in its proposal was another issue over which he expressed concern. "Students want to talk to a professor," he said, indicating that he had received phone calls and e-mails from students on this subject.
Stating his concern over the "behind the scenes" activities leading up to the meeting, Mr. Hempel said those types of discussions were not beneficial to the Central Oregon community. "Our System can do better," he observed. Continuing, Mr. Hempel said he entrusted much of the analysis to staff, and felt confident in their recommendations.
"I can’t imagine that we could have set this up any worse than we did," said Mr. Willis. "When I first looked over the materials, it was clear to me that we have two fine institutions, and a big need in an area that is currently underserved. We must decide on this today." However, Mr. Willis asked that, within the final decision, a way in which to bring resources and capacity together might be realized.
Ms. Wustenberg moved that the Committee approve the Chancellor’s recommendations, but in addition, she asked to include Mr. Lussier’s and Mr. Willis’ comments regarding additional collaboration. Ms. Lehmann seconded the motion. Board Secretary Vines translated her motion to include, "further require ask that the Chancellor and presidents work out a blueprint for substantial collaborative efforts in Central Oregon." Ms. Wustenberg agreed to the wording.
Wanting to ensure that the language was explicit enough to satisfy both Mr. Lussier’s and Mr. Willis’ comments, Dr. Richmond asked for further clarification of the motion. Dr. Vines read again, "We forward to the Board the Chancellor’s recommendations to award the branch campus management to OSU and that we instruct the Chancellor and the two presidents to work out a blueprint for successful collaborative efforts in Central Oregon."
Mr. Lussier stated his immediate concern was about getting a program off and running. Secondly, he wanted to get away from the win-lose mentality that has emerged from the process and use both programs’ strengths. "I want to see this work in a substantially collaborative way," he said. Mr. VanLuvanee indicated that a message could not be crafted ensuring collaborative behavior, which is incentivized in the new model of autonomy granted the campuses.
The Chancellor remarked that CORAB would work to ensure appropriate resources were allocated to the project, but Mr. VanLuvanee insisted the responsibility was in the hands of the Board. That being said, Mr. Willis offered to have the System Strategic Planning Committee oversee the details of the collaborative process, and then report back to the Board. Dr. Richmond asked for a verbal commitment from each president about their willingness to collaborate.
Mr. Williams said he was uncomfortable with the collaboration instruction, and said that he could not support the motion as it stood. He felt more clarity was needed in order for each president to be successful. Unsure if that directive should be included in the motion, Mr. Williams viewed the issue as more of a management behavior that the Board would be instilling into the culture of OUS.
Mr. VanLuvanee, noting that the discussion was leading to a non-vote, said he felt confident that the presidents, professional as they were, would oblige to a Board directive to work together on bringing the branch campus to fruition.
President Risser pointed out that the OSU proposal stated very clearly that UO would continue to teach its current programs. "To me," he said, "that was a huge step toward cooperation from the outset. Our leading a branch does not preclude UO from being there."
President Frohnmayer said UO was prepared to support any decision of the Board in order to enhance educational opportunities in Central Oregon. He indicated that he was reassured by President Risser’s comments regarding collaboration and UO’s ongoing stake in the region, but asked that the motion clearly state its wishes because of the people in Central Oregon who are waiting to earn a UO degree.
Dr. Vines, prior to re-reading the amended motion, suggested that perhaps a vote could be taken on the initial recommendations made by the Chancellor, with the motion and second on the floor, and then take another vote on the language regarding collaborative actions desired by the Board. Mr. Lussier disagreed, saying that the message to forge positive relationships must be included in one motion. "I cannot support a motion that ‘hopes’ that might occur," he said. Mr. Willis indicated that he really didn’t care about the mechanics of the motion, but asked that a final decision be made. "The state deserves and the people of Central Oregon deserve everything we have," said Mr. Willis. "I don’t see that as a really complicated process."
Reminding members of the original motion on the floor, Dr. Vines asked to return to it for a vote. Ms. Wustenberg said she was amenable to first voting on the first portion of the motion, but Ms. Lehmann hesitated to do so. Mr. VanLuvanee, once again voicing his confidence that all involved will follow through with the directives of the Committee and Board, indicated that he was somewhat concerned about including commands, such as in the second portion of the original motion on the table.
Ms. Wustenberg then rescinded her original motion and moved that the Committee forward the Chancellor’s recommendation to the Board, awarding the branch campus management to OSU. Dr. Richmond pointed out that the motion did not have the critical wording in it that would ensure UO students in Central Oregon working toward their degrees could still earn them. OSU’s proposal, reiterated President Risser, states that UO will continue to award degrees in programs already offered via the University Center.
Ms. Lehmann asked to then include the words, "collaborative programs as proposed" in the second part of the motion earlier discussed.
Believing the language to be redundant, and further expressing his concern over the divisiveness of the issue, Mr. Williams said he hoped that once a decision was made, everyone should move on with the Board’s overall mandate, which is to provide higher education to the citizens of Oregon. Agreeing with Mr. Williams, Mr. VanLuvanee observed that collaborative activities between the two institutional leaders should happen naturally, but felt the motion "nudged" it somewhat.
President Creighton described partnership models in which EOU is involved. He noted that expectations are clear about who awards a degree—the institution providing the service. "The concept I’m talking about is service and not ownership," he said. "There is a confederation among institutions, there is a lead institution, which is what the Board suggested should occur, but there would be a genuine confederation of degrees providing services to the citizens of Central Oregon," President Creighton observed.
Dr. Vines re-read the amended motion made by Ms. Wustenberg: "To forward to the Board approval of the Chancellor’s recommendation to award the branch campus management to OSU as outlined in their RFP proposal." Ms. Lehmann seconded Ms. Wustenberg’s motion.
Still hoping to include wording regarding collaboration in the motion, Mr. Lussier said he would reluctantly support the motion, but wanted more of a clarifying statement in the motion itself. Dr. Richmond and Mr. Young agreed with his assessment. Rather than have the Board mandate such an action, Mr. Williams suggested that the two presidents present a proposal at a future meeting about how they intend to collaborate in Central Oregon. Dr. Vines reminded members that Mr. Willis, as chair of the System Strategic Planning Committee, offered that the Committee work with the presidents on the proposal.
Looking for ways to make the motion itself as clear as possible, Mr. VanLuvanee asked for suggestions from the Board Secretary. Dr. Vines said that a statement could be made for the record regarding the collaboration following the approval of the motion itself. Vice Chancellor Clark suggested that it might be included in the implementation plan.
Mr. Lussier reiterated his desire to include a statement in the motion mandating that the Chancellor and the two presidents forge a statement of collaboration in ways that maximize the value of higher education services in Central Oregon, which would become part of the implementation plan. Ms. Wustenberg agreed that she would be comfortable with the additional language.
Revising the motion, Dr. Vines read it as follows:
"To accept the Chancellor’s recommendation to award the branch campus management to OSU as outlined in their proposal, and mandate the Chancellor and the two presidents to forge a statement of collaboration in ways that maximize the value of higher education services in Central Oregon as part of the implementation plan."
Ms. Lehmann seconded the revised motion as accepted by Ms. Wustenberg.
Chancellor Cox said that the implementation plan should be ready for presentation by the April 20, 2001, Board meeting.
Asking to clarify if the OSU proposal included a degree in general humanities, President Frohnmayer noted that one has been in the works by UO for two years. President Risser responded that it was an approved degree, but to his knowledge it had not been approved at the Central Oregon location. Vice Chancellor Clark explained that, in summer 2000, an agreement was made not to initiate new programs beyond UO’s general social science program until the branch campus management issue was settled. So, while there has been preparation on the part of UO, Dr. Clark indicated that there had not been a commitment to offer that program.
After a final reading by Dr. Vines of the aforementioned motion, the following indicated their favor of it in a roll call vote: Directors Aschkenasy, Hempel, Imeson, Lehmann, Lussier, Richmond, Williams, Willis, Wustenberg, and VanLuvanee. Those voting no: Director Young.
Impact of the Governor's Proposed Budget on OUS: Connecting Board Priorities and Policies with Budget Decisions
Vice Chancellor Anderes explained the major points of his presentation (copies are on file in the Board’s office). These included responses to questions raised by Board members at the January 17 Budget and Finance Committee meeting, an identification of programs that would benefit from additional funds (creating an addback list), as well as a review of possible courses of action regarding budget priorities and funding.
Following Dr. Anderes’ report, Mr. Imeson initiated a discussion about cell averages and costs based within single disciplines. If overall cell averages were increased, said Dr. Anderes, the cost of 12 other disciplines within a cell are also raised. Creating a scenario for which funding might be diverted within a cell, Mr. Imeson said when the cells are underfunded issues become more complicated. Making up costs through tuition is the kind of policy discussion that prompts a range of questions that will need to be refined and reviewed as the new budget model moves forward.
Dr. Anderes said that the validity of the model is its reality-based nature. Putting money outside of the model, including that for targeted programs and specialty programs, is also valid. What needs to occur, he explained, is the ability to describe the benchmarks of OUS expenditures to future lawmakers and how those are factored in with peers. But, he continued, as time goes on, the connection between the cells to the peers may no longer be there. Concluding his remarks, he cautioned against significantly altering the cells for state and other priorities as it would "diminish the value of the model."
A basic policy question for the Board and the state when using taxpayer dollars, said Mr. Imeson, would be how to prioritize the funding of programs at specific levels, and if the Board should actually do that. Mr. Williams asked for further clarification on the model, cells, and the actual transfer of funds. Explaining that it varied by institution, Dr. Anderes said that institutions could identify accurate amounts of General Fund and tuition dollars. How those dollars are pooled and allocated is also different between institutions, he said.
Moving to possible courses of action, Chancellor Cox explained that legislators have expressed their commitment to restoration of some of the proposed higher education budget. Therefore, he urged the Board reaffirm its priorities at this point. Mr. VanLuvanee, agreeing with the Chancellor, said that the number one funding priority should remain full funding of the current service level (funding the model). "If we begin to compromise in the middle of the process, we will have compromised ourselves out of a solution," he pointed out. OUS Director of Government Relations Grattan Kerans further detailed some of the scenarios, but agreed that it remained a fluid situation and recommended nothing more than a reaffirmation of the Board’s original goals.
Mr. Imeson remarked that, given the current level of funding being suggested for OUS, it might be difficult to undertake some of the initiatives the Board proposed. Ms. Lehmann stressed the importance of the legislature understanding that if the model was not adequately funded, some of the priorities would, in fact, be impossible.
Approval of Minutes
Mr. Lussier moved and Mr. Willis seconded the motion to approve the December 15, 2000, Committee of the Whole minutes as submitted. The minutes were unanimously approved.
The Committee meeting adjourned at 1:17 p.m.