OREGON STATE BOARD OF HIGHER EDUCATION
MINUTES OF REGULAR MEETING
ROOMS 327/328/329, SMITH MEMORIAL CENTER
PORTLAND STATE UNIVERSITY

July 19, 1996

ROLL CALL

The meeting of the State Board of Higher Education was called to order at 9 a.m. by President Herb Aschkenasy.

On roll call, the following answered present:
Ms. Diane Christopher
Mr. Tom Imeson
Ms. Gail McAllister
Mr. Mark Rhinard
Mr. Les Swanson
Ms. April Waddy
Ms. Phyllis Wustenberg
Dr. Herb Aschkenasy

Ms. Puentes, Dr. Whittaker, and Mr. Willis were absent due to business conflicts.

MINUTES APPROVED

The Board dispensed with the reading of the minutes of the June 21, 1996, meeting of the Board. Ms. Christopher moved to approve the minutes, and Mr. Rhinard seconded the motion. The following voted in favor: Directors Imeson, Christopher, McAllister, Rhinard, Swanson, Waddy, Wustenberg, and Aschkenasy. Those voting no: none.

PRESIDENT'S REPORT

Board Secretary

President Aschkenasy pointed out that his first official action was to position Dr. Thompson, secretary of the Board, to his immediate left at the head table.

Dr. Aschkenasy thanked the Board for electing him as president. In addition, he acknowledged and thanked Board members and staff for all the support he received during his recent illness.

Recognition of Board Members, Vice Chancellor; Board Directions

President Aschkenasy recognized the individual and collective contributions of immediate-past President Swanson, former Board members Bailey, Miller, and Richardson, and Vice Chancellor Ihrig. He noted that, with so many new faces, the Board needs to develop cohesion and a sense of community to effectively lead OSSHE in this era of academic and industrial change, both statewide and nationally.

Welcome New Board Members

Dr. Aschkenasy welcomed new Board member Phyllis Wustenberg to the Board. Ms. Wustenberg is from Bay City (near Tillamook) with a background in mink ranching.

Long-range Planning

Dr. Aschkenasy announced his appointment of Mr. Imeson to serve as Board liaison to the planning solution teams.

Committee Members

President Aschkenasy announced Board Committee assignments -- Executive Committee: Aschkenasy, Christopher, Imeson, McAllister, and Swanson; Joint Boards Working Group: Puentes, Swanson, Whittaker; Agricultural Research: Wustenberg; OHSU Board Representative: Imeson; Public Information Committee: Rhinard, Willis; Investment Committee: Swanson, Willis. Dr. Aschkenasy explained that Mr. Bailey will continue to serve on the OHSU Board until Mr. Imeson can be confirmed.

Association of Oregon Counties

Dr. Aschkenasy welcomed Mr. Mike McArthur, Sherman County judge, who requested to speak on behalf of Gilliam County Judge Laura M. Pryor, president of the Association of Oregon Counties (AOC). Mr. McArthur expressed AOC's confidence in and commitment to the Extension Service in Oregon. The Board's willingness to make the Extension Service a priority in the budget proposal was commended. In addition, the AOC wanted to formally recognize the contributions of some OSU colleges, such as the College of Forestry, which provide crucial resources to the Extension Service. (A copy of Ms. Pryor's letter is on file in the Board's office.)

CHANCELLOR'S REPORT

Recognition, W. Ihrig; Vice Chancellor Search Committee

Chancellor Cox publicly recognized the vast contribution by Vice Chancellor Ihrig, who has accepted a position at the University of Washington. He noted that Mr. Ihrig leaves a marvelous legacy -- the Higher Education Administrative Efficiency Act. Dr. Cox announced that Ms. Marilyn Foute will serve as interim vice chancellor.

SOSC Dean Ron Bolstad will chair the search for vice chancellor for finance and administration. Board members Aschkenasy, McAllister, and Rhinard will serve on that committee. Currently, the goal is to announce the appointment in October and have the new vice chancellor begin work in December.

Welcome New Board Members

Dr. Cox joined President Aschkenasy in welcoming the new Board members -- Mr. Whittaker and Ms. Wustenberg.

Legislative Leadership Institute

The Chancellor indicated that the annual Legislative Leadership Institute would be conducted at the end of July on the SOSC campus. He underlined that this is not a lobbying session, but rather "a very intense workshop for legislators to focus on issues important to Oregon." He congratulated the Government Relations staff for putting together this comprehensive workshop.

Announcement, D. Stenard

Dr. Cox noted that Dr. Dick Stenard, EOSC dean of students, underwent double bypass surgery. He wished him a speedy recovery.

IFS Report

Ms. Martha Sargent, president of the Interinstitutional Faculty Senate (IFS), welcomed new Board members and provided a brief background and description of IFS. She indicated that she, Provost Arnold, and Vice Chancellor Ihrig had met to discuss the present budget and the Board's goal of moving faculty salaries to a competitive level. Ms. Sargent stated that the targets are reasonable and appropriate. In addition, Ms. Sargent discussed the implications of evolving technology and the pressing need for increased faculty training and technological support. "The strategic planning process identified many goals which call for a change in how we view faculty jobs. More emphasis is being placed on business/education partnerships, active participation in state social and economic issues, and cross-institutional programs. We will be asking faculty to have a much more visible role, a much different role than in the past. Can we operate as we always have but expect faculty to automatically adapt to new expectations?" Ms. Sargent admitted that these are exciting times, but urged the Board to support faculty priorities of training, technology, technological support, and increased salaries.

1997-1999 BIENNIAL BUDGET PROPOSAL

Introduction

The following is a summary of the 1997-1999 biennial budget request for the Oregon State System of Higher Education, which is due in the Governor's Office on September 1, 1996. The budget request reflects the Board's strategic initiatives that have been developed during the planning process. The summary describes Oregon's economic trends, the resulting outlook for state revenue, and the potential impact on state support for OSSHE. Following that, details of the OSSHE budget request for 1997-1999 are presented.

Key Economic and Demographic Trends

The following are the key economic and demographic trends facing Oregon in the 1997-1999 biennium, as outlined by the Department of Administrative Services' Office of Economic Analysis.

The State's Revenue Outlook

According to the state's Office of Economic Analysis, General Fund revenue is expected to grow along with Oregon's economy. General Fund revenue for 1997-1999 is currently forecast to grow to $8.123 billion, which is 14.6 percent above the current 1995-1997 biennium estimate of $7.089 billion. Lottery revenue is expected to decline from $561 million in 1995-1997 to $525 million in 1997-1999.

General Fund - Lottery Fund Estimates
(Millions of Dollars)

1995-1997
1997-1999
Estimate-June 1996
General Fund
Beginning Balance 497 242
Revenue 7,089 8,123
TOTAL $7,586 $8,365
Lottery
Beginning Balance 182 0
Revenue 561 525
TOTAL $ 743 $ 525
Total State Resources $8,329 $8,890
+6.7%

Source: Preliminary 1997-1999 Estimates Report 6/18/96

The State's Budget Gap

The state's Office of Economic Analysis estimates that $8.857 billion will be required in 1997-1999 to continue at current service levels the legislatively approved programs funded by the General Fund and Lottery Fund. Resources are estimated to fall $339 million below the amount necessary to fund the current service level, leaving a two percent ending balance. In the current biennium, higher education received General Fund and Lottery Fund appropriations totaling $627 million, $523 million of which was for OSSHE and $104 million for OHSU. The initial starting point for the 1997-1999 current service level estimate for higher education, as made by the state's Office of Economic Analysis, is $683 million. This amount has been used to estimate the 1997-1999 budget resources shortfall for the state.

The OSSHE 1997-1999 Biennial Budget Request

Governor Kitzhaber issued his budget instructions for the development of the 1997-1999 biennial budget request in early March 1996. The following summarizes the policies under which all state agencies (including OSSHE) must build their 1997-1999 biennial budget requests.

Summary of the OSSHE Biennial Budget Request

The following table summarizes the OSSHE 1997-1999 Biennial Budget request. Following this summary are more detailed descriptions of the "decision packages" that comprise the budget request, as well as the procedures that guided the development of the budget. This summary excludes the Capital Construction budget (funded from other funds), but does include the Debt Service component.

1997-1999 Biennial Budget Request - Summary
(In Millions)

GENERAL FUND
LOTTERY
OTHER FUNDS
TOTAL
1995-1997 Leg. Apprd. Budget $500.74 $ 33.14 $599.93 $1,133.81
Base Personal Services 14.56 .91 1.03 16.50
Debt Service Adjustment 2.63 2.63
Nonrecurr. Adjustment (.89) (9.52) (10.40)
Essential Program Packages
General Inflation (2%/yr) $ 3.75 $ .77 $ 8.34 $ 12.86
Lib. Inflation (Addnl. 8%/hr) 1.44 1.36 2.80
New Bldg. Opr. & Maint. 3.06 2.87 5.93
Unclass. Sal. Roll-fwd 8.09 .34 7.08 15.51
Mgmt. Svc. & Class. Roll-fwd 2.80 .09 2.76 5.65
Fund Shifts 27.66 (27.66)
Vet. Medicine 8.10 (8.10)
Agri. Exper. Station 10.24 (10.24)
Extension Service 3.79 (3.79)
Forest Research Lab. 3.69 (3.69)
Joint Sch. of Engineering 1.84 (1.84)
Other/Technical (i.e., COPs) (.27) (.01) (7.57) (7.86)
Subtotal Essential Packages $ 46.53 $(26.47) $ 14.84 $ 34.89
1997-1999 Current Service Level $564.46 $6.69 $606.28 $1,177.43
Policy Option Packages
Unclassified Sal. Adjust. $45.00 -- $ 4.20 $ 49.20
Mgmt. Svc. & Classified 9.00 -- 1.30 10.30
Freeze Instruction Fees 16.80 -- (16.80) --
Student Access 39.10 -- 29.00 68.10
Instructional Technology 20.00 20.00
Targeted Job Growth 11.50 11.50
Collaborative Partnerships 12.00 12.00
Agric. Experiment Station 6.50 6.50
Extension Service 6.20 6.20
Forest Research Laboratory 2.00 2.00
Subtotal Policy Packages $168.10 $ -- $ 17.70 $ 185.80
1997-1999
Biennial Budget Request

$732.56

$ 6.69

$623.98

$1,363.23

The Current Service Level Budget

The Governor's budget instructions for 1997-1999 allow state agencies to document the costs associated with maintaining the 1995-1997 service level into the 1997-1999 biennium. This is referred to as the "current service level budget." The combination of the (1) Base Budget and the (2) Essential Program Option Packages represents the resources necessary to maintain the 1995-1997 service level into 1997-1999.

1. The Base Budget - The base budget includes the 1995-1997 legislatively adopted budget plus Emergency Board, special session, and approved administrative actions through April 1996. The base budget also includes the roll-up costs of the merit salary adjustment granted in 1996-97 and one merit salary adjustment to be granted during 1997-1999 for classified employees, per the Department of Administrative Services budget instructions. The base budget also includes the roll-up cost of the $15 million provided by the 1995 legislature and applied to unclassified salaries.

2. Essential Program Option Packages - An essential program option package will identify budget adjustments such as general inflation (two percent per year), extraordinary inflation for library materials (eight percent per year), program phase-ins/phase-outs to bring the base budget to a current service level, cost increases associated with Board-approved salary adjustment plans, and fund shifts affecting current programs. The following table lists OSSHE's essential program option packages.

Essential Program Option Packages

Gen. Fund Lottery Other Total
General Inflation $ 3,756,493 $ 773,069 $ 8,337,709 $12,867,274
Library Inflation (Addnl. 8%) 1,441,636 -0- 1,355,034 2,796,670
New Building Opr. & Maint. 3,058,406 -0- 2,869,569 5,927,975
Unclass. Sal. Roll-fwd 8,086,389 338,377 7,078,919 15,503,685
Mgmt. Svc/Class. Sal. Roll-fwd 2,803,932 92,841 2,759,274 5,656,047
Fund Shifts: 27,661,122 (27,661,122)
Vet. Medicine 8,104,795 (8,104,795) -0-
Agr. Exp. Sta. 10,244,151 (10,244,151) -0-
Extension Service 3,786,292 (3,786,292) -0-
Forest Res. Lab 3,688,007 (3,688,007) -0-
Jt. School of Engineering 1,837,877 (1,837,877) -0-
Other (i.e., COPs, Assmt.) (274,811) (16,337) (7,573,629) (7,867,777)
Total Essential Program
Option Packages

$46,533,167

$(26,473,172)

$14,826,876

$34,886,871

3. Program Policy Option Packages - A policy program option package presents decision points that will affect the budget if implemented. The following is a summary of the policy program option packages proposed to be funded from the General Fund budget request for the 1997-1999 biennium. A discussion of each package follows the summary.

Program Policy Option Packages

General Fund
1997-1999

1.

Unclassified Salary Adjustment $ 45.0 million
2. Management Svc. and Classified Sal. Adjust. 9.0 million
3. Freeze Instruction Fees 16.8 million
4. Access Funding 39.1 million
5. Instructional Technology 20.0 million
6. Targeted Job Growth 11.5 million
7. Partnerships with Other Sectors 12.0 million
8. Agricultural Experiment Station 6.5 million
9. Extension Service 6.2 million
10. Forest Research Laboratory 2.0 million
Total Policy Option Packages $168.1 million

Discussion of Program Policy Option Packages

1. Unclassified Salary Adjustment - General Fund Request $45.0 million

Academic salaries in Oregon's public higher education institutions in 1995-96 ranked near the bottom one-third of all public doctoral-granting institutions in the United States. The following table shows the national ranking of the three OSSHE universities by academic salaries.

Rank of Oregon Institutions among Public
Doctoral-Granting Institutions by Average Salary

1985-86 1990-91 1994-95 1995-96
UO 97 110 103 112
OSU 96 106 91 90
PSU 93 112 100 106
Total Public 109 123 127 131

Nationally, academic salaries increased 3.4 percent in 1993-94, 3.3 percent in 1995-95, and 3.1 percent in 1995-96, for an average increase of 3.3 percent over the past three years. In Oregon, there were no funds appropriated for salary increases in 1993-94 and 1994-95. In 1995-96, salaries were increased an average of 3 percent, with $15 million made available by the 1995 legislature.

It is proposed that OSSHE present an academic salary plan to the Governor that will bring the average of OSSHE salaries to the national average by the year 2002-03, or within the next three biennia. If we assume that the national average will continue to increase at an annual rate of 3.3 percent, realizing this goal will require an annual increase of 6.0 percent in OSSHE academic salaries. In 1997-1999, the cost to the General Fund for a 6.0 percent annual salary increase is $45.0 million. Adjustments in the rate of increase for faculty salaries may have to be made in future biennia if the national rate of increase exceeds 3.3 percent.

2. Management Service and Classified Salary Plan - General Fund Request $9.0 million

A. Management Service - $2.3 million is requested to finance a salary increase plan for management service employees. This funding will increase the dollars available for management service employees by four percent per year. Within this available funding, a plan will be developed to address inflationary as well as pay for performance increases.

B. Classified Service - $6.7 million is requested to finance a salary increase plan for classified employees. This funding will provide for an inflationary adjustment, as well as funds to address those employee classifications that are below the market for similar jobs.

3. Freeze Instruction Fees - General Fund Request $16.8 million

The instruction fee is that portion of tuition that, along with the General Fund, finances the instruction and support activities of an institution. The other fees that comprise tuition are the building fee, resource fee(s), incidental fee, and health fee.

In 1990-91, the year Measure 5 passed, the resident undergraduate instruction fee at OSSHE universities was $1,470 per year (at the colleges $1,392). In 1996-97, the instruction fee will be $2,694 at the universities. This represents an annual increase of 10.6 percent during this six-year period, a period when general inflation was consistently less than three percent per year. Also, during this time period, a new fee of $150 per year (the technology resource fee) was added to help fund needed instructional technology improvements. (Note: The Oregon Institute of Technology is the only institution that has not added a technology resource fee. The fee at Western Oregon State College and Southern Oregon State College is $72 per year.) Thus, tuition, which is the total of all mandatory fees for enrollment, has increased for resident undergraduates from $1,965 to $3,540, for an 80 percent increase in six years. Tuition for nonresident undergraduates has increased from $5,724 to $11,664, an increase of nearly 104 percent in six years.

The budget instructions issued by the Governor's Office require that, in building the current service level budget, other revenues (e.g., instruction fees) must support a proportionate share of the increases necessary to finance the current service level. This guideline requires that instruction fee revenue must increase by $16.8 million over the 1995-1997 level of $360 million. To generate $16.8 million, an increase in instruction fee rates of around 3.5 percent per year in the 1997-1999 biennium will be required.

The budget request for 1997-1999 seeks to freeze all instruction and resource fees at the 1996-97 levels. Therefore, an additional $16.8 million in General Fund support must be requested in 1997-1999 to offset a freeze in instruction fee rates.

4. Access Funding - General Fund Request $39.1 million

A. Traditional Academic Year Funding - $24.7 million

The traditional three-term academic year enrollment is the basis for the access funding request. Self-support, "for-credit" instructional activities such as summer session, and nontraditional education (i.e., evening and weekend programs, continuing education) are not included in these enrollment projections.

Earlier projections of traditional enrollment demand for the 1997-1999 biennium were near 65,000 headcount. The latest projections estimate that enrollment will grow from the 58,365 headcount in fall 1995 to 61,992 by fall 1997 and 63,937 by fall 1998. The enrollment on which the 1996-97 annual budget is based (i.e., the targeted enrollment) is 60,912. Therefore, the additional General Fund amount requested for enrollment growth in the 1997-1999 biennium is based on the growth from 60,912 to 62,968 (the average of 61,992 and 63,937), an increase of 3.4 percent, and annual taxpayer support of $5,555 dollars per additional (2,224) FTE student projected in 1997-1999.

It should be noted that OSSHE's plan to teach 60,912 headcount students in the 1995-1997 biennium was based on absorbing 2,000 additional students without additional state General Fund support due to savings expected from SB 271. However, because SB 271 was not enacted as requested, identifiable savings will finance approximately 1,000 students. Thus, in 1995-1997 OSSHE will have absorbed 1,000 students without additional resources in the form of further administrative savings or state General Fund support.

The following is a summary of OSSHE's traditional academic year headcount enrollment for the 1995-1997 and 1997-1999 biennia.

Academic Year Headcount

1995-1997
Target

1995-96
Fall Actual

1997-1999
Target

UO

18,013

17,139

18,621

OSU

14,756

14,161

15,439

PSU

15,045

14,348

15,376

WOSC

3,861

3,908

4,283

SOSC

4,634

4,529

4,682

EOSC

2,020

1,847

1,875

OIT

2,583

2,433

2,692

Total

60,912

59,365

62,968

B. Nontraditional Academic Credit Instruction Funding - $14.4 million

OSSHE provides educational services to an additional 60,000 students annually by providing instruction during the summer or at nontraditional times and places during the year. This instruction is all self-supporting; thus, the number of students and the breadth of academic offerings has been limited, although demand is increasing for "when-and-where-you-need-it" credit programs. It is proposed that the state use tax dollars to begin support for the nontraditional student population so that their numbers can grow and programs can be expanded to better serve Oregon's population and economy.

OSSHE's first request in response to the needs of these growing student populations is based on annual taxpayer support of $1,110 (only 20 percent of the level provided for the regular academic year student) per FTE student in OSSHE's nontraditional academic credit activities (6,463). This limited taxpayer support will make it possible to reduce charges to students, thus increasing the number of students who can be served. In addition, program offerings can be expanded, making it possible to offer more academic degrees to those students unable to come to traditional campus programs. With this additional support, OSSHE could serve between 2,500 and 3,000 additional FTE students, saving the taxpayers nearly $20 million when compared to the cost of the traditional campus-based instruction.

5. Instructional Technology - General Fund Request $20.0 million

This funding package will enable OSSHE institutions to use the new technologies to expand access and enhance the quality of instruction and academic services for both on- and off-campus learners.

A. Campus Investments - Each campus is presently investing in technology infrastructure developments using reallocated funds, grants, and corporate gifts (and, in the case of six campuses, student technology resource fees. Student contributions to technology are approximately $12 million biennially.) These commitments, however, fall far short of what campuses need to use the new technologies effectively to expand access and enhance quality. Special state funding is needed to match campus and student contributions. The funds requested will be used to expand and upgrade computer labs; complete wiring of dorms, classrooms, and other instruction-related sites for technology access; expand the number of network connections and television-classroom links to better serve off-campus learners, particularly to facilitate asynchronous conferencing; and strengthen computer technical support services (hardware and software) to address the growing problem of diverse student readiness to undertake technology-based classes.

B. Curriculum Investments - Only a small percentage of faculty (about ten percent) have the knowledge and skills to redesign their courses for a technology format (e.g., multimedia presentations, student assignments using computer conferencing, teaching with interactive television). Few faculty have adequate access to technical assistance on their campuses (e.g., instructional designers, graphic designers, software designers) to assist them in redesigning courses. Of particular need is redesign of courses for entire degree programs, which will be used among multiple campuses and/or across sectors (OSSHE to community colleges and off-campus learning sites). Statewide planning directions call for a core of high-demand degree programs at the baccalaureate and graduate levels to be available for delivery to multiple sites throughout the state. An estimated 150-200 courses will need to be redesigned for delivery using new formats in the next two years, with marketing and pilot-testing needed for new programs in line with accreditation requirements. The requested funds will be used to (1) conduct a series of faculty development workshops on an array of instructional technology topics at the campus and System levels; (2) provide for technical assistance staff (instructional designers, graphic designers, programmers) at each campus to ensure that faculty are able to receive critically needed assistance in the redesign and provision of technology-infused courses; (3) provide for release time for a group of faculty (estimated 150-200 each year) who will be selected to become involved in core course and/or program redesign for the benefit of multiple institutions (both within OSSHE and within other educational sectors); and (4) obtain copyright permissions for use of graphic materials for courses, plus marketing and pilot-testing the delivery of new programs at sites throughout the state.

C. Systemwide Technology-Accessible Catalogue - Presently, courses/ programs at each campus are described in a text-based college catalogue. As campuses develop technology-delivered courses (credit and noncredit) that can be delivered both on and off campuses, a wide variety of constituents will need timely access to course information. Potential students will also need information about the technology requirements for participating in a course. A master "electronic" catalogue - an electronic "window" to credit and noncredit courses in OSSHE - is needed in order to better serve OSSHE students and to ultimately link with other sectors such as Oregon's community colleges, high schools, and business and industry. The requested funds will be used to develop a statewide electronic "window" (catalogue) containing a schedule of credit and noncredit courses and/or programs potential users can access electronically. These will include interactive television, computer on-line, CD-ROM, videotape, and other such alternative format courses of interest to constituents throughout Oregon. Funds will be provided each campus to develop its portion of the electronic catalogue following a Systemwide format and to maintain current information on campus offerings. Coordination will be needed to build, maintain, and provide the OSSHE catalogue, as well as providing links to other electronic catalogues, such as the Oregon community colleges.

D. High-Speed Connectivity to Campuses/Centers/Partners - Every OSSHE campus serves a range of off-campus centers established to provide access to academic programs and services for students who cannot travel to the main campuses. As technology-based courses develop for on-campus student uses and hold the potential for increasing efficiency and effectiveness, the infrastructure will need to be in place to permit the transmittal of courses to a variety of off-campus sites, centers, and partnerships, including those with business and industry.

Examples of such partnerships already in place include the Central Oregon University Center in Bend, the new CAPITAL Center in Beaverton, SOSC's Medford Center, and OSU's Hatfield Marine Science Center at Newport. The list continues with numerous centers in eastern Oregon that are supplied instructional programs by EOSC, the OIT Metro campus in Portland, and OSSHE campus partnerships with community colleges and high schools (e.g., PSU/Portland Community College/Westview High School, UO/Lane Community College/Eugene 4J School District).

Particularly problematic is the lack of high-speed connectivity among OSSHE campuses and their centers and key partnership sites. As faculty develop more sophisticated courseware requiring higher bandwidth for transmittal to students, and as more students seek access to campus technology (e.g., e-mail accounts, conferencing), our present linkages cannot handle the technology requirements. Much more bandwidth will be needed to accommodate the increased traffic and the higher-level demands.

The requested funds will be used to expand high-speed connectivity among OSSHE campuses, OSSHE centers, and key partnerships; first priority for these funds will be to ensure that OSSHE institutions are connected with reasonable bandwidth. Funds will be used to expand the size and number of lines and to add equipment such as compressed interactive video systems that can accommodate high-quality interactive television transmissions, computer conferencing software, and transmittal of computer animations. Partners in these endeavors will be expected to contribute to the costs of these technology upgrades.

6. Targeted Job Growth: Aligning Programs with Workforce Needs - General Fund Request $11.5 million

This funding package will enable OSSHE institutions to develop a carefully selected number of new and expanded degree programs needed to fuel the state's economic growth.

A. New and Expanded Programs - The Oregon Employment Department (OED) has identified occupations that require a bachelor's degree or greater for entry into Oregon's labor market. Many of these occupations are critical to fueling the state's economic growth. About half of the 11 fastest-growing occupations between 1995-2005 are related to high-technology industries; others are related to specific human services expected to grow as a result of an increasing (and aging) population.

Among the top employment categories by projected growth are computer scientists, computer engineers, computer analysts, industrial engineers, agricultural engineers, physical therapists, and residential counselors. OSSHE does not currently provide all these programs. For programs that are provided, OSSHE is preparing too small a number to meet the expected demand. Also, there are new occupational categories projected that are not currently tracked by the OED. These are areas which OSSHE needs to expand to assist the state in maintaining a competitive economic environment.

The requested funds will be used to plan, develop, and offer a carefully selected group of new programs and expand existing programs at the baccalaureate and graduate levels, such as:

1) Software Engineering (MS) at Oregon Joint Graduate Schools of Engineering

2) Crime and Violent Behavior (BA/MA specialty at UO and PSU, bachelor's to be available at WOSC and at other OSSHE colleges as needed)

3) Environmental Sciences (graduate programs) collaborative programs to be delivered by OSSHE universities

4) Physical Therapy (MPT) joint degree program involving multiple campuses

5) Teacher Technology/Computer Specialist Certificate, delivered from consortia of OSSHE campuses to various sites

6) Business (BS) delivered to needed locations in the state

7) Computer Science (BS) delivered via technology to EOSC and possibly other sites from lead campus

8) Social Work (MSW) expansion to needed locations in the state (PSU)

9) Biotechnology initiatives

B. Workforce Alignment Projects Including Internship Program Expansion - Campuses offer a variety of internship/practica experiences for students, though most are in the more occupationally targeted programs in which practica are required by state or national licensing boards. More internship programs are needed to enable students to better prepare for their post-college employment and to ensure close articulation between academic programs and workforce applications.

The Oregon Assessment Model (OAM) was developed in 1993 to assess the outcomes of a college education for program improvement and accountability reasons. Because of restricted resources, only a portion of the OAM has been implemented. Full implementation of employer follow-up projects/studies and forums with employers are needed to develop a database to assist campuses to better align programs with critical workforce needs. The requested funds will be used to develop new internship programs and expand existing programs at each campus. Funds would also be used to enable OSSHE campuses to undertake employer follow-up studies on graduates in occupational areas of critical importance to the state's economy and to identify needed new occupations for improved alignment with OSSHE's academic programs.

7. Collaborative Partnerships With Other Sectors - General Fund Request $12 million

A funding package would enable OSSHE institutions to develop high-priority partnerships with other public sectors to meet the state's goal for a continuum of educational programs and services.

A. Partnerships with Oregon Community Colleges - Because of cost, many students are electing to begin their college educations in an Oregon community college. This trend has occurred for the last several years. With more Oregon students expected to begin their baccalaureate-level educations in community colleges, OSSHE campuses will need to work closely with community colleges to greatly strengthen program articulation and student recruitment initiatives.

The requested funds will be used to (1) assist OSSHE campuses to upgrade articulation agreements with community colleges to reduce lost time to graduation once students transfer in specific majors; (2) provide for early advising by OSSHE faculty to students in community colleges that leads, where there is parallel registration, to a student taking courses via technology; (3) provide for orientation and recruitment forums; (4) develop a master electronic catalogue with the community colleges to encourage cross-registration where this will help students expedite their progress toward baccalaureate completion; (5) develop baccalaureate-completion centers/campuses at additional sites in the state based on cooperative planning between OSSHE institutions and community colleges; (6) expand programs at the Central Oregon University Center in Bend; (7) provide resources to enable OIT to offer lower-division courses to students as part of a cooperative agreement with the Klamath County Community College Service District; and (8) assist SOSC in its cooperation with Rogue Community College to expand college offerings to residents of Josephine and Jackson counties.

B. Partnerships with Oregon K-12 - At the centerpiece of Oregon K-12's school improvement initiative adopted by the legislature is the emphasis on a performance-based system of standards and assessment, plus the raising of standards to meet the needs of a competitive Oregon workforce. In order to facilitate high school transition to college, OSSHE institutions are involved in alignment initiatives in content, assessment, and teacher preparation. This collaborative effort has been supported primarily by grant funds. State support will be required if this significant effort is to be continued the next two years. These efforts have been mandated by the Joint Boards of Education as a critically needed cross-sector priority.

A second area of priority is the production of new educators who will staff Oregon's 21st century elementary, middle, and high schools. A new four-stage licensure system for teachers was adopted by the Teacher Standards and Practices Commission (TSPC) in 1996, and revised standards are under consideration for administrators and counselors. Campuses that offer approved teacher preparation programs are required to have changes in place by fall 1998 for the new licensure programs. (There are six OSSHE campuses with approved teacher preparation programs.) Funds are needed to assist campuses in redesigning their programs to meet the new formats, working in partnership with K-12 school districts.

A third area of priority is the development and delivery of college courses to high school students to enable "college-ready" high schoolers to begin college coursework. The goal is to assist students to reduce their time to college graduation and make use of enrichment curricula needed as high schools implement higher standards. Early college-entry programs are increasingly common in other states, where funding of such programs has been found to accelerate time to college graduation (e.g., Colorado, Minnesota, Florida).

The requested funds will be used to:

1) Enable the Proficiency-based Admission Standards System (PASS), developed by OSSHE in 1994, to significantly expand activities in developing an assessment system for the new college admission system that can be used by high school teachers throughout the state, and preparing teachers for a proficiency system. The latter includes preparing existing teachers with assessment skills needed to carry out the new admission system, as well as preparing pre-service students in the assessment skills they will need once they become a licensed teacher in Oregon. PASS will expand the number of school/community college/OSSHE institution partnership sites.

2) Assist six OSSHE campuses with approved teacher preparation programs to redesign their programs in alignment with the new four-stage licensure system recently approved by TSPC: early childhood, elementary, middle, and high school. The 100-some specialty programs offered by OSSHE campuses to prepare approximately 1,200 new teachers, administrators, counselors, and psychologists each year (and retrain existing educators) would be aligned to the new requirements.

3) Assist OSSHE campuses in placing students in practica with school districts that have already become involved in school reform initiatives.

4) Develop foreign language proficiency assessment staff development programs needed by high school teachers to respond to OSSHE's new college foreign language admission requirement being implemented in 1997-98.

5) Pilot early-college readiness projects in collaboration with community colleges by delivering college courses to students who are "college ready."

6) Pilot OIT's "OPT for CO-OP," a proposal to link OIT, school districts, community colleges, and key high-tech employers with a combined school/work program beginning with high school seniors and progressing through a college degree. The results will lead to highly trained technologists for the semiconductor industry who have gained paid work experience during their schooling.

C. Partnerships with Schools and Human and Criminal Justice Service Agencies - There is growing concern in Oregon about increasing child and youth delinquency, destructive behavior and abuse of children, and adult crime. Multi-agency partnerships (K-12 schools, human service agencies, criminal justice agencies, and colleges/universities) are needed to address these growing problems. The retraining of existing educators, human service, and criminal justice staffs throughout Oregon is needed to assist them in learning how to screen for and intervene with the at-risk youth and adult populations. New professionals prepared in a variety of OSSHE degree programs will also need skills to work with at-risk students and their families, as well as to work in intervention initiatives at schools and social/juvenile service agencies. Also needed are improved educational programs for Oregon's growing prison population.

OSSHE, working with the community colleges, can assess educational needs and deliver programs. The funds requested will be used to teach existing and future educators (teachers, counselors, and administrators) and related human service personnel (social workers, child psychologists, law enforcement) methods for creating safe schools and identifying and intervening with children/youth who threaten the stability and safety of those schools and/or who may be at risk for developing other problems. Funds will also be used to train child services and community policing staff to participate more effectively in a variety of prevention projects.

8. Agricultural Experiment Station - General Fund Request $6.5 million

This funding package would enable the Agricultural Experiment Station (AES) to conduct research to improve the management of Oregon's agriculture, improve natural resource management, and leverage the economic contributions of Oregon's agriculture.

A. Value-Added Products and Markets: Leveraging Economic Contributions of Agriculture - Although Oregon is a major producer of more than 100 economically important commodities for consumers worldwide, it falls far short of the national average for adding value to its agricultural production. Targeted research can move Oregon toward the national average within the next decade, thereby adding jobs and businesses. The establishment and operation of a Food Innovation Center in Portland in conjunction with the Oregon Department of Agriculture is one component of this value-added research strategy. The Food Innovation Center will target new products for domestic and international markets and quality assurance to meet the high standards our trading partners demand. A second research component in the AES explores and develops new higher-value crops that may be grown in place of those traditionally of lower value. Branch research center scientists located throughout the state, and others on campus in Corvallis, will carry out research supporting the value-added strategy.

B. Natural Resources Management and Policy: Knowledge for Understanding Nature as a System - Oregon's farm and ranch businesses rely on and interact with complex natural systems. This research strategy examines relationships within and among natural systems on a scale larger than most farms or ranches. Research on this larger "landscape" scale (often the size of an entire watershed) encompasses interactions among water, plants, insects, animals, nutrients, soil, and agricultural production activities. Research results will offer information useful not only to livestock and crop producers interested in economic and environmental viability, but also to public policy makers. Research outcomes will address such concerns as soil erosion, economics, profitability, endangered species, water policy, and public land issues. Special consideration will be given to the impact of regulations on economic and environmental sustainability of agriculture and resource systems.

C. Integrated Management Systems: Economically and Environmentally Sustainable Agriculture - This strategy enhances and expands research aimed at assuring that Oregon's agricultural producers remain economically competitive and efficient. One component involves accelerated laboratory development and improvement of agricultural commodities and products. A second component will undertake on-farm studies aimed at reducing the lag between research initiation and implementation. On-farm research will be planned and conducted cooperatively by field-based faculty and agricultural producers.

D. Updated Technologies for Oregon-Centered Research - Re-sources are needed to support faculty research in the form of technicians and service and supplies. Another vital component necessary to improving the effectiveness and efficiency of conducting research is the need to improve communications networks by using up-to-date technologies.

9. Extension Service - General Fund Request $6.2 million

This funding package would enable the Extension Service to educate Oregonians by delivering research-based, objective information to help them solve problems, develop leadership, and manage resources wisely.

A. Management and Protection of Natural Resources - Educational programs will focus on issues relating to grazing, soil and water management and conservation, irrigation, salmon management, watershed restoration, water quality, and waste management.

B. Value-Added Agriculture and Forest Products and Markets - Educational programs will focus on applying research to add value to Oregon's agriculture and forest products, thereby adding to the economic base through jobs and businesses. Programs will include food and fiber processing and domestic and international marketing and trade.

C. Agriculture and Forestry Profitability - Educational programs will address profitable, diverse agriculture and forestry production systems that are compatible with a quality environment including both commercial and small landowners involved in crop production, livestock production, forest health, and Christmas tree production.

D. Food Safety, Diet, Nutrition, and Health - Educational programs will include nutrition, food safety, management of family resources, and healthy lifestyles. One focus audience will include limited-income families.

E. Youth Development Life Skills - The 4-H youth development program addresses complex, critical needs of youth in the areas of long-term life skills, job preparation skills, subject matter skills, and community involvement. This is a high-priority program area for the people of Oregon.

F. Rural/Urban Interface and Growth - The focus of this area is on those parts of the state experiencing significant population growth. Educational programs will include land use, alternative energy sources, construction and weatherization, household water and waste management, and air quality.

G. Educational Delivery - The public is demanding more access to print-on-demand publications and educational program delivery through a variety of media. This area will also focus on providing meaningful accountability of Extension education.

10. Forest Research Laboratory - General Fund Request $2.0 million

This funding package will allow Oregon's forest products industry to remain competitive in a global environment. Research is needed to maximize the efficiency of production of wood fiber from the land; to improve recovery of fiber and value from smaller logs off nonindustrial, private lands; to create new wood fiber composite materials from smaller, lower-quality logs (especially from forests in eastern Oregon); and to develop new international marketing strategies for these new products, all within the constraints imposed by increased public demand for environmental protection in the forests and at the mill sites. Specific research topics proposed under this initiative include (1) improving the culture and use of underutilized or low-value tree species; (2) developing silviculture treatments applicable to private lands that will increase growth rates and value of end products; (3) developing new systems to more efficiently integrate reforestation, forest culture, harvesting, transportation, processing, and manufacturing and marketing of wood products; and (4) enhancing forest sustainability and long-term economic growth through improved conservation and recycling technologies. The proposed Forest Research Laboratory research parallels work planned for 1997-1999 by the Agricultural Experiment Station in value-added agricultural products, integrated management systems, and natural resource management on agricultural lands.

Staff Recommendation to the Board

Staff recommended that the Board approve the OSSHE 1997-1999 Biennial Budget Request as presented above and authorize staff to forward this budget to the Governor's Office on September 1, 1996.

Board Discussion and Action

Vice Chancellor Ihrig reviewed the 1997-1999 Biennial Budget Request. He explained that the state's Office of Economic Analysis estimated $683 million would be needed to maintain the current service level for higher education (including OHSU) during 1997-1999. Mr. Ihrig also pointed out to the Board the fund shift from Lottery dollars to General Fund dollars for Veterinary Medicine, Forest Research Laboratory, Extension Service, Oregon Joint Graduate Schools of Engineering, and the Agricultural Experiment Station. "We feel that it's important that these ongoing programs be funded by the General Fund. Now that the General Fund seems to be rising and the Lottery funds are slowing down, it's a good time to make that shift."

Mr. Ihrig noted that the Program Policy Option Packages fit both within the overall System priorities (including strategic objectives and targets identified in the Board's long-range planning to date) and the Governor's identified priorities. Mr. Rhinard asked if these Packages are listed according to ranked priority. Mr. Ihrig responded that, in general, they were. However, he emphasized that this is a general framework subject to further refinement.

Dr. Aschkenasy expressed his concern that the more detailed budget make explicit that legislative investment will result in improvements, rather than just add-ons. Mr. Ihrig responded that, while the docket provided a summary of the budget, such information (including documentation of savings resulting from SB 271) is being gathered for use during the legislative process. "This budget document does include more than we finally committed to and received from passage of SB 271," Mr. Ihrig noted. "There was a statement in the bill on enrollment and access to institutions in the System. It says that the target for this biennium regarding enrollment, at the 60,912 level, included the 2,000 students the System committed to on passage of SB 271. The actual legislation that passed only provided us enough savings to handle 1,000 students. But the numbers in the budget are still based on us self-funding the 2,000 students. So in this budget we are committing to a higher level, but we can't continue to do this."

Further, he noted that the budget parameters are purposely broad enough to allow room for responsiveness to the Governor's and Board's strategic planning. As those directions become more specific, so will the budget. Dr. Aschkenasy agreed that it was not important for that level of specificity now as long as it would be included as we approach the legislature.

Mr. Imeson underlined the importance of trying to align program opportunities with job growth opportunities.

Ms. Christopher asked for clarification about the role Oregon counties play in the Extension Service program. Mr. Quenzer responded that the Extension Service is a cooperative program with participation by counties, the state, and, in some cases, the federal government. President Risser elaborated, explaining that "in all cases, the state and federal funding only go to counties where the county has contributed a share, and the share contributed by the county is for support of the office itself. The state and federal funding goes for programs; the local county funding goes to support the offices."

Ms. Christopher moved and Mr. Swanson seconded the motion to approve the staff recommendation. On roll call, the following voted in favor: Directors Imeson, Christopher, McAllister, Rhinard, Swanson, Waddy, Wustenberg, and Aschkenasy. Those voting no: none.

CAPITAL CONSTRUCTION BUDGET REQUEST, 1997-2003

Staff Report to the Board

State law requires the Board to submit to the Governor's budget office, in September prior to the legislative session, a capital construction budget request for a six-year period. The period under consideration is 1997-2003. The capital construction budget recommended to the Board for 1997-1999 is $396,437,000 for OSSHE's seven institutions excluding Oregon Health Sciences University. This submittal is in contrast to the capital construction budget for fiscal year 1995-1997 that totaled $412,375,000 including OHSU, or $337,375,000 without OHSU.

A large portion of the capital construction budget is associated with renovating existing buildings and constructing new facilities to serve a large expected student enrollment increase during the six-year plan period. While OSSHE headcount enrollment as of fall term 1995 is just under 60,000 students, Systemwide projections by OSSHE's Institutional Research Office indicate that higher numbers of in-state high school graduates during this plan period will create higher enrollment demand at OSSHE's institutions. OSSHE now expects enrollment demand will increase to a new high of approximately 70,000 base headcount enrollment by fall term 2003, 17 percent student enrollment above the current period. OSSHE expects this enrollment demand trend to continue for several years past this plan horizon. Current physical capacity of the campuses is approximately 67,000 student enrollment.

Given the continued constraints on state financing for new facilities (the legislature has not approved General Funds for construction of new facilities in any of the last three biennia) and anticipated demand for significantly increased student instruction capacity over the next six years, the state's colleges and universities are proposing both new and renovated facilities that represent creative approaches to both space utilization and financing. Wherever practical, projects that represent optimal, innovative space usage featuring a variety of new instructional technology innovations, as well as financing structures that leverage state dollars with gift and grant funds, are given high priority in this budget request. Examples of these types of projects include SOSC's Visual Arts Center, University of Oregon's Campus Development Project, and WOSC's Academic Facilities and Programs Accommodation Project.

These projects feature creative approaches to providing new student instruction capacity by combining renovation of existing facilities along with relocation of selected departments to better suited sites on-campus with the explicit objective of minimizing the need for new construction. Today's renovation projects also incorporate instructional and distance learning technologies to the extent practicable. They feature classrooms with multimedia capability to serve a variety of class sizes and types whether students are physically present or at remote sites elsewhere in the state. Computer labs will provide students access to the Internet for on-line learning opportunities worldwide as well as state-of-the-art application programs for enhanced learning.

At the same time, OSSHE institutions will continue to watch for selected market opportunities, especially those that offer an opportunity to leverage limited investment funds (both institution-specific and state) with the guarantee of rental income by public and private tenants, so that other building tenants share the space to help offset the cost of debt service until such time as the institution is prepared to assume full occupancy. A good example of this innovative arrangement is PSU's Urban Center, Phase II, project approved by the Emergency Board in May. In this instance, space was acquired that suits instructional and research engineering requirements at a cost of approximately one-third the cost of new construction in the downtown market. In addition, the facility will have outside tenants and parking to help pay debt service.

OSSHE's capital construction objectives for the next three biennia are straightforward: (1) to increase student instructional capacity for expected enrollment growth Systemwide; (2) to provide increased programmatic access to students by incorporating state-of-the-art technologies in newly renovated and constructed facilities; and (3) to optimize the use of existing facilities while protecting the state's capital investments by continuing to make progress toward System goals for reducing the approximately $200 million in deferred maintenance. These are the collective criteria that have guided the staff's evaluation of Systemwide and campus-specific capital project needs. They are reflected in the overall prioritization of projects within each of the funding categories. Final prioritization, of course, takes into account such factors as project phasing capability over two or more biennia, project requests and prioritizations in previous biennia, and compatibility with the campus master plan. Even if all listed projects were approved, it is unlikely that the total projected student enrollment could be satisfied on the campuses, arguing for increased off-campus instruction delivery. As indicated herein, several of the proposed projects incorporate advanced instructional technologies that will enable enhanced distance learning modes and access statewide.

The Capital Construction Budget is divided between Education and General Projects, used to support the instruction, research, and service missions of the State System, and Auxiliary Projects that are related to student services and the various self-support activities of the colleges and universities. The project budgets shown for 1997-1999 include inflation adjustments through the date of expected completion. Those projects budgeted for subsequent biennia are depicted in January 1996 dollars.

Education and General Projects

The total request for Education and General projects is $270.7 million, including $162.3 million of state funds. State funds used for capital construction purposes include General Fund, Lottery, and Article XI-G bonds.

As in the past three biennia, the principal thrust of the 1997-1999 request for this category, supported largely from the state General Fund, is the repair and renovation of existing facilities. This has been the main focus of the Board's budget requests since the 1991 biennium in an attempt to reduce the $200 million backlog of deferred maintenance. The $23.5 million request for state funds builds on efforts undertaken and progress made during the past three biennia in the rehabilitation of OSSHE's capital assets to preserve and enhance the System's capital asset base, which has an estimated current asset valuation of over $1.5 billion. Following the financing model successfully utilized in the 1995-1997 biennium, staff is recommending that one-half of the total requested state funds, or $11.8 million, derive from General Fund and an equivalent amount derive from Article XI-G bonds. The General Fund dollars are included in the Board's operating budget request for 1997-1999. If the legislature approves the Article XI-G bond financing for these projects, the $11.8 million in the operating budget can be used to match the bonds as required by the Oregon Constitution.

Staff recommends Classroom and Lab Modernization as the second priority for the 1997-1999 biennium in the Education and General Fund category. A total of $7.7 million is requested for specific projects focusing on academic classroom and lab modernization, including technological enhancements for on-site and distance learning, at five campuses. This Systemwide high prioritization is consistent with two of Governor Kitzhaber's policy initiatives for higher education - increasing capacity on our campuses to ensure access for the higher numbers of Oregon high school graduates and providing closer links among our campuses through the use of telecommunications technology. It is also consistent with the strategic objectives outlined in the Board's Strategic Plan, specifically assuring access to lifelong higher education opportunities statewide and ensuring efficient and adaptive System and campus operations. As an example, funding will permit EOSC to upgrade and adapt classrooms for college instructional use in an on-campus elementary school whose lease will not be renewed by the local school district. Funds will also address similar kinds of cost-effective renovations of outdated facilities at OIT, OSU, SOSC, and UO, resulting in enhanced utilization and increased instructional capacity at each location.

A high priority in the Education and General category for 1997-1999 is a Systemwide Seismic Inventory of all buildings on the seven campuses. This item is ranked high for this biennium to meet the anticipated new state seismic codes that are being proposed by the Seismic Rehabilitation Task Force created by Senate Bill 1057. The draft report is in final stages of public comment and is due to be finalized in September. The proposed new seismic upgrade standards call for a mandatory inventory of all state and municipal buildings by July 2002. The second stage calls for an evaluation of all unreinforced masonry buildings by July 2007. By July 2017, appropriate evaluations and repairs must have been completed for all buildings. Therefore, this request for the 1997-1999 biennium will permit OSSHE to begin this comprehensive inventory of campus buildings.

A total of 29 Education and General projects require state support for new facilities or modernization of facilities. These include several projects that have been requested (in part or whole) in previous biennia, including SOSC's Visual Arts Project, UO's Campus Development Project, and PSU's Urban Center, Phase I. These projects are ranked one, two, and three respectively on OSSHE's list for New/Renovation Construction. Of the total of $129.7 million projected under this category, $73.3 million would come from state funds (General Fund and Article XI-G Bonds) and $56.4 million from Other Funds (gifts, grants, parking fees, and miscellaneous revenue).

Projects listed as high priority in the Education and General Plant category typically have the following characteristics in common: (1) a net gain in new instructional capacity; (2) leveraging of state funds with gift and grant funds; (3) optimization of space utilization; and 4) budgetary prioritization in previous biennia. For example, SOSC's Center for the Visual Arts requires a total of $5.6 million in state funds with a 50 percent match of $5.6 million in gifts by the College. SOSC is also actively pursuing federal grants that could further reduce the required state funding portion. The project will consolidate visual arts programs and labs that are currently spread over the campus in several buildings and enable the campus to achieve its desired focus in arts education in southern Oregon. UO's Campus Development Project has similar characteristics in that it is a phased project involving a combination of retrofit of existing facilities for additional student instructional capacity (for the College of Arts and Sciences), an addition to the Business School, and construction of a new law center. The University will provide over half of the project funding ($19.9 million out of a total project budget of $36 million) through gifts and grants.

PSU's Urban Center, Phase I, has also been submitted to the legislature in prior biennia; however, Lottery funds did not become available to the project, leading to its resubmission for this biennium. This project will consolidate classroom and office space for a major academic program (Urban and Public Affairs) into a single facility, provide distance learning capabilities, and comply with metropolitan Portland's University District plan adopted in April 1995. Like other high-priority projects that require partial state funding, this project features $7.9 million in Article XI-G Bonds with $7.9 million in matching gifts and grants by the University, $10 million in federal funds, and $3.5 million in Article XI-F (1) bonds.

WOSC's Academic Facilities and Programs Accommodation project (Phase I) features an arrangement with the Oregon Police Academy and Oregon Military Academy to relocate the training and instructional programs to facilities at the periphery of campus, freeing up core campus space for much-needed academic program expansion and relocation. In addition, an anonymous donor has recently committed $1 million to WOSC for the library portion of this project. OSU's Milne Computer Center Addition features the addition of two floors to the existing computer center, thereby providing two regional organizations - Network for Engineering and Research in Oregon (NERO) and Northwest Alliance for Computational Science and Engineering (NACSE) - a single permanent location for network-based education. The project creates both campus-based computer-assisted instruction capability and distance learning stations at OSU's Extension Services Offices statewide.

Six Education and General projects, totaling just over $42.6 million, do not require state funds. The largest projects are the UO's Network Information and Science Center ($15.7 million in grant funds) and UO's Center for At-Risk Studies ($11.2 million in grant funds).

It is understood that the Board may wish to change the direction and projects represented by the new construction efforts as it continues its long-range planning efforts. Most of these projects incorporate contemporary technology in their planning in order to extend the ability of faculty to instruct students and conduct research. The Board has opportunities to revise the list prior to the beginning of the 1997 legislative session, with the concurrence of the Governor. In addition, amendments are possible during the upcoming biennium and in the context of the 1999-2001 budget process. However, a listing of priorities and projects must be submitted to the Fiscal Policy Analysis Division of the Department of Administrative Services no later than September 1, 1996, for inclusion in the 1997-1999 capital construction budget.

UO Campus Development Project

As a result of receipt of a gift from Phil Knight, the UO is seeking Board approval to proceed on a faster schedule with the new School of Law approved in concept by the Board in April 1996 as part of the three-phase Campus Development Project, with a total budget of $36 million to be included in the System capital request for the 1997 legislature. The gift, of which $10 million is dedicated to the construction of the new Law School Building, allows the University to move immediately on that phase of the Campus Development Project.

The schedule as outlined means the project is planned to go to bid prior to the time that the legislature will be able to approve the capital appropriations bill. Therefore, staff is asking the Board for approval to take this item to the Emergency Board for expenditure authority of $36 million. Of this total, $16.9 million in expenditure authority was granted for the Gilbert Hall Addition and renovation of the current Law School in the 1993 and 1995 legislative sessions, respectively, and can be transferred to this project. The balance of $19.1 million in new expenditure authority needs Emergency Board approval.

At the April Board meeting, the Board approved the overall concept of the project as described: (1) to establish the Campus Development Project with a budget of $36 million and (2) the transfer of the expenditure limitation authority previously established for the Gilbert Hall Addition and Phase I of the Law School Addition and Alterations Project to the overall Campus Development Project. Further, the Board authorized staff to initiate appropriate planning, as well as incorporate the Campus Development Project in the System capital request prepared for the 1997 legislature with the limitations, appropriations, and bonding authority necessary to complete the project within a total budget of $36.0 million.

The revised plan for the new William F. Knight Law Center restructures the use of funds as anticipated in the April Board meeting docket item, but entirely within the total budget of $36 million and concept as presented to the Board. Specifically, the plan currently calls for a total of $25 million for the new Law School (versus $24.5 million in April), comprising $5.6 million in Article XI-F bonds, $4.7 million in Article XI-G bonds, and $14.7 million in gifts. Existing expenditure limitation authority can be transferred to cover the Article XI-F(1) bonds as well as the Article XI-G bonds; however, an additional expenditure authority of $8.1 million in Other Funds (for gifts) will be required to initiate this project. Under the revised plan, construction of the Gilbert Hall Addition for the College of Business will require a total of $7 million expenditure authority comprising $1.7 million of Article XI-G bonds and $5.3 million in Other Funds limitation ($0.1 million in Article XI-F (1) bonds, and $5.2 million in gifts). Finally, the renovation of the current Law School building for classroom and office space primarily for the College of Arts and Sciences will require new expenditure authority of $4 million for Article XI-G bonds. Since the Emergency Board has authority to approve full project expenditure limitation of $36 million but not new bonding authority, staff is requesting Board approval to seek legislative authority, as appropriate, for necessary approvals of limitations, appropriations, and bonding authority.

UO Campus Development Project
Revised Funding Summary (in thousands)



Total
Type F
Bonds
Type G Bonds Gifts/
Grants
Gilbert Hall Addition (new classroom facility) $7,000 100 1,700 5,200
Renovation of Current Law School Building for general instruction use 4,000 0 4,000 0
New Law School Building 25,000 5,600 4,700 14,700
TOTALS 36,000 5,700 10,400 19,900

Building Fee Projects

Facilities used for student activities are funded from the fee assessed as part of each student's tuition each term. The building fee has been used to fund and finance projects in the following categories: student unions, recreation and athletic facilities, student health services facilities, and child care facilities. The maximum fee level is established by statute. It was last raised in 1989 to $18.50 per term during the regular academic year ($27.75 per term for law students) and $14 for the summer session. If the academic year term fee had kept pace with construction industry inflation, it would stand at approximately $23 per term as of January 1996. Most student building projects are financed using bonds, whose debt service is repaid from the building fee debt service fund. Smaller projects may be funded from the cash available in the fund.

The Board's staff is submitting the 1997-1999 building fee project prioritizations at two student building fee levels: the current level of $18.50 per term per student and a proposed level of $25 per term per student. At the current level, approximately $4 million in bonds can be issued for the two-year period. This would cover a previously approved project for which bonds have not yet been issued and possibly a portion of a new project for this 1997-1999 biennium. At the $25 level, approximately $14 million in bonds can be issued for the biennium. Given the total requests submitted by the seven colleges and universities for 1997-1999 of over $42 million, it is clear that none of this request can be met at the current fee level, and only about 26 percent of proposed projects at the higher level. Therefore, staff recommends the Board approve projects for funding at the higher fee level of $25 per student per term, subject to legislative approval of a student building fee increase.

At the higher fee level, three projects can receive phased project funding: UO's Recreation and Fitness Center ($4 million), PSU's Smith Memorial Center Renovation ($3.7 million), and WOSC's Werner College Center Remodel/Addition ($3.1 million). These projects are given the highest priority due to a number of criteria agreed to by the campuses: (1) campus student support for the project; (2) documented project need and beneficial use to students; (3) capital renewal (protection of the asset investment and conformance with code requirements); (4) co-funding availability; and (5) prior project prioritization. For example, UO students voted to increase their student fees for the Recreation and Fitness Center if the Board, and ultimately the legislature, approves a match for this project. While this vote is not legally binding on OSSHE, it indicates the extent of student support at UO for this project.

This budget also includes $2 million of "Miscellaneous" System funds for which OSSHE will seek expenditure limitation to provide System flexibility for student building project allocations to campuses should available funds exceed current pro forma projections. OSSHE has also submitted a Legislative Concept to the Governor's Office as a placeholder for a student building fee increase subject to Board authorization. At the same time, OSSHE has instituted a dialogue with campus student and management representatives, including the Oregon Student Lobby, on student building fee levels.

Table II depicts the building fee projects proposed for 1997-1999.

Auxiliary Services Projects

Several projects were proposed by the colleges and universities that are self-supporting from operations and that can retire debt associated with their construction from auxiliary revenues. Projects totaling $103.3 million are proposed for 1997-1999 under this category. If the Consolidated Dormitory Debt Service Pool is continued into fiscal year 1997 (a proposal by the Housing Directors to freeze the Pool and fund future dormitory housing projects on a campus-specific basis is currently being studied by OSSHE), projects from several institutions (OIT, OSU, SOSC, and UO) totaling approximately $11.6 million may be funded during the next biennium if approved as part of this capital construction budget submittal. Analysis of historical funding of dormitory projects through the Pool and projected total new projects indicates that renovation of existing facilities (without adding new beds) is the largest single factor impacting prospective increases in dormitory fee levels. If these proposed projects are approved for funding under the Pool, each campus will need to determine its respective share of the debt and adjust dormitory fees accordingly.

Table III lists all the Auxiliary Services projects and indicates their respective revenue sources by institution.

Sources of Funds for 1997-1999 Projects
(in thousands)

General Fund, Lottery and Article XI-G Bonds $162,327
Gifts 74,245
Housing 48,405
Building Fee 13,705
Grants 40,960
Parking 12,865
Other Auxiliary Revenues 6,700
Other Revenue/Reserves 27,530
Bond Interest Earnings --
Lottery Interest Earnings --
Total $386,737

1999-2003 Projects

Projects for the years 1999-2003 are not reviewed extensively and typically are listed in 1996 dollars.

For 1999-2001, the colleges and universities requested $323.3 million for Education and General projects and $111.9 million for Auxiliary Services projects. Major projects for that biennium include a wide variety of Education and General Projects, with continuing major efforts to address building repair and modernization needs. While a few large new classroom facilities are proposed, most of the projects involve building retrofit and addition and modernization to optimize utilization of space and accommodate student enrollment growth. In addition, the colleges and universities are proposing some projects to meet seismic codes as well as Americans with Disabilities Act (ADA), health, and safety requirements. For example, only two of PSU's seven total projects in this category are for new buildings: an Advanced Technology Building ($18 million) and a new Classroom Building ($32.6 million); the other five PSU projects in that biennium involve building additions and renovation.

Likewise, OSU's major thrust for this biennium in this funding category is again for academic modernization of classrooms and laboratories, utility and street improvements, and building renovation and additions. The two new facilities (out of ten projects total) at OSU are an Engineering and Computer Science Building ($24 million) and the Linus Pauling Institute Building ($13.5 million). The vast majority of UO's projects for that biennium are dedicated to building alterations and additions. EOSC's largest project (out of three total) is for a remodel of Inlow Hall. Three of SOSC's four projects in this category are for building renovation/remodel, and one is for seismic reinforcements for ten campus buildings. WOSC's three Education and General projects include Phase 2 of its Academic Facilities and Programs Accommodation project ($7.1 million), targeted to begin in the 1997-1999 biennium and smaller projects aimed at nonstructural seismic improvements and physical access upgrades. OIT is following a similar pattern of moving into Phase II on its single biggest project to convert Cornett Hall to new academic program uses ($4.5 million), constructing one new facility (Administrative Services Building - $4 million), and two other projects involving classroom modernization and an addition to the physical plant.

Auxiliary services projects featured in the 1999-2001 biennium include several student housing and dormitory projects, including Phase II of OSU's University Housing and Dining Services project for Hawley Hall and Oxford Hall ($6.1 million total); UO's Hamilton East Repairs, Hamilton West Repairs, and Food Service Upgrades ($4.8 million); and a new Residence Hall, Phase II, for EOSC ($9.5 million). Other projects feature upgrade and remodel of campus facilities such as Phase 3 of WOSC's Werner College Center Remodel ($3.3 million), PSU's Ondine Conference Center Renovations ($2.1 million) and Helen Gordon Child Development Center Addition and Rehabilitation ($5.5 million), and parking improvements for SOSC ($1.8 million).

Plans of the colleges and universities for the 2001-2003 biennium would include an array of projects totaling an additional $191.3 million in the Educational and General category and $54.2 million of Auxiliary Services projects. OSU is projecting the largest share of need in this category ($83.2 million). Projects include Phase III Academic Modernization of Classrooms and Laboratories ($30.1 million), deferred maintenance ($22.2 million), utility improvements ($10.9 million), and a Center for the Performing Arts ($20 million). PSU's projects, totaling $70.3 million, include three new buildings (for Social Work-Professional Programs, Engineering, and Fine Arts) as well as the renovation of the Science Building. SOSC's projects again address seismic reinforcements for five campus buildings, renovation of Churchill Hall ($3.5 million), and completion of the College's physical plant complex ($1.1 million). Again, UO's Educational and General projects for that biennium principally address renovation and modernization of existing facilities. WOSC's priorities are to complete its highest priority project, the Academic Facilities and Programs Accommodation project ($6.4 million), in addition to making structural seismic improvements to several of its facilities ($3.7 million).

Auxiliary services projects for the 2001-2003 biennium include continuation of OSU's University Housing and Dining Services renovation program, Phase III, with Cauthorn Hall Renovation ($5.8 million); an addition to SOSC's Greensprings Complex ($4.28 million) and a new Broadcast Building ($3 million); and construction of a new facility to house the Paul Jensen Arctic Museum at WOSC ($2.5 million) and structural seismic improvements ($3.1 million). Projects at PSU total $7.3 million for the 2001-2003 biennium and include ADA upgrades, seismic, and life safety upgrades, as well as boiler and mechanical replacements to PSU's student housing.

Table IV portrays the Education and General plant program for 1999-2001, while Table V depicts the projects anticipated for Auxiliary Enterprises during those biennia.

1997-2003 Project Totals

The six-year capital construction totals ($ in thousands) for Education and General projects and for building fee and auxiliary enterprises are shown below.


Category


1997-1999


1999-2001


2001-2003
Six-Year
Total
Ed & General $262,062 $323,323 $191,287 $ 776,672
Bldg Fee & Auxiliary 124,675 111,905 54,225 290,805
Total $386,737 $435,228 $245,512 $1,067,477

For comparison purposes, the six-year budget adopted by the Board in July 1994 included $774 million of Education and General projects and more than $548 million of building fee and auxiliary efforts, for a total of $1,323,000,000. For 1993-1999, the total stood at $1,237,000,000.

Bonds

Bonds are proposed for several projects. Article XI-F(1) bonds are for projects that are self-supporting and funded from the building fee, the Consolidated Dormitory Pool, family housing, housing at PSU, parking, and other self-support projects. Included in the 1997-1999 list is $109,205,000 of Article XI-F(1) bonds for self-supporting projects. In addition, another $14,650,000 is needed to support previously approved projects for which bonds have not yet been sold. Another two percent of the amount of the bonds is allowed to be sold to defray the costs of sale. This brings the total requirement for Article XI-F(1) bonds to $126,330,000 for 1997-1999. This compares to $68,365,000 of such bonds approved by the legislature for sale in 1995-1997.

Article XI-G bonds are used to support Education and General projects and can be used to substitute for General Fund and Lottery Funds as long as at least one-half of the costs of the project are borne by the General Fund or Lottery Fund. Debt service on Article XI-G bonds typically is paid from the state General Fund. In line with the action of the 1995 legislature, staff recommends that $11,767,000 of Article XI-G bonds be issued to support half the projects entitled Repair and Renovation of Facilities.

In addition, with the Board's concurrence, staff will suggest that the Governor and/or legislative assembly consider utilizing such bonds for up to half the General Fund amount of the other projects in Part I of Table I. For four of the projects in Part I, it will be suggested that the state funds portion be matched 100 percent with bonds where the colleges and universities have raised an equal amount of gift funds to match the bond portion. Any such request will be contingent upon the addition of the necessary debt service from the General Fund to the operating budget.

Certificates of Participation (COPs)

Certificates of Participation are used to finance equipment, systems, and other purchases and must be approved by the legislative assembly. In 1995-1997, approximately $30 million of such certificates were approved to finance various projects, most notably the Human Resources Information System and instructional technology equipment and systems.

Equipment and systems acquisition is budgeted in the operating budget, as is the debt service on any Certificates of Participation that actually are issued. (An exception exists for nonlimited funds. In 1995-1997, no Certificates of Participation were requested for equipment or systems acquisition associated with nonlimited funds such as housing or internal service funds.)

For 1997-1999, Certificates of Participation are requested for the following projects.
College/
University

Project Name

Net Cash
Proceeds

System Human Resource Information System $3,000,000
System Instructional Technology Equipment 3,500,000
UO Campus Computing & Telecommunications
System Upgrade Equipment


5,400,000
SOSC Network Improvements 1,070,000
SOSC Document Imaging System 400,000
SOSC Mainframe Upgrade and Software Enhancement 320,000
SOSC Residence Hall Furnishings 100,000*
PSU Computer Equipment 2,000,000
PSU Classroom Instruction Equipment 2,000,000
TOTAL $17,790,000

* Nonlimited

If these proposals are approved by the Board, the Department of Administrative Services, and the legislative assembly, the Board will be able to issue Certificates of Participation for these projects during 1997-1999 through the state. The Board will have the opportunity to review and approve the issuance of these certificates for any of these projects before any sale is made.

Staff Recommendation to the Board

Staff recommended the Board authorize staff to prepare and submit to the Department of Administrative Services a 1997-2003 Capital Construction Budget in accordance with the following tables. Further, it was recommended that staff be authorized by the Board to apply for the necessary grants and seek the necessary bonding and Certificate of Participation authorizations to effect the projects and purchase the equipment and systems discussed for 1997-1999.

Staff also concurred with the request of the University of Oregon and recommended the Board approve the revised plan for the Campus Development Project and authorize staff to seek legislative authority, as appropriate, for necessary approvals of limitation, appropriations, and bonding authority for the Campus Development Project.

Board Discussion and Action

Vice Chancellor Ihrig summarized the information provided in the docket. Ms. Waddy raised a concern that there are not explicit criteria for use of the building fee before the fee is raised. Mr. Ihrig explained that the legislature needs to approve the increase first, then the Board would decided whether to actually implement an increase. He indicated that the Administrative Council and student representatives are working on a firmer definition now, but their work hasn't been completed. President Aschkenasy noted Ms. Waddy's concern and suggested that this one aspect not hold up submittal of the entire budget. He indicated that the Board could "make a firm commitment to having an explanation of how these fees are set if we ever approve another one." Ms. Waddy agreed with that approach.

Ms. Wustenberg asked for clarification of the original intent of the building fees. Mr. Ihrig replied that they were for buildings and facilities that supported student activities on campuses (e.g., student unions, recreation and athletic facilities, student health service facilities, and child care facilities). Ms. Christopher asked if this money had ever been used for buildings other than those for student activities. Mr. Quenzer responded that about 12 years ago, some remodeling and additions had been done that did not fit the criteria. Mr. Ihrig added that there's been nothing out of line in recent history; however, "it's one of those things that gnaws at the students. If it's been done once, it could be done again. So they're asking for clarification on the true intent of the building fee rather than having a generalized explanation." Mr. Imeson and Mr. Ihrig both commented that the request seems reasonable, and Mr. Ihrig underlined that is why the process of working with student representatives is underway.

Dr. Aschkenasy inquired about the errata sheet in the Board packet that increased the total COPs. Mr. Ihrig responded that the errata sheets were to correct clerical errors that occurred at the time of docket printing.

Dr. Aschkenasy asked directly if the money from Mr. Knight was "in hand," and not just a pledge. Mr. Ihrig responded that the money has been received and that will be confirmed before allowing any construction.

Mr. Swanson moved and Ms. Christopher seconded the motion to approve the staff recommendation. On roll call, the following voted in favor: Directors Imeson, Christopher, McAllister, Rhinard, Swanson, Waddy, Wustenberg, and Aschkenasy. Those voting no: none.

1997-1999 CAPITAL CONSTRUCTION BUDGET
STAFF FUNDING RECOMMENDATIONS
TABLE I--Education and General

($ in thousands)

PART I. GENERAL FUND, LOTTERY AND Article XI-G BONDS


Inst.


Project Name
State
Funds
Other
Funds


Total
A. Repair, Maintenance & Renovation Projects
1. Repair & Renovation of Facilities $ 11,767 $ 0 $ 11,767
2. Classroom & Lab Modernization & Tech Enhancements 7,660 0 7,660
3. WOSC-Academic Facility & Program Accomm., Ph I 7,470 0 7,470
4. System-Seismic Improvements 5,000 1,245 6,245
5. System-ADA/Accessibility 6,250 55 6,305
6. System-Safety Improvements 1,905 0 1,905
7. System-Classroom & Lab Mod & Tech Enhance, Pt 2 26,860 0 26,860
8. OSU-Laboratory Modernization, Phase I (Milam Hall) 3,560 0 3,560
9. OSU-Malheur Experiment Station Modernization 300 0 300
10. OSU-Greenhouse Modernization, Ph I 3,930 0 3,930
11. UO-Allen Hall Renovation, Phase II & III 1,685 1,570 3,255
12. UO-Utility Infrastructure Improvements 4,070 340 4,410
13. UO-Museum of Art Climate Control 1,970 4,775 6,745
14. OSU-Women's Building Physical Therapy 1,460 0 1,460
15. SOSC-Drama Lab Improvements 600 0 600
16. SOSC-Athletic Recreation Improvements 310 0 310
17. PSU-Central City Street Car Improvements 2,000 0 2,000
Subtotal--Repair, Maintenance & Renovation $ 86,797 $ 7,985 $ 94,782
B. New/Renovation Construction Projects
1. SOSC-Center for Visual Arts $ 5,620 $ 5,620 $ 11,240
2. UO-Campus Development Project 10,400 25,600 36,000
3. PSU-Urban Center, Phase I 15,730 13,480 29,210
4. OSU-Milne Computer Center Addition 7,865 0 7,865
5. EOSC-New Science Building 14,610 0 14,610
6. OIT-LRC Distance Learning Center 390 0 390
7. SOSC-Computer Network Infrastructure 225 110 335
8. PSU-Art, Engineering & Facilities Shops 1,120 1,970 3,090
9. PSU-Center for Korean Studies 5,100 5,100 10,200
10. SOSC-Life Sciences/Math/Classroom 12,220 4,490 16,710
Subtotal--New Construction $ 73,280 $ 56,370 $129,650
C. Land Acquisition & Other
1. System-Seismic Inventory 1,500 400 1,900
2. System-Land Acquisition 750 1,000 1,750
Subtotal--Land Acquisition & Other $ 2,250 $ 1,400 $ 3,650
TOTAL GENERAL FUND SUPPORTED PROJECTS $162,327 $65,755 $228,082

PART II. NONGENERAL FUND


Inst.


Project Name


Fund Source


Amount
New or Maint.
OSU Forest Ecosystem Research Lab Gifts/Grants $ 6,000 New
OSU HMSC Fisheries Building Gifts/Grants 4,000 New
UO Museum of Natural History Gifts/Grants 1,460 New
UO Network Info & Science Center Gifts/Grants 15,730 New
UO Career Center Facility Gifts/Grants 4,160 New
UO Center For At-Risk Studies Gifts/Grants 11,230 New
TOTAL NONGENERAL FUND $ 42,580
TOTAL Educational and General $270,662

1997-1999 CAPITAL CONSTRUCTION BUDGET
STAFF FUNDING RECOMMENDATIONS
TABLE II-BUILDING FEE

($ in thousands)


Rank


Inst.


Project Name

Requested
Bldg. Fee
Funding

At $25
per term
(increase)

New,
Renov. or Mainten.

1 UO Recreation & Fitness Center 8,440 4,000 Ren/New
2 PSU Smith Memorial Center Renov, Ph I 4,160 3,700 Renov.
3 WOSC Werner College Center Remod/Add, Ph II 3,485 3,100 New/Ren.
4 SYS Miscellaneous 2,000 2,000 Maint/Ren
5 OIT College Union Addition 4,995 0 New
6 OSU Memorial Union Renov. & Repair, Ph III 1,800 0 Maint/Ren
7 PSU Health & PE Building Activities Annex, Ph I 3,905 0 New
Additional Alterations 560 0 Maint.
8 SOSC Seismic Reinforcements 650 0 Maint./Ren
a) Stevenson Union 540 0 Maint/Ren
b) Student Health Center 0 Maint/Ren
9 SOSC Stevenson Union Improvements 1,685 0 Maint/Ren
10 SOSC Athletic/Recreation Improvements 310 0 Maint/Ren
11 SOSC Britt Ballroom Remodel 560 0 New
12 OSU Dixon Rec Center, Ph. III 8,940 0 New
$ 42,030 $ 12,800

Under the current fee level of $18.50 per student per term, an estimated $4 million of bonds can be issued this biennium for student building fee projects. This will cover a previously approved project for $3.9 million, UO's Erb Memorial Union Renovation approved for the 1995-1997 biennium, for which bonds have not yet been issued. Increasing the current fee level to $25 per student per term, if legislatively approved, would provide an estimated $14 million of bonds to be issued this biennium for student building fee projects.

TABLE III--AUXILIARY SERVICES
($ in thousands)


Inst.


Project Name


Fund Source



Amount

New,
Renov. or
Mainten.

OIT Residence Hall Restroom Remodel Housing $ 225 Maint\Renov
OIT Residence Hall Improvements Housing 730 Maint\Renov
OSU University Housing & Dining Services, Ph 1
1) Poling Hall Renovation Housing 3,595 Maint\Renov
2) Warehouse Addition Housing 1,575 New
OSU Gill Col. Athletic Training Room Modernization Gifts 225 Maint\Renov
OSU Willamette River Crew Facility Gifts 470 Maint\Renov
SOSC Access for Disabled Persons Housing 60 Maint\Renov
SOSC Seismic Reinforcements Housing 685 Maint\Renov
SOSC Computer Network Infrastructure Housing 110 New
SOSC US Forest Service/SOSC Building User Fees 2,810 New
SOSC Siskiyou Arboretum Gifts 505 New
SOSC Susanne Homes Electrical Upgrades Housing 565 Maint\Renov
SOSC JPR Equipment Upgrade Gifts 365 Maint\Renov
UO Bean West Seismic Housing 2,245 Maint\Renov
UO Housing Electronic Lock-Up Housing 395 Maint\Renov
UO Carson Seismic Housing 1,405 Maint\Renov
UO Recreation & Fitness Center Gift & Fees 9,700 Renov/New
PSU Student Housing Grade School Housing 30,900 New
PSU Student Housing ADA Housing 450 Maint\Renov
PSU Native American Cultural Center Gifts 1,855 New
PSU Waseda University Center Gifts 21,910 New
PSU Parking Structure #3 Seismic Parking 620 Maint\Renov
PSU Parking Structure #4 Parking 8,765 New
PSU Student Housing Rehabilitation and Repair Housing 2,250 Maint\Renov
PSU Public Health & DEQ Labs Lease Payment 20,560 New
TOTAL, AUXILIARY SERVICES $112,975
GRAND TOTAL - ALL 1997-1999 RECOMMENDED PROJECTS $396,437

OREGON STATE BOARD OF HIGHER EDUCATION
1999-2003 CAPITAL CONSTRUCTION BUDGET
PROJECTS LISTINGS BY INSTITUTION

TABLE IV LISTING OF INSTITUTIONAL REQUESTS FOR CAPITAL CONSTRUCTION AND LAND ACQUISITION TO BE FINANCED THROUGH STATE FUNDS AND/OR GIFTS AND GRANTS DURING 1999-2001 AND 2001-2003.

Board's Request
Education & General Plant Program
(total includes all funding sources)
($ in thousands)
Priorities 1999-2001

2001-2003

EASTERN OREGON STATE COLLEGE
1. Hunt Hall Elevator $ 500
2. Agricultural/Science Greenhouse 700
3. Inlow Hall Remodel 3,500
1. Physical Education Building Addition $ 2,000
2. New Academic Building I 7,000
3. New Academic Building II 4,500
TOTAL EOSC 1999-2003 Ed & General Projects $ 4,700 $13,500
OREGON INSTITUTE OF TECHNOLOGY
1. Cornett Hall Phase II, Conversion $ 4,500
2. Administrative Services Building 4,000
3. Classroom Modernization 1,100
4. Physical Plant Addition 300
1. Health Technologies Building $ 8,700
TOTAL OIT 1999-2003 Ed & General Projects $ 9,900 $ 8,700
OREGON STATE UNIVERSITY
1. Academic Modernization, Phase II $ 12,400
2. Deferred Maintenance 22,176
3. Utility Improvements 450
4. 35th Street Improvements (City) 755
5. Engineering & Computer Science Building 24,000
6. Linus Pauling Institute Building 13,500
7. Milam Hall Renovation and Modernization 14,200
8. Cordley Hall Addition and Modernization 10,760
9. Gilmore Hall Addition 5,000
10. Benton Hall Renovation 2,665
1. Academic Modernization, Phase III, Classroom/Lab Modernization $ 30,075
2. Deferred Maintenance 22,176
3. Utility Improvements 10,905
4. Center for the Performing Arts 20,000
TOTAL OSU 1999-2003 Ed & General Projects $105,906 $83,156
PORTLAND STATE UNIVERSITY
1. Advanced Technology Building $ 24,000
2. Millar Library Addition 21,000
3. Classroom Building 32,600
4. Science Building 2 Renewal 8,390
5. Lincoln Hall Renewal 14,670
6. Cramer Hall Renewal 7,400
7. Shattuck Hall Renovation, Phase 2 (Seismic) 2,000
1. Social Work - Professional Programs Building $ 22,500
2. Engineering Building 26,000
3. Fine Arts Building 16,400
4. Science Building I Renewal 5,400
TOTAL PSU 1999-2003 Ed & General Projects $110,060 $ 70,300
SOUTHERN OREGON STATE COLLEGE
1. Seismic Reinforcements - 9 Buildings $ 4,185
2. Central Hall Renovation 3,200
3. Taylor Hall Remodel 175
4. Britt Center Renovation 2,600
1. Seismic Reinforcements - 5 Buildings $ 875
2. Churchill Hall Renovation 3,500
3. Physical Plant Complex Completion 1,125
TOTAL SOSC 1999-2003 Ed & General Projects $10,160 $ 5,500
UNIVERSITY OF OREGON
1. Agate Hall Alteration $ 4,500
2. A&AA Addition & Alterations, Phase II 4,400
3. Campus Entry & Street System Improvements 853
4. Computing Center Addition & Alterations 5,600
5. Condon Hall Addition 2,900
6. Education Addition & Alteration, Phase II 5,214
7. Friendly Hall Addition 1,600
8. Integrated Research & Teaching Facility in Cognition 1,200
9. Klamath Hall Undergraduate Chemistry Labs 1,600
10. Knight Library Expansion 14,600
11. Military Science Addition & Alterations 420
12. Music Addition 2,700
13. Onyx Bridge Undergraduate Organic Chemistry Lab 300
14. Oregon Hall Addition & Alteration 3,718
15. OIMB Library & Information Technology Center 567
16. Facilities Services Administration & Shops Building 10,516
17. Power Plant Modifications 250
18. PLC Atrium & Office Wing 4,600
19. PLC Elevator Improvements 540
20. Theater Arts Facilities 7,600
TOTAL UO 1999-2003 Ed & General Projects $ 73,678 $ 0
WESTERN OREGON STATE COLLEGE
1. Academic Facilities & Program Accommodations, Ph. 2 $ 7,147
2. Seismic Improvement Non-Structural 1,550
3. Physical Access Upgrade, Phase 1 222
1. Academic Facilities & Program Accommodation, Phase 3 $ 6,401
2. Seismic Improvements Phase 1 Structural 3,730
TOTAL WOSC 1999-2003 Ed & General Projects $ 8,919 $10,131
GRAND TOTAL EDUCATION & GENERAL PROJECTS $323,323 $191,287
TABLE V LISTING OF INSTITUTIONAL REQUESTS FOR CAPITAL CONSTRUCTION AND LAND ACQUISITION TO BE FINANCED THROUGH AUXILIARY ENTERPRISES DURING 1999-2001 AND 2001-2003.

Board's Request
Auxiliary Enterprises
(total includes all funding sources)
($ in thousands)

Priorities 1999-2001 2001-2003
EASTERN OREGON STATE COLLEGE
1. Residence Hall, Phase II $ 9,500 $ 0
TOTAL EOSC 1999-2003 Auxiliary Enterprise Projects $ 9,500 $ 0
OREGON INSTITUTE OF TECHNOLOGY
1. Residence Hall Improvements (second floor) $ 700
2. Replace Parking Log Lighting 135
1. Residence Hall Improvements (first floor) $ 750
TOTAL OIT 1999-2003 Auxiliary Enterprise Projects $ 835 $ 750
OREGON STATE UNIVERSITY
1. Burt Hall Addition $ 3,000
2. Weatherford Hall Renovation and Residential College 15,000
3. Utility Improvements (Sewer Separation/Planning) 450
4. University Housing and Dining Services, Phase II
-Hawley Hall
-Oxford Hall
5,650
1. Utility Improvements (Sewer Separation/Construction) $ 10,905
2. University Housing and Dining Services, Phase III
-Cauthorn Hall Renovation
5,800
TOTAL OSU 1999-2003 Auxiliary Enterprise Projects $ 24,100 $ 16,705
PORTLAND STATE UNIVERSITY
1. Campus Technology Commons $ 32,000
2. Student Housing ADA Upgrade 400
3. Ondine Conference Center Renovations 2,100
4. Helen Gordon Child Development Center Addition & Rehab 5,500
5. Student Housing Rehabilitation 1,800
6. Library East/Smith Center Rehabilitation 2,600
1. Student Housing ADA Upgrade $ 200
2. Parking 1 & 2 Seismic Rehabilitation 940
3. Student Housing Seismic & Life Safety Upgrade 4,200
4. Student Housing Boiler & Mechanical Replacement 2,000
TOTAL PSU 1999-2003 Auxiliary Enterprise Projects $ 44,400 $ 7,340
SOUTHERN OREGON STATE COLLEGE
1. Technlology Enhanced Information Resource Center $ 14,675
2. Seismic Reinforcement 4,185
3. Parking Improvements 1,800
1. Greensprings Complex Addition $ 4,280
2. Broadcast Building 3,000
TOTAL SOSC 1999-2003 Auxiliary Enterprise Projects $20,660 $ 7,280
UNIVERSITY OF OREGON
1. Housing
-Hamilton East Repairs
-Hamilton West Repairs
-Food Service Upgrades

$2,000
2,000
800
1. Housing
-New Residence Hall
-Walton Complex Repairs
-University Inn/Riley Hill Repairs
-Food Service Upgrades





$ 13,000
1,750
1,000
800
TOTAL UO 1999-2003 Auxiliary Enterprise Projects $ 4,800 $ 16,550
WESTERN OREGON STATE COLLEGE
1. Werner College Center Remodel, Phase 3 $ 3,250
2. Valsetz Food Service Remodel 2,800
3. Seismic Improvements, Non-Structural 1,560
1. Paul Jensen Arctic Museum $ 2,500
2. Seismic Improvements Phase 1, Structural 3,100
TOTAL WOSC 1999-2003 Auxiliary Enterprise Projects $ 7,610 $ 5,600
GRAND TOTAL AUXILIARY PROJECTS $111,905 $ 54,225

1996-97 ANNUAL OPERATING BUDGET

Introduction

The recommended 1996-97 annual operating budget allocations are in accord with the actions of the 1995 legislature in approving the 1995-1997 appropriations for the Oregon State System of Higher Education.

The recommended budget for 1996-97 assumes an instruction fee increase of 4 percent for resident undergraduate students. Nonresident undergraduates will experience instruction fee increases of 4 percent at the University of Oregon, 8 percent at the colleges and at Portland State University, and 10 percent at Oregon State University. At the universities, graduate resident instruction fees will increase 10 percent, while nonresident graduate rates will increase 14 percent.

The following are the issues and staff recommendations concerning the institution allocations for 1996-97.

The Allocation Process

The 1996-97 allocation is based on the 1995-96 allocation, which was determined by applying the Budget Allocation System (BAS) Model. However, the 1996-97 allocation has been adjusted for inflation on services and supplies and equipment. The 1996-97 allocation also reflects the distribution of unclassified salary dollars to finance the unclassified salary plan in 1996-97, as approved by the Board at the July 21, 1995, meeting (see below for summary description).

The BAS Model forms the basis for the allocations to the campuses. The BAS Model determines the funding level for each institution based on academic program offerings, student enrollment mix by level, physical plant size and type, and student headcount, among other factors. The combination of these factors reflects the mission of each institution, which is determined by the Board. The Board's policy intent is to fund institutions equitably using the BAS Model's calculation of resource need for each campus based on that campus' mission.

The UO and Southern Oregon State College are provided, in addition to the normal BAS funding, an incentive amount of approximately $1,750 per FTE nonresident undergraduate student. The incentive funding amount is provided to recognize the added nonresident undergraduate enrollment these two institutions serve while charging total cost to those students. The incentive funding, plus the normal BAS funding, finances nonresident undergraduate students at about 100 percent of the BAS Model; whereas, due to limited resources, other students will be funded at about 73 percent of the BAS Model. The other System institutions benefit from the revenues generated by the added nonresident students at UO and SOSC because approximately 12 percent of the nonresident income generated in 1996-97 at UO and SOSC will be shared with them through the System resource pool.

Enrollment

The budget allocations for 1996-97, as outlined in this narrative, withhold from each institution an amount for enrollment uncertainty. The total System amount withheld is $3,250,000. After the fall 1996 enrollment is known and revised revenue estimates are made based upon that known enrollment, the uncertainty funds will be released if resources are available.

The following summarizes System enrollment for the three-term academic year that is funded in part from state support. A complete picture of the number of students served in the State System would total over 200,000 each year when all students served in the self-support instruction activities, such as continuing education and summer session, are included.
1994-95

Budgeted

1995-96

Actual

1995-1997

Target

Midpoint

Headcount

3-Term FTE

Headcount

3-Term FTE

Headcount

3-Term FTE

UO 16,680 14,186 17,139 14,563 18,013 15,100
OSU 14,131 11,991 14,161 11,945 14,756 12,702
PSU 14,428 8,900 14,348 8,865 15,045 8,815
WOSC 3,871 3,238 3,908 3,364 3,861 3,284
SOSC 4,535 3,631 4,529 3,566 4,634 3,729
EOSC 1,931 1,516 1,847 1,504 2,020 1,622
OIT 2,444 1,826 2,433 1,770 2,583 2,070
Total 58,020 45,288 58,365 45,577 60,912 47,322

Special Allocations

Veterinary Medicine, Oregon State University: The budget allocation provides $7,800,000 (biennial) in Lottery resources to the College of Veterinary Medicine. This amount is down from the $8,000,000 provided in 1993-1995.

Joint Graduate Schools of Engineering: The budget allocation provides $1,784,000 (biennial) of Lottery funding for the Joint Graduate Schools of Engineering. This is down from the $2,000,000 provided in 1993-1995.

Joint Graduate Schools of Business: The budget allocation provides $1,784,000 (biennial) of General Fund resources for the Joint Graduate Schools of Business. This is down from the $2,000,000 of Lottery funding provided in 1993-1995.

Endowment Match Program: $2,035,000 (biennial) has been set aside to continue the Endowment Match Program to provide incentive funds for campuses to encourage private sector endowments.

Minority Faculty Recruitment Program: $1,000,000 (biennial) has been set aside to implement a minority faculty recruitment program.

Statewide Public Services

The statewide public service budgets are special line-item appropriations by the legislature. The legislature provided additional Lottery funding to the statewide public service budgets to restore their state support to 1993-1995 funding levels. The amounts added are as follows.

1995-1997 State Support

Added Total
Agricultural Experiment Station $5,159,000 $38,124,291
Extension Service 3,660,000 27,975,060
Forest Research Laboratory 444,000 3,703,000

Unclassified Salary Increases

At the July 21, 1995, meeting, the Board approved an unclassified salary policy for 1995-1997 that granted a retention salary increase of three percent on July 1, 1995, followed by a six percent recruitment and retention increase on January 1, 1997 (or mid-contract; for example, nine-month contract staff will receive the increase on February 1, 1997). The presidents have submitted to the Chancellor a plan outlining the policies and guidelines to be used in granting the increases. The institution salary plans focus on merit increases that will maximize the impact on the retention and recruitment of high-quality faculty.

The current employer contribution for medical and dental insurance is $403 per month. This will be increased by five percent (to $423) on December 1, 1996.

Classified Salary Increases

Bargaining between the State System and the Oregon Public Employees Union (OPEU), which represents the System's classified staff, ended on May 3, 1996, with a bargaining agreement. The following are highlights of that agreement:

A four-year agreement that expires on June 30, 1999

A contract reopener on salary, differentials, and insurance in December 1996

Successor Agreement negotiations starting December 1998.

An additional salary step added to all salary ranges

Employees who reach the top step of their salary range on or after February 1, 1996, shall move to the new step on their anniversary date following implementation of the agreement

A classified Early Retirement Incentive Plan

A cooperative project involving a Joint Salary Survey

The cost of this agreement in 1996-97 (approximately $1.5 million) will be absorbed by the institutions through resource reallocations.

Other Issues

House Bill 5035: This legislation allocated $25,169,000 in Lottery funds from the Executive Department Economic Development Fund to the Oregon State System of Higher Education. However, these funds will not be released by the Emergency Board because of the Lottery revenue shortfall in 1995-1997. A portion of the funds ($3,500,000) was to be used to freeze resident undergraduate instruction fees in 1996-97. Because the funds are not available, instruction fees are increasing four percent for resident undergraduates in 1996-97.

PERS Six Percent Employer Attribution: Due to voter approval of Measure 8 in November 1994, the 1995 legislature, in approving the State System budget for 1995-1997, removed from the budget the General Fund and Lottery-funded dollars that financed the PERS six percent employer attribution. A lower court has ruled Measure 8 unconstitutional, and that ruling is currently being appealed to the Oregon Supreme Court. Because of the lower court ruling, the Emergency Board has released the funds previously removed from the State System budget, except for one difference. The 1995-1997 General Fund and Lottery-funded cost of the PERS six percent attribution is $17.1 million dollars. The Emergency Board released only $12.1 million. Therefore, the State System must absorb $5 million in costs for which it is not funded.

Travel Reimbursements: With the passage of Senate Bill 271, the Board of Higher Education approves the travel reimbursement rates for employees, as well as nonemployees, of the State System of Higher Education. The following travel reimbursement rates are recommended for 1996-97.

In-state:

Meals and Incidental Expenses and Lodging:

Standard: Per diem using OSSHE High-Low classification. Ashland, Bend, Portland metropolitan area, and Oregon coastal communities are classified as "high." All other Oregon cities are classified as "low." For "low" cities, the per diem for meals and incidental expenses is $26, and lodging (including tax) is $52. For "high" cities, the per diem for meals and incidental expenses is $26, and lodging (including tax) is $67. No receipts required for lodging, meals, and incidental expenses.

Exception (e.g., conferences): Per diem for meals and incidental expenses of $26 and lodging at actual and reasonable cost. Lodging receipts required. Deductions required for meals provided. Institutional policy applies regarding pre-approvals. Institutional policy applies regarding exceptions for reimbursement of lodging at actual and reasonable cost for the Portland Metropolitan area, lodging receipts required.

Out-of-State (Continental U.S.):

Meals and Incidental Expenses and Lodging:

Standard: Per diem using federal High-Low Schedule. Cities are classified as either "low," with meals and incidental expenses of $28 and lodging (including tax) of $67, or classified as "high," with meals and incidental expenses of $36 and lodging (including tax) of $116. No receipts required for lodging, meals, and incidental expenses.

Exception (e.g., conferences): Per diem for meals and incidental expenses of $36 and lodging at actual and reasonable cost. Lodging receipts required. Deductions required for meals provided. Institutional policy applies regarding pre-approvals.

Alaska, Hawaii, Puerto Rico, U.S. Possession, and International:

Meals and Incidental Expenses and Lodging:

Standard: Per diem for meals and incidental expenses as well as lodging using Federal Specific Locality Table. No receipts required for lodging, meals and incidental expenses.

Exception (e.g., conferences): Per diem for meals and incidental expenses using Federal Specific Locality Table and lodging at actual and reasonable cost. Lodging receipts required. Deductions required for meals provided. Institutional policy applies regarding pre-approvals.

Private Vehicle Mileage: Reimburse at $.25 per mile.

Vehicle Rentals: Receipts are required for vehicle rentals.

Noncommercial Lodging: When using noncommercial facilities, the per diem for lodging is $17.

Staff Recommendation to the Board

Staff recommended the Board approve the budget recommendations and allocations for 1996-97 as discussed above and as summarized on Table 1, following.

Board Discussion and Action

Vice Chancellor Ihrig reviewed the Operating Budget and provided an explanation of the Budget Allocation System (BAS) model. He indicated that, "What I have seen of modeling around the country and what I've learned from my own experience has led me to conclude that the BAS model is the fairest, most logical model for allocating costs. Like all models, it continually has to be modified as there is new information. But the model is updated on a biennial basis so that there are fair comparisons.

"Further," Mr. Ihrig added, "the BAS model is part of the way we function as a System and we have been very successful. But that success can lead institutions to want to build on things outside the System parameters that can, in the end, very well weaken the System. With this type of system, I think we have to be very, very careful that we continue to build on the strengths of the System and work together to get the resources that are needed to make it completely strong in concept."

Ms. Christopher asked about the nonresident incentive for campuses. Mr. Ihrig indicated that, at the last Council of Presidents' meeting, the decision was made to allow campuses to retain 90 percent of the nonresident resources and divide the remaining 10 percent among the State System. "This gives campuses the freedom to adjust to market and utilize capacity that residents are not using. The campuses are provided with an incentive and the System also benefits. If they can't sustain that market and nonresident enrollments drop, then the campus absorbs 90 percent loss of revenue and the System shares in a 10 percent loss."

President Aschkenasy indicated that six of the seven presidents have not had a salary increase in three years, including this past year when they elected not to accept increases so that more resources could be used to meet faculty needs. "Needless to say, their salaries have slipped in relation to national comparisons and just simple equity. There are, included in the annual budget, raises for these six people. The two university presidents would be raised to the level that President Risser received when he was hired, which is $130,000 plus expenses, and each of the four college presidents would be raised to a salary of $104,000 plus expenses. If you approve the annual operating budget, we will proceed with those increases for our presidents."

Dr. Aschkenasy added that Chancellor Cox asked not to be included in this group. "I'm raising the issue because I really don't think that's the way we ought to do things. So I'm going to ask the Board to think about this. I think maybe at the September meeting we can address this issue." Mr. Imeson agreed that it is inappropriate to leave the Chancellor's salary at the current level.

Ms. Christopher moved and Ms. McAllister seconded the motion to approve the staff recommendation. On roll call vote, the following voted in favor: Directors Imeson, Christopher, McAllister, Rhinard, Swanson, Waddy, Wustenberg, and Aschkenasy. Those voting no: none.

Table 1
Oregon State System of Higher Education
OPERATING BUDGET 1996-97


1995-96
Allocation
Inflation and
Other
Adjustments

1996-97
Allocation
Enrollment
Uncertainty To Be Alloc.
UO $136,907,424 $4,697,046 $141,604,470 $1,000,000
OSU 134,230,952 5,464,786 139,695,738 1,000,000
PSU 75,795,200 3,112,768 78,907,968 700,000
WOSC 23,150,443 418,500 23,568,943 200,000
SOSC 25,538,632 587,665 26,126,297 200,000
EOSC 13,669,486 240,503 13,909,989 50,000
OIT 18,051,601 440,034 18,491,635 100,000
OCATE 2,421,504 65,492 2,486,996
CA 16,476,972 534,401 17,011,373
To Be Allocated 17,296,650 (10,537,641) 6,759,009 (3,250,000)
Education & General $463,538,864 $5,023,554 $468,562,418
Agr. Exp. Station 25,256,734 244,441 25,501,175
Extension Service 24,067,821 175,991 24,243,812
Forest Research Lab. 5,827,731 14,103 5,841,824
Self-Support Activities 160,129,892 8,005,108 168,135,000
(Est.)
Gifts, Grants, Contracts 217,997,456 10,902,544 228,900,000
(Est.)
Total $896,818,498 $24,365,741 $921,184,239
To Be Allocated:
Enrollment Uncertainty 3,250,000 3,250,000
Joint Engineering 892,000 892,000
Joint Business 892,000 892,000
91-93 Endow. Match 193,475 132,429
93-95 Endow. Match 523,675 75,080
95-97 Endow. Match 1,017,500 1, 017,500
Fac. Development 500,000 500,000
Joint Business 1994-95 885,000
1994-95 Balances 9,143,000
Total To Be Allocated 17,296,650 6,759,009

ACADEMIC YEAR FEE BOOK 1996-97, TUITION & OTHER FEE POLICIES

Staff Report to the Board

The Academic Year Fee Book contains the fees and associated policies relating to all mandatory charges required of students within the Oregon State System of Higher Education.

Tuition represents the mandatory fees assessed all students for enrollment in a System institution. Tuition is comprised of the following separate fees: Instruction, Resource, Building, Incidental, and Health Service.

Comparisons of tuition among representative Western public institutions, shown in Schedules 1(A), (B), and (C), depict the relationship of annual tuition charges and percentage changes of Oregon institutions versus others in the West. Schedule 2 contains the proposed annual tuition totals for each OSSHE institution.

Passage of Senate Bill 2 by the 1995 legislature removed Oregon Health Sciences University from OSSHE. The State Board of Higher Education no longer has the authority to set fees for OHSU. As a result, all references to OHSU have been removed from the fee book.

Instruction Fees: Instruction fees, shown on Schedule 3, represent the assessment to students of fees that apply toward support of the Education and General Services component of the Department of Higher Education expenditure budget. Fees are assessed within undergraduate and graduate fee structures by resident and nonresident student classifications. The residency classification applies to all admitted students. Nonadmitted students enrolling under the part-time student policy are assessed a fee appropriate to the level of the course taken, without regard to residency status.

The full-time instruction fee rate for undergraduates is assessed for all credit hours between 12 and 18. The full-time instruction fee rate for graduates is assessed for all credit hours between 9 and 16. The fees for fewer credit hours are prorated for the hours enrolled. Hours taken above the plateau are assessed an additional amount for each hour taken.

Instruction fees for the colleges and universities within the Oregon Department of Higher Education are increasing at varying rates dependent upon the institution and student classification. Generally, instruction fees for resident undergraduate students at all institutions and resident graduate students at the four colleges are increasing four percent above 1995-96 rates. The resident graduate instruction fees at UO, OSU, and PSU are increasing at ten percent above the 1995-96 rates. For nonresident undergraduate students, the instruction fees are increasing four percent at UO, SOSC, and EOSC; eight percent at PSU, WOSC, and OIT; and ten percent at OSU. Nonresident graduate instruction fees are increasing by ten percent at WOSC, SOSC, EOSC, OIT, and UO Law School; and 14 percent at UO, OSU, and PSU.

Building Fee: The building fee, summarized on Schedule 4, generates monies to finance the debt retirement for construction associated with student centers, health centers, and recreational facilities constructed through the issuance of Article XI-F(1) bonds. The 1989 legislature authorized the student building fee at a maximum of $18.50. The 1995 legislature has authorized that the fee be continued at $18.50 for full-time students. A reduced pro rata fee is assessed on part-time students.

Incidental Fee: Incidental fee changes recommended by the institutions are shown on Schedule 4. This fee recommendation is, for the most part, determined by student committees in accordance with a Board-approved incidental fee policy on each campus. The funds generated by this fee are used for a variety of student activities.

Those institutions increasing their incidental fee are as follows: UO, 8.9 percent; OSU, 2.7 percent; SOSC, 6.5 percent; EOSC, 5.2 percent. The incidental fees at PSU, WOSC, and OIT are remaining at 1995-96 levels.

Health Service Fee: Institution recommendations are provided in Schedule 4. This fee is used to support the student health services of each institution. Optional health insurance policies are made available by some institutions. Generally, rate increases reflect the institutions' efforts to maintain the self-support nature of these services and some shifting of counseling expense from the Education and General fund as a means of addressing budget reductions.

The health service fees are being increased at five institutions. Those institutions and the fee increases are as follows: UO, 9.7 percent; OSU, 11.3 percent; WOSC, 11.9 percent; SOSC, 6.2 percent; OIT, 8.3 percent. The fees at PSU and EOSC will remain the same as 1995-96.

Resource Fee: Resource fee changes recommended by the institutions are shown on Schedule 4. Resource fees provide resources for specific programs to assist with faculty salaries, resource materials, equipment, and specialized services. The fees are assessed only to students admitted to, or generally understood to be enrolled in, specific programs and are not paid by students in other programs who might incidentally take a course offered by one of these specified programs. However, students enrolled under the part-time student fee policy are subject to the resource fees appropriate to specific courses taken. Resource fees may be proposed by institutions for approval by the Board. The estimated income of all such fees may be no more than five percent of the total Education and General budgeted resources, less institution-specific income.

Whenever a resource fee is assessed, it will be remitted for those students on Board-approved fee remission programs, such as the freshman minority and junior minority programs. The result will be that nearly 20 percent of these resource fees will be remitted.

Several institutions assess various resource fees. Some are increasing current rates and/or adding new resource fees. All the dollar amounts are on a per-quarter basis unless otherwise noted. Most fees are prorated for part-time hours.

The UO is increasing the Law School resource fee of $1,600 per semester for residents by 22.0 percent and decreasing the $2,075 per semester fee for nonresidents by ten percent; the College of Business Administration fee of $100 per term for residents and $250 per term for nonresidents remains the same; and the Technology fee of $50 per term for all students remains the same.

OSU is keeping all of its resource fees at the 1995-96 levels: MBA residents at $125; MBA nonresidents at $305; Engineering at $125; Pharmacy at $980 for both undergraduates and the PharmD program; Technology fee at $50 per term assessed to all students; one-time matriculation fee of $50 assessed to all new students; and an admission fee of $50 assessed one time to all new PharmD students.

PSU has no increases in the College of Business Administration master's program fee of $10 per credit hour up to $100; Engineering program fees of $10 per credit hour up to $100. The Technology fee is proposed for increases to $42 per term for undergraduates and $45 for graduate students, up from $24 and $27 respectively.

WOSC is keeping its Technology fee of $2 per credit with a maximum of $24 per term for undergraduates and $18 per term for graduates.

SOSC has no increase in its MBA resource fee of $100 per term for residents and $150 for nonresidents. SOSC is adding a Technology fee of $24 per term.

EOSC has no increase in the one-time matriculation fee of $50 for new students. EOSC is adding a Technology fee of $50 per term.

OIT has no resource fees.

Other Policy Changes: Other fees and policies set forth in Sections I, II, and III of the Academic Year Fee Book provide direction to the institutions and set other fees that are established by Board rules. A few significant changes are proposed to these policies.

The Joint Professional Schools of Business is initiating a master's program in International Management. The annual tuition is set at $12,500. It is intended that within four years, by the 1999-00 fiscal year, this program is to be fully self-supported.

Per-credit-hour fees for courses taken through the Oregon Center for Advanced Technology Education (OCATE) are proposed to be $559 for each three-credit-hour class and $746 for each four-credit-hour class. Additional credit hours will be $187 per credit hour.

OIT and Klamath Community College Service District: A special instruction fee rate of $35 per credit hour for specified lower division courses is proposed for OIT. In May the residents of Klamath County voted to form the Klamath Community College Service District. In anticipation of this vote and in keeping with the Governor's desire for more collaboration between the sectors of postsecondary education providers in the state, a Memorandum of Understanding between the Board of Higher Education and the Board of Education was signed in November 1995. This document outlined a working relationship to be established between OIT and the Klamath Community College Service District. Through this memorandum it was agreed that OIT would provide a number of specified lower division courses for the Service District at rates comparable to normal community college rates. Because of the differing natures of four-year and two-year colleges, the differences in student activities and health services provided, and the differences in state funding support, the tuition for OSSHE institutions is roughly three to four times that of community colleges. To accommodate this relationship, a community college fee will need to be established for the courses being provided under this agreement. Klamath Community College Service District desires to have at least some of these courses provided fall term of 1996.

Community college residency policy allows any individual who resides within a community college service area for 90 days to be declared a resident. The residency requirements for the State System of Higher Education are much more rigorous, including a year's residency before being eligible to attend a state institution of higher education. Because of these differences between the two residency policies, the special fees for these lower division courses offered as part of the Memorandum of Understanding must be made available to all OIT students. This is necessary since all students attending that institution could easily qualify as community college service district residents and thus be able to register at the Klamath Community College Service District for these lower division courses. The need to lower the fee rates for certain lower division courses at OIT may result in a loss of approximately $1.6 million per year in tuition revenue. In the 1997-1999 Biennial Budget request, OSSHE is requesting General Fund support from the Governor and legislature to offset this estimated loss in revenue,

Residence Hall and Food Service Charge: Institutional residence halls and food services operate as auxiliary services. As such, their fees and charges are to cover the cost of their operations. In recommending residence hall room and board charges for 1996-97, institution administrators estimated residence hall occupancy in relation to enrollment projections and present occupancy patterns.

Recommended changes in 1996-97 room and board rates are reflected in the examples given in Schedule 5. These rates are only examples, since each institution offers various room and board combinations. Most basic room and board rates will increase between four and ten percent. The rates are detailed in the Academic Year Fee Book.

Not covered by this action are rates for the PSU campus. Student Services Northwest, Inc., a private corporation, operates the residence halls at PSU and establishes the rates as specified in a service contract. The rates require approval by PSU officials.

Report of Public Hearing on Academic Year Fee Book

Summary of Testimony Received

The public hearing on the 1996-97 Academic Year Fee Book was conducted on Tuesday, June 18, 1996, in room 121 of Susan Campbell Hall on the UO campus. Two persons attended the hearing.

A written statement was received in April signed by four students from EOSC: Steve Gilmore, Associated Student Body Vice President; Joe Morgan, Associated Student Body Senator; Dan Baker, Associated Student Body Senator; and Josh Cypher, Associated Student Body Finance Executive. Their joint statement protested EOSC's proposed $50 per term Technology Resource Fee. They made four specific points in presenting their arguments. First, they said the proposal ignores the budgetary process and that the fee is too high. Second, the statement claims that "students had no part whatsoever in the original decision to implement the fee and how much the fee will be set at"; and that the fee "opens the door for the administration, in the future, to ignore the concerns of students." Third, the "unjustified fee will affect students in a negative manner." Fourth, students should not have "to pay for a technology fee when we already pay for technology in our instruction fee." The students asked for a "better formulated plan . . . and specific details on this . . . fee and justification as to why [it] has been set at $50."

Attending the public hearing on June 18 was Ed Dennis, Executive Director of the Oregon Student Lobby. Mr. Dennis submitted a nine-page written testimony outlining the Oregon Student Lobby case against further tuition increases. Mr. Dennis opened his remarks by stating that, during the last legislative session, the Oregon Student Lobby encouraged the legislature to oppose technology/resource fees and to instead appropriate an adequate amount of money to fund technology advances on campus. He also noted that his organization has worked with the past two Governors, the legislature, and the Oregon State Board of Higher Education to deal with Measure 5 funding reductions and intends to press for a tuition freeze in the 1997-1999 biennium. The general position of the testimony presented was that students should not continue to make up for state funding reductions through increased tuition. To support this position, Mr. Dennis presented a number of arguments.

Mr. Dennis asserted that students are not the only beneficiaries of higher education. Society as a whole benefits. Because of the broader sociological and economic benefits, students should not, therefore, have to pay an increasing share of their education. He cited a number of studies demonstrating the societal benefits of individuals with a college education. Mr. Dennis highlighted a number of Chronicle of Higher Education reports of improved funding and tuition freezes by a number of other states.

He then described how, in Oregon, the student has been paying an increasing share of the cost of instruction, rising from 25 percent historically to approximately 40 percent. Mr. Dennis also noted the annual rates of increase in excess of inflation, which place Oregon's tuition the highest in the West for in-state residents.

Citing two studies on the effects of tuition increases on enrollment, Mr. Dennis noted that every $100 increase in tuition causes an approximate two percent decrease in enrollment. Freshmen are most sensitive to tuition increases because of the other educational options open to them, particularly through local community colleges. Citing another study, students expect to have to "stop out" of school from time to time to work and expect to have to borrow more to pay for school. Mr. Dennis quoted higher education Board members and the former Chancellor on the negative effects of tuition increases on students' and families' ability to pay for education.

Mr. Dennis concluded his written testimony with several examples of how other states have been protecting funding and tuition levels of higher education in contrast to the approach taken in Oregon.

He concluded by saying that "Oregon cannot afford to raise tuition again. After the approval of this fee book, we must have a reprieve - a freeze for the coming biennium. We have done too much to price our Oregon residents out of our schools. I would ask the Oregon State Board of Higher Education to consider this testimony carefully before any decision is made concerning tuition and fee increases for the 1997-199 biennium." Following Mr. Dennis' presentation, a student from EOSC, Daniel Hunt, Associated Student Body Communications Executive, presented oral testimony and submitted the results of a student government-sponsored survey. Mr. Hunt spoke in opposition to the proposed Technology Fee at EOSC. He presented the findings of a random survey conducted with 200 students in early June. (Mr. Hunt noted the survey has a margin of error of four percent.) The survey asked ten questions about students' use of computers and the proposed Technology Fee. Mr. Hunt emphasized three of the responses. To the question, "Are you informed of what the Technology Fee is?" 41 percent said "Yes," 58 percent said "No." To the question, "Would you be willing to pay $50 per term for upgraded or expanded technology?" 31 percent said "Yes" and 65 percent said "No." To the question, "If the Technology Fee is implemented, will you increase your use of school computers?" 23.5 percent said "Yes," while 71 percent said "No." Mr. Hunt indicated that the Associated Student Senate at EOSC was divided on the issue of the Technology Fee and had decided to remain neutral on the issue.

Staff Recommendation to the Board

Staff recommended that the Board amend OAR 580-040-0040 as follows:

(Italicized material is added; brackets denote deletion.)

OAR 580-040-0040 Academic Year Fee Book

"The document entitled Academic Year Fee Book, dated July 19, 1996 [July 21, 1995] is hereby amended by reference as a permanent rule. All prior adoptions of academic year fee documents are hereby repealed except as to rights and obligations previously acquired or incurred thereunder."

Through the amendment, the Board adopted the document entitled Academic Year Fee Book, memos of attachment amending the draft document, and other amendments and attached schedules noted in this agenda item.

Board Discussion and Action

After Mr. Ihrig reviewed the contents of the Academic Year Fee Book, President Aschkenasy commented that, "While it doesn't pertain to the Fee Book, I am concerned that even a four percent increase in tuition is higher than the rate of inflation. While I understand that tuition relates directly to the level of state funding, I continue to be concerned about rising costs for students."

Ms. Wustenberg moved and Mr. Imeson seconded the motion to approve the staff recommendation. On roll call, the following voted in favor: Directors Imeson, Christopher, McAllister, Waddy, Wustenberg, and Aschkenasy. Those voting no: none. Mr. Rhinard and Mr. Swanson were out of the room at the time of the vote.

Following the vote, President Frohnmayer asked to comment, not as an objection to the Academic Year Fee Book, but to raise the issue of the level and percentage increase of graduate tuition, "which have an extraordinarily disproportionate effect on the graduate and research programs of the UO and OSU." Mr. Frohnmayer requested the Board consider the issue of appropriate financial aid in order to alleviate these concerns for the two research universities. "I'm authorized to tell you that President Risser joins me in these remarks." President Ramaley added that all three universities would benefit from increased scholarship support and graduate assistantships. President Aschkenasy asked for suggestions as to the direction the Board might take. Dr. Thompson indicated that the task force on graduate education and research may address that. Chancellor Cox indicated that staff would respond by October.

Schedule 1 (A)
Annual Tuition Rates in Representative Institutions - 1996-97*
In Descending Order of Resident U/Grad 1996-97 Rate
Public Colleges in the West

Institutions

Year
Resid. U/Grad. Nonres. U/Grad. Resid. Grad. Nonres. Grad.
Western Oregon St. Coll. 1995-96
1996-97
% Change
2,985
3,099
3.8%
8,466
9,117
7.7%
4,629
4,809
3.9%
7,869
8,619
9.5%
West. Washington University 1995-96
1996-97
% Change
2,523
2,613
3.6%
8,469
8,796
3.9%
3,921
4,065
3.7%
11,547
12,000
3.9%
Eastern Montana College 1995-96
1996-97
% Change
2,304
2,388
3.6%
6,316
6,559
3.8%
2,656
2,756
3.8%
6,672
6,928
3.8%
Boise State University 1995-96
1996-97
% Change
1,964
2,104
7.1%
7,310
7,450
1.9%
2,416
2,578
6.7%
7,762
7,924
2.1%
West. St. Coll. Colorado 1995-96
1996-97
% Change
2,003
2,086
4.1%
6,749
7,064
4.7%
--
--
--
--
--
--
Chico State University 1995-96
1996-97
% Change
2,006
2,046
2.0%
7,910
7,950
0.5%
2,006
2,046
2.0%
7,910
7,950
0.5%
North. Arizona University 1995-96
1996-97
% Change
1,884
2,010
6.7%
7,100
7,526
6.0%
1,884
2,010
6.7%
7,100
7,526
6.0%
South. Utah St. College 1995-96
1996-97
% Change
1,902
1,800
1.2%
6,042
5,652
0.4%
2,157
1,935
1.1%
6,591
6,180
0.3%
West. New Mexico University 1995-96
1996-97
% Change
1,486
1,516
2.0%
5,454
5,604
2.8%
1,606
1,636
1.9%
5,574
5,724
2.7%
U. of Hawaii, Hilo 1995-96
1996-97
% Change
554
938
69.3%
3,146
5,786
83.9%
--
--
--
--
--
--

*NOTE: Many of the 1996-97 numbers are tentative pending approval by policy-setting body.

Schedule 1 (B)
Public Universities in the West

Institutions

Year
Resid. U/Grad. Nonres. U/Grad. Resid. Grad. Nonres. Grad.
Univ. of California, Davis 1995-96
1996-97
% Change
4,544
4,230
(7.1%)
12,253
12,624
3.0%
4,799
4,419
(7.9%)
12,498
12,813
2.5%
Univ. of California, Berkeley 1995-96
1996-97
% Change
4,346
4,355
0.2%
12,044
12,749
5.9%
4,386
4,395
0.2%
12,082
12,789
5.9%
University of Oregon 1995-96
1996-97
% Change
3,381
3,540
4.7%
11,193
11,664
4.2%
5,376
5,889
9.5%
8,877
10,062
13.3%
Oregon State University 1995-96
1996-97
% Change
3,312
3,447
4.1%
10,116
11,085
9.6%
5,307
5,796
9.2%
8,739
9,891
13.2%
University of Washington 1995-96
1996-97
% Change
3,024
3,258
7.7%
8,297
9,873
19.0%
4,621
5,052
9.3%
11,573
12,483
7.9%
Univ. of Colorado, Boulder 1995-96
1996-97
% Change
2,840 13,908 3,584 13,710

(Not available at this time)

Colorado State University 1995-96
1996-97
% Change
2,780
2,855
2.7%
9,388
9,792
4.3%
3,110
3,193
2.7%
9,768
10,187
4.3%
University of Utah 1995-96
1996-97
% Change
2,508
2,514
0.2%
7,707
7,713
0.1%
2,036
2,041
0.2%
6,180
6,185
0.1%
University of Montana 1995-96
1996-97
% Change
2,458
2,485
1.1%
6,652
6,734
1.2%
2,238
2,323
3.8%
5,564
5,816
4.5%
Univ. of Alaska, Fairbanks 1995-96
1996-97
% Change
2,446
2,470
1.0%
5,758
5,830
1.3%
3,490
3,544
1.5%
6,190
6,298
1.7%
University of Hawaii, Manoa 1995-96
1996-97
% Change
1,631
2,421
48.4%
4,825
7,869
63.1%
2,187
3,261
49.1%
6,553
8,205
25.2%
University of Wyoming 1995-96
1996-97
% Change
2,006
2,144
6.9%
6,404
6,872
7.3%
2,426
2,597
7.0%
6,818
7,325
7.4%
University of New Mexico 1995-96
1996-97
% Change
1,996
2,071
3.8%
7,542
7,922
5.0%
2,166
2,247
3.7%
7,736
8,024
3.7%
Arizona State University 1995-96
1996-97
% Change
1,884
2,010
6.7%
7,912
8,378
5.9%
1,884
2,010
6.7%
7,912
8,378
5.9%
Utah State University 1995-96
1996-97
% Change
1,992
1,992
0.0%
6,042
6,042
0.0%
1,182
1,182
0.0%
3,690
3,690
0.0%
University of Nevado, Reno 1995-96
1996-97
% Change
1,830
1,920
4.9%
6,730
7,020
4.3%
1,344
1,392
3.6%
6,244
6,492
4.0%
University of Idaho 1995-96
1996-97
% Change
1,620
1,768
9.1%
7,000
7,420
6.0%
2,160
2,308
6.9%
7,540
7,960
5.6%

Schedule 1 (C)
Annual Tuition Rates in Representative Institutions - 1995-96*
in Descending Order of Resident U/Grad 1995-96 RatePAC-10 Public Institutions

Institutions

Year
Resid. U/Grad. Nonres. U/Grad. Resid. Grad. Nonres. Grad.
Univ. of California, Berkeley 1995-96
1996-97
% Change
4,346
4,355
0.2%
12,044
12,749
5.9%
4,386
4,395
0.2%
12,082
12,789
5.9%
Univ. of Cal., Los Angeles 1995-96
1996-97
% Change
3,891
4,001
2.8%
11,589
12,395
7.0%
4,362
4,473
2.5%
12,060
12,867
6.7%
University of Oregon 1995-96
1996-97
% Change
3,381
3,540
4.7%
11,193
11,664
4.2%
5,376
5,889
9.5%
8,877
10,062
13.3%
Oregon State University 1995-96
1996-97
% Change
3,312
3,447
4.1%
10,116
11,085
9.6%
5,307
5,796
9.2%
8,739
9,891
13.2%
University of Washington 1995-96
1996-97
% Change
3,027
3,258
7.6%
8,297
9,873
19.0%
4,621
5,052
9.3%
11,573
12,483
7.9%
Washington State University 1995-96
1996-97
% Change
3,150
3,142
(0.2%)
8,654
8,866
2.4%
4,876
4,936
1.2%
12,220
12,368
1.2%
Arizona State University 1995-96
1996-97
% Change
1,884
2,010
6.7%
7,912
8,378
5.9%
1,884
2,010
6.7%
7,912
8,378
5.9%
University of Arizona 1995-96
1996-97
% Change
1,884
2,010
6.7%
7,912
8,378
5.9%
1,884
2,010
6.7%
7,912
8,378
5.9%

Schedule 2
Total Tuition Recommendations
Full-Time Student
1996-97 Academic Year

Full-Time Tuition
1996-97 1995-96 % Change
UO
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
$ 3,540
11,664
5,889
10,062
$ 3,381
11,193
5,376
8,877
4.7%
4.2%
9.5%
13.5%
OSU
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
3,447
11,085
5,796
9,891
3,312
10,116
5,307
8,739
4.1%
9.6%
9.2%
13.2%
PSU
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
3,342
10,608
5,700
9,795
3,183
9,816
5,187
8,619
5.0%
8.1%
9.9%
13.6%
WOSC
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
3,099
9,117
4,809
8,619
2,985
8,466
4,629
7,869
3.8%
7.7%
3.9%
9.5%
SOSC
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
3,147
8,847
4,875
8,685
2,949
8,430
4,611
7,851
6.7%
4.9%
5.7%
10.6%
EOSC
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
3,162
3,162
4,962
8,742
2,898
2,895
4,629
7,851
9.1%
9.1%
7.2%
11.3%
OIT
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
3,144
10,083
4,797
8,607
3,030
9,360
4,620
7,860
3.8%
7.7%
3.8%
9.5%
Other
UO MA/MS/MSIR (CBA) Resident
UO MA/MS/MSIR (CBA) Nonresident
6,189
10,812
5,676
9,627
9.0%
12.3%
UO Law Semester Resident
UO Law Semester Nonresident
9,090
13,572
8,000
13,190
13.6%
2.9%
OSU MBA Resident
OSU MBA Nonresident
6,171
10,806
5,682
9,654
8.6%
11.9%
OSU Engineering Undergrad. Resident
OSU Engineering Undergrad. Nonres.
3,822
11,460
3,687
10,491
3.7%
9.2%
OSU Engineering Grad. Resident
OSU Engineering Grad. Nonresident
6,171
10,266
5,682
9,114
8.6%
12.6%
OSU Pharmacy Undergrad. Resident
OSU Pharmacy Undergrad. Nonresident
6,387
14,025
6,252
13,056
2.2%
7.4%
OSU Pharmacy PharmD Resident
OSU Pharmacy PharmD Nonresident
8,736
12,831
8,247
11,679
5.9%
9.9%
OSU Veterinary Medicine Resident
OSU Veterinary Medicine Nonresident
9,177
17,940
8,382
15,798
9.5%
13.6%
PSU Sch. of Business Grad. Resident
PSU Sch. of Business Grad. Nonresident
6,000
10,095
5,487
8,919
9.3%
13.2%
PSU Engineering Undergrad. Resident
PSU Engineering Undergr. Nonresident
3,642
10,908
3,483
10,116
4.6%
7.8%
PSU Engineering Grad. Resident
PSU Engineering Grad. Nonresident
6,000
10,095
5,487
8,919
9.3%
13.2%
SOSC MBA Resident
SOSC MBA Nonresident
5,175
9,135
4,911
8,301
5.4%
10.0%
OIT Metro Ctr. Undergrad. Resident*
OIT Metro Ctr. Undergrad. Nonresident*
2,656
9,595
2,511
8,881
4.1%
8.0%
OIT Metro Ctr. Graduate Resident*
OIT Metro Ctr. Graduate Nonresident*
4,309
8,119
4,141
7,381
4.1%
10.0%

Note: Tuition includes fees for instruction, resource, building, incidental, and health service fees at all institutions.

*At the OIT Metro Center, only the instruction fee and building fee and a special $6 annual incidental fee are mandatory; other fees are optional.

Schedule 3
Instruction Fee Recommendations
Full-Time Student
1996-97 Academic Year
Full-Time Instruction Fee
1996-97 1995-96 % Change
UO
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
$2,694
10,818
5,043
9,216
$2,589
10,401
4,584
8,085
4.0%
4.0%
10.0%
14.0%
OSU
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
2,694
10,332
5,043
9,138
2,589
9,393
4,584
8,016
4.0%
10.0%
10.0%
14.0%
PSU
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
2,694
9,960
5,043
9,138
2,589
9,222
4,584
8,016
4.0%
8.0%
10.0%
14.0%
WOSC
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
2,520
8,538
4,248
8,058
2,424
7,905
4,086
7,326
4.0%
8.0%
4.0%
10.0%
SOSC
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
2,520
8,220
4,248
8,058
2,424
7,905
4,086
7,326
4.0%
4.0%
4.0%
10.0%
EOSC
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
2,316
2,316
4,116
7,896
2,226
2,226
3,957
7,179
4.0%
4.0%
4.0%
10.0%
OIT
Undergraduate Resident
Undergraduate Nonresident
Graduate Resident
Graduate Nonresident
2,595
9,534
4,248
8,058
2,496
8,826
4,086
7,326
4.0%
8.0%
4.0%
10.0%
Other
UO Law Semester Resident
UO Law Semester Nonresident
5,044
8,576
4,588
7,800
10.0%
10.0%
OSU Veterinary Medicine Resident
OSU Veterinary Medicine Nonresident
8,424
17,187
7,659
15,075
10.0%
14.0%

Schedule 4
Building, Incidental, Health Service, & Resource Fee Recommendations
Full-Time Student
1996-97 Academic Year
1996-97 1995-96 % Change
Building Fee
All Institutions $55.50 $55.50 0.0%
UO Law (Semester) 54.00 54.00 0.0%
Incidental Fee
UO 403.50 370.50 8.9%
OSU 340.50 331.50 2.7%
PSU 304.50 304.50 0.0%
WOSC 282.00 282.00 0.0%
SOSC 319.50 300.00 6.5%
EOSC 489.00 465.00 5.2%
OIT 297.00 297.00 0.0%
UO Law (Semester) 405.00 370.00 9.5%
OIT Metro Center 6.00 0.00 n/a
Health Service Fee
UO 237.00 216.00 9.7%
OSU 207.00 186.00 11.3%
PSU 162.00 162.00 0.0%
WOSC 169.50 151.50 11.9%
SOSC 180.00 169.50 6.2%
EOSC* 151.50 151.50 0.0%
OIT 196.50 181.50 8.3%
UO Law (Semester) 237.00 216.00 9.7%
Resource Fees
UO
Technology Fee - All 150.00 150.00 0.0%
Law Residents
Law Nonresidents
3,200.00
4,150.00
2,622.00
4,600.00
22.0%
(9.8%)
C. of Bus. Master Residents
C. of Bus. Master Nonres.
300.00
750.00
300.00
750.00
0.0%
0.0%
OSU
Technology Fee - All 150.00 150.00 0.0%
MBA Residents
MBA Nonresidents
375.00
915.00
375.00
915.00
0.0%
0.0%
Engineering 375.00 375.00 0.0%
Pharmacy 2,940.00 2,940.00 0.0%
PSU
Technology Undergraduates
Technology Graduates
126.00
135.00
72.00
81.00
75.0%
66.7%
School of Business Master's 300.00 300.00 0.0%
Engineering 300.00 300.00 0.0%
WOSC
Technology Undergraduates
Technology Graduates
72.00
54.00
72.00
54.00
0.0%
0.0%
SOSC
Technology Fee - All 72.00 0.00 n/a
MBA Residents
MBA Nonresidents
300.00
450.00
300.00
450.00
0.0%
0.0%
EOSC
Technology Fee - All 150.00 0.00 n/a

Schedule 5
Oregon Department of Higher Education
Comparison of Basic Residence Hall Rates 1996-97 to 1995-96

The following are comparative samples of board and room rates for a basic dorm room with double occupancy and the student on a 19-meal per week plan. Each institution offers a variety of room and meal options at rates above and below these listed. Refer to the Fee Book for a more definitive schedule of rates.
1996-97 1995-96 % Change
University of Oregon
Basic multiple, 19 meals

$4,342

$3,949

10.0%
Oregon State University
Basic multiple, 16 meals

4,361

4,144

5.2%
Western Oregon State College
Basic multiple, 19 meals

4,065

3,839

5.9%
Southern Oregon State College
Basic multiple, 19 meals

4,181

3,984

4.9%
Eastern Oregon State College
Basic multiple, 19 meals

4,070

3,895

4.5%
Oregon Institute of Technology
Basic multiple, 19 meals

4,045

3,875

4.4%

B.S. IN BIOLOGICAL ENGINEERING, OSU

Introduction

Oregon State University (OSU) requests authorization to offer a new instructional program leading to the Bachelor of Science (B.S.) in Biological Engineering. Biological engineering is an emerging, interdisciplinary field of study that enables individuals to analyze and solve engineering problems within the complex realm of biological systems. The Board reviewed a preliminary proposal for this program on February 16, 1996. The proposed program will be offered by OSU's Department of Bioresource Engineering (which already provides master's- and doctoral-level training) in the Colleges of Agricultural Sciences and Engineering. This department would now also train students at the baccalaureate level. This proposed program will (1) provide students with a strong background in engineering and life sciences, (2) train highly qualified professionals for the agricultural, biological, food, medical, and pharmaceutical industries, (3) prepare students for graduate studies in related fields, and (4) prepare individuals for registration as professional engineers. The program plans to seek and gain accreditation by the Accreditation Board for Engineering and Technology (ABET) and to foster interdisciplinary teaching and research activity among the engineering, agricultural, and biological sciences faculty at OSU. No other undergraduate program in biological engineering exists in the state of Oregon.

Staff Analysis

1. Relationship to Mission

The proposed program is directly related to Oregon State University's long-standing land-grant mission -- an institution with a strong emphasis in agriculture, engineering, and physical/life-sciences programs. The proposed biological engineering program is interdisciplinary in nature and requires the integration of such fields as mathematics, chemistry, physics, biological sciences, and engineering. The proposed undergraduate program builds on efforts underway at OSU for over a decade, when the institution recognized opportunities in the emerging area of biotechnology and established the Center for Gene Research and Biotechnology. This Center was created to foster research collaboration among faculty research groups in the Colleges of Engineering, Forestry, Pharmacy, Science, and Veterinary Medicine and places OSU among the national leaders in biotechnology research. By intertwining biotechnology with OSU's strengths in engineering and pharmacy, this proposed undergraduate program will advance the institution's mission, as well as its commitment and contributions to the biotechnology field.

2. Evidence of Need

Industries that rely on personnel trained in bioengineering fields are experiencing significant growth, and the rapidly expanding biotechnology industry in Oregon and the Pacific Northwest will particularly benefit from this proposed program. Recent advances in recombinant DNA technology have expanded the opportunities for exploiting biological systems and for increasing the number and quality of biologically based products. In 1992, the National Research Council reported that most training and education of bioprocess engineers occurred at the graduate level, and OSU's experience is consistent with this observation. The Ph.D. program in Bioresource Engineering has been in existence since 1991 and was the institution's first step in formally bridging the biosciences with engineering in order to address important needs in the bioprocesssing area. However, in the present day, as biologically derived products move from research to production, needs for different staff distributions are developing. The shift is from an emphasis on Ph.D.-level research scientists to B.S.-level process engineers, cell culture and fermentation specialists, and bioseparation experts. Data gathered by the U.S. Congress' Office of Technology Assessment suggests the demand for trained personnel has changed, or is changing, in biotechnology companies and that several organizations have reported "difficulties hiring biochemical engineers at the B.S./M.S. level with cell culture and fermentation experience." A graduate of OSU's proposed B.S. program in Biological Engineering would be highly qualified for positions such as these, as well as for employment in more traditional engineering fields such as the agricultural, chemical, food, and environmental industries.

The increased demand for qualified biological engineers is reflected in the substantial student interest in the field. Recently established B.S. programs at other institutions show steady growth in enrollment in the first five years of operation. Rutgers University's biological engineering program climbed from 32 to 134 students in a five-year span, Clemson's University's program rose from 20 to 70, and the University of Nebraska-Lincoln's program expanded from 26 to 58. Several programs have sustained total student enrollment of over 100 and it is anticipated that OSU's proposed program will elicit a similar response.

3. Quality of the Proposed Program

In the past decade, OSU has made significant commitment to the advancement of this field through the establishment of the aforementioned Center for Gene Research and Biotechnology, which has positioned OSU among the national leaders in biotechnology activity. Following this model of success, this proposed undergraduate degree program is anticipated to be of the highest possible quality, both in terms of curriculum as well as faculty to deliver the curriculum. The 192 course credits required for this degree meet the requirements for OSU's baccalaureate core, which includes a number of writing-intensive courses. Students in the program will be prescribed a program that includes courses in mathematics, chemistry, physics, biological sciences, general engineering and engineering science, and biological engineering. This proposed course of study meets or exceeds all ABET requirements in areas designated for an accredited biological engineering program. Further, OSU's strong commitment to teaching and research in biotechnology is reflected in the quality of the current faculty in the Department of Bioresource Engineering who are well qualified to deliver this proposed program. Recently (1994-95), two faculty with teaching and research expertise in the bioprocess engineering area have been added. A third new faculty member with expertise in bioprocess engineering will join the department in July. Combined with the existing faculty, a core group of six faculty members with strengths in bioprocess engineering will be responsible for the new B.S. in Biological Engineering program.

4. Adequacy of Resources to Offer the Program

Faculty. No new funds are sought in order to implement this proposed new program. Five of the six core faculty positions are in place, and the sixth will soon be in place as a result of filling the faculty line made available by (former department chair) Dr. Hashimoto's move to OSU's Academic Affairs office. In addition to the newly acquired faculty members, the teaching efforts of several tenured faculty members have been redirected to support the new bioengineering emphasis. And, although the Department of Bioresource Engineering has offered a graduate program, many of the course offerings were at the combined upper division-graduate level. No major changes are anticipated in order to deliver course content to undergraduates.

Library, Facilities, and Equipment. The library holdings of OSU are considerable in the areas of the agricultural, physical and biological sciences, and engineering. They are adequate to meet the needs of an undergraduate biological engineering program. The Department of Bioresource Engineering is housed in Gilmore Hall which, since 1990, has been completely renovated with the inclusion of nine new research laboratories, graduate student offices, a student computer lab, and a remodeled classroom. The adjacent Gilmore Annex has also been remodeled to accommodate two new graduate student offices, a fully instrumented teaching laboratory, a research laboratory, and a research shop. Further, a $5 million addition to Gilmore Hall has been included in OSU's Education and General Projects for 1999-2001, which will provide an additional 10,500 square feet of teaching and research laboratory space. Finally, to accompany the renovated facilities and planned building expansion, the Department of Bioresource Engineering has invested in a substantial amount of additional equipment to support its teaching and research efforts.

Program Review

The proposed program has been reviewed positively by all appropriate institutional committees as well as the Academic Council.

Staff Recommendation to the Board

Staff recommended that the Board authorize Oregon State University to establish a program leading to the B.S. in Biological Engineering effective fall term 1996, with the first freshman cohort entering in fall term 1997. A follow-up review of the program will be conducted by the State System Office of Academic Affairs in the 2002-03 academic year. The proposal should be placed on the consent agenda for final action at the July Board meeting.

Board Discussion and Action (June 21, 1996)

Mr. Miller moved and Ms. Puentes seconded the motion to approve the staff recommendation. The following voted in favor: Directors Bailey, Christopher, McAllister, Miller, Puentes, Rhinard, Waddy, Willis, and Swanson. Those voting no: none.

Board Discussion and Action (July 19, 1996)

Mr. Imeson moved and Ms. McAllister seconded the motion to approve the staff recommendation. The following voted in favor: Directors Imeson, Christopher, McAllister, Rhinard, Swanson, Waddy, Wustenberg, and Aschkenasy. Those voting no: none.

APPOINTMENT TO FOREST RESEARCH LABORATORY ADVISORY COMMITTEE

Staff Report to the Board

ORS 526.225 specifies that the Board of Higher Education shall appoint a Forest Research Laboratory Advisory Committee composed of 15 members, nine of whom are to be individuals who are engaged, actively and principally, in timber management of forest lands, harvesting, or processing of forest products; three individuals who are the heads of state and federal public forestry agencies; and three individuals from the public-at-large. Although the statute does not prescribe the terms of the Committee members, the practice has been to make appointments for a period of three years. Traditionally, those who are performing actively and effectively have been recommended for reappointment to a second three-year term, with all members replaced at the conclusion of a second term.

Dr. George W. Brown, director of the Forest Research Laboratory, with the concurrence of President Paul Risser, has made the following recommendation:

Appointment of Robert W. Williams, newly appointed Regional Forester for the USDA Forest Service, Pacific Northwest Region, to replace John E. Lowe, who has retired. Mr. Williams began his career with the Forest Service in Idaho and has served as District Ranger on two national forests and an internal auditor for the Office of the Inspector General in Atlanta, Georgia. In addition, he has been a staff officer on the Payette National Forest in Idaho, and Deputy Forest Supervisor of the Boise National Forest and of the Beaverhead National Forest in Montana.

The Regional Forester for the USDA serves as a permanent member of the committee until he/she retires or resigns the position. Therefore, Mr. Williams is recommended as a permanent member.

Staff Recommendation to the Board

Staff recommended the Board approve the above appointment to the Forest Research Laboratory Advisory Committee.

Board Discussion and Action

Mr. Imeson moved and Ms. McAllister seconded the motion to approve the staff recommendation. The following voted in favor: Directors Imeson, Christopher, McAllister, Rhinard, Swanson, Waddy, Wustenberg, and Aschkenasy. Those voting no: none.

SEMI-ANNUAL AUDIT REPORT AND ANNUAL AUDIT PLAN

Staff Report to the Board

The Internal Audit Division's (IAD) Semi-Annual Audit Report, including the supplemental materials, summarizes internal audit activity for the six-month period January 1996 through June 1996. A brief description is provided for each project conducted during this six-month period. In addition, this semi-annual report includes a status report on the 1995-96 Internal Audit Plan. IAD's 1996-97 Internal Audit Plan is also included within the supplementary materials. This plan provides a brief overview of IAD's proposed work for the upcoming year. These reports are submitted to the Chancellor, members of the Board, and to the State of Oregon Department of Administrative Services.

Board Discussion

Vice Chancellor Ihrig announced that Controller Steve Katz has accepted the position of controller at Fresno State University. Mr. Mike Green will serve as interim controller, and a search for a permanent controller will be launched after the vice chancellor search is completed.

There were no Board member questions or comments regarding the audit report or plan.

(No Board action required)

PROFICIENCY-BASED ADMISSION STANDARDS SYSTEM (PASS) PROJECT

Staff Report

This is a regular progress report to the Board on the development of the Proficiency-based Admission Standards System (PASS). In previous actions, the Board has adopted a new approach to admission of students to any of the State System's seven public baccalaureate institutions. Students admitted beginning fall term 2001 will be required to demonstrate their knowledge and skills in six content areas: mathematics, science, social science, second languages, humanities/literature, and visual and performing arts. Embedded in the content areas are cognitive and intellectual skills in: reading, writing, listening and speaking, analytic thinking, problem solving, technology, integrative thinking, team work, and quality work.

These changes are being made for several reasons. First, school reform legislation passed in 1991 and amended in 1995 will require students to demonstrate mastery of "rigorous academic content standards" in order to receive Certificates of Initial and Advanced Mastery. As the high school program and curriculum changes to offer these certificates, higher education must adapt its admission procedures to accept students who have attained performance-based certificates. Second, too many students who are admitted to college, at present, either fail to proceed in a timely fashion to obtain their bachelor's degree or require remedial coursework in order to complete college-level work. By clearly identifying the knowledge and skills needed to succeed in college, students should be better prepared and their success rates should increase. And, third, higher education in Oregon is changing as well. Colleges and universities are becoming more productive and innovative. Students in the future can expect to work more independently to demonstrate their mastery of college-level material. Performance-based admission criteria will help students be prepared for a college environment in which they will be expected to meet standards to move through their program of study successfully and in a timely fashion.

PASS grew out of a meeting of the Joint Boards of Education in July 1993. The Board of Higher Education agreed to provide the Board of Education with the knowledge and skill standards students need to be admitted to college. Professor David Conley, University of Oregon, leads the PASS project. With participation from higher education, community college and high school faculty, the proficiency standards list was created, presented to the State Board of Higher Education, and adopted in principle on January 28, 1994. PASS staff gathered input and reactions to the proficiencies from February through April 1994, and the Board approved the revised proficiencies at its May 27, 1994, meeting. During the 1995-96 academic year, more detailed descriptions of each proficiency were developed and initial work on the assessment system began in conjunction with 30 partnership sites consisting of a high school, community college, and OSSHE college or university.

Beginning with freshmen admitted fall term 2001, students will be expected to demonstrate proficiencies by three types of assessments: criterion-referenced, common tasks, and teacher-verified. These are currently being developed collaboratively with PASS partnership high schools, community colleges, OSSHE institutions, and the Oregon Department of Education. Assessments will be available beginning fall 1997. Transcripts containing a combination of proficiencies and grades are expected through 2001.

The extensive development work undertaken by the PASS project is supported from multiple sources, including the OSSHE Academic Affairs budget, a one-time legislative appropriation in the 1993-1995 biennium and, in largest part, from competitive grants:

U.S. Department of Education, Fund for the Improvement of Post-Secondary Education: To support development of assessments and partnerships (FIPSE grant). $300,000

U.S. Department of Education, Office of Educational Research and Improvement, Fund for Innovation in Education: To support development of training materials, trainers, and to expand the number of partnerships (FIE grant). $1,100,000

U.S. Department of Education, Office of Reform Assistance and Dissemination, Eisenhower Professional Development Federal Activities Program: To develop materials and strategies for teacher education programs to better prepare teachers to teach in standards-based schools (STEP grant). $1,200,000

The Pew Charitable Trusts, Philadelphia, Pennsylvania: To implement PASS standards in all high schools in the Portland Public Schools (Pew grant). $600,000

Dr. Conley was present at the Board meeting to provide an update on the status and future directions of the project: collaborative work with all educational sectors and the Oregon Department of Education in refinement of the proficiency standards, direct work with 30 partnership sites, involvement of high school teachers in training and assessment activities, development of assessments translatable to the admission process, and Oregon's national leadership of this new approach.

Board Discussion

Dr. Conley directed Board attention to materials provided in their packets -- PASS Frequently Asked Questions, and the latest revision of the standards. He emphasized that PASS staff are working on alignment of content standards with the standards from the Oregon Department of Education (ODE). "As ODE comes up with new standards, defines them more clearly for the CIM and the CAM, we then match them with our standards. And, at each step, we're working toward using language that's similar and, whenever possible, identical, so that it's clear to students what they need to do for initial mastery, advanced mastery, and college admission."

Dr. Conley also noted that, by September 1997, it's estimated that 300 to 600 students will be certified on some proficiencies. Other project progress is in the area of transcripting. "I met two days ago with the OSSHE admission directors, and they were quite enthusiastic about the potential of a system like this. There's so much more information to use, not only to determine admission, but to determine placement, to help eliminate remedial education requirements, and to provide other types of information related to majors, etc. We've developed a task force from the admission officers and will begin work on developing a transcripting system so the proficiencies can be reported without any need for additional admission officers or resources around the admissions process."

Finally, Dr. Conley explained the project's national connections with The College Board and other states who are interested in Oregon's progress.

Dr. Ashkenasy asked about the viability of PASS if the Certificates of Mastery don't go into effect. Dr. Conley responded that, while elimination of the Certificates would eliminate much of the rationale for PASS, it doesn't mean that the work wouldn't continue. However, he believes that such withdrawal of support is unlikely because the Governor has demonstrated strong commitment to the Certificates. Dr. Conley added that he is currently appointed to one of the Governor's task forces on education.

Ms. Christopher inquired about the role of community colleges in relation to the work of PASS and ODE. Dr. Conley replied that they are developing the Proficiency Requirements for Entrance into Programs (PREP), which is similar to PASS. Mr. Bassett added that "the commitment is to see that they are linked, and we are greatly advantaged by Dr. Conley's work."

(No Board action required)

STATUS OF THE WESTERN UNDERGRADUATE EXCHANGE PROGRAM

Staff Report to the Board

This is the annual report on Oregon's experience with the Western Undergraduate Exchange Program (WUE) established by the Western Interstate Commission for Higher Education (WICHE) in 1988. In 1989, the Oregon State Board of Higher Education approved a staff recommendation for OSSHE institutions to begin participating in WUE.

The goals of WUE are to increase student access and choice while enhancing the efficient use of educational resources among the Western states. The basic assumptions underlying WUE are that: (1) most institutions have some programs that can accommodate additional students at little or no additional cost; and (2) additional nonresident students can be attracted to those programs by offering a tuition discount.

Institutions charge nonresident WUE students 150 percent of resident tuition if they apply and are admitted to one of the designated WUE programs. WUE tuition is significantly less than nonresident tuition at all participating institutions.

Participating institutions specify which programs will be available to WUE students and admit WUE students to those programs on a space-available basis. Institutions are under no obligation to admit WUE students.

WUE has proven to be a popular program with students and parents in all of the participating states. Across all participating states, WUE enrollments have increased dramatically over the life of the program, increasing from 3,931 students in 1990-91 to 6,953 students in 1995-96, an increase of 77 percent. Oregon students enrolling in WUE programs in participating states have increased from 288 students in 1990-91 to 764 students in 1995-96, an increase of 165 percent. WUE students from other states enrolling in Oregon colleges increased from 62 in 1990-91 to 313 in 1995-96, an increase of 405 percent. Overall, Oregon currently has a net outflow of 451 students under the WUE program. Almost 75 percent of Oregon students enrolled under the WUE program attend colleges in Idaho, Montana, and Nevada.

The following tables reflect a history of Oregon WUE enrollments since 1990-91.

Western Undergraduate Exchange (WUE) Enrollment History

Students from WUE States Enrolled at Oregon Institutions

Institution

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

EOSC

N/A

N/A

N/A

N/A

N/A

N/A

OIT

32

33

55

58

67

70

OSU

9

21

34

46

79

112

PSU

3

4

3

2

5

6

SOSC

7

14

36

37

34

66

UO

11

16

28

52

84

56

WOSC

0

0

0

0

2

3

TOTALS

62

88

156

195

271

313

% Change

42%

77%

25%

39%

15%

Oregon Students Enrolled at Institutions in WUE States*

State

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

Alaska

1

15

13

27

25

34

Colorado

10

13

17

28

39

50

Hawaii

4

3

1

3

6

4

Idaho

147

352

285

305

327

288

Minnesota

12

15

N/A

N/A

N/A

N/A

Montana

87

131

247

269

215

140

Nevada

0

0

13

62

73

135

N. Mexico

1

2

4

6

5

4

N. Dakota

11

18

19

16

37

34

S. Dakota

2

8

8

12

12

17

Utah

7

6

17

20

32

31

Wyoming

6

5

11

17

13

27

TOTALS

288

568

635

765

784

764

% Change

97%

12%

20%

25%

-3%

* Arizona, California, and Washington do not participate in WUE.

Board guidelines for OSSHE participation in WUE require the following:

A WUE program must be able to accommodate a limited number of additional students without requiring additional resources;

WUE admissions must be on a space-available basis and limited to the programs approved for WUE participation by the State System Office of Academic Affairs;

Nonresident students previously or currently enrolled at OSSHE institutions will not be allowed to convert to WUE status;

WUE students who change majors to a non-WUE program will lose their WUE status;

WUE students enrolled in accordance with the above guidelines shall continue to be eligible for the WUE tuition rate for the duration of their undergraduate academic program, even if that program is removed from the approved list; and

Institutions participating in WUE are required to provide an annual report to the State System Office of Academic Affairs reflecting the number of WUE students enrolled by program, together with the students' states of origin.

Oregon has limited the number of WUE students coming into the state by limiting the programs in which WUE students may enroll. The State System has adhered to the original WUE policy of maximizing state resources by attracting additional students to targeted programs that can accommodate additional students at no additional cost and with no adverse effect on access for residents. In contrast, some other states have allowed their institutions to make most or all of their programs available to WUE students.

Oregon's experience with the WUE program is mixed. The program continues to provide Oregonians with competitively priced out-of-state college alternatives. For example, in 1995-96 the average OSSHE resident tuition rate of $3,100 was lower than the WUE tuition rate of $3,660 at the University of Montana, but considerably higher than the WUE tuition rate of $2,430 at the University of Idaho. However, the net outflow of students represents potential loss of enrollment to OSSHE institutions, particularly losses to institutions in Idaho. It is of interest that fewer Oregon students elected to attend college in Montana and Idaho this past academic year than in the previous year.

(No Board action required)

FOLLOW-UP REVIEWS CONDUCTED IN 1995-96 OF SELECTED PROGRAMS

Staff Report

In November 1990, the Board approved a policy directing the Office of Academic Affairs to conduct a follow-up review of each degree program or significant new option within an existing degree program approved by the Board since January 1, 1983. The purpose of the follow-up review is to provide brief descriptive information to the Board about the status of new programs five years after their establishment. Follow-up review reports include information about program implementation in terms of faculty resources; patterns of student enrollments and degrees granted; available financial, library, facilities, and equipment resources; and prospects and problems that may affect the program's progress over the next five years.

During the 1995-96 academic year, the following programs, approved by the Board during the 1988-89 academic year, were reviewed:

Oregon State University
Post-Baccalaureate Certificate in Accounting
Certificate in Science, Technology, and Society (discontinued in July 1995 and not reviewed for this Board report)

Portland State University
Extended Teacher Education Program
M.S. in Computer Science
Ph.D. in Public Administration and Policy
Bachelor of Music Program

Southern Oregon State College
B.A./B.S. in Theatre Arts
Extended Teacher Education Program

Summaries of these seven program reviews follow.

Post-Baccalaureate Certificate in Accounting, Oregon State University

In December 1988, Oregon State University received authorization from the Board to offer the Post-Baccalaureate Certificate in Accounting. OSU requested the program to ensure the required coursework and formal academic advising needed to complete an accounting education that exceeds the minimum required for professional accounting certification; provide the tangible incentive of a certificate that recognizes post-baccalaureate completion in accounting; and attract students who may be interested in an accounting career but who may not have pursued their undergraduate education at OSU.

OSU offers a B.A./B.S. degree program in Business Administration with a concentration in Accounting; it does not offer a graduate certificate or degree in accounting. The implementation of the post-baccalaureate certificate has provided OSU with a way to achieve its stated objectives and better serve post-baccalaureate students with an interest in accounting. Approximately 35 certificates have been awarded between 1991-92 and 1995-96. OSU reports that many of the students, who are older than the average student and come to the University with wider work experience, are now Certified Public Accountants (CPAs) and are employed in public accounting firms such as Talbot, Karvola and Wirewick; Olson and Straughn; and Deloitte and Touche. Other graduates are working in the governmental and private sectors.

All coursework for the certificate program is offered by the College of Business faculty. Currently, nine faculty (7.9 FTE) who provide instruction for the undergraduate accounting program also teach in this program. Students are able to transfer 15 credit hours of coursework from other institutions toward the 39-credit-hour program requirement. At the time of Board approval, OSU's Post-Baccalaureate Certificate in Accounting was similar to the Post-Baccalaureate Certificate offered by Portland State University. OSU noted that its program is intended for those students who are place-bound near Corvallis. OSU has not offered the program off-campus. There is no indication from institutions in the State System that the certificate program has had a negative impact on their accounting programs.

The certificate program required no additional campus resources to be implemented. A small amount of recurring financial resources (less than $1,000) has been reallocated to consolidate the academic records of post-baccalaureate students (e.g., transcripts, status reports, correspondence) within the academic unit for purposes of academic advising, scheduling, and monitoring student progress.

OSU expects to continue the program at its current level of operations in terms of student enrollment and faculty support. Curriculum will be adapted as necessary to meet the needs of the state, the professions, and the students.

Extended (Fifth-Year) Teacher Education Program, Portland State University

As part of legislatively required redesign of teacher education programs in the late 1980s, the Board approved the Extended Teacher Education program at Portland State University in January 1989. Board authorization included the elimination of PSU's undergraduate-level teacher certification programs and the implementation of a fifth-year graduate-level teacher preparation program. The purpose of the Extended Teacher Education program was to strengthen PSU's teacher preparation programs through the requirement of a regular academic major for all prospective teachers. Also, the extended program afforded PSU the opportunity to redesign its undergraduate professional education courses to meet the requirements for a graduate-level professional curriculum and to increase field-based student teaching experiences with qualified local school district supervising teachers.

There are 57 faculty members (53.3 FTE) assigned to the teacher education programs at PSU. More than 990 master's degrees in Teacher Education have been granted from 1991-95. The annual projected student enrollment (at 250 students) is comparable to the current annual student enrollment (at 242 full-time and 437 part-time). Demand has remained relatively stable over the past five years. The application to admit ratio is three-to-one.

The total budget for the School of Education in 1995 was $2.995 million. The Extended Teacher Education program was funded through reallocation of existing General Fund resources. The extended program is accredited by the Oregon Teachers and Standards Practices Commission, The Northwest Regional Accreditation Consortium, and the National Council for Accreditation of Teacher Education. PSU reports that the library resources adequately support the Extended Teacher Education program. The institution notes that the recent decline in dollars available for purchasing non-print resources needs to return to the higher levels of 1993-94.

The School of Education is currently in the midst of a comprehensive program review focusing on admissions policy and procedures, the role of education and reform on the curriculum, and instructional delivery issues.

M.S. in Computer Science, Portland State University

In May 1989, the Board approved an M.S. degree in Computer Science at Portland State University. PSU requested the program as part of its mission and long-term commitment to provide quality educational opportunities to meet the needs of the high technology community in the Portland metropolitan area. PSU's Master of Science program in Computer Science was the result of a recommendation of the Interinstitutional Committee on Computer Science. The committee was formed to respond to the Board's questions about the State System's rapidly expanding Computer Science programs. A report by the committee was issued in July 1987. The Board, upon reviewing the report, directed the Chancellor's Office to implement the committee's recommendations.

Currently, the program involves 13 regular full-time (1.0 appointments) faculty. Ten of the faculty are tenure-track or tenured and three are on term appointments. In addition, a substantial number of adjunct faculty have taught in the program. At the present time, the department is recruiting for three vacancies, the result of two resignations and a retirement.

There are approximately 50 students pursuing the master's degree in Computer Science. This exceeds the projected enrollment of 40 students by 1993-94. Sixty-four master's degrees have been granted in computer science since 1989-90, compared to the projected 90 degrees. The actual number of graduates exceeded projections from 1990 to 1993 (25 projected/39 actual); however, since then the number of graduates has been less than projected. Program courses are offered through OCATE, which attracts a mix of students who are enrolled in the program and many who are not. Since the inception of the program, there have been 1,531 graduate-level students enrolled in Computer Science graduate courses. At the same time, these courses have enrolled 204 undergraduates, 93 post-baccalaureates, and 342 other types of enrollments.

In terms of resource support, library resources are considered adequate. Since the time the Board originally considered PSU's request to implement the Computer Science program, there have been issues related to adequate facilities and equipment available to support the program. In 1989, staff noted that the Computer Science Department did not have adequate or suitable office space for the increased number of faculty or graduate students. In 1995-96, the department considers facilities adequate for most purposes; however, some courses and research projects are limited by a lack of adequate laboratory space. The Department of Computer Science would like to have a computer systems laboratory for its operating systems, laboratory, and related courses. Lack of space is considered to be a major barrier to acquiring and installing the necessary laboratory equipment. This space problem is expected to be resolved with the acquisition of a building near the campus; the plan for this site has recently been acted upon by the Board.

The Computer Science Department's budget for the 1995-96 academic year was $1.3 million. Although it is difficult to apportion resources between graduate and undergraduate programs, an estimated $330,000 (25 percent) annually can be attributed to the M.S. program. The department receives additional income from courses offered through OCATE, and faculty have generated numerous grants and contracts from a variety of sources which they believe would be impossible without the M.S. program. The program is not accredited at this time since there is no appropriate accreditation nationally of these programs.

Although enrollment is stable, PSU is planning a major effort to recruit additional students and proposes several strategies to do so. In addition, a survey is planned of existing students in order to determine ways the program might change to improve the rate of degree completion for part-time students.

In general, the Computer Science Department indicates that it does not consider the program to be as strong as faculty would like it to be. The admissions standards are lower than proposed, requiring as a minimum standard the completion of the equivalent of the lower-division computer science courses rather than the baccalaureate degree specialization. Justification given for the weaker standard is a need to be competitive with other providers of program offerings in computer science in Portland. The result is lack of ability to teach core courses of the program at the genuine graduate level as determined by the faculty. A committee is in the process of making recommendations on how to strengthen the program. PSU proposes that the program be continued for five years while a more aggressive campaign is undertaken to strengthen the program's academic structure and recruit more and better prepared students.

Ph.D. in Public Administration and Policy, Portland State University

In October 1988, the Board approved the Ph.D. in Public Administration and Policy at Portland State University. This doctoral program prepares advanced graduate students for teaching and research careers in higher education, government service, policy institutes, and the health sector. It focuses on the study and creation of knowledge that ameliorates public sector problems and supports effective public services at local, state, national, and international levels. The degree program replaced the Ph.D. in Urban Studies: Public Administration and Policy. PSU's objective for the programmatic change was to offer a clear path for its master's students to doctoral study in public administration. Also, the emphasis has shifted to a broader policy research-based degree rather than a restricted policy orientation in urban studies.

The Public Administration and Policy program is interdisciplinary and draws faculty from departments within the School of Urban and Public Affairs, Urban Studies and Planning, Public Administration, Administration of Justice, and Public Health Education. Currently, the program's governance structure is made up of 18 faculty members within the School of Urban and Public Affairs and two student representatives. Of these faculty, 12 are full professors, 5 are associate professors, and 1 is an assistant professor. Faculty members contribute to the program while holding academic appointments in their respective departments. The program is coordinated by a faculty member. There are no plans for additional hires of faculty to support the program during the next two years.

Sixty-six students are currently pursuing Ph.D. degrees in Public Administration and Policy. Of these, 5 are minority students (7.5 percent), 12 are foreign students (18 percent), and 29 are female (44 percent). The first Ph.D. degree was awarded in the summer of 1992; to date, nine degrees have been awarded.

The Public Administration and Policy Program has no separate budget. When the program began, one new position was allocated. Since 1989, only existing resources have been reallocated to the program from the various departments in the school and the Dean's Office. Library resources, particularly interlibrary loans, are inadequate due to budget cutbacks; however, e-mail accounts for students enable access to additional resources. Student access to computers is considered good. Facilities are considered marginally adequate. There is not enough room to house doctoral students working as graduate assistants near their faculty mentors. Plans for a new building to house the School of Urban Affairs will help to address space needs.

Student demand for the program is considered strong. Earlier students enrolling in the program were placebound and attended part time. In 1995-96, all entering students attended on a full-time basis. Two-thirds of the students are from out of state, and this is considered an indicator of the program's increasingly good reputation.

An internal review of the program's strengths and weaknesses by a distinguished visiting faculty member was conducted during the 1995-96 academic year. Among the strengths identified were the "unusually attractive matrix of substantive specializations" in public policy and administration offered in the program and the program's "market position" in Portland that attracts community partnerships and responds to student interests. The greatest weakness of the program is the administrative and governance structure. The program is interdepartmental and has no real academic "home." This seems to have a negative effect on ownership of the program and reliability of instructional resources. An internal reviewer of the program has recommended that the program become a separate department with clear administrative structure, authority, and accountability.

Bachelor of Music, Portland State University

The Bachelor of Music (B.M.) at Portland State University was approved by the Board in October 1988. This degree was established in response to student and community interests in having access to performance or studio training. Also, the program prepares those students who intend to pursue a graduate degree in Music.

There are 22 faculty involved with the B.M. program (17 FTE). The faculty have achieved national and international recognition for their performances. The program specialties are in the areas of voice and all orchestral instruments, and performance preparation as composers and conductors. The B.M. program has produced undergraduates who have gone on to graduate and professional pursuits. Approximately 190 undergraduates are enrolled in Music major programs with about 48 students enrolled in the B.M. program. Since the program was implemented, 58 degrees have been awarded. The numbers for enrollment and degrees awarded are below those projected when the program began. The estimate was an annual enrollment of 60 students and 20 annual graduates after the program was fully established. At present, the number of majors is increasing.

The total Music Department budget is $1,047,626. The financial support for operating the B.M. program ($10,000) has not changed since the program was implemented. The Music Department indicates that its accrediting body, the National Association of Schools of Music (NASM), has insisted that the program regularly budget monies for instruments. The B.M. program has been funded through reallocation of existing financial resources. The reallocated funds came from the B.A. and B.S. degrees in Music. Students formerly in the B.A./B.S. programs transferred to the B.M. program if they wanted a professional degree. The B.A./B.S. degrees were then revised to accommodate students interested in Music degrees with a Liberal Arts emphasis.

The Department of Music considers the B.M. program a major reason for increased private gifts for scholarships, including the largest scholarship gift in the institution's history. PSU requests that the program continue as designed. The institution is developing a proposal for a Master's of Music degree to accommodate B.M. graduates, particularly those students from the metropolitan area (the preliminary proposal was presented to the Board in May 1996). To accommodate expected additional students involved in all undergraduate music programs, the Department of Music projects the need to add faculty in voice, saxophone, and low brass -- or consider limitation of enrollment.

B.A./B.S. in Theatre Arts, Southern Oregon State College

Southern Oregon State College received Board approval in May 1988 to offer the B.A./B.S. degrees in Theatre Arts. The B.A./B.S. degrees were designed to provide a broad-based liberal arts program that includes opportunities for practical theatre experience. Prior to 1988, all undergraduate students interested in a theatre degree had a single option: an intensively pre-professional-oriented Bachelor of Fine Arts (B.F.A.) degree. Since 1988, the B.A./B.S. degrees have become the prevailing choice of 85 to 90 percent of students entering the theatre program. There are 147 majors and pre-majors in theatre. Approximately 130 of these majors are pursuing the B.A./B.S. The department has granted 46 B.A./B.S. degrees since the new programs appeared in the 1989 catalogue.

A faculty of 5.0 FTE provide instruction for B.A./B.S. and B.F.A. degree programs. Occasionally, guest faculty and/or guest artists are hired on a part-time basis. Due to the recent growth in majors, the department anticipates hiring an additional full-time faculty member. This faculty member will instruct acting majors with specific emphasis in voice and movement.

The Theatre Department considers its level of available resources to be excellent. Library staff is continually adding to its theatre holdings. SOSC's library now houses the Bailey Collection, which is comprised of theatre-related materials. In terms of facilities and equipment, the only major issue is classroom space available to the Theatre Department, a long-standing need. The department is seeking approval of funding to provide classrooms within the theatre building. There are also plans to make available special classrooms with technical and media capabilities.

The total budget for all theatre degree programs, not including staffing, is $87,000. This amount covers supplies, services, and production budgets. The theatre program annually generates $33,000 of its budget. The department has not pursued accreditation from the National Association of Schools of the Theatre (NAST).

Due to increasing student demand, program faculty indicate a future need to add faculty and/or limit enrollment in this area to better meet students' needs and to give sufficient individual attention.

Extended Teacher Education Program, Southern Oregon State College

In January 1989, Board approval was awarded to Southern Oregon State College to implement its proposal to offer an Extended Teacher Education program. As was the case with other OSSHE institutions, legislative mandates in the 1980s for redesign of teacher education programs drove changes in SOSC's programs. Program approval authorized implementation of a fifth-year graduate program where students can earn their basic licensure in either elementary, secondary, or special education. The elementary program is a 12-month program compared to the secondary program, which requires nine months for licensure completion. The special education program consists of a 12-month stand-alone program leading to a Handicapped Learner II endorsement that permits an educator to teach only in the area of special education. For educators who already hold an elementary or secondary teaching license and wish to acquire special education licensure, SOSC offers a 12-month dual program that adds a special education Handicapped Learner I endorsement. A student who completes one of the Board-approved teacher education programs and wants to earn a master's degree can take an additional 21-24 quarters hours of coursework to complete several master's degree options.

Upon implementing the Extended Teacher Education program in 1990-91, SOSC phased out its existing undergraduate teacher certification programs. Since implementing the program, SOSC reports that the elementary and secondary fifth-year basic licensure programs are well subscribed, while the special education has had less than expected enrollment. On an annual basis, the elementary basic licensure program has two cohorts of 25 students each for a total of 50 students. The secondary basic licensure program enrolled 48 students for the 1995-96 academic year. The stand-alone and dual special education program had eight students enrolled during 1995-96. On an average there are 10 students enrolled in the two special education programs compared to an average of 40-60 students for the elementary and secondary programs. Students who complete SOSC's fifth-year licensure program earn an Oregon basic teaching license, but they do not earn a degree until they complete the additional 21-24 credit hours required for the master's degree. From 1990-91 to 1994-95, 137 students earned an elementary teaching license, 199 students earned a secondary teaching license, and 50 earned either a Handicapped Learner I or II endorsement. Also during this period, 32 students completed the additional coursework to earn the master's degree.

There are ten FTE tenure-track faculty and two FTE faculty on fixed-contract appointments in the Department of Education. Seventeen faculty from other departments teach instructional methodology courses and/or supervise student teachers in their specialties. Additional faculty hires are anticipated in SOSC's teacher education program in response to student demand that will result from new licensure designs and the incorporation of elements of the professional development school model.

General Fund resources, previously allocated to the undergraduate teacher education program, were reallocated to the fifth-year Extended Teacher Education program. The budget for the Education Department for 1995-96 was $812,723, about two-thirds of which was faculty and staff salaries. Library resources, facilities, and equipment needed for the Extended Teacher Education program are generally considered adequate at present. However, additional computers are sought to keep abreast of instructional needs in technology.

The Extended Teacher Education program is accredited through the National Council for the Accreditation of Teacher Education (NCATE). A review was conducted by NCATE during the 1996 spring quarter and a positive outcome is expected. In addition, the program received approval from Oregon's Teacher Standards and Practices Commission (TSPC) in 1992 and has gone through the reapproval process during the 1996 spring quarter.

Board Discussion

Vice Chancellor Clark summarized the rationale behind conducting the follow-up program reviews. Dr. Aschkenasy asked if she recommended this process be continued, and Dr. Clark replied affirmatively.

(No Board action required)

CORPORATE AND PUBLIC AFFAIRS

Legislative Leadership Institute

The Legislative Leadership Institute is a biennial event sponsored by the OSSHE Government Affairs Office. The Institute is held for selected legislators on State System campuses during the summers when the legislature is not in session. In 1994 the Institute was held at PSU and served 12 members of the legislature. Participants will attend a series of thought-provoking discussions with senior faculty from OSSHE institutions on current public policy research of practical value to legislators.

The dialogue between Oregon legislators and OSSHE faculty during the Institute provides a link between policy makers seeking the best available information and faculty responsible for developing this knowledge. This in-depth examination of the social, economic, and demographic trends impacting public policy decisions is the sole purpose of the Institute.

Southern Oregon State College in Ashland will host the second Summer Institute, July 31 to August 3, 1996. Featured this year are:

(No Board action required)

LONG-RANGE PLANNING AND THE GOVERNOR'S PLANNING PROCESS

Dr. Cox reviewed the Board's long-range planning process to date with the appointment of solution teams. The Chancellor underlined the importance of aligning the planning with the Governor's policy directions. "Some of the teams have more immediate tasks because they relate specifically to the Governor's budget planning for next fall. Others will extend into the year and perhaps even a year beyond."

Access & Affordability
(Relates to Governor's Task Force on Access & Affordability)

Solution Team Chair Co-Chair/Assoc
Work with the Governor & legislature to develop the funding required to meet the growing demand at predictable and affordable levels Cox
Develop a barrier-free admission and transfer process to enable students to achieve their academic goals Dow Arnold
Partner with the community colleges to provide baccalaureate capacity and access Dow Arnold
Implement the Proficiency-based Admission Standards System (PASS) Dow Conley
Establish accelerated three- and four-year baccalaureate programs Reno Wolf
Create a virtual university initiative -- expanding technology capabilities Systemwide to share Oregon's academic wealth throughout the state Gilbert
Develop academic schedule and calendar flexibility to provide greater access and efficiency for System students and other constituents Clark Provosts

Economic Linkages
(Relates to Governor's Task Force on Economic Linkages)

Solution Team Chair Co-Chair/Assoc
Build greater critical mass in strategically needed graduate education and research programs key to Oregon's future through investment and consolidation Frohnmayer Byrne (resource)
Develop greater graduate/research capacity in the Portland metro area Ramaley Byrne (resource)
Build greater critical mass in engineering education and research, and raise programs to national ranking Risser Reardon
Expand availability/accessibility to technology/technician education to better serve Oregon's high technology industry Wolf
Create and fund a professional development, lifelong learning center -- a visible, accessible single point of contact for Oregonians Ramaley Shepard
Increase the number of experientially based programs, practica, and internships offered across the System Petersen Hunt

Other Immediate Initiatives

Solution Team Chair Co-Chair/Assoc
Establish, at both the System and institution levels, a process of continuous communication to identify and meet the needs of Oregon's higher education stakeholders Cox Wyse
Move salaries to a level that is nationally competitive to attract and retain the best faculty and staff Sargent Arnold
Establish Systemwide and institutional indicators to measure performance and quality, with a regular OSSHE report card to the public Youngblood Hopkins-Powell
Focus the Chancellor's office on policy, criteria setting, System strategy and necessary central services ensuring the institutions have appropriate support, flexibility, and incentives to achieve strategic objectives Reno Moseley

Presentation, R. Bassett

Chancellor Cox invited Mr. Roger Bassett to address the Board in his role as advisor to the Governor on education issues. Mr. Bassett commented that state government has been undergoing a transition over the last eight or nine years, moving from an organization of agencies and segments to one of strategies, initiatives, agendas, and investments. He indicated that the structure of government is of lesser importance to Governor Kitzhaber than the strategic priorities. In that vein, Mr. Bassett reemphasized the Governor's commitment to making education in Oregon a high priority.

Mr. Bassett outlined the Governor's work strategy.

Applying these stages to the education agenda, Mr. Bassett presented a rough timeline: Stage I, now until August '97; Stage II, November '96 through September '97; Stage III, September '97 through September '98. "Clearly that means the bigger agenda is the 1999 session, and there is another session between now and then. For the 1997 session, the Governor plans, for education issues, to cull out of all these groups early ideas, preferably those that create momentum and get us started in the direction of the bigger one...I think what it means is we'll be looking in the next couple of months for ideas out of your work, ideas out of the budget requests of the two boards [of education], and ideas out of other settings that have a high likelihood of buy-in sufficient for legislative action in 1997. If they don't, then they'll go into the category of 'needs more work' and be placed in the perspective and timeline headed to the 1999 session."

Mr. Bassett addressed the issue of matching the work of the Governor's task forces with the work of the solution teams. "Where they do match, the two task forces of the Governor would accept the recommendations of the solution teams as direct input or direct transfer of recommendations. And those would become ideas at the Stage I discussion level."

Finally, Mr. Bassett directed Board attention to the handout entitled "Education as a Continuum," highlighting the Governor's education -- his five areas of highest personal investment in education.

RECOGNITION, REP. A. GORDLEY

Chancellor Cox recognized Representative Avel Gordley, who asked to address the Board. Rep. Gordley spoke in support of PSU and its key role in the Portland metropolitan area. She also recognized the contributions of Board member Waddy. "In citing April, I want to say that I would like to participate in ensuring that she has a successful tenure on the Board. We enjoy a positive mentoring relationship and I respect very much the leadership role that she's taken on, not only on this Board, but the leadership role she provided at OSU, particularly at a very critical moment in the life of OSU, what with the racial tensions of the past several months. Again, I know that her role on this Board is a difficult one. Her voice may be one that is not always heard. From my experience, including current experiences, I know that there are formal and informal networks for communicating and making decisions, and in order for April's experience to be meaningful and successful and for you to benefit fully from what she has to contribute, I hope that you'll establish a formal mentoring system for her and any student who is a part of this Board."

Additionally, Ms. Gordley stated, "I was very pleased to see in the budget an emphasis on minority faculty recruitment, the $1 million set aside. But I have to tell you in all frankness that people are not going to come to Oregon and they're not going to stay unless we fully understand why others who have been recruited have left us. That's a piece of research analysis that I know you must be committed to if you're putting this kind of dollar investment into this program.

"These are issues that can only be well explored by involving communities of interest in the planning and the design of a recruitment and retention program. My commitment is to work with you, whether I'm in the legislature or not, to build a system of higher education in the state of Oregon that serves all Oregonians and all of our communities of interest.

"Finally, I would like to draw your attention to a piece of information in your packet that has to do with the description of the key economic and demographic trends. One of the things that continues to strike me in my work as a legislator as we receive briefings from various state agencies and get into discussions about the future of Oregon and its economic trends is the missing or weak analysis when it comes to looking at the racial and ethnic trends and the implications. We have to look at the growing income gap, the socioeconomic issues that are national trends that are also trends here in Oregon as another key indicator. And, frankly, I don't know how you can have a discussion about key economic and demographic trends in the state of Oregon without also having a discussion about the changing demographics of the population and those socioeconomic issues."

COMMITTEES

Joint Boards Working Group

Mr. Swanson indicated that the Joint Boards Working Group would meet in early September. Recently, past Board of Education chair Susan Massey and he attended a meeting of the Teacher Standards and Practices Commission (TSPC) to encourage reconsideration of their decision about licensure requirements. Soon thereafter, TSPC voted to reconsider.

ITEMS FROM BOARD MEMBERS

Ms. Wustenberg thanked the Board members for their warm welcome.

ADJOURNMENT

The Board meeting adjourned at 1:10 p.m.

Virginia L. Thompson, Secretary of the Board

Herb Aschkenasy, President of the Board